EXHIBIT 5
SUBSCRIPTION AGREEMENT
dated as of
May 22, 1998
among
MERCURY ACQUISITION CORPORATION
and
THE BUYERS NAMED HEREIN
relating to the purchase and sale
of
Common Stock
Preferred Stock
and Warrants
of
Mercury Acquisition Corporation
TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions
Section 1.1. Definitions.............................................1
ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale.......................................3
Section 2.2. Closing.................................................3
ARTICLE 3
Representations and Warranties of Seller
Section 3.1. Corporate Existence and Power...........................4
Section 3.2. Corporate Authorization.................................4
Section 3.3. Governmental Authorization..............................4
Section 3.4. Noncontravention........................................4
Section 3.5. Capitalization and Voting Rights........................5
Section 3.6. Valid Issuance of Securities............................5
Section 3.7. Litigation..............................................6
Section 3.8. Newly Formed Corporation................................6
Section 3.9. Meaning of Seller.......................................6
ARTICLE 4
Representations and Warranties of Buyers
Section 4.1. Existence and Power.....................................6
Section 4.2. Authorization...........................................7
Section 4.3. Governmental Authorization..............................7
Section 4.4. Purchase for Investment.................................7
Section 4.5. Private Placement.......................................7
Section 4.6. Litigation..............................................8
Section 4.7. Brokers or Finders' Fees................................8
ARTICLE 5
Conditions to Closing
Section 5.1. Conditions to Obligations of Each Buyer and the Seller..9
Section 5.2. Conditions to Obligation of Each Buyer..................9
Section 5.3. Conditions to Obligation of the Seller.................10
ARTICLE 6
Survival; Indemnification
Section 6.1. Survival...............................................10
Section 6.2. Indemnification........................................11
Section 6.3. Exclusivity............................................11
ARTICLE 7
Termination
Section 7.1. Grounds for Termination................................12
Section 7.2. Effect of Termination..................................12
ARTICLE 8
Miscellaneous
Section 8.1. Notices................................................12
Section 8.2. Amendments and Waivers.................................13
Section 8.3. Expenses...............................................14
Section 8.4. Successors and Assigns.................................14
Section 8.5. Governing Law..........................................14
Section 8.6. Jurisdiction...........................................14
Section 8.7. Waiver Of Jury Trial...................................14
Section 8.8. Counterparts; Third Party Beneficiaries................14
Section 8.9. Entire Agreement.......................................15
Section 8.10. Captions...............................................15
Section 8.11. Severability...........................................15
Section 8.12. Interpretation.........................................15
Schedule A Schedule of Investors
Exhibit A Certificate of Incorporation of Mercury Acquisition
Corporation
Exhibit B Preferred Stock
Exhibit C Form of Warrant
Exhibit D Form of Investors' Agreement
SUBSCRIPTION AGREEMENT
AGREEMENT dated as of May 22, 1998 between Mercury Acquisition
Corporation, a Delaware corporation ("Seller") and the Persons named on
Schedule A hereto (each a "Buyer" and collectively, the "Buyers").
W I T N E S S E T H :
WHEREAS, the Seller has agreed to merge with and into
Thermadyne Holdings Corporation (the "Company") on the terms and conditions
set forth in the Agreement and Plan of Merger dated as of January 20, 1998
(the "Merger") between the Seller and the Company, as amended (as amnded,
and as the same may be further amended from time to time, the "Merger
Agreement");
WHEREAS, to finance, in part, the payment of the consideration
payable in the Merger, the Seller intends to issue shares of common stock, par
value $0.01 per share (the "Common Stock"), shares of preferred stock (the
"Preferred Stock") and warrants to purchase common stock (the "Warrants" and,
together with the Common Stock and the Preferred Stock, the "Securities");
WHEREAS, all of the outstanding capital stock of the Seller is
currently owned by DLJ Merchant Banking Partners II, L.P. ("DLJMB") and
affiliated funds and entities (collectively, the "DLJMB Entities");
WHEREAS, the Seller desires to issue and sell the relevant
Securities to each of the Buyers, and each of the Buyers desires to purchase
the relevant Securities from the Seller, upon the terms and subject to the
conditions hereinafter set forth;
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) The following terms, as used
herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"Closing Date" means the date of the Closing.
"Common Share" means one share of Common Stock.
"Investors' Agreement" means the Investors' Agreement dated as
of the Closing Date among Mercury Acquisition Corporation, DLJ Merchant
Banking Partners II, L.P., DLJ Merchant Banking Partners ▇▇-▇, ▇.▇., ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇ Diversified Partners, L.P., DLJ Diversified
Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A,
L.P., DLJMB Funding II, Inc., DLJ EAB Partners, L.P., UK Investment Plan 1997
Partners, DLJ First ESC, L.P., and DLJ ESC II, L.P.
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest or encumbrance in respect of
such property or asset.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Transaction Documents" means this Agreement, the Merger
Agreement, the Investors' Agreement and the Warrants.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Accredited Investor 4.06(h)
Certificate of Incorporation 3.05
Closing 2.2
Common Stock Recitals
Company Recitals
Damages 6.2
DLJMB Recitals
Preferred Stock Recitals
Purchase Price 2.1
Securities Recitals
Warrants Recitals
ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, the Seller agrees to issue and sell to each
Buyer and each Buyer agrees, severally and not jointly, to purchase from the
Seller the Securities set forth opposite such Buyer's name on Schedule A
hereto at the Closing. The purchase price for the Securities (the "Purchase
Price") is the amount in cash specified on Schedule A hereto. The Purchase
Price shall be paid as provided in Section 2.2.
Section 2.2. Closing. The closing (the "Closing") of the
purchase and sale of the Securities hereunder shall take place at the offices
of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, as soon as
possible, but in no event later than five business days, after satisfaction of
the conditions set forth in Article 5, or at such other time or place as
Buyers and Seller may agree. At the Closing:
(a) Each Buyer shall deliver to the Seller, in immediately
available funds, Seller's amount of the aggregate Purchase Price set forth
opposite such Buyer's name on Schedule A hereto, by wire transfer (or other
means acceptable to Seller) to an account of the Seller with a bank in New
York City designated by Seller, by notice to such Buyer, not later than two
business days prior to the Closing Date.
(b) The Seller shall deliver to each Buyer certificates, or other
appropriate documentation, for the relevant Securities duly registered in the
name of such Buyer.
ARTICLE 3
Representations and Warranties of Seller
The Seller represents and warrants to each Buyer as of the date
hereof and as of the Closing Date that:
Section 3.1. Corporate Existence and Power. The Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted and as proposed to be
conducted.
Section 3.2. Corporate Authorization. The execution, delivery
and performance by the Seller of each of the relevant Transaction Documents and
the consummation of the transactions contemplated hereby and thereby
(including the issuance and sale of the Securities) are within the Seller's
corporate powers and have been duly authorized by all necessary corporate
action on the part of the Seller. Each of the relevant Transaction Documents
constitutes or, when executed, will constitute a valid and binding agreement of
the Seller, enforceable against the Seller in accordance with its respective
terms, except (i) as limited by the applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement or creditors' rights generally, or (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
Section 3.3. Governmental Authorization. The execution,
delivery and performance by the Seller of each of the relevant Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby require no order, license, consent, authorization or approval of, or
exemption by, or action by or in respect of, or notice to, or filing or
registration with, any governmental body, agency or official except such as
have been obtained and the filing of the Certificate of Designation by the
Seller for the Preferred Stock with the office of the Secretary of State for
the State of Delaware.
