Exhibit
4.1


 




 





SECOND AMENDED AND RESTATED CREDIT AGREEMENT


 


Dated as of
November 22, 2004


 


among


 


THERMADYNE
INDUSTRIES, INC.,


THERMAL DYNAMICS
CORPORATION,


TWECO PRODUCTS,
INC.,


VICTOR EQUIPMENT
COMPANY,


C & G SYSTEMS,
INC.,


STOODY COMPANY,


THERMAL ARC, INC.,


PROTIP CORPORATION
and


THERMADYNE
INTERNATIONAL CORP.,


 


as
Borrowers,


 


THE OTHER CREDIT
PARTIES SIGNATORY HERETO,


 


as
Credit Parties,


 


THE LENDERS
SIGNATORY HERETO


FROM TIME TO TIME,


 


as
Lenders,


 


and


 


GENERAL ELECTRIC
CAPITAL CORPORATION,


 


as
Agent and Lender


 


and


 


GECC CAPITAL
MARKETS GROUP, INC.,


 


as
Lead Arranger


 




 
























 


TABLE OF
CONTENTS


 


	
  1.

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Credit Facilities.

  	
   

  
	
   

  	
  1.2

  	
  Letters of Credit.

  	
   

  
	
   

  	
  1.3

  	
  Prepayments.

  	
   

  
	
   

  	
  1.4

  	
  Use of Proceeds.

  	
   

  
	
   

  	
  1.5

  	
  Interest and
  Applicable Margins.

  	
   

  
	
   

  	
  1.6

  	
  Cash Management Systems.

  	
   

  
	
   

  	
  1.7

  	
  Fees.

  	
   

  
	
   

  	
  1.8

  	
  Receipt of Payments.

  	
   

  
	
   

  	
  1.9

  	
  Application and
  Allocation of Payments.

  	
   

  
	
   

  	
  1.10

  	
  Loan Account and
  Accounting.

  	
   

  
	
   

  	
  1.11

  	
  Indemnity.

  	
   

  
	
   

  	
  1.12

  	
  Access.

  	
   

  
	
   

  	
  1.13

  	
  Taxes.

  	
   

  
	
   

  	
  1.14

  	
  Capital Adequacy; Increased Costs;
  Illegality.

  	
   

  
	
   

  	
  1.15

  	
  Single Loan

  	
   

  
	
   

  	
  1.16

  	
  Eligible Accounts.

  	
   

  
	
   

  	
  1.17

  	
  Eligible Inventory.

  	
   

  
	
   

  	
  1.18

  	
  Conversion to Dollars

  	
   

  
	
   

  	
  1.19

  	
  Judgment Currency; Contractual
  Currency.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Conditions to the Loans.

  	
   

  
	
   

  	
  2.2

  	
  Further
  Conditions to Each Loan and to the Release of Funds from the Australian
  Blocked Account and the UK Collection Accounts.

  	
   

  
	
   

  	
  2.3

  	
  Further
  Conditions to Delayed Draw Term Loan

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Corporate
  Existence; Compliance with Law; FEIN.

  	
   

  
	
   

  	
  3.2

  	
  Executive Offices, Collateral
  Locations.

  	
   

  
	
   

  	
  3.3

  	
  Corporate Power, Authorization,
  Enforceable Obligations.

  	
   

  
	
   

  	
  3.4

  	
  Financial
  Statements and Projections.

  	
   

  
	
   

  	
  3.5

  	
  Material Adverse Effect.

  	
   

  
	
   

  	
  3.6

  	
  Ownership of Property;
  Liens.

  	
   

  
	
   

  	
  3.7

  	
  Labor Matters.

  	
   

  
	
   

  	
  3.8

  	
  Ventures,
  Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.

  	
   

  
	
   

  	
  3.9

  	
  Government Regulation.

  	
   

  
	
   

  	
  3.10

  	
  Margin Regulations.

  	
   

  
	
   

  	
  3.11

  	
  Taxes.

  	
   

  



 


i





















 


	
   

  	
  3.12

  	
  ERISA.

  	
   

  
	
   

  	
  3.13

  	
  No Litigation.

  	
   

  
	
   

  	
  3.14

  	
  Brokers.

  	
   

  
	
   

  	
  3.15

  	
  Intellectual Property.

  	
   

  
	
   

  	
  3.16

  	
  Full Disclosure.

  	
   

  
	
   

  	
  3.17

  	
  Environmental Matters.

  	
   

  
	
   

  	
  3.18

  	
  Insurance.

  	
   

  
	
   

  	
  3.19

  	
  Deposit and
  Disbursement Accounts.

  	
   

  
	
   

  	
  3.20

  	
  Government Contracts.

  	
   

  
	
   

  	
  3.21

  	
  Customer and Trade
  Relations.

  	
   

  
	
   

  	
  3.22

  	
  Bonding; Licenses.

  	
   

  
	
   

  	
  3.23

  	
  Solvency.

  	
   

  
	
   

  	
  3.24

  	
  Status of Holdings.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  FINANCIAL
  STATEMENTS AND INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Reports and Notices.

  	
   

  
	
   

  	
  4.2

  	
  Communication with
  Accountants.

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Maintenance
  of Existence and Conduct of Business.

  	
   

  
	
   

  	
  5.2

  	
  Payment of Charges.

  	
   

  
	
   

  	
  5.3

  	
  Books and Records.

  	
   

  
	
   

  	
  5.4

  	
  Insurance;
  Damage to or Destruction of Collateral.

  	
   

  
	
   

  	
  5.5

  	
  Compliance with Laws.

  	
   

  
	
   

  	
  5.6

  	
  Supplemental Disclosure.

  	
   

  
	
   

  	
  5.7

  	
  Intellectual Property.

  	
   

  
	
   

  	
  5.8

  	
  Environmental Matters.

  	
   

  
	
   

  	
  5.9

  	
  Landlords’ Agreements, Mortgagee
  Agreements, Bailee Letters and Real Estate Purchases.

  	
   

  
	
   

  	
  5.10

  	
  Inventory Reports.

  	
   

  
	
   

  	
  5.11

  	
  Further Assurances.

  	
   

  
	
   

  	
  5.12

  	
  Centre of Main Interest

  	
   

  
	
   

  	
  5.13

  	
  Refinancing
  of Second Lien Loan Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Mergers, Subsidiaries, Etc.

  	
   

  
	
   

  	
  6.2

  	
  Investments; Loans and
  Advances.

  	
   

  
	
   

  	
  6.3

  	
  Indebtedness.

  	
   

  
	
   

  	
  6.4

  	
  Employee
  Loans and Affiliate Transactions.

  	
   

  
	
   

  	
  6.5

  	
  Capital Structure and
  Business.

  	
   

  
	
   

  	
  6.6

  	
  Guaranteed Indebtedness.

  	
   

  
	
   

  	
  6.7

  	
  Liens.

  	
   

  
	
   

  	
  6.8

  	
  Sale of Stock and Assets.

  	
   

  
	
   

  	
  6.9

  	
  ERISA.

  	
   

  



 


ii





















 


	
   

  	
  6.10

  	
  Financial Covenants.

  	
   

  
	
   

  	
  6.11

  	
  Hazardous Materials

  	
   

  
	
   

  	
  6.12

  	
  Sale-Leasebacks

  	
   

  
	
   

  	
  6.13

  	
  Cancellation of
  Indebtedness.

  	
   

  
	
   

  	
  6.14

  	
  Restricted Payments.

  	
   

  
	
   

  	
  6.15

  	
  Change of Corporate Name,
  State of Incorporation or Location; Change of Fiscal Year.

  	
   

  
	
   

  	
  6.16

  	
  No Impairment
  of Intercompany Transfers.

  	
   

  
	
   

  	
  6.17

  	
  Real Estate Purchases.

  	
   

  
	
   

  	
  6.18

  	
  Changes Relating
  to High Yield Notes

  	
   

  
	
   

  	
  6.19

  	
  Holdings.

  	
   

  
	
   

  	
  6.20

  	
  German Account

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  TERM

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Termination.

  	
   

  
	
   

  	
  7.2

  	
  Survival
  of Obligations Upon Termination of Financing Arrangements.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  EVENTS OF
  DEFAULT; RIGHTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Events of Default.

  	
   

  
	
   

  	
  8.2

  	
  Remedies.

  	
   

  
	
   

  	
  8.3

  	
  Waivers by Credit Parties.

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  ASSIGNMENT
  AND PARTICIPATIONS; APPOINTMENT OF AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Assignment and
  Participations.

  	
   

  
	
   

  	
  9.2

  	
  Appointment of Agent.

  	
   

  
	
   

  	
  9.3

  	
  Agent’s Reliance, Etc.

  	
   

  
	
   

  	
  9.4

  	
  GE Capital and Affiliates.

  	
   

  
	
   

  	
  9.5

  	
  Lender Credit Decision.

  	
   

  
	
   

  	
  9.6

  	
  Indemnification.

  	
   

  
	
   

  	
  9.7

  	
  Successor Agent.

  	
   

  
	
   

  	
  9.8

  	
  Setoff and Sharing of
  Payments.

  	
   

  
	
   

  	
  9.9

  	
  Advances;
  Payments; Non-Funding Lenders; Information; Actions in Concert.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  SUCCESSORS AND ASSIGNS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Successors and Assigns.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Complete
  Agreement; Modification of Agreement.

  	
   

  
	
   

  	
  11.2

  	
  Amendments and Waivers.

  	
   

  
	
   

  	
  11.3

  	
  Fees and Expenses.

  	
   

  
	
   

  	
  11.4

  	
  No Waiver.

  	
   

  



 


iii





















 


	
   

  	
  11.5

  	
  Remedies.

  	
   

  
	
   

  	
  11.6

  	
  Severability.

  	
   

  
	
   

  	
  11.7

  	
  Conflict of Terms.

  	
   

  
	
   

  	
  11.8

  	
  Confidentiality.

  	
   

  
	
   

  	
  11.9

  	
  GOVERNING LAW.

  	
   

  
	
   

  	
  11.10

  	
  Notices.

  	
   

  
	
   

  	
  11.11

  	
  Section Titles.

  	
   

  
	
   

  	
  11.12

  	
  Counterparts.

  	
   

  
	
   

  	
  11.13

  	
  WAIVER OF JURY TRIAL.

  	
   

  
	
   

  	
  11.14

  	
  Press Releases and
  Related Matters.

  	
   

  
	
   

  	
  11.15

  	
  Reinstatement.

  	
   

  
	
   

  	
  11.16

  	
  Advice of Counsel.

  	
   

  
	
   

  	
  11.17

  	
  No Strict Construction.

  	
   

  
	
   

  	
  11.18

  	
  Limitation
  on Security Interest with respect to Foreign Subsidiaries.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  CROSS-GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Cross-Guaranty.

  	
   

  
	
   

  	
  12.2

  	
  Waivers by Credit Parties.

  	
   

  
	
   

  	
  12.3

  	
  Benefit of Guaranty.

  	
   

  
	
   

  	
  12.4

  	
  Waiver of Subrogation, Etc.

  	
   

  
	
   

  	
  12.5

  	
  Election of Remedies.

  	
   

  
	
   

  	
  12.6

  	
  Limitation.

  	
   

  
	
   

  	
  12.7

  	
  Contribution
  with Respect to Guaranty Obligations.

  	
   

  
	
   

  	
  12.8

  	
  Liability Cumulative.

  	
   

  
	
   

  	
  12.9

  	
  Guarantee Unconditional

  	
   

  
	
   

  	
  12.10

  	
  Foreign Currency
  Obligations

  	
   

  
	
   

  	
  12.11

  	
  Section 956 of the IRC

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  RESTATEMENT OF
  PRIOR CREDIT AGREEMENT

  	
   

  



 


iv





















 


INDEX OF
APPENDICES


 


	
  Annex A (Recitals)

  	
  -

  	
  Definitions

  
	
  Annex B (Section 1.2)

  	
  -

  	
  Letters of Credit

  
	
  Annex C (Section 1.8)

  	
  -

  	
  Cash Management System

  
	
  Annex D (Section
  2.1(a))

  	
  -

  	
  Closing Checklist

  
	
  Annex E (Section
  4.1(a))

  	
  -

  	
  Financial Statements
  and Projections – Reporting

  
	
  Annex F (Section
  4.1(b)

  	
  -

  	
  Collateral Reports

  
	
  Annex G (Section
  6.10)

  	
  -

  	
  Financial Covenants

  
	
  Annex H (Section
  9.9(a))

  	
  -

  	
  Lenders’ Wire Transfer
  Information

  
	
  Annex I (Section
  11.10)

  	
  -

  	
  Notice Addresses

  
	
  Annex
  J (from Annex A - Commitments definition)

  	
  -

  	
  Commitments as of
  Closing Date

  
	
  Annex K (Article XIII)

  	
  -

  	
  Principal Balance of
  Loans on the Closing Date

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)(i)

  	
  -

  	
  Form of Notice of
  Revolving Credit Advance

  
	
  Exhibit 1.1(a)(ii)

  	
  -

  	
  Form of Revolving Note

  
	
  Exhibit 1.1(c)

  	
  -

  	
  Form of Term Note

  
	
  Exhibit 1.1(d)(ii)

  	
  -

  	
  Form of Swing Line Note

  
	
  Exhibit 1.5(e)

  	
  -

  	
  Form of Notice of
  Conversion/Continuation

  
	
  Exhibit 2.2

  	
  -

  	
  Form of Notice of Cash
  Collateral Release

  
	
  Exhibit 4.1(b)

  	
  -

  	
  Form of Borrowing Base
  Certificate

  
	
  Exhibit 9.1(a)

  	
  -

  	
  Form of Assignment
  Agreement

  
	
  Exhibit B-1

  	
  -

  	
  Application for Standby
  Letter of Credit

  
	
  Exhibit B-2

  	
   

  	
  Master Agreement for
  Standby Letters of Credit

  
	
  Exhibit C

  	
  -

  	
  Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Disclosure Schedule 1.1

  	
  -

  	
  Agent’s Representatives

  
	
  Disclosure Schedule 1.4

  	
  -

  	
  Sources and Uses; Funds
  Flow Memorandum

  
	
  Disclosure Schedule 3.1

  	
  -

  	
  Type of Entity; State
  of Organization; FEIN

  
	
  Disclosure Schedule 3.2

  	
  -

  	
  Executive Offices,
  Collateral Locations

  
	
  Disclosure Schedule
  3.4(b)

  	
  -

  	
  Pro Forma

  
	
  Disclosure Schedule
  3.4(c)

  	
  -

  	
  Projections

  
	
  Disclosure Schedule 3.6

  	
  -

  	
  Real Estate and Leases

  
	
  Disclosure Schedule 3.7

  	
  -

  	
  Labor Matters

  
	
  Disclosure Schedule 3.8

  	
  -

  	
  Ventures, Subsidiaries
  and Affiliates; Outstanding Stock

  
	
  Disclosure Schedule
  3.8A

  	
  -

  	
  Corporate Structure
  Chart

  
	
  Disclosure Schedule
  3.11

  	
  -

  	
  Tax Matters

  
	
  Disclosure Schedule
  3.12

  	
  -

  	
  ERISA Plans

  
	
  Disclosure Schedule
  3.14

  	
  -

  	
  Brokers

  
	
  Disclosure Schedule
  3.13

  	
  -

  	
  Litigation

  
	
  Disclosure Schedule
  3.15

  	
  -

  	
  Intellectual Property

  



 


v





















 


	
  Disclosure Schedule
  3.17

  	
  -

  	
  Hazardous Materials

  
	
  Disclosure Schedule
  3.18

  	
  -

  	
  Insurance

  
	
  Disclosure Schedule
  3.19

  	
  -

  	
  Deposit and
  Disbursement Accounts

  
	
  Disclosure Schedule
  3.20

  	
  -

  	
  Government Contracts

  
	
  Disclosure Schedule
  3.22

  	
  -

  	
  Bonds; Licenses

  
	
  Disclosure Schedule 5.1

  	
  -

  	
  Trade Names

  
	
  Disclosure Schedule 6.3

  	
  -

  	
  Indebtedness

  
	
  Disclosure Schedule
  6.4(a)

  	
  -

  	
  Transactions with Affiliates

  
	
  Disclosure Schedule 6.7

  	
  -

  	
  Existing Liens

  



 


vi





















 


This
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated
as of November 22, 2004 among THERMADYNE INDUSTRIES, INC., a Delaware
corporation (“Industries”), THERMAL DYNAMICS CORPORATION, a Delaware
corporation (“Dynamics”), TWECO PRODUCTS, INC., a Delaware corporation (“Tweco”),
VICTOR EQUIPMENT COMPANY, a Delaware corporation (“Victor”), C & G
SYSTEMS, INC., an Illinois corporation (“C & G”), STOODY COMPANY, a
Delaware corporation (“Stoody”), THERMAL ARC, INC., a Delaware
corporation (“Thermal Arc”), PROTIP CORPORATION, a Missouri corporation
(‘ProTip”), THERMADYNE INTERNATIONAL CORP., a Delaware corporation (“International”)
(International, ProTip, Thermal Arc, Stoody, C & G, Victor, Tweco, Dynamics
and Industries are sometimes collectively referred to herein as the “Borrowers”
and individually as a “Borrower”); the other Credit Parties signatory
hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its
individual capacity, “GE Capital”), for itself, as Lender, and as Agent
for Lenders, and the other Lenders signatory hereto from time to time.


 


RECITALS


 


WHEREAS,
on February 23, 2004, Agent and Lenders entered into an Amended and Restated
Credit Agreement (the “Prior Credit Agreement”) with the Borrowers
providing for Revolving Loans of up to $50,000,000, a Term Loan in the
aggregate original principal amount of $20,000,000 and Borrowers have certain
Loans and Letters of Credit outstanding thereunder (collectively with the Prior
Revolving Loan and Prior Term Loan, the “Prior Loans”);


 


WHEREAS,
Borrowers, Agent and Lenders desire to further amend and restate the Prior
Credit Agreement to, among other things, (i) convert the Term Loan under the
Prior Credit Agreement with an outstanding principal balance of $20,000,000
into the Term Loan A hereunder in the principal amount of $9,250,000 and
convert the balance into a portion of the Revolving Loan, (ii) provide for a
Delayed Draw Term Loan in the aggregate principal amount of up to $2,050,000,
(iii) increase the Revolving Loan Commitments from $50,000,000 to $80,000,000,
(iv) increase the Letter of Credit sub-facility from $20,000,000 to
$25,000,000; and (v) add each of the Australian Collateral Party, the Canadian
Collateral Party and the UK Collateral Party as Credit Parties;


 


WHEREAS,
Borrowers desire that the terms governing the Prior Loans be amended and
restated in accordance herewith; and


 


WHEREAS,
Borrowers have advised the Agent that Thermadyne Receivables, Inc., a Delaware
corporation, a Guarantor and Credit Party under the Prior Credit Agreement has
been dissolved;


 


WHEREAS,
capitalized terms used in this Agreement shall have the meanings ascribed to
them in Annex A and, for purposes of this Agreement and the other Loan
Documents, the rules of construction set forth in Annex A shall
govern.  All Annexes, Disclosure
Schedules, Exhibits and other attachments (collectively, “Appendices”)
hereto, or expressly identified to this Agreement, are incorporated herein by
reference, and taken together with this Agreement, shall constitute but a
single agreement.  These Recitals shall
be construed as part of this Agreement.


 


2





















 


NOW,
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:


 


1.                                      AMOUNT AND TERMS OF CREDIT


 


1.1           Credit Facilities.


 


(a)           Revolving Credit Facility.


 


(i)            Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available to Borrowers from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each, a “Revolving
Credit Advance”).  The Pro Rata Share
of the Revolving Loan of any Revolving Lender shall not at any time exceed its
separate Revolving Loan Commitment.  The
obligations of each Revolving Lender hereunder shall be several and not joint.  Until the Commitment Termination Date,
Borrowers may borrow, repay and reborrow under this Section 1.1(a); provided
that the amount of any Revolving Credit Advance to be made at any time shall
not exceed Borrowing Availability at such time; provided, further,
that notwithstanding anything to the contrary contained in this Agreement the
Revolving Loan plus the outstanding principal amount of the Term Loans shall in
no circumstance exceed $75,000,000 until such time as all obligations under the
Second Lien Credit Agreement (and all related documents) have been paid in full
and satisfactory evidence thereof has been provided to Agent.  Borrowing Availability may be reduced by
Reserves imposed by Agent in its reasonable credit judgment.  Each Revolving Credit Advance shall be made
on notice by Borrower Representative on behalf of Borrowers to one of the
representatives of Agent identified in Schedule 1.1 at the address
specified therein.  Any such notice must
be given no later than (1) 12:00 noon (New York time) on the Business Day of
the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or
(2) 12:00 noon (New York time) on the date which is three (3) Business Days
prior to the proposed Revolving Credit Advance, in the case of a LIBOR
Loan.  Each such notice (a “Notice of
Revolving Credit Advance”) must be given in writing (by telecopy or
overnight courier) substantially in the form of Exhibit 1.1(a)(i), and
shall include the information required in such Exhibit and such other
information as may be reasonably required by Agent.  If Borrowers desire to have the
Revolving Credit Advances bear interest by reference to a LIBOR Rate, Borrower
Representative must comply with Section 1.5(e).


 


(ii)           Except as provided in Section 1.12, Borrowers
shall execute and deliver to each Revolving Lender a note to evidence the
Revolving Loan Commitment of that Revolving Lender.  Each note shall be in the principal amount of
the Revolving Loan Commitment of the applicable Revolving Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(ii)  (each a “Revolving
Note” and, collectively, the “Revolving Notes”). Each Revolving Note
shall represent the obligation of Borrowers to pay the amount of the applicable
Revolving Lender’s Revolving Loan Commitment or, if less, such Revolving Lender’s
Pro Rata Share of the aggregate unpaid principal amount of all Revolving Credit
Advances to Borrowers together with interest thereon as prescribed in Section
1.5.  The entire unpaid balance of
the aggregate Revolving Loan and all other non-contingent Obligations shall


 


3





















 


be immediately due and payable in
full in immediately available funds on the Commitment Termination Date.


 


(iii)          Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower Representative, in its discretion
Agent may (but shall have absolutely no obligation to), make Revolving Credit
Advances to Borrowers on behalf of Revolving Lenders in amounts that cause the
outstanding balance of the aggregate Revolving Loan to exceed the Borrowing
Base (less the Swing Line Loan) (any such excess Revolving Credit Advances are
herein referred to collectively as “Overadvances”); provided that
(A) no such event or occurrence shall cause or constitute a waiver of Agent’s,
Swing Line Lender’s or Revolving Lenders’ right to refuse to make any further
Overadvances, Swing Line Advances or Revolving Credit Advances, or incur any
Letter of Credit Obligations, as the case may be, at any time that an
Overadvance exists, and (B) no Overadvance shall result in an Event of Default
based on Borrowers’ failure to comply with Section 1.3(b) for so long as
Agent permits such Overadvance to be outstanding, but solely with respect to
the amount of such Overadvance.  In
addition, Overadvances may be made even if the conditions to lending set forth
in Section 2 have not been met. 
All Overadvances shall constitute Index Rate Loans, shall bear interest
at the Default Rate and shall be payable on the earlier of demand or the
Commitment Termination Date.  Except as
otherwise provided in Section 1.9(b), the authority of Agent to make
Overadvances is limited to an aggregate amount not to exceed $1,000,000 at any
time, shall not cause the aggregate Revolving Loan to exceed the Maximum
Amount, and may be revoked prospectively by a written notice to Agent signed by
Revolving Lenders holding more than 50% of the Revolving Loan Commitments.


 


(b)           Term Loan A. 
On the Closing Date, Borrowers shall repay the Term Loan under and as
defined in the Prior Credit Agreement so that the outstanding principal balance
after giving effect to such payment is $9,250,000 and each Term Lender agrees,
severally and not jointly, to continue such term loan as the term loan
hereunder (the “Term Loan A”). 
The Borrowers agree, jointly and severally, to repay the Term Loan A in
equal quarterly installments of $330,357 on the last day of each Fiscal Quarter
of each year commencing on December 31, 2004 (“Scheduled Installments A”).


 


The final installment
shall in all events equal the entire remaining principal balance of the Term
Loan A.  Notwithstanding the foregoing,
the outstanding principal balance of the Term Loan A shall be due and payable
in full on the Commitment Termination Date. 
Amounts borrowed under this Section 1.1(b) and repaid may not be
reborrowed.


 


(c)           Delayed Draw Term Loan. 
Each Term Lender agrees, severally and not jointly, to lend to Borrowers
in one draw, subject to satisfaction of the conditions set forth in Section
2.2 and Section 2.3 below, its Pro Rata Share of up to $2,050,000 (the
“Delayed Draw Term Loan”); provided, however, that Agent has sole
discretion to determine the principal amount of the Delayed Draw Term Loan up
to a maximum amount of $2,050,000.  The
Term Loan A and the Delayed Draw Term Loan will be
referred to together as the “Term Loans.”  Borrower shall repay the Delayed Draw Term
Loan in equal quarterly installments, based on a seven (7) year amortization
(3.57% of the original principal balance per installment), on the last day of
each Fiscal Quarter (“Scheduled Installments B”) commencing with the
first Fiscal Quarter after the Delayed Draw Term Loan is funded and ending on
the fifth anniversary of the


 


4





















 


Closing Date. The final
installment shall in all events equal the entire remaining principal balance of
the Delayed Draw Term Loan. 
Notwithstanding the foregoing, the outstanding principal balance of the
Delayed Draw Term Loan shall be due and payable in full on the Commitment
Termination Date.  Amounts borrowed under
this Section 1.1(c) and repaid may not be reborrowed.


 


The
Term Loans shall be evidenced by
promissory notes substantially in the form of Exhibit 1.1(c) (as
amended, modified, extended, substituted or replaced from time to time, each a “Term
Note” and, collectively, the “Term Notes”), and Borrowers shall
execute and deliver each Term Note to the applicable Term Lender.  Each Term Note shall represent the obligation
of Borrowers to pay the amount of the applicable Term Lender’s Term Loan
Commitment, together with interest thereon.


 


(d)           Swing Line Facility.


 


(i)            Agent shall notify the Swing Line Lender upon Agent’s
receipt of any Notice of Revolving Credit Advance.  Subject to the terms and conditions hereof,
the Swing Line Lender may, in its discretion, make available from time to time
until the Commitment Termination Date advances (each, a “Swing Line Advance”)
in accordance with any such notice. The provisions of this Section 1.1(d)
shall not relieve Revolving Lenders of their obligations to make Revolving
Credit Advances under Section 1.1(a); provided that if the Swing
Line Lender makes a Swing Line Advance pursuant to any such notice, such Swing
Line Advance shall be in lieu of any Revolving Credit Advance that otherwise
may be made by Revolving Credit Lenders pursuant to such notice.  The aggregate amount of Swing Line Advances
outstanding shall not exceed at any time the lesser of (A) the Swing Line
Commitment and (B) the lesser of the Maximum Amount and (except for
Overadvances) the Borrowing Base, in each case, less the outstanding balance of
the Revolving Loan at such time (“Swing Line Availability”).  Until the Commitment Termination Date,
Borrowers may from time to time borrow, repay and reborrow under this Section
1.1(d).  Each Swing Line Advance
shall be made pursuant to a Notice of Revolving Credit Advance delivered to
Agent by Borrower Representative on behalf of the Borrowers in accordance with Section
1.1(a).  Any such notice must be
given no later than 12:00 noon (New York time) on the Business Day of the
proposed Swing Line Advance.  Unless the
Swing Line Lender has received at least one Business Day’s prior written notice
from Requisite Revolving Lenders instructing it not to make a Swing Line
Advance, the Swing Line Lender shall, notwithstanding the failure of any
condition precedent set forth in Sections 2.2, be entitled to fund that
Swing Line Advance, and to have each Revolving Lender make Revolving Credit
Advances in accordance with Section 1.1(d)(iii) or purchase
participating interests in accordance with Section 1.1(d)(iv).  Notwithstanding any other provision of this
Agreement or the other Loan Documents, the Swing Line Loan shall constitute an
Index Rate Loan.  Borrowers shall repay
the aggregate outstanding principal amount of the Swing Line Loan upon demand
therefor by Agent.


 


(ii)           Borrowers shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment.  Such note shall be in the principal amount of
the Swing Line Commitment of the Swing Line Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(d)(ii)
(the “Swing Line Note”).  Each
Swing Line Note


 


5





















 


shall represent the obligation of
Borrowers to pay the amount of the Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Swing Line Advances together with
interest thereon as prescribed in Section 1.5.  The entire unpaid balance of the Swing Line
Loan and all other noncontingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.


 


(iii)          The Swing Line Lender, at any time and from time to
time no less frequently than once weekly shall on behalf of Borrowers (and each
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrowers (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender’s Pro Rata Share of the principal amount
of the applicable Borrower’s Swing Line Loan (the “Refunded Swing Line Loan”)
outstanding on the date such notice is given. 
Unless any of the events described in Sections 8.1(h) or 8.1(i)
has occurred (in which event the procedures of Section 1.1(d)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00 p.m.
(New York time) in immediately available funds on the Business Day next
succeeding the date that notice is given. 
The proceeds of those Revolving Credit Advances shall be immediately
paid to the Swing Line Lender and applied to repay the Refunded Swing Line
Loan.


 


(iv)          If, prior to repaying a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(d)(iii), one of the
events described in Sections 8.1(h) or 8.1(i) has occurred, then,
subject to the provisions of Section 1.1(d)(v) below, each Revolving
Lender shall, on the date such Revolving Credit Advance was to have been made
for the benefit of the Borrowers, purchase from the Swing Line Lender an
undivided participation interest in the Swing Line Loan in an amount equal to
its Pro Rata Share of such Swing Line Loan. 
Upon request, each Revolving Lender shall promptly transfer to the Swing
Line Lender, in immediately available funds, the amount of its participation
interest.


 


(v)           Each Revolving Lender’s obligation to make Revolving
Credit Advances in accordance with Section 1.1(d)(iii) and to purchase
participation interests in accordance with Section 1.1(d)(iv) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right that
such Revolving Lender may have against the Swing Line Lender, any Borrower or
any other Person for any reason whatsoever; (B) the occurrence or continuance
of any Event of Default; (C) any inability of Borrowers to satisfy the
conditions precedent to borrowing set forth in this Agreement at any time; or
(D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.  If any
Revolving Lender does not make available to Agent or the Swing Line Lender, as
applicable, the amount required pursuant to Sections 1.1(d (iii) or 1.1(d)(iv),
as the case may be, the Swing Line Lender shall be entitled to recover such
amount on demand from such Revolving Lender, together with interest thereon for
each day from the date of non-payment until such amount is paid in full at the
Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.


 


6





















 


(e)           Reliance on Notices; Appointment of
Borrower Representative.  Agent shall
be entitled to rely upon, and shall be fully protected in relying upon, any
Notice of Revolving Credit Advance, Notice of Conversion/Continuation or
similar notice believed by Agent to be genuine. 
Agent may assume that each Person executing and delivering any notice in
accordance herewith was duly authorized, unless the responsible individual
acting thereon for Agent has actual knowledge to the contrary.  Each Borrower hereby designates Holdings as
its representative and agent on its behalf for the purposes of issuing Notices
of Revolving Credit Advances and Notices of Conversion/Continuation, giving
instructions with respect to the disbursement of the proceeds of the Revolving
Credit Advances, selecting interest rate options, requesting Letters of Credit,
giving and receiving all other notices and consents hereunder or under any of
the other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the
Loan Documents.  Borrower Representative
hereby accepts such appointment.  Agent
and each Lender may regard any notice or other communication pursuant to any
Loan Document from Borrower Representative as a notice or communication from
all Borrowers, and may give any notice or communication required or permitted
to be given to any Borrower or Borrowers hereunder to Borrower Representative
on behalf of such Borrower or Borrowers. 
Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower Representative
shall be deemed for all purposes to have been made by such Borrower and shall
be binding upon and enforceable against such Borrower to the same extent as if
the same had been made directly by such Borrower.


 


1.2           Letters of Credit.  Subject to and in accordance with the terms
and conditions contained herein and in Annex B, Borrower Representative,
on behalf of the applicable Borrower, shall have the right to request, and
Revolving Lenders agree to incur, or purchase participations in, Letter of
Credit Obligations in respect of each Borrower.


 


1.3           Prepayments.


 


(a)           Voluntary Prepayments; Reductions in
Revolving Loan Commitments.  Borrowers may
at any time on at least five (5) days’ prior written notice by Borrower
Representative to Agent (i) voluntarily prepay all or part of the Term Loans; provided
that any such prepayments shall be in a minimum amount of $1,000,000 and
integral multiples of $250,000 in excess of such amount; provided  further
that no such prepayment shall be made unless there is $15,000,000 of Borrowing
Availability after giving effect to any such prepayment; and/or (ii)
permanently reduce (but not terminate in whole) the Revolving Loan Commitment; provided
that (A) any such prepayments or reductions shall be in a minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of such amount, (B)
the Revolving Loan Commitment shall not be reduced to an amount less than
$25,000,000, and (C) after giving effect to such reductions, Borrowers shall
comply with Section 1.3(b)(i).  In
addition, Borrowers may at any time on at least ten (10) days’ prior written
notice by Borrower Representative to Agent terminate the Revolving Loan
Commitment; provided that upon such termination, all Loans and other
Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with Annex B hereto. 
Any voluntary prepayment and any reduction or termination of the
Revolving Loan Commitment must be accompanied by payment of the


 


7





















 


Fee required by Section 1.7(d), if any, plus the payment of any
LIBOR funding breakage costs in accordance with Section 1.11(b).  Upon any such reduction or termination of the
Revolving Loan Commitment, each Borrower’s right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its
behalf, or request Swing Line Advances, shall simultaneously be permanently
reduced or terminated, as the case may be; provided that a permanent reduction
of the Revolving Loan Commitment shall require a corresponding pro rata
reduction in the L/C Sublimit.  Any
voluntary prepayment of the Term Loans must be accompanied by payment of any
LIBOR funding breakage costs in accordance with Section 1.11(b).  Each notice of partial prepayment shall
designate the Loans or other Obligations to which such prepayment is to be
applied; provided that any partial prepayments of the Term Loans made by
or on behalf of any Borrower shall be applied to prepay the scheduled
installments of such Borrower’s Term Loans in inverse order of maturity.  Notwithstanding the foregoing, if at the time
of any partial prepayment of the Term Loan made by or on behalf of any
Borrower, the outstanding balance of the Revolving Loan is $0, then such
voluntary prepayment shall be applied, pro rata, to all remaining scheduled
installments of such Borrower’s Term Loan.


 


(b)           Mandatory Prepayments.


 


(i)            If at any time the aggregate outstanding balances of
the Revolving Loan and the Swing Line Loan exceed the lesser of (A) the Maximum
Amount and (B) the Borrowing Base, Borrowers shall immediately repay the
aggregate outstanding Revolving Credit Advances to the extent required to
eliminate such excess.  If any such excess remains after repayment in full of the aggregate
outstanding Revolving Credit Advances, Borrowers shall provide cash collateral
for the Letter of Credit Obligations in the manner set forth in Annex B
to the extent required to eliminate such excess.  Notwithstanding the foregoing, any
Overadvance made pursuant to Section 1.1(a)(iii)
shall be repaid in accordance with Section 1.1(a)(iii).


 


(ii)           Immediately upon receipt by any Credit Party of any
cash proceeds of any asset disposition, Borrowers shall prepay the Loans in an
amount equal to all such proceeds, net of (A) commissions and other reasonable
and customary transaction costs, fees and expenses properly attributable to
such transaction and payable by Borrowers in connection therewith (in each
case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to
holders of senior Liens on such asset (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for
income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with Section 1.3(c).  Notwithstanding the foregoing, if the Credit
Parties notify Agent of their intent to reinvest such proceeds in replacement
fixed assets, Credit Parties shall apply such proceeds to the Revolving Loan
pending the reinvestment thereof and shall only be obligated to make
prepayments in accordance with Section 1.3(c) to the extent that such
proceeds are not so reinvested. The following shall not be subject to mandatory
prepayment under this clause (ii): (1) proceeds of sales of Inventory in
the ordinary course of business and (2) the proceeds of any asset disposition
or series of asset dispositions otherwise permitted under Section 6.8
not in excess of $500,000.


 


8





















 


(iii)          If Holdings or any Borrower issues Stock or any debt
security in a public offering or in a private placement underwritten, placed or
initially purchased by an investment bank (other than the High Yield Notes), no
later than the Business Day following the date of receipt of the proceeds
thereof, all Borrowers (in the case of an issuance by Holdings) or the issuing
Borrower shall prepay the Loans in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
(including legal fees) paid to non-Affiliates in connection therewith; provided,
that no such prepayment or commitment reduction shall be required with respect
to an amount equal to such proceeds that are received (A) pursuant to any
employee or stock option plan or (B) in connection with any refinancing of
Indebtedness.  Any such prepayment shall
be applied in accordance with Section 1.3(c).


 


(c)           With respect to the prepayments
described in Sections 1.3(b)(ii) and (iii) and prepayments from
insurance or condemnation proceeds in accordance with Section 5.4(b),
(i) such prepayments shall be applied first, to reimbursable Fees and
expenses of Agent; second, to interest then due and payable on the Term
Loans (ratably in proportion to the interest accrued as to each Term Loan A and
Delayed Draw Term Loan); third, to the Scheduled Installments of the
Term Loans pro rata in inverse order of maturity until the Term Loans have been
prepaid in full; fourth, to interest then due and payable on the Swing
Line Loan; fifth, to the principal balance of the Swing Line Loan until
the same has been repaid in full; sixth, to interest then due and
payable on Revolving Credit Advances; seventh, to the principal balance
of Revolving Credit Advances until the same has been paid in full (without a
permanent reduction in the Revolving Loan Commitment); eighth, to any
Letter of Credit Obligations to provide cash collateral therefor in the manner
set forth in Annex B, until all such Letter of Credit Obligations
have been fully cash collateralized in the manner set forth in Annex B
and ninth, to all other Obligations, including expenses of Lenders
reimbursable under Section 11.3. 
Notwithstanding the foregoing, so long as no Event of Default has occurred
and is continuing, the net cash proceeds from the exercise of those certain
Class A, Class B and Class C Warrants issued pursuant to those certain Warrant
Agreements entered into between Thermadyne Holdings Corporation and Equiserve
Trust Company as of May 23, 2003 may be applied at the Borrowers’ discretion, first,
to interest then due and payable on the Swing Line Loan; second, to the
principal balance of the Swing Line Loan until the same has been repaid in
full; third, to interest then due and payable on Revolving Credit
Advances; fourth, to the principal balance of Revolving Credit Advances
until the same has been paid in full; fifth, to any Letter of Credit
Obligations to provide cash collateral therefor in the manner set forth in Annex B
until all such Letter of Credit Obligations have been fully cash collateralized
in the manner set forth in Annex B, and then to the Term Loans in the
manner set forth above.  Prepayments of
the Revolving Credit Advances and Swing Line Loan as set forth above shall not
result in a permanent reduction of the Revolving Loan Commitment.


 


(d)           No Implied Consent. 
Nothing in this Section 1.3 shall be construed to constitute
Agent’s or any Lender’s consent to any transaction that is not permitted by
other provisions of this Agreement or the other Loan Documents.


