Exhibit 10.1


 


ACQUISITION
AGREEMENT


 


 


BY
AND BETWEEN


 


THERMADYNE
ITALIA S.R.L.


 


AND


 


MASE GENERATORS S.P.A.


 


 


RELATING
TO


 


GEN SET S.P.A.


 


 


 


December 22,
2005


 


Marena, Bonvicini, Aghina & Ludergnani


STUDIO LEGALE


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE 1 - PRELIMINARY COVENANTS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  RECITALS
  AND ANNEXES

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  DEFINED
  TERMS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  ACCOUNTING
  PRINCIPLES

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2
  - SALE AND PURCHASE OF THE SHARES

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  SALE
  AND PURCHASE

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  CLOSING

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  NATURE
  OF THE AGREEMENT

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3
  - PRICE - PAYMENTS

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  PRICE
  OF THE SHARES

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  PAYMENTS

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 - ACTIONS PRIOR TO OR AT THE CLOSING DATE

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  CORPORATE
  ACTIONS

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  PERFORMANCE
  OF CLOSING

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  SIMULTANEOUS
  TRANSACTIONS

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 - SELLER’S REPRESENTATIONS AND WARRANTIES

  	
  5

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  SELLER’S
  REPRESENTATIONS AND WARRANTIES

  	
  5

  
	
   

  	
   

  	
   

  
	
  5.1.1

  	
  Power and authority of Seller

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.1.2

  	
  Share Capital of the Company

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.1.3

  	
  Title to the Shares

  	
  7

  
	
   

  	
   

  	
   

  
	
  S.1.4

  	
  Good Standing

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.1.5

  	
  By-laws and corporate records

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.1.6

  	
  Powers of attorney

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.1.7

  	
  No conflict

  	
  8

  
	
   

  	
   

  	
   

  
	
  5.1.8

  	
  Financial statements and accounting books

  	
  8

  
	
   

  	
   

  	
   

  
	
  5.1.9

  	
  Interests in other entities—Shareholders Agreements

  	
  8

  
	
   

  	
   

  	
   

  
	
  5.1.10

  	
  Receivables

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.1.11

  	
  Inventory

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.1.12

  	
  Title to Assets

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.1.13

  	
  Real Property and Leases

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.1.14

  	
  Intellectual property rights

  	
  11

  
	
   

  	
   

  	
   

  
	
  5.1.15

  	
  Bank Accounts and Loans

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.1.16

  	
  Guarantees given by the Company

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.1.17

  	
  Material Contracts

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.1.18

  	
  Insurance policies

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.1.19

  	
  Taxes

  	
  13

  
	
   

  	
   

  	
   

  
	
  5.1.20

  	
  Employees

  	
  13

  
	
   

  	
   

  	
   

  
	
  5.1.21

  	
  Litigation

  	
  14

  
	
   

  	
   

  	
   

  
	
  5.1.22

  	
  Conduct of Business

  	
  15

  
	
   

  	
   

  	
   

  
	
  5.1.23

  	
  Compliance with laws

  	
  15

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  NO
  DISCLAIMER; NO OTHER REPRESENTATIONS AND WARRANTIES

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 - INDEMNIFICATION OBLIGATIONS

  	
  16

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  INDEMNIFICATION
  BY SELLER

  	
  16

  



 


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  6.2

  	
  INDEMNIFICATION
  BY BUYER

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  LIMITATIONS
  ON SELLER’S INDEMNIFICATION

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  THRESHOLD

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  CAP

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  TIME
  LIMITS

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  CLAIMS

  	
  19

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  THIRD
  PARTY CLAIMS

  	
  19

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  PAYMENT
  OF THE AMOUNT OF INDEMNIFICATION

  	
  20

  
	
   

  	
   

  	
   

  
	
  6.10

  	
  PROVISIONAL
  PAYMENTS

  	
  20

  
	
   

  	
   

  	
   

  
	
  6.11

  	
  EXCLUSIVE
  REMEDY

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 - BUYER’S REPRESENTATIONS AND WARRANTIES

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 - FURTHER COVENANTS

  	
  22

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  GUARANTEE
  OF THERMADYNE HOLDINGS

  	
  22

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  GUARANTEE
  OF MASE

  	
  22

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  AGREEMENTS
  WITH AFFILIATES OF THE THERMADYNE GROUP

  	
  22

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  INTERIM
  MANAGEMENT

  	
  23

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  NON
  COMPETITION

  	
  23

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  CONFIDENTIALITY

  	
  24

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  PRESS
  RELEASES

  	
  24

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  COOPERATION

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 - MISCELLANEA

  	
  25

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  COSTS

  	
  25

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  SEVERABILITY

  	
  25

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  WAIVER

  	
  26

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  ENTIRE
  AGREEMENT

  	
  26

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  AMENDMENTS

  	
  26

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  NOTICES

  	
  26

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  APPLICABLE
  LAW

  	
  27

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  ARBITRATION

  	
  28

  



 


ii





















 


ACQUISITION AGREEMENT


 


By
this agreement dated as of December 22, 2005 (the “Agreement”)
by and between


 


THERMADYNE ITALIA S.R.L., with registered offices in Via Stazione 5,
Villanova D’ Ardenghi, Pavia, Italy, share capital Euro 46,482, Tax code and
Register of Enterprises of Milano no. 07978050156, represented by Mr Oreste
Cazzaniga, duly empowered (the “Thermadyne Italia”
or the “Seller”, depending on the context)


 


and


 


MASE
GENERATORS S.P.A.,
with registered offices in Via Tortona, 345, Cesena (Forli-Cesena), Italy,
share capital Euro 3,500,000, Tax code and Register of Enterprises of
Forli-Cesena no. 00687150409, represented by Mr. Luigi Foresti, duly
empowered (“Mase”),