Section 3.4. Noncontravention. The execution, delivery and
performance by Seller of each of the relevant Transaction Documents and the
consummation of the transactions contemplated hereby and thereby do not and
will not (i) violate the certificate of incorporation or bylaws of Seller, (ii)
violate any applicable law, rule, regulation, judgment, injunction, order or
decree, (iii) require any consent or other action by any Person under,
constitute a default under (with due notice or lapse of time or both), or give
rise to any right of termination, cancellation or acceleration of any right or
obligation of the Seller or to a loss of any benefit to which Seller is
entitled under any provision of any agreement or other instrument binding upon
the Seller or any of the Seller's assets or properties or (iv) result in the
creation or imposition of any material Lien on any property or asset of the
Seller.
Section 3.5. Capitalization and Voting Rights. (a) The
authorized capital stock of the Seller consists of 30,000,000 shares of Common
Stock and 15,000,000 shares of Preferred Stock, and the outstanding capital
stock of the Seller immediately prior to the Closing is 58,000 shares of
Common Stock and no shares of Preferred Stock. The rights, privileges and
preferences of the Common Stock are set forth in the Certificate of
Incorporation attached hereto as Exhibit A (the "Certificate of
Incorporation") and the rights, privileges and preferences of the Preferred
Stock are set forth in the Certificate of Designation attached hereto as
Exhibit B.
(b) Immediately following the Closing the outstanding capital
stock of Seller will be 2,608,696 shares of Common Stock, 2 million shares of
Preferred Stock and Warrants to purchase 353,428 shares of Common Stock. The
Form of Warrant is attached hereto as Exhibit C.
(c) Except as set forth in this Section 3.05 there are, and
immediately after the Closing there will be, no outstanding (i) shares of
capital stock or voting securities of the Seller, (ii) securities of the
Seller convertible into or exchangeable for shares of capital stock or voting
securities of the Seller, (iii) options or other rights to acquire from the
Seller, or other obligation of the Seller to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Seller or (iv) other than as expressly permitted in
the Transaction Documents or employment plans, no obligation of the Seller to
repurchase or otherwise acquire or retire any shares of capital stock or any
convertible securities, rights or options of the type described in (i), (ii),
or (iii).
Section 3.6. Valid Issuance of Securities. Each of the
Securities (other than the Warrants) which are being issued to the Buyers
hereunder, have been duly and validly authorized and when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be fully paid and nonassessable. The Warrants, when executed and
delivered will constitute valid and binding obligations of the Seller,
enforceable in accordance with their terms. The Seller has reserved and will
keep available for issuance upon exercise of the Warrants the total number of
Warrant Shares (as defined in the Warrants) deliverable upon exercise of all
Warrants from time to time outstanding. The issuance of the Warrant Shares
has been duly and validly authorized and, when issued and sold in accordance
with the Warrants, the Warrant Shares will be duly and validly issued, fully
paid and nonassessable and free of preemptive rights.
Section 3.7. Litigation. There is no action, suit,
investigation or proceeding pending against, or to the knowledge of the
Seller, threatened against or affecting the Seller or any of its respective
properties before any court or arbitrator or any governmental body, agency or
official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement or which
could reasonably be expected to have a material adverse effect on the
business, financial condition, properties or operations of the Seller, nor is
the Seller aware that there is any basis for the foregoing.
Section 3.8. Newly Formed Corporation. The Seller was
incorporated on January 16, 1998 in the State of Delaware solely for the
purpose of effectuating the transactions contemplated in this Agreement and
the Merger Agreement and has not conducted any business or entered into any
agreements or commitments except with respect to the foregoing.
Section 3.9. Meaning of Seller. Except as otherwise
specifically provided herein, references to the Seller contained in this
Article 3 shall be construed to refer to the Seller on the date hereof and for
purposes of Section 5.02(a)(ii) immediately prior to the consummation of the
transactions contemplated by the Merger Agreement.
ARTICLE 4
Representations and Warranties of Buyers
Each Buyer represents and warrants to the Seller, severally as
to itself only and not jointly or as to any other Buyer, as of the date hereof
and as of the Closing Date that:
Section 4.1. Existence and Power. Such Buyer, if not an
individual, is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has all powers (corporate,
partnership or otherwise) and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted. Such Buyer, if an individual, has the legal
capacity to enter into this Agreement and the Investors' Agreement.
Section 4.2. Authorization. The execution, delivery and
performance by such Buyer of each of this Agreement, and when executed, the
Investors' Agreement and the consummation of the transactions contemplated
hereby and thereby are or, when executed, will be within the powers (corporate,
partnership or otherwise) of such Buyer and have been or will have been duly
authorized by all necessary action on the part of such Buyer. This Agreement
constitutes and the Investors' Agreement, when executed, will constitute a
valid and binding agreement of such Buyer, each enforceable in accordance with
their respective terms, except (i) as limited by the applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement or creditors' rights generally, or (ii) as limited by
laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies.
Section 4.3. Governmental Authorization. The execution,
delivery and performance by such Buyer of this Agreement and the Investors'
Agreement and the consummation of the transactions contemplated hereby and
thereby require no order, license, consent, authorization or approval of, or
exemption by, or action by or in respect of, or notice to, or filing or
registration with, any governmental body, agency or official.
Section 4.4. Purchase for Investment. Such Buyer is
purchasing the relevant Securities for investment for its own account and not
with a view to, or for sale in connection with, any distribution thereof.
Section 4.5. Private Placement. (a) Such Buyer understands
that (i) the offering and sale of the Securities hereby is intended to be
exempt from registration under the 1933 Act and (ii) there is only a limited
market for the relevant Securities, and there can be no assurance that any
Buyer will be able to sell or dispose of the relevant Securities to be
purchased by such Buyer.
(b) Such Buyer's financial situation is such that such
Buyer can afford to bear the economic risk of holding the relevant Securities
acquired hereunder for an indefinite period of time, and such Buyer can afford
to suffer the complete loss of the investment in the relevant Securities.
(c) Such Buyer's knowledge and experience in financial and
business matters are such that it is capable of evaluating the merits and
risks of the investment in the relevant Securities, or such Buyer has been
advised by a representative possessing such knowledge and experience.
(d) Such Buyer understands that the Securities acquired
hereunder are a speculative investment which involves a high degree of risk of
loss of the entire investment therein, that there are substantial restrictions
on the transferability of the Securities as set forth in the Investors'
Agreement, and that for an indefinite period following the date hereof there
will be no (or only a limited) public market for the Securities and that,
accordingly, it may not be possible for such Buyer to sell the Securities in
case of emergency or otherwise.
(e) Such Buyer and its representatives, including, to the
extent it deems appropriate, its professional, financial, tax and other
advisors, have reviewed all documents provided to them in connection with the
investment in the Securities, and such Buyer understands and is aware of the
risks related to such investment.
(f) Such Buyer and its representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, Seller and its representatives concerning the terms and
conditions of the acquisition of the Securities and related matters and to
obtain all additional information which such Buyer or its representatives deem
necessary.
(g) All information which such Buyer has provided to Seller
and its representatives concerning such Buyer and such Buyer's financial
position is true, complete and correct, and such Buyer agrees to promptly
notify Seller if at any time this ceases to be the case prior to the Closing.
(h) Such Buyer is an "accredited investor" as such term is
defined in Regulation D under the 1933 Act.
Section 4.6. Litigation. There is no action, suit,
investigation or proceeding pending against, or to the knowledge of such Buyer
threatened against or affecting, such Buyer before any court or arbitrator or
any governmental body, agency or official which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement or the Investors' Agreement.
