**Exhibit 4.6**

 

**SEVENTH AMENDMENT**

**to**

**SECOND AMENDED AND RESTATED CREDITAGREEMENT**

 

ThisSEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”),executed as of August 5, 2005 and effective as of August 1, 2005, byand among THERMADYNE INDUSTRIES, INC., a Delaware corporation (“Industries”),THERMAL DYNAMICS CORPORATION, a Delaware corporation (“Dynamics”), TWECOPRODUCTS, INC., a Delaware corporation (“Tweco”), VICTOR EQUIPMENTCOMPANY, a Delaware corporation (“Victor”), C & G SYSTEMS, INC.,an Illinois corporation (“C & G”), STOODY COMPANY, a Delawarecorporation (“Stoody”), THERMAL ARC, INC., a Delaware corporation (“ThermalArc”), PROTIP CORPORATION, a Missouri corporation (“ProTip”), THERMADYNEINTERNATIONAL CORP., a Delaware corporation (“International”, andcollectively with ProTip, Thermal Arc, Stoody, C & G, Victor, Tweco,Dynamics and Industries, the “Borrowers”), the other persons designatedas Credit Parties on the signature pages hereof, GENERAL ELECTRIC CAPITALCORPORATION, a Delaware corporation (“Agent”) and the Persons signatorythereto from time to time as Lenders. Unless otherwise specified herein, capitalized terms used in thisAmendment shall have the meanings ascribed to them in Annex A tothe Credit Agreement and the Intercreditor Agreement (each as hereinafterdefined). 

 

RECITALS

 

WHEREAS, the Borrowers, the Credit Parties, Agent andLenders have entered into that certain Second Amended and Restated CreditAgreement dated as of November 22, 2004 (as further amended, supplemented,restated or otherwise modified from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrowers have requested that RequisiteLenders amend certain provisions of the Credit Agreement to, among otherthings, amend and restate the Financial Covenants;

 

NOW THEREFORE, in consideration of the mutualexecution hereof and other good and valuable consideration, the parties heretoagree as follows:

 

### 1.                                       Amendmentto Section 5.  Section 5 ofthe Credit Agreement is hereby amended by adding the following new Section 5.14:

###  

“Section 5.14.   If on any day (the “Shortfall Day”)Borrowing Availability is less than $10,000,000, Borrower shall deliver toAgent within 15 days after the Shortfall Day a 13-week availability forecastreport (provided, that no more than one such forecast report shall be requiredfor more than one Shortfall Day during any period of 30 consecutive days), inform and substance reasonably acceptable to Agent, for the 13-week periodbeginning on the Shortfall Day.”

 

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### 2.                                       Amendmentand Restatement of Annex F.  Annex Fof the Credit Agreement is hereby amended and restated in its entirety to readas provided on Exhibit F attached hereto.

###  

### 3.                                       Amendmentand Restatement of Annex G.  Annex Gof the Credit Agreement is hereby amended and restated in its entirety to readas provided on Exhibit G attached hereto.

###  

### 4.                                       Representationsand Warranties of Credit Parties. The Credit Parties represent and warrant that:

###  

#### (a)                                            theexecution, delivery and performance by the Credit Parties of this Amendmenthave been duly authorized by all necessary corporate action required on itspart and this Amendment is a legal, valid and binding obligation of the CreditParties enforceable against the Credit Parties in accordance with its termsexcept as the enforcement thereof may be subject to (i) the effect of anyapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting creditors’ rights generally and (ii) general principles ofequity (regardless of whether enforcement is sought in a proceeding in equityor at law); and

####  

#### (b)                                           aftergiving effect to this Amendment, each of the representations and warrantiescontained in the Credit Agreement is true and correct in all material respectson and as of the date hereof as if made on the date hereof, except to theextent that such representations and warranties expressly relate to an earlierdate.

####  

### 5.                                       ConditionsTo Effectiveness.  This Amendmentshall be effective upon the following (all in form and substance satisfactoryto Agent):

###  

#### (a)                                        executionand delivery of this Amendment by the Requisite Lenders and the Credit Parties;and

####  

#### (b)                                       theAgent shall have received a copy of a fully executed and delivered amendment,in form and substance satisfactory to Agent, to that certain Second Lien CreditAgreement, dated as of July 29, 2004, by and among the Borrowers, CreditSuisse First Boston and the other Persons signatory thereto;

####  

#### (c)                                        theAgent shall have received, for the ratable benefit of the Lenders, payment ofan amendment fee in an amount equal to $25,000 (which shall be fully earned andpayable as of the date hereof); and

####  

#### (d)                                       paymentin full of all fees, costs and expenses, including the reasonable fees, costsand expenses of counsel or other advisors for advice, assistance, or other representationin connection with this Amendment, as provided in Section 11.3(a) ofthe Credit Agreement.