 


1.4           Use of Proceeds. 
Borrowers shall utilize the proceeds of the Loans solely to provide (a)
working capital financing for Borrowers and (b) funds for other general
corporate purposes of Borrowers. Disclosure Schedule (1.4) contains a
description of Borrowers’


 


9





















 


sources and uses of funds as of
the Closing Date, including Revolving Credit Advances and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred to particular uses.


 


1.5           Interest and Applicable Margins.


 


(a)           Borrowers shall pay interest to
Agent, for the ratable benefit of Lenders in accordance with the various Loans
being made by each Lender, in arrears on each applicable Interest Payment Date,
at the following rates:  (i) with respect
to the Revolving Credit Advances, the Index Rate plus the Applicable Revolver
Index Margin per annum or, at the election of Borrower Representative, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per
annum, based on the aggregate Revolving Credit Advances outstanding from time
to time; (ii) with respect to such portion of the Term Loans  designated as an Index Rate Loan, the Index Rate plus the
Applicable Term Loan Index Margin per annum or, with respect to such portion of
the Term Loans designated as a LIBOR Loan, the applicable LIBOR Rate plus the
Applicable Term Loan LIBOR Margin per annum; and (iii) with respect to the
Swing Line Loan, the Index Rate plus the Applicable Revolver Index Margin per
annum.


 


As of
the Closing Date, the Applicable Margins are as follows:


 


	
  Applicable
  Revolver Index Margin

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable
  Revolver LIBOR Margin

  	
   

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term
  Loan Index Margin

  	
   

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term
  Loan LIBOR Margin

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable L/C
  Margin

  	
   

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable
  Unused Line Fee Margin

  	
   

  	
  0.50

  	
  %

  



 


The
Applicable Margins may be adjusted by reference to the following grids:


 


	
  If Fixed Charge Coverage Ratio is:

  	
   

  	
  Level of

  Applicable Margins:

  	
   

  
	
  <
  1.20

  	
   

  	
  Level I

  	
   

  
	
  <
  1.35, but > 1.20

  	
   

  	
  Level II

  	
   

  
	
  > 1.35

  	
   

  	
  Level III

  	
   

  



 


10





















 


Applicable
Margins


 


	
   

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  
	
  Applicable Revolver
  Index Margin

  	
   

  	
  0.50

  	
  %

  	
  0.25

  	
  %

  	
  0.00

  	
  %

  
	
  Applicable
  Revolver LIBOR Margin

  	
   

  	
  2.25

  	
  %

  	
  2.00

  	
  %

  	
  1.75

  	
  %

  
	
  Applicable Term
  Loan Index Margin

  	
   

  	
  0.75

  	
  %

  	
  0.50

  	
  %

  	
  0.25

  	
  %

  
	
  Applicable Term
  Loan LIBOR Margin

  	
   

  	
  2.50

  	
  %

  	
  2.25

  	
  %

  	
  2.00

  	
  %

  
	
  Applicable L/C
  Margin

  	
   

  	
  2.25

  	
  %

  	
  2.00

  	
  %

  	
  1.75

  	
  %

  
	
  Applicable
  Unused Line Fee Margin

  	
   

  	
  0.50

  	
  %

  	
  0.50

  	
  %

  	
  0.50

  	
  %

  



 


(b)           Adjustments in the Applicable
Margins commencing with the Fiscal Quarter ending December 31, 2004 shall be
implemented quarterly on a prospective basis, for each calendar month
commencing at least five (5) days after the date of delivery to Lenders of the
quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. 
Concurrently with the delivery of those Financial Statements, Borrower
Representative shall deliver to Agent and Lenders a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins.  Failure to timely deliver such Financial Statements
shall, in addition to any other remedy provided for in this Agreement, result
in an increase in the Applicable Margins to the highest level set forth in the
foregoing grid, until the first day of the first calendar month following the
delivery of those Financial Statements demonstrating that such an increase is
not required.  If an Event of Default has
occurred and is continuing at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which such Event of Default is
waived or cured.


 


(c)           If any payment on any Loan becomes
due and payable on a day other than a Business Day, the maturity thereof will
be extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.


 


(d)           All computations of Fees calculated
on a per annum basis and interest shall be made by Agent on the basis of a
360-day year, in each case for the actual number of days occurring in the
period for which such interest and Fees are payable.  The Index Rate is a floating rate determined
for each day.  Each determination by
Agent of an interest rate and Fees hereunder shall be presumptive evidence of
the correctness of such rates and Fees.


 


11





















 


(e)           So long as an Event of Default has
occurred and is continuing under Section 8.1(a), (h) or (i) or so
long as any other Event of Default has occurred and is continuing and at the
election of Agent (or upon the written request of Requisite Lenders) confirmed
by written notice from Agent to Borrower Representative, the interest rates
applicable to the Loans and the Letter of Credit Fees shall be increased by two
percentage points (2%) per annum above the rates of interest or the Letter of
Credit Fees otherwise applicable hereunder unless Agent or Requisite Lenders
elect to impose a smaller increase (as finally determined, the “Default Rate”),
and all such Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall
accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.


 


(f)            Subject to the conditions precedent
set forth in Section 2.2, Borrower Representative shall have the option
to (i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii)
convert at any time all or any part of the outstanding Loans (other than the
Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR
Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.11(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iv) continue all or any
portion of any Loan (other than the Swing Line Loan) as a LIBOR Loan upon the
expiration of the applicable LIBOR Period and the succeeding LIBOR Period of
that continued Loan shall commence on the first day after the last day of the
LIBOR Period of the Loan to be continued. 
Any Loan or group of Loans having the same proposed LIBOR Period to be made
or continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$2,000,000 and integral multiples of $1,000,000 in excess of such amount.  Any such election must be made by 12:00 noon
(New York time)  on the third Business Day prior
to (1) the date of any proposed Advance which is to bear interest at the
LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to
be continued as such, or (3) the date on which Borrower Representative
wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period
designated by Borrower Representative in such election.  If no election is received with respect to a
LIBOR Loan by 12:00 noon (New York time) on the third Business Day prior to the
end of the LIBOR Period with respect thereto (or if a Default or an Event of
Default has occurred and is continuing or if the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that
LIBOR Loan shall be converted to an Index Rate Loan at the end of its LIBOR
Period.  Borrower Representative must
make such election by notice to Agent in writing, by telecopy or overnight
courier.  In the case of any conversion
or continuation, such election must be made pursuant to a written notice (a “Notice
of Conversion/Continuation”) in the form of Exhibit 1.5(e).  No Loan shall be made as or converted into a
LIBOR Loan until seven (7) days after the Closing Date.


 


(g)           Notwithstanding anything to the
contrary set forth in this Section 1.5, if a court of competent
jurisdiction determines in a final order that the rate of interest payable
hereunder exceeds the highest rate of interest permissible under law (the “Maximum
Lawful Rate”), then so long as the Maximum Lawful Rate would be so
exceeded, the rate of interest payable hereunder shall be equal to the Maximum
Lawful Rate; provided, however, that if at any time thereafter the rate
of interest payable hereunder is less than the Maximum Lawful Rate, Borrowers
shall continue to pay interest hereunder at the Maximum Lawful Rate until such
time as the total interest received by Agent, on behalf of Lenders, is equal to
the total interest that


 


12





















 


would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement.  In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the amount
that such Lender could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate.


 


1.6           Cash Management Systems.  On or prior to the Closing Date, Borrowers
will establish and will maintain until the Termination Date, the cash
management systems described in Annex C (the “Cash Management Systems”).


 


1.7           Fees.


 


(a)           Borrowers shall pay to GE Capital,
individually, the Fees specified in the GE Capital Fee Letters.


 


(b)           As additional compensation for the
Revolving Lenders, Borrowers shall pay to Agent, for the ratable benefit of
such Revolving Lenders, in arrears, on the first Business Day of each month
prior to the Commitment Termination Date and on the Commitment Termination
Date, a Fee for Borrowers’ non-use of available funds in an amount equal to the
Applicable Unused Line Fee Margin per annum (calculated on the basis of a 360
day year for actual days elapsed) multiplied by the difference between (x) the
Maximum Amount (as it may be reduced from time to time) and (y) the average for
the period of the daily closing balances of the aggregate Revolving Loan and
the Swing Line Loan outstanding during the period for which such Fee is due.


 


(c)           As additional compensation for the
Term Lenders, Borrowers shall pay to Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to earlier
of the Commitment Termination Date or the date on which the Delayed Draw Term
Loan is advanced, a fee for Borrowers’ non-use of available funds in an amount
equal to the Applicable Unused
Line Fee Margin per annum multiplied by the maximum principal amount of the
Delayed Draw Term Loan ($2,050,000) until such time that the Delayed Draw Term
Loan is made in accordance with Section 1.1(c).


 


(d)           If Borrowers prepay the Revolving
Loan and reduce or terminate the Revolving Loan Commitment during the first two
Loan Years following the Prior Credit Agreement Closing Date, whether
voluntarily or involuntarily and whether before or after acceleration of the
Obligations, or if the Revolving Loan Commitment is otherwise terminated,
Borrowers shall pay to Agent, for the benefit of Lenders, as liquidated damages
and compensation for the costs of being prepared to make funds available
hereunder in an amount equal to the Applicable Percentage (as defined below)
multiplied by the amount of the reduction of the Revolving Loan
Commitment.  As used herein, the term “Applicable
Percentage” shall mean (x)  two percent (2%), in the case of a
prepayment and corresponding reduction or termination of the Revolving Loan
Commitment during the first Loan Year following the Closing Date, (y) one
percent (1%), in the case of a prepayment and corresponding reduction or
termination of the Revolving Loan Commitment during the second Loan Year following
the Closing Date and (z) zero for any reductions thereafter.  The Credit Parties agree that the Applicable
Percentages are a reasonable calculation of Lenders’ lost profits in view of
the


 


13





















 


difficulties and impracticality
of determining actual damages resulting from an early termination of the
Commitments.  Notwithstanding the
foregoing, no prepayment fee shall be payable by Borrowers upon a mandatory
prepayment made pursuant to Sections 1.3(b), 1.9, 1.14(c) or 5.4(b);
provided that Borrowers do not permanently reduce or terminate the
Revolving Loan Commitment upon any such prepayment.


 


(e)           Borrowers shall pay to Agent, for
the ratable benefit of Revolving Lenders, the Letter of Credit Fee as provided in
Annex B.


 


1.8           Receipt of Payments.  Borrowers shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account.  For purposes of computing Fees and
determining Borrowing Availability as of any date, all payments shall be deemed
received on the Business Day on which immediately available funds therefor are
received in the Collection Account prior to 2:00 p.m. (New York time).  Payments received after 2:00 p.m. (New York
time) on any Business Day or on a day that is not a Business Day shall be
deemed to have been received on the following Business Day.  Solely for purposes of calculating interest,
all payments shall be deemed received on the first Business Day following the
Business Day on which immediately available funds therefor are received in the
Collection Account prior to 2 p.m. (New York time).


 


1.9           Application and Allocation of
Payments.


 


(a)           So long as
no Event of Default has occurred and is continuing, (i) payments consisting of
proceeds of Accounts received in the ordinary course of business shall be
applied, first, to the Swing Line Loan and, second, the Revolving
Loan; (ii) payments matching specific scheduled payments then due shall be applied
to those scheduled payments; (iii) voluntary prepayments shall be applied in
accordance with the provisions of Section 1.3(a); and (iv) mandatory
prepayments shall be applied as set forth in Section 1.3(c).  All payments and prepayments applied to a
particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other unscheduled
payment, and as to all payments made following the Commitment Termination Date,
each Borrower hereby irrevocably waives the right to direct the application of
any and all payments received from or on behalf of such Borrower, and each
Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records.  In the absence of a specific determination by
Agent with respect thereto, payments shall be applied to amounts then due and
payable in the order set forth in Section 1.3(c).


 


(b)           Agent is authorized to, and at its
sole election may, charge to the Revolving Loan balance on behalf of each
Borrower and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest,
owing by Borrowers under this Agreement or any of the other Loan Documents if
and to the extent Borrowers fail to pay promptly any such amounts as and when
due.  At Agent’s option and to the extent
permitted by law, any charges so made shall constitute part of the Revolving
Loan hereunder.


 


14





















 


1.10         Loan Account and Accounting.  Agent, acting as agent for the Lenders and,
solely for purposes of Treasury Regulation Section 5f.103-1(c), each Borrower,
shall maintain a loan account (the “Loan Account”) on its books to
record: all Advances, all Overadvances, all Letter of Credit Obligations, all
participations in the Letter of Credit Obligations, the amount of the
reimbursement obligations of the Borrower for each drawing made under a Letter
of Credit, all payments made by Borrowers, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations,
and each Borrower and Agent shall treat each Person whose name is entered in
the Loan Account as a Lender or as an L/C Issuer, as the case may be, for all
purposes hereunder.  All entries in the
Loan Account shall be made in accordance with Agent’s customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent’s most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by each Borrower; provided that any failure to so
record or any error in so recording shall not limit or otherwise affect any
Borrower’s duty to pay the Obligations. 
Agent shall render to Borrower Representative a monthly accounting of
transactions with respect to the Revolving Loan and Swing Line Loan setting
forth the balance of the Loan Account for the immediately preceding month.  Unless Borrower Representative notifies Agent
in writing of any objection to any such accounting (specifically describing the
basis for such objection), within thirty (30) days after the date thereof, each
and every such accounting shall be presumptive evidence of all matters
reflected therein.  Only those items
expressly objected to in such notice shall be deemed to be disputed by
Borrowers.  Notwithstanding any provision
herein contained to the contrary, any Lender may elect (which election may be
revoked) to dispense with the issuance of Notes to that Lender and may rely on
the Loan Account as evidence of the amount of Obligations from time to time
owing to it.


 


1.11         Indemnity.


 


(a)           Each Credit Party that is a
signatory hereto shall jointly and severally indemnify and hold harmless each
of Agent, Lenders and their respective Affiliates, and each such Person’s respective
officers, directors, employees, attorneys, agents and representatives (each, an
“Indemnified Person”), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys’ fees and disbursements and other costs of investigation
or defense, including those incurred upon any appeal) that may be instituted or
asserted against or incurred by any such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents and the administration of such credit, and in
connection with or arising out of the transactions contemplated hereunder and
thereunder and any actions or failures to act in connection therewith, including
any and all Environmental Liabilities and legal costs and expenses arising out
of or incurred in connection with disputes between or among any parties to any
of the Loan Documents (collectively, “Indemnified Liabilities”); provided
that (i) no such Credit Party shall be liable for any indemnification to an
Indemnified Person to the extent that any such suit, action, proceeding, claim,
damage, loss, liability or expense results from that Indemnified Person’s gross
negligence or willful misconduct and (ii) Indemnified Liabilities shall not
include any taxes, levies, imposts, deductions, charges or withholdings imposed
by any Governmental Authority, or any liabilities with respect thereto, that
may be instituted or asserted or incurred as the result of credit having been
extended, suspended or terminated, the indemnification for which shall be
governed solely and exclusively by Section 1.13.  NO


 


15





















 


INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO
ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH
PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY,
FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED
AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY
LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.


 


(b)           To induce Lenders to provide the
LIBOR Rate option on the terms provided herein, if (i) any LIBOR Loans are
repaid in whole or in part prior to the last day of any applicable LIBOR Period
(whether that repayment is made pursuant to any provision of this Agreement or
any other Loan Document or occurs as a result of acceleration, by operation of
law or otherwise); (ii) any Borrower shall default in payment when due of the
principal amount of or interest on any LIBOR Loan; (iii) any Borrower shall
refuse to accept any borrowing of, or shall request a termination of, any
borrowing of, conversion into or continuation of, LIBOR Loans after Borrower
Representative has given notice requesting the same in accordance herewith; or
(iv) any Borrower shall fail to make any prepayment of a LIBOR Loan after
Borrower Representative has given a notice thereof in accordance herewith, then
Borrowers shall jointly and severally indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing other than any loss, costs or expenses with respect to
taxes, levies, imposts, deductions, charges or withholdings imposed by any
Governmental Authority, or any liabilities with respect thereto, the
indemnification for which shall be governed solely and exclusively by Section
1.13; provided, that notwithstanding clause (i) of this Section
1.11(b), if at any time the mandatory prepayment of any Loan would result,
after giving effect to the procedures set forth in this Agreement, in Borrowers
incurring costs as a result of LIBOR Loans (“Affected LIBOR Loans”)
being prepaid other than on the last day of a LIBOR Period applicable thereto,
which costs are required to be paid hereunder, then Borrowers may, in their
sole discretion, deposit amounts that otherwise would have been paid in respect
of the Affected LIBOR Loans with Agent (which amount must be equal in amount to
the amount of the Affected LIBOR Loans not immediately prepaid) to be held as a
security for the obligations of Borrowers to make such mandatory prepayment
pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Agent, with such cash collateral to be
directly applied upon the first occurrence or occurrences thereafter of the
last day of a LIBOR Period applicable to the relevant Loan that is a LIBOR Loan
(or such earlier date or dates as shall be requested by Borrowers) to repay an
aggregate principal amount of such Loan equal to the Affected LIBOR Loans not
initially repaid pursuant to this sentence. 
Such indemnification shall include any loss (excluding loss of margin
but including lost opportunity costs) or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate deposits from which
such funds were obtained other than any loss or expense with respect to taxes,
levies, imposts, deductions, charges or withholdings imposed by any
Governmental Authority, or any liabilities with respect thereto, the
indemnification for which shall be governed solely and exclusively by Section
1.13.  For the purpose of calculating
amounts payable to a Lender under this subsection, each Lender shall be deemed
to have actually funded its relevant LIBOR Loan through the purchase of a
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
that LIBOR Loan and having a maturity comparable to the relevant LIBOR Period; provided
that each Lender may fund each of its LIBOR Loans in any


 


16





















 


manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection.  This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder. 
As promptly as practicable under the circumstances, each Lender shall
provide Borrower Representative with its written calculation of all amounts
payable pursuant to this Section 1.11(b), and such calculation shall be
binding on the parties hereto unless Borrower Representative shall object in
writing within ten (10) Business Days of receipt thereof, specifying the basis
for such objection in detail.


 


1.12         Access.  Each
Credit Party that is a party hereto shall, during normal business hours, from
time to time upon two (2) Business Days’ prior notice as frequently as Agent
reasonably determines to be appropriate: (a) provide Agent and any of its
officers, employees and agents access to its properties, facilities, advisors,
officers and employees of each Credit Party and to the Collateral, (b) permit
Agent, and any of its officers, employees and agents, to inspect, audit and
make extracts from any Credit Party’s books and records, and (c) permit Agent,
and its officers, employees and agents, to inspect, review, evaluate and make
test verifications and counts of the Accounts, Inventory and other Collateral
of any Credit Party.  If an Event of
Default has occurred and is continuing, each such Credit Party shall provide
such access to Agent and to each Lender at all times and without advance
notice.  Furthermore, so long as any
Event of Default has occurred and is continuing, Borrowers shall provide Agent
and each Lender with access to their suppliers and customers.  Each Credit Party shall make available to
Agent and its counsel reasonably promptly originals or copies of all books and
records that Agent may reasonably request. 
Each Credit Party shall deliver any document or instrument necessary for
Agent, as it may from time to time reasonably request, to obtain records from
any service bureau or other Person that maintains records for such Credit
Party, and shall maintain duplicate records or supporting documentation on
media, including computer tapes and discs owned by such Credit Party.  Agent will give Lenders at least five (5)
days’ prior written notice of regularly scheduled audits.  Representatives of other Lenders may
accompany Agent’s representatives on regularly scheduled audits at no charge to
Borrowers.


 


1.13         Taxes.


 


(a)           Except as provided in this Section
1.13, any and all payments by each Borrower hereunder (including any
payments made pursuant to Section 12) or under the Notes shall be made,
in accordance with this Section 1.13, free and clear of and without
deduction for any and all present or future Taxes.  If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to Section 12) or under the Notes, (i) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 1.13) Agent, Lenders or L/C Issuers, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and (iii)
such Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law.  Within thirty (30) days after the date of any
payment of Taxes, Borrower Representative shall furnish to Agent the original
or a certified copy of a receipt evidencing payment thereof.  In addition, each Borrower agrees to pay any
Other Taxes.


 


17





















 


(b)           Each Credit Party that is a
signatory hereto shall jointly and severally indemnify and, within ten (10)
days of written demand therefor, pay Agent, each Lender and each L/C Issuer for
the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 1.13)
paid by Agent or such Lender or such L/C Issuer, as appropriate, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, provided such written demand sets forth in reasonable
detail the basis and calculation of such amount.


 


(c)


 


(i)            Each Lender, each L/C Issuer and each Agent that is
not a United States person as defined in Section 7701(a)(30) of the IRC (each,
a “Foreign Lender”) as to which payments to be made under this Agreement
or under the Notes are fully exempt from United States withholding tax under an
applicable statute or tax treaty shall provide prior to or on the Closing Date
to Borrower Representative and Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign Lender’s
entitlement to such exemption (a “Certificate of Exemption”).  Any Person that is not a United States person
as defined in Section 7701(a)(30) of the IRC that
seeks to become a Lender, an L/C Issuer or an Agent, as applicable, under this
Agreement shall provide a Certificate of Exemption to Borrower Representative
and Agent prior to becoming a Lender, an L/C Issuer or an Agent, as applicable,
hereunder.  No Person that is not a
United States person as defined in Section 7701(a)(30) of the IRC may become a
Lender, an L/C Issuer or an Agent, as applicable, hereunder if such Person
fails to deliver a Certificate of Exemption in advance of becoming a Lender, an
L/C Issuer or an Agent, as applicable.


 


(ii)           Each Lender, each L/C Issuer and each Agent that is a
United States person as defined in Section 7701(a)(30) of the IRC (each a “U.S.
Lender”) shall provide prior to or on the Closing Date (or on or prior to
the date it becomes a party to this Agreement) to Borrower Representative and
Agent a properly completed and executed IRS Form W-9 (certifying that such U.S.
Lender is entitled to an exemption from United States backup withholding tax)
or any successor form.  Solely for
purposes of this Section 1.13, a U.S. Lender shall not include a Lender,
an L/C Issuer or an Agent that may be treated as an exempt recipient based on
the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii).


 


(iii)          Each Lender, each L/C Issuer and Agent, from time to
time after submitting the forms, certificates or documents referred to in this Section
1.13, shall submit to the Borrower Representative and the Agent such
additional duly completed and signed copies of one or the other such forms,
certificates or documents (or such successor forms, certificates or other
documents as shall be adopted from time to time by the IRS or relevant taxing
authorities) (A) on or before the date that any such form, certificate, or document
expires or becomes obsolete, (B) after the occurrence of any event requiring a
change in the most recent form, certificate or document previously delivered by
it to the Borrower Representative and Agent, (C) from time to time thereafter
if reasonably requested by the Borrower Representative or Agent and (D) as may
be appropriate under then current United States law or regulations to avoid
United States withholding taxes on payments in respect of any amounts to be
received by such Lender, such L/C Issuer or such Agent pursuant to this
Agreement and/or the Notes.


 


18





















 


(iv)          If Agent, any Lender or any L/C Issuer determines that
it is unable to submit to the Borrower Representative or the Agent any form, certificate
or document that such Agent, such Lender, or such L/C Issuer, as the case may
be, is requested to submit pursuant to this Section 1.13, or that it is
required to withdraw or cancel any such form, certificate or document, or that
any such form, certificate or document previously submitted has otherwise
become ineffective or inaccurate, such Agent, such Lender or such L/C Issuer,
as the case may be, shall promptly notify the Borrower Representative and Agent
of such fact.


 


(v)           No Credit Party shall be required pursuant to this Section
1.13 to pay any additional amount to, or to indemnify, any Lender, any L/C
Issuer or Agent, as the case may be, to the extent that (A) such Lender, such
L/C Issuer or Agent becomes subject to Taxes subsequent to the Closing Date
(or, if applicable, subsequent to the date such Person becomes a party to this
Agreement) as a result of any change in the circumstances of such Lender, such
L/C Issuer or Agent, as the case may be (other than a change in applicable
law), including without limitation a change in the residence, place of
incorporation, principal place of business or a change in the branch or lending
office of such Lender, such L/C Issuer or Agent, as the case may be, or as a
result of the sale by such Lender of participating interests in such Lender’s
creditor position(s) hereunder; or (B) such Taxes would not have been incurred
but for the failure of such Lender, such L/C Issuer or Agent, as the case may
be, to provide to the Borrower Representative or Agent any form, certificate or
document that it was required so to do pursuant to Section 1.13 other
than any form, certificate or document required as a result of a change in law.


 


(d)           Each Lender and each L/C Issuer
agrees that, upon the occurrence of any event giving rise to the operation of Section
1.13(a) or Section 1.13(b) with respect to such Lender or L/C
Issuer, as the case may be, it will, if requested by a Credit Party, use
reasonable commercial efforts (subject to such Lender’s or L/C Issuer’s overall
internal policies of general application) to designate another lending office
for any Loans or Letter of Credit Obligations affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the reasonable judgment of such Lender or
such L/C Issuer, as the case may be, cause such Lender and its lending
office(s) or such L/C Issuer and its lending office(s), as the case may be, to
suffer no economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section shall affect or postpone any of the obligations of
any Credit Party or the rights of any Lender or any L/C Issuer pursuant to Section
1.13(a) or Section 1.13(b).


 


(e)           Notwithstanding any provision
contained herein to the contrary, any indemnity with respect to taxes, levies,
imposts, deductions, charges or withholdings imposed by any Governmental
Authority, or any liabilities with respect thereto, shall be governed solely
and exclusively by this Section 1.13.


 


1.14         Capital Adequacy; Increased Costs;
Illegality.


 


(a)           If any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case,


 


19





















 


adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Lender and thereby reducing the rate of return on such Lender’s capital as a
consequence of its obligations hereunder, then Borrowers shall from time to
time upon demand by such Lender (with a copy of such demand to Agent) pay to
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction; provided, however, that
Borrowers shall not have any obligation under this Section 1.14(a) to
pay any additional amount with respect to taxes, levies, imposts, deductions,
charges or withholdings imposed by any Governmental Authority, or any
liabilities with respect thereto, indemnification for which shall be governed
solely and exclusively by Section 1.13. A certificate as to the amount
of that reduction and showing the basis of the computation thereof submitted by
such Lender to Borrower Representative and to Agent shall be presumptive
evidence of the matters set forth therein.


 


(b)           If, due to either (i) the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) or (ii) the compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having
the force of law), in each case adopted after the Closing Date, there shall be
any increase in the cost to any Lender of agreeing to make or making, funding
or maintaining any Loan, then Borrowers shall from time to time, upon demand by
such Lender (with a copy of such demand to Agent), pay to Agent for the account
of such Lender additional amounts sufficient to compensate such Lender for such
increased cost; provided, however, that Borrowers shall not have any
obligation under this Section 1.14(b) to pay any additional amount with
respect to taxes, levies, imposts, deductions, charges or withholdings imposed
by any Governmental Authority, or any liabilities with respect thereto,
indemnification for which shall be governed solely and exclusively by Section
1.13. A certificate as to the amount of such increased cost, submitted to
Borrower Representative and to Agent by such Lender, shall be presumptive
evidence of the matters set forth therein. 
Each Lender agrees that, as promptly as practicable after it becomes
aware of any circumstances referred to above which would result in any such
increased cost, the affected Lender shall, to the extent not inconsistent with
such Lender’s internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and payable to
it by Borrowers pursuant to this Section 1.14(b).


 


(c)           Notwithstanding anything to the
contrary contained herein, if the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) shall make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Lender to agree to make or to make or to continue to
fund or maintain any LIBOR Loan, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan at another branch or office of
that Lender without, in that Lender’s reasonable opinion, materially adversely
affecting it or its Loans or the income obtained therefrom, on notice thereof
and demand therefor by such Lender to Borrower Representative through Agent,
(i) the obligation of such Lender to agree to make or to make or to
continue to fund or maintain LIBOR Loans shall terminate and (ii) each
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing by
such Borrower to such Lender, together with interest accrued thereon, unless
Borrower Representative on behalf of such Borrower, within five (5) Business
Days after the delivery of such notice and demand, converts all LIBOR Loans
into Index Rate Loans.


 


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(d)           Within thirty (30) days after
receipt by Borrower Representative of written notice and demand from any Lender
(an “Affected Lender”) for payment of additional amounts or increased
costs as provided in Sections 1.13, 1.14(a) or 1.14(b), Borrower
Representative may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. 
So long as no Event of Default has occurred and is continuing, Borrower
Representative, with the consent of Agent, may obtain, at Borrowers’ expense, a
replacement Lender (“Replacement Lender”) for the Affected Lender, which
Replacement Lender must be reasonably satisfactory to Agent.  If Borrowers obtain a Replacement Lender
within ninety (90) days following notice of their intention to do so, the
Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale and such assignment shall not require the
payment of an assignment fee to Agent; provided that Borrowers shall
have reimbursed such Affected Lender for the additional amounts or increased
costs that it is entitled to receive under this Agreement through the date of
such sale and assignment.  Notwithstanding
the foregoing, Borrowers shall not have the right to obtain a Replacement
Lender if the Affected Lender rescinds its demand for increased costs or
additional amounts within 15 days following its receipt of Borrowers’ notice of
intention to replace such Affected Lender. 
Furthermore, if Borrowers give a notice of intention to replace and do
not so replace such Affected Lender within ninety (90) days thereafter,
Borrowers’ rights under this Section 1.14(d) shall terminate with
respect to such Affected Lender and Borrowers shall promptly pay all increased
costs or additional amounts demanded by such Affected Lender pursuant to Sections
1.13, 1.14(a) and 1.14(b), as applicable.


 


1.15         Single Loan. 
Subject to Article XIII, all Loans to Borrowers and all of the
other Obligations of Borrowers arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrowers secured, until
the Termination Date, by all of the Collateral.


 


1.16         Eligible Accounts.  All of the Accounts owned by any Collateral
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrowers to Agent shall be “Eligible Accounts” for purposes of this
Agreement, except any Account to which any of the exclusionary criteria set
forth below applies.  Agent shall have
the right to establish, modify or eliminate Reserves against Eligible Accounts
from time to time in its reasonable credit judgment.  In addition, Agent reserves the right, at any
time and from time to time after the Closing Date, to adjust any of the
criteria set forth below and to establish new criteria, and to adjust advance
rates with respect to Eligible Accounts, in its reasonable credit judgment,
reflecting changes in the collectability or realization values of such Accounts
arising or discovered by Agent after the Closing Date subject to the approval
of Supermajority Revolving Lenders in the case of adjustments or new criteria
or changes in advance rates which have the effect of making more credit
available.  Eligible Accounts shall not
include any Account of any Collateral Party:


 


(a)           that does not arise from the actual
and bona fide sale and delivery of goods by such Collateral Party or the
performance of services by such Collateral Party in the ordinary course of its
business transactions and in accordance with the terms and conditions contained
in any documents related thereto;


 


21





















 


(b)           (i) upon which such Collateral Party’s
right to receive payment is not absolute or is contingent upon the fulfillment
of any condition whatsoever or; (ii) as to which such Collateral Party is not
able to bring suit or otherwise enforce its remedies against the Account Debtor
through judicial process or (iii) if the Account represents a progress billing
consisting of an invoice for goods sold or used or services rendered pursuant
to a contract under which the Account Debtor’s obligation to pay that invoice
is subject to such Collateral Party’s satisfactory completion of any further
performance under such contract or is subject to the equitable lien of a surety
bond issuer;


 


(c)           to the extent that any defense,
counterclaim, setoff, recoupment or dispute is asserted or may arise from time
to time in respect of such Account;


 


(d)           that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor;


 


(e)           with respect to which an invoice,
reasonably acceptable to Agent in form and substance, has not been sent to the
applicable Account Debtor;


 


(f)            that (i) is not owned by such Collateral
Party or (ii) is subject to any Lien of any other Person, other than Liens in
favor of Agent, on behalf of itself and Lenders;


 


(g)           that arises from a sale to any director,
officer, other employee or Affiliate of any Credit Party, or to any entity that
has any common officer or director with any Credit Party;


 


(h)           that is the obligation of an Account
Debtor that is a foreign government, the United States government or a
political subdivision thereof, or any state, county or municipality or
department, agency or instrumentality thereof unless Agent, in its sole
discretion, has agreed to the contrary in writing and such Collateral Party, if
necessary or desirable, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, the Financial Administration Act
(Canada), or any similar law or applicable state, county or municipal law
restricting assignment thereof or any equivalent law, rule or regulation in any
other jurisdiction;


 


(i)            that is the obligation of an Account
Debtor located outside of the United States or Canada unless payment thereof is
assured by a letter of credit assigned and delivered to Agent, reasonably
satisfactory to Agent as to form, amount and issuer; provided that
Accounts owing to the Australian Collateral Party by Account Debtors located in
Australia and New Zealand, Accounts owing to the UK Collateral Party by Account
Debtors located in the United Kingdom and Accounts owing to the UK Collateral
Party from European Account Debtors up to an aggregate maximum amount of
$1,500,000 shall not be subject to this Section 1.16(i);


 


(j)            to the extent such Collateral Party or
any Subsidiary thereof is liable for goods sold or services rendered by the
applicable Account Debtor to such Collateral Party or any Subsidiary thereof
but only to the extent of the potential offset;


 


22





















 


(k)           that arises with respect to goods
that are delivered on a bill-and-hold, cash-on-delivery, repurchase or return
basis or placed on consignment, sale and return, approval, repurchase or
return, guaranteed or installment sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional or contingent;


 


(l)            that is in default; provided, that, without
limiting the generality of the foregoing, an Account shall be deemed in default
upon the occurrence of any of the following:


 


(i)            the Account is not paid within the
earlier of: sixty (60) days following its due date or ninety (90) days
following its original invoice date;


 


(ii)           the Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of creditors or
is unable or admits its inability to pay its debts as they fall due or fails to
pay its debts generally as they come due or by reason of actual or anticipated
financial difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its indebtedness;


 


(iii)          the Account Debtor becomes an insolvent under
administration or insolvent (each as defined in the Corporations Act 2001
(Cwlth)), or has a controller appointed, or is in receivership, in receivership
and management, liquidation, in provisional liquidation, under administration,
wound up, subject to any arrangement, deed of company arrangement, assignment
or composition, protected from creditors under any statute, dissolved (other
than to carry out a reconstruction while solvent) or is otherwise unable to pay
debts when they fall due or has something similar happens;


 


(iv)          a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other federal,
state or foreign (including any provincial) receivership, insolvency relief or
other law or laws for the relief of debtors (including without limitation, any
bankruptcy, dissolution, liquidation, administration, receiverhip, winding-up,
reorganization or similar proceedings in any jurisdiction); or


 


(v)           there are proceedings or actions which are threatened
or pending against such Account Debtor which might result in any material
adverse change in such Account Debtor’s financial condition (including, without
limitation, receivership, any bankruptcy, dissolution, liquidation,
administration, winding-up, reorganization or similar proceedings in any
jurisdiction).


 


(m)          that is the obligation of an Account
Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts
owing by that Account Debtor are ineligible under the other criteria set forth
in this Section 1.16;


 


(n)           as to which Agent’s Lien thereon, on behalf of itself
and Lenders, is not a first priority perfected Lien;


 


(o)           as to which any of the representations
or warranties in the Loan Documents are untrue;


 


23





















 


(p)           to the extent such Account is
evidenced by a judgment, Instrument or Chattel Paper;


 


(q)           to the extent such Account exceeds any
credit limit established by Agent, in its reasonable credit judgment, following
prior notice of such limit by Agent to Borrower Representative;


 


(r)            to the extent that such Account,
together with all other Accounts owing by such Account Debtor and its
Affiliates as of any date of determination exceed ten percent (10%) of all
Eligible Accounts; provided, however, that with respect to Accounts
owing from Airgas, Inc., Praxair, Inc. and The BOC Group, such percentage shall
be deemed to be fifteen percent (15%);


 


(s)           that is payable in any currency
other than (i) in the case of the Borrowers, Dollars, (ii) in the case of the
Australian Collateral Party, Australian Dollars, (iii)  in the case of the Canadian Collateral Party,
Canadian Dollars or (iv) in the case of the UK Collateral Party, British Pounds
Sterling, U.S. Dollars or Euros;


 


(t)            that represents interest payments or
service charges.


 


1.17         Eligible Inventory.  All of the Inventory owned by any Collateral
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrowers to Agent shall be “Eligible Inventory” for purposes of this
Agreement, except any Inventory to which any of the exclusionary criteria set
forth below applies.  Agent shall have
the right to establish, modify or eliminate Reserves against Eligible Inventory
from time to time in its reasonable credit judgment.  In addition, Agent reserves the right, at any
time and from time to time after the Closing Date, to adjust any of the
criteria set forth below and to establish new criteria and to adjust advance
rates with respect to Eligible Inventory, in its reasonable credit judgment
reflecting changes in the salability or realization values of Inventory arising
or discovered by Agent after the Closing Date, subject to the approval of
Supermajority Revolving Lenders in the case of adjustments or new criteria or
changes in advance rates which have the effect of making more credit available.
Eligible Inventory shall not include any Inventory of any Collateral Party
(unless otherwise indicated below) that:


 


(a)           is not owned by such Collateral
Party free and clear of all Liens and rights of any other Person (including the
rights of a purchaser that has made progress payments and the rights of a
surety that has issued a bond to assure such Collateral Party’s performance
with respect to that Inventory), except the Liens in favor of Agent, on behalf
of itself and Lenders, and Permitted Encumbrances in favor of landlords and
bailees to the extent permitted in Section 5.9 hereof (subject to
Reserves established by Agent in accordance with Section 5.9 hereof);


 


(b)           (i) is not located on premises
owned, leased or rented by such Collateral Party and set forth in Disclosure
Schedule (3.2), or (ii) is stored at a leased location, unless Agent has
given its prior consent thereto and unless either (x) a reasonably satisfactory
landlord waiver has been delivered to Agent, or (y) Reserves reasonably
satisfactory to Agent have been established with respect thereto or (iii) is
stored with a bailee or warehouseman unless a reasonably satisfactory, acknowledged
bailee letter has been received by Agent and Reserves


 


24





















 


reasonably satisfactory to Agent have been established with respect
thereto, or (iv) is located at an owned location subject to a mortgage in favor
of a lender other than Agent unless a reasonably satisfactory mortgagee waiver
has been delivered to Agent, or (v) is located at any site if the aggregate
book value of Inventory at any such location is less than $100,000;


 


(c)           is placed, purchased or sold on
consignment (other than Eligible Consigned Inventory up to an aggregate maximum
amount of $2,000,000) or is in transit, except for Inventory in transit between
locations of Collateral Parties as to which Agent’s Liens have been perfected
at origin and destination, and except for Eligible In-Transit Inventory up to
an aggregate maximum amount of $5,000,000;


 


(d)           is covered by a negotiable document
of title, unless such document has been delivered to Agent with all necessary
endorsements, free and clear of all Liens except those in favor of Agent and
Lenders;


 


(e)           is obsolete, slow moving (in excess
of two year’s supply), unsalable, unrentable, shopworn, seconds, damaged,
defective, unfit for sale, is being repaired, is not of good or merchantable quality
or does not meet all standards imposed by any Governmental Authority having
regulatory authority over such goods, their use, lease or sale;


 


(f)            consists of display items or packing
or shipping materials, parts, manufacturing supplies, work-in-process
Inventory, replacement parts, prototypes or consists of unfinished goods;


 


(g)           consists of goods which have been returned by the
buyer;


 


(h)           is not of a type held for sale in the ordinary course
of such Collateral Party’s business;


 


(i)            is not subject to a first priority
lien in favor of Agent on behalf of itself and Lenders, subject to Permitted
Encumbrances as set forth in clause (e) of the definition thereof
(subject to reserves satisfactory to Agent);


 


(j)            breaches any of the representations or warranties
pertaining to Inventory set forth in the Loan Documents;


 


(k)           consists of Hazardous Materials or goods
that can be transported or sold only with licenses that are not readily
available;


 


(l)            is not covered by casualty insurance
reasonably acceptable to Agent;


 


(m)          is subject to any patent or trademark
license requiring the payment of royalties or fees or requiring the consent of
the licensor for a sale thereof by Agent;


 


(n)           includes any accumulated depreciation of
such Inventory;


 


(o)           has been leased pursuant to the terms
of any capital lease, lease with a bargain option, finance lease program or
purchase lease or similar program;


 


25





















 


(p)           in respect of which title is retained
by the seller thereof or, in the case of the UK Collateral Party, which is
subject to Romalpa provisions in favour of any Person;


 


(q)           in the case of the Australian
Collateral Party, which does not meet all standards imposed by any Australian
federal or state government authority, including relating to its production,
acquisition or importation for inventory located in Australia or which does not
consist of raw materials or finished good for inventory located in Australia.