Section 4.7. Brokers or Finders' Fees. There is no investment
banker, broker, finder or other intermediary which has been retained by, will
be retained by or is authorized to act on behalf of such Buyer who might be
entitled to any fee or commission from the Company, the Seller or the DLJ
Entities upon consummation of the transactions contemplated by this Agreement.
ARTICLE 5
Conditions to Closing
Section 5.1. Conditions to Obligations of Each Buyer and the
Seller. The obligations of each Buyer and the Seller to consummate the
Closing are subject to the satisfaction of the following conditions:
(a) No provision of any applicable law, rule or regulation
and no judgment, injunction, order or decree by any governmental
entity of competent jurisdiction shall prohibit the consummation of
the Closing or the Merger.
(b) All material actions by or in respect of, or filings
with, any governmental body, agency, official or authority required to
permit the consummation of the Closing shall have been taken, made or
obtained.
(c) The conditions to the consummation of the Merger
Agreement shall have been satisfied or waived and the Merger shall
have been consummated as contemplated by the Merger Agreement, with
any waiver of conditions and any other changes having been consented
to by each of the DLJMB Funds.
(d) The Certificate of Designation for the Preferred Stock
shall have been duly filed at the office of the Secretary of State of
the State of Delaware.
(e) Each other Buyer shall have purchased the Securities to
be purchased by it hereunder by paying the Purchase Price applicable
thereto in accordance with Section 2.02.
(f) Each Buyer and the Seller shall have entered into the
Investors' Agreement on substantially the terms set forth in the term
sheet attached hereto as Exhibit D.
Section 5.2. Conditions to Obligation of Each Buyer. The
obligation of each Buyer to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) (i) The Seller shall have performed in all material
respects all of its obligations hereunder required to be performed by
it on or prior to the Closing Date and (ii) the representations and
warranties of the Seller contained in this Agreement and in any
certificate or other writing delivered by the Seller pursuant hereto
shall be true in all material respects when made and at and as of the
Closing Date, as if made at and as of such date.
(b) Such Buyer shall have received all documents it may
reasonably request relating to the existence of the Seller and the
authority of the Seller for this Agreement, all in form and substance
reasonably satisfactory to such Buyer.
Section 5.3. Conditions to Obligation of the Seller. The
obligation of the Seller to consummate the Closing with respect to any Buyer
is subject to the satisfaction of the following further conditions:
(a) (i) Such Buyer shall have performed in all material
respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date and (ii) the representations and
warranties of such Buyer contained in this Agreement and in any
certificate or other writing delivered by such Buyer pursuant hereto
shall be true in all material respects when made and at and as of the
Closing Date, as if made at and as of such date.
(b) The Seller shall have received all documents it may
reasonably request relating to the existence of such Buyer and the
authority of such Buyer for this Agreement, all in form and substance
reasonably satisfactory to the Seller.
ARTICLE 6
Survival; Indemnification
Section 6.1. Survival. The representations and warranties
of the parties hereto contained in this Agreement or in any certificate
delivered pursuant hereto or in connection herewith shall survive the
Closing until twelve months after the Closing Date. Notwithstanding the
preceding sentence, any representation or warranty in respect of which
indemnity may be sought under this Agreement shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence, if
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the party against whom such indemnity
may be sought prior to such time, but only as to such inaccuracy or breach.
A breach of any representation or warranty made in this Agreement shall not
affect in any manner whatsoever the relative rights and obligations of the
parties to and under the Investors' Agreement.
Section 6.2. Indemnification. (a) The Seller hereby
indemnifies, severally and not jointly, each Buyer and its Affiliates, limited
partners, general partners, directors, officers and employees against and
agrees to hold each of them harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with
any action, suit or proceeding) ("Damages") incurred or suffered by any such
party arising out of any misrepresentation or breach of warranty, covenant or
agreement made or to be performed by the Seller pursuant to this Agreement;
provided that with respect to any Buyer, (i) the Seller shall not be liable
under this Section 6.02(a) unless the aggregate amount of Damages with respect
to all matters referred to in this Section 6.02(a) for which such Buyer has
sought indemnification exceeds $100,000 and then only to the extent of such
excess and (ii) Seller's maximum liability under this Section 6.02(a) shall
not exceed the amount of the Purchase Price paid by such Buyer to the Seller.
(b) Each Buyer hereby indemnifies, severally and not jointly, the
Seller and its Affiliates, limited partners, general partners, directors,
officers and employees against and agrees to hold each of them harmless from
any and all Damages incurred or suffered by any such party arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by such Buyer pursuant to this Agreement; provided that (i) such
Buyer shall not be liable under this Section 6.02(b) unless the aggregate
amount of Damages with respect to all matters referred to in this Section
6.02(b) exceeds $100,000 and then only to the extent of such excess and (ii)
such Buyer's maximum liability under this Section 6.02(b) shall not exceed the
amount of Purchase Price paid by such Buyer to the Seller.
Section 6.3. Exclusivity. After the Closing, Section 6.2 will
provide the exclusive remedy for any misrepresentation, breach of warranty,
covenant or other agreement or other claim arising out of this Agreement or the
transactions contemplated hereby.
ARTICLE 7
Termination
Section 7.1. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of the Seller and Buyers;
(b) by the Seller or any Buyer as to the Seller or Buyer if
the Closing shall not have been consummated as of the close of
business on June 30, 1998; or
(c) by the Seller or any Buyer if consummation of the
transactions contemplated hereby would violate any non-appealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses 7.01(b)
or (c) shall give notice of such termination to the other party.
Section 7.2. Effect of Termination. If this Agreement is
terminated as permitted by Section 7.01, such termination shall be without
liability of either party (or any stockholder, general partner, limited
partner, director, officer, employee, agent, consultant or representative of
such party) to the other party to this Agreement; provided that if such
termination shall result from the willful (i) failure of either party to
fulfill a condition to the performance of the obligations of the other party,
(ii) failure to perform a covenant of this Agreement or (iii) breach by either
party hereto of any representation or warranty or agreement contained herein,
such party shall be fully liable for any and all Damages incurred or suffered
by the other party as a result of such failure or breach. The provisions of
Sections 8.3, 8.5 and 8.6 shall survive any termination hereof pursuant to
Section 7.1.
ARTICLE 8
Miscellaneous
Section 8.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given, if to any Buyer, to such Buyer at the
address specified by such Buyer on the signature pages of this Agreement or
in a notice given by such Buyer to the Seller for such purpose;
if to the Seller, to:
Mercury Acquisition Corporation
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice.
All such notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the place of
receipt.
Section 8.2. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed, in the case of an amendment, by each party to
this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 8.3. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost
or expense, except that if the Closing shall occur, the Company shall
reimburse the DLJ Entities for all costs and expenses incurred by such
entities.
Section 8.4. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto.
Section 8.5. Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New York.
Section 8.6. Jurisdiction. The parties hereto agree that any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court
for the Southern District of New York or any New York State court sitting in
New York City, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
8.01 shall be deemed effective service of process on such party.
Section 8.7. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 8.8. Counterparts; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement shall confer upon any Person other
than the parties hereto any rights or remedies hereunder.
Section 8.9. Entire Agreement. This Agreement along with the
Investors' Agreement (including the documents, schedules and exhibits referred
to herein and therein) and the other Exhibits hereto constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this
Agreement.
Section 8.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 8.11. Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be executed from this Agreement and the balance of the Agreement shall
be interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by law.