 

2

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### 6.                                       ReferenceTo And Effect Upon The Credit Agreement.

###  

#### (a)                                            TheCredit Agreement and the other Loan Documents shall remain in full force andeffect, as amended hereby, and are hereby ratified and confirmed.

####  

#### (b)                                           Theexecution, delivery and effectiveness of this Amendment shall not operate as awaiver of any right, power or remedy of Agent or any Lender under the CreditAgreement or any Loan Document, nor constitute a waiver or amendment of anyprovision of the Credit Agreement or any Loan Document, except as specificallyset forth herein.  Upon the effectivenessof this Amendment, each reference in the Credit Agreement to “this CreditAgreement,” “hereunder,”  “hereof,” “herein”or words of similar import shall mean and be a reference to the CreditAgreement as amended hereby.

####  

### 7.                                       GoverningLaw.  THIS AMENDMENT SHALL BEGOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TOCONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.

###  

### 8.                                       Headings.  Section headings in this Amendment areincluded herein for convenience of reference only and shall not constitute apart of this Amendment for any other purposes.

###  

### 9.                                       Counterparts.  This Amendment may be executed in any numberof counterparts, each of which when so executed shall be deemed an original,but all such counterparts shall constitute one and the same instrument.

###  

### 10.                                 Reaffirmationof Guaranties.  The Credit Partiessignatory hereto hereby reaffirm their Guaranties of the Obligations, takinginto account the provisions of this Amendment.

###  

[Signature pages follow]

 

3

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IN WITNESSWHEREOF, the parties hereto have executed and delivered this Amendment as ofthe date first written above.

 
|       | LENDER:                           |                                 |
|------------|-----------------------------------|--------------------------------------|
|       |                              |                                 |   |
|       | **GENERAL  ELECTRIC CAPITAL**     |                                 |
|       | **CORPORATION,**                  |                                 |
|       | as Agent and  Lender              |                                 |
|       |                              |                                 |   |
|       | By:                               | /s/ Dennis W.  Cloud                 |   |
| ** ** | ** **                        | Duly Authorized Signatory            | ** ** |
| ** ** | ** **                        | ** **                           | ** ** |
| ** ** | ** **                        | ** **                           | ** ** |
|       | CREDIT PARTIES:                   |                                 |
|       |                              |                                 |   |
| ** ** | **THERMADYNE  INDUSTRIES, INC.**  | ** **                           |
| ** ** | ** **                        | ** **                           | ** ** |
|       | By:                               | /s/ Patricia S.  Williams            |   |
|       | Name:                             | Patricia S.  Williams                |   |
|       | Title:                            | VP, Secretary  & General Counsel |   |
|       |                              |                                 |   |
| ** ** | **THERMAL  DYNAMICS CORPORATION** | ** **                           |
| ** ** | ** **                        | ** **                           |
| ** ** | ** **                        | ** **                           | ** ** |
|       | By:                               | /s/ Patricia S.  Williams            |   |
|       | Name:                             | Patricia S.  Williams                |   |
|       | Title:                            | VP, Secretary  & General Counsel |   |
|       |                              |                                 |   |
|       |                              |                                 |   |
| ** ** | **TWECO  PRODUCTS, INC.**         | ** **                           |
| ** ** | ** **                        | ** **                           |
| ** ** | ** **                        | ** **                           |
|       | By:                               | /s/ Patricia S.  Williams            |   |
|       | Name:                             | Patricia S.  Williams                |   |
|       | Title:                            | VP, Secretary  & General Counsel |   |
|       |                              |                                 |   |
|       |                              |                                 |   |
| ** ** | **VICTOR  EQUIPMENT COMPANY**     | ** **                           |
| ** ** | ** **                        | ** **                           |
| ** ** | ** **                        | ** **                           | ** ** |
|       | By:                               | /s/ Patricia S.  Williams            |   |
|       | Name:                             | Patricia S.  Williams                |   |
|       | Title:                            | VP, Secretary  & General Counsel |   |
|            |                                   |                                      |  |  |  |

 