 


1.18         Conversion to Dollars.  All valuations or computations of monetary
amounts set forth in this Agreement shall include the Dollar Equivalent of
amounts of currencies other than Dollars. 
In connection with all Dollar amounts set forth in this Agreement and
the Loan Documents, amounts in currencies other than Dollars shall be converted
to Dollars in accordance with prevailing exchange rates, as determined by Agent
in its reasonable discretion, on the applicable date.  Unless otherwise
specifically set forth in this Agreement, all monetary amounts shall be in Dollars.


 


1.19         Judgment Currency; Contractual Currency.


 


(a)           If,
for the purpose of obtaining or enforcing judgment against any Credit Party in
any court in any jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 1.19
referred to as the “Judgment Currency”) an amount due under any Loan
Document in any currency (the “Obligation Currency”) other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding (i) the date of
actual payment of the amount due, in the case of any proceeding in the courts
of any jurisdiction that will give effect to such conversion being made on such
date, or (ii) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the applicable date as of
which such conversion is made pursuant to this Section 1.19 being
hereinafter referred to as the “Judgment Conversion Date”);


 


(b)           If,
in the case of any proceeding in the court of any jurisdiction referred to in Section 1.19(a),
there is a change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of actual receipt for value of the amount due, the
applicable Credit Party shall pay such additional amount (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount
actually received in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of the
Judgment Currency stipulated in the judgment or judicial order at the rate of
exchange prevailing on the Judgment Conversion Date.  Any amount due from a Credit Party under this
Section 1.19(b) shall be due as a separate debt and shall not be
affected by judgment being obtained for any other amounts due under or in
respect of any of the Loan Documents;


 


(c)           The
term “rate of exchange” in this Section 1.19 means the rate of
exchange at which Agent would, on the relevant date at or about noon (New York
City time), be able to sell the Obligation Currency against the Judgment
Currency to prime banks; and


 


26





















 


(d)           Any
amount received or recovered by Agent in respect of any sum expressed to be due
to them (whether for itself or as trustee for any other person) from any Credit
Party under this Agreement or under any of the other Loan Documents in a
currency other than the currency (the “contractual currency”) in which such sum
is so expressed to be due (whether as a result of, or from the enforcement of,
any judgment or order of a court or tribunal of any jurisdiction, the
winding-up of a Credit Party or otherwise) shall only constitute a discharge of
such Credit Party to the extent of the amount of the contractual currency that
Agent is able, in accordance with its usual practice, to purchase with the
amount of the currency so received or recovered on the date of receipt or recovery
(or, if later, the first date on which such purchase is practicable).  If the amount of the contractual currency so
purchased is less than the amount of the contractual currency so expressed to
be due, such Credit Party shall indemnify Agent against any loss sustained by
it as a result, including the cost of making any such purchase other than
losses resulting from the gross negligence or willful misconduct of the Person
seeking such indemnification.


 


2.                                      CONDITIONS PRECEDENT


 


2.1           Conditions to the Loans.  This Agreement shall be effective on the date
on which all of the following conditions have been satisfied or provided for in
a manner reasonably satisfactory to Agent, or waived in writing by Agent:


 


(a)           Credit Agreement; Loan Documents. 
This Agreement or counterparts hereof shall have been duly executed by,
and delivered to, Borrowers, each other Credit Party, Agent and Lenders; and
Agent shall have received such documents, instruments, agreements and legal
opinions as Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all
those listed in the Closing Checklist attached hereto as Annex D, each
in form and substance reasonably satisfactory to Agent.


 


(b)           Payment of Fees. 
Borrowers shall have paid the Fees required to be paid on the Closing
Date in the respective amounts specified in Section 1.7 (including the
Fees specified in the GE Capital Fee Letters), and shall have reimbursed Agent
for all fees, costs and expenses of closing presented as of the Closing Date.


 


(c)           Opening Availability. Holdings and its Subsidiaries
shall have Borrowing Availability as of the close of business on the Closing
Date (as calculated on a pro forma basis with all trade payables being paid
currently, expenses and liabilities being paid in the ordinary course of
business and without acceleration of sales or deterioration of working
capital), after giving effect to the consummation of the Related Transactions,
of at least $20,000,000.


 


(d)           Pro
Forma.  Agent shall have received the
Pro Forma reflecting, among other things, stockholders’ equity of at least
$150,000,000.


 


(e)           Total
Indebtedness. Agent shall have received satisfactory evidence that Holdings
and its Subsidiaries, on a consolidated basis, shall not have outstanding
Indebtedness in excess of $278,300,000 on the Closing Date.


 


27





















 


(f)            Environmental.
Agent shall have received a confirmation, satisfactory in both form and
substance to Agent, from the Borrowers stating that no material change has
occurred with respect to any environmental liability of the Credit Parties
since the Prior Credit Agreement Closing Date.


 


(g)           Approvals.  Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons, including, without limitation, all requisite
Governmental Authorities, to the execution, delivery and performance of this
Agreement and the other Loan Documents and the consummation of the Related
Transactions or (ii) an officer’s certificate in form and substance reasonably
satisfactory to Agent affirming that no such consents or approvals are
required.


 


(h)           Amendments
to the Second Lien Credit Agreement. 
Agent shall have received satisfactory evidence that (i) the maturity of
the indebtedness under the Second Lien Credit Agreement shall have been
extended to July 22, 2005 or later, and (ii) the Second Lien Credit Agreement
has been amended to provide that at the end of each corresponding Fiscal
Quarter the maximum leverage ratio permitted in the Second Lien Credit
Agreement is 0.50 greater than the maximum Leverage Ratio permitted in Annex
G of this Agreement.


 


(i)            Equitable
Australian Mortgage. Agent shall have received an executed equitable
mortgage from Quetala Pty Ltd., in form and substance reasonably acceptable to
Agent, with respect to the Mortgaged Property. 
In addition, Agent shall have received a certificate of title with respect
to the Mortgaged Property to be held in custody by the Agent or Agent’s
designee.


 


2.2           Further Conditions to Each Loan and
to the Release of Funds from the Australian Blocked Account and the UK
Collection Accounts.  Except as
otherwise expressly provided herein, but without prejudice to the terms of the
UK Debenture with regard to the UK Collection Accounts, no Lender shall be
obligated to fund any Advance or make the Delayed Draw Term Loan, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation or
release funds from the Australian Blocked Account and/or the UK Collection
Accounts, if, as of the date thereof:


 


(a)           any representation or warranty by
any Credit Party contained herein or in any other Loan Document is untrue or
incorrect in any material respect as of such date as determined by Agent or
Requisite Lenders, except to the extent that such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement and Agent or Requisite
Lenders have determined not to make such Advance, convert or continue any Loan
as LIBOR Loan or incur such Letter of Credit Obligation or release funds from
the Australian Blocked Account and/or the UK Collection Accounts as a result of
the fact that such warranty or representation is untrue or incorrect in any
material respect;


 


(b)           any Event of Default has occurred
and is continuing or would result after giving effect to any Advance (or the
incurrence of any Letter of Credit Obligation), and Agent or Requisite Lenders
shall have determined not to make any Advance, convert or continue any Loan as
a LIBOR Loan or incur any Letter of Credit Obligation or release funds from the


 


28





















 


Australian Blocked Account and/or the UK Collection Accounts as a
result of that Event of Default;


 


(c)           after giving effect to any Advance
(or the incurrence of any Letter of Credit Obligations), the outstanding
principal amount of the aggregate Revolving Loan would exceed the lesser of the
Borrowing Base and the Maximum Amount, in each case, less the then outstanding
principal amount of the Swing Line Loan.


 


The request by any Borrower for an Advance, the
issuance of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan, the release of funds from the Australian
Blocked Account and/or the UK Collection Accounts or the incurrence of the
Delayed Draw Term Loan shall be deemed to constitute, as of the date thereof,
(i) a representation and warranty by Borrowers that the conditions in this Section
2.2  have been satisfied and (ii) a
reaffirmation by Borrowers of the cross-guaranty provisions set forth in Section
12 and of the granting and continuance of Agent’s Liens, on behalf of
itself and Lenders, pursuant to the Collateral Documents.  Each request for release of funds from the
Australian Blocked Account or the UK Collection Accounts shall be made pursuant
to a Notice of Cash Collateral Release delivered to Agent or Agent’s designee
by the Australian Collateral Party or UK Collateral Party, as applicable, and
agreed to and acknowledged by the Borrower Representative, substantially in the
form of Exhibit 2.2.  In the case
of the UK Collateral Party, any such notice must be given no later than 12:00
noon (Chicago time) on the Business Day immediately preceding the Business Day
of the proposed release of funds.  In the
case of the Australian Collateral Party, any such notice must be given no later
than 12:00 noon (Sydney, Australia time]) on the Business Day of the proposed
release of funds.


 


2.3           Further Conditions to Delayed Draw
Term Loan.  In addition to the
conditions provided Section 2.2 above, the obligation of the Term
Lenders to make the Delayed Draw Term Loan is subject to (a) the Agent’s
reasonable determination that as to the Mortgaged Property no material
Environmental Liabilities exist, and (b) the Australian Collateral Party having
delivered to Agent an executed mortgage in recordable form, and otherwise in
form and substance reasonably acceptable to Agent, with respect to the
Mortgaged Property, and such other documents, instruments, certificates and
agreements that Agent may reasonably request.


 


3.                                      REPRESENTATIONS AND WARRANTIES


 


To
induce Lenders to make the Loans and to incur the Letter of Credit Obligations,
the Credit Parties executing this Agreement, jointly and severally, make the
following representations and warranties to Agent and each Lender with respect
to all Credit Parties, each and all of which shall survive the execution and
delivery of this Agreement.


 


3.1           Corporate Existence; Compliance
with Law; FEIN.  Each Credit
Party (a) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization and each Credit Party’s
name as it appears in official filings in its state of incorporation or
organization, organization type, organization number, if any, issued by its
state incorporation or organization, and federal employer identification number
are set forth in


 


29





















 


Disclosure Schedule (3.1); (b) is
duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect;
(c) has the requisite power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease and to conduct its business as now conducted
or proposed to be conducted; (d) subject to specific representations regarding
Environmental Laws, has all licenses, permits, consents or approvals from or
by, and has made all material filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; (e) is in compliance
with its charter and bylaws or partnership or operating agreement, as
applicable; and (f) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.


 


3.2           Executive Offices, Collateral Locations.  As of the Closing Date, the current location
of each Credit Party’s chief executive office, warehouses and premises at which
any Collateral with a fair market value in excess of $5,000 is located, and the
United States and Canadian ports of entry and the names and address for all
customs brokers for Eligible In-Transit Inventory are set forth in Disclosure
Schedule (3.2), none of such locations has changed within the one (1) month
preceding the Closing Date and each Credit Party has only one jurisdiction of
incorporation or organization.


 


3.3           Corporate Power, Authorization, Enforceable
Obligations.  The execution, delivery
and performance by each Credit Party of the Loan Documents to which it is a
party and the creation of all Liens provided for therein: (a) are within such
Person’s power; (b) have been duly authorized by order of the Bankruptcy Court
or all necessary corporate, limited liability company or limited partnership
action, as applicable; (c) do not contravene any provision of such Person’s
charter, bylaws or partnership or operating agreement, as applicable; (d) do
not violate any law or regulation in its respective jurisdiction, or any order
or decree of any court or Governmental Authority in its respective
jurisdiction; (e) do not conflict with or result in the breach or termination
of, constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Person, other than
those in favor of Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person.  Each of
the Loan Documents shall be duly executed and delivered by each Credit Party that
is a party thereto and each such Loan Document shall constitute a legal, valid
and binding obligation of such Credit Party enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).


 


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3.4           Financial Statements and
Projections.


 


(a)           Financial Statements. 
The Financial Statements referred to in paragraph (a) of Annex E
to the Prior Credit Agreement for periods ending on or prior to December 31,
2003 have been delivered to Agent and have been prepared in accordance with
GAAP consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for the
absence of footnotes and normal year-end audit adjustments) and present fairly
in all material respects the financial position of the Persons covered thereby
as at the dates thereof and the results of their operations and cash flows for
the periods then ended.


 


(b)           Pro Forma. 
The Pro Forma delivered on or prior to the date hereof and attached
hereto as Disclosure Schedule (3.4(b)) was prepared by Holdings giving
pro forma effect to the Related Transactions, was based on the unaudited
consolidated and consolidating balance sheets of Holdings and its Subsidiaries
dated as of August 31, 2004, and was prepared in good faith by the Credit
Parties, reflecting items of recurring significance and which are factually
supportable based on currently available information.


 


(c)           Projections. 
The Projections prepared by Holdings and attached to the Prior Credit
Agreement as Disclosure Schedule 3.4(c) reflecting projections for the
three year period beginning on January 1, 2003 on a month-by-month basis
through December 31, 2003 (on a consolidated and consolidating basis), on a
quarterly basis for 2004 (on a consolidated basis only) and on a year-by-year
basis thereafter (on a consolidated basis only) are attached hereto as Disclosure
Schedule (3.4(b)).


 


3.5           Material Adverse Effect.  Between the Prior Credit Agreement Closing
Date and the Closing Date: (a) no Credit Party has incurred any obligations,
contingent or noncontingent liabilities, liabilities for Charges, long-term
leases or unusual forward or long-term commitments that are not reflected in
the Pro Forma and that, alone or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, (b) no material contract, lease or other
agreement or instrument has been entered into by any Credit Party or has become
binding upon any Credit Party’s assets and to Borrowers’ knowledge no law or
regulation applicable to any Credit Party has been adopted that has had or
could reasonably be expected to have a Material Adverse Effect, and (c) no
Credit Party is in default and to the best of Borrowers’ knowledge no third
party is in default under any material contract, lease or other agreement or
instrument, that alone or in the aggregate could reasonably be expected to have
a Material Adverse Effect.  Since the
Prior Credit Agreement Closing Date no event has occurred, that alone or together
with other events, could reasonably be expected to have a Material Adverse
Effect.


 


3.6           Ownership of Property; Liens.  As of the Closing Date, the real estate (“Real
Estate”) listed in Disclosure Schedule (3.6) constitutes all of the
real property owned, leased, subleased, or used by any Credit Party.  Each Credit Party owns good and marketable
fee simple title to all of its owned Real Estate, and valid and marketable
leasehold interests in all of its leased Real Estate, all as described on Disclosure
Schedule (3.6), and, if requested by Agent, copies of all such leases or a
summary of terms thereof reasonably


 


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satisfactory to Agent have been
delivered to Agent.  Disclosure
Schedule (3.6) further describes any Real Estate with respect to which any
Credit Party is a lessor, sublessor or assignor as of the Closing Date.  Each Credit Party also has good and
marketable title to, or valid leasehold interests in, all of its personal
property and assets.  As of the Closing
Date, none of the properties and assets of any Credit Party are subject to any
Liens other than Permitted Encumbrances and Liens in existence on the date
hereof and summarized on Disclosure Schedule (6.7), and there are no
facts, circumstances or conditions known to any Credit Party that may result in
any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances.  Each Credit
Party has received all deeds, assignments, waivers, consents, nondisturbance
and attornment or similar agreements, bills of sale and other documents, and
has duly effected all recordings, filings and other actions necessary to
establish, protect and perfect such Credit Party’s right, title and interest in
and to all such Real Estate and other properties and assets.  Disclosure Schedule (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate.  As of the Closing Date, no portion of any
Credit Party’s Real Estate has suffered any material damage by fire or other
casualty loss that has not heretofore been repaired and restored in all
material respects to its original condition or otherwise remedied.  As of the Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.


 


3.7           Labor Matters. 
Except as set forth on Disclosure Schedule (3.7), as of the
Closing Date (a) no strikes or other material labor disputes against any Credit
Party are pending or, to any Credit Party’s knowledge, threatened; (b) hours
worked by and payment made to employees of each Credit Party materially comply
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matters; (c) all payments due from any Credit
Party for employee health and welfare insurance have been paid or accrued as a
liability on the books of such Credit Party; (d) no Credit Party is a party to
or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and, if requested by Agent, true and complete copies of any
agreements described on Disclosure Schedule (3.7) have been delivered to
Agent); (e) there is no organizing activity involving any Credit Party pending
or, to any Credit Party’s knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any
Credit Party’s knowledge, threatened with the National Labor Relations Board
(or any comparable body outside the United States of America), and no labor
organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) there are no material complaints or charges
against any Credit Party pending or, to the knowledge of any Credit Party,
threatened to be filed with any Governmental Authority in its respective
jurisdiction or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.


 


3.8           Ventures, Subsidiaries and
Affiliates; Outstanding Stock and Indebtedness.  Except as set forth in Disclosure Schedule
(3.8), as of the Closing Date, no Credit Party has any Subsidiaries, is
engaged in any joint venture or partnership with any other Person, or is an
Affiliate of any other Person.  All of
the issued and outstanding Stock of each Credit Party (other than Holdings) is
owned by each of the Stockholders and in the amounts set


 


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forth in Disclosure Schedule
(3.8).  Except as set forth in Disclosure
Schedule (3.8), there are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which any Credit Party may
be required to issue, sell, repurchase or redeem any of its Stock or other
equity securities or any Stock or other equity securities of its
Subsidiaries.  Set forth on Disclosure
Schedule 3.8A is a corporate structure chart which shows in diagram form
the ownership of each of the Credit Parties and their Subsidiaries.  All outstanding Indebtedness and Guaranteed
Indebtedness of each Credit Party as of the Closing Date (except for the
Obligations) is described in Section 6.3 (including Disclosure
Schedule (6.3)).


 


3.9           Government Regulation.  No Credit Party is an “investment company” or
an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company,” as such terms are defined in the Investment
Company Act of 1940.  No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal, state or foreign statute that
restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers, the
application of the proceeds thereof and repayment thereof and the consummation
of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange
Commission.


 


3.10         Margin Regulations.  No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being
referred to herein as “Margin Stock”). 
No Credit Party owns any Margin Stock, and none of the proceeds of the
Loans or other extensions of credit under this Agreement will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Indebtedness that was originally
incurred to purchase or carry any Margin Stock or for any other purpose that
might cause any of the Loans or other extensions of credit under this Agreement
to be considered a “purpose credit” within the meaning of Regulations T, U or X
of the Federal Reserve Board.  No Credit
Party will take or permit to be taken any action that might cause any Loan
Document to violate any regulation of the Federal Reserve Board.


 


3.11         Taxes.  All
federal and other material tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority, and
all Charges have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (excluding
(i) Charges or other amounts being contested in accordance with Section
5.2(b) and (ii) any Charges discharged in the Chapter 11 Cases or payable
over time in accordance with the Plan of Reorganization), unless the failure to
so file or pay would not reasonably be expected to result in fines, penalties
or interest in excess of $100,000 in the aggregate.  Proper and accurate amounts have been
withheld by each Credit Party from its respective employees for all periods in
compliance in all material respects with all applicable federal, state, local
and foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities (except to the extent discharged in the Chapter 11
Cases or payable over time in accordance with the Plan of Reorganization).  Disclosure Schedule (3.11)


 


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sets forth as of the Closing Date
those taxable years for which any Credit Party’s tax returns are currently
being audited by the IRS or any other applicable Governmental Authority, and
any assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding.  Except
as described in Disclosure Schedule (3.11), as of the Closing Date, no
Credit Party has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges for any open
periods.  Except as set forth on Disclosure
Schedule (3.11), none of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to each Credit Party’s
knowledge, as a transferee.  As of the
Closing Date, no Credit Party has agreed or been requested to make any
adjustment under IRC Section 481(a), by reason of a change in accounting method
or otherwise, which would reasonably be expected to have a Material Adverse
Effect.


 


3.12         ERISA.


 


(a)           Disclosure
Schedule (3.12) lists, as of the Closing Date, (i) all ERISA Affiliates and
(ii) all Plans, including Title IV Plans, Multiemployer Plans, and all Retiree
Welfare Plans.  Copies of all such listed
Plans, if requested by Agent, together with a copy of the latest form IRS/DOL
5500-series, as applicable, for each such Plan, have been delivered to
Agent.  Except with respect to
Multiemployer Plans, each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the IRC, the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the
IRC, and nothing has occurred that would cause the loss of such qualification
or tax-exempt status.  Each Plan is in
compliance in all respects with the applicable provisions of ERISA, the IRC and
its terms, including the timely filing of all reports required under the IRC or
ERISA, except for non-compliance which would not have a Material Adverse
Effect.  Neither any Credit Party nor
ERISA Affiliate has failed to make any material contribution or pay any
material amount due as required by either Section 412 of the IRC or Section 302
of ERISA or the terms of any such Plan, except for non-compliance which would
not have a Material Adverse Effect.  No “prohibited
transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC,
has occurred with respect to any Plan, that would
subject any Credit Party to a tax on prohibited transactions imposed by Section
502(i) of ERISA or Section 4975 of the IRC, which would have a Material Adverse
Effect.


 


(b)           Except as set forth in Disclosure
Schedule (3.12) or in the Company’s Financial Statements provided to the
Lenders from time to time or as would not have a Material Adverse Effect: (i)
no Title IV Plan has any material Unfunded Pension Liability; (ii) no ERISA
Event has occurred or is reasonably expected to occur; (iii) there are no
pending, or to the knowledge of any Credit Party, threatened material claims
(other than claims for benefits in the normal course), sanctions, actions or
lawsuits, asserted or instituted against any Plan or any Credit Party or ERISA
Affiliate as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any material liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a “standard termination” as
that term is used in Section 4041 of ERISA, nor has any Title IV Plan of any
Credit Party or any ERISA Affiliate (determined at any time within the last
five years)


 


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with material Unfunded Pension Liabilities been transferred outside of
the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of
any Credit Party or ERISA Affiliate (determined at such time); and (iv) no
Credit Party or ERISA Affiliate has any material liability with respect to
post-retirement benefit obligations within the meaning of the FASB 106.


 


3.13         No Litigation. 
No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of any Credit Party, threatened against any Credit
Party, before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, “Litigation”), (a) that challenges any Credit
Party’s right or power to enter into or perform any of its obligations under
the Loan Documents to which it is a party, or the validity or enforceability of
any Loan Document or any action taken thereunder, or (b) that has a reasonable
risk of being determined adversely to any Credit Party and that, if so
determined, could reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Disclosure
Schedule (3.13), as of the Closing Date there is no Litigation pending or,
to any Credit Party’s knowledge, threatened, that seeks damages in excess of
$250,000 or injunctive relief against, or alleges criminal misconduct of, any
Credit Party.


 


3.14         Brokers.  Except
as set forth on Disclosure Schedule (3.14), no broker or finder brought
about the obtaining, making or closing of the Loans or the Related
Transactions, and no Credit Party or Affiliate thereof has any obligation to
any Person in respect of any finder’s or brokerage fees in connection
therewith.


 


3.15         Intellectual Property.  As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now conducted by it or presently proposed to be
conducted by it. Each Patent, Trademark, and registered Copyright existing as
of the Closing Date and each material License in effect as of the Closing Date
is listed, together with application or registration numbers, as applicable, in
Disclosure Schedule (3.15).  To
its knowledge, each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect.  Except
as set forth in Disclosure Schedule (3.15), no Credit Party is aware of
any material infringement claim by any other Person with respect to any
Intellectual Property.


 


3.16         Full Disclosure. 
No information contained in this Agreement, any of the other Loan
Documents, Financial Statements or Collateral Reports or other written reports
from time to time prepared by any Credit Party and delivered hereunder or any
written statement (other than the Projections) prepared by any Credit Party and
furnished by or on behalf of any Credit Party to Agent or any Lender pursuant
to the terms of this Agreement contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, taken as a whole, not
misleading in light of the circumstances under which they were made.


 


3.17         Environmental Matters.


 


(a)           Except as set forth in Disclosure
Schedule (3.17), as of the Closing Date: (i) the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and


 


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that would not result in Environmental Liabilities that could
reasonably be expected to exceed $100,000; (ii) no Credit Party has caused or
suffered to occur any material Release of Hazardous Materials on, at, in,
under, above, to, from or about any of its Real Estate; (iii) the Credit
Parties are and have been in compliance with all Environmental Laws, except for
such noncompliance that would not result in Environmental Liabilities which
could reasonably be expected to exceed $100,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $100,000,
and all such Environmental Permits are valid, uncontested and in good standing;
(v) no Credit Party is involved in operations or knows of any facts, circumstances
or conditions, including any Releases of Hazardous Materials, that are likely
to result in any Environmental Liabilities of such Credit Party which could
reasonably be expected to exceed $100,000; (vi) there is no Litigation arising
under or related to any Environmental Laws, Environmental Permits or Hazardous
Material that seeks damages, penalties, fines, costs or expenses in excess of
$100,000 or injunctive relief against, or that alleges criminal misconduct by,
any Credit Party; (vii) no notice has been received by any Credit Party
identifying it as a “potentially responsible party” or requesting information
under CERCLA or analogous state or foreign statutes, and to the knowledge of
the Credit Parties, there are no facts, circumstances or conditions that may
result in any Credit Party being identified as a “potentially responsible party”
under CERCLA or analogous state or foreign statutes; and (viii) the Credit
Parties have made available to Agent copies of all existing material
environmental reports, reviews and audits and all written information
pertaining to actual or potentially material Environmental Liabilities, in each
case relating to any Credit Party.


 


(b)           Each Credit Party hereby
acknowledges and agrees that Agent (i) is not now, and has not ever been, in
control of any of the Real Estate or any Credit Party’s affairs, and (ii) does
not have the capacity through the provisions of the Loan Documents or otherwise
to influence any Credit Party’s conduct with respect to the ownership, operation
or management of any of its Real Estate or compliance with Environmental Laws
or Environmental Permits.


 


3.18         Insurance.  Disclosure
Schedule (3.18) lists all insurance policies of any nature maintained, as
of the Closing Date, for current occurrences by each Credit Party, as well as a
summary of the terms of each such policy.


 


3.19         Deposit and Disbursement Accounts.  Disclosure Schedule (3.19) lists all
banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Closing Date, including any Disbursement
Accounts, and such Schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number
therefor.


 


3.20         Government Contracts.  Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract
or agreement with any Governmental Authority and no Credit Party’s Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state, local or foreign law.


 


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3.21         Customer and Trade Relations.  As of the Closing Date, there exists no
actual or, to the knowledge of any Credit Party, threatened termination or
cancellation of, or any material adverse modification or change in:  the business relationship of any Credit Party
with any customer or group of customers whose purchases during the preceding 12
months caused them to be ranked among the ten largest customers of such Credit
Party; or the business relationship of any Credit Party with any supplier
essential to its operations.


 


3.22         Bonding; Licenses.  Except as set forth on Disclosure Schedule
3.22, as of the Closing Date, no Credit Party is a party to or bound by any
surety bond agreement or binding requirement with respect to products or
services sold by it or any trademark or patent license agreement with respect
to products sold by it.


 


3.23         Solvency.  Before
and after giving effect to (a) the Loans and Letter of Credit Obligations to be
made or incurred on the Closing Date or such other date as Loans and Letter of
Credit Obligations requested hereunder are made or incurred, (b) the disbursement
of the proceeds of such Loans pursuant to the instructions of Borrower
Representative; (c) the consummation of the Related Transactions; and (d) the
payment and accrual of all transaction costs in connection with the foregoing,
each Credit Party is and will be Solvent.


 


3.24         Status of Holdings.  Prior to the Closing Date, Holdings has not
engaged in any trade or business.


 


4.                                      FINANCIAL STATEMENTS AND INFORMATION


 


4.1           Reports and Notices.


 


(a)           Each Credit Party executing this
Agreement hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to Agent or to Agent and Lenders, as
required, the Financial Statements, notices, Projections and other information
at the times, to the Persons and in the manner set forth in Annex E.


 


(b)           Each Credit Party executing this
Agreement hereby agrees that, from and after the Closing Date and until the
Termination Date, it shall deliver to Agent or to Agent and Lenders, as
required, the various Collateral Reports (including Borrowing Base Certificates
in the form of Exhibit 4.1(b)) at the times, to the Persons and in the
manner set forth in Annex F.


 


4.2           Communication with Accountants.  Each Credit Party executing this Agreement
authorizes (a) Agent and (b) so long as an Event of Default has occurred and is
continuing, each Lender, to communicate directly with its independent certified
public accountants, including Ernst & Young, LLP, and authorizes those
accountants and advisors to communicate to Agent and each Lender information relating
to any Credit Party with respect to the business, results of operations and
financial condition of any Credit Party.


 


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5.                                      AFFIRMATIVE COVENANTS


 


Each
Credit Party executing this Credit Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof and until the
Termination Date:


 


5.1           Maintenance of Existence and Conduct
of Business.  Each Credit Party
shall:  do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
in its jurisdiction of formation or organization, as applicable, and its
material rights and franchises; continue to conduct its business substantially
as now conducted or as otherwise permitted hereunder;  at all times take all reasonable action to
maintain, preserve and protect all of its assets and properties used or useful
in the conduct of its business, and keep the same in good repair, working order
and condition in all material respects (taking into consideration ordinary wear
and tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and transact business only in such corporate and trade
names as are set forth in Disclosure Schedule (5.1).


 


5.2           Payment of Charges.


 


(a)           Subject to Section 5.2(b),
each Credit Party shall pay and discharge or cause to be paid and discharged
promptly all Charges payable by it, including (i) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed) and all
Charges with respect to tax, social security and unemployment withholding with
respect to its employees, (ii) lawful claims for labor, materials, supplies and
services or otherwise, and (iii) all storage or rental charges payable to
warehousemen or bailees, in each case, before any thereof shall become past
due, except in the case of clauses (ii) and (iii) where the
failure to pay or discharge such Charges would not result in aggregate
liabilities in excess of $200,000.


 


(b)           Each Credit Party may in good faith
contest, by appropriate proceedings, the validity or amount of any Charges,
Taxes or claims described in Section 5.2(a); provided that (i)
adequate reserves with respect to such contest are maintained on the books of
such Credit Party, in accordance with GAAP; (ii) no Lien shall be imposed to
secure payment of such Charges in excess of $1,000,000 (other than payments to
warehousemen and/or bailees) that is superior to any of the Liens securing the
Obligations and such contest is maintained and prosecuted continuously and with
diligence and operates to suspend collection or enforcement of such Charges;
(iii) none of the Collateral becomes subject to forfeiture or loss as a result
of such contest; and (iv) such Credit Party shall promptly pay or discharge
such contested Charges, Taxes or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence reasonably
acceptable to Agent of such compliance, payment or discharge, if such contest
is terminated or discontinued adversely to such Credit Party or the conditions
set forth in this Section 5.2(b) are no longer met.


 


5.3           Books and Records.  Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on
a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4).


 


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5.4           Insurance; Damage to or Destruction
of Collateral.


 


(a)           The Credit Parties shall, at their
sole cost and expense, maintain the policies of insurance described on Disclosure
Schedule (3.18) as in effect on the date hereof or otherwise in form
and amounts and with insurers reasonably acceptable to Agent.  Such policies of insurance (or the loss
payable and additional insured endorsements delivered to Agent) shall contain
provisions pursuant to which the insurer agrees to provide thirty (30) days
prior written notice to Agent in the event of any non-renewal, cancellation or
amendment of any such insurance policy. 
If any Credit Party at any time or times hereafter shall fail to obtain
or maintain any of the policies of insurance required above, or to pay all
premiums relating thereto, Agent may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable.  Agent shall have no obligation to obtain
insurance for any Credit Party or pay any premiums therefor.  By doing so, Agent shall not be deemed to
have waived any Event of Default arising from any Credit Party’s failure to
maintain such insurance or pay any premiums therefor.  All sums so disbursed, including reasonable
attorneys’ fees, court costs and other charges related thereto, shall be
payable on demand by Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.


 


(b)           Each Credit Party shall deliver to
Agent, in form and substance reasonably satisfactory to Agent, endorsements to
(i) all “All Risk” and business interruption insurance naming Agent, on behalf
of itself and Lenders, as loss payee, and (ii) all general liability and other
liability policies naming Agent, on behalf of itself and Lenders, as additional
insured.  Each Credit Party irrevocably
makes, constitutes and appoints Agent (and all officers, employees or agents
designated by Agent), so long as any Event of Default has occurred and is
continuing or the anticipated insurance proceeds exceed $1,000,000, as such
Credit Party’s true and lawful agent and attorney-in-fact for the purpose of
making, settling and adjusting claims under such “All Risk” policies of
insurance, endorsing the name of such Credit Party on any check or other item
of payment for the proceeds of such “All Risk” policies of insurance and for
making all determinations and decisions with respect to such “All Risk”
policies of insurance.  Agent shall have
no duty to exercise any rights or powers granted to it pursuant to the
foregoing power-of-attorney.  Borrower
Representative shall promptly notify Agent of any loss, damage, or destruction
to the Collateral in the amount of $1,000,000 or more, whether or not covered
by insurance.  After deducting from such
proceeds (i) the expenses incurred by Agent in the collection or handling
thereof, and (ii) amounts required to be paid to creditors (other than Lenders)
having Permitted Encumbrances, Agent may, at its option, apply such proceeds to
the reduction of the Obligations in accordance with Section 1.3(c);
provided, that in the case of insurance proceeds pertaining to any
Credit Party that is not a Borrower, such insurance proceeds shall be applied
ratably to all of the Loans owing by the Borrowers, or permit or require the
applicable Credit Party to use such money, or any part thereof, to replace,
repair, restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if the
casualty giving rise to such insurance proceeds could not reasonably be
expected to have a Material Adverse Effect and such insurance proceeds do not
exceed $1,000,000 in the aggregate, Agent shall permit the applicable Credit
Party to replace, restore, repair or rebuild the property; provided that
if such Credit Party shall not have completed or entered into binding
agreements, within 180 days of such casualty, or in the case of real property,


 


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12 months of such casualty, to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(c);
provided, further, that in the case of insurance proceeds pertaining to
any Credit Party that is not a Borrower, such insurance proceeds shall applied
ratably to all of the Loan owing by the Borrowers.  All insurance proceeds that are to be made
available to any Credit Party to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding principal
balance of the Revolving Loan (which application shall not result in a
permanent reduction of the Revolving Loan Commitment) and upon such
application, Agent shall establish a Reserve against the Borrowing Base in an
amount equal to the amount of such proceeds so applied.  All insurance proceeds made available to any
Credit Party that is not a Borrower to replace, repair, restore or rebuild
Collateral shall be deposited in a cash collateral account.  Thereafter, such funds shall be made available
to that Credit Party to provide funds to replace, repair, restore or rebuild
the Collateral as follows: (i) Borrower Representative shall request a
Revolving Credit Advance or a release from the cash collateral account be made
to such Credit Party in the amount requested to be released; (ii) so long as
the conditions set forth in Section 2.2 have been met, Revolving Lenders
shall make such Revolving Credit Advance; or Agent shall release funds from the
cash collateral account; and (iii) in the case of insurance proceeds applied
against the Revolving Loan, the Reserve established with respect to such
insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance.  To the extent not used to
replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.3(c); provided,
that in the case of insurance proceeds pertaining to any Credit Party that is
not a Borrower, such insurance proceeds shall be applied to the Loans.


 


5.5           Compliance with Laws.  Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA, labor laws, and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.


 


5.6           Supplemental Disclosure.  From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of an Event of Default) or at
Credit Parties’ election, the Credit Parties shall supplement each Disclosure
Schedule hereto, or any representation herein or in any other Loan Document,
with respect to any matter hereafter arising that, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or as an exception to such representation
or that is necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that
(a) no such supplement to any such Disclosure Schedule or representation shall
amend, supplement or otherwise modify any Disclosure Schedule or
representation, or be or be deemed a waiver of any Event of Default resulting
from the matters disclosed therein, except as consented to by Agent and
Requisite Lenders in writing, and (b) no supplement shall be required or
permitted as to representations and warranties that relate solely to the
Closing Date.


 


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5.7           Intellectual Property.  Each Credit Party will conduct its business
and affairs without infringement of or interference with any Intellectual
Property of any other Person in any material respect and shall comply in all
material respects with the terms of its Licenses.


 


5.8           Environmental Matters.  Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have
a Material Adverse Effect; (b) implement any and all investigation,
remediation, removal and response actions that are appropriate or necessary to
maintain the value and marketability of the Real Estate or to otherwise comply
with Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate in all material respects; (c) notify Agent promptly after such Credit
Party becomes aware of any violation of Environmental Laws or Environmental
Permits or any Release on, at, in, under, above, to, from or about any Real
Estate that is reasonably likely to result in Environmental Liabilities in
excess of $250,000; and (d) promptly forward to Agent a copy of any order,
notice, request for information or any communication or report received by such
Credit Party in connection with any such violation or Release or any other
matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$250,000, in each case whether or not the Environmental Protection Agency or
any Governmental Authority has taken or threatened any action in connection
with any such violation, Release or other matter.  If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability
arising thereunder, or a Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Estate, that, in each case, could
reasonably be expected to have a Material Adverse Effect, then each Credit
Party shall, upon Agent’s written request (i) cause the performance of such
environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrowers’ expense, as Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Agent and shall be in
form and substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. 
Borrowers shall reimburse Agent for the costs of such audits and tests
and the same will constitute a part of the Obligations secured hereunder.