Section 8.12. Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
MERCURY ACQUISITION
CORPORATION
By:
------------------------------
Name:
Title:
DLJ MERCHANT BANKING PARTNERS
II, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ MERCHANT BANKING PARTNERS
II-A, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ OFFSHORE PARTNERS II, C.V., a
Netherlands Antilles Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as advisory general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ DIVERSIFIED PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc.,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ DIVERSIFIED PARTNERS-A, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners, Inc.,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ MILLENNIUM PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc., as
managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJMB FUNDING II, INC., a Delaware
corporation
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ FIRST ESC, L.P.,
By: DLJ LBO Plans Management Corporation,
as manager
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
UK INVESTMENT PLAN 1997
PARTNERS
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.,
as general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation,
as managing general partner
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation,
as manager
By:
------------------------------
Name:
Title:
Address: c/o DLJ Merchant
Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE A
No. of No. of
Common Preferred No. of Aggregate
Investor Shares Shares Warrants Purchase Price(*)
-------- ------ --------- -------- -----------------
DLJ Merchant Banking Partners II, 1,643,283 1,259,850 222,634 $88,189,513.50
L.P.
DLJ Merchant Banking Partners II-A, 65,443 50,173 8,866 3,512,108.50
L.P.
DLJ Offshore Partners II, C.V. 80,808 61,953 10,948 4,336,701.00
DLJ Diversified Partners, L.P. 96,074 73,657 13,016 5,155,978.00
DLJ Diversified Partners-A, L.P. 35,679 27,354 4,834 1,914,775.50
DLJMB Funding II, Inc. 291,758 223,680 39,527 15,657,651.00
DLJ Millennium Partners, L.P. 26,570 20,370 3,600 1,425,915.00
DLJ Millennium Partners-A, L.P. 5,182 3,973 702 278,104.00
DLJ EAB Partners, L.P. 7,378 5,657 1,000 395,966.00
UK Investment Plan 1997 Partners 43,478 33,333 5,890 2,333,316.00
DLJ ESC II, L.P. 309,881 237,576 41,983 16,630,294.50
DLJ First ESC, L.P. 3,162 2,424 428 169,689.00
Total 2,608,696 2,000,000 353,428 $140,000,012.00
----------
(*) Aggregate Purchase Price column includes amounts previously paid on
January 20, 1998.
CERTIFICATE OF INCORPORATION
OF
MERCURY ACQUISITION CORPORATION
* * * * *
FIRST: The name of the Corporation is Mercury Acquisition
Corporation.
SECOND: The address of its registered office in the State of
Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The name of its registered agent at such address is
Corporation Service Company.
THIRD: The purpose of the Corporation is 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 ("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"). 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.
FIFTH: The name and mailing address of the incorporator are:
Name Mailing Address
------------------------------- -----------------------------
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The power of the incorporator as such shall terminate upon the
filing of this Certificate of Incorporation.
SIXTH: The Names and mailing addresses of the persons who are to
serve as directors until the first annual meeting of stockholders or until
their successors are elected and qualified are:
Name Mailing Address
------------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SEVENTH: The Board of Directors shall have the power to adopt,
amend or repeal the bylaws of the Corporation.
EIGHTH: Election of directors need not be by written ballot
unless the bylaws of the Corporation so provide.
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 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.
IN WITNESS WHEREOF, I have hereunto signed my name this 16th
day of January, 1998.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
CROSS-REFERENCE SHEET
Article of Certificate Section of the General Corporation Law of the
of Incorporation State of Delaware ("GCL")
-------------------------- ---------------------------------------------
First(1) 102(a)(1)
Second(1) 102(a)(2); see also 131
Third(1) 102(a)(3)
Fourth(1) 102(a)(4); see also 151(a)
Fifth(1) 102(a)(5) and 102(a)(6)
Sixth(1) 102(a)(6)
Seventh(1) 109(a)
Eighth(2) 211(e)
Ninth
Section (1) 102(b)(7)
Section (2) 145
Section (3) 145(g)
Section (4) 145(f)
Section (5) See 102(b)(1)
Tenth 241 and 242
----------
(1) Denotes matters that are required to be included in the certificate of
incorporation by the GCL.
(2) Denotes articles of the certificate of incorporation which alter the
position that would otherwise prevail under the GCL.
EXHIBIT B
Preferred Stock
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF 13% SENIOR EXCHANGEABLE
PREFERRED STOCK DUE 2010
of
MERCURY ACQUISITION CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇., Secretary, of Mercury Acquisition Corporation, a Delaware
corporation (hereinafter called the "Corporation"), pursuant to the provisions
of Sections 103 and 151 of the General Corporation Law of the State of
Delaware, do hereby make this Certificate of Designations and do hereby state
and certify that pursuant to the authority expressly vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the Board of
Directors duly adopted the following resolution:
RESOLVED, that, pursuant to Article Fourth of the Certificate of
Incorporation (which authorizes 15,000,000 shares of preferred stock, $0.01
par value ("Preferred Stock"), of which no shares of Preferred Stock are
currently issued and outstanding), the Board of Directors hereby fixes the
powers, designations, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions, of
a series of Preferred Stock.
RESOLVED, that each share of such series of Preferred Stock
shall rank equally in all respects and shall be subject to the following
provisions:
(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 (the "Senior 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, par value $0.01 per share ("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 Inc. 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 paragraph (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 Paragraph 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 executed
in May, 1998 among Thermadyne ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇ Merchant Banking Partners ▇▇-▇, ▇.▇., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇ 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:
Year 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.
(c) In the case of any redemption pursuant to Sections 5(a),
(b) or (d) hereof, notice having been mailed as provided in Section 6(b)
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.
(d) 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.
(e) In the case of a redemption pursuant to Section 5(c)
hereof, notice having been mailed as provided in Section 6(d) 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 Annex 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 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(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 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.
IN WITNESS WHEREOF, Mercury Acquisition Corporation has caused
this Certificate of Designations to be signed and attested by the undersigned
this __th day of _____, 1998.
Mercury Acquisition Corporation
By
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
ATTEST:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Secretary
ANNEX A
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SUMMARY OF TERMS
OF INDENTURE FOR
13% SUBORDINATED EXCHANGE DEBENTURES
Parties: Mercury Acquisition 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, quarterly 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
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.
EXHIBIT C
Form of Warrant
MERCURY ACQUISITION CORPORATION
Class A Warrant for the Purchase of Shares of
Common Stock of Mercury Acquisition Corporation
-----------------------------------------------
No. ____ Warrant to Purchase
____ Shares
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, VOTING AND
OTHER MATTERS AS SET FORTH IN THE INVESTORS' AGREEMENT (AS HEREIN
DEFINED), COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM THE
COMPANY OR ANY SUCCESSOR THERETO.
FOR VALUE RECEIVED, MERCURY ACQUISITION CORPORATION, a Delaware
corporation (the "Company"), hereby certifies that [HOLDER], its successor or
permitted assigns (the "Holder"), is entitled, subject to the provisions of
this Warrant, to purchase from the Company, at the times specified herein,
_____ fully paid and non-assessable shares of common stock of the Company, par
value $ 0.01 per share (the "Warrant Shares"), at a purchase price per share
equal to the Exercise Price (as hereinafter defined). The number of Warrant
Shares to be received upon the exercise of this Warrant and the price to be
paid for a Warrant Share are subject to adjustment from time to time as
hereinafter set forth.
(a) DEFINITIONS.