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|   | **C &  G SYSTEMS, INC.**   |                                 |
|--------|-------------------------------------|--------------------------------------|
|   |                                |                                 |   |
|   | By:                                 | /s/ Patricia S.  Williams            |   |
|   | Name:                               | Patricia S.  Williams                |   |
|   | Title:                              | VP, Secretary  & General Counsel |   |
|   |                                |                                 |   |
|   |                                |                                 |   |
|   | **STOODY  COMPANY**                 |                                 |
|   | ** **                          |                                 |
|   |                                |                                 |   |
|   | By:                                 | /s/ Patricia S.  Williams            |   |
|   | Name:                               | Patricia S.  Williams                |   |
|   | Title:                              | VP, Secretary  & General Counsel |   |
|   |                                |                                 |   |
|   | ** **                          |                                 |
|   | **THERMAL  ARC, INC.**              |                                 |
|   | ** **                          |                                 |
|   |                                |                                 |   |
|   | By:                                 | /s/ Patricia S.  Williams            |   |
|   | Name:                               | Patricia S.  Williams                |   |
|   | Title:                              | VP, Secretary  & General Counsel |   |
|   |                                |                                 |   |
|   | ** **                          |                                 |
|   | **THERMADYNE  INTERNATIONAL CORP.** |                                 |
|   | ** **                          |                                 |
|   |                                |                                 |   |
|   | By:                                 | /s/ Patricia S.  Williams            |   |
|   | Name:                               | Patricia S.  Williams                |   |
|   | Title:                              | VP, Secretary  & General Counsel |   |
|   |                                |                                 |   |
|   | ** **                          |                                 |
|   | **PROTIP  CORPORATION**             |                                 |
|   | ** **                          |                                 |
|   |                                |                                 |   |
|   | By:                                 | /s/ Patricia S.  Williams            |   |
|   | Name:                               | Patricia S.  Williams                |   |
|   | Title:                              | VP, Secretary  & General Counsel |   |
|        |                                     |                                      |  |  |  |

 

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| ** ** | **THERMADYNE  HOLDINGS CORPORATION** | ** **                           |
|------------|--------------------------------------|--------------------------------------|
| ** ** | ** **                           | ** **                           |
| ** ** | ** **                           | ** **                           | ** ** |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|       |                                 |                                 |   |
|       | ** **                           |                                 |
|       | **MECO  HOLDING COMPANY**            |                                 |
|       |                                 |                                 |   |
|       |                                 |                                 |   |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|       |                                 |                                 |   |
| ** ** | ** **                           | ** **                           |
| ** ** | **C&G  SYSTEMS HOLDING, INC.**   | ** **                           |
| ** ** | ** **                           | ** **                           |
| ** ** | ** **                           | ** **                           | ** ** |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|       |                                 |                                 |   |
| ** ** | ** **                           | ** **                           |
| ** ** | **THERMADYNE  AUSTRALIA PTY LTD.**   | ** **                           |
| ** ** | ** **                           | ** **                           |
| ** ** | ** **                           | ** **                           | ** ** |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|       |                                 |                                 |   |
| ** ** | ** **                           | ** **                           |
| ** ** | **DUXTECH  PTY LTD.**                | ** **                           |
| ** ** | ** **                           | ** **                           |
| ** ** | ** **                           | ** **                           | ** ** |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|       |                                 |                                 |   |
| ** ** | ** **                           | ** **                           |
| ** ** | **CIGWELD  PTY LTD.**                | ** **                           |
| ** ** | ** **                           | ** **                           |
| ** ** | ** **                           | ** **                           | ** ** |
|       | By:                                  | /s/ Patricia S.  Williams            |   |
|       | Name:                                | Patricia S.  Williams                |   |
|       | Title:                               | VP, Secretary  & General Counsel |   |
|            |                                      |                                      |  |  |  |

 