 


5.9           Landlords’ Agreements, Mortgagee
Agreements, Bailee Letters and Real Estate Purchases.  Each Credit Party shall use commercially
reasonable efforts to obtain a landlord’s agreement, mortgagee agreement or
bailee letter, as applicable, from the lessor of each leased property,
mortgagee of owned property or bailee with respect to any warehouse or
manufacturing, processor, converter or customs broker facility or other
location where Collateral is stored or located that has an aggregate fair
market value or purchase price (whichever is higher, as determined by Agent) in
excess of $100,000 at any time from and after the date of this Agreement, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the Collateral
at that


 


41





















 


location, and shall otherwise be
reasonably satisfactory in form and substance to Agent.  With respect to such locations or warehouse
space leased or owned as of the Closing Date and thereafter, if Agent has not
received a landlord or mortgagee agreement or bailee letter as of the Closing
Date (or, if later, as of the date such location is acquired or leased), any
Borrower’s Eligible Inventory at that location shall, in Agent’s discretion, be
excluded from the Borrowing Base or be subject to such Reserves as may be
established by Agent in its reasonable credit judgment.  After the Closing Date, no new real property
or new warehouse space shall be leased by any Credit Party and no Inventory
shall be shipped to a processor or converter under arrangements established
after the Closing Date if the Collateral to be stored or located at such location
(i) has an aggregate fair market value or purchase price (whichever is higher,
as determined by Agent) in excess of $100,000 or (ii) has an aggregate fair
market value or purchase price (whichever is higher, as determined by Agent)
when aggregated with Collateral which has been stored at new real property or
new warehouse spaces leased after the Closing Date or shipped to a processor or
converter under arrangements established after the Closing Date in excess of
$500,000, without the prior written consent of Agent (which consent, in Agent’s
reasonable discretion, may be conditioned upon the establishment of Reserves
acceptable to Agent) or, unless and until a reasonably satisfactory landlord
agreement or bailee letter, as appropriate, shall first have been obtained with
respect to such location.  Each Credit
Party shall timely and fully pay and perform its obligations in all material
respects under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.  In addition to the foregoing, each of Tweco
and Victor may store, keep or otherwise maintain (i) Inventory in an amount not
to exceed $12,000,000 in the
aggregate, and (ii) other Collateral in an amount not to exceed $6,000,000 in the aggregate, at any
warehouse or facility operated in Mexico by either Victor Equipment de Mexico
S.A. de C.V. (“Victor Mexico”) or Tweco de Mexico, S.A. de C.V. (“Tweco
Mexico”) so long as each of Victor Mexico and Tweco Mexico, as applicable,
is a wholly owned direct Subsidiary of any Borrower.  To the extent otherwise permitted hereunder,
if any Credit Party proposes to acquire a fee ownership interest in Real Estate
after the Closing Date, it shall first provide to Agent a mortgage or deed of
trust granting Agent a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, real property
survey, local counsel opinion(s), and, if required by Agent, supplemental
casualty insurance and flood insurance, and such other documents, instruments
or agreements reasonably requested by Agent, in each case, in form and
substance reasonably satisfactory to Agent.


 


5.10         Inventory Reports.  From time to time at the request of Agent,
the Collateral Parties will obtain and deliver to Agent, in each case at
Borrowers’ expense, an Inventory Appraisal in form and substance and from
appraisers reasonably satisfactory to Agent, stating the then current fair
market and Net Orderly Liquidation Values of all or any portion of the
Inventory; provided, however, so long as no Default or Event of
Default is continuing, Agent shall not obtain or request an appraisal as to any
particular category of Inventory to be performed more than two times during any
year at Borrowers’ expense.


 


5.11         Further Assurances.  Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party’s expense and upon the reasonable request of Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as


 


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may be necessary or proper (and in the case of the UK Security
Documents preserve, establish or otherwise evidence the fixed nature of such
security) in the reasonable opinion of Agent to carry out more effectively the
provisions and purposes of this Agreement and each Loan Document.


 


5.12         Centre of Main Interest


 


The UK
Collateral Party shall maintain its center of main interest within the United
Kingdom for the purposes of Recital 13 of EC Regulation No 1346/2000 of 29 May
2000 on Insolvency Proceedings in the United Kingdom.


 


5.13         Refinancing of Second Lien Loan
Obligations.  Unless the Second
Lien Loan Obligations are prepaid in accordance with Section 6.3(b)(vi),
no later than May 22, 2005, the Second Lien Loan Obligations shall be
refinanced or the terms and provisions of the Second Lien Loan Documents shall
be amended, in each case on terms and conditions satisfactory to Agent in its
sole discretion, so that the Indebtedness refinancing the Second Lien Loan
Obligations or the Indebtedness evidenced by the amended Second Lien Loan
Documents, as the case may be, matures no earlier than 90 days after the fifth
anniversary of the Closing Date, does not have the effect of increasing or
decreasing the principal amount thereof and that is otherwise on terms and
conditions no less favorable to Agent or any Lender than the terms of the
existing Second Lien Loan Documents and Intercreditor Agreement.


 


6.                                      NEGATIVE COVENANTS


 


Each
Credit Party executing this Agreement jointly and severally agrees as to all
Credit Parties that from and after the date hereof until the Termination Date:


 


6.1           Mergers, Subsidiaries, Etc.  No Credit Party shall, by operation of law or
otherwise, (a) form a new Subsidiary, unless otherwise permitted
hereunder, or (b) merge or amalgamate with, consolidate with, acquire all or
substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person, except (i) any Borrower may merge, amalgamate or
consolidate with, or acquire the assets or Stock of any other Borrower, (ii)
any Subsidiary of Holdings that is not a Credit Party may merge, amalgamate or
consolidate with, or acquire the assets or Stock of another Subsidiary of
Holdings that is not a Credit Party, (iii) any Borrower may merge, amalgamate
or consolidate with, or acquire the Stock or assets of any other Subsidiary of
Holdings that is a Credit Party, (iv) any Credit Party that is not a Borrower
may merge, amalgamate or consolidate with, or acquire the assets or Stock of
any other Credit Party that is not a Borrower, and (v) for transactions
otherwise permitted under Sections 6.2 or 6.8; provided,
that in the case of clause (iii) above, the continuing or surviving
Person, or the transferee, as the case may be, shall be a Borrower.


 


6.2           Investments; Loans and Advances.  Except as otherwise expressly permitted by
this Section 6, no Credit Party shall, or shall cause or permit its
Foreign Subsidiaries to, make or permit to exist any investment in, or make,
accrue or permit to exist loans or advances of money to, any Person, through
the direct or indirect lending of money, holding of securities or otherwise,
except: (a) that Borrowers and Foreign Subsidiaries may hold investments
comprised of notes payable issued by Account Debtors to any Borrower or any


 


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Foreign Subsidiary pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of business
consistent with past practices; (b) each Credit Party and Foreign Subsidiary
may maintain its existing investments in its Subsidiaries as of the Closing
Date; (c) any Borrower may make investments in any other Borrower; (d) any
Foreign Subsidiary may make investments in any other Foreign Subsidiaries; (e)
any Borrower may make investments in any Credit Party (other than Holdings)
that is not a Borrower; provided that such investments in Credit Parties shall
not exceed $100,000 in the aggregate; (f) any Borrower may make
investments in, or create, any wholly-owned domestic Subsidiary, provided that
such Subsidiary becomes a Borrower, the Stock of such Subsidiary is pledged to
Agent, and such Subsidiary grants Liens to Agent on all of its assets to secure
the Obligations, subject only to Permitted Encumbrances; (g) the Credit Parties
(other than Holdings) may make loans to Holdings, in lieu of distributions
permitted under Section 6.14(d), the proceeds of which shall be
used by Holdings solely to pay out of pocket expenses for administrative, legal
and accounting services provided by third parties that are reasonable and
customary and incurred in the ordinary course of business for such professional
services, or to pay franchise fees, costs and expenses associated with the
issuance and maintenance of its capital stock and similar costs and expenses,
in an annual aggregate amount not to exceed $3,000,000 per Fiscal Year after
the Closing Date; (h) the Credit Parties (other than Holdings) may make loans
to Holdings, in lieu of distributions permitted under Section 6.14(e),
the proceeds of which shall be used by Holdings solely to pay taxes as part of
a consolidated, combined or unitary group, (i) any Borrower may make
investments in, or create, any wholly-owned Foreign Subsidiary, such that the
aggregate amount of all investments in such direct Foreign Subsidiaries funded
after the Prior Credit Agreement Closing Date shall not exceed $5,000,000
(exclusive of investments permitted in clause (k) of this Section 6.2);
provided that 65% of such stock of such direct Foreign Subsidiary
(except that in the case of any Foreign Collateral Parties, 100% of such stock)
shall be pledged to secure the Obligations; (j) any Credit Party or Foreign
Subsidiary may maintain advances, loans and investments in any of their Foreign
Subsidiaries that are in existence as of the date hereof, provided such
advances, loans and investments are not increased; (k) any Credit Party or
Foreign Subsidiary may make investments in any of its Foreign Subsidiaries
consisting of the conversion of intercompany loans (but not intercompany
accounts payable, except for $1,100,000 of intercompany accounts payable
owed by South African Subsidiaries) outstanding as of the Closing Date into
equity; (l) so long as no Event of Default has occurred and is continuing and
there is no outstanding Revolving Loan balance, Borrowers may make investments,
subject to Control Letters in favor of Agent for the benefit of Lenders or
otherwise subject to a perfected security interest in favor of Agent for the
benefit of Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor’s
Ratings Group or Moody’s Investors Service, Inc., (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of “A” or better by a
nationally recognized rating agency (an “A Rated Bank”), (iv) time
deposits maturing no more than thirty (30) days from the date of creation
thereof with A Rated Banks and (v) mutual funds that invest solely in one or
more of the investments described in clauses (i) through (iv)
above; (m) other investments by Credit Parties


 


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and Foreign Subsidiaries not exceeding $100,000 in the aggregate at any
time outstanding; (n) other investments by Credit Parties and Foreign
Subsidiaries not exceeding $2,000,000 in the aggregate at any time outstanding
with Agent’s prior written approval; (o) transactions permitted pursuant to Section
6.4; (p) the Credit Parties may hold investments comprised of one or more
promissory notes equal to all or a portion of the purchase price paid by the
buyer in connection with the disposition of those certain assets set forth in
the Asset Sale Side Letter as permitted pursuant to Section 6.8(g); (q)
Capital Expenditures not prohibited by subsection (a) of Annex G and (r)
the Credit Parties may make a one time investment, advance or loan in the
aggregate amount of $1,500,000 to Thermadyne Victor, Ltd. within ninety (90)
days of the Closing Date.


 


6.3           Indebtedness.


 


(a)           No Credit Party shall, or shall
cause or permit its Foreign Subsidiaries to, create, incur, assume or permit to
exist any Indebtedness, except (without duplication) (i) Indebtedness secured
by purchase money security interests and Capital Leases permitted in Section
6.7(d), (ii) the Loans and the other Obligations, (iii) unfunded pension
fund and other employee benefit plan obligations and liabilities to the extent
they are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in Disclosure Schedule (6.3) and refinancings
thereof or amendments or modifications thereto that do not have the effect of
increasing or decreasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and that are otherwise on
terms and conditions no less favorable to any Credit Party, Foreign Subsidiary,
Agent or any Lender, as reasonably determined by Agent, than the terms of the
Indebtedness being refinanced, amended or modified, (v) Indebtedness arising
from investments, loans or advances among the Credit Parties and any other
Subsidiary of Holdings that are permitted under Section 6.2
(including extensions of the maturity thereof), (vi) Indebtedness consisting of
Guaranteed Indebtedness permitted pursuant to Section 6.6, (vii)
Indebtedness owed to Bank One, N.A. or any of its banking affiliates in respect
of any liabilities arising from treasury, depository and cash management
services or in connection with any automated clearing house transfers of funds
not to exceed $500,000 in the aggregate at any time outstanding, (viii)
Indebtedness consisting of hedging agreements
providing protection against fluctuations in currency values or
commodity prices in connection with any Borrower’s or any of its Subsidiaries’
operations, so long as management of such Borrower or such Subsidiary, as the
case may be, has determined that the entering into of any such hedging
agreement is a bona fide hedging activity (and is not for speculative
purposes), (ix) Indebtedness of Foreign Subsidiaries (excluding Capital Lease
Obligations) in an aggregate outstanding principal amount not to exceed
$15,000,000, (x) Indebtedness consisting of intercompany loans and advances
made by any Borrower to any other Borrower; provided that: (A) each
Borrower shall record all intercompany transactions on its books and records in
a manner reasonably satisfactory to Agent; (B) the obligations of each Borrower
under any such intercompany loans and advances shall be subordinated in right
of payment to the Obligations of such Borrower hereunder; (C) at the time any
such intercompany loan or advance is made by any Borrower to any other Borrower
and after giving effect thereto, each such Borrower shall be Solvent; and (D)
no Event of Default would occur and be continuing after giving effect to any
such proposed intercompany loan; (xi) Indebtedness consisting of intercompany
loans and advances made by any Foreign Subsidiary to any other Foreign
Subsidiary; (xii) obligations of any Credit Party under any interest rate swap,
cap or collar agreement or similar agreement or arrangement related to exposure
to interest rates with respect to not more than $50 million principal amount of
Indebtedness in the aggregate for


 


45





















 


all Credit Parties; and (xiii) Indebtedness consisting of secured
Second Lien Loan Obligations of Borrowers to Second Lien Lenders (as defined in
the Intercreditor Agreement) under the Second Lien Credit Agreement in an
aggregate principal amount not to exceed $20,000,000.


 


(b)           No Credit Party shall, directly or
indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any
Indebtedness prior to its scheduled amortization dates, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with Sections 6.8(b) or (c); (iii) Indebtedness permitted by Section
6.3(a)(iv) upon any refinancing thereof in accordance with Section
6.3(a)(iv); (iv) prepayments of the High Yield Notes to the extent
permitted under Section 1.3(c) hereof; (v) other prepayments of
Indebtedness (excluding any Subordinated Debt) not in excess of $250,000 in the
aggregate; and (vi)  payment in full of
the Second Lien Loan Obligations, as long as at the time of such payment in
full (a) no Event of Default has occurred and is continuing, (b) Borrowing
Availability shall not be less than $40,000,000 (with all trade payables being
paid current other than those being contested in the ordinary course of
business), at any time during the 60 day period immediately prior to such
prepayment, and (c) Borrowers shall deliver to Agent projections evidencing that
Borrowing Availability shall not be less than $20,000,000 (with all trade
payables being paid current) at any time during the  one-year period immediately after giving effect to such
prepayment; provided, however, that condition (b) may be satisfied if on
the day with the least amount of Borrowing Availability during such 60 pay
period prior to such payment in full, (x) Borrowing Availability on such day,
plus (y) without duplication, net cash proceeds arising out of the sale of any
of Holdings’ Subsidiaries (with the prior written consent of Agent) occurring
after the Closing Date and prior to May 22, 2004 exceeds $40,000,000 (for the
avoidance of doubt, Borrowing Availability for this measurement will be
considered on a pro forma basis net of any assets sold in such subsidiary
sales).


 


6.4           Employee Loans and Affiliate
Transactions.


 


(a)           No Borrower shall enter into or be a
party to any transaction with any other Credit Party (other than other
Borrowers) or any Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Borrower’s business and upon
fair and reasonable terms that are no less favorable to such Borrower than
would be obtained in a comparable arm’s length transaction with a Person not an
Affiliate of such Borrower (except for transactions otherwise expressly
permitted hereunder).  In addition, if
any such transaction or series of related transactions (other than purchases
and sales of Inventory in the ordinary course of business) involves payments in
excess of $500,000 in the aggregate, the terms of these transactions must be
disclosed in advance to Agent and Lenders. 
All such transactions in excess of $500,000 existing as of the date
hereof are described in Disclosure Schedule (6.4(a)).


 


(b)           No Credit Party shall enter into any
lending or borrowing transaction with any employees of any Credit Party, except
loans to its respective employees in the ordinary course of business consistent
with past practices for travel and entertainment expenses, relocation costs and
similar purposes and stock option financing up to a maximum of $1,000,000 in
the aggregate at any one time outstanding.


 


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6.5           Capital Structure and Business.  If all or part of a Credit Party’s Stock is
pledged to Agent, that Credit Party shall not issue additional Stock.  No Credit Party shall amend its charter or
bylaws in a manner that would adversely affect Agent or Lenders or such Credit
Party’s duty or ability to repay the Obligations.  No Credit Party shall engage in any business
other than the businesses currently engaged in by it or businesses reasonably
related thereto.


 


6.6           Guaranteed Indebtedness.  No Credit Party shall, or shall cause or
permit its Foreign Subsidiaries to, create, incur, assume or permit to exist
any Guaranteed Indebtedness except (a) by endorsement of instruments or items
of payment for deposit to the general account of any Credit Party, (b) for
Guaranteed Indebtedness incurred for the benefit of any other Credit Party if
the primary obligation is expressly permitted by this Agreement, including
without limitation the guaranty of the High Yield Notes by the Collateral
Parties and the guaranty of the Second Lien Loan Obligations by the Credit
Parties, and (c) Guaranteed Indebtedness incurred for the benefit of any
Foreign Subsidiary by any other Foreign Subsidiary if the primary obligation is
permitted by this Agreement.


 


6.7           Liens.  No Credit
Party shall, or shall cause or permit its Foreign Subsidiaries to, create,
incur, assume or permit to exist any Lien on or with respect to its Accounts or
any of its other properties or assets (whether now owned or hereafter acquired)
except for (a) Permitted Encumbrances; 
(b) Liens in existence on the date hereof and summarized on Disclosure
Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the
principal amount of the Indebtedness so secured is not increased and the Lien
does not attach to any other property; (c) any Liens granted by Foreign
Subsidiaries to secure Indebtedness permitted by Section 6.3(a); (d)
Liens under any conditional sale or other title retention agreements (including
Capital Leases) or in connection with purchase money Indebtedness with respect
to Equipment and Fixtures acquired by (i) any Credit Party in the ordinary
course of business, involving the incurrence of an aggregate amount of purchase
money Indebtedness and Capital Lease Obligations of not more than $23,000,000
outstanding at any one time for all such Liens and (ii) any Foreign Subsidiary
in the ordinary course of business, involving the incurrence of an aggregate
amount of purchase money Indebtedness and Capital Lease Obligations of not more
than $6,500,000 (excluding any sale-leaseback transaction permitted under Section
6.12) outstanding at any one time for all such Liens; provided that,
in each case, such Liens attach only to the assets subject to such purchase
money debt and such Indebtedness is incurred within twenty (20) days following
such purchase and does not exceed 100% of the purchase price of the subject
assets; and (e) other Liens securing Indebtedness not exceeding $250,000 in the
aggregate at any time outstanding, so long as such Liens do not attach to any
Accounts or Inventory.  In addition, no
Credit Party shall become a party to any agreement, note, indenture or
instrument, or take any other action, that would prohibit the creation of a
Lien on any of its properties or other assets in favor of Agent, on behalf of
itself and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases or Licenses which prohibit Liens upon the
assets that are subject thereto.


 


6.8           Sale of Stock and Assets.  No Credit Party shall sell, transfer, convey,
assign or otherwise dispose of any of its properties or other assets, including
the Stock of any of its Subsidiaries (whether in a public or a private offering
or otherwise) or any of its


 


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Accounts, other than (a) the sale of Inventory in the ordinary course
of business, (b) the sale or other disposition by a Credit Party of Equipment,
Fixtures or Real Estate that are obsolete or no longer used or useful in such
Credit Party’s business and having a book value not exceeding (i) $1,000,000 in
the aggregate in any Fiscal Year without Agent’s consent and (ii) $2,000,000 in
the aggregate in any Fiscal Year without the consent of the Requisite Lenders,
(c) the sale or discount of overdue accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof; provided, that this sub-section (c) shall not permit the UK Collateral
Party to sell Accounts of the UK Collateral Party without the Agent’s consent;
(d) sales of Stock or assets of any
Subsidiary of Holdings in connection with a transaction permitted under Section
6.1(b) or Sections 6.2(f) or (h), (e)  the sale of Equipment
and Fixtures by Tweco in connection with the moving of its facilities in
Wichita, Kansas to Denton, Texas, in an amount not to exceed $500,000, (f) the
sale or other disposition of other Equipment and Fixtures having a book value
not exceeding $1,000,000 in the aggregate in any Fiscal Year, and (g) as
permitted in Section 6.2(k).


 


6.9           ERISA.  No
Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or
permit to occur (i) an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA or (ii) an ERISA Event
to the extent such ERISA Event would reasonably be expected to result in taxes,
penalties and other liabilities in an aggregate amount in excess of $250,000 in
the aggregate.


 


6.10         Financial Covenants.  Borrowers shall not breach or fail to comply
with any of the Financial Covenants.


 


6.11         Hazardous Materials.  No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.


 


6.12         Sale-Leasebacks. 
No Credit Party shall, or shall cause or permit its Foreign Subsidiaries
to, engage in any sale-leaseback or synthetic lease transaction involving any
of its assets, except for the sale-leaseback of the Tecmo facility prior to the
date hereof and such other transactions not in excess of $6,000,000 in the
aggregate for Italian Subsidiaries and $2,000,000 in the aggregate for all
other Foreign Subsidiaries.


 


6.13         Cancellation of Indebtedness.  No Credit Party shall cancel any claim or
debt owing to it, except for reasonable consideration negotiated on an arm’s
length basis and in the ordinary course of its business consistent with past
practices (other than as permitted under Section 6.2(k)).


 


6.14         Restricted Payments.  No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrowers to the
extent permitted by Sections 6.2 and 6.3, (b) dividends and
distributions by Subsidiaries of any Borrower paid to such Borrower, (c)
employee loans permitted under Section 6.4(b), (d)


 


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payments of principal and interest on intercompany loans issued in
accordance with Section 6.3, (e) distributions to Holdings, the proceeds
of which shall be applied by Holdings directly to pay out of pocket expenses,
for administrative, legal and accounting services provided by third parties
that are reasonable and customary and incurred in the ordinary course of
business for such professional services, or to pay franchise fees, costs and
expenses associated with the issuance and maintenance of its capital stock and
similar costs and expenses, in an annual aggregate amount not in excess of
$3,000,000 per Fiscal Year, (f) distributions to Holdings in such amounts as
are necessary to enable Holdings to pay income taxes as part of a consolidated
group when and as such income taxes are due; provided that the aggregate
amount distributed to pay such income taxes by Credit Parties shall not exceed
their proportionate share of such income taxes based on the taxable income
generated by the Credit Parties as compared to the taxable income generated by
all of Holdings’ Subsidiaries and (g) distributions to Holdings, the proceeds
of which will be used by Holdings to make payments of interest on the High
Yield Notes to the extent such payments are not barred under Article X of the
Indenture.


 


6.15         Change of Corporate Name, State of
Incorporation or Location; Change of Fiscal Year.  Without altering the restrictions on mergers
involving Credit Parties herein contained, no Credit Party shall (a) change its
name as it appears in official filings in the jurisdiction of its incorporation
or other organization, (b) change its chief executive office, principal place
of business, corporate offices or warehouses or locations at which Collateral
is held or stored, or the location of its records concerning the Collateral,
(c) change the type of entity that it is, (d) change its organization
identification number, if any, issued by its jurisdiction of incorporation or
other organization, or (e) change its jurisdiction of incorporation or
organization or incorporate or organize in any additional jurisdictions, in
each case without at least thirty (30) days prior written notice to Agent and
after Agent’s written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection of any
Liens in favor of Agent, on behalf of Lenders, in any Collateral, has been
completed or taken, and provided that any such new location shall be in
the continental United States.  No Credit
Party shall change its Fiscal Year.


 


6.16         No Impairment of Intercompany
Transfers.  No Credit Party
shall, or shall cause or permit its Foreign Subsidiaries to, directly or
indirectly enter into or become bound by any agreement, instrument, indenture
or other consensual obligation (other than this Agreement, the other Loan
Documents, the High Yield Notes and any loan documents executed in connection
therewith and any other documents reflecting Indebtedness permitted pursuant to
Section 6.3) that could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of any Borrower to any Borrower or between Borrowers.


 


6.17         Real Estate Purchases.  No Credit Party shall purchase a fee simple
ownership interest in Real Estate with an aggregate purchase price in excess of
$500,000.


 


6.18         Changes Relating to High Yield Notes.  No Credit Party shall change or amend the
terms of any Subordinated Debt (or any indenture or agreement in connection
therewith) including, without limitation, the High Yield Notes other than to
add the Collateral Parties as guarantors, if the effect of such amendment is
to: (a) increase the interest rate on such Subordinated Debt; (b) change the
dates upon which payments of principal or


 


49





















 


interest are due on such Subordinated Debt other than to extend such
dates; (c) change any default or event of default other than to delete or make
less restrictive any default provision therein, or add any covenant with
respect to such Subordinated Debt; (d) change the redemption or prepayment
provisions of such Subordinated Debt other than to extend the dates therefor or
to reduce the premiums payable in connection therewith; (e) grant any security
or collateral to secure payment of such Subordinated Debt; or (f) change or
amend any other term if such change or amendment would materially increase the
obligations of the Credit Party thereunder or confer additional material rights
on the holder of such Subordinated Debt in a manner adverse to any Credit
Party, Agent or any Lender.


 


6.19         Holdings.  Holdings
shall not engage in any trade or business other than as a holding company for
its Subsidiaries, or own any assets (other than Stock of its Subsidiaries) or
incur any Indebtedness or Guaranteed Indebtedness (other than the Obligations
and the High Yield Notes); provided, that Holdings may guarantee leases
and other contractual obligations of its Subsidiaries.


 


6.20         German Account. 
The UK Collateral Party shall not permit the balance of the German
Account to at any time exceed 150,000 Euros.


 


7.                                      TERM


 


7.1           Termination. 
The financing arrangements contemplated hereby shall be in effect until
the Commitment Termination Date, and the Loans and all other Obligations shall
be automatically due and payable in full on such date.


 


7.2           Survival of Obligations Upon Termination of
Financing Arrangements.  Except
as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or
not due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date.  Except as otherwise expressly provided herein
or in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Credit Parties, and all
rights of Agent and each Lender, all as contained in the Loan Documents, shall
not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided that the provisions of Section 11, the payment
obligations under Sections 1.13 and 1.14, and the indemnities
contained in the Loan Documents shall survive the Termination Date.


 


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8.                                      EVENTS OF DEFAULT; RIGHTS AND REMEDIES


 


8.1           Events of Default.  The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an “Event
of Default” hereunder:


 


(a)           Any Borrower (i) fails to make any
payment of principal of the Loans or any of the other Obligations when due and
payable, (ii) fails to make any payment of interest on, or Fees owing in
respect of, the Loans or any of the other Obligations when due and payable, and
such default shall continue unremedied for more than three (3) days, or (iii)
fails to pay or reimburse Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within five (5) days following Agent’s
demand for such reimbursement or payment of expenses.


 


(b)           Any Credit Party fails or neglects
to perform, keep or observe any of the provisions of Sections 1.4, 1.6,
5.4(a), 5.13 or 6, or any of the provisions set forth in Annexes
C or G, respectively.


 


(c)           Any Borrower fails or neglects to
perform, keep or observe any of the provisions of Section 4.1 or any
provisions set forth in Annex E, and the same shall remain unremedied
for three (3) Business Days or more.


 


(d)           Any Credit Party fails or neglects
to perform, keep or observe any other provision of
this Agreement or of any of the other Loan Documents (other than any provision
embodied in or covered by any other clause of this Section 8.1) and the
same shall remain unremedied for twenty-five (25) days or more.


 


(e)           A default or breach occurs under any
other agreement, document or instrument to which any Credit Party is a party
that is not cured within any applicable grace period therefor, and such default
or breach (i) involves the failure to make any payment when due in respect of
any Indebtedness or Guaranteed Indebtedness (other than the Obligations) of any
Credit Party in excess of $500,000 in the aggregate (including amounts owing to
all creditors under any combined or syndicated credit arrangements), or (ii)
causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness
or a trustee to cause, Indebtedness or Guaranteed Indebtedness or a portion
thereof in excess of $500,000 in the aggregate to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment, or cash
collateral in respect thereof to be demanded, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee.


 


(f)            Any information contained in any
Borrowing Base Certificate is untrue or incorrect in any respect (other than
(i) inadvertent, immaterial errors not exceeding $250,000 in the aggregate in
any Borrowing Base Certificate, (ii) errors understating the Borrowing Base or
(iii) errors occurring when Borrowing Availability continues to exceed
$10,000,000 after giving effect to the correction of such errors), or any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to Agent or any Lender by any Credit Party
is untrue or incorrect in any material respect as of the date when made or
deemed made.


 


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(g)           Assets of any Credit Party with a
fair market value of $250,000 or more are attached, expropriated, seized, levied
upon or subjected to a writ, distress, warrant, sequestration, execution or
analogous procedure in any jurisdiction, or come within the possession of any
receiver, manager, administrative receiver, administrator, examiner, trustee,
custodian, supervisor, compulsory or interim manager, assignee or other similar
officer acting for the benefit of creditors of any Credit Party and such
condition continues for twenty (20) days or more.


 


(h)           (i) A case or proceeding is
commenced or petition or other filing is made against any Credit Party seeking
a decree or order in respect of such Credit Party (x) under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (y) appointing a custodian, receiver, receiver or manager,
administrative receiver, administrator examiner, trustee, supervisor,
compulsory or interim manager, liquidator, assignee, trustee or sequestrator
(or similar official) for such Credit Party or for any substantial part of any
such Credit Party’s assets, or (z) ordering the winding-up, liquidation,
bankruptcy, dissolution, administration, examination or reorganization (by way
of voluntary arrangement, scheme of arrangement or otherwise) of the affairs of
such Credit Party, and (other than in respect of the UK Collateral Party unless
such case or proceeding is frivolous or vexatious) such case or proceeding
shall remain undismissed or unstayed for sixty (60) days or more or a decree or
order granting the relief sought in such case or proceeding is granted by a
court of competent jurisdiction; or (ii) the Australian Collateral Party
becomes an insolvent under administration or insolvent (each as defined in the
Corporations Act 2001 (Commonwealth)), or has a controller appointed, or is in receivership, in receivership
and management, in liquidation, in provisional liquidation, under
administration or composition, protected from creditors under any statute,
dissolved (other than to carry out a reconstruction while solvent) or is
otherwise unable to pay debts when they fall due or has something similar
happen.


 


(i)            Any Credit Party (i) files a
petition seeking relief under the Bankruptcy Code, or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) consents to or
fails to contest in a timely and appropriate manner the institution of
proceedings thereunder or the filing of any such petition or the appointment of
or taking possession by a custodian, receiver, manager, administrative
receiver, administrator, examiner, trustee, supervisor, compulsory or interim
manager, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party’s
assets, (iii) makes an assignment, composition, compromise or any arrangement
for the benefit of creditors, (iv) takes any action in furtherance of any of
the foregoing; or (v) admits in writing its inability to, or is generally
unable to, pay its debts as such debts become due (including without
limitation, with regard to the UK Collateral Party, within the meaning of
Sections 123(1)(a), (b), (c) or (d) of the United Kingdom Insolvency Act 1986
(as amended from time to time) or suspends making payments.


 


(j)            A final judgment or judgments for
the payment of money in excess of $1,000,000 in the aggregate at any time are
outstanding against one or more of the Credit Parties, and the same are not,
within thirty (30) days after the entry thereof, discharged or execution
thereof stayed or bonded pending appeal, or such judgments are not discharged
prior to the expiration of any such stay.


 


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(k)           Any material provision of any Loan
Document for any reason ceases to be valid, binding and enforceable in
accordance with its terms (or any Credit Party shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in
any action or inaction based on any such assertion, that any provision of any
of the Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any Lien created under any Loan
Document ceases to be a valid and perfected first priority Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby other than as a result of actions or omissions of Agent.


 


(l)            Any Change of Control occurs.


 


(m)          Any material uninsured claims
relating to exposure to asbestos shall be asserted against any Credit Party,
which claims have a reasonable likelihood of success.


 


(n)           On or before the date which is 90
days after the Closing Date (i) Australian Collateral Party has not delivered
to Agent a stamped and executed transfer of the Mortgaged Property to the
Australian Collateral Party in registerable form and (ii) simultaneously with
delivery of such transfer of title, the Australian Collateral Party has not
delivered to Agent an executed mortgage from the Australian Collateral Party in
registerable form, and otherwise in form and substance reasonably acceptable to
Agent, with respect to the Mortgaged Property.


 


(o)           On or before the date which is 60
days after the Closing Date, the UK Collateral Party has not delivered to Agent
an executed German law governed account pledge with respect to the German
Account and, to the extent reasonably required by the Agent, an executed German
law governed assignment of receivables with respect to Accounts owing by
Account Debtors of the UK Collateral Party located in Germany, in each case in
form and substance reasonably acceptable to Agent.


 


8.2           Remedies.


 


(a)           If any Event of Default has occurred
and is continuing, Agent may (and at the written request of the Requisite
Revolving Lenders shall), without notice, suspend the Revolving Loan facility
with respect to additional Advances and/or the incurrence of additional Letter
of Credit Obligations, whereupon any additional Advances and additional Letter
of Credit Obligations shall be made or incurred in Agent’s sole discretion (or
in the sole discretion of the Requisite Lenders, if such suspension occurred at
their direction) so long as such Event of Default is continuing.  If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the
Default Rate.


 


(b)           If any Event of Default has occurred
and is continuing, Agent may (and at the written request of the Requisite
Revolving Lenders shall), without notice: (i) terminate the Revolving Loan
facility with respect to further Advances or the incurrence of further Letter
of Credit Obligations; and (ii) reduce the Revolving Loan Commitment from time
to time.  If any


 


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Event of Default has occurred and is continuing, Agent may (and at the
written request of Requisite Lenders shall), without notice: (i) declare all or
any portion of the Obligations, including all or any portion of any Loan to be forthwith
due and payable, and require that the Letter of Credit Obligations be cash
collateralized in the manner set forth in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrowers and each other Credit Party; and (ii) exercise
any rights and remedies provided to Agent under the Loan Documents or at law or
equity, including all remedies provided under the Code; provided that
upon the occurrence of an Event of Default specified in Sections 8.1(h)
or (i), the Commitments shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.


 


8.3           Waivers by Credit Parties.  Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives (including for
purposes of Section 12): (a) presentment, demand and protest and notice
of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agent on which any Credit Party may in any way be liable, and
hereby ratifies and confirms whatever Agent may do in this regard, (b) all
rights to notice and a hearing prior to Agent’s taking possession or control
of, or to Agent’s replevy, attachment or levy upon, the Collateral or any bond
or security that might be required by any court prior to allowing Agent to
exercise any of its remedies, and (c) the benefit of all valuation, appraisal,
marshaling and exemption laws.


 


9.                                      ASSIGNMENT AND PARTICIPATIONS;
APPOINTMENT OF AGENT


 


9.1           Assignment and Participations.


 


(a)           Subject to the terms of this Section
9.1, any Lender may make an assignment to a Qualified Assignee of, or sell
participations in, at any time or times, the Loan Documents, Loans, Letter of
Credit Obligations and any Commitment or any portion thereof or interest
therein, including any Lender’s rights, title, interests, remedies, powers or
duties thereunder.  Any assignment by a
Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement (an “Assignment Agreement”)
substantially in the form attached hereto as Exhibit 9.1(a) and
otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Agent; (ii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable Loans to be
assigned to it for its own account, for investment purposes and not with a view
to the distribution thereof; (iii) after giving effect to any such partial
assignment, the assignee Lender shall have Commitments in an amount at least
equal to $2,500,000 and the assigning Lender shall have retained Commitments in
an amount at least equal to $2,500,000; (iv) include a payment to Agent of an
assignment fee of $3,500; and (v) so long as no Event of Default has occurred
and is continuing, require the consent of Borrower Representative, which shall
not be unreasonably withheld or delayed, provided, further, that
an assignment will not be effective unless it is recorded by Agent in the


 


54





















 


Loan Account.  In the case of an assignment by a Lender
under this Section 9.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as all other Lenders
hereunder, provided, however that such assignee shall not be entitled to
receive any greater payment under Section 1.13  than the assigning Lender
would have received had such assignment not occurred.  The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment.  Each Borrower hereby acknowledges and agrees that
any assignment shall give rise to a direct obligation of Borrowers to the
assignee and that the assignee shall be considered to be a “Lender”.  In all instances, each Lender’s liability to
make Loans hereunder shall be several and not joint and shall be limited to
such Lender’s Pro Rata Share of the applicable Commitment.  In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such
Lender shall so notify Borrowers and Borrowers shall, upon the request of Agent
or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned.  Notwithstanding the foregoing
provisions of this Section 9.1(a), (i) any Lender may at any time pledge
the Obligations held by it and such Lender’s rights under this Agreement and
the other Loan Documents to a Federal Reserve Bank, provided that no
such pledge to a Federal Reserve Bank shall release such Lender from such
Lender’s obligations hereunder or under any other Loan Document, and (ii) any
Lender that is an investment fund may assign the Obligations held by it and
such Lender’s rights under this Agreement and the other Loan Documents to
another investment fund managed by the same investment advisor, provided
further that such Lender shall notify Agent of any such assignment for
purposes of maintaining the Loan Account in accordance with Section 1.10
hereof, and such assignment will not become effective unless such assignment is
recorded in the Loan Account.


 


(b)           Any participation by a Lender of all
or any part of its Commitments shall be made with the understanding that all
amounts payable by Borrowers hereunder shall be determined as if that Lender
had not sold such participation, and that the holder of any such participation
shall not be entitled to require such Lender to take or omit to take any action
hereunder except actions directly affecting (i) any reduction in the principal
amount of, or interest rate or Fees payable with respect to, any Loan in which
such holder participates, (ii) any extension of the scheduled amortization of
the principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (iii) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement, the
Collateral Documents or the other Loan Documents).  No Borrower or Credit Party shall have any
obligation or duty to any participant. 
Neither Agent nor any Lender (other than the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred. In addition, each Lender granting a
participation under this Section 9.1 shall keep a register,
meeting the requirements of Treasury Regulation Section 5f.103-1(c), of each
participant, specifying such participant’s entitlement to payments of principal
and interest with respect to such participation.


 


(c)           Except as expressly provided in this
Section 9.1, no Lender shall, as between Borrowers and that Lender, or
Agent and that Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other Obligations
owed to such Lender.


 


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(d)           Each Credit Party executing this
Agreement shall assist any Lender permitted to sell assignments or
participations under this Section 9.1 as reasonably required to enable
the assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be reasonably requested and, if requested by
Agent, the preparation of informational materials for, and the participation of
management in meetings with and/or conference calls with, potential assignees
or participants.  Each Credit Party
executing this Agreement shall certify the correctness, completeness and
accuracy in all material respects of all descriptions of the Credit Parties and
their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in Section 3.4(b) and shall be subject to
confidentiality covenants substantially equivalent to those contained in Section
11.8.


 


(e)           Any Lender may furnish any
information concerning Credit Parties in the possession of such Lender from
time to time to assignees and participants (including prospective assignees and
participants); provided that such Lender shall obtain from assignees or
participants confidentiality covenants substantially equivalent to those
contained in Section 11.8.


 


(f)            So long as no Event of Default has
occurred and is continuing, no Lender shall assign or sell participations in
any portion of its Loans or Commitments to a potential Lender or participant,
if, as of the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements under Section
1.14(a), increased costs under Section 1.14(b), an inability to fund
LIBOR Loans under Section 1.14(c), or withholding taxes in accordance
with Section 1.13.