 


WHEREAS


 


A.                                    Thermadyne Italia is an affiliate of the Thermadyne
Group (the “Thermadyne Group”), whose parent
company is Thermadyne Holdings Corporation, Suite 300, 16052 Swingley
Ridge Road, St. Louis, Missouri (“Thermadyne Holdings”);


 


B.                                    Thermadyne Italia is the sole shareholder of GEN SET S.P.A., a company organized and existing under the
laws of Italy, having its registered office at Via Stazione 5, Villa-nova D’Ardenghi,
Pavia, Italy, and an issued and fully paid share capital of Euro 7,488,000.00,
tax code and Register of Enterprises of Pavia no. 102111540157 (the “Company”), active in the field of manufacture of, inter alia, power generators
and motor welding;


 


C.                                    Thermadyne Italia is interested in selling,
and Mase is interested in purchasing, through GEN SET
S.R.L., a newly established company controlled by Mase and
designated by it (“Newco” or,
together with Mase, the “Buyer”), the
entire share capital of the Company upon the terms and conditions set forth
herein; and


 


1





















 


D.                                    On November 8, 2005 Thermadyne Holdings
and Mase entered into a letter of intent whereby the parties thereto agreed
upon certain terms and conditions to be included in the Agreement (the “Letter of Intent”),


 


NOW THEREFORE IT IS AGREED AS FOLLOWS.


 


ARTICLE 1 - PRELIMINARY COVENANTS


 


1.1                               RECITALS AND ANNEXES


 


The recitals set out above,
as well as the documents attached hereto as Annexes, form an integral and
substantive part of the Agreement.


 


1.2                               DEFINED TERMS


 


Defined terms are used
throughout the Agreement in the specific meaning respectively attributed to
each of them herein. Terms defined in the plural include the singular and vice-versa.


 


Seller and Buyer are
sometimes referred to collectively as the “Parties”.


 


1.3                               ACCOUNTING PRINCIPLES


 


For the purpose of the
Agreement, reference is made to the rules of Italian law applicable to the
drafting of financial statements, as integrated by, interpreted and applied in
accordance with the accounting principles issued by the Commission of the “Consiglio Nazionale dei Dottori Commercialisti e dei
Ragionieri” (the “Accounting
Principles”).


 


2





















 


ARTICLE 2
- SALE AND PURCHASE OF THE SHARES


 


2.1                               SALE AND PURCHASE


 


Subject
to the terms and conditions set forth in the Agreement, Seller hereby agrees to
sell to Buyer, and Buyer agrees to purchase, all the no. 7,488,000 shares
representing 100% of the share capital of the Company (the “Shares”), free from all liens and encumbrances of any kind
(the “Sale and Purchase”).


 


All
rights and interests relating to the Shares, including accrued and unpaid
dividends (“godimento”) are
hereby transferred with effective date as of the Closing Date (as hereinafter
defined).


 


2.2                               CLOSING


 


The
Sale and Purchase shall take place, as specified herein (the “Closing”) at the office of the Notary Roberto Scotto, in
Cesena, Corte Piero della Francesca, 49, on December 29, 2005, or such
other date (not later than December 31, 2005) and place as the Parties may
mutually agree in writing (the “Closing Date”).


 


2.3                               NATURE OF THE AGREEMENT


 


Upon
Closing, the Agreement will have the nature of and will be considered as a
definitive sale and purchase agreement, and shall remain in full force and
effect until consummation of all relations deriving therefrom, with no need of
further confirmation or repetition of the provisions of the Agreement in other
documents.


 


ARTICLE 3 - PRICE – PAYMENTS


 


3.1                               PRICE OF THE SHARES


 


The
aggregate purchase price for the Shares has been agreed between the Parties in
the fixed amount of Euro 7,596,865 (seven million five hundred and ninety-six


 


3





















 


thousand
eight hundred and sixty-five), subject to no adjustment (the “Price of the Shares”).


 


3.2                               PAYMENTS


 


The
Price of the Shares shall be paid at the Closing Date, simultaneously with the
Closing, as follows:


 


(a)                               the amount of Euro 4,900,000 (four million nine hundred thousand) shall
be paid by Buyer to Seller in immediately available funds by means of wire
transfer, with value date as of the date of payment, on the bank account and at
the bank previously notified in writing by Seller to Buyer or, alternatively,
at Buyer’s choice, by means of certified checks (“assegni circolari”) (the “Payment in
Cash”); whilst


 


(b)                              the residual amount of Euro 2,696,865 (two million six hundred and ninety-six
thousand eight hundred and sixty-five) shall be paid by Buyer to Seller
according to separate agreements between the Parties, by offsetting respective
credits vis-à-vis each other.


 


ARTICLE 4 - ACTIONS PRIOR TO OR AT THE CLOSING DATE


 


4.1                               CORPORATE ACTIONS


 


On
the Closing Date, Seller shall cause that an ordinary shareholders’ meeting of
the Company take place to resolve upon the following matters:


 


(a)                               resignation of all directors and statutory auditors of the Company;


 


(b)                              appointment of new directors and statutory auditors, as per the
previous written instructions of Buyer; and


 


(c)                               formal waiver of any and all claims of the Company vis-à-vis each of
the above resigning directors and statutory auditors, pursuant to Article 2393
of the Italian


 


4





















 


Civil
Code, except in case of gross negligence and wilful misconduct (‘dolo o colpa grave’).


 


4.2                               PERFORMANCE OF CLOSING


 


At
Closing each of the Parties shall take or cause to be taken the following
actions:


 


(a)                               Seller shall deliver to Buyer all the share certificates representing
the Shares, duly endorsed in favour of Buyer;


 


(b)                              Buyer shall pay to Seller the Payment in Cash;


 


(c)                               Seller and Buyer shall execute and deliver any other instrument or
document in connection with the Sale and Purchase, including the required stamp
duty form, as required for the completion of the Sale and Purchase; and


 


(d)                              the transfer of the Shares shall be recorded in the Company’s
shareholders’ book.