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| ** ** | **QUETALA  PTY. LTD.**                           | ** **                           |
|------------|--------------------------------------------------|--------------------------------------|
| ** ** | ** **                                       | ** **                           |
| ** ** | ** **                                       | ** **                           | ** ** |
|       | By:                                              | /s/ Patricia S.  Williams            |   |
|       | Name:                                            | Patricia S. Williams                 |   |
|       | Title:                                           | VP, Secretary  & General Counsel |   |
| ** ** | ** **                                       | ** **                           | ** ** |
| ** ** | ** **                                       | ** **                           | ** ** |
| ** ** | **QUETACK  PTY. LTD.**                           | ** **                           |
| ** ** | ** **                                       | ** **                           |
| ** ** | ** **                                       | ** **                           | ** ** |
|       | By:                                              | /s/ Patricia S.  Williams            |   |
|       | Name:                                            | Patricia S.  Williams                |   |
|       | Title:                                           | VP, Secretary  & General Counsel |   |
| ** ** | ** **                                       | ** **                           | ** ** |
| ** ** | ** **                                       | ** **                           |
| ** ** | **THERMADYNE  WELDING PRODUCTS  CANADA LIMITED** | ** **                           |
| ** ** | ** **                                       | ** **                           |
| ** ** | ** **                                       | ** **                           | ** ** |
|       | By:                                              | /s/ Patricia S.  Williams            |   |
|       | Name:                                            | Patricia S.  Williams                |   |
|       | Title:                                           | VP, Secretary  & General Counsel |   |
|       |                                             |                                 |   |
| ** ** | ** **                                       | ** **                           |
| ** ** | **THERMADYNE  INDUSTRIES LIMITED**               | ** **                           |
| ** ** | ** **                                       | ** **                           |
| ** ** | ** **                                       | ** **                           | ** ** |
|       | By:                                              | /s/ Patricia S.  Williams            |   |
|       | Name:                                            | Patricia S.  Williams                |   |
|       | Title:                                           | VP, Secretary  & General Counsel |   |
|            |                                                  |                                      |  |  |  |

 

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EXHIBIT F

 

**AMENDED AND RESTATED ANNEX F (Section 4.1(b))**

**to**

**CREDIT AGREEMENT**

 

**COLLATERAL REPORTS**

 

Borrowers shall deliver or cause to be delivered thefollowing:

 

(a)                                  ToAgent, upon its request, and in any event no less frequently than ten (10) BusinessDays after the end of each Fiscal Month (except that the October, 2004 reportshall not be due until November 30, 2004) (together with a copy of all orany part of the following reports requested by any Lender in writing after theClosing Date), each of the following reports, each of which shall be preparedby the applicable Borrower as of the last day of the immediately precedingFiscal Month:

 

(i)                                     aBorrowing Base Certificate with respect to each Collateral Party, in each caseaccompanied by such supporting detail and documentation as shall be requestedby Agent in its reasonable discretion;

 

(ii)                                  withrespect to each Collateral Party, a summary of Inventory by location and typewith a supporting perpetual Inventory report, in each case accompanied by suchsupporting detail and documentation as shall be requested by Agent in itsreasonable discretion; and

 

(iii)                               withrespect to each Collateral Party, a monthly aging summary showing Accountsoutstanding 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 requestedby Agent in its reasonable discretion.

 

(b)                                 ToAgent, on a monthly basis or at such more frequent intervals as Agent may requestfrom time to time (together with a copy of all or any part of such deliveryrequested by any Lender in writing after the Closing Date), collateral reportswith respect to each Collateral Party, including all additions and reductions(cash and non-cash) with respect to Accounts of such Collateral Party, in eachcase accompanied by such supporting detail and documentation as shall berequested by Agent in its reasonable discretion each of which shall be preparedby the applicable Collateral Party as of the last day of the immediatelypreceding week;

 

(c)                                  ToAgent, at the time of delivery of each of the monthly Financial Statementsdelivered pursuant to Annex E:

 

(i)                                     areconciliation of the Accounts trial balance of each Collateral Party to suchCollateral Party’s most recent Borrowing Base Certificate, general ledger andmonthly Financial Statements delivered pursuant to Annex E, in each caseaccompanied by such supporting detail and documentation as shall be requestedby Agent in its reasonable discretion;

 

4

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

 

(iii)                               anaging of accounts payable and a reconciliation of that accounts payable agingto each Borrower’s general ledger and monthly Financial Statements deliveredpursuant to Annex E, in each case accompanied by such supportingdetail and documentation as shall be requested by Agent in its reasonablediscretion;

 

(iv)                              areconciliation of the outstanding Loans as set forth in the monthly LoanAccount statement provided by Agent to the Borrowers general ledger and monthlyFinancial Statements delivered pursuant to Annex E, in each caseaccompanied by such supporting detail and documentation as shall be requestedby Agent in its reasonable discretion;

 

(v) adetailed report of unpaid shipping and related charges that are owing or willbe owing to shippers with respect to Eligible In-Transit Inventory reported onthe Borrowing Base for such Fiscal Month;