 


(g)           Notwithstanding anything to the
contrary contained herein, any Lender (a “Granting Lender”), may grant
to a special purpose funding vehicle (an “SPC”), identified as such in
writing by the Granting Lender to Agent and Borrowers, the option to provide to
Borrowers all or any part of any Loans that such Granting Lender would
otherwise be obligated to make to Borrowers pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make
any Loan; and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if such Loan were made by such Granting Lender. 
No SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender).  Any SPC may (i) with notice to,
but without the prior written consent of, Borrowers and Agent and assign all or
a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by Borrowers and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support
the funding or maintenance of Loans and (ii) disclose on a confidential basis
any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.  This Section
9.1(g) may not be amended without the prior written consent of each
Granting


 


56





















 


Lender, all or any of whose Loans are being funded by an SPC at the
time of such amendment.  For the
avoidance of doubt, the Granting Lender shall for all purposes, including without
limitation, the approval of any amendment or waiver of any provision of any
Loan Document or the obligation to pay any amount otherwise payable by the
Granting Lender under the Loan Documents, continue to be the Lender of record
hereunder.  In addition, each Granting
Lender (i) shall keep a register, meeting the requirements of Treasury
Regulation Section 5f.103-1(c), of each SPC which has funded all or any part of
any Loan that such Granting Lender would otherwise be obligated to make to
Borrowers pursuant to this Agreement, specifying such SPC’s entitlement to
payments of principal and interest with respect to such Loan and (ii) shall
collect, prior to the time such SPC receives payments with respect to such
funded Loan, from each such SPC the appropriate forms, certificates and
statements described in Section 1.13 (and updated as required by Section
1.13) as if such SPC were a Lender under Section 1.13.


 


(h)           For purposes of this Section 9.1
with respect to each Letter of Credit, if an L/C Issuer transfers its rights
with respect to a Borrower’s reimbursement obligation with respect to a Letter
of Credit, (i) such L/C Issuer shall give notice of such transfer to the Agent
for notation in the Loan Account, (ii) each such transfer shall be notated in
the Loan Account and (iii) no such transfer will be effective for purposes of
this Agreement unless it has been recorded in the Loan Account.


 


9.2           Appointment of Agent.  GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents.  The provisions of this Section
9.2 are solely for the benefit of Agent and Lenders and no Credit Party nor
any other Person shall have any rights as a third party beneficiary of any of
the provisions hereof.  In performing its
functions and duties under this Agreement and the other Loan Documents, except
to the extent provided in Section 1.10, Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person.  Agent shall
have no duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. 
The duties of Agent shall be mechanical and administrative in nature and
Agent shall not have, or be deemed to have, by reason of this Agreement, any
other Loan Document or otherwise a fiduciary relationship in respect of any
Lender.  Except as expressly set forth in
this Agreement and the other Loan Documents, Agent shall not have any duty to
disclose, and shall not be liable for failure to disclose, any information
relating to any Credit Party or any of their respective Subsidiaries or any
Account Debtor that is communicated to or obtained by GE Capital or any of its
Affiliates in any capacity.  Neither
Agent nor any of its Affiliates nor any of their respective officers,
directors, employees, agents or representatives shall be liable to any Lender
for any action taken or omitted to be taken by it hereunder or under any other
Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.


 


If
Agent shall request instructions from Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders or all affected Lenders with respect
to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, Requisite Revolving Lenders,


 


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Supermajority Revolving Lenders or all affected Lenders, as the case
may be, and Agent shall not incur liability to any Person by reason of so
refraining.  Agent shall be fully
justified in failing or refusing to take any action hereunder or under any
other Loan Document (a) if such action would, in the opinion of Agent, be
contrary to law or the terms of this Agreement or any other Loan Document, (b)
if such action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders or all affected Lenders, as
applicable.


 


9.3           Agent’s Reliance, Etc.  Neither Agent nor any of its Affiliates nor
any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct.  Without limiting the generality of the
foregoing, Agent:  (a)  may treat the payee of any Note as the holder
thereof until Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to Agent; (b)
may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in
respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by telecopy,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.


 


9.4           GE Capital and Affiliates.  With respect to its Commitments hereunder,
GE Capital shall have the same rights and powers under this Agreement and
the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, include GE Capital in its individual
capacity.  GE Capital and its Affiliates
may lend money to, invest in, and generally engage in any kind of business
with, any Credit Party, any of their Affiliates and any Person who may do
business with or own securities of any Credit Party or any such Affiliate, all
as if GE Capital were not Agent and without any duty to account therefor to
Lenders.  GE Capital and its Affiliates
may accept fees and other consideration from any Credit Party for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.  GE Capital owns certain
equity interests in Holdings.  Each
Lender acknowledges


 


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the potential conflict of
interest between GE Capital as owner of that equity investment and GE Capital
as Agent.


 


9.5           Lender Credit Decision.  Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other
documents and information as it has deemed appropriate, made its own credit and
financial analysis of the Credit Parties and its own decision to enter into
this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. 
Each Lender acknowledges the potential conflict of interest of each
other Lender as a result of Lenders holding disproportionate interests in the
Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.


 


9.6           Indemnification.  Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Credit Parties hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by Agent in connection
therewith; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent’s gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent is not
reimbursed for such expenses by Credit Parties.


 


9.7           Successor Agent. 
Agent may resign at any time by giving not less than thirty (30) days’
prior written notice thereof to Lenders and Borrower Representative.  Upon any such resignation, the Requisite
Lenders shall have the right to appoint a successor Agent.  If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Agent’s giving notice of resignation,
then the resigning Agent may, on behalf of Lenders, appoint a successor Agent,
which shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary
of a commercial bank or financial institution if such commercial bank or
financial institution is organized under the laws of the United States of
America or of any State thereof and has a combined capital and surplus of at
least $300,000,000.  If no successor
Agent has been appointed pursuant to the foregoing, within thirty (30) days
after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any,
as the Requisite Lenders appoint a successor Agent as provided above.  Any successor Agent appointed by Requisite
Lenders hereunder shall


 


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be subject to the approval of Borrower Representative, such approval
not to be unreasonably withheld or delayed; provided that such approval
shall not be required if a Default or an Event of Default has occurred and is
continuing.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent.  Upon the earlier
of the acceptance of any appointment as Agent hereunder by a successor Agent or
the effective date of the resigning Agent’s resignation, the resigning Agent
shall be discharged from its duties and obligations under this Agreement and
the other Loan Documents, except that any indemnity rights or other rights in
favor of such resigning Agent shall continue. 
After any resigning Agent’s resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was acting as Agent under this Agreement and
the other Loan Documents.


 


9.8           Setoff and Sharing of Payments.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default and
subject to Section 9.9(f), each Lender is hereby authorized at any time
or from time to time, without prior notice to any Credit Party or to any Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of any Borrower or Guarantor (regardless of whether
such balances are then due to such Borrower or Guarantor) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of any Borrower or Guarantor against and
on account of any of the Obligations that are not paid when due; provided that
the Lender exercising such offset rights shall give notice thereof to the
affected Credit Party promptly after exercising such rights.  Any Lender exercising a right of setoff or
otherwise receiving any payment on account of the Obligations in excess of its
Pro Rata Share thereof shall purchase for cash (and the other Lenders or
holders shall sell) such participations in each such other Lender’s or holder’s
Pro Rata Share of the Obligations as would be necessary to cause such Lender to
share the amount so offset or otherwise received with each other Lender or
holder in accordance with their respective Pro Rata Shares (other than offset
rights exercised by any Lender with respect to Sections 1.11, 1.13 or 1.14).  Each Lender’s obligation under this Section
9.8 shall be in addition to and not in limitation of its obligations to
purchase a participation in an amount equal to its Pro Rata Share of the Swing
Line Loans under Section 1.1. 
Each Credit Party that is a Borrower or Guarantor agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender or holder were a direct holder of the
Loans and the other Obligations in the amount of such participation.  Notwithstanding the foregoing, if all or any
portion of the offset amount or payment otherwise received is thereafter
recovered from the Lender that has exercised the right of offset, the purchase
of participations by that Lender shall be rescinded and the purchase price
restored without interest.


 


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9.9           Advances; Payments; Non-Funding
Lenders; Information; Actions in Concert.


 


(a)           Advances; Payments.


 


(i)            Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c).  If the Swing Line Lender declines to make a
Swing Line Loan or if Swing Line Availability is zero, Agent shall notify
Revolving Lenders, promptly after receipt of a Notice of Revolving Credit
Advance and in any event prior to 1:00 p.m. (New York time) on the date such
Notice of Revolving Advance is received, by telecopy, telephone or other
similar form of transmission.  Each
Revolving Lender shall make the amount of such Lender’s Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent’s account as set forth in Annex H not later than 3:00 p.m. (New
York time) on the requested funding date, in the case of an Index Rate Loan,
and not later than 12:00 noon (New York time) on the requested funding date, in
the case of a LIBOR Loan.  After receipt
of such wire transfers (or, in the Agent’s sole discretion, before receipt of
such wire transfers), subject to the terms hereof, Agent shall make the
requested Revolving Credit Advance to the Borrower designated by Borrower
Representative in the Notice of Revolving Credit Advance.  All payments by each Revolving Lender shall
be made without setoff, counterclaim or deduction of any kind.


 


(ii)           Not less than once during each calendar week or more
frequently at Agent’s election (each, a “Settlement Date”), Agent shall
advise each Lender by telephone, or telecopy of the amount of such Lender’s Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. 
Provided that each Lender has funded all payments or Advances required
to be made by it and has purchased all participations required to be purchased
by it under this Agreement and the other Loan Documents as of such Settlement
Date, Agent shall pay to each Lender such Lender’s Pro Rata Share of principal,
interest and Fees paid by Borrowers since the previous Settlement Date for the
benefit of such Lender on the Loans held by it. 
To the extent that any Lender (a “Non-Funding Lender”) has failed
to fund all such payments and Advances or failed to fund the purchase of all
such participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender’s Pro Rata Share of all payments received
from Borrowers.  Such payments shall be
made by wire transfer to such Lender’s account (as specified by such Lender in Annex
H or the applicable Assignment Agreement) not later than 2:00 p.m. (New
York time) on the next Business Day following each Settlement Date.


 


(b)           Availability of Lender’s Pro Rata
Share.  Agent may assume that each Revolving Lender
will make its Pro Rata Share of each Revolving Credit Advance available to
Agent on each funding date.  If such Pro
Rata Share is not, in fact, paid to Agent by such Revolving Lender when due,
Agent will be entitled to recover such amount on demand from such Revolving
Lender without setoff, counterclaim or deduction of any kind.  If any Revolving Lender fails to pay the amount
of its Pro Rata Share forthwith upon Agent’s demand, Agent shall promptly
notify Borrower Representative and Borrowers shall immediately repay such
amount to Agent.  Nothing in this Section
9.9(b) or elsewhere in this Agreement or the other Loan Documents shall be
deemed to require Agent to advance funds on behalf of any Revolving Lender or
to relieve any Revolving Lender from its obligation to fulfill its Commitments


 


61





















 


hereunder or to prejudice any rights
that Borrowers may have against any Revolving Lender as a result of any default
by such Revolving Lender hereunder.  To
the extent that Agent advances funds to any Borrower on behalf of any Revolving
Lender and is not reimbursed therefor on the same Business Day as such Advance
is made, Agent shall be entitled to retain for its account all interest accrued
on such Advance until reimbursed by the applicable Revolving Lender.


 


(c)           Return of Payments.


 


(i)            If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be
received by Agent from Borrowers and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.


 


(ii)           If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender.  In addition, each Lender will
repay to Agent on demand any portion of such amount that Agent has distributed
to such Lender, together with interest at such rate, if any, as Agent is
required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.


 


(d)           Non-Funding Lenders. 
The failure of any Non-Funding Lender to make any Revolving Credit
Advance or any payment required by it hereunder or to purchase any
participation in any Swing Line Loan to be made or purchased by it on the date
specified therefor shall not relieve any other Lender (each such other Revolving
Lender, an “Other Lender”) of its obligations to make such Advance or
purchase such participation on such date, but neither any Other Lender nor
Agent shall be responsible for the failure of any Non-Funding Lender to make an
Advance, purchase a participation or make any other payment required
hereunder.  Notwithstanding anything set
forth herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a “Lender”
or a “Revolving Lender” (or be included in the calculation of “Requisite
Lenders”, “Requisite Revolving Lenders” or “Supermajority Revolving Lenders”
hereunder) for any voting or consent rights under or with respect to any Loan
Document.  At Borrower Representative’s
request, Agent or a Person reasonably acceptable to Agent shall have the right
with Agent’s consent and in Agent’s sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding
Lender agrees that it shall, at Agent’s request, sell and assign to Agent or
such Person, all of the Commitments of that Non-Funding Lender for an amount
equal to the principal balance of all Loans held by such Non-Funding Lender and
all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.


 


(e)           Dissemination of Information. 
Agent shall use reasonable efforts to provide Lenders with any notice of
an Event of Default received by Agent from, or delivered by Agent to, any
Credit Party, with notice of any Event of Default of which Agent has actually
become aware and with notice of any action taken by Agent following any Event
of Default;


 


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provided that Agent shall not
be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent’s gross negligence or willful
misconduct.  Lenders acknowledge that
Borrowers are required to provide Financial Statements to Lenders in accordance
with Annex E hereto and agree that Agent shall have no duty to provide
the same to Lenders.


 


(f)            Actions in Concert. 
Anything in this Agreement to the contrary notwithstanding, each Lender
hereby agrees with each other Lender that no Lender shall take any action to
protect or enforce its rights arising out of this Agreement or the Notes
(including exercising any rights of setoff) without first obtaining the prior
written consent of Agent and Requisite Lenders, it being the intent of Lenders
that any such action to protect or enforce rights under this Agreement and the
Notes shall be taken in concert and at the direction or with the consent of
Agent or Requisite Lenders.


 


10.                               SUCCESSORS AND ASSIGNS


 


10.1         Successors and Assigns.  This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party),
except as otherwise provided herein or therein. 
No Credit Party may assign, transfer, hypothecate or otherwise convey
its rights, benefits, obligations or duties hereunder or under any of the other
Loan Documents without the prior express written consent of Agent and
Lenders.  Any such purported assignment,
transfer, hypothecation or other conveyance by any Credit Party without the
prior express written consent of Agent and Lenders shall be void.  The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of each
Credit Party, Agent and Lenders with respect to the transactions contemplated
hereby and no Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement or any of the other Loan Documents.


 


11.                               MISCELLANEOUS


 


11.1         Complete Agreement; Modification of
Agreement.  The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2.  Any
letter of interest, commitment letter, fee letter or confidentiality agreement,
if any, between any Credit Party and Agent or any Lender or any of their
respective Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.  Notwithstanding the
foregoing, the GE Capital Fee Letter shall survive the execution and delivery
of this Agreement and shall continue to be binding obligations of the parties.


 


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11.2         Amendments and Waivers. 


 


(a)           Except for actions expressly
permitted to be taken by Agent, no amendment, modification, termination or
waiver of any provision of this Agreement or any other Loan Document, or any
consent to any departure by any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by Agent and
Borrowers, and by Requisite Lenders, Requisite Revolving Lenders, Supermajority
Revolving Lenders or all affected Lenders, as applicable.  Except as set forth in clauses (b) and
(c) below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the written consent of
Requisite Lenders.


 


(b)           No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement or the Loan Documents that (i) releases any Guaranty or (ii)
increases the multiplier set forth in the definition of the Borrowing Base or
modifies the definition of Adjusted EBITDA or EBITDA to make more credit
available under the Revolving Loan facility, shall be effective unless the same
shall be in writing and signed by Agent, Supermajority Revolving Lenders and
Borrowers.  No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in Section
2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed
by Agent, Requisite Lenders and Borrowers. 
Notwithstanding anything contained in this Agreement to the contrary, no
waiver or consent with respect to any Default or any Event of Default shall be
effective for purposes of the conditions precedent to the making of Loans or
the incurrence of Letter of Credit Obligations set forth in Section 2.2
unless the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers.


 


(c)           No amendment, modification,
termination or waiver shall, unless in writing and signed by Agent and each
Lender directly affected thereby: (i) increase the principal amount of any
Lender’s Commitment (which action shall be deemed only to affect those Lenders
whose Commitments are increased and may be approved by Requisite Lenders,
including those Lenders whose Commitments are increased); (ii) reduce the
principal of, rate of interest on or Fees payable with respect to any Loan or
Letter of Credit Obligations of any affected Lender; (iii) extend any scheduled
payment date (other than payment dates of mandatory prepayments under Section
1.3(b)) or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender; (v) except as otherwise permitted
herein or in the other Loan Documents, release, or permit any Credit Party to
sell or otherwise dispose of, any Collateral with a value exceeding $5,000,000
in the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of them
to take any action hereunder; and (vii) amend or waive this Section 11.2
or the definitions of the terms “Requisite Lenders”, “Requisite Revolving
Lenders” or “Supermajority Revolving Lenders” insofar as such definitions
affect the substance of this Section 11.2.  Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance


 


64





















 


and for the specific purpose for
which it was given.  No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document.  No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the holder of that Note. 
No notice to or demand on any Credit Party in any case shall entitle
such Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. 
Any amendment, modification, termination, waiver or consent effected in accordance with this Section 11.2 shall
be binding upon each holder of the Notes at the time outstanding and each
future holder of the Notes.


 


(d)           If, in connection with any proposed
amendment, modification, waiver or termination:


 


(i)            requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) or in any of clauses (ii),
(iii) or (iv) below being referred to as a “Non-Consenting
Lender”);


 


(ii)           requiring the consent of Supermajority
Revolving Lenders, the consent of Requisite Revolving Lenders is obtained, but
the consent of Supermajority Revolving Lenders is not obtained;


 


(iii)          requiring the consent of Requisite Revolving Lenders,
the consent of Revolving Lenders holding 51% or more of the aggregate Revolving
Loan Commitments is obtained, but the consent of Requisite Revolving Lenders is
not obtained; or


 


(iv)          requiring the consent of Requisite Lenders, the consent of Lenders
holding 51% or more of the aggregate Commitments is obtained, but the consent
of Requisite Lenders is not obtained,


 


then, so long as Agent is not a Non-Consenting Lender,
at Borrower Representative’s request, Agent or a Person reasonably acceptable
to Agent shall have the right with Agent’s consent and in Agent’s sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lenders, and such Non-Consenting Lenders agree that they shall, upon Agent’s
request, sell and assign to Agent or such Person, all of the Commitments of
such Non-Consenting Lenders for an amount equal to the principal balance of all
Loans held by the Non-Consenting Lenders and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.


 


(e)           Upon payment in full in cash and
performance of all of the Obligations (other than indemnification Obligations),
termination of the Commitments and a release of all claims against Agent and
Lenders, and so long as no suits, actions, proceedings or claims are pending or
threatened against any Indemnified Person asserting any damages, losses or
liabilities that are Indemnified Liabilities, Agent shall deliver to Borrowers
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.


 


11.3         Fees and Expenses.  Borrowers shall reimburse (i) Agent for all
reasonable fees, costs and expenses (including the reasonable fees and expenses
of all of its


 


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counsel, advisors, consultants and auditors) and (ii) Agent (and, with
respect to clauses (c) and (d) below, all Lenders) for all
reasonable fees, costs and expenses, including the reasonable fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers), incurred in connection with the negotiation,
preparation and filing and/or recordation of the Loan Documents and incurred in
connection with:


 


(a)           any amendment, modification or waiver
of, consent with respect to, or termination of, any of the Loan Documents or
Related Transactions Documents or advice in connection with the syndication and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;


 


(b)           any litigation, contest, dispute,
suit, proceeding or action (whether instituted by Agent, any Lender, any Credit
Party or any other Person and whether as a party, witness or otherwise) in any
way relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection herewith or therewith,
including any litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case commenced by or
against any or all of the Credit Parties or any other Person that may be
obligated to Agent by virtue of the Loan Documents; including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or
more Events of Default; provided that in the case of reimbursement of
counsel for Lenders other than Agent, such reimbursement shall be limited to
one counsel for all such Lenders; provided, further, that no Person
shall be entitled to reimbursement under this clause (c) in respect of
any litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person’s gross negligence or willful
misconduct;


 


(c)           any attempt to enforce any remedies
of Agent against any or all of the Credit Parties or any other Person that may
be obligated to Agent or any Lender by virtue of any of the Loan Documents,
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more
Events of Default; provided that in the case of reimbursement of counsel
for Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders;


 


(d)           any workout or restructuring of the
Loans during the pendency of one or more Events of Default; and


 


(e)           efforts to (i) monitor the Loans or
any of the other Obligations, (ii) evaluate, observe or assess any of the
Credit Parties or their respective affairs, and (iii) verify, protect,
evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of
any of the Collateral;


 


including, as to each of clauses (a) through (e)
above, all reasonable attorneys’ and other professional and service providers’
fees arising from such services and other advice, assistance or other
representation, including those in connection with any appellate proceedings,
and all expenses, costs, charges and other fees incurred by such counsel and
others in connection with or relating to any of the events or actions described
in this Section 11.3, all of which shall be payable, on demand, by
Borrowers to Agent, provided, however, that Borrowers shall not


 


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reimburse Agent or any Lenders for any fees, costs, or expenses with
respect to taxes, levies, imposts, deductions, charges or withholdings imposed
by any Governmental Authority, or any liabilities with respect thereto, the
indemnification for which shall be governed solely and exclusively by Section
1.13. Without limiting the generality of the foregoing, such expenses,
costs, charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.


 


11.4         No Waiver.  Agent’s
or any Lender’s failure, at any time or times, to require strict performance by
the Credit Parties of any provision of this Agreement or any other Loan
Document shall not waive, affect or diminish any right of Agent or such Lender
thereafter to demand strict compliance and performance herewith or
therewith.  Any suspension or waiver of
an Event of Default shall not suspend, waive or affect any other Event of
Default whether the same is prior or subsequent thereto and whether the same or
of a different type.  Subject to the
provisions of Section 11.2, none of the undertakings, agreements,
warranties, covenants and representations of any Credit Party contained in this
Agreement or any of the other Loan Documents and no Event of Default by any
Credit Party shall be deemed to have been suspended or waived by Agent or any
Lender, unless such waiver or suspension is by an instrument in writing signed
by an officer of or other authorized employee of Agent and the applicable
required Lenders, and directed to Borrowers specifying such suspension or
waiver.


 


11.5         Remedies. 
Agent’s and Lenders’ rights and remedies under this Agreement shall be cumulative
and nonexclusive of any other rights and remedies that Agent or any Lender may
have under any other agreement, including the other Loan Documents, by
operation of law or otherwise.  Recourse
to the Collateral shall not be required.


 


11.6         Severability. 
Wherever possible, each provision of this Agreement and the other Loan
Documents shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or any other Loan
Document shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such other Loan Document.


 


11.7         Conflict of Terms.  Except as otherwise
provided in this Agreement or any of the other Loan Documents by specific
reference to the applicable provisions of this Agreement, if any provision
contained in this Agreement conflicts with any provision in any of the other
Loan Documents, the provision contained in this Agreement shall govern and
control.


 


11.8         Confidentiality.  Agent and each Lender agree (i) to use any
confidential information provided to them by the Credit Parties only in
connection with the transactions contemplated by this Agreement and (ii) to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential such confidential information for a


 


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period of two (2) years following payment in full of the Obligations,
except that Agent and any Lender may disclose such information following notice
to Borrower Representative (a) to Persons employed or engaged by Agent or such
Lender; (b) to any bona fide assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this Section
11.8 (and any such bona fide assignee or participant or potential assignee
or participant may disclose such information to Persons employed or engaged by
them as described in clause (a) above); (c) as required or requested by
any Governmental Authority or reasonably believed by Agent or such Lender to be
compelled by any court decree, subpoena or legal or administrative order or
process; (d) as, on the advice of Agent’s or such Lender’s counsel, is required
by law; (e) in connection with the exercise of any right or remedy under the
Loan Documents or in connection with any Litigation to which Agent or such
Lender is a party; or (f) that ceases to be confidential through no fault of
Agent or any Lender.  Notwithstanding
anything to the contrary set forth herein or in any other agreement to which
the parties hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the
transactions contemplated by this Agreement, shall not apply to the federal tax
structure or federal tax treatment of such transactions, and each party hereto
(and any employee, representative, or agent of any party hereto) may disclose
to any and all persons, without limitation of any kind, the federal tax
structure and federal tax treatment of such transactions.  The preceding sentence is intended to cause
such transactions not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury regulations promulgated under IRC Section 6011, and
shall be construed in a manner consistent with such purpose.  In addition, each party hereto acknowledges
that it has no proprietary or exclusive rights to the tax structure of such
transactions or any tax matter or tax idea related to such transactions.


 


11.9         GOVERNING LAW. 
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,
NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED
THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK
COUNTY; PROVIDED  FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR


 


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OTHER COURT ORDER IN FAVOR OF AGENT.  EACH CREDIT PARTY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION
THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM  NON  CONVENIENS AND HEREBY CONSENTS
TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY
SUCH COURT.  EACH CREDIT PARTY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT
PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS, PROPER POSTAGE PREPAID.


 


11.10       Notices.  Except
as otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other parties, or
whenever any of the parties desires to give or serve upon any other parties any
communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be deemed to have been validly served, given or delivered:
(a) upon the earlier of actual receipt and three (3) Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) one
(1) Business Day after deposit with a reputable overnight courier with all
charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address or
facsimile number indicated in Annex I or to such other address (or
facsimile number) as may be substituted by notice given as herein
provided.  The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice.  Failure or delay in
delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower
Representative or Agent) designated in Annex I to receive copies shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.


 


11.11       Section Titles. 
The Section titles and Table of Contents contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of this Agreement between the parties hereto.


 


11.12       Counterparts. 
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.


 


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11.13       WAIVER OF JURY TRIAL.  BECAUSE DISPUTES ARISING
IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED THERETO.


 


11.14       Press Releases and Related Matters.  Each Credit Party executing this Agreement
agrees that neither it nor its Affiliates will in the future issue any press
releases or other public disclosure using the name of GE Capital or its
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days’ prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will
consult with GE Capital before issuing such press release or other public
disclosure.  Each Credit Party consents
to the publication by Agent or any Lender of advertising material relating to
the financing transactions contemplated by this Agreement using Borrower’s
name, product photographs, logo or trademark. 
Agent or such Lender shall provide a draft of any advertising material
to each Credit Party for review and comment prior to the publication thereof.  Agent reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.


 


11.15       Reinstatement. 
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Credit Party for
liquidation or reorganization, should any Credit Party become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Credit Party’s
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” “fraudulent
preference,” or otherwise, all as though such payment or performance had not
been made.  In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.


 


11.16       Advice of Counsel.  Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.


 


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11.17       No Strict Construction.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Agreement.


 


11.18       Limitation on Security Interest
with respect to Foreign Subsidiaries. 
No Credit Party shall be required to pledge with respect to any directly
held Foreign Subsidiary (except for the Australian Collateral Party, Canadian
Collateral Party and UK Collateral Party) more than the sum of (a) 65% of the
total combined voting power of all classes of Stock of such Foreign Subsidiary
that are entitled to vote, and (b) 100% of all nonvoting Stock of any such
Subsidiary.  No Credit Party shall be
required to pledge any of the Stock of any indirectly held Foreign Subsidiary
(except for the Australian Subsidiaries, Canadian Subsidiaries and UK
Subsidiaries).


 


12.                               CROSS-GUARANTY


 


12.1         Cross-Guaranty.  Each Credit Party hereby agrees that such
Credit Party is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Agent and Lenders and their respective successors
and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or
hereafter owing to Agent and Lenders by each other Credit Party.  Each Credit Party agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and
not of collection, that its obligations under this Section 12 shall
not be discharged until payment and performance, in full, of the Obligations
has occurred, and that its obligations under this Section 12 shall be
absolute and unconditional, irrespective of, and unaffected by,


 


(a)           the genuineness, validity,
regularity, enforceability or any future amendment of, or change in, this
Agreement, any other Loan Document or any other agreement, document or
instrument to which any Credit Party is or may become a party;


 


(b)           the absence of any action to enforce
this Agreement (including this Section 12) or any other Loan Document or
the waiver or consent by Agent and Lenders with respect to any of the
provisions thereof;


 


(c)           the existence, value or condition of,
or failure to perfect its Lien against, any security for the Obligations or any
action, or the absence of any action, by Agent and Lenders in respect thereof
(including the release of any such security);


 


(d)           the insolvency of any Credit Party; or


 


(e)           any other action or circumstances that
might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor.


 


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Each Credit Party shall be regarded, and shall be in
the same position, as principal debtor with respect to the Obligations
guaranteed hereunder.


 


12.2         Waivers by Credit Parties.  Each Credit Party expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel Agent or Lenders to marshal assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Credit Party. 
It is agreed among each Credit Party, Agent and Lenders that the
foregoing waivers are of the essence of the transaction contemplated by this
Agreement and the other Loan Documents and that, but for the provisions of this
Section 12 and such waivers, Agent and Lenders would decline to enter
into this Agreement.


 


12.3         Benefit of Guaranty.  Each Credit Party agrees that the provisions
of this Section 12 are for the benefit of Agent and Lenders and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Credit Party and Agent or Lenders,
the obligations of such other Credit Party under the Loan Documents.


 


12.4         Waiver of Subrogation, Etc.  Notwithstanding anything to the contrary in
this Agreement or in any other Loan Document, and except as set forth in Section 12.7,
each Credit Party hereby expressly and irrevocably waives any and all rights at
law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor. 
Each Credit Party acknowledges and agrees that this waiver is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Credit Party’s liability hereunder or the enforceability of this Section 12,
and that Agent, Lenders and their respective successors and assigns are
intended third party beneficiaries of the waivers and agreements set forth in
this Section 12.4.


 


12.5         Election of Remedies.  If Agent or any Lender may, under applicable
law, proceed to realize its benefits under any of the Loan Documents giving
Agent or such Lender a Lien upon any Collateral, whether owned by any Credit
Party or by any other Person, either by judicial foreclosure or by non-judicial
sale or enforcement, Agent or any Lender may, at its sole option, determine which
of its remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 12. 
If, in the exercise of any of its rights and remedies, Agent or any
Lender shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against any Credit Party or any other Person,
whether because of any applicable laws pertaining to “election of remedies” or
the like, each Credit Party hereby consents to such action by Agent or such
Lender and waives any claim based upon such action, even if such action by
Agent or such Lender shall result in a full or partial loss of any rights of
subrogation that each Credit Party might otherwise have had but for such action
by Agent or such Lender.  Any election of
remedies that results in the denial or impairment of the right of Agent or any
Lender to seek a deficiency judgment against any Credit Parties shall not
impair any other Credit Party’s obligation to pay the full amount of the
Obligations.  In the event Agent or any
Lender shall bid at any foreclosure or trustee’s sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or
less than the amount of the Obligations and the amount of such bid need not be
paid by Agent or such Lender but shall be


 


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credited against the
Obligations.  The amount of the
successful bid at any such sale, whether Agent, Lender or any other party is
the successful bidder, shall be conclusively deemed to be the fair market value
of the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Section 12, notwithstanding that any
present or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Agent or any Lender might
otherwise be entitled but for such bidding at any such sale.


 


12.6         Limitation.  Notwithstanding
any provision herein contained to the contrary, each Credit Party’s liability
under this Section 12 (which liability is in any event in addition to
amounts for which such Credit Party is primarily liable under Section 1)
shall be limited to an amount not to exceed as of any date of determination the
greater of:


 


(a)           the net amount of all Loans advanced
to any other Credit Party under this Agreement and then re-loaned or otherwise
transferred to, or for the benefit of, such Credit Party; and


 


(b)           the amount that could be claimed by
Agent and Lenders from such Credit Party under this Section 12 without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law after
taking into account, among other things, such Credit Party’s right of
contribution and indemnification from each other Credit Party under Section 12.7.


 


12.7         Contribution with Respect to Guaranty
Obligations.


 


(a)           To the extent that any Credit Party
shall make a payment under this Section 12 of all or any of the
Obligations (other than Loans made to that Credit Party for which it is
primarily liable) (a “Guarantor Payment”) that, taking into account all
other Guarantor Payments then previously or concurrently made by any other
Credit Party, exceeds the amount that such Credit Party would otherwise have
paid if each Credit Party had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Credit Party’s “Allocable
Amount” (as defined below) (as determined immediately prior to such Guarantor
Payment) bore to the aggregate Allocable Amounts of each of the Credit Parties
as determined immediately prior to the making of such Guarantor Payment, then,
following indefeasible payment in full in cash of the Obligations and
termination of the Commitments, such Credit Party shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each
other Credit Party for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.


 


(b)           As of any date of determination, the
“Allocable Amount” of any Credit Party shall be equal to the maximum
amount of the claim that could then be recovered from such Credit Party under
this Section 12 without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law.


 


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(c)           This Section 12.7 is intended
only to define the relative rights of Credit Parties and nothing set forth in
this Section 12.7 is intended to or shall impair the obligations of
Credit Parties, jointly and severally, to pay any amounts as and when the same
shall become due and payable in accordance with the terms of this Agreement,
including Section 12.1.  Nothing
contained in this Section 12.7 shall limit the liability of any Credit
Party to pay the Loans made directly or indirectly to that Credit Party and
accrued interest, Fees and expenses with respect thereto for which such Credit
Party shall be primarily liable.


 


(d)           The parties hereto acknowledge that
the rights of contribution and indemnification hereunder shall constitute
assets of the Credit Party to which such contribution and indemnification is owing.


 


(e)           The rights of the indemnifying Credit
Parties against other Credit Parties under this Section 12.7 shall be
exercisable upon the full and indefeasible payment of the Obligations and the
termination of the Commitments.


 


12.8         Liability Cumulative.  The liability of Credit Parties under this Section
12 is in addition to and shall be cumulative with all liabilities of each
Credit Party to Agent and Lenders under this Agreement and the other Loan
Documents to which such Credit Party is a party or in respect of any
Obligations or obligation of the other Credit Party, without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.


 


12.9         Guarantee
Unconditional. 
The obligations of each Credit Party under this Section 12 are
continuing, unconditional and absolute and, without limiting the generality of
the foregoing, will not be released, discharged, diminished, limited or
otherwise affected by (and each Credit Party hereby consents to or waives, as
applicable, to the fullest extent permitted by applicable law): (a) any
extension, other indulgence, renewal, settlement, discharge, compromise,
waiver, subordination or release in respect of any Obligation, security, Person
or otherwise; (b) any modification or amendment of or supplement to the
Obligations, including any increase or decrease in the principal, the rates of
interest or other amounts payable thereunder; (c) any release, non-perfection
or invalidity of any direct or indirect security for any Obligation; (d) any
change in the existence, structure, constitution, name, objects, powers,
business, control or ownership of any Borrower or any other Person, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
any Borrower or any other person or its assets; (e) the existence of any
claim, set-off or other rights which any Credit Party may have at any time
against any Borrower, the Agent, any Lender, or any other Person, whether in
connection herewith or any unrelated transactions; (f) any invalidity,
illegality or unenforceability relating to or against any Borrower or any
provision of applicable law or regulation purporting to prohibit the payment by
any Borrower of the principal or interest under the Obligations; (g) any limitation,
postponement, prohibition, subordination or other restriction on the rights of
the Agent or any Lender to payment of the Obligations; (h) any release,
substitution or addition of any cosigner, endorser or other guarantor of the
Obligations; (i) any defence arising by reason of any failure of the Agent
or any Lender to make any presentment, demand for performance, notice of non-performance,
protest, and any other notice, including notice of all of the following:  acceptance of this Section 12.9,
partial payment or non-payment of all or any part of the Obligations and the
existence, creation, or incurring of new or additional


 


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Obligations; (j) any
defence arising by reason of any failure of the Agent or any Lender to proceed
against any Borrower or any other Person, to proceed against, apply or exhaust
any security held from any Borrower or any other Person for the Obligations, to
proceed against, apply or exhaust any security held from any Credit Party or any
other Person for this Section 12.9 or to pursue any other remedy in the
power of the Agent or any Lender whatsoever; (k) any law which provides
that the obligation of a guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal obligation or which
reduces a guarantor’s obligation in proportion to the principal obligation;
(l) any defence arising by reason of any incapacity, lack of authority, or
other defence of any Borrower or any other Person, or by reason of any
limitation, postponement, prohibition on the Agent’s or any Lender’s right to
payment of the Obligations or any part thereof, or by reason of the cessation
from any cause whatsoever of the liability of any Borrower or any other Person
with respect to all or any part of the Obligations, or by reason of any act or
omission of the Agent, any Lender or others which directly or indirectly
results in the discharge or release of any Borrower or any other Person or all
or any part of the Obligations or any security or guarantee therefor, whether
by contract, operation of law or otherwise; (m) any defence arising by
reason of any failure by the Agent or any Lender to obtain, perfect or maintain
a perfected or prior (or any) security interest in or lien or encumbrance upon
any property of any Borrower or any other Person, or by reason of any interest
of the Agent or any Lender in any property, whether as owner thereof or the
holder of a security interest therein or lien or encumbrance thereon, being
invalidated, voided, declared fraudulent or preferential or otherwise set
aside, or by reason of any impairment by the Agent or any Lender of any right
to recourse or collateral; (n) any defence arising by reason of the
failure of the Agent or any Lender to marshall any assets; (o) any defence
based upon any failure of the Agent or any Lender to give to any Borrower or
any Credit Party notice of any sale or other disposition of any property
securing any or all of the Obligations or any guarantee thereof, or any defect
in any notice that may be given in connection with any sale or other
disposition of any such property, or any failure of the Agent or any Lender to
comply with any provision of applicable law in enforcing any security interest
in or lien upon any such property, including any failure by the Agent to
dispose of any such property in a commercially reasonable manner; (p) any
dealing whatsoever with any Borrower or other person or any security, whether
negligently or not, or any failure to do so; (q) any defence based upon or
arising out of any bankruptcy, insolvency, reorganization, moratorium,
arrangement, readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Borrower or any other Person, including any
discharge of, or bar against collecting, any of the Obligations, in or as a
result of any such proceeding; or (r) any other act or omission to act or
delay of any kind by any Borrower, the Agent, any Lender, or any other Person
or any other circumstance whatsoever, whether similar or dissimilar to the
foregoing, which might, but for the provisions of this Section 12,
constitute a legal or equitable discharge, limitation or reduction of any
Credit Party’s obligations hereunder (other than the payment in full of all of
the Obligations).  The foregoing
provisions apply (and the foregoing waivers will be effective) even if the
effect of any action (or failure to take action) by the Agent or any Lender is
to destroy or diminish any Credit Party’s subrogation rights, each Credit Party’s
right to proceed against any Borrower for reimbursement, each Credit Party’s
right to recover contribution from any other guarantor or any other right or
remedy.


 


75





















 


12.10       Foreign Currency Obligations.  Each Credit Party will make
payment under this Section 12.10 relative to each Obligation in the
currency (the “Original Currency”) in which the relevant Borrower is
required to pay such Obligation.  If any
Credit Party makes payment relative to any Obligation in a currency (the “Other
Currency”) other than the Original Currency (whether voluntarily or
pursuant to an order or judgment of a court or tribunal of any jurisdiction),
such payment will constitute a discharge of the liability of any Credit Party
hereunder in respect of such Obligation only to the extent of the amount of the
Original Currency which the Agent is able to purchase in Chicago, Illinois with
the amount it receives on the date of receipt. 
If the amount of the Original Currency which the Agent is able to
purchase is less than the amount of such currency originally due to it in
respect to the relevant Obligation, each Credit Party will indemnify and save
the Agent and the Lenders harmless from and against any loss or damage arising
as a result of such deficiency.  This
indemnity will constitute an obligation separate and independent from the other
obligations contained in this Section 12.10, will give rise to a
separate and independent cause of action, will apply irrespective of any
indulgence granted by the Agent or any Lender and will continue in full force
and effect notwithstanding any judgment or order in respect of any amount due
hereunder or under any judgment or order.