 


4.3                               SIMULTANEOUS TRANSACTIONS


 


Any
and all actions and transactions constituting the Closing, including without
limitation all deeds, instruments and documents to be executed at Closing and
deliveries to be made at Closing pursuant to the Agreement, shall be regarded
for the purposes of the Closing as a single transaction so that such actions
and transactions shall be deemed to occur simultaneously, and no such
transaction shall be deemed to have been consummated until all such
transactions have been consummated.


 


ARTICLE 5 - SELLER’S REPRESENTATIONS AND WARRANTIES


 


5.1                               SELLER’S REPRESENTATIONS AND WARRANTIES


 


Seller
hereby gives Buyer the following representations and warranties (the “Seller’s Representations and Warranties”), as qualified by
the specifications and/or


 


5





















 


additional information set out in the disclosure schedule attached
hereto as Annex A  (the “Disclosure Schedule”).


 


It
is agreed that (i) the Disclosure Schedule is an integral part of the
Seller’s Representations and Warranties, (ii) the Seller’s Representations
and Warranties refer to the date hereof and to the Closing Date, unless
otherwise specified therein; and (iii) said Seller’s Representations and
Warranties will continue in full force and effect for the period, depending on
the nature of each of them, specified in the Agreement.


 


5.1.1                     Power and authority of Seller


 


Seller
has full power and authority to perform the Sale and Purchase, as well as the
power to transfer the Shares to Buyer, as provided for in the Agreement.


 


Seller
has taken all actions necessary to authorize execution, delivery and
performance of the Agreement.


 


All
consents, approvals, authorizations and other requirements provided for by any
law which must be obtained or satisfied by Seller and which are necessary for
the execution and delivery by Seller of the Agreement and the consummation of the transactions
contemplated herein have been obtained and satisfied.


 


Seller
has obtained all required or appropriate consent to the Sale and Purchase from
its lenders.


 


5.1.2                     Share Capital of the Company


 


As
of the Closing Date, the share capital of the Company is equal to Euro
7,488,000.00, and is represented solely by the Shares. The Shares are duly
authorized, validly issued, outstanding and fully paid up.


 


There
are no pending transactions on the capital of the Company, neither in form of
payments attributable to future capital increases nor as financing by the
shareholder, and no third party may claim any right in connection with the
Shares or the issuance of new shares of the Company.


 


6





















 


Since
December 23, 2004 until the Closing Date no dividends have been or shall
be resolved nor distributed, in any form.


 


5.13                        Title to the Shares


 


Seller
has full legal title to the Shares and full right, power and authority to the
sale and transfer thereof.


 


The
Shares represent 100% of the share capital of the Company.


 


At
the Closing Date the Shares shall be free and clear of any pledges, liens, encumbrances,
restrictions or commitments and of any rights of third parties.


 


The
transfer of the Shares by Seller to Buyer provided for herein shall vest in
Buyer legal and beneficial title to the Shares.


 


5.1.4                     Good Standing


 


The
Company is duly organized, validly existing and in good standing under the
Italian law, and has full right and authority to carry on its activity as now
conducted and to own its properties.


 


5.1.5                     By-laws and corporate records


 


A
complete copy of the up-dated by-laws of the Company has been delivered to
Buyer prior to the date hereof.


 


The
Company has duly kept all corporate books and records which are mandatory under
Italian law.


 


5.1.6                     Powers of attorney


 


The
Disclosure Schedule contains a list of all powers of attorney granted by
the Company and currently in force.


 


7





















 


5.1.7                     No conflict


 


The
execution and delivery of the Agreement by Seller and the fulfilment of the
obligations provided for herein at the charge of Seller is neither in conflict
with, nor shall result in a material violation or breach of any binding
obligation of Seller, nor to the best of Seller’s knowledge of any laws,
regulations or orders of the judicial authority or of any other competent
authorities applicable to Seller nor shall cause the anticipated termination of
any agreement or licence of which the Company is a party or howsoever
applicable to any of its assets and properties.


 


5.1.8                     Financial statements and accounting books


 


The
financial statements of the Company as of December 31, 2004, copy of which
is attached hereto as Annex B/l
(the “2004 Financial Statements”) have
been prepared in accordance with the applicable law and by applying the
Accounting Principles on a consistent basis and are true, real and correct and
give a true and fair view of the Company’s financial position and the results
of its operations and correctly reflect all assets and liabilities of the
Company as at their reference date.


 


The
pro-forma financial statements of the Company as at September 30, 2005,
copy of which is attached hereto as Annex
B/2  (the “Pro-Forma Financial
Statements”) have been prepared broadly on the basis of the 2004
Financial Statements.


 


The
2004 Financial Statements and the Pro-Forma Financial Statements are herebelow
sometimes collectively referred to as the “Financial
Statements”.


 


The
accounting books and records (“scritture
contabili”) of the Company are complete and have been regularly kept
in accordance with the applicable laws.


 


5.1.9                     Interests in other entities – Shareholders
Agreements


 


Expect
for the shareholding interest equal to 90% of the capital of OCIM Sri (“Ocim”),
and except as otherwise specified in the Disclosure Schedule, the Company has
no direct or indirect participations and/or interests of any kind in other
entities.


 


8





















 


At
the Closing Date the Company shall not be part of any put and call or other
shareholders agreement concerning Ocim.


 


5.1.10              Receivables


 


It
is acknowledged that point 5.1.10 of the Disclosure Schedule specifies
certain intercompany accounts receivable, which (i) have been past due for
more than 12 months and are expected not to be paid, and (ii) are excluded
from the Seller’s Representations and Warranties (the “Excluded Receivables”).


