Item 1.01
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Entry into a Material Definitive Agreement
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Issuance of Senior Notes; Indenture
On April 19, 2016, Diebold, Incorporated (Diebold) issued $400 million in aggregate principal amount of 8.5% Senior Notes due 2024 (the
Notes) at an issue price of 100% of the principal amount thereof in a private offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 (the Securities Act) and to persons
outside the United States under Regulation S under the Securities Act. The Notes were issued in connection with Diebolds previously announced potential acquisition (the Acquisition) of Wincor Nixdorf Aktiengesellschaft, a German
public stock corporation (Wincor Nixdorf).
The Notes were issued pursuant to an indenture, dated as of April 19, 2016, among Diebold, as
issuer, the subsidiaries of Diebold named therein as guarantors (the Guarantors) and U.S. Bank National Association, as trustee (the Indenture).
The Notes bear interest at the rate of 8.5% per annum, which accrues from April 19, 2016, and is payable semiannually in arrears on April 15 and
October 15 of each year, commencing on October 15, 2016. The Notes mature on April 15, 2024, unless earlier redeemed or repurchased, and are subject to the terms and conditions set forth in the Indenture.
Diebold may redeem some or all of the Notes at any time on or after April 15, 2019 at the redemption prices and on the terms specified in the Indenture.
Diebold may also redeem up to 35% of the Notes using the proceeds of certain equity offerings completed before April 15, 2019, at a redemption price of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date. In addition, at any time prior to April 15, 2019, Diebold may redeem some or all of the Notes at a price equal to 100% of the principal amount, plus a make-whole premium, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. If the Acquisition has not closed by November 21, 2016, or if an Acquisition Termination Event (as defined herein) occurs, Diebold will be required to redeem the Notes, in whole but not in part, at a redemption price
equal to 100% of the aggregate principal amount of the Notes, plus accrued and unpaid interest on the Notes to, but excluding, the date of redemption. Acquisition Termination Event means (1) the Business Combination Agreement, dated as
of November 23, 2015, between Diebold and Wincor Nixdorf, is terminated prior to the consummation of the Acquisition, (2) the necessary regulatory approvals to Diebolds voluntary public takeover offer for all ordinary shares of Wincor Nixdorf
are not obtained or waived on or prior to November 21, 2016, or (3) Diebolds board of directors determines in its reasonable judgment that the Acquisition will not occur. If Diebold experiences specific kinds of changes in control or it or any
of its restricted subsidiaries sells certain of their assets, then Diebold must offer to repurchase the Notes on the terms set forth in the Indenture.
The Notes and the Note guarantees will be Diebolds and the Guarantors senior unsecured obligations and will: (i) rank senior in right of payment
to all of Diebolds and the Guarantors future subordinated indebtedness; (ii) rank equally in right of payment with all of Diebolds and the Guarantors existing and future senior indebtedness; (iii) be effectively subordinated
to any of Diebolds and the Guarantors existing and future secured debt, including indebtedness under the credit agreement, dated November 23, 2015, among Diebold and certain of its subsidiaries, as borrowers or guarantors, JP Morgan
Chase Bank, N.A., as administrative agent, and the lenders parties thereto from time to time (as amended, supplemented and otherwise modified, the Senior Credit Facility), to the extent of the value of the assets securing such debt; and
(iv) be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of Diebolds subsidiaries that do not guarantee the Notes.
The Notes will be guaranteed on a senior unsecured basis by (i) all of Diebolds existing and future direct
and indirect domestic subsidiaries (other than securitization subsidiaries) that guarantee the Senior Credit Facility and (ii) all of Diebolds existing and future direct and indirect domestic subsidiaries (other than securitization
subsidiaries and immaterial subsidiaries) that guarantee any of Diebolds or any Guarantors indebtedness for borrowed money. Under certain circumstances specified in the Indenture, the Guarantors may be released from their guarantees
without the consent of the holders of the Notes.
The Indenture contains certain covenants that, among other things, limit Diebolds ability, and the
ability of its restricted subsidiaries, to incur additional indebtedness and guarantee indebtedness, pay dividends or make distributions or certain other restricted payments, repurchase or redeem capital stock, prepay, redeem or repurchase certain
debt, issue certain preferred stock or similar equity securities, make loans and investments, sell assets, incur liens, enter into transactions with affiliates, enter into agreements restricting subsidiaries ability to pay dividends, and
consolidate, merge or sell all or substantially all assets.
The Indenture contains events of default customary for agreements of its type (with customary
grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to Diebold or certain of its subsidiaries, all outstanding Notes will become due and
payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare all of the Notes, to
be due and payable immediately.
Registration Rights Agreement
In connection with the issuance of the Notes, Diebold, the Guarantors and J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC, as representatives
for the initial purchasers listed therein, entered into a registration rights agreement relating to the Notes, dated April 19, 2016 (the Registration Rights Agreement). Under the Registration Rights Agreement, Diebold and the Guarantors
agreed, for the benefit of the holders of the Notes, that they will (1) within 150 days after the closing date of the Notes offering, file a registration statement on an appropriate registration form with respect to a registered offer to exchange
the Notes for notes registered under the Securities Act (the Exchange Notes), which shall also be guaranteed by the Guarantors, with terms substantially identical in all material respects to the Notes (except that the Exchange Notes will
not contain terms with respect to transfer restrictions or any increase in annual interest rate) and (2) use their commercially reasonable efforts to cause the registration statement to be declared effective under the Securities Act within 240 days
after the closing date of the Notes offering.
In the event that Diebold and the Guarantors determine that a registered exchange offer is not available or
may not be completed because it would violate any applicable law or applicable interpretations of the staff of the Securities and Exchange Commission (the SEC), or, if for any reason the exchange offer is not for any other reason
completed within 270 days after the closing date of the Notes offering, or, in certain circumstances, any initial purchaser so requests in connection with any offer or sale of Notes, Diebold and the Guarantors will file a shelf registration
statement relating to resales of the Notes as soon as practicable, but not later than 300 days after the closing date of the Notes offering, and use commercially reasonable efforts to cause such shelf registration statement to become effective on or
prior to 60 days after the filing thereof and to keep that shelf registration statement effective until the date that is 12 months after the date such shelf registration statement becomes effective, or such shorter period that will terminate when
all Notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement.
If Diebold does not comply with these obligations, subject to limitations set forth in the Registration Rights
Agreement, Diebold will be required to pay additional interest to holders of Notes in an amount equal to 0.25% per annum on the principal amount of the Notes, for the first 90 days following such default. Thereafter, the amount of
additional interest will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until the default is cured, up to a maximum amount of 1.00% per annum.
The above summaries of the Indenture and the Registration Rights Agreement are qualified in their entirety by reference to the Indenture and the Registration
Rights Agreement relating to the Notes, which are attached hereto as Exhibits 4.1 and 10.1, respectively, and are incorporated herein by reference.