 


12.11       Section 956 of the IRC.  If the Obligations incurred hereunder by any
of the UK Collateral Party, the Canadian Collateral Party or the Australian
Collateral Party would result in material adverse tax liabilities under Section
956 of the IRC (or any similar statute) for Borrowers or the other Credit
Parties (as demonstrated by Borrowers in a manner reasonably satisfactory to
Agent), Agent shall consider (but shall be under no obligation of any kind) the
appropriateness of the following actions (a) Agent’s Liens on such Foreign
Collateral Party’s assets shall be released, (b) the pledge of such Foreign
Collateral Party’s stock shall be reduced to 65% of its voting Stock, (c) such
Foreign Collateral Party’s Accounts and Inventory shall be excluded from the
Borrowing Base, (d) such Foreign Collateral Party shall be released from its
Guaranty of the Obligations and (e) such other amendments or modifications
shall be made to this Agreement as are mutually agreed upon by Required Lenders
and Borrowers, (collectively, a “956 Discharge”).


 


13.                               RESTATEMENT OF PRIOR CREDIT AGREEMENT


 


The
parties hereto agree that, on the Closing Date, the following transactions
shall be deemed to occur automatically, without further action by any party
hereto:


 


(a)           the Prior Credit Agreement shall be
deemed to be amended and restated in its entirety in the form of this
Agreement;


 


(b)           all Existing Obligations (including,
without limitation, all Prior Loans) outstanding on the Closing Date shall, to
the extent not paid on the Closing Date, in all respects be continuing and
shall be deemed to be Obligations outstanding hereunder;


 


76





















 


(c)           the guaranties and Collateral
Documents, including the Liens created thereunder in favor of Agent for the
benefit of Agent and Lenders or in favor of Agent and Lenders, as applicable,
and securing payment of the Existing Obligations, as amended and restated on
the Closing Date, shall remain in full force and effect with respect to the
Obligations (including the Term Loan Obligations) and are hereby reaffirmed;
and


 


(d)           all references in the other Loan
Documents to the Prior Credit Agreement shall be deemed to refer without
further amendment to this Agreement.


 


The parties acknowledge and agree that this Agreement
and the other Loan Documents do not constitute a novation, payment and
reborrowing or termination of the Existing Obligations and that all such
Existing Obligations (including, without limitation, the Prior Loans) are in
all respects continued and outstanding as Obligations under this Agreement and
the Notes with only the terms being modified from and after the effective date
of this Agreement as provided in this Agreement, the Notes and the other Loan
Documents.  After giving effect to this
Agreement and all Revolving Credit Advances funded on the Closing Date, the aggregate
outstanding principal balances of the Loans on the Closing Date are as set
forth on Annex K hereto.


 


[Signature
pages follow]


 


77





















 


IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  THERMADYNE
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL DYNAMICS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TWECO PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VICTOR EQUIPMENT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C & G SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


[Signature Page to Credit Agreement]


 


S-1





















 


	
   

  	
  STOODY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL ARC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTIP CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION,

  
	
   

  	
  as Agent and Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Duly
  Authorized Signatory

  
					



 


[Signature Page to Credit Agreement]


 


S-2





















 


The
following Persons are signatories to this Agreement in their capacity as Credit
Parties and not as Borrowers.


 


 


	
   

  	
  THERMADYNE
  HOLDINGS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MECO
  HOLDING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C&G
  SYSTEMS HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE
  AUSTRALIA PTY LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUXTECH
  PTY LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIGWELD
  PTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


[Signature Page to Credit Agreement]


 


S-3





















 


	
   

  	
  QUETALA
  PTY. LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  QUETACK
  PTY. LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE
  WELDING PRODUCTS

  CANADA LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE
  INDUSTRIES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


[Signature Page to Credit Agreement]


 


S-4





















 


ANNEX A (Recitals)


to


CREDIT
AGREEMENT


 


DEFINITIONS


 


Capitalized
terms used in the Loan Documents shall have (unless otherwise provided
elsewhere in the Loan Documents) the following respective meanings,
and all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to
this Agreement:


 


“Account
Debtor” means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).


 


“Accounting
Changes” has the meaning ascribed thereto in Annex G.


 


“Accounts”
means all “accounts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including (a) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper, or Instruments), (including any such
obligations that may be characterized as an account or contract right under the
Code), (b) all of each Credit Party’s rights in, to and under all purchase
orders or receipts for goods or services, (c) all of each Credit Party’s rights
to any goods represented by any of the foregoing (including unpaid sellers’
rights of rescission, replevin, reclamation and stoppage in transit and rights
to returned, reclaimed or repossessed goods), (d) all rights to payment due to
any Credit Party for property sold, leased, licensed, assigned or otherwise
disposed of, for a policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be provided,
for the use or hire of a vessel under a charter or other contract, arising out
of the use of a credit card or charge card, or for services rendered or to be
rendered by such Credit Party or in connection with any other transaction
(whether or not yet earned by performance on the part of such Credit Party),
(e) all health care insurance receivables and (f) all collateral security of
any kind, given by any Account Debtor or any other Person with respect to any
of the foregoing.


 


“Adjusted
EBITDA” means, for any period, 100% of the EBITDA of Holdings and its
domestic Subsidiaries (excluding all Foreign Subsidiaries) and 65% of the
EBITDA of Borrowers’ Canadian Subsidiaries.


 


“Advance”
means any Revolving Credit Advance or Swing Line Advance, as the context may
require.


 


“Affiliate”
means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, 10% or more of the Stock having ordinary voting power in
the election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, (c) each of such
Person’s officers, directors, joint venturers and partners and (d) in the case
of Borrowers, the immediate family members, spouses and lineal descendants of
individuals


 


A-1





















 


who are Affiliates of any Borrower.  For the purposes of this definition, “control”
of a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that neither Agent nor Lender shall be deemed to be an Affiliate of the Credit
Parties.


 


“Agent”
means GE Capital in its capacity as Agent for Lenders or its successor
appointed pursuant to Section 9.7.


 


“Agreement”
means the Credit Agreement by and among Borrowers, the other Credit Parties
party thereto, GE Capital, as Agent and Lender and the other Lenders from time
to time party thereto, as the same may be amended, supplemented, restated or
otherwise modified from time to time.


 


“Appendices”
has the meaning ascribed to it in the recitals to this Agreement.


 


“Applicable
L/C Margin” means the per annum fee, from time to time in effect, payable
with respect to outstanding Letter of Credit Obligations as determined by reference
to Section 1.5(a).


 


“Applicable
Margins” means collectively the Applicable L/C Margin, the Applicable
Unused Line Fee Margin, the Applicable Term Loan Index Margin, the Applicable
Term Loan LIBOR Margin, the Applicable Revolver Index Margin, and the
Applicable Revolver LIBOR Margin.


 


“Applicable
Revolver Index Margin” means the per annum interest rate margin from time
to time in effect and payable in addition to the Index Rate applicable to the
Revolving Loan, as determined by reference to Section 1.5(a).


 


“Applicable
Revolver LIBOR Margin” means the per annum interest rate from time to time
in effect and payable in addition to the LIBOR Rate applicable to the Revolving
Loan, as determined by reference to Section 1.5(a).


 


“Applicable
Term Loan Index Margin” means the per annum interest rate from time to time
in effect and payable in addition to the Index Rate applicable to the Term
Loan, as determined by reference to Section 1.5(a).


 


“Applicable
Term Loan LIBOR Margin” means the per annum interest rate from time to time
in effect and payable in addition to the LIBOR Rate applicable to the Term
Loan, as determined by reference to Section 1.5(a).


 


“Applicable
Unused Line Fee Margin” means the per annum fee, from time to time in
effect, payable in respect of Borrowers’ non-use of committed funds pursuant to
Section 1.7(b), which fee is determined by reference to Section
1.5(a).


 


“Asset
Sale Side Letter” has the meaning ascribed to it in Section 6.8.


 


“Assignment
Agreement” has the meaning ascribed to it in Section 9.1(a).


 


A-2





















 


“Australian
Acknowledgement and Undertaking” means that certain Acknowledgement and
Undertaking dated the date hereof executed by each of Quetala Pty. Ltd.,
Quetack Pty. Ltd. and the Australian Collateral Party in favor of the Agent.


 


“Australian
Blocked Account” means any Australian bank account into which deposits by
the Australian Collateral Party are made, and which account is the subject of
an irrevocable direction to the bank to transfer funds in the account
telegraphically daily to an account nominated by Agent.


 


“Australian
Blocked Account Agreement” means that certain Blocked Account Agreement
dated on or about the date hereof (as amended, restated, supplemented or
otherwise modified from time to time) by and among the Agent, the Commonwealth
Bank of Australia and Cigweld Pty Ltd.


 


“Australian
Collateral Party” means Cigweld Pty Ltd (ACN 007 226 815).


 


“Australian
Deed of Guarantee” means each Deed of Guaranty and Indemnity dated on or
about the date hereof by and among certain Australian Foreign Subsidiaries and
the Agent.


 


“Australian
Fixed and Floating Charge” means each Fixed and Floating Charge dated on or
about the date hereof (as amended, restated, supplemented or otherwise modified
from time to time) by and among the Australian Collateral Party, Thermadyne
Australia Pty Ltd, Duxtech Pty. Ltd. and Agent, on behalf of itself and
Lenders.


 


“Australian
Mortgage of Shares” means the Mortgage of Shares dated on or about the date
hereof (as amended, restated, supplemented or otherwise modified from time to
time) executed by Industries and Holdings in favor of the Agent, on behalf of
itself and Lenders.


 


“Australian
Security Documents” means the Australian Fixed and Floating Charge, Australian
Deed of Guarantee, Australian Mortgage of Shares, Australian Blocked Account
Agreement and Australian Acknowledgement and Undertaking.


 


“Australian
Subsidiary” means each Subsidiary of any Borrower organized under the laws
of Australia.


 


“Bankruptcy
Code” means the provisions of Title 11 of the United States Code, 11 U.S.C.
§§101 et  seq.


 


“Bankruptcy
Court” means, the United States Bankruptcy Court for the Eastern District
of Missouri, Eastern Division, having jurisdiction over the Chapter 11 Cases,
or if such court ceases to exercise jurisdiction over the Chapter 11 Cases,
such other court that exercises jurisdiction over the Chapter 11 Cases.


 


“Borrower
Representative” means Holdings in its capacity as Borrower Representative
pursuant to the provisions of Section 1.1(c).


 


A-3





















 


“Borrowers”
and “Borrower” have the respective meanings ascribed thereto in the
preamble to this Agreement.


 


“Borrowing
Availability” means as of any date of determination, the lesser of (i) the
Maximum Amount and (ii) the Borrowing Base, in each case, less the sum
of the aggregate Revolving Loans and Swing Line Loans then outstanding, less,
in each case, Reserves established by Agent in its reasonable judgment.


 


“Borrowing
Base” means, as of any date of determination by Agent, from time to time,
an amount equal to the sum at such time of:


 


(a)           up to 85% of the book value of Collateral Parties’ Eligible
Accounts; plus


 


(b)           the
lesser of (i) up to 85% of the Net Orderly Liquidation Value of the sum of the
Collateral Parties’ Eligible Inventory multiplied by the then current NOLV
Factor, by category, of Eligible Inventory; and (ii) up to 65% of the book
value of sum of the Collateral Parties’ Eligible Inventory valued at the lower of
cost (determined on a first-in, first-out basis) or market; plus


 


(c)           the
lesser of (i) up to 85% of the Net Orderly Liquidation Value of the sum of the
Collateral Parties’ Eligible In-Transit Inventory multiplied by the then
current NOLV Factor, by category, of Eligible In-Transit Inventory; and (ii) up
to 65% of the book value of sum of the Collateral Parties’ Eligible In-Transit
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market; less


 


(d)           the Rent Reserve; less


 


(e)           the Shipping Reserve; less


 


(f)            the Processors Reserve; less


 


in each of (a), (b) and (c)
above, any other Reserves established by Agent at such time.  In addition, the Agent may at any time make
any adjustments to the Borrowing Base at its sole discretion to reflect
fluctuations in currency values.


 


“Borrowing
Base Certificate” means a certificate to be executed and delivered from
time to time by each Borrower in the form attached to this Agreement as Exhibit
4.1(b).


 


“Business
Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the State of Illinois or New York and
in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.


 


“C
& G” has the meaning ascribed thereto in the preamble to this
Agreement.


 


“C&G
Holdings” means C&G Systems Holding, Inc., a Delaware corporation.


 


“Canadian
Blocked Accounts Agreement” means that certain Blocked Accounts Agreement
(as amended, restated, supplemented or otherwise modified from time to time) by


 


A-4





















 


and between the Canadian
Collateral Party, The Bank of Nova Scotia and the Agent, on behalf of itself
and Lenders.


 


“Canadian
Collateral Party” means Thermadyne Welding Products Canada, Limited.


 


“Canadian
Guarantee” means that certain Canadian Guarantee dated the date hereof (as
amended, restated, supplemented or otherwise modified from time to time) by and
between the Canadian Collateral Party and the Agent, on behalf of itself and
Lenders.


 


“Canadian
Pledge Agreement” means that certain Canadian Pledge Agreement dated the
date hereof (as amended, restated, supplemented or otherwise modified from time
to time) by and between the Canadian Collateral Party and the Agent, on behalf
of itself and Lenders.


 


“Canadian
Security Agreement” means that certain Canadian Security Agreement dated
the date hereof (as amended, restated, supplemented or otherwise modified from
time to time) by and between the Canadian Collateral Party and the Agent, on
behalf of itself and Lenders.


 


“Canadian
Security Documents” means the Canadian Guarantee, Canadian Pledge
Agreement, Canadian Security Agreement and Canadian Blocked Accounts Agreement.


 


“Canadian
Subsidiaries” means each Subsidiary of any Borrower organized under the
laws of Canada or any province of Canada.


 


“Capital
Expenditures” means, with respect to any Person, all expenditures (by the
expenditure of cash or the incurrence of Indebtedness) by such Person during
any measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto that have a useful life of more than one
year and that are required to be capitalized under GAAP, plus, without duplication, cash investments in Foreign Subsidiaries.


 


“Capital
Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.


 


“Capital
Lease Obligation” means, with respect to any Capital Lease of any Person,
the amount of the obligation of the lessee thereunder that, in accordance with
GAAP, would appear on a balance sheet of such lessee in respect of such Capital
Lease.


 


“Cash
Collateral Account” has the meaning ascribed to it Annex B.


 


“Cash
Equivalents” has the meaning ascribed to it in Annex B.


 


“Cash
Management Systems” has the meaning ascribed to it in Section 1.6.


 


“Certificate
of Exemption” has the meaning ascribed to it in Section 1.13(c).


 


A-5





















 


“Change
of Control” means any of the following: 
(a) any person or group of persons (within the meaning of the Securities
Exchange Act of 1934), other than Angelo, Gordon & Co. or the High Yield
Note Holders, shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 30% or more of the issued and outstanding
shares of capital Stock of Holdings having the right to vote for the election
of directors of Holdings under ordinary circumstances; (b) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Holdings (together with any new
directors whose election by the board of directors of Holdings or whose
nomination for election by the Stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office; or (c) a “Change
of Control” as defined in the Indenture.


 


“Chapter
11 Cases” means, the cases under Chapter 11 of the Bankruptcy Code
commenced by, among others, the Borrowers, styled In re Thermadyne Holdings Corporation, et al., Chapter 11
Case No. 01-52840-399, Jointly Administered filed in the Bankruptcy Court.


 


“Charges”
means all federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (d) any Credit Party’s
ownership or use of any properties or other assets, or (e) any other aspect of
any Credit Party’s business.


 


“Chattel
Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Credit Party.


 


“Closing
Date” means November 22, 2004.


 


“Closing
Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex
D.


 


“Code”
means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York, for the Australian Collateral
Party or any events in Australia, means the Corporations Act (Commenwealth) and
for the Canadian Collateral Party or any event in Canada means the Personal
Property Security Act (Ontario), and for the UK Collateral Party or any events
in the United Kingdom, means the Companies Act 1985 (as amended from time to
time) and all other laws that govern or otherwise impact the creation,
registration, perfection or enforceability of security over Collateral located
in the United Kingdom; provided that to the extent that the Code is used
to define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided
further, that in the event that, by reason of mandatory provisions of law, any
or all of the


 


A-6





















 


attachment, perfection or priority of, or remedies with respect to,
Agent’s or any Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.


 


“Collateral”
means the property covered by the Security Agreement and the other Collateral
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Agent, on behalf of itself and Lenders,
to secure the Obligations.


 


“Collateral
Documents” means the Security Agreement, the Pledge Agreements, the
Guaranties, the Patent Security Agreement, the Trademark Security Agreement,
the UK Security Documents, the Australian Security Documents, the Canadian
Security Documents and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations, including but not limited to, those agreements entered into under
the Initial Credit Agreement and Prior Credit Agreement.


 


“Collateral
Parties” means, collectively, the Borrowers, the Australian Collateral
Party, the Canadian Collateral Party and the UK Collateral Party.


 


“Collection
Account” means that certain account of Agent, account number 502-328-54 in
the name of Agent at Deutsche Bank Trust Company Americas in New York, New York
ABA No. 021 001 033, or such other account as may be specified in writing by
Agent as the “Collection Account.”


 


“Commitment
Termination Date” means the earliest of (a) the fifth anniversary of the
Closing Date, (b) the date of termination of Lenders’ obligations to make
Advances and to incur Letter of Credit Obligations or permit existing Loans to
remain outstanding pursuant to Section 8.2(b), and (c) the date of
indefeasible prepayment in full by Borrowers of the Loans and the cancellation
and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to Annex B,
and the permanent reduction of all Commitments to zero dollars ($0).


 


“Commitments”
means (a) as to any Lender, the aggregate of such Lender’s Revolving Loan
Commitment (including without duplication the Swing Line Lender’s Swing Line
Commitment as a subset of its Revolving Loan Commitment) and Term Loan
Commitment as set forth on Annex J to this Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all Lenders,
all Lenders’ Revolving Loan Commitments (including without duplication the
Swing Line Lender’s Swing Line Commitment as a subset of its Revolving Loan
Commitment) and Term Loan Commitment, which commitment shall be Ninety One
Million Three Hundred Thousand Dollars ($91,300,000) on the Closing Date, as to
each of clauses (a) and (b), as such Commitments may be reduced,
amortized or adjusted from time to time in accordance with this Agreement.


 


A-7





















 


“Compliance
Certificate” means a certificate to be executed and delivered from time to
time by Borrower Representative in the form attached to this Agreement as Exhibit
C.


 


“Confirmation
Order” means that the Confirmation Order filed in the Bankruptcy Cases on
April 3, 2003.


 


“Contracts”
means all “contracts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, in any event, including all contracts,
undertakings, or agreements (other than rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating
to the terms of payment or the terms of performance of any Account.


 


“Control
Letter” means a letter agreement between Agent and (i) the issuer of
uncertificated securities with respect to uncertificated securities in the name
of any Credit Party, (ii) a securities intermediary with respect to securities,
whether certificated or uncertificated, securities entitlements and other
financial assets held in a securities account in the name of any Credit Party,
(iii) a futures commission merchant or clearing house, as applicable, with
respect to commodity accounts and commodity contracts held by any Credit Party,
whereby, among other things, the issuer, securities intermediary or futures
commission merchant limits any security interest in the applicable financial
assets in a manner reasonably satisfactory to Agent, acknowledges the Lien of
Agent, on behalf of itself and Lenders, on such financial assets, and agrees to
follow the instructions or entitlement orders of Agent without further consent
by the affected Credit Party.


 


“Copyright
License” means rights under any written agreement now owned or herein after
acquired by any Credit Party granting any right to use any Copyright.


 


“Copyright
Security Agreements” means those certain Copyright Security Agreements
dated as of May 23, 2003 (as amended, restated, supplemented or otherwise
modified from time to time) made in favor of Agent, on behalf of itself and
Lenders, by each applicable Credit Party.


 


“Copyrights”
means all of the following now owned or hereafter adopted or acquired by any
Credit Party: (a) all copyrights and works of authorship (whether registered or
unregistered), all registrations and recordings thereof, and all applications
in connection therewith, including all registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.


 


“Credit
Parties” means Holdings, MECO Holdings, C&G Holdings, each Borrower,
each domestic Subsidiary of a Borrower, the Australian Collateral Party,
Duxtech Pty Ltd. (ACN 007 211 190), Thermadyne Australia Pty Ltd. (ACN 071 843
028), Quetala Pty. Ltd. (ACN 007 246 862), Quetack Pty. Ltd. (ACN 007 226 575),
the Canadian Collateral Party and the UK Collateral Party.


 


A-8





















 


“Default”
means any event that, with the passage of time or notice or both, would, unless
cured or waived, become an Event of Default.


 


“Default
Rate” has the meaning ascribed to it in Section 1.5(d).


 


“Delayed
Draw Term Loan” has the meaning ascribed thereto in Section 1.1(c).


 


“Delayed
Draw Term Loan Commitment” means (a) as to any Lender, the commitment
of such Lender to make its Pro Rata Share of each of the Delayed Draw Term Loan
(each as set forth on Annex J) in the maximum aggregate amount set forth
in Section 1.1(c) or in the most recent Assignment Agreement, if any,
executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make the Term Loans.  The Delayed Draw Term Loan Commitment with
respect to each Term Loan shall reduce automatically by the amount prepaid or
repaid in respect of such Term Loan (but solely by the amount of such
prepayment or repayment allocable to a Lender, for purposes of clause (a) of
this definition).


 


“Deposit
Accounts” means all “deposit accounts” as such term is defined in the Code,
now or hereafter held in the name of any Credit Party.


 


“Disbursement
Accounts” has the meaning ascribed to it in Annex C.


 


“Disclosure
Schedules” means the Schedules prepared by Borrowers and denominated as
Disclosure Schedules (1.4) through (6.7) in the Index to this
Agreement.


 


“Documents”
means all “documents,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located.


 


“Dollars”
or “$”  means
lawful currency of the United States of America.


 


“Dollar
Equivalent” means, with respect to any amount denominated in Dollars, such
amount of Dollars, and with respect to any amount denominated in a currency
other than Dollars, the amount of Dollars, as of any date of determination,
into which such other currency can be converted in accordance with the terms
hereof.


 


“Dynamics”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“EBITDA” means,
with respect to any Person for any fiscal period, without duplication, an
amount equal to (a) consolidated net income of such Person for such period
determined in accordance with GAAP, minus (b) the sum of (i) income tax
credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during
such period arising from the sale, exchange or other disposition of capital assets
by such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities) and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense (including commitment,
agency and letter of credit fees) and deferred financing costs, (iii)
depreciation and amortization for such period, (iv) amortized


 


A-9





















 


debt discount for such period, (v) the amount of any deduction to
consolidated net income as the result of any grant to the management or
employees of such Person or its Subsidiaries of any Stock or stock options, in
each case to the extent included in the calculation of consolidated net income
of such Person for such period in accordance with GAAP, but without
duplication, (vi) the accrual net of any payment in cash related to the net
periodic post retirement benefits, (vii) losses from extraordinary items for
such period, (viii) the non-cash portion of any non-recurring expenses, (ix)
restructuring expenses related to, arising out of or in connection with the
Chapter 11 Cases, (x) any non-recurring employee severance expenses and
non-recurring cash expenses related to plant reorganizations, not to exceed $10,000,000
in the aggregate, incurred prior to January 1, 2005, (xi) the non-cash portion
of any expense or loss attributable to any interest rate agreement or
arrangement permitted under Section 6.3(a)(xii) in any such case prior
to the termination or expiration of such agreement or arrangement and (xii)
$8,900,000 of non-cash reserves to be recorded at December 31, 2003 related
solely to the implementation of a new reserve methodology for Inventory and
Accounts and implementation of an initial accrual for warranty obligations, plus
or minus as applicable (d) the amount of cash received or expended in
such period in respect of any amount which, under clauses (c)(viii) and (xii)
above, was taken into account in determining EBITDA for such period or any prior
period.  For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person’s Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has actually been received by such
Person in the form of cash dividends or distributions; (3) the undistributed
earnings of any Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any
net gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over
the cost to such Person of the investment in such Subsidiary.


 


“Eligible Consigned
Inventory” shall mean Eligible Inventory of any Borrower on consignment (a)
located in the United States, (b) at a location at which the aggregate book
value of such Eligible Inventory is no less than $100,000, (c) with a consignee
of such Borrower with respect to which the aggregate book value of such
consigned Eligible Inventory is not less than $100,000, and (d) with respect to
which Agent shall have received, in each case in form and substance
satisfactory to Agent: (i) a valid consignment agreement or arrangement which
is reasonably satisfactory to Agent is in place with respect to such Eligible
Inventory; (ii) UCC searches against the consignee in those jurisdictions in
which such Eligible Inventory is subject to consignment and the jurisdiction in
which the consignee is organized or maintains its principal place of business
and such other searches that the Agent deems necessary or appropriate; (iii)


 


A-10





















 


UCC-1 financing statements between the consignee and such Borrower, as
consignor, in form and substance satisfactory to Agent, which are duly assigned
to Agent; (iv) a written notice to any lender to the consignee of the first
priority security interest in such Eligible Inventory of Agent; and (v) an
agreement in writing, in form and substance satisfactory to Agent, from the
consignee, pursuant to which such consignee, inter alia, acknowledges the first
priority security interest of Agent in such Collateral, agrees to waive any and
all claims such consignee may, at any time, have against such Collateral,
whether for processing, storage, breach of warranty (with respect to prior
purchases) or otherwise, and agrees to permit Agent access to the premises of
such consignee so as to remove such Collateral from such premises and
acknowledges that it holds and will hold possession of the Collateral for the
benefit of Agent and agrees to follow all instructions of Agent with respect
thereto.


 


“Eligible
In-Transit Inventory” means all raw materials and finished goods Inventory
owned by Borrowers, the Australian Collateral Party or the UK Collateral Party
and not covered by Letters of Credit, and which Inventory is in transit to one
of the Borrowers’, the Australian Collateral Party’s or the UK Collateral Party’s
facilities and which Inventory (a) has been paid for, unless the supplier
(other than a supplier which is a Credit Party) has waived rights to stoppage
in-transit and the law of the applicable jurisdiction where such supplier is
located permits such waiver, (b) is owned by one of the Borrowers, the
Australian Collateral Party or the UK Collateral Party, as applicable (c) is
fully insured, (d) is subject to a first priority security interest in and lien
upon such goods (and any insurance proceeds in respect thereof) in favor of
Agent (except for any possessory lien upon such goods in the possession of a
freight carrier or shipping company securing only the freight charges for the
transportation of such goods to such Borrowers, the Australian Collateral Party
or the UK Collateral Party), (e) is evidenced or deliverable pursuant to a
valid and binding bill of lading (i) issued by a reputable shipping company or
its accredited agent, (ii) bearing a description of the relevant Inventory
either in general or particular terms, and (iii) made out to or otherwise
endorsed in favour of the Borrowers, Australian Collateral Party or UK
Collateral Party, as applicable, an original of which (together with any
required number of non-negotiable copies) has been delivered to Agent or an
agent acting on its behalf or designating Agent as consignee, (f) has been
shipped by a Foreign Subsidiary of the Credit Parties or, in the case of the
Australian Collateral Party and the UK Collateral Party, has been shipped by
any other Credit Party organised or incorporated in a jurisdiction other than
its respective jurisdiction of incorporation, and (g) is otherwise deemed to be
“Eligible Inventory” hereunder.


 


“Enhanced Financial Covenants”  means  the
financial covenants set forth in Annex G.


 


“Environmental
Laws” means all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, standards and regulations (including
equivalent legislation and by-laws applicable in Australian federal, state and
municipal jurisdictions), now or hereafter in effect, and any applicable
judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation) or human health and safety as it
relates to environmental protection. 
Environmental Laws include any applicable provision of the


 


A-11





















 


Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous
Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.);
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.);
the Toxic Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean
Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control
Act (33 U.S.C. §§ 1251 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all applicable regulations
promulgated thereunder, and all applicable analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or
approval statutes.


 


“Environmental
Liabilities” means, with respect to any Person in any jurisdiction, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand
by any Person arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release of a Hazardous Material at, on, in,
under, to or from any real or personal property whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute
or common law.


 


“Environmental
Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any
Environmental Laws.


 


“Equipment”
means all “equipment,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located and, in any event,
including all such Credit Party’s machinery and equipment, including processing
equipment, conveyors, machine tools, data processing and computer equipment,
including embedded software and peripheral equipment and all engineering,
processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, together with all additions and accessions
thereto, replacements therefor, all parts therefor, all substitutes for any of
the foregoing, fuel therefor, and all manuals, drawings, instructions,
warranties and rights with respect thereto, and all products and proceeds
thereof and condemnation awards and insurance proceeds with respect thereto.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any applicable regulations promulgated thereunder.


 


“ERISA
Affiliate” means, with respect to any Credit Party, any Person that,
together with such Credit Party, are treated as a single employer within the
meaning of Sections 414(b), (c), (m) or (o) of the IRC.


 


A-12





















 


“ERISA
Event” means, with respect to any Credit Party or any ERISA Affiliate, (a)
with respect to a Title IV Plan, any event described in Section 4043(c) of
ERISA for which notice to the PBGC has not been waived; (b) the withdrawal of
any Credit Party or ERISA Affiliate from a Title IV Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal
of any Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the
filing of a notice of intent to terminate a Title IV Plan in a distress
termination described in Section 4041(c) of ERISA or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f)
with respect to a Title IV Plan, the existence of an “accumulated funding
deficiency” (as defined in Section 412 of the IRC or Section 302 of ERISA)
whether or not waived, or the failure to make by its due date a required
installment under Section 412(m) of the Code or the failure to make any
required contribution to a Multiemployer Plan; (g) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to a Title IV Plan; (h) the
making of any amendment to any Title IV Plan which could result in the
imposition of a lien or the posting of a bond or other security; (i) with
respect to a Title IV Plan an event described in Section 4062(e) of ERISA; (j)
any other event or condition that would reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (k) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (l) the loss of a Qualified Plan’s qualification or tax exempt
status.


 


“European Account Debtors” means with
regard to Accounts owing to the UK Collateral Party, Account Debtors whose
principal place of business is located in any of Austria, Belgium, France,
Finland, Germany Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain or Sweden, in each case to the extent that such countries remain member
states of the European Union.


 


“Event
of Default” has the meaning ascribed to it in Section 8.1.


 


“Existing
Obligations” shall mean the “Obligations”, as defined in the Prior Credit
Agreement.


 


“Federal
Funds Rate” means, for any day, a floating rate equal to the weighted
average of the rates on overnight Federal funds transactions among members of
the Federal Reserve System, as determined by Agent in its sole discretion,
which determination shall be final, binding and conclusive (absent manifest
error).


 


“Federal
Reserve Board” means the Board of Governors of the Federal Reserve System.


 


“Fees”
means any and all fees payable to Agent or any Lender pursuant to this
Agreement or any of the other Loan Documents.


 


“Financial
Covenants” means the financial covenants set forth in Annex G.


 


A-13





















 


“Financial
Statements” means the consolidated and consolidating income statements and
balance sheets and consolidated statements of cash flows of Holdings and its
Subsidiaries delivered in accordance with Section 3.4(a) and Annex E
(subsections (a) and (c) only).


 


“Fiscal
Month” means any of the monthly accounting periods of Borrowers.


 


“Fiscal
Quarter” means any of the quarterly accounting periods of Borrowers, ending
on March 31, June 30, September 30 and December 31 of each year.


 


“Fiscal
Year” means any of the annual accounting periods of Borrowers ending on
December 31st of each year.


 


“Fixed
Charges” means, with respect to any Person for any fiscal period,
(a) the aggregate of all Interest Expense paid or accrued (without
duplication) during such period (less any interest income received in cash
during such period), plus (b) scheduled payments of principal with
respect to Indebtedness during such period, plus (c) Capital
Expenditures during such period (other than that portion of such Capital
Expenditures financed by lenders other than the Lenders hereunder), plus
(d) income taxes paid or currently payable in cash with respect to such fiscal
period.


 


“Fixed
Charge Coverage Ratio” means, with respect to any Person for any fiscal
period, the ratio of EBITDA to Fixed Charges.


 


“Fixtures”
means all “fixtures” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party.


 


“Foreign
Collateral Parties” 
means, collectively, the Australian Collateral Party, the
Canadian Collateral Party and the UK Collateral Party.


 


“Foreign
Lender” has the meaning ascribed to it in Section 1.13(c).


 


“Foreign
Subsidiary” shall mean a Subsidiary created or organized outside the United
States or under the law of a jurisdiction other than the United States or any
political subdivision thereof.


 


“Funded
Debt” means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness, and specifically including Capital Lease
Obligations, revolving credit and short-term debt, and also including, in the
case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons, but
expressly excluding any obligation attributable to any hedging agreement
related to currency values or commodity prices permitted under Section
6.3(a)(viii) or any interest rate agreement or arrangement permitted under Section
6.3(a)(xii).


 


“GAAP”
means generally accepted accounting principles in the United States of America
(or in the case of the Australian Collateral Party, Canadian Collateral Party
and UK


 


A-14





















 


Collateral Party, generally accepted accounting principles in
Australia, Canada or the UK, respectively) consistently applied, as such term
is further defined in Annex G to this Agreement.


 


“GE
Capital” means General Electric Capital Corporation, a Delaware
corporation.


 


“GE
Capital Fee Letter” means that certain letter, dates as of the date hereof,
between GE Capital and Borrowers with respect to certain Fees to be paid by
Borrowers to GE.


 


“German Account” means that certain
account owned by the UK Collateral Party and held at Nassauische Sparkasse (Z.
H. Peter Hasert, Karl Bosch Str. 10a, 65203 Wiesbaden,
Germany).


 


“General
Intangibles” means all “general intangibles,” as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including all
right, title and interest that such Credit Party may now or hereafter have in
or under any Contract, all payment intangibles, customer lists, Licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License),
all rights and claims in or under insurance policies (including insurance for
fire, damage, loss and casualty, whether covering personal property, real
property, tangible rights or intangible rights, all liability, life, key man
and business interruption insurance, and all unearned premiums), uncertificated
securities, choses in action, deposit, checking and other bank accounts, rights
to receive tax refunds and other payments, rights to receive dividends,
distributions, cash, Instruments and other property in respect of or in
exchange for pledged Stock and Investment Property, rights of indemnification,
all books and records, correspondence, credit files, invoices and other papers,
including without limitation all tapes, cards, computer runs and other papers
and documents in the possession or under the control of such Credit Party or
any computer bureau or service company from time to time acting for such Credit
Party.


 


“Goods”
means all “goods” as defined in the Code, now owned or hereafter acquired by
any Credit Party, wherever located, including embedded software to the extent
included in “goods” as defined in the Code, manufactured homes, standing timber
that is cut and removed for sale and unborn young of animals.


 


“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government in any jurisdiction.


 


“Guaranteed
Indebtedness” means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness,
lease, dividend, or other obligation (“primary obligation”) of any other
Person (the “primary obligor”) in any


 


A-15





















 


manner, including any obligation or arrangement of such Person to (a)
purchase or repurchase any such primary obligation, (b) advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, (d) protect
the beneficiary of such arrangement from loss (other than product warranties
given in the ordinary course of business) or (e) indemnify the owner of such
primary obligation against loss in respect thereof.  The amount of any Guaranteed Indebtedness at
any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of
which such Guaranteed Indebtedness is incurred and (y) the maximum amount for
which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness, or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.


 


“Guaranties”
means any guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.


 


“Guarantors”
means each Person, if any, that executes a guaranty or
other similar agreement in favor of Agent, for itself and the ratable benefit
of Lenders, in connection with the transactions contemplated by this Agreement
and the other Loan Documents.


 


“Hazardous
Material” means any substance, material or waste that is regulated as
hazardous, toxic, pollutant, or words of similar meaning or effect, under any
Environmental Laws, including any material or substance that is (a) defined as
a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,”  “restricted
hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special
waste,” “toxic substance” or other similar term or phrase under any
Environmental Laws, or (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance.


 


“High
Yield Notes” means the 9.25% Senior Subordinated Notes due 2014 issued by
Holdings and guaranteed by the other Credit Parties pursuant to that certain
Indenture dated as of February 5, 2004 (the “Indenture”) in an aggregate
principal amount of $175,000,000.


 


“Holdings”
means Thermadyne Holdings Corporation, a Delaware corporation.


 


“Indebtedness”
means, with respect to any Person, without duplication, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred 6 months or more, but excluding obligations to
trade creditors incurred in the ordinary course of business that are unsecured
and not overdue by more than 6 months unless being contested in good faith, (b)
all reimbursement and other obligations with respect to letters of credit,
bankers’ acceptances and surety bonds, whether or not matured, (c) all
obligations evidenced by notes, bonds, debentures or similar instruments, (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender


 


A-16





















 


under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations and
the present value (discounted at the Index Rate as in effect on the Closing
Date) of future rental payments under all synthetic leases, (f) all obligations
of such Person under commodity purchase or option agreements or other commodity
price hedging arrangements, in each case whether contingent or matured, (g) all
obligations of such Person under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising
from fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
and (i) the Obligations.


 


“Indemnified
Liabilities” has the meaning ascribed to it in Section 1.11(a).


 


“Indemnified
Person” has the meaning ascribed to in Section 1.11.


 


“Indenture”
has the meaning ascribed to it in the definition of “High Yield Notes”.


 


“Index
Rate” means, for any day, a floating rate equal to the higher of (i) the
rate publicly quoted from time to time by The Wall Street Journal
as the “prime rate” (or, if The Wall Street Journal ceases
quoting a prime rate, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled “Selected Interest Rates” as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per
annum.  Each change in any interest rate
provided for in this Agreement based upon the Index Rate shall take effect at
the time of such change in the Index Rate.


 


“Index
Rate Loan” means a Loan or portion thereof bearing interest by reference to
the Index Rate.


 


“Industries”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“Initial
Credit Agreement” means that certain Credit Agreement, dated as of February
5, 2004, by and among the Borrowers, Credit Parties (as defined therein), Agent
and other Persons signatory thereto.


 


“Instruments”
means all “instruments,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and, in any event,
including all certificated securities, all certificates of deposit, and all
promissory notes and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel
Paper.


 


“Intellectual
Property” means any and all Licenses, Patents, Copyrights, Trademarks, and
the goodwill associated with such Trademarks.


 


A-17





















 


“Intercreditor
Agreement” means that certain Amended and Restated Intercreditor Agreement
dated as of the date hereof by and among First Lien Agent, the First Lien
Lenders, the Second Lien Agent and the Second Lien Lenders (as each such term
is defined therein).


 


“Interest
Expense” means, with respect to any Person for any fiscal period, interest
expense (whether cash or non-cash) of such Person determined in accordance with
GAAP for the relevant period ended on such date, including, without
duplication, interest expense with respect to any Funded Debt of such Person
and interest expense for the relevant period that has been capitalized on the
balance sheet of such Person.


 


“Interest
Payment Date” means (a) as to any Index Rate Loan, the first Business Day
of each month to occur while such Loan is outstanding, and (b) as to any LIBOR
Loan, the last day of the applicable LIBOR Period provided that, in
addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an “Interest Payment Date”
with respect to any interest that has then accrued under this Agreement.


 


“International”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“Inventory”
means all “inventory,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and in any event
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party’s business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.