 


It
is further acknowledged that the receivable versus the Spanish distributor GREYMO
S.A., equal to Euro 323,914, shall be included among the Excluded Receivables.


 


Such
Excluded Receivables will be transferred to Seller, pro-soluto, for an aggregate amount of Euro 1,000 promptly
after the Closing Date and effective as of January 2, 2006, by means of
the exchange of letters according to the text attached hereto as Annex C, it being understood that
until such transfer the Company shall not attempt to collect any of such
Excluded Receivables.


 


Except
for the Excluded Receivables, all accounts receivable, notes receivable and
other credits of the Company as are reflected in the Financial Statements and,
for the period from October 1, 2005 to the Closing Date, will be reflected
in the Company’s accounting books, are and shall be valid and existing and, to
the best of Seller’s knowledge, are collectable in the ordinary course of
business consistent with past practice.


 


5.1.11              Inventory


 


(a)                                  Point 5.1.11 of the Disclosure Schedule identifies
certain no moving and slow moving inventory items, respectively defined as
products with no sales in the last 24 months and as products having a turnover
not in line with the normal business standards, which are valued in the
aggregate of Euro 1,200,820.69, and for which Buyer acknowledges that the
expected recovery value is lower than the corresponding book value, net of the
relevant provision reflected in the


 


9





















 


Company’s
Financial Statements, and that the Buyer will not seek indemnification,
pursuant to the Agreement or otherwise, for such difference (the “Excluded Inventory”).


 


(b)           Without prejudice for the above clause (a):


 


(i)            the quantities of inventory items reflected
in the accounting books (including the Excluded Inventory) are effectively
existing, it being understood that physical differences in inventory items
having an aggregate book value up to a maximum amount of Euro 250,000 (two
hundred and fifty thousand) will not be taken into account; and


 


(ii)           all inventory items (excluding the Excluded
Inventory) are saleable and/or usable.


 


5.1.12              Title to Assets


 


The
Company has full legal title to all plants, machinery, equipment, and other
assets reflected in the Financial Statements and in general in the accounting
books of the Company.


 


Except
as otherwise specified in the Disclosure Schedule, all such assets owned by the
Company are subject to no liens, pledges, mortgages, encumbrances, reservations
of ownership or rights of any kind of any third parties.


 


All
plants, machinery and equipment and the other assets used by the Company are in
good operating conditions as to the use they are destined to, except for the
ordinary wear and tear.


 


5.1.13              Real Property and Leases


 


The
Disclosure Schedule contains a true and correct list of each parcel of
real property owned (the “Owned Real Property”)
and of each parcel of real property leased (the “Leased Real Property”) by the Company (as lessor or lessee)
and all liens relating to or affecting any parcel of real property referred to
above; provided that Buyer hereby


 


10





















 


acknowledges
that: (i) the Company has requested a cadastral search on its real estate;
and (ii) such search shall replace item 5.1.13 of the Disclosure Schedule,
should the results of such search be different from the list provided in the
Disclosure Schedule, along with any other Owned Real Property not evidenced in
the cadastral search. Except as otherwise specified in the Disclosure Schedule,
the Company has good and valid title to the Owned Real Property and a valid
leasehold in the Leased Real Property, in each case free and clear of any
liens. The Owned Real Property is in material compliance with all applicable
provisions of substantive law or public approvals, including applicable zoning,
building and workplace safety and environmental protection laws and
regulations, and, in general, there are no legal or administrative proceedings
pertaining to the Owned Real Property which have not been settled.


 


5.1.14              Intellectual property rights


 


The
Disclosure Schedule contains a list of all patents, patent applications,
inventions, trademarks, trade names, copyrights, trade secrets and know-how
presently owned or used by the Company (the “Intellectual
Property Rights”), related to, or necessary for its activity as
presently conducted, as well as a list of all contracts in force of which the
Company has granted or obtained the right to use such Intellectual Property
Rights.


 


Such
Intellectual Property Rights are free and clear of any pledges, liens,
encumbrances, restrictions or commitments and of rights of any kind of any
third parties.


 


All
relevant registrations are in full force and effect and all due accomplishments
and payments related to such registrations have been regularly performed and
paid.


 


No
claims or proceedings for infringement of any rights of a third party has been
received, is pending or is known to be threatened against the Company and none
of the products sold by the Company infringes rights of any kind of any third
parties.


 


No
intellectual property rights necessary for the activity of the Company as
presently conducted are owned by Seller, either directly or indirectly,
provided however that,


 


11





















 


should
any such intellectual property rights, after the Closing Date, result to be the
property of Seller, it will be transferred to the Company at no cost.


 


5.1.15              Bank Accounts and Loans


 


All
bank accounts maintained by the Company, as well as all loans and/or credit
facilities of the Company, are listed in the Disclosure Schedule.


 


5.1.16              Guarantees given by the Company


 


There
are no outstanding bank or other guarantees, letters of patronage and comfort
letters issued by the Company in favour of any third parties.


 


5.1.17              Material Contracts


 


All
contracts or agreements, including sale and purchase orders, presently in force
with the Company which are material for it (i.e. of a value higher than Euro 50,000
unless otherwise specified in the Disclosure Schedule) are listed in the
Disclosure Schedule, and a copy thereof has been provided to Buyer before the
date hereof. For the avoidance of any doubt, Buyer acknowledges that the
Disclosures Schedule lists the current commercial agreements for foreign
countries, including (but not limited to) those with Camstony and Welcon.


 


All
contracts or agreements entered into by the Company are fully in force and
effect; to the best of Seller’s knowledge, the Company is not in material
breach under any such contract or agreement, nor has it received any notice of
termination or otherwise implying such termination, and no anticipated
termination or, as to loan agreements, anticipated reimbursement, shall be in
any way caused by the transactions contemplated in the Agreement.