(1) The following terms, as used herein, have the following
meanings:
"Affiliate" shall have the meaning given to such term in Rule
12b-2 promulgated under the Securities and Exchange Act of 1934, as amended.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized by law to
close.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company or other capital stock of the Company that is not
preferred as to liquidation or dividends.
"Duly Endorsed" means duly endorsed in blank by the Person or
Persons in whose name a stock certificate is registered or accompanied by a
duly executed stock assignment separate from the certificate with the
signature(s) thereon guaranteed by a commercial bank or trust company or a
member of a national securities exchange or of the National Association of
Securities Dealers, Inc.
"Exercise Price" means $0.01 per Warrant Share, such Exercise
Price to be adjusted from time to time as provided herein.
"Expiration Date" means May 15, 2010 at 5:00 p.m. New York City
time.
"Fair Market Value" means, with respect to one share of Common
Stock on any date, the Current Market Price Per Common Share for purposes of
paragraph (h)(6) hereof.
"Investors Agreement" means the Investors Agreement dated as of
the date hereof among Thermadyne Holdings Corporation, DLJ Merchant Banking
Partners II, L.P., DLJ Merchant Banking Partners ▇▇-▇, ▇.▇., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇ Diversified Partners, L.P., DLJ Diversified Partners-A,
L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJ
Funding II, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, ▇.▇.,
▇▇▇ ▇▇▇ ▇▇, ▇.▇., ▇▇▇ First ESC, L.P., and the stockholders listed on the
signature pages thereto.
"Person" means an individual, partnership, corporation, limited
liability company, trust, joint stock company, association, joint venture, or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Principal Holders" means, on any date, the Holders of at least
25% of the Warrants.
"transfer" shall have the meaning assigned to such term in the
Investors' Agreement.
"Warrants" means the Warrants issued to the subscribers under
the Subscription Agreement dated as of the date hereof among the Company and
the subscribers listed on the signature pages thereof.
(2) Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Investors' Agreement.
(b) EXERCISE OF WARRANT.
(1) The Holder is entitled to exercise this Warrant in
whole or in part at any time, or from time to time, until the
Expiration Date or, if such day is not a Business Day, then
on the next succeeding day that shall be a Business Day. To
exercise this Warrant, the Holder shall execute and deliver
to the Company a Warrant Exercise Notice substantially in the
form annexed hereto. No earlier than ten days after delivery
of the Warrant Exercise Notice, the Holder shall deliver to
the Company this Warrant Certificate, including the Warrant
Exercise Subscription Form forming a part hereof duly
executed by the Holder, together with payment of the
applicable Exercise Price, provided however, that in
connection with a public offering of the Common Stock, a
Holder may deliver the Warrant Exercise Notice, the Warrant
Exercise Subscription Form and this Warrant Certificate to
the Company simultaneously. Upon such delivery and payment,
the Holder shall be deemed to be the holder of record of the
Warrant Shares subject to such exercise, notwithstanding
that the stock transfer books of the Company shall then be
closed or that certificates representing such Warrant Shares
shall not then be actually delivered to the Holder.
Notwithstanding anything herein to the contrary, in lieu of
payment in cash of the applicable Exercise Price, the Holder
may elect (i) to receive upon exercise of this Warrant, the
number of Warrant Shares reduced by a number of shares of
Common Stock having the aggregate Fair Market Value equal to
the aggregate Exercise Price for the Warrant Shares, (ii) to
deliver as payment, in whole or in part of the aggregate
Exercise Price, shares of Common Stock having the aggregate
Fair Market Value equal to the applicable non-cash portion
of the aggregate Exercise Price for the Warrant Shares or
(iii) to deliver as payment, in whole or in part of the
aggregate Exercise Price, such number of Warrants which, if
exercised, would result in a number of shares of Common
Stock having an aggregate Fair Market Value equal to the
applicable non-cash portion of the aggregate Exercise Price
for the Warrant Shares. Notwithstanding anything to the
contrary in this paragraph (b)(1), if the aggregate Fair
Market Value of the Common Stock applied or delivered
pursuant to (i), (ii) or (iii) above exceeds the aggregate
Exercise Price, in no event shall the Holder be entitled to
receive any amounts from the Company.
(2) The Exercise Price may be paid in cash or by
certified or official bank check or bank cashier's check
payable to the order of the Company or by any combination of
such cash or check. The Company shall pay any and all
documentary, stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of the Warrant
Shares.
(3) If the Holder exercises this Warrant in part, this
Warrant Certificate shall be surrendered by the Holder to the
Company and a new Warrant Certificate of the same tenor and
for the unexercised number of Warrant Shares shall be
executed by the Company. The Company shall register the new
Warrant Certificate in the name of the Holder or in such
name or names of its transferee pursuant to paragraph (f)
hereof as may be directed in writing by the Holder and
deliver the new Warrant Certificate to the Person or Persons
entitled to receive the same.
(4) Upon surrender of this Warrant Certificate in
conformity with the foregoing provisions, the Company shall
transfer to the Holder of this Warrant Certificate
appropriate evidence of ownership of the shares of Common
Stock or other securities or property (including any money)
to which the Holder is entitled, registered or otherwise
placed in, or payable to the order of, the name or names of
the Holder or such transferee as may be directed in writing
by the Holder, and shall deliver such evidence of ownership
and any other securities or property (including any money)
to the Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a
share as provided in paragraph (e) below.
(c) RESTRICTIVE LEGEND. Certificates representing shares of
Common Stock issued pursuant to this Warrant shall bear a legend substantially
in the form of the legend set forth on the first page of this Warrant
Certificate to the extent that and for so long as such legend is required
pursuant to the Investors' Agreement.
(d) RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of its authorized but unissued shares of Common Stock
or other securities of the Company from time to time issuable upon exercise of
this Warrant as will be sufficient to permit the exercise in full of this
Warrant. All such shares shall be duly authorized and, when issued upon such
exercise, shall be validly issued, fully paid and non-assessable, free and
clear of all liens, security interests, charges and other encumbrances or
restrictions on sale and free and clear of all preemptive rights, except to the
extent set forth in the Investors' Agreement.
(e) FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant and in lieu of delivery of any such fractional share upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the Current Market Price Per Common Share (as defined in
paragraph (h)(6)) at the date of such exercise.
The Company further agrees that it will not change the par
value of the Common Stock from par value $0.01 per share to any higher par
value which exceeds the Exercise Price then in effect, and will reduce the par
value of the Common Stock upon any event described in paragraph (h) that (i)
provides for an increase in the number of shares of Common Stock subject to
purchase upon exercise of this Warrant, in inverse proportion to and effective
at the same time as such number of shares is increased, but only to the extent
that such increase in the number of shares, together with all other such
increases after the date hereof, causes the aggregate Exercise Price of all
Warrants (without giving effect to any exercise thereof) to be greater than
$3,534.28 or (ii) would, but for this provision, reduce the Exercise Price
below the par value of the Common Stock.
(f) EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.
(1) This Warrant and the Warrant Shares are subject to
the provisions of the Investors' Agreement, including the
restrictions on transfer. Each taker and holder of this
Warrant Certificate by taking or holding the same, consents
and agrees that the registered holder hereof may be treated
by the Company and all other persons dealing with this
Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights
represented hereby. The Holder, by its acceptance of this
Warrant, will be subject to the provisions of, and will have
the benefits of, the Investors' Agreement to the extent set
forth therein, including the transfer restrictions and the
registration rights included therein.