 


“Inventory
Appraisal” means the inventory appraisal delivered to Agent prior to the
Closing Date setting forth the Net Orderly Liquidation Value of Inventory and
each inventory appraisal in form and substance reasonably satisfactory to Agent
delivered to Agent pursuant to Section 5.10.


 


“Investment
Property” means all “investment property” as such term is defined in the
Code now owned or hereafter acquired by any Credit Party, wherever located,
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all
securities entitlements of any Credit Party, including the rights of any Credit
Party to any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of
any Credit Party; and (v) all commodity accounts held by any Credit Party.


 


“IRC”
means the Internal Revenue Code of 1986 and all regulations promulgated
thereunder.


 


A-18





















 


“IRS”
means the Internal Revenue Service.


 


“Italian Subsidiary” means each Subsidiary of
any Borrower organized under the laws of Italy.


 


“Joint
Account” has the meaning ascribed to it in Annex C.


 


“L/C
Issuer” has the meaning ascribed to it in Annex B.


 


“L/C
Sublimit” has the meaning ascribed to it in Annex B.


 


“Lenders”
means GE Capital, the other Lenders named on the signature pages of this
Agreement, and, if any such Lender shall decide to assign all or any portion of
the Obligations, such term shall include any assignee of such Lender.


 


“Letter
of Credit Fee” has the meaning ascribed to it in Annex B.


 


“Letter
of Credit Obligations” means all outstanding obligations incurred by Agent
and Lenders at the request of Borrower Representative, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by Agent or another L/C Issuer or the purchase of
a participation as set forth in Annex B with respect to any Letter
of Credit.  The amount of such Letter of
Credit Obligations shall equal the maximum amount that may be payable at such
time or at any time thereafter by Agent or Lenders thereupon or pursuant
thereto.


 


“Letters
of Credit” means documentary or standby letters of credit issued for the
account of any Borrower by any L/C Issuer, and bankers’ acceptances issued by
any Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.


 


“Letter-of-Credit
Rights” means “letter-of-credit rights” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including rights to
payment or performance under a letter of credit, whether or not such Credit
Party, as beneficiary, has demanded or is entitled to demand payment or
performance.


 


“Leverage
Ratio” means, with respect to Holdings and its Subsidiaries, on a
consolidated basis, the ratio of (a) Funded Debt (less all cash and cash
equivalents on hand) as of any date of determination (including the average
daily closing balance of the Revolving Loan for the thirty (30) days preceding
and including any date of determination), to (b) EBITDA for the twelve months
ending on that date of determination.


 


“LIBOR
Business Day” means a Business Day on which banks in the City of London are
generally open for interbank or foreign exchange
transactions.


 


“LIBOR
Loan” means a Loan or any portion thereof bearing interest by reference to
the LIBOR Rate.


 


“LIBOR
Period” means, with respect to any LIBOR Loan, each period commencing on a
LIBOR Business Day selected by Borrower Representative pursuant to this


 


A-19





















 


Agreement and ending one, two or three months thereafter, as selected
by Borrower Representative’s irrevocable notice to Agent as set forth in Section
1.5(e); provided that the foregoing provision relating to LIBOR
Periods is subject to the following:


 


(a)           if
any LIBOR Period would otherwise end on a day that is not a LIBOR Business Day,
such LIBOR Period shall be extended to the next succeeding LIBOR Business Day
unless the result of such extension would be to carry such LIBOR Period into
another calendar month in which event such LIBOR Period shall end on the
immediately preceding LIBOR Business Day;


 


(b)           any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to such
date;


 


(c)           any LIBOR Period that begins on the last LIBOR Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period) shall
end on the last LIBOR Business Day of a calendar month;


 


(d)           Borrower
Representative shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and


 


(e)           Borrower
Representative shall select LIBOR Periods so that there shall be no more than
seven (7) separate LIBOR Loans in existence at any one time.


 


“LIBOR
Rate” means for each LIBOR Period, a rate of interest determined by Agent
equal to:


 


(a)           the
offered rate for deposits in United States Dollars for the applicable LIBOR
Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time),
on the second full LIBOR Business Day next preceding the first day of such
LIBOR Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by


 


(b)           a
number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on
the day that is two (2) LIBOR Business Days prior to the beginning of such
LIBOR Period (including basic, supplemental, marginal and emergency reserves
under any regulations of the Federal Reserve Board or other Governmental
Authority having jurisdiction with respect thereto, as now and from time to
time in effect) for Eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Federal Reserve Board) that are required to
be maintained by a member bank of the Federal Reserve System.


 


If
such interest rates shall cease to be available from Telerate News Service (or
its successor satisfactory to Agent), the LIBOR Rate shall be determined from
such financial reporting service or other information as shall be mutually
acceptable to Agent and Borrower Representative.


 


A-20





















 


“License”
means any Copyright License, Patent License, Trademark License or other license
of rights or interests now held or hereafter acquired by any Credit Party.


 


“Lien”
means any mortgage or deed of trust, pledge, hypothecation, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance,
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Code or comparable law of
any jurisdiction).


 


“Litigation”
has the meaning ascribed to it in Section 3.13.


 


“Loan
Account” has the meaning ascribed to it in Section 1.10.


 


“Loan
Documents” means this Agreement, the Notes, the Collateral Documents, the
Master Standby Agreement, and all other agreements, instruments, documents and
certificates identified in the Closing Checklist (or previously delivered under
the Initial Credit Agreement or Prior Credit Agreement) executed and delivered
to, or in favor of, Agent or any Lenders and including all other pledges,
powers of attorney, consents, assignments, contracts, notices, letter of credit
agreements and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent or any Lender in connection with this Agreement
or the transactions contemplated thereby. 
Any reference in this Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to this Agreement or such Loan Document as the same may be in effect at
any and all times such reference becomes operative.


 


“Loans”
means the Revolving Loan, Term Loans and the Swing Line Loan.


 


“Loan
Year” means each succeeding period of twelve consecutive months ending on
an anniversary of the Prior Credit Agreement Closing Date.


 


“Lock
Boxes” has the meaning ascribed to it in Annex C.


 


“Margin
Stock” has the meaning ascribed to in Section 3.10.


 


“Master
Disbursement Account” has the meaning ascribed to it in Annex C.


 


“Master
Standby Agreement” means that certain Master Agreement for Standby Letters
of Credit dated as of May 23, 2003 (as amended, restated, supplemented or otherwise
modified from time to time) among Borrowers, as Applicant(s), and GE Capital,
as issuer.


 


“Material
Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or financial or other condition of the Credit
Parties considered as a whole (except, with regard to periods prior to the
Prior Credit Agreement Closing Date, for matters relating to the Chapter 11
Cases and related proceedings), (b) any Borrower’s ability to


 


A-21





















 


pay any of the Loans or any of the other Obligations in accordance with
the terms of this Agreement, (c) the Collateral or Agent’s Liens, on behalf of
itself and Lenders, on the Collateral or the priority of such Liens, or (d)
Agent’s or any Lender’s rights and remedies under this Agreement and the other
Loan Documents.  Without limiting the
generality of the foregoing, any event or occurrence adverse to one or more
Credit Parties which results or could reasonably be expected to result in
losses, costs, damages, liabilities or expenditures in excess of $ 10,000,000
shall constitute a Material Adverse Effect.


 


“Maximum
Amount” means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Lenders as of that date.


 


“MECO
Holdings” means MECO Holding Company, a Delaware corporation.


 


“Mortgaged Property”
means that certain property located at 73 Gower Street, Preston VICTORIA 3072
referred to in the title records as CT Volume 10746 Folio 083.


 


“Mortgages”
means each of the mortgages, deeds of trust, leasehold mortgages, leasehold
deeds of trust, collateral assignments of leases or other real estate security
documents delivered by any Credit Party to Agent on behalf of itself and
Lenders with respect to the Mortgaged Properties, all in form and substance
reasonably satisfactory to Agent.


 


“Multiemployer
Plan” means a “multiemployer plan” as defined in Sections 3(37) or 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate has or has had any obligation or liability, contingent or otherwise,
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.


 


“Net
Orderly Liquidation Value” means the proceeds of Inventory which could be
obtained in an orderly liquidation (net of all liquidation expenses, costs of
sale, operating expenses and retrieval and related costs), as determined
pursuant to the most recent Inventory Appraisal delivered to Agent and notified
to Borrowers and the Lenders.


 


“NOLV
Factor” means, as of the date of the Inventory Appraisal most recently
received by Agent, the relationship between the book value of Inventory and the
Net Orderly Liquidation Value, expressed as a percentage.  The NOLV Factor will be increased or reduced
promptly upon receipt by Agent of each updated Inventory Appraisal.


 


“Non-Funding
Lender” has the meaning ascribed to it in Section 9.9(a)(ii).


 


“Notes”
means, collectively, the Revolving Notes, the Term Notes and the Swing Line
Notes.


 


“Notice
of Conversion/Continuation” has the meaning ascribed to it in Section
1.5(e).


 


“Notice
of Revolving Credit Advance” has the meaning ascribed to it in Section
1.1(a).


 


A-22





















 


“Obligations”
means all loans, advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable) owing by any Credit Party to Agent or
any Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement,
letter of credit agreement or other instrument, arising under this Agreement or
any of the other Loan Documents.  This
term includes all principal, interest (including all interest that accrues
after the commencement of any case or proceeding by or against any Credit Party
in bankruptcy, whether or not allowed in such case or proceeding), Fees,
hedging obligations under swaps, caps and collar arrangements provided by any
Lender, expenses, attorneys’ fees and any other sum chargeable to any Credit
Party under this Agreement or any of the other Loan Documents.


 


“Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.


 


“Overadvance”
has the meaning ascribed to it in Section 1.1(a)(iii).


 


“Patent
License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention
that is claimed in an existing Patent.


 


“Patent
Security Agreements” means those certain Patent Security Agreements dated
as of May 23, 2003 (as amended, restated, supplemented or otherwise modified
from time to time) made in favor of Agent, on behalf of itself and Lenders, by
each applicable Credit Party.


 


“Patents”
means all of the following in which any Credit Party now holds or hereafter
acquires any interest: (a) all letters patent of the United States or of any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or of any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States or any
other country, and (b) all reissues, continuations, continuations-in-part or
extensions thereof.


 


“PBGC”
means the Pension Benefit Guaranty Corporation.


 


“Permitted
Encumbrances” means the following encumbrances: (a) Liens for taxes or assessments
or other governmental Charges not yet due and payable or which are being
contested in accordance with Section 5.2(b); (b) pledges or deposits of
money securing statutory obligations under workmen’s compensation, unemployment
insurance, social security or public liability laws or similar legislation
(excluding Liens under ERISA); (c) pledges or deposits of money securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Credit Party or Foreign Subsidiary is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers’, mechanics’
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers’,
warehousemen’s, suppliers’ or other similar possessory liens arising in


 


A-23





















 


the ordinary course of business and securing liabilities in an
outstanding aggregate amount not in excess of $1,000,000 at any time, so long
as such Liens attach only to Inventory; (f) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which any Credit Party or
Foreign Subsidiary is a party; (g) any attachment or judgment lien not constituting
an Event of Default under Section 8.1(j); (h) zoning restrictions,
easements, licenses, or other restrictions on the use of any Real Estate or
other minor irregularities in title (including leasehold title) thereto, so
long as the same do not materially impair the use, value, or marketability of
such Real Estate; (i) presently existing or hereafter created Liens in favor of
Agent, on behalf of Lenders; (j) Liens expressly permitted under clauses (b)
and (c) of Section 6.7 of this Agreement; (k) customary Liens and
set-off rights in favor of banks maintaining accounts for the Credit Parties or
other Foreign Subsidiaries, (l) other customary Liens imposed in the
jurisdiction of a Foreign Subsidiary provided such Lien is not reasonably
expected to have a material adverse effect on such Foreign Subsidiary and (m)
Liens pursuant to the Second Lien Loan Documents solely to the extent securing
Second Lien Loan Obligations.


 


“Person”
means any individual, sole proprietorship, partnership, company, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).


 


“Plan”
means, at any time, an “employee benefit plan”, as defined in Section 3(3) of
ERISA, that any Credit Party or ERISA Affiliate has or has had any obligation
or liability, contingent or otherwise, maintains, contributes to or has an
obligation to contribute to or has maintained, contributed to or had an
obligation to contribute to at any time within the past 7 years on behalf of
participants who are or were employed by any Credit Party or ERISA Affiliate.


 


“Plan
of Reorganization” means, that certain First Amended and Restated Joint
Plan of Reorganization under Chapter 11 of the Bankruptcy Code dated January
17, 2003, filed in the Chapter 11 Cases including the First Amended and
Restated Disclosure Statement filed in conjunction therewith.


 


“Pledge
Agreements” means those certain Pledge Agreements dated as of May 23, 2003
(as amended, restated, supplemented or otherwise modified from time to time) by
Holdings and each Borrower, pledging to Agent 100% of the Stock of all of their
domestic Subsidiaries (other than Thermadyne Cylinder Co.) and 100% of the
non-voting Stock and 65% of the voting Stock of all Foreign Subsidiaries
directly owned by a domestic Credit Party and any pledge agreements entered
into after the Closing Date by any Credit Party (as required by this Agreement
of any other Loan Document).


 


“Prior
Credit Agreement” has the meaning ascribed thereto in the recitals to this
Agreement.


 


“Prior
Credit Agreement Closing Date” means February 5, 2004.


 


“Prior
Loans” has the meaning ascribed thereto in the recitals to this Agreement.


 


A-24





















 


“Pro
Forma” means the unaudited consolidated balance sheet of Holdings and its
Subsidiaries as of August 31, 2004 after giving pro  forma effect
to the Related Transactions.


 


“Proceeds”
means “proceeds,” as such term is defined in the Code, including (a) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to any
Credit Party from time to time with respect to any of the Collateral, (b) any
and all payments (in any form whatsoever) made or due and payable to any Credit
Party from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting under color of governmental
authority), (c) any claim of any Credit Party against third parties (i) for
past, present or future infringement of any Patent or Patent License, or (ii)
for past, present or future infringement or dilution of any Copyright,
Copyright License, Trademark or Trademark License, or for injury to the
goodwill associated with any Trademark or Trademark License, (d) any recoveries
by any Credit Party against third parties with respect to any litigation or
dispute concerning any of the Collateral including claims arising out of the
loss or nonconformity of, interference with the use of, defects in, or
infringement of rights in, or damage to, Collateral, (e) all amounts collected
on, or distributed on account of, other Collateral, including dividends,
interest, distributions and Instruments with respect to Investment Property and
pledged Stock, and (f) any and all other amounts, rights to payment or other
property acquired upon the sale, lease, license, exchange or other disposition
of Collateral and all rights arising out of Collateral.


 


“Processors Reserve” means, as of any date of
determination, Reserves from time to time established at the Agent’s sole discretion
based on amounts owing to one or more processors of a Collateral Party’s
Inventory.


 


“Projections”
means Holdings’ and its Subsidiaries’ projections as
described in Section 3.4(b) hereto.


 


“Pro
Rata Share” means with respect to all matters relating to any Lender, (a)
prior to the Commitment Termination Date, (i) with respect to the Revolving
Loan, the percentage obtained by dividing (A) the Revolving Loan Commitment of
that Lender by (B) the aggregate Revolving Loan Commitments of all Lenders,
(ii) with respect to the Term Loan A, the percentage obtained by dividing (A)
the Term Loan A Commitment of that Lender by (B) the aggregate Term Loan A
Commitment of all Lenders, (iii) with respect to the Delayed Draw Term Loan,
the percentage obtained by dividing (A) the Delayed Draw Term Loan Commitment
of that Lender by (B) the aggregate Delayed Draw Term Loan Commitment of all
Lenders, and (iv) with respect to all Loans, the percentage obtained by
dividing (A) the aggregate Commitments of that Lender by (B) the aggregate
Commitments of all Lenders, in each case, as any such percentages may be
adjusted by assignments permitted pursuant to Section 9.1, and (b) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders.


 


“ProTip”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“Qualified
Plan” means a Plan that is intended to be tax-qualified under Section
401(a) of the IRC.


 


A-25





















 


“Qualified
Assignee” means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Moody’s at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to
Borrowers without the imposition of any withholding or similar taxes; provided
that no Person proposed to become a Lender after the Closing Date and
determined by Agent to be acting in the capacity of a vulture fund or distressed
debt purchaser shall be a Qualified Assignee, and no Person or Affiliate of
such Person proposed to become a Lender after the Closing Date and that holds
Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.


 


“Real
Estate” has the meaning ascribed to it in Section 3.6.


 


“Refunded
Swing Line Loan” has the meaning ascribed to it in Section 1.1(c)(iii).


 


“Related
Transactions” means the borrowing under the Revolving Loan and the Term
Loan on the Closing Date and the payment of all fees, costs and expenses
associated therewith.


 


“Relationship
Bank” has the meaning ascribed to it in Annex C.


 


“Release”
means any release, spill, emission, leaking, pumping, pouring, emitting,
emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Material in the environment, including the
movement of Hazardous Material through or in the air, soil, surface water,
ground water or property.


 


“Rent
Reserve” means, as of any date determination, a Reserve established at the
Agent’s sole discretion for up to four (4) months rent owing under leases of
any of the Collateral Parties with respect to locations as to which Agent has
not received a landlord agreement in form and substance reasonably satisfactory
to the Agent or otherwise waived such requirement, or as to which rent for such
location is not current.


 


“Requisite
Lenders” means Lenders having (a) more than 66 2/3% of the Commitments of
all Lenders, or (b) if the Commitments have been terminated, more than
66 2/3% of the aggregate outstanding amount of all Loans; provided
that so long as there are only two Lenders, Requisite Lenders shall mean all
Lenders.


 


“Requisite
Revolving Lenders” means Lenders having (a) more than 66 2/3% of the Revolving
Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments have
been terminated, more than 66 2/3% of the aggregate outstanding amount of the
Revolving Loan; provided that so long as there are only two Revolving
Lenders, Requisite Revolving Lenders shall mean all Revolving Lenders.


 


A-26





















 


“Reserves”
means (a) the Rent Reserve, (b) reserves established by Agent from time to time
against Eligible Inventory pursuant to Section 5.9, (c) reserves
established pursuant to Section 5.4(c), (d) reserves established to
reflect UK Prior Claims, (e) such other reserves against Eligible Accounts,
Eligible Inventory or Borrowing Availability of the Collateral Parties that
Agent may, in its reasonable credit judgment, establish from time to time.  Without limiting the generality of the
foregoing, Reserves established to ensure the payment of accrued Interest
Expenses or Indebtedness shall be deemed to be a reasonable exercise of Agent’s
credit judgment.


 


“Restricted
Payment” means, with respect to any Credit Party (a) the declaration or
payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of
Stock; (b) any payment on account of the purchase, redemption, defeasance,
sinking fund or other retirement of such Credit Party’s Stock or any other
payment or distribution made in respect thereof, either directly or indirectly;
(c) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to, any Subordinated Debt; (d) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire Stock of such Credit Party now or
hereafter outstanding; (e) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any shares of such Credit Party’s Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer
of funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) by such Credit Party to any Stockholder of such
Credit Party or its Affiliates.


 


“Retiree
Welfare Plan” means, at any time, a Plan that is a welfare plan (within the
meaning of Section 3(1) of ERISA) and that provides for continuing coverage or
benefits for any participant or any beneficiary of a participant after the last
day of the calendar month following such participant’s termination of
employment, other than continuation coverage provided pursuant to Section 4980B
of the IRC or other similar state law and at the sole expense of the
participant or the beneficiary of the participant.


 


“Revolving
Credit Advance” has the meaning ascribed to it in Section 1.1(a)(i).


 


“Revolving
Lenders” means, as of any date of determination, Lenders having a Revolving
Loan Commitment.


 


“Revolving
Loan” means, at any time, the sum of (i) the aggregate amount of Revolving
Credit Advances outstanding to Borrower plus (ii) the aggregate Letter
of Credit Obligations incurred on behalf of Borrower.  Unless the context otherwise requires,
references to the outstanding principal balance of the Revolving Loan shall
include the outstanding balance of Letter of Credit Obligations.


 


A-27





















 


“Revolving
Loan Commitment” means (a) as to any Lender, the aggregate commitment of
such Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth on Annex J to this Agreement or in the most
recent Assignment Agreement executed by such Lender, and (b) as to all Lenders,
the aggregate commitment of all Lenders to make Revolving Credit Advances or
incur Letter of Credit Obligations, which aggregate commitment shall be Eighty
Million Dollars ($80,000,000) on the Closing Date, as such amount may be
further adjusted, if at all, from time to time in accordance with this
Agreement.


 


“Revolving
Note” has the meaning ascribed to it in Section 1.1(a)(ii).


 


“Scheduled
Installments” means, collectively, the Scheduled Installments A and Scheduled
Installments B.


 


“Scheduled
Installments A” has the meaning ascribed to it in Section 1.1(b).


 


“Scheduled
Installments B” has the meaning ascribed to it in Section 1.1(c).


 


“Second Lien Credit Agreement” shall mean
that certain Second Lien Credit Agreement, dated as of July 29, 2004, by and
among Credit Suisse First Boston, the Borrowers and the other Persons signatory
thereto, in the initial principal amount of $20,000,000, as amended by that
certain Amendment No. 1 and Agreement, effective as of July 29, 2004 and that
certain Amendment No. 2 and Joinder Agreement, dated as of the date hereof.


 


“Second Lien Loan Obligations” has the
meaning ascribed to it in the Intercreditor Agreement.


 


“Second Lien Loan Documents” has the meaning
ascribed to in the Intercreditor Agreement.


 


“Security
Agreement” means that certain Security Agreement dated as of May 23, 2003
(as amended, restated, supplemented or otherwise modified from time to time)
entered into by and among Agent, on behalf of itself and Lenders, and each
Credit Party that is a signatory thereto.


 


“Security
Trustee” means the Agent acting in its capacity as security trustee
pursuant to the UK Security Documents.


 


“Senior
Notes” means the senior notes issued by Holdings on the Prior Credit
Agreement Closing Date and guaranteed by other Credit Parties pursuant to the
Plan of Reorganization in an aggregate principal amount of $180,000,000, as the
same may be amended, supplemented, restated or otherwise modified from time to
time.


 


“Senior
Notes Agreement” means that certain Restated Credit and Guaranty Agreement
dated as of May 23, 2003 among Holdings, the guarantors referred to therein,
the new term lenders referred to therein and Deutsche Bank Trust Company
Americas.


 


A-28





















 


“Shipping
Reserve” means, as of any date of determination, a Reserve established at
the Agent’s sole discretion for shipping and related costs related to Eligible
In-Transit Inventory.


 


“Software”
means all “software” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, other than software embedded in any
category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.


 


“Solvent”  means, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person; (b) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts
and liabilities mature; (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person’s property would constitute an unreasonably small capital; and (e)
with respect to such Person incorporated under the laws of England and Wales
only, a Person that is not “unable to pay its debts”.  In this context, “unable to pay its debts”
means that there are no grounds on which such Person would be deemed unable to
pay its debts (as defined in Section 123(1) of the United Kingdom Insolvency
Act 1986 (as amended by the United Kingdom Enterprise Act 2002)) or on which a
court would be satisfied that the value of such Person’s assets is less than
the amount of its liabilities, taking into account its contingent and
prospective liabilities (as such term would be construed for the purposes of
Section 123(2) of the United Kingdom Insolvency Act 1986 (as amended by the
United Kingdom Enterprise Act 2002)). 
The amount of contingent liabilities (such as litigation, guaranties and
pension plan liabilities) at any time shall be computed as the amount that, in
light of all the facts and circumstances existing at the time, represents the
amount that can be reasonably be expected to become an actual or matured
liability.


 


“Stock”
means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including common stock, preferred stock or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934).


 


“Stockholder”
means, with respect to any Person, each holder of Stock of such Person.


 


“Stoody”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“South African Subsidiary” means each
Subsidiary of any Borrower organized under the laws of South Africa.


 


A-29





















 


“Subordinated
Debt” means any Indebtedness of any Credit Party subordinated to the Obligations
in a manner and form satisfactory to Agent and Lenders in their sole
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.


 


“Subsidiary”
means, with respect to any Person, (a) any corporation of which an aggregate of
more than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner
or may exercise the powers of a general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.


 


“Supermajority
Revolving Lenders” means Lenders having (a) 80% or more of the Revolving
Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments have
been terminated, 80% or more of the aggregate outstanding amount of the
Revolving Loan (with the Swing Line Loan being attributed to the Lender making
such Loan) and Letter of Credit Obligations; provided that so long as
there are only two Lenders, Supermajority Revolving Lenders shall mean all
Lenders.


 


“Supporting
Obligations” means all “supporting obligations” as such term is defined in
the Code, including letters of credit and guaranties issued in support of
Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or
Investment Property.


 


“Swing
Line Advance” has the meaning ascribed to it in Section 1.1(c)(i).


 


“Swing
Line Availability” has the meaning ascribed to it in Section 1.1(c)(i).


 


“Swing
Line Commitment” means, as to the Swing Line Lender, the commitment of the
Swing Line Lender to make Swing Line Advances as set forth on Annex J to
this Agreement, which commitment constitutes a subfacility of the Revolving
Loan Commitment of the Swing Line Lender.


 


“Swing
Line Lender” means GE Capital.


 


“Swing
Line Loan” means, as the context may require, at any time, the aggregate
amount of Swing Line Advances outstanding to any Borrower or to all Borrowers.


 


“Swing
Line Note” has the meaning ascribed to it in Section 1.1(c)(ii).


 


“Taxes”
means taxes, levies, imposts, deductions, charges or withholdings imposed by
any Governmental Authority, and all liabilities with respect thereto, excluding
franchise taxes and taxes imposed on or measured by the net income or overall
gross receipts of


 


A-30





















 


Agent or a Lender or an L/C Issuer or similar taxes imposed on Agent or
a Lender or an L/C Issuer by the jurisdictions under the laws of which such
Agent or such Lender or such L/C Issuer, as applicable, is organized, conducts
business or has a present or former connection or any political subdivision
thereof.


 


“Term
Lenders” means those Lenders having a Term Loan
Commitment.


 


“Term
Note(s)” has the meaning ascribed to in Section 1.1(b).


 


“Term
Loan A” has the meaning ascribed to it in Section 1.1(b).


 


“Term
Loans” has the meaning ascribed to in Section 1.1(c).


 


“Term
Loan Commitment” means the Delayed Draw Term Loan Commitment and the Term
Loan A Commitment, as applicable.


 


“Term
Loan A Commitment” means (a) as to any Lender, the commitment of such
Lender to make its Pro Rata Share of each of the Term Loan A (each as set forth
on Annex J) in the maximum aggregate amount set forth in Section
1.1(b) or in the most recent Assignment Agreement, if any, executed by such
Lender and (b) as to all Lenders, the aggregate commitment of all Lenders
to make the Term Loans.  The Term Loan A Commitment with respect to each Term Loan shall reduce
automatically by the amount prepaid or repaid in respect of such Term Loan (but
solely by the amount of such prepayment or repayment allocable to a Lender, for
purposes of clause (a) of this definition).


 


“Term
Note” has the meaning ascribed to it in Section 1.1(b)(i).


 


“Term
Notes” means, collectively, the Term A Notes and
the Term B Notes.


 


“Termination
Date” means the date on which (a) the Loans have been indefeasibly repaid
in full, (b) all other Obligations under this Agreement and the other Loan
Documents have been completely discharged (c) all Letter of Credit Obligations
have been cash collateralized, canceled or backed by standby letters of credit
in accordance with Annex B, and (d) none of Borrowers shall have any
further right to borrow any monies under this Agreement.


 


 “Thermal Arc” has the meaning ascribed
thereto in the preamble to this Agreement.


 


“Title
IV Plan” means a Plan (other than a Multiemployer Plan), that is subject to
Title IV of ERISA or Section 412 of the IRC.


 


“Trademark
Security Agreements” means those certain Trademark Security Agreements
dates as of May 23, 2003 (as amended, restated, supplemented or otherwise
modified from time to time) made in favor of Agent, on behalf of Lenders, by
each applicable Credit Party.


 


“Trademark
License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right to use any Trademark.


 


A-31





















 


“Trademarks”
means all of the following now owned or hereafter existing or adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names,
business names, trade styles, trade dress, service marks, logos, and other
source or business identifiers (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.


 


“Tweco”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“Tweco
Mexico” has the meaning ascribed to it in Section 5.9.


 


“UK
Collection Accounts” means the collection accounts opened in the name of
the UK Collateral Party in accordance with the terms of and as further defined
in the UK Debenture.


 


“UK
Collateral Party” means Thermadyne Industries Limited registered in England
and Wales with company number 01144214.


 


 “UK Debenture” means the debenture
dated on or about the date hereof (as amended, restated, supplemented or
otherwise modified from time to time) between the UK Collateral Party and the
Agent.


 


“UK
Prior Claims” means (a) the Dollar equivalent amount equal to £600,000 in
British Pounds Sterling, being the amount subject to unsecured creditor
dilution pursuant to the United Kingdom Insolvency Act 1986 (as amended by the
United Kingdom Enterprise Act 2002) or such other amounts as may be specified
from time to time as a matter of English law plus (b) an amount
determined by the Agent from time to time representing an estimate of potential
prior ranking capital gains or other taxes.


 


“UK
Security Documents” means, together the UK Debenture and the UK Share
Charge.


 


 “UK Share Charge” means the charge over
shares dated on or about the date hereof (as amended, restated, supplemented or
otherwise modified from time to time) between Victor and the Agent.


 


“UK
Subsidiary” means any Subsidiary organized under the laws of the United
Kingdom.


 


“Unfunded
Pension Liability” means, at any time, the aggregate amount, if any, of the
sum of (a) the amount by which the present value of all accrued benefits under
each Title IV Plan exceeds the fair market value of all assets of such Title IV
Plan allocable to such benefits in accordance with Title IV of ERISA, all
determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five (5) years following a transaction which
might reasonably be


 


A-32





















 


expected to be covered by Section
4069 of ERISA, the liabilities (whether or not accrued) that could be avoided
by any Credit Party or any ERISA Affiliate as a result of such transaction.


 


“U.S.
Lender” has the meaning ascribed to it in Section 1.13(c).


 


“Victor”
has the meaning ascribed thereto in the preamble to this Agreement.


 


“Victor
Mexico” has the meaning ascribed to it in Section 5.9.


 


Rules
of construction with respect to accounting terms used in this Agreement or the
other Loan Documents shall be as set forth in Annex G.  All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the
meanings provided for by the Code to the extent the same are used or defined
therein; in the event that any term is defined differently in different
Articles or Divisions of the Code, the definition contained in Article or
Division 9 shall control.  Unless
otherwise specified, references in this Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in this Agreement.  The words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in this Agreement
or any such Annex, Exhibit or Schedule.


 


Wherever
from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders.  The words “including”,
“includes” and “include” shall be deemed to be followed by the words “without
limitation”; the word “or” is not exclusive; references to Persons include
their respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations.


 


A-33





















 


ANNEX B (Section
1.2)


to


CREDIT
AGREEMENT


 


LETTERS
OF CREDIT


 


(a)           Issuance.
Subject to the terms and conditions of this Agreement, Agent and Revolving
Lenders agree to incur, from time to time prior to the Commitment Termination
Date, upon the request of Borrower Representative on behalf of the applicable
Borrower and for such Borrower’s account, Letter of Credit Obligations by
causing Letters of Credit to be issued by GE Capital or a Subsidiary
thereof or a bank or other legally authorized Person selected by or acceptable
to Agent in its sole discretion (each, an “L/C Issuer”) for such
Borrower’s account and guaranteed by Agent; provided that if the L/C
Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the
terms and conditions hereinafter set forth, purchase (or be deemed to have
purchased) risk participations in all such Letters of Credit issued with the
written consent of Agent, as more fully described in paragraph (b)(ii)
below.  The aggregate amount of all such
Letter of Credit Obligations shall not at any time exceed the least of (i)
Twenty Five Million Dollars ($25,000,000) (the “L/C Sublimit”) and
(ii) the Maximum Amount less the aggregate outstanding principal balance
of the Revolving Credit Advances and the Swing Line Loan, and (iii) the
Borrowing Base less the aggregate outstanding principal balance of the
Revolving Credit Advances and the Swing Line Loan.  No such Letter of Credit shall have an expiry
date that is more than one year following the date of issuance thereof, unless
otherwise determined by the Agent, in its sole discretion (including with
respect to customary evergreen provisions), and neither Agent nor Revolving
Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an
expiry date that is later than the Commitment Termination Date.


 


(b)           (i)            Advances Automatic;
Participations.  In the event that
Agent or any Revolving Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, such payment shall then be deemed automatically to
constitute a Revolving Credit Advance to the applicable Borrower under Section
1.1(a) of this Agreement regardless of whether an Event of Default has
occurred and is continuing and notwithstanding any Borrower’s failure to
satisfy the conditions precedent set forth in Section 2, and each
Revolving Lender shall be obligated to pay its Pro Rata Share thereof in
accordance with this Agreement.  The
failure of any Revolving Lender to make available to Agent for Agent’s own
account its Pro Rata Share of any such Revolving Credit Advance or payment by
Agent under or in respect of a Letter of Credit shall not relieve any other
Revolving Lender of its obligation hereunder to make available to Agent its Pro
Rata Share thereof, but no Revolving Lender shall be responsible for the
failure of any other Revolving Lender to make available such other Revolving
Lender’s Pro Rata Share of any such payment.


 


(ii)           If it
shall be illegal or unlawful for any Borrower to incur Revolving Credit
Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in Sections 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Revolving Lender to be
deemed to have assumed a ratable share of the reimbursement


 


B-1





















 


obligations owed to an L/C Issuer, or if the L/C Issuer is a Revolving
Lender, then (A) immediately and without further action whatsoever, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Revolving Lender’s Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations in respect of
all Letters of Credit then outstanding and (B) thereafter, immediately upon
issuance of any Letter of Credit, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as
the case may be) an undivided interest and participation in such Revolving
Lender’s Pro Rata Share (based on the Revolving Loan Commitments) of the Letter
of Credit Obligations with respect to such Letter of Credit on the date of such
issuance.  Each Revolving Lender shall
fund its participation in all payments or disbursements made under the Letters
of Credit in the same manner as provided in this Agreement with respect to
Revolving Credit Advances.


 


(c)           Cash
Collateral.


 


(i)            If
Borrowers are required to provide cash collateral for any Letter of Credit
Obligations pursuant to this Agreement, including Section 8.2 of this
Agreement, prior to the Commitment Termination Date, each Borrower will pay to
Agent for the ratable benefit of itself and Revolving Lenders cash or cash
equivalents acceptable to Agent (“Cash Equivalents”) in an amount equal
to 105% of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding for the benefit of such Borrower.  Such funds or Cash Equivalents shall be held
by Agent in a cash collateral account (the “Cash Collateral Account”)
maintained at a bank or financial institution acceptable to Agent.  The Cash Collateral Account shall be in the
name of the applicable Borrower and shall be pledged to, and subject to the
control of, Agent, for the benefit of Agent and Lenders, in a manner
satisfactory to Agent.  Each Borrower
hereby pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. 
This Agreement, including this Annex B, shall constitute a
security agreement under applicable law.


 


(ii)           If any
Letter of Credit Obligations, whether or not then due and payable, shall for
any reason be outstanding on the Commitment Termination Date, Borrowers shall
either (A) provide cash collateral therefor in the manner described above, or
(B) cause all such Letters of Credit and guaranties thereof, if any, to be
canceled and returned, or (C) deliver a stand-by letter (or letters) of credit
in guaranty of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty (30)
additional days) as, and in an amount equal to 105% of, the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a
Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its reasonable discretion.


 


(iii)          From
time to time after funds are deposited in the Cash Collateral Account by any
Borrower, whether before or after the Commitment Termination Date, Agent may
apply such funds or Cash Equivalents then held in the Cash Collateral Account
to the


 


B-2





















 


payment of any amounts, and in such order as Agent may elect, as shall
be or shall become due and payable by such Borrower to Agent and Lenders with
respect to such Letter of Credit Obligations of such Borrower and, upon the
satisfaction in full of all Letter of Credit Obligations of such Borrower, to
any other Obligations of any Borrower then due and payable.


 


(iv)          No Borrower
nor any Person claiming on behalf of or through any Borrower shall have any
right to withdraw any of the funds or Cash Equivalents held in the Cash
Collateral Account, except that upon the termination of all Letter of Credit
Obligations and the payment of all amounts payable by Borrowers to Agent and
Lenders in respect thereof, any funds remaining in the Cash Collateral Account
shall be applied to other Obligations then due and owing and upon payment in
full of such Obligations, any remaining amount shall be paid to Borrowers or as
otherwise required by law.  Interest earned
on deposits in the Cash Collateral Account shall be held as additional
collateral.


 


(d)           Fees
and Expenses.  Borrowers agree to pay
to Agent for the benefit of Revolving Lenders, as compensation to such Lenders
for Letter of Credit Obligations incurred hereunder, (i) all costs and expenses
incurred by Agent or any Lender on account of such Letter of Credit
Obligations, and (ii) for each month during which any Letter of Credit
Obligation shall remain outstanding, a fee (the “Letter of Credit Fee”)
in an amount equal to the Applicable L/C Margin from time to time in effect
multiplied by the maximum amount available from time to time to be drawn under
the applicable Letter of Credit.  Such
fee shall be paid to Agent for the benefit of the Revolving Lenders in arrears,
on the first day of each month and on the Commitment Termination Date.  In addition, Borrowers shall pay to any L/C
Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued. 
Notwithstanding anything to the contrary set forth herein, Borrowers
shall not pay to Agent for the benefit of Revolving Lenders or to any L/C
Issuer any amount pursuant to this clause (d) with respect to taxes,
levies, imposts, deductions, charges or withholdings imposed by any
Governmental Authority, or any liabilities with respect thereto, the
indemnification for which shall be governed solely and exclusively by Section
1.13 of this Agreement.


 


(e)           Request
for Incurrence of Letter of Credit Obligations.  Borrower Representative shall give Agent at
least two (2) Business Days’ prior written notice requesting the incurrence of
any Letter of Credit Obligation.  The
notice shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Application for Standby Letter of
Credit or Application for Documentary Letter of Credit (as applicable),
attached hereto.  Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower Representative and approvals by Agent and the L/C Issuer may be made
and transmitted pursuant to electronic codes and security measures mutually
agreed upon and established by and among Borrower Representative, Agent and the
L/C Issuer.


 


(f)            Obligation
Absolute.  The obligation of
Borrowers to reimburse Agent and Revolving Lenders for payments made with
respect to any Letter of Credit Obligation shall be absolute, unconditional and
irrevocable, without necessity of presentment, demand, protest or


 


B-3





















 


other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable.  Such obligations of Borrowers and Revolving
Lenders shall be paid strictly in accordance with the terms hereof under all
circumstances including the following:


 


(i)            any lack of validity or enforceability of any Letter of
Credit or this Agreement or the other Loan Documents or any other agreement;


 


(ii)           the
existence of any claim, setoff, defense or other right that any Borrower or any
of their respective Affiliates or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such transferee may be acting), Agent, any Lender, or any
other Person, whether in connection with this Agreement, the Letter of Credit,
the transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between any Borrower or any of their
respective Affiliates and the beneficiary for which the Letter of Credit was
procured);


 


(iii)          any
draft, demand, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;


 


(iv)          payment
by Agent (except as otherwise expressly provided in paragraph (g)(ii)(C) below)
or any L/C Issuer under any Letter of Credit or guaranty thereof against
presentation of a demand, draft or certificate or other document that does not
comply with the terms of such Letter of Credit or such guaranty;


 


(v)           any other circumstance or event whatsoever, that is similar
to any of the foregoing; or


 


(vi)          the fact that a Default or an Event of Default has  occurred and is continuing.