 


5.1.18              Insurance policies


 


The
properties and assets of the Company are covered by insurance policies against
such types of risks that as are customary and appropriate In their industry,
copies of


 


12





















 


which
have been provided to Buyer before the date hereof, and a list of which is
attached to the Disclosure Schedule.


 


Such
policies are valid and in force, and there are no damages still to be liquidated,
premiums due and not paid, nor any other unfulfilment or claim in respect
thereof.


 


5.1.19              Taxes


 


The
Company is in compliance with all obligations arising from the applicable laws
and regulations in tax matters, customs duties and other fiscal charges.


 


In
particular Seller hereby confirms as follows:


 


(a)                                  all direct taxes due have been entirely and
timely paid or adequately reserved for;


 


(b)                                 all indirect taxes payable have been
regularly paid;


 


(c)                                  all withholding taxes have been properly
applied on any relevant revenues, including on accrued interests on loans and
intercompany facilities;


 


(d)                                 all taxes, customs duties, or other fiscal
charges arising in any way whatsoever in relation with any performed transactions
have been regularly paid;


 


(e)                                  all tax declarations required by law to be
filed have been correctly filed with the appropriate authorities; and


 


(f)                                    no tax requests, claims or proceedings are
pending, nor to the best of Seller’s knowledge there are circumstances which
could give rise to such requests, claims or proceedings.


 


5.1.20              Employees


 


(a)                                  The Disclosure Schedule lists the names
of all the employees of the Company, specifying the relevant level, seniority,
cash compensation or salary;


 


13





















 


(b)           the employees of the Company are correctly
placed in their respective category and compensated pursuant to the applicable
laws and collective bargaining agreements and the relevant termination
indemnity funds (“Trattamento di Fine
Rapporto”), when applicable, have been correctly reserved for, and
there are no other special arrangements for additional compensation;


 


(c)           the Company has filed and performed all
declarations, returns and all the requirements with respect to social security
and welfare laws and regulations.


 


All
insurance, social security and welfare charges and contributions due by the
Company have been regularly paid or reserved for;


 


(d)           no claims or proceedings are pending against
the Company started by any of its employees or by the relevant labour or social
security authorities, and in general there is no litigation concerning labour
matters relating to facts preceding the date hereof, nor to the best of Seller’s
knowledge there are circumstances which could give rise to such litigations;


 


(e)           the Company has no collective agreements
other than the applicable “Contratto Collettivo”, nor corporate pension plans
or profits sharing arrangements; and


 


(f)            the Company is in material compliance with
all laws and applicable labour collective agreements respecting employment and
employment practices, terms and conditions of employment, pay equity, wages and
hours and laws.


 


5.1.21     Litigation


 


Except
as provided in the Disclosure Schedule, there are no actions, suits,
investigations or proceedings pending or, to the best of Seller’s knowledge,
threatened against


 


14





















 


the
Company, in any court or before any authorities and/or arbitral or similar
bodies; the Company is not subject to any order, judgment or decree or the like
with any authority; there are no claims pending against the Company, and, to the best of Seller’s knowledge, there
are no circumstances which could give rise to any of the above, except as
otherwise specified in point 5.1.21 of the Disclosure Schedule, it being
expressly understood that the litigation threatened by the Spanish distributor
GREYMO S.A. and the lawsuit with Michael E. Mahoney (the “Litigations”), which will both remain at
the charge of Seller, which shall exclusively defend such claims, and for which
consequently Seller shall remain liable towards Buyer.


 


5.1.22     Conduct of Business


 


Since
October 1, 2005 until the Closing Date the business of the Company has
been and shall be carried, on in the ordinary course.


 


5.1.23     Compliance with laws


 


The
Company has complied in all material respects with and is not in default under
or in violation of any law, statute, rule, regulation, order, code, license,
permit, authorization or other provisions relating to it or its properties and
assets or applicable to its business, including in particular, but not limited
to, those concerning fire-fighting, health and security, zoning, building and
environmental matters.


 


In
particular the products sold by the Company are in compliance with, and do not
violate, any law and regulation of any country where they are sold.


 


There
are no claims, actions, proceedings or orders pending for alleged violation of
the above laws and regulations, including in particular those relating to
product liability, nor to the best of Seller’s knowledge there are
circumstances which could give rise to such claims, actions, proceedings or
orders.


 


5.2          NO DISCLAIMER; NO OTHER
REPRESENTATIONS AND WARRANTIES 


 


It is expressly agreed that:


 


15





















 


(a)           the disclosures made by Seller to Buyer under
the Disclosure Schedule concerning the Litigations; and


 


(b)          any due diligence investigations of any kind
made by Buyer on the Company which have been made before the date hereof,


 


shall
not limit or otherwise impair Seller’s Representations and Warranties or affect
the rights of Buyer under the Agreement in any way whatsoever.


 


Except
for the representations and warranties expressly contained in this Article 5,
the Seller does not make any representations and warranties (whether expressed
or implied) in connection with the execution and delivery of this Agreement.


 


ARTICLE 6 - INDEMNIFICATION OBLIGATIONS


 


6.1          INDEMNIFICATION BY SELLER


 


Seller
shall indemnify Buyer for:


 


(a)          any loss or damage deriving from the breach
of Seller’s Representations and Warranties set forth in paragraphs 5.1.1,
5.1.2, 5.1.3 and 5.1.4;


 


(b)          any lack of assets or any and all liabilities
of the Company, whether absolute, accrued, contingent or otherwise, existing at
the Closing Date or arising out of any fact, act or omissions occurred on or
prior to such date, to the extent that any such liability is not reflected in
the Financial Statements; and


 


(c)          any and all costs, losses or damages incurred
by Buyer and/or the Company, in connection with any breach of the Seller’s
Representations and Warranties to the extent they are not indemnified pursuant
to clauses (a) or (b) above.