 

(vi) adetailed report of the Inventory in-transit from the United States to Canada onthe date thereof; and

 

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

 

(d)                                 ToAgent, at the time of delivery of each of the annual Financial Statementsdelivered pursuant to Annex E, (i) a listing of governmentcontracts of each Collateral Party subject to the Federal Assignment of ClaimsAct of 1940 or the Financial Administration Act (Canada); and (ii) a listof any applications for the registration of any Patent, Trademark or Copyrightfiled by any Credit Party with the United States Patent and Trademark Office,the United States Copyright Office or any similar office or agency (in theUnited States of America or any other jurisdiction) in the prior FiscalQuarter;

 

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

 

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

 

5

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particular category of Collateral to be performed morethan two times during any Year at Borrower’s expense;

 

(g)                                 Suchother reports, statements and reconciliations with respect to the BorrowingBase, Collateral or Obligations of any or all Credit Parties as Agent shallfrom time to time request in its reasonable discretion; and

 

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

 

6

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EXHIBIT G

 

**AMENDED AND RESTATED ANNEX G (Section 6.10)**

**to**

**CREDIT AGREEMENT**

 

**FINANCIAL COVENANTS**

 

(a)                                  FinancialCovenants. Borrowers shall not breach or fail to comply with any of thefollowing financial covenants, each of which shall be calculated in accordancewith GAAP consistently applied:

 

(i)                                     MaximumCapital Expenditures.  Holdings andits Subsidiaries on a consolidated basis shall not make Capital Expendituresduring the following periods that exceed in the aggregate the amounts set forthopposite 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 |   |   |

 

; provided, however, that the amount ofpermitted Capital Expenditures referenced above will be increased in any periodby the positive amount equal to the lesser of (i) 50% of the amount ofpermitted Capital Expenditures for the immediately prior period, and (ii) theamount (if any), equal to the difference obtained by taking the CapitalExpenditures limit specified above for the immediately prior period minusthe actual amount of any Capital Expenditures expended during such prior period(the “Carry Over Amount”), and for purposes of measuring complianceherewith, the Carry Over Amount shall be deemed to be the last amount spent onCapital Expenditures in that succeeding year; provided, further,that the amount of Capital Expenditures for Fiscal Year 2003 and Fiscal Year2004 shall not include up to $5,500,000 of Capital Expenditures made in connectionwith the expansion of the real property located in Denton, Texas to the extentfinanced with a Capital Lease.

 

(ii) MinimumFixed Charge Coverage Ratio. Holdings and its Subsidiaries shall have on a consolidated basis at theend of each Fiscal Quarter, a Fixed Charge Coverage Ratio for the 12-monthperiod then ended 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;

1.00 for the Fiscal Quarter ending September 30,2004;

0.90 for the Fiscal Quarter ending December 31,2004;

 

S-1

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0.85 for the Fiscal Quarter ending March 31,2005;

0.90 for the Fiscal Quarter ending June 30, 2005;

1.00 for the Fiscal Quarter ending September 30,2005;

1.10 for the Fiscal Quarter ending December 31,2005;

1.05 for the Fiscal Quarter ending March 31,2006;

1.05 for the Fiscal Quarter ending June 30, 2006;

1.05 for the Fiscal Quarter ending September 30,2006; and

1.10 for each Fiscal Quarter thereafter.

 

(iii)                               MinimumEBITDA.  Until such time as theSecond Lien Loan Obligations have been paid in full in accordance with Section 6.3(b)(vi) orrefinanced in accordance with Section 5.13, Holdings and itsSubsidiaries on a consolidated basis shall have, at the end of each FiscalQuarter set forth below, EBITDA for the 12-month period then ended of not lessthan 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                                                |       | $          | 41,500,000 |   |
| Fiscal Quarter ending March 31, 2005                                                   |       | $          | 39,000,000 |   |
| Fiscal Quarter ending June 30, 2005                                                    |       | $          | 37,000,000 |   |
| Fiscal Quarter ending September 30, 2005                                               |       | $          | 40,440,000 |   |
| Fiscal Quarter ending December 31, 2005                                                |       | $          | 46,690,000 |   |
| Fiscal Quarter ending March 31, 2006                                                   |       | $          | 44,320,000 |   |
| Fiscal Quarter ending June 30, 2006                                                    |       | $          | 49,980,000 |   |
| Fiscal Quarter ending September 30, 2006                                               |       | $          | 49,130,000 |   |
| 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)                              (iv)                              MaximumLeverage Ratio.  Until such time asthe Second Lien Loan Obligations have been paid in full in accordance with Section 6.3(b)(vi) orrefinanced in accordance with Section 5.13 (provided,however, that if after such payment in full or refinancing, BorrowingAvailability is at any time less than $15,000,000 this Financial Covenant shallbe reinstated until the Commitment Termination Date), Holdings and itsSubsidiaries on a consolidated basis shall have, at