(2) Subject to compliance with the transfer
restrictions set forth in the Investors' Agreement, upon
surrender of this Warrant to the Company, together with
the attached Warrant Assignment Form duly executed, the
Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee or assignees named in
such instrument of assignment and, if the Holder's entire
interest is not being assigned, in the name of the Holder
and this Warrant shall promptly be canceled.
(g) LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the
Company of evidence satisfactory to it (in the exercise of its reasonable
discretion) of the loss, theft, destruction or mutilation of this Warrant
Certificate, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant Certificate, if mutilated, the Company shall execute and deliver a
new Warrant Certificate of like tenor and date.
(h) ANTI-DILUTION PROVISIONS. The Exercise Price of this
Warrant and the number of shares of Common Stock for which this Warrant may
be exercised shall be subject to adjustment from time to time upon the
occurrence of certain events as provided in this paragraph (h); provided
that notwithstanding anything to the contrary contained herein, the
Exercise Price shall not be less than the par value of the Common Stock, as
such par value may be reduced from time to time in accordance with
paragraph (e).
(1) In case the Company shall at any time after the
date hereof (i) declare a dividend or make a distribution on
Common Stock payable in Common Stock, (ii) subdivide or
split the outstanding Common Stock, (iii) combine or
reclassify the outstanding Common Stock into a smaller
number of shares, or (iv) issue any shares of its capital
stock in a reclassification of Common Stock (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation),
the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date
of such subdivision, split, combination or reclassification
shall be proportionately adjusted so that, giving effect to
paragraph (h)(9), the exercise of this Warrant after such
time shall entitle the holder to receive the aggregate
number of shares of Common Stock or other securities of the
Company (or shares of any security into which such shares of
Common Stock have been reclassified pursuant to clause (iii)
or (iv) above) which, if this Warrant had been exercised
immediately prior to such time, such holder would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, split, combination
or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(2) In case the Company shall issue or sell any Common
Stock (other than Common Stock issued (I) upon exercise of
the Warrants, (II) pursuant to any Common Stock related
employee compensation plan of the Company approved by the
Company's Board of Directors, or (II) upon exercise or
conversion of any security the issuance of which caused an
adjustment under paragraphs (h)(3) or (h)(4) hereof), the
Exercise Price to be in effect after such issuance or sale
shall be determined by multiplying the Exercise Price in
effect immediately prior to such issuance or sale by a
fraction, the numerator of which shall be the sum of (x) the
number of shares of Common Stock outstanding immediately
prior to the time of such issuance or sale multiplied by the
Current Market Price Per Common Share immediately prior to
such issuance or sale and (y) the aggregate consideration,
if any, to be received by the Company upon such issuance or
sale, and the denominator of which shall be the product of
the aggregate number of shares of Common Stock outstanding
immediately after such issuance or sale and the Current
Market Price Per Common Share immediately prior to such
issuance or sale but in no event will such fraction exceed
1. In case any portion of the consideration to be received
by the Company shall be in a form other than cash, the fair
market value of such noncash consideration shall be utilized
in the foregoing computation. Such fair market value shall be
determined by the Board of Directors of the Company; provided
that if the Principal Holders shall object to any such
determination, the Board of Directors shall retain an
independent appraiser reasonably satisfactory to the
Principal Holders to determine such fair market value. The
Holder shall be notified promptly of any consideration other
than cash to be received by the Company and furnished with a
description of the consideration and the fair market value
thereof, as determined by the Board of Directors.
(3) In case the Company shall fix a record date for the
issuance of rights, options or warrants to the holders of its
Common Stock or other securities entitling such holders to
subscribe for or purchase for a period expiring within 60
days of such record date shares of Common Stock (or
securities convertible into shares of Common Stock) at a
price per share of Common Stock (or having a conversion
price per share of Common Stock, if a security convertible
into shares of Common Stock) less than the Current Market
Price Per Common Share on such record date, the maximum
number of shares of Common Stock issuable upon exercise of
such rights, options or warrants (or conversion of such
convertible securities) shall be deemed to have been issued
and outstanding as of such record date and the Exercise
Price shall be adjusted pursuant to paragraph (h)(2) hereof,
as though such maximum number of shares of Common Stock had
been so issued for an aggregate consideration payable by the
holders of such rights, options, warrants or convertible
securities prior to their receipt of such shares of Common
Stock. In case any portion of such consideration shall be in
a form other than cash, the fair market value of such
noncash consideration shall be determined as set forth in
paragraph (h)(2) hereof. Such adjustment shall be made
successively whenever such record date is fixed; and in the
event that such rights, options or warrants are not so
issued or expire unexercised, or in the event of a change in
the number of shares of Common Stock to which the holders of
such rights, options or warrants are entitled (other than
pursuant to adjustment provisions therein which are no more
favorable in their entirety than those contained in this
paragraph (h)), the Exercise Price shall again be adjusted
to be the Exercise Price which would then be in effect if
such record date had not been fixed, in the former event, or
the Exercise Price which would then be in effect if such
holder had initially been entitled to such changed number of
shares of Common Stock, in the latter event.
(4) In case the Company shall sell or issue rights,
options (other than options issued pursuant to a plan
described in clause II of paragraph (h)(2)) or warrants
entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible into shares of
Common Stock) or shall issue convertible securities, and the
price per share of Common Stock of such rights, options,
warrants or convertible securities (including, in the case
of rights, options or warrants, the price at which they may
be exercised) is less than the Current Market Price Per
Common Share, the maximum number of shares of Common Stock
issuable upon exercise of such rights, options or warrants
or upon conversion of such convertible securities shall be
deemed to have been issued and outstanding as of the date of
such sale or issuance, and the Exercise Price shall be
adjusted pursuant to paragraph (h)(2) hereof as though such
maximum number of shares of Common Stock had been so issued
for an aggregate consideration equal to the aggregate
consideration paid for such rights, options, warrants or
convertible securities and the aggregate consideration
payable by the holders of such rights, options, warrants or
convertible securities prior to their receipt of such shares
of Common Stock. In case any portion of such consideration
shall be in a form other than cash, the fair market value of
such noncash consideration shall be determined as set forth
in paragraph (h)(2) hereof. Such adjustment shall be made
successively whenever such rights, options, warrants or
convertible securities are issued; and in the event that such
rights, options or warrants expire unexercised, or in the
event of a change in the number of shares of Common Stock to
which the holders of such rights, options, warrants or
convertible securities are entitled (other than pursuant to
adjustment provisions therein which are no more favorable in
their entirety than those contained in this paragraph (h)),
the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such rights,
options, warrants or convertible securities had not been
issued, in the former event, or the Exercise Price which
would then be in effect if such holders had initially been
entitled to such changed number of shares of Common Stock,
in the latter event. No adjustment of the Exercise Price
shall be made pursuant to this paragraph (h)(4) to the
extent that the Exercise Price shall have been adjusted
pursuant to paragraph (h)(3) upon the setting of any record
date relating to such rights, options, warrants or
convertible securities and such adjustment fully reflects
the number of shares of Common Stock to which the holders of
such rights, options, warrants or convertible securities are
entitled and the price payable therefor.
(5) In case the Company shall fix a record date for the
making of a distribution to holders of Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash,
assets or other property (other than dividends payable in
Common Stock or rights, options or warrants referred to in,
and for which an adjustment is made pursuant to, paragraph
(h)(3) hereof), the Exercise Price to be in effect after
such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
Current Market Price Per Common Share on such record date,
less the fair market value (determined as set forth in
paragraph (h)(2) hereof) of the portion of the assets, cash,
other property or evidence of indebtedness so to be
distributed which is applicable to one share of Common
Stock, and the denominator of which shall be such Current
Market Price Per Common Share. Such adjustments shall be
made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the
Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if such record date had
not been fixed.