 


The
indemnification for the items provided for under clauses (a), (b) and (c) above,
(hereinafter, the “Liabilities”)
shall be made upon the following terms and conditions (the “Indemnification”).


 


16





















 


6.2          INDEMNIFICATION BY BUYER


 


Buyer
hereby agrees to defend and hold harmless Seller and its partners,
shareholders, managers, officers, directors, employees, agents, successors and
assigns, from and against any damage, liability, loss, claim, suit, proceeding,
cost or expense (including settlement costs, interest, penalties, reasonable
attorneys’ fees or other expenses for investigation or defense) of any actions
or threatened actions occasioned by, resulting from or arising out of any
breach of any of Buyer’s Representations and Warranties (as hereinafter
defined).


 


6.3          LIMITATIONS ON SELLER’S INDEMNIFICATION


 


The
amount of the Indemnification (the “Amount of the
Indemnification”) shall be equal to the amount corresponding to any
Liabilities, increased by direct financial charges in connection with such
Liability, if any, after deduction of:


 


(a)          the amount of the specific reserve fund, if
any, posted for the relevant Liability in the Financial Statements except that (i) the
reserve fund posted for the Excluded Receivables cannot be utilized for any
unpaid receivable and (ii) the reserve fund posted for the Excluded
Inventory cannot be utilized for other inventory items; and


 


(b)          the amount of any contingent assets which
should arise with respect to the Financial Statements and referred to the
period of operation of the Company prior to the Closing Date, except for any
plus-values existing in and capital gains deriving from the sale of fixed
assets or inventory items.


 


6.4          THRESHOLD


 


Except
for Liabilities concerning tax matters and/or the Litigations, it is further
understood that for any other Liabilities Seller’s Indemnification obligations
shall not arise


 


17





















 


until
the Amount of Indemnification in the aggregate exceeds Euro 100,000 (one
hundred thousand) (the “Threshold”).


 


Should
the amount of the Threshold be exceeded, Seller shall be liable to pay to Buyer
the entire Amount of Indemnification and any subsequent Amount of
Indemnification.


 


6.5          CAP


 


The
Parties acknowledge that Seller’s Indemnification obligation, except for
Liabilities concerning the Litigations in no event shall exceed, in the
aggregate, Euro 1,000,000 (one million) or, if deriving from Liabilities
concerning tax matters, Euro 1,250,000 (one million two hundred and fifty
thousand).


 


For
the avoidance of doubt, it is hereby specified that in no case the maximum
aggregate liability of the Seller pursuant to the Seller’s Indemnification
obligations arising out of the Liabilities and Liabilities concerning tax
matters shall exceed Euro 1,250,000.


 


6.6          TIME LIMITS


 


The
Indemnification obligation of Seller shall apply to any Claim (as hereinafter
defined) made by Buyer within the following time limits:


 


(a)          with respect to the Seller’s Representations
and Warranties set forth in paragraph 5.1.3 for a period of eighteen (18)
months after the Closing Date;


 


(b)          as to Liabilities concerning tax, customs
duties, labour and social security and environmental matters, until expiration
of the applicable statute of limitations; and


 


(c)          eighteen (18) months from the Closing Date as
to Liabilities of any other nature.


 


18





















 


6.7          CLAIMS


 


A
person entitled to assert a claim for indemnification, (a “Claim”
or “Claims”, as the case may be) under the
Agreement (the “Indemnitee”), by sending a
written notice thereof to the other Party (the “Indemnitor”),
promptly but in no event later than 30 (thirty) days after becoming aware of
any circumstances giving rise to the Claim, stating in said notice its nature,
basis and, to the extent practicable, its estimated amount and the following
shall apply:


 


(a)          upon receipt of the Claim, the Indemnitor
shall have 30 (thirty) days to submit its objections, if any (the “Objections Term”);


 


(b)          should the Indemnitor fail to give notice
thereof within the Objections Term the Claim shall be considered as finally
accepted by the Indemnitor; and


 


(c)          should, on the contrary, the Indemnitor
submit its objection within the Objections Term, and the Parties would not find
an agreement upon such Claim (the “Agreement on the Claim”)
within 30 (thirty) days from the elapsing of the Objections Term, either Party
may have recourse to arbitration as provided for herein.


 


6.8          THIRD PARTY CLAIMS


 


In
case of any proceedings started or claim laid by third parties against the
Company or Buyer which may originate an Indemnification obligation of Seller
pursuant to the Agreement (the “Third Party Claims”
or the “Third Party Claim”, as the case may
be), the following shall apply:


 


(a)          Buyer shall promptly, but in no event later
than 10 (ten) business days after becoming aware thereof, inform Seller in
writing of the Third Party Claim;


 


(b)          Seller shall have the right to participate in
the defense against the Third


 


19





















 


Party
Claim by appointing, at its own expense, its own advisors and/or legal counsel
to defend together with Buyer’s counsel; provided that Seller shall not be
liable for any legal expense incurred by Buyer in connection with defense of
the Third Party Claim; and


 


(c)          any settlement related to said Third Party
Claim shall require the previous written consent of the Seller, which consent
shall not be unreasonably withheld.


 


6.9          PAYMENT OF THE AMOUNT OF INDEMNIFICATION


 


Without
prejudice for any provisional payment as specified in paragraph 6.10 below, any
Amount of Indemnification due by Seller pursuant to the Agreement shall be paid
to Buyer within 30 days from either:


 


(a)          the elapsing of the Objection Term, should
Seller have accepted the Claim or failed to raise any objection to same;


 


(b)          the date of the Agreement on the Claim;


 


(e)          the date of issuance of an arbitration award
as provided for herein; and


 


(d)          the date of issuance of an arbitration award
or of the relevant court decision, or of the relevant settlement, in case of a
Third Party Claim,


 


by
means of wire transfer of immediately available funds to the current account
and with the bank as previously indicated by Buyer to Seller in writing.