 


(g)           Indemnification;
Nature of Lenders’ Duties.


 


(i)            In
addition to amounts payable as elsewhere provided in this Agreement, Borrowers
hereby agree to pay and to protect, indemnify, and save harmless Agent and each
Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys’ fees and
allocated costs of internal counsel) that Agent or any Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of any Letter
of Credit or guaranty thereof, or (B) the failure of Agent or any Lender
seeking indemnification or of any L/C Issuer to honor a demand for payment
under any Letter of Credit or guaranty thereof as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than (i) to the
extent solely as a result of the gross negligence or willful misconduct of
Agent, L/C Issuer or such Lender (as finally determined by a court of competent


 


B-4





















 


jurisdiction) or (ii) with respect to taxes, levies, imposts,
deductions, charges or withholdings imposed by any Governmental Authority, or
any liabilities with respect thereto, the indemnification for which shall be
governed solely and exclusively by Section 1.13 of this Agreement.


 


(ii)           As between
Agent, L/C Issuer and any Lender and Borrowers, Borrowers assume all risks of
the acts and omissions of, or misuse of any Letter of Credit by beneficiaries,
of any Letter of Credit.  In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law,
neither Agent nor any Lender shall be responsible for:  (A) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document issued by any party in
connection with the application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit; provided
that in the case of any payment by Agent or L/C Issuer under any Letter of Credit
or guaranty thereof, Agent or L/C Issuer shall be liable to the extent such
payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (D) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they may be in cipher; (E)
errors in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a payment
under any Letter of Credit or guaranty thereof or of the proceeds thereof; (G)
the credit of the proceeds of any drawing under any Letter of Credit or
guaranty thereof; and (H) any consequences arising from causes beyond the
control of Agent, L/C Issuer or any Lender. None of the above shall affect,
impair, or prevent the vesting of any of Agent’s, L/C Issuer’s or any Lender’s
rights or powers hereunder or under this Agreement.


 


(iii)          Nothing
contained herein shall be deemed to limit or to expand any waivers, covenants
or indemnities made by Borrowers in favor of any L/C Issuer in any letter of
credit application, reimbursement agreement or similar document, instrument or
agreement between or among Borrowers and such L/C Issuer, including a Master Standby
Agreement entered into with Agent.


 


B-5





















 


ANNEX D (Section
2.1(a))


to


CREDIT
AGREEMENT


 


CLOSING
CHECKLIST


 


In addition to, and not
in limitation of, the conditions described in Section 2.1 of this
Agreement, pursuant to Section 2.1(a), the items set forth on the
closing checklist attached hereto must be received by Agent in form and
substance satisfactory to Agent on or prior to the Closing Date (each
capitalized term used but not otherwise defined therein shall have the meaning
ascribed thereto in Annex A to this Agreement)


 


D-1





















 


ANNEX E (Section
4.1(a))


to


CREDIT
AGREEMENT


 


FINANCIAL
STATEMENTS AND PROJECTIONS — REPORTING


 


Borrowers
shall deliver or cause to be delivered to Agent or to Agent and Lenders, as
indicated, the following:


 


(a)           Monthly
Financials.  To Agent and Lenders,
within thirty (30) days after the end of each Fiscal Month, financial
information regarding Holdings and its Subsidiaries, certified by the Chief
Financial Officer of Borrower Representative, consisting of consolidated and
consolidating (i) unaudited balance sheets as of the close of such Fiscal Month
and the related consolidated and consolidating statement of income and
consolidated statement of cash flows for that portion of the Fiscal Year ending
as of the close of such Fiscal Month and (ii) unaudited statements of income
and cash flows for such Fiscal Month, setting forth in comparative form the
figures for the corresponding period in the prior year and the figures
contained in the Projections for such Fiscal Year, all prepared in accordance
with GAAP (subject to normal year-end adjustments).  Such financial information shall be
accompanied by a certification of the Chief Financial Officer of Borrower
Representative that (x) such financial information presents fairly in all
material respects in accordance with GAAP (subject to normal year-end
adjustments) the financial position and results of operations of Holdings and
its Subsidiaries, on a consolidated and consolidating basis, in each case as at
the end of such Fiscal Month and for that portion of the Fiscal Year then ended
and (y) any other information presented is true, correct and complete in all
material respects and that there was no Event of Default in existence as of
such time or, if an Event of Default has occurred and is continuing, describing
the nature thereof and all efforts undertaken to cure such Event of
Default.  In addition, the financial
information for the last month of each Fiscal Quarter shall be accompanied by
(A) a Compliance Certificate and (B) a management discussion and analysis that includes a comparison to budget for that Fiscal Quarter and
a comparison of performance for that Fiscal Quarter to the corresponding period
in the prior year.


 


(b)           Operating
Plan. To Agent and Lenders, as soon as available, but not later than ten
(10) Business Days after the end of each Fiscal Year (except for the operating
plan for the Fiscal Year ending December 31, 2005, which shall be delivered by
January 31, 2005) an annual operating plan for Holdings and its Subsidiaries,
on a consolidated and consolidating basis, approved by the Board of Directors
of Holdings and its Subsidiaries, for the following Fiscal Year, which (i) includes
a statement of all of the material assumptions on which such plan is based,
(ii) includes monthly balance sheets, income statements and statements of cash
flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management’s good faith estimates of future financial
performance based on historical performance), and including plans for
personnel, Capital Expenditures and facilities.


 


E-1





















 


(c)           Annual
Audited Financials. To Agent and Lenders, within ninety (90) days after the
end of each Fiscal Year, audited Financial Statements for Holdings and its
Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year, which
Financial Statements shall be prepared in accordance with GAAP and certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent.  Such Financial Statements shall be
accompanied by (i) a reconciliation of the Compliance Certificate previously
delivered in connection with the financial statements for December of each
year, (ii) a report from such accounting firm to the effect that, in connection
with their audit examination, nothing has come to their attention to cause them
to believe that an Event of Default has occurred with respect to the Financial
Covenants (or specifying those Events of Default that they became aware of), it
being understood that such audit examination extended only to accounting
matters and that no special investigation was made with respect to the
existence of Events of Default, (iii) the annual letters to such accountants in
connection with their audit examination detailing contingent liabilities and
material litigation matters, and (iv) the certification of the Chief Executive
Officer or Chief Financial Officer of Borrowers that all such Financial
Statements present fairly in all material respects in accordance with GAAP the
financial position, results of operations and statements of cash flows of
Borrowers and their Subsidiaries on a consolidated and consolidating basis, as
at the end of such Fiscal Year and for the period then ended, and that there
was no Event of Default in existence as of such time or, if an Event of Default
has occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Event of Default.


 


(d)           Management
Letters.  To Agent and Lenders,
within five (5) Business Days after receipt thereof by any Credit Party, copies
of all management letters, exception reports or similar letters or reports
received by such Credit Party from its independent certified public
accountants.


 


(e)           Default
Notices.  To Agent and Lenders, as
soon as practicable, and in any event within five (5) Business Days after an
executive officer of any Borrower has actual knowledge of the existence of any
Event of Default or other event that has had a Material Adverse Effect,
telephonic or telecopied notice specifying the nature of such Event of Default
or other event, including the anticipated effect thereof, which notice, if
given telephonically, shall be promptly confirmed in writing on the next
Business Day.


 


(f)            SEC
Filings and Press Releases.  To Agent
and Lenders, promptly upon there becoming available, copies of:  (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.


 


(g)           Subordinated
Debt and Equity Notices.  To Agent,
as soon as practicable, copies of all material written notices given or
received by any Credit Party with respect to any Subordinated Debt or Stock of
such Person, and, within two (2) Business Days after any Credit


 


E-2





















 


Party obtains knowledge of any matured or unmatured event of default
with respect to any Subordinated Debt, notice of such event of default.


 


(h)           Supplemental
Schedules.  To
Agent, supplemental disclosures, if any, required by Section 5.6.


 


(i)            Litigation.  To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in excess of $250,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or
its assets or against any Credit Party or ERISA Affiliate in connection with
any Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities or (vi) involves any product recall.


 


(j)            Insurance
Notices.  To Agent,
disclosure of losses or casualties required by Section 5.4.


 


(k)           Lease
Default Notices.  To Agent, (i)
within two (2) Business Days after receipt thereof, copies of any and all
default notices received under or with respect to any leased location or public
warehouse where Collateral is located, (ii) monthly within three (3) Business
Days after payment thereof, evidence of payment of lease or rental payments as
to each leased or rented location for which a landlord or bailee waiver has not
been obtained and (iii) such other notices or documents as Agent may reasonably
request.


 


(l)            Lease
Amendments.  To Agent, within two (2)
Business Days after receipt thereof, copies of all material amendments to real
estate leases.


 


(m)          Hedging
Agreements.  To Agent, within two (2)
Business Days after entering into such agreement or amendment, copies of all
interest rate, commodity or currency hedging agreements or amendments thereto.


 


(n)           Good
Standing Certificates.  Not less
frequently than once during each calendar quarter, each Credit Party shall,
unless Agent shall otherwise consent, provide to Agent a certificate of good
standing, certificate of compliance, certificate of status or other comparable
certification from its jurisdiction of incorporation or organization.


 


(o)           Borrowing
Base Certificate.  To Agent,
concurrently with the delivery of the monthly financial statements delivered
pursuant to clause(a) of this Annex E,
a Borrowing Base Certificate.


 


(p)           Other
Documents.  To Agent and Lenders,
such other financial and other information respecting any Credit Party’s
business or financial condition as Agent or any Lender shall from time to time
reasonably request.


 


E-3





















 


ANNEX F (Section
4.1(b))


to


CREDIT
AGREEMENT


 


COLLATERAL
REPORTS


 


Borrowers
shall deliver or cause to be delivered the following:


 


(a)           To
Agent, upon its request, and in any event no less frequently than ten (10)
Business Days after the end of each Fiscal Month (except that the October, 2004
report shall not be due until November 30, 2004) (together with a copy of all
or any part of the following reports requested by any Lender in writing after
the Closing Date), each of the following reports, each of which shall be
prepared by the applicable Borrower as of the last day of the immediately
preceding Fiscal Month:


 


(i)            a Borrowing Base Certificate with respect to each Collateral
Party, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion;


 


(ii)           with
respect to each Collateral Party, a summary of Inventory by location and type
with a supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion; and


 


(iii)          with respect to each Collateral Party, a monthly aging
summary showing Accounts outstanding aged from invoice date as follows:  1 to 30 days, 31 to 60 days, 61 to 90 days
and 91 days or more, accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion.


 


(b)           To
Agent, on a monthly basis or at such more frequent intervals as Agent may
request from time to time (together with a copy of all or any part of such
delivery requested by any Lender in writing after the Closing Date), collateral
reports with respect to each Collateral Party, including all additions and
reductions (cash and non-cash) with respect to Accounts of such Collateral
Party, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion each of which shall be
prepared by the applicable Collateral Party as of the last day of the immediately
preceding week;


 


(c)           To
Agent, at the time of delivery of each of the monthly Financial Statements
delivered pursuant to Annex E:


 


(i)            a
reconciliation of the Accounts trial balance of each Collateral Party to such
Collateral Party’s most recent Borrowing Base Certificate, general ledger and
monthly Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be requested
by Agent in its reasonable discretion;


 


F-1





















 


(ii)           a
reconciliation of the perpetual inventory by location of each Collateral Party
to such Collateral Party’s most recent Borrowing Base Certificate, general
ledger and monthly Financial Statements delivered pursuant to Annex E,
in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;


 


(iii)          an
aging of accounts payable and a reconciliation of that accounts payable aging
to each Borrower’s general ledger and monthly Financial Statements delivered
pursuant to Annex E, in each case accompanied by such supporting
detail and documentation as shall be requested by Agent in its reasonable
discretion;


 


(iv)          a
reconciliation of the outstanding Loans as set forth in the monthly Loan
Account statement provided by Agent to the Borrowers general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be requested
by Agent in its reasonable discretion;


 


(v) a
detailed report of unpaid shipping and related charges that are owing or will
be owing to shippers with respect to Eligible In-Transit Inventory reported on
the Borrowing Base for such Fiscal Month;


 


(vi) a
detailed report of the Inventory in-transit from the United States to Canada on
the date thereof; and


 


(vii) a
detailed report of any amounts payable to any of the Collateral Party’s
consignee’s with respect to Eligible Consigned Inventory.


 


(d)           To
Agent, at the time of delivery of each of the annual Financial Statements
delivered pursuant to Annex E, (i) a listing of government contracts of
each Collateral Party subject to the Federal Assignment of Claims Act of 1940
or the Financial Administration Act (Canada); and (ii) a list of any
applications for the registration of any Patent, Trademark or Copyright filed
by any Credit Party with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency (in the United
States of America or any other jurisdiction) in the prior Fiscal Quarter;


 


(e)           Each
Collateral Party, at its own expense, shall deliver to Agent the results of
each physical verification, if any, that such Collateral Party or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, of all or any portion of their Inventory (and, if a
Default or an Event of Default has occurred and is continuing, each Collateral
Party shall, upon the request of Agent, conduct, and deliver the results of,
such physical verifications as Agent may require);


 


(f)            Each
Collateral Party, at its own expense, shall deliver to Agent such appraisals of
its assets as Agent may request at any time, such appraisals to be conducted by
an appraiser, and in form and substance reasonably satisfactory to Agent; provided,
however, so long as no Default or Event of Default is continuing, Agent
shall not obtain or request an


 


F-2





















 


appraisal as to any particular
category of Collateral to be performed more than two times during any Year at
Borrower’s expense;


 


(g)           Such
other reports, statements and reconciliations with respect to the Borrowing
Base, Collateral or Obligations of any or all Credit Parties as Agent shall
from time to time request in its reasonable discretion; and


 


(h)           The
UK Collateral Party shall, immediately upon becoming aware of the same, provide
the Agent with details in writing of any creditor of the UK Collateral Party
whose terms of business include retention of title provisions.


 


F-3





















 


ANNEX G (Section
6.10)


to


CREDIT
AGREEMENT


 


FINANCIAL
COVENANTS


 


(a)           Financial
Covenants. Borrowers shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:


 


(i)            Maximum
Capital Expenditures.  Holdings and
its Subsidiaries on a consolidated basis shall not make Capital Expenditures
during the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:


 


	
  Period

  	
   

  	
  Maximum Capital Expenditures per Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  2003;

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  Fiscal Year
  2004;

  	
   

  	
  $

  	
  17,000,000

  	
   

  
	
  Fiscal Year
  2005;

  	
   

  	
  $

  	
  17,000,000

  	
   

  
	
  Fiscal Year
  2006;

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  Fiscal Year
  2007;

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  Fiscal Year
  2008;

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  Fiscal Year
  2009;

  	
   

  	
  $

  	
  18,000,000

  	
   

  



 


;provided, however, that the amount of
permitted Capital Expenditures referenced above will be increased in any period
by the positive amount equal to the lesser of (i) 50% of the amount of
permitted Capital Expenditures for the immediately prior period, and (ii) the
amount (if any), equal to the difference obtained by taking the Capital
Expenditures limit specified above for the immediately prior period minus
the actual amount of any Capital Expenditures expended during such prior period
(the “Carry Over Amount”), and for purposes of measuring compliance
herewith, the Carry Over Amount shall be deemed to be the last amount spent on
Capital Expenditures in that succeeding year; provided, further,
that the amount of Capital Expenditures for Fiscal Year 2003 and Fiscal Year
2004 shall not include up to $5,500,000 of Capital Expenditures made in
connection with the expansion of the real property located in Denton, Texas to
the extent financed with a Capital Lease.


 


(ii)           Minimum
Fixed Charge Coverage Ratio. 
Holdings and its Subsidiaries shall have on a consolidated basis at the
end of each Fiscal Quarter, a Fixed Charge Coverage Ratio for the 12-month
period then ended (or with respect to the Fiscal Quarter ending on September
30, 2003, the period commencing on January 1, 2003 and ending on the last day
of such Fiscal Quarter) of not less than the following:


 


1.10 for
the Fiscal Quarter ending December 31, 2003;


1.10 for
the Fiscal Quarter ending March 31, 2004;


1.05 for
the Fiscal Quarter ending June 30, 2004;


 


G-1





















 


1.00 for
the Fiscal Quarter ending September 30, 2004;


0.90 for
the Fiscal Quarter ending December 31, 2004;


0.925 for
the Fiscal Quarter ending March 31, 2005;


0.95 for
the Fiscal Quarter ending June 30, 2004;


1.05 for
the Fiscal Quarter ending September 30, 2005;


1.10 for
the Fiscal Quarter ending December 30, 2005; and


1.10 for
each Fiscal Quarter ending thereafter.


 


(iii)          Minimum
EBITDA.  Until such time as the
Second Lien Loan Obligations have been paid in full in accordance with Section
6.3(b)(vi) or refinanced in accordance with Section 5.13, Holdings
and its Subsidiaries on a consolidated basis shall have, at the end of each
Fiscal Quarter set forth below, EBITDA for the 12-month period then ended (or
with respect to the Fiscal Quarter ending on September 30, 2003, the period
commencing on January 1, 2003 and ending on the last day of such Fiscal
Quarter) of not less than the following:


 


	
  Period

  	
   

  	
  EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2003

  	
   

  	
  $

  	
  48,000,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2004

  	
   

  	
  $

  	
  46,500,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2004

  	
   

  	
  $

  	
  47,600,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2004

  	
   

  	
  $

  	
  47,000,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2004

  	
   

  	
  $

  	
  46,000,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2005

  	
   

  	
  $

  	
  46,000,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2005

  	
   

  	
  $

  	
  46,000,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2005

  	
   

  	
  $

  	
  49,600,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2005

  	
   

  	
  $

  	
  53,360,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2006

  	
   

  	
  $

  	
  55,440,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2006

  	
   

  	
  $

  	
  57,600,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2006

  	
   

  	
  $

  	
  59,760,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2006

  	
   

  	
  $

  	
  61,070,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2007

  	
   

  	
  $

  	
  60,175,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2007

  	
   

  	
  $

  	
  60,650,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2007

  	
   

  	
  $

  	
  61,125,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2007

  	
   

  	
  $

  	
  61,600,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2008

  	
   

  	
  $

  	
  62,075,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2008

  	
   

  	
  $

  	
  62,550,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2008

  	
   

  	
  $

  	
  63,025,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2008

  	
   

  	
   

  	
   

  
	
  and for each
  Fiscal Quarter ending thereafter

  	
   

  	
  $

  	
  63,500,000

  	
   

  



 


(iv)          Maximum
Leverage Ratio.  Until such time as
the Second Lien Loan Obligations have been paid in full in accordance with Section
6.3(b)(vi) or refinanced in accordance with Section 5.13 (provided,
however, that if after such payment in full or refinancing, Borrowing
Availability is at any time less than $15,000,000 this Financial Covenant shall
be reinstated until the Commitment Termination Date), Holdings and its
Subsidiaries on a consolidated basis shall have, at the end of each Fiscal
Quarter set forth below, a Leverage Ratio


 


G-2





















 


as of the last day of such Fiscal Quarter and for the 12-month period
then ended (or with respect to the Fiscal Quarter ending on September 30, 2003,
the period commencing on January 1, 2003 and ending on the last day of such
Fiscal Quarter) of not more than the following:


 


5.00 for
the Fiscal Quarter ending December 31, 2003;


5.00 for
the Fiscal Quarter ending March 31, 2004;


5.00 for
the Fiscal Quarter ending June 30, 2004;


5.50 for
the Fiscal Quarter ending September 30, 2004;


5.50 for
the Fiscal Quarter ending December 31, 2004;


5.25 for
the Fiscal Quarter ending March 31, 2005;


4.75 for
the Fiscal Quarter ending June 30, 2005;


4.25 for
the Fiscal Quarter ending September 30, 2005; and


4.00 for
each Fiscal Quarter ending thereafter.


 


(b)           Enhanced
Financial Covenants:


 


(i)            Minimum
Fixed Charge Coverage Ratio. 
Holdings and its Subsidiaries shall have, on a consolidated basis, a
Fixed Charge Coverage Ratio for the 12-month period ending April 30, 2004 of
not less than 1.25.


 


(ii)           Minimum
EBITDA. Holdings and its Subsidiaries shall have, on a consolidated basis,
EBITDA for the 12-month period ending April 30, 2004 of not less than
$51,000,000.


 


(iii)          Maximum
Leverage Ratio.  Holdings and its
Subsidiaries shall have, on a consolidated basis, a Leverage Ratio for the 12-month
period ending April 30, 2004 of not more than 4.25.


 


Unless
otherwise specifically provided herein, any accounting term used in this
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied.  That
certain items or computations are explicitly modified by the phrase “in
accordance with GAAP” shall in no way be construed to limit the foregoing.  If any “Accounting Changes” (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in this Agreement or any other
Loan Document, then Borrowers, Agent and Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the criteria
for evaluating Borrowers’ and their Subsidiaries’ financial condition shall be
the same after such Accounting Changes as if such Accounting Changes had not
been made; provided, however, that this Agreement of Requisite
Lenders to any required amendments of such provisions shall be sufficient to
bind all Lenders.  “Accounting Changes”
means (i) changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants (or
successor thereto or any agency with similar functions); (ii) changes in
accounting principles concurred in by any Borrower’s certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the


 


G-3





















 


accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent reversal (in
whole or in part) of such reserves; and (iv) the reversal of any reserves
established as a result of purchase accounting adjustments.  All such adjustments resulting from
expenditures made subsequent to the Closing Date (including capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period.  If
Agent, Borrowers and Requisite Lenders agree upon the required amendments, then
after appropriate amendments have been executed and the underlying Accounting
Change with respect thereto has been implemented, any reference to GAAP
contained in this Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after
giving effect to the implementation of such Accounting Change.  If Agent, Borrowers and Requisite Lenders
cannot agree upon the required amendments within thirty (30) days following the
date of implementation of any Accounting Change, then all Financial Statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with this Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting
Change.  For purposes of Section 8.1,
a breach of a Financial Covenant contained in this Annex G shall be
deemed to have occurred as of any date of determination by Agent or as of the
last day of any specified measurement period, regardless of when the Financial
Statements reflecting such breach are delivered to Agent.


 


G-4





















 


ANNEX I (Section 11.10)


to


CREDIT
AGREEMENT


 


NOTICE
ADDRESSES


 


(A)        If to Agent
or GE Capital, at:


 


General Electric Capital Corporation


500 West Monroe Street


Chicago, Illinois 60661


Attention: 
Thermadyne, Account Manager


Telecopier No.: 
(312) 419-7500


 


with a copy to:


 


General Electric Capital
Corporation


201 High Ridge Road


Stamford, Connecticut 06927-5100


Attention:  Corporate Counsel - Commercial Finance


Telecopier No.: (203)
316-7889


 


(B)           If
to any Borrower, to Borrower Representative, at:


 


Thermadyne Holdings Corporation


16052 Swingley Ridge Rd., Suite 300


Chesterfield, MO 63017


Attention: Chief Financial Officer


Telecopier No.: 636-728-3010


 


with copies to:


 


Thermadyne Holdings Corporation


16052 Swingley Ridge Rd., Suite 300


Chesterfield, MO 63017


Attention: General Counsel


Telecopier No.: 636-728-3011


 


and



 


Armstrong Teasdale LLP


One Metropolitan Square


Suite 2600 St. Louis,
Missouri 63102


Attention: John L.
Sullivan


Telecopier No.:
314-621-5065


 


I-1





















 


ANNEX J
(from Annex A - Commitments definition)


to


CREDIT
AGREEMENT


 


	
   

  	
  Lender

  
	
   

  	
   

  
	
  Revolving Loan
  Commitment

  	
  General Electric
  Capital Corporation

  
	
  (including a Swing Line
  Commitment

  	
   

  
	
  of $1,000,000):

  	
   

  
	
  $80,000,000

  	
   

  
	
   

  	
   

  
	
  Term Loan Commitments:

  	
   

  
	
   

  	
   

  
	
  Term Loan A:

  	
   

  
	
  $9,250,000

  	
  General Electric
  Capital Corporation

  
	
   

  	
   

  
	
  Delayed Draw Term Loan:

  	
   

  
	
  $2,050,000

  	
  General Electric
  Capital Corporation

  



 


J-1





















 


ANNEX
K (from Section 13)


to


CREDIT
AGREEMENT


 


Outstanding
Principal Balance of Loans on the Closing Date


 


	
  Revolving Loan

  	
  $

  	
                               

  	
   

  
	
  (includes aggregate Letter of Credit Obligations in
  the amount of $                      )

  	
   

  	
   

  
	
  Term Loan

  	
  $

  	
  20,000,000

  	
   

  
	
  TOTAL

  	
  $

  	
                                   

  	
   

  



 


K-1





















 


EXHIBIT 1.1(A)(I)


to


CREDIT
AGREEMENT


 


FORM OF NOTICE OF REVOLVING CREDIT ADVANCE


 


                      ,
          


 


General Electric Capital
Corporation,

for itself, as Lender, and as Agent

for Lenders


500 West Monroe Street


Chicago, Illinois 60661


 


Attention:                                         Thermadyne
Holdings Corporation,

Account Manager


 


Ladies
and Gentlemen:


 


The undersigned, Thermadyne Holdings Corporation, a
Delaware corporation (“Borrower Representative”) refers to the Second
Amended and Restated Credit Agreement, dated as of November 22, 2004 (the “Credit
Agreement,” the terms defined therein being used herein as therein
defined), by and among the undersigned, the other persons named therein as
Borrowers, the other Credit Parties signatory thereto, General Electric Capital
Corporation, a Delaware corporation, for itself, as Lender, and as Agent for
Lenders, and Lenders, and hereby gives you notice, irrevocably, pursuant to Section
1.1(a)(i) of the Credit Agreement, that the undersigned hereby requests a
Revolving Credit Advance under the Credit Agreement, and in that connection
sets forth below the information relating to such Revolving Credit Advance as
required by Section 1.1(a)(i) of the Credit Agreement:


 


(i)                                                                                     The
date of the requested Revolving Credit Advance is                     ,         .


 


(ii)                                                                                  The
aggregate amount of the requested Revolving Credit Advance is $                        .


 


(iii)                                                                               The
requested Revolving Credit Advance is [an Index Rate Loan]
[a LIBOR Loan with a LIBOR Period of                 ].


 


(iv)                                                                              The
requested Revolving Credit Advance is to be sent to:


 


[Name
of Bank]

[City of Bank]

Beneficiary:

Account No.:  [number]

ABA No.:  [number]

Attn:  [name]


 





















 


The undersigned hereby certifies that all of the
statements contained in Section 2.2 of the Credit Agreement are
true and correct in all material respects on the date hereof, and will be true
in all material respects on the date of the requested Revolving Credit Advance,
before and after giving effect thereto and to the application of the proceeds
therefrom.


 


 


	
   

  	
  THERMADYNE
  HOLDINGS

  CORPORATION, as Borrower Representative

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title

  	
   

  
					



 





















 


EXHIBIT
1.1(a)(ii)


to


CREDIT
AGREEMENT


 


FORM OF
[SECOND AMENDED AND RESTATED] REVOLVING NOTE


 


New York, New York


 


$      ,      ,                        
    ,         


 


FOR
VALUE RECEIVED, each of the undersigned (each individually a “Borrower”
and collectively, the “Borrowers”), HEREBY PROMISES TO PAY to the order
of                                               
(“Lender”) and its registered assigns, at the offices of GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as Agent for Lenders (“Agent”),
at its address at 500 West Monroe, Chicago, Illinois, or at such other place as
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of                                               
DOLLARS AND               
CENTS ($      ,      ,      )
or, if less, the aggregate unpaid amount of all Revolving Credit Advances made
to the undersigned under the “Credit Agreement” (as hereinafter defined).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement or in Annex
A thereto.


 


This
Revolving Note is one of the Revolving Notes issued pursuant to that certain
Second Amended and Restated Credit Agreement dated as of November 22, 2004 by
and among Borrowers, the other Persons named therein as Credit Parties, Agent,
Lender and the other Persons signatory thereto from time to time as Lenders
(including all annexes, exhibits and schedules thereto, and as from time to
time amended, restated, supplemented or otherwise modified, the “Credit
Agreement”), and is entitled to the benefit and security of the Credit
Agreement, the Security Agreement and all of the other Loan Documents referred
to therein.  Reference is hereby made to
the Credit Agreement for a statement of all of the terms and conditions under
which the Loans evidenced hereby are made and are to be repaid.  The date and amount of each Revolving Credit
Advance made by Lenders to Borrowers, the rates of interest applicable thereto
and each payment made on account of the principal thereof, shall be recorded by
Agent on its books; provided that the failure of Agent to make any such
recordation shall not affect the obligations of Borrowers to make a payment
when due of any amount owing under the Credit Agreement or this Revolving Note
in respect of the Revolving Credit Advances made by Lender to Borrowers.


 


The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Credit Agreement, the terms of which
are hereby incorporated herein by reference. 
Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement. The terms of the Credit
Agreement are hereby incorporated herein by reference.


 


If any
payment on this Revolving Note becomes due and payable on a day other than a Business
Day, the payment thereof shall be extended to the next succeeding Business Day


 





















 


and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.


 


Upon
and after the occurrence of any Event of Default, this Revolving Note may, as
provided in the Credit Agreement, and without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by
Borrowers), be declared, and immediately shall become, due and payable.


 


Time
is of the essence of this Revolving Note.


 


Except
as provided in the Credit Agreement, this Revolving Note may not be assigned by
Lender to any Person.


 


THIS REVOLVING NOTE IS NOT A NOVATION OF BUT MERELY RESTATES
AND RE-EVIDENCES ALL OF THE EXISTING PRINCIPAL OBLIGATIONS OUTSTANDING UNDER
THAT CERTAIN AMENDED AND RESTATED REVOLVING NOTE, EXECUTED BY THE UNDERSIGNED
IN FAVOR OF AGENT AND DATED AS OF FEBRUARY 5, 2004 (THE “PRIOR NOTE”).  NOTHING HEREIN OR IN THE CREDIT AGREEMENT
SHALL DEEM THE EXISTING PRINCIPAL OBLIGATIONS OUTSTANDING UNDER THE PRIOR NOTE
WHICH ARE BEING RE-EVIDENCED BY THIS INSTRUMENT TO
HAVE BEEN PAID.  INTEREST ACCRUED UNDER
THE PRIOR NOTE PRIOR TO THE DATE OF THIS REVOLVING NOTE REMAINS ACCRUED AND
UNPAID UNDER THIS REVOLVING NOTE AND DOES NOT CONSTITUTE ANY PART OF THE
PRINCIPAL AMOUNT OF THIS REVOLVING NOTE.


 


THIS
REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES.


 


 


	
   

  	
  THERMADYNE
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL DYNAMICS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


	
   

  	
  TWECO PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VICTOR EQUIPMENT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C & G SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOODY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL ARC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE INTERNATIONAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


	
   

  	
  PROTIP CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


EXHIBIT
1.1(c)


to


CREDIT
AGREEMENT


 


FORM OF
[AMENDED AND RESTATED] TERM NOTE


 


New York, New York


$      ,      ,                        
    ,         


 


FOR
VALUE RECEIVED, each of the undersigned (each individually a “Borrower”
and collectively, the “Borrowers”), jointly and severally, HEREBY
PROMISES TO PAY to the order of                                                   
(“Lender”) at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, as Agent for Lenders (“Agent”), at its address at
500 West Monroe, Chicago, Illinois, or at such other place as Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of                                                       
($    ,      ,      ).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the “Credit Agreement” (as
hereinafter defined) or in Annex A thereto.


 


This
Term Note is one of the Term Notes issued pursuant to that certain Second
Amended and Restated Credit Agreement dated as of November 22, 2004 by and
among Borrowers, the other Persons named therein as Credit Parties, Agent,
Lender and the other Persons signatory thereto from time to time as Lenders
(including all annexes, exhibits and schedules thereto and as from time to time
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
and is entitled to the benefit and security of the Credit Agreement, the
Security Agreement and all of the other Loan Documents referred to
therein.  Reference is hereby made to the
Credit Agreement for a statement of all of the terms and conditions under which
the Loans evidenced hereby are made and are to be repaid.  The principal balance of the Term Loan, the rates of interest
applicable thereto and the date and amount of each payment made on account of
the principal thereof, shall be recorded by Agent on its books; provided that
the failure of Agent to make any such recordation shall not affect the
obligations of Borrowers to make a payment when due of any amount owing under
the Credit Agreement or this Term Note.


 


The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Credit Agreement.  Interest thereon shall be paid until such
principal amount is paid in full at such interest rates and at such times, and
pursuant to such calculations, as are specified in the Credit Agreement.  The terms of the Credit Agreement are hereby
incorporated herein by reference. Each Borrower shall be primarily liable for
payments of the indebtedness evidenced hereby as set forth in Section 1.1(b)
of the Credit Agreement as in effect from time to time and secondarily liable
for the remainder of the indebtedness evidenced hereby as set forth in Section
12 of the Credit Agreement.


 


If any
payment on this Term Note becomes due and payable on a day other than a
Business Day, the payment thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.


 





















 


Upon
and after the occurrence of any Event of Default, this Term Note may, as
provided in the Credit Agreement, and without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other requirements of
any kind, all of which are hereby expressly waived by Borrowers, be declared,
and immediately shall become, due and payable.


 


Time
is of the essence of this Term Note.


 


Except
as provided in the Credit Agreement, this Term Note may not be assigned by
Lender to any Person.


 


[THIS AMENDED AND RESTATED NOTE IS NOT A NOVATION OF BUT
MERELY RESTATES AND RE-EVIDENCES ALL OF THE EXISTING PRINCIPAL OBLIGATIONS
OUTSTANDING UNDER THAT CERTAIN TERM NOTE, EXECUTED BY THE UNDERSIGNED IN FAVOR
OF AGENT AND DATED AS OF FEBRUARY 5, 2004 (THE “PRIOR NOTE”).  UNLESS OTHERWISE PROVIDED IN THE CREDIT
AGREEMENT, NOTHING HEREIN OR IN THE CREDIT AGREEMENT SHALL DEEM THE EXISTING
PRINCIPAL OBLIGATIONS OUTSTANDING UNDER THE PRIOR NOTE WHICH ARE
BEING RE-EVIDENCED BY THIS INSTRUMENT TO HAVE BEEN PAID.  INTEREST ACCRUED UNDER THE PRIOR NOTE PRIOR
TO THE DATE OF THIS TERM NOTE REMAINS ACCRUED AND UNPAID UNDER THIS TERM NOTE
AND DOES NOT CONSTITUTE ANY PART OF THE PRINCIPAL AMOUNT OF THIS TERM NOTE.]


 


THIS TERM
NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.


 


(Signature
Pages Follow)


 





















 


	
   

  	
  THERMADYNE
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL DYNAMICS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TWECO PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VICTOR EQUIPMENT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C & G SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOODY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


	
   

  	
  THERMAL ARC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADYNE INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTIP CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


EXHIBIT
1.1(d)(ii)


to


CREDIT
AGREEMENT


 


FORM OF [SECOND AMENDED AND RESTATED]
SWING LINE NOTE


 


New York, New York


$      ,      ,                        
    ,         


 


FOR
VALUE RECEIVED, each of the undersigned (each individually a “Borrower”
and collectively, the “Borrowers”), HEREBY PROMISES TO PAY to the order
of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“Swing Line
Lender”) and its registered assigns at the offices of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, as Agent (in such capacity, the “Agent”)
at the Agent’s address at 500 West Monroe, Chicago, Illinois, or at such other
place as Agent may designate from time to time in writing, in lawful money of
the United States of America and in immediately available funds, the amount of                                       
DOLLARS AND NO CENTS ($      ,      ,      )
or, if less, the aggregate unpaid amount of all Swing Line Advances made to the
undersigned under the “Credit Agreement” (as hereinafter defined).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement or in Annex
A thereto.


 


This
Swing Line Note is issued pursuant to that certain Second Amended and Restated
Credit Agreement dated as of November 22, 2004 by and among Borrowers, the
other Persons named therein as Credit Parties, Agent, Swing Line Lender and the
other Persons signatory thereto from time to time as Lenders (including all
annexes, exhibits and schedules thereto and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”),
and is entitled to the benefit and security of the Credit Agreement, the
Security Agreement and all of the other Loan Documents.  Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid.  The date and amount of each Swing Line
Advance made by Swing Line Lender to Borrowers, the rate of interest applicable
thereto and each payment made on account of the principal thereof, shall be
recorded by Agent on its books; provided that the failure of Agent to make any
such recordation shall not affect the obligations of Borrowers to make a
payment when due of any amount owing under the Credit Agreement or this Swing
Line Note in respect of the Swing Line Advances made by Swing Line Lender to
Borrowers.


 


The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Credit Agreement, the terms of which
are hereby incorporated herein by reference. 
Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement.  The terms of the Credit Agreement are hereby
incorporated herein by reference.


 





















 


If any
payment on this Swing Line Note becomes due and payable on a day other than a
Business Day, the payment thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.


 


Upon
and after the occurrence of any Event of Default, this Swing Line Note may, as
provided in the Credit Agreement, and without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by
Borrowers), be declared, and immediately shall become, due and payable.


 


Time
is of the essence of this Swing Line Note.


 


Except
as provided in the Credit Agreement, this Swing Line Note may not be assigned
by Lender to any Person.


 


THIS SECOND AMENDED AND RESTATED SWING LINE NOTE IS NOT A
NOVATION OF BUT MERELY RESTATES AND RE-EVIDENCES ALL OF THE EXISTING PRINCIPAL
OBLIGATIONS OUTSTANDING UNDER THAT CERTAIN AMENDED AND RESTATED SWING LINE
NOTE, EXECUTED BY THE UNDERSIGNED IN FAVOR OF AGENT AND DATED AS OF FEBRUARY 5,
2004 (THE “PRIOR NOTE”).  UNLESS
OTHERWISE PROVIDED IN THE CREDIT AGREEMENT, NOTHING HEREIN OR IN THE CREDIT
AGREEMENT SHALL DEEM THE EXISTING PRINCIPAL OBLIGATIONS OUTSTANDING UNDER THE
PRIOR NOTE WHICH ARE BEING RE-EVIDENCED BY THIS
INSTRUMENT TO HAVE BEEN PAID.  INTEREST
ACCRUED UNDER THE PRIOR NOTE PRIOR TO THE DATE OF THIS SWING LINE NOTE REMAINS
ACCRUED AND UNPAID UNDER THIS SWING LINE NOTE AND DOES NOT CONSTITUTE ANY PART
OF THE PRINCIPAL AMOUNT OF THIS SWING LINE NOTE.


 


THIS
SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES.


 


	
   

  	
  THERMADYNE
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


	
   

  	
  THERMAL DYNAMICS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TWECO PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VICTOR EQUIPMENT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C & G SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOODY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMAL ARC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


	
   

  	
  THERMADYNE INTERNATIONAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTIP CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 





















 


SCHEDULE 2.1


 


Assignor Lender’s Loans


 


	
  Principal Amount

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Subtotal

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accrued Interest

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Unused Line Fee

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Other + or -$

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  



 


All determined as of the
Effective Date.