(6) For the purpose of any computation under paragraph
(e) or paragraph (h)(2), (3), (4) or (5) hereof, on any
determination date, the Current Market Price Per Common
Share shall be deemed to be the average (weighted by daily
trading volume) of the Daily Prices (as defined below) per
share of the Common Stock for the 20 consecutive trading days
ending three days prior to such date. "Daily Price" means
(1) if the shares of Common Stock then are listed and traded
on the New York Stock Exchange, Inc. ("NYSE"), the closing
price on such day as reported on the NYSE Composite
Transactions Tape; (2) if the shares of Common Stock then
are not listed and traded on the NYSE, the closing price on
such day as reported by the principal national securities
exchange on which the shares are listed and traded; (3) if
the shares of Common Stock then are not listed and traded on
any such securities exchange, the last reported sale price
on such day on the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ"); (4) if the shares of Common Stock then
are not listed and traded on any such securities exchange
and not traded on the NASDAQ National Market, the average of
the highest reported bid and lowest reported asked price on
such day as reported by NASDAQ; or (5) if such shares are
not listed and traded on any such securities exchange, not
traded on the NASDAQ National Market and bid and asked
prices are not reported by NASDAQ, then the average of the
closing bid and asked prices, as reported by The Wall Street
Journal for the over-the-counter market. If on any
determination date the shares of Common Stock are not quoted
by any such organization, the Current Market Price Per
Common Share shall be the fair market value of such shares
on such determination date as determined by the Board of
Directors, without regard to considerations of the lack of
liquidity, applicable regulatory restrictions or any of the
transfer restrictions or other obligations imposed on such
shares set forth in the Investors' Agreement. If the
Principal Holders shall object to any determination by the
Board of Directors of the Current Market Price Per Common
Share, the Current Market Price Per Common Share shall be
the fair market value per share of the applicable class of
Common Stock as determined by an independent appraiser
retained by the Company at its expense and reasonably
acceptable to the Principal Holders. For purposes of any
computation under this paragraph (h), the number of shares
of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the
Company.
(7) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least one percent in such price; provided
that any adjustments which by reason of this paragraph
(h)(7) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this paragraph (h) shall be made to the
nearest one tenth of a cent or to the nearest hundredth of a
share, as the case may be.
(8) In the event that, at any time as a result of the
provisions of this paragraph (h), the holder of this Warrant
upon subsequent exercise shall become entitled to receive
any shares of capital stock or other securities of the
Company other than Common Stock, the number of such other
shares so receivable upon exercise of this Warrant shall
thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to
the provisions contained herein.
(9) Upon each adjustment of the Exercise Price as a
result of the calculations made in paragraphs (h)(1), (2),
(3), (4) or (5) hereof, the number of shares for which this
Warrant is exercisable immediately prior to the making of
such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of
shares of Common Stock obtained by (i) multiplying the
number of shares covered by this Warrant immediately prior
to this adjustment of the number of shares by the Exercise
Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(10) The Company shall notify all Holders of the
fixing a record date for the purpose of payment of a cash
dividend to holders of Common Stock as soon as reasonably
practicable, but in no event less than 20 days prior to any
such record date.
(11) Not less than 10 nor more than 30 days prior to
the record date or effective date, as the case may be, of
any action which requires or might require an adjustment or
readjustment pursuant to this paragraph (h), the Company
shall forthwith file in the custody of this Secretary or an
Assistant Secretary at its principal executive office and
with its stock transfer agent or its warrant agent, if any,
an officers' certificate showing the adjusted Exercise Price
determined as herein provided, setting forth in reasonable
detail the facts requiring such adjustment and the manner of
computing such adjustment. Each such officers' certificate
shall be signed by the chairman, president or chief
financial officer of the Company and by the secretary or any
assistant secretary of the Company. Each such officers'
certificate shall be made available at all reasonable times
for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to paragraph (f) and the
Company shall, forthwith after each such adjustment, mail a
copy, by first-class mail, of such certificate to the Holder.
(12) The Holder shall, at its option, be entitled to
receive, in lieu of the adjustment pursuant to paragraph
(h)(5) otherwise required thereof, on the date of exercise
of the Warrants, the evidences of indebtedness, other
securities, cash, property or other assets which such Holder
would have been entitled to receive if it had exercised its
Warrants for shares of Common Stock immediately prior to the
record date with respect to such distribution. The Holder
may exercise its option under this paragraph (h)(12) by
delivering to the Company a written notice of such exercise
within seven days of its receipt of the certificate of
adjustment required pursuant to paragraph (h)(11) to be
delivered by the Company in connection with such
distribution.
(i) CONSOLIDATION, MERGER, OR SALE OF ASSETS. In case of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) or any sale or transfer of
all or substantially all of the assets of the Company or of the Person formed
by such consolidation or resulting from such merger or which acquires such
assets, as the case may be, the Holder shall have the right thereafter to
exercise this Warrant for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock for which this Warrant may have
been exercised immediately prior to such consolidation, merger, sale or
transfer, assuming (i) such holder of Common Stock is not a Person with which
the Company consolidated or into which the Company merged or which merged into
the Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) in
the case of a consolidation merger, sale or transfer which includes an
election as to the consideration to be received by the holders, such holder
of Common Stock failed to exercise its rights of election, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock held
immediately prior to such consolidation, merger, sale or transfer by other than
a constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("non-electing share"), then
for the purpose of this paragraph (i) the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, sale or
transfer by each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares).
Adjustments for events subsequent to the effective date of such a
consolidation, merger and sale of assets shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Warrant. In any such
event, effective provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving corporation, in any contract of
sale, conveyance, lease or transfer, or otherwise so that the provisions set
forth herein for the protection of the rights of the Holder shall thereafter
continue to be applicable; and any such resulting or surviving corporation
shall expressly assume the obligation to deliver, upon exercise, such shares
of stock, other securities, cash and property. The provisions of this
paragraph (i) shall similarly apply to successive consolidations, mergers,
sales, leases or transfers. Notwithstanding the foregoing provisions of this
paragraph (i), the treatment of this Warrant in connection with the merger of
the Company with and into Thermadyne Holdings Corporation shall be governed by
paragraph (n).
(j) NOTICES. Any notice, demand or delivery authorized by this
Warrant Certificate shall be in writing and shall be given to the Holder or the
Company as the case may be, at its address (or telecopier number) set forth
below, or such other address (or telecopier number) as shall have been
furnished to the party giving or making such notice, demand or delivery:
If to the Company: Mercury Acquisition Corporation
c/o DLJ Merchant Banking Partners II, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Holder: [Holder]
[Address]
[Address]
Telecopy:
Attention:
Each such notice, demand or delivery shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified herein and the intended recipient confirms the receipt of such
telecopy or (ii) if given by any other means, when received at the address
specified herein.
(k) RIGHTS OF THE HOLDER. Prior to the exercise of any Warrant,
the Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote,
to receive dividends or other distributions or to receive any notice of
meetings of shareholders or any notice of any proceedings of the Company
except as may be specifically provided for herein.
(l) GOVERNING LAW. THIS WARRANT CERTIFICATE AND ALL RIGHTS
ARISING HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, AND THE PERFORMANCE THEREOF SHALL BE
GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS.