 


6.10        PROVISIONAL PAYMENTS


 


Seller,
if so requested by Buyer, shall have to make available to the Company the
amounts to be paid by same on the basis of tax assessments or other fiscal
orders or judicial or administrative decisions even when only provisionally
enforceable, provided that the Company or Buyer shall reimburse Seller of the
sums subsequently recovered


 


20





















 


by
the Company or Buyer, net of any taxes at the charge of the Company or Buyer,
if any, in connection with any Amount of Indemnification paid by Seller.


 


6.11        EXCLUSIVE REMEDY


 


Except
for claims of fraud or intentional misrepresentation, the indemnities provided
for in this Article 6 shall be the exclusive remedy for breach of the
Seller’s Representations and Warranties in lieu of any other right or remedy
provided by applicable law or otherwise.


 


ARTICLE 7 - BUYER’S REPRESENTATIONS AND WARRANTIES


 


Buyer
hereby represents and warrants to Seller as follows (the “Buyer’s
Representations and Warranties”):


 


(a)          Mase is and Newco will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Mase has full right and authority to carry on
its activity as now conducted and to own its properties;


 


(b)          Buyer will have all requisite power and
authority to execute and deliver the Agreement and to fully perform Buyer’s
obligations hereunder and to consummate the transactions contemplated hereby;


 


(c)          Buyer will have taken all actions necessary
to authorize execution, delivery and performance of the Agreement;


 


(d)          Buyer has all requisite financial ability and
resources to execute, deliver and perform its obligations under the Agreement;


 


(e)          all consents, approvals, authorizations and
other requirements provided for by (i) any law, rule or regulation of
any government or agency; or (ii) any judgment, order, writ, decree,
permit or license of any court or other


 


21





















 


agency
or any government; which must be obtained or satisfied by Buyer and which are
necessary for the execution and delivery by Buyer of the Agreement and the
consummation of the transactions contemplated in the Agreement shall have been
obtained and satisfied;


 


(f)           neither the execution and delivery of this
Agreement nor the performance or consummation of the transactions contemplated
hereby will conflict with, or result in a breach or violation of, constitute a
default under, or accelerate the performance provided by the terms of (A) any
contract, agreement, commitment or instrument to which Buyer is a party or by
which Buyer or any of its assets are bound or committed; or (B) Mase or
Newco’s certificate of incorporation, by-laws or other governing instrument.


 


ARTICLE 8 - FURTHER
COVENANTS


 


8.1                               GUARANTEE OF THERMADYNE HOLDINGS


 


By
executing the Agreement, Thermadyne Holdings unconditionally guarantees the
performance of any and all obligations of Seller under the Agreement and
assumes the further undertakings set forth below.


 


8.2                               GUARANTEE OF MASE


 


By
executing the Agreement, Mase unconditionally guarantees the performance of any
and all obligations of Newco under the Agreement.


 


8.3                               AGREEMENTS WITH AFFILIATES OF THE THERMADYNE
GROUP


 


Thermadyne
Holdings and Thermadyne Italia shall cause that - on or promptly after the
Closing Date, but in any event effective as of the Closing Date – all
agreements and/or arrangements existing between the Company and any affiliate
of the Thermadyne Group are terminated by mutual agreement with the Company,
provided that (i) any


 


22





















 


such
affiliate of the Thermadyne Group shall not be entitled to have or to claim
from the Company any indemnification or other payment due by the Company in
connection with such termination; (ii) all outstanding accepted orders
existing at the date hereof shall be completed.


 


It
is agreed that, upon such termination, Thermadyne Holdings and Thermadyne
Italia shall use their commercial best efforts so that the affiliates of the
Thermadyne Group reconstitute with the Company new commercial arrangements for
the purchase of products of the Company, at market terms and conditions to be
agreed upon.


 


8.4          INTERIM MANAGEMENT


 


Except
as may be expressly permitted by Buyer in writing upon request by Seller, it
being understood that such Buyer’s consent shall not be unreasonably withheld,
Seller shall procure that in the period between the date hereof and the Closing
Date the Company conducts its business in the normal and ordinary course
consistent with past practice without disposing of any material assets, buying
new material assets and/or entering into any extraordinary transaction; use
reasonable efforts to preserve intact its organization; continue in full force
and effect all existing insurance policies; and use all reasonable efforts to
preserve relations with suppliers, customers and others having business
dealings with it in a manner consistent with past practices.


 


8.5          NON
COMPETITION


 


Seller
undertakes that, after the Closing Date and for a period of at least five
years, it shall not, whether on its own account or in conjunction with or on
behalf of or through any entity, person, firm, company or other organization,
and in any form whatsoever, and whether as a principal, agent, consultant or in
any other capacity whatsoever, directly or indirectly, operate in the field of
the manufacture, marketing or sale of power generators in the territory of
Europe, North and South America and Far East, provided that such non
competition obligation shall not apply to:


 


23





















 


(i)         the activity currently
operated through Ocim;


 


(ii)        the purchase and sale of products of the
Company supplied by it to affiliates of the Thermadyne Group; and


 


(iii)       occasional not material sales of power
generators which Thermadyne Group may from time to time make to its welding
customers as a part of its existing commitment to service them.


 


It
is expressly acknowledged by Seller that the compensation for the above non
competition obligation has been taken into account in the determination of the
Price of the Shares.