 

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the end of each Fiscal Quarter set forth below, a Leverage Ratio as ofthe last day of such Fiscal Quarter and for the 12-month period then ended ofnot 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;

5.53 for the Fiscal Quarter ending September 30,2004;

6.18 for the Fiscal Quarter ending December 31,2004;

6.70 for the Fiscal Quarter ending March 31,2005;

7.08 for the Fiscal Quarter ending June 30, 2005;

6.35 for the Fiscal Quarter ending September 30,2005;

5.17 for the Fiscal Quarter ending December 31,2005;

5.70 for the Fiscal Quarter ending March 31,2006; and

4.89 for the Fiscal Quarter ending June 30, 2006;

4.94 for the Fiscal Quarter ending September 30,2006; and

4.00 for each Fiscal Quarter ending thereafter.

 

(b)                                 EnhancedFinancial Covenants:

 

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

 

(ii)                                  MinimumEBITDA. 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 LeverageRatio.  Holdings and its Subsidiariesshall have, on a consolidated basis, a Leverage Ratio for the 12-month periodending April 30, 2004 of not more than 4.25.

 

Unless otherwise specifically provided herein, anyaccounting term used in the Agreement shall have the meaning customarily givensuch term in accordance with GAAP, and all financial computations hereundershall be computed in accordance with GAAP consistently applied.  That certain items or computations areexplicitly modified by the phrase “in accordance with GAAP” shall in no way beconstrued to limit the foregoing.  If any“Accounting Changes” (as defined below) occur and such changes result in achange in the calculation of the financial covenants, standards or terms usedin the Agreement or any other Loan Document, then Borrowers, Agent and Lendersagree to enter into negotiations in order to amend such provisions of theAgreement so as to equitably reflect such Accounting Changes with the desiredresult that the criteria for evaluating Borrowers’ and their Subsidiaries’financial condition shall be the same after such Accounting Changes as if suchAccounting Changes had not been made; provided, however, that theagreement of Requisite Lenders to any required amendments of such provisionsshall be sufficient to bind all Lenders. “Accounting Changes” means (i) changes in accountingprinciples required by the promulgation of any rule, regulation, pronouncementor

 

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opinion by the Financial Accounting Standards Board ofthe American Institute of Certified Public Accountants (or successor thereto orany agency with similar functions); (ii) changes in accounting principlesconcurred in by any Borrower’s certified public accountants; (iii) purchaseaccounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and theapplication of the accounting principles set forth in FASB 109, including theestablishment of reserves pursuant thereto and any subsequent reversal (inwhole or in part) of such reserves; and (iv) the reversal of any reservesestablished as a result of purchase accounting adjustments.  All such adjustments resulting fromexpenditures made subsequent to the Closing Date (including capitalization ofcosts and expenses or payment of pre-Closing Date liabilities) shall be treatedas expenses in the period the expenditures are made and deducted as part of thecalculation of EBITDA in such period.  IfAgent, Borrowers and Requisite Lenders agree upon the required amendments, thenafter appropriate amendments have been executed and the underlying AccountingChange with respect thereto has been implemented, any reference to GAAPcontained in the Agreement or in any other Loan Document shall, only to theextent of such Accounting Change, refer to GAAP, consistently applied aftergiving effect to the implementation of such Accounting Change.  If Agent, Borrowers and Requisite Lenderscannot agree upon the required amendments within thirty (30) days following thedate of implementation of any Accounting Change, then all Financial Statementsdelivered and all calculations of financial covenants and other standards andterms in accordance with the Agreement and the other Loan Documents shall beprepared, delivered and made without regard to the underlying AccountingChange.  For purposes of Section 8.1,a breach of a Financial Covenant contained in this Annex F shall bedeemed to have occurred as of any date of determination by Agent or as of thelast day of any specified measurement period, regardless of when the FinancialStatements reflecting such breach are delivered to Agent.

 

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