(m) AMENDMENTS; WAIVERS. Any provision of this Warrant
Certificate may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Holder and the
Company, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
(n) CONVERSION UPON MERGER. Upon the consummation of the
merger of the Company with and into Thermadyne Holdings Corporation on the
date hereof pursuant to the Plan and Agreement of Merger dated as of January
20, 1998 between the Company and Thermadyne Holdings Corporation, as amended,
this Warrant shall automatically and without further action on the part of the
Holder constitute a Warrant to acquire shares of common stock of Thermadyne
Holdings Corporation on the terms and conditions as are set forth herein.
IN WITNESS WHEREOF, the Company has duly caused this
Warrant Certificate to be signed by its duly authorized officer and to be
dated as of ____ __ , 1998.
MERCURY ACQUISITION
CORPORATION
By
-----------------------------------
Name:
Title:
Acknowledged and Agreed:
[HOLDER]
By
--------------------------
Title:
WARRANT EXERCISE NOTICE
(To be delivered prior to exercise of the Warrant by execution of
the Warrant Exercise Subscription Form)
To: Mercury Acquisition Corporation
The undersigned hereby notifies you of its intention to
exercise the Warrant to purchase shares of Common Stock, par value $0.01 per
share, of Mercury Acquisition Corporation.
The undersigned intends to exercise the Warrant to purchase
__________ shares of Common Stock (the "Shares") at $____ per Share (the
Exercise Price currently in effect pursuant to the Warrant). The undersigned
intends to pay the aggregate Exercise Price for the Shares in cash, certified
or official bank or bank cashier's check (or a combination of cash and check)
as indicated below.
-OR-
The undersigned intends to exercise the Warrant to purchase
__________ shares of Common Stock (the "Shares") and wishes, in lieu of paying
the Exercise Price of $____ per share currently in effect pursuant to the
Warrant, to receive that number of shares reduced by a number of shares of
Common Stock having an aggregate Fair Market Value (as defined in the Warrant)
equal to the aggregate Exercise Price for the Shares.
-OR-
The undersigned intends to exercise the Warrant to purchase
__________ shares of Common Stock (the "Shares") at the Exercise Price of
$____ per share currently in effect pursuant to the Warrant, and intends to
pay $_____ of the aggregate Exercise Price for the Shares in cash, certified
or official bank or bank cashier's check (or a combination of cash and check)
as indicated below, and to deliver as payment of $____ of the aggregate
Exercise Price that number of shares of Common Stock having an aggregate Fair
Market Value (as defined in the Warrant) equal to such non-cash portionof the
aggregate Exercise Price for the Shares.
-OR-
The undersigned intends to exercise the Warrant to purchase
__________ shares of Common Stock (the "Shares") at the Exercise Price of
$____ per share currently in effect pursuant to the Warrant, and intends to
pay $_____ of the aggregate Exercise Price for the Shares in cash, certified
or official bank or bank cashier's check (or a combination of cash and check)
as indicated below, and to deliver as payment of $____ of the aggregate
Exercise Price that number of Warrants which, if exercised, would result in a
number of shares of Common Stock having an aggregate Fair Market Value (as
defined in the Warrant) equal to such non-cash portionof the aggregate
Exercise Price for the Shares.
Date:
------------ ---, ----.
--------------------------------
(Signature of Owner)
--------------------------------
(Street Address)
--------------------------------
(City) (State) (Zip Code)
Payment: $___________ cash
$___________ check
____________ shares of Common Stock having a Fair
Market Value of $___________
_____________ Warrants exercisable for shares of Common
Stock having a Fair Market Value of $__________
WARRANT EXERCISE NOTICE
(To be delivered prior to exercise of the Warrant by execution of
the Warrant Exercise Subscription Form)
To: Mercury Acquisition Corporation
The undersigned irrevocably exercises the Warrant for the
purchase of ___________ shares of Common Stock (the "Shares"), par value $0.01
per share, of Mercury Acquisition Corporation (the "Company") at $_____ per
Share (the Exercise Price currently in effect pursuant to the Warrant) and
herewith makes payment of $___________ (such payment being made in cash or by
certified or official bank or bank cashier's check payable to the order of the
Company or by any permitted combination of such cash or check), all on the
terms and conditions specified in the within Warrant Certificate, surrenders
this Warrant Certificate and all right, title and interest therein to the
Company and directs that the Shares deliverable upon the exercise of this
Warrant be registered or placed in the name and at the address specified below
and delivered thereto.
-OR-
The undersigned irrevocably exercises the Warrant for the
purchase of ___________ shares of Common Stock (the "Shares"), par value $0.01
per share, of Mercury Acquisition Corporation (the "Company") at $_____ per
Share (the Exercise Price currently in effect pursuant to the Warrant)
(provided that in lieu of payment of $_________, the undersigned will receive
a number of Shares reduced by a number of shares of Common Stock having an
aggregate Fair Market Value (as defined in the Warrant) equal to the aggregate
Exercise Price for the Shares), all on the terms and conditions specified in
the within Warrant Certificate, surrenders this Warrant Certificate and all
right, title and interest therein to the Company and directs that the Shares
deliverable upon the exercise of this Warrant be registered or placed in the
name and at the address specified below and delivered thereto.
-OR-
The undersigned irrevocably exercises the Warrant for the
purchase __________ shares of Common Stock (the "Shares") at $_______ per Share
(the Exercise Price currently in effect pursuant to the Warrant), and herewith
makes payment of $_____ of the aggregate Exercise Price for the Shares in
cash, certified or official bank or bank cashier's check (or a combination of
cash and check), and herewith delivers as payment of $____ of the aggregate
Exercise Price that number of shares of Common Stock having an aggregate Fair
Market Value (as defined in the Warrant) equal to such non-cash portionof the
aggregate Exercise Price for the Shares, all on the terms and conditions
specified in the within Warrant Certificate, surrenders this Warrant
Certificate and all right, title and interest therein to the Company and
directs that the Shares deliverable upon the exercise of this Warrant be
registered or placed in the name and at the address specified below and
delivered thereto.
-OR-
The undersigned irrevocably exercises the Warrant for the
purchase of __________ shares of Common Stock, par value $0.01 per share, of
Mercury Acquisition Corporation (the "Company") at $____ per share (the
Exercise Price currently in effect pursuant to the Warrant), and herewith
makes payment of $_____ of the aggregate Exercise Price for the Shares in
cash, certified or official bank or bank cashier's check (or a combination of
cash and check), and herewith delivers as payment of $____ of the aggregate
Exercise Price that number of Warrants which, if exercised, would result in a
number of shares of Common Stock having an aggregate Fair Market Value (as
defined in the Warrant) equal to such non-cash portionof the aggregate
Exercise Price for the Shares, all on the terms and conditions specified in the
within Warrant Certificate, surrenders this Warrant Certificate and all right,
title and interest therein to the Company and directs that the Shares
deliverable upon the exercise of this Warrant be registered or placed in the
name and at the address specified below and delivered thereto.
Date:
------------ ---, ----.
--------------------------------
(Signature of Owner)
--------------------------------
(Street Address)
--------------------------------
(City) (State) (Zip Code)
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised portion of the Warrant evidenced by the
within Warrant Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
WARRANT ASSIGNMENT FORM
-----------------------
Dated
------------
FOR VALUE RECEIVED, ______________________________
hereby sells, assigns and transfers unto,
_______________________________________ (the "Assignee"),
(please type or print in block letters)
_________________________________________________________
(insert address)
its right to purchase up to shares of Common Stock
represented by this Warrant and does hereby irrevocably
constitute and appoint _______________________ Attorney, to
transfer the same on the books of the Company, with full
power of substitution in the premises.
Signature
-----------------