 


8.6                               CONFIDENTIALITY


 


Unless
compelled to disclose by judicial or administrative orders or by requirements
of law, or disclosed in action or proceeding brought by a Party hereto in
pursuit of its rights or in exercise of its remedies hereunder, each Party shall,
and shall use its best efforts to cause its affiliates and its officers,
employees, counsels, accountants, financial advisors, consultants or other
representatives to, keep confidential the contents of the Agreement and all
documents and information concerning the other Party furnished to it by the
other Party in connection with the Agreement.


 


8.7                               PRESS RELEASES


 


Neither
Party shall make any public announcements or issue press releases without
previously agreeing with the other Party the contents and timing thereof,
provided however that each Party may make all announcements and disclosures
that may be required by applicable laws or regulations, previously consulting,
to the extent that it is feasible, the other Party concerning such
announcements and disclosures.


 


24





















 


8.8                               COOPERATION


 


The
Parties shall render each other their best cooperation to solve any operational
issue which may arise in connection with the Sale and Purchase, and, in such a
framework, will be ready to execute any deed of integration of the Agreement as
may be necessary for the best performance of same.


 


Furthermore,
the Buyer shall cooperate with the Thermadyne Group in connection with the
group’s annual audit review for the 2005 fiscal year.


 


ARTICLE 9 - MISCELLANEA


 


9.1                               COSTS


 


Buyer
and Seller shall each bear their own expenses, costs and fees (including,
without limitation, brokers, investment bankers, attorneys’ and auditors’ fees)
in connection with the Agreement and the transactions contemplated hereby.


 


The
costs associated with the transfer of the Shares (such as notarial fees, stamp
duties and others, if any) shall be as to 2/3 at the charge of Buyer and as to
1/3 at the charge of Seller.


 


9.2                               SEVERABILITY


 


Should
one or more provisions contained herein be invalid or unenforceable in all or
in part under the applicable provisions of law, the invalid or unenforceable
provision(s) shall be severed from the Agreement and the Parties shall in good
faith negotiate and agree to replace such provision(s) with other(s) having the
same or similar economic effect to the maximum extent as permitted by law.


 


25





















 


9.3                               WAIVER


 


Neither
Party shall have been deemed to have waived rights arising out of the Agreement
or out of any default or breach hereunder by the other Party, unless such Party
acknowledges such waiver in writing.


 


No
waiver of any default or breach of a provision hereof shall be construed as to
constitute a waiver of any further default or breach thereunder, whether
similar or not, or as a waiver of the provisions itself.


 


9.4                               ENTIRE AGREEMENT


 


The
Agreement merges and supersedes any previous agreements or understandings among
the Parties, written or verbal, concerning the subject matter hereof, including
but not limited to the Letter of Intent; represents (together with any
documents referred to herein) the entire agreement among the Parties; and may
not be contradicted by evidence of any prior agreement or understanding,
whether written or verbal.


 


9.5                               AMENDMENTS


 


Any
modifications or amendments to the Agreement shall only be valid and binding if
in writing and duly signed by the Parties.


 


9.6                               NOTICES


 


Any
notice or communication between the Parties in connection with the Agreement
shall be valid if made in writing and delivered in person or sent by registered
letter or telefax confirmed by registered letter, as follows (without prejudice
to future changes communicated in accordance herewith):


 


26





















 


if
to Buyer, to:


 


Thermadyne Italia Srl


c/o Thermadyne Holdings Corporation 


Suite 300, 16052 Swingley Ridge Road 


St. Louis, Missouri 63017 (USA) 


telefax: 001.636.728.3010 


Attention: Ms. Patricia S. Williams


 


copy
to:


 


Thermadyne Italia Srl 


Mr. Oreste Cazzaniga 


Via A. Boito, 12 


Monza (Milano), Italy 


telefax; 02.96458902


 


if
to Seller to:


 


Mase Generators SpA 


Via Tortona, 345 


Cesena (Forli-Cesena), Italy 


telefax: 0547.317555 


Attention: Mr. Luigi Foresti


 


Notices
delivered in person shall be effective immediately; notices sent by telefax
shall be effective immediately if received on a business day or, if not, on the
first subsequent business day; notices sent by registered letter shall be
effective upon receipt unless the letter merely confirms a previous notice sent
by telefax.


 


9.7                               APPLICABLE LAW


 


The
Agreement shall be governed by, and construed in accordance with, the laws of Italy.


 


27





















 


9.8                               ARBITRATION


 


All
disputes arising out of or in connection with the Agreement shall be finally
settled under the National Rules of Arbitration of the National and
International Chamber of Commerce of Milan by three arbitrators appointed in
accordance with the said Rules.


 


The
arbitrators will issue the award applying the rules of law (i.e. ‘arbitrato secondo diritto’).


 


The
arbitration procedure shall be held in Milan, Italy and the arbitrators, taking
into account the language of the Agreement or of other related documents, if
any, must be fluent in the English language.


 


 


LIST OF ANNEXES


 


	
  Annex
  A

  	
  -

  	
  Disclosure
  Schedule

  
	
  Annex
  B/l

  	
  -

  	
  2004
  Financial Statements

  
	
  Annex
  B/2

  	
  -

  	
  Pro-Forma
  Financial Statements

  
	
  Annex
  C

  	
  -

  	
  Transfer
  of the Excluded Receivables

  



 


 


	
   

  	
  THERMADYNE ITALIA S.R.L.

  	
   

  	
  MASE GENERATORS S.P.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Oreste Cazzaniga

  	
   

  	
   

  	
  /s/ Luigi Foresti

  	
   

  
	
   

  	
  (Oreste Cazzaniga)

  	
   

  	
  (Luigi Foresti)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERMADNYE HOLDINGS CORPORATION

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Patricia S. Williams

  	
   

  	
   

  
	
   

  	
  (Patricia S. Williams)

  	
   

  	
   

  
								



 


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