**Exhibit 4.14**

 

EXECUTION COPY

 

 

 

**SECONDLIEN CREDIT AGREEMENT**

 

**datedas of**

 

**July 29,2004**

 

**among**

 

**THERMADYNEINDUSTRIES, INC.,**

**THERMALDYNAMICS CORPORATION,**

**TWECOPRODUCTS, INC.,**

**VICTOREQUIPMENT COMPANY,**

**C& G SYSTEMS, INC.,**

**STOODYCOMPANY,**

**THERMALARC, INC.,**

**PROTIPCORPORATION and**

**THERMADYNEINTERNATIONAL CORP.,**

 

 

**THEGUARANTORS PARTY HERETO,**

 

 

**THELENDERS PARTY HERETO**

 

**and**

 

**CREDITSUISSE FIRST BOSTON,****as Administrative Agent and Collateral Agent**

 

 

**CREDITSUISSE FIRST BOSTON,****as Sole Lead Arranger and Sole Bookrunning Manager**

 

 

[CS&M Ref No. 5865-273]

 

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**TABLEOF CONTENTS**

 
| ARTICLE I                                                                        |   |
|---------------------------------------------------------------------------------------|--------|
|                                                                                  |   |
| Definitions                                                                           |   |
|                                                                                  |   |
| SECTION 1.01. Defined Terms                                                      |   |
| SECTION 1.02. Terms Generally                                                    |   |
| SECTION 1.03. Senior Indebtedness                                                |   |
| SECTION 1.04. Borrower Representative                                            |   |
|                                                                                  |   |
| ARTICLE II                                                                       |   |
|                                                                                  |   |
| The  Credits                                                                          |   |
|                                                                                  |   |
| SECTION 2.01. Commitments                                                        |   |
| SECTION 2.02. Loans                                                              |   |
| SECTION 2.03. Borrowing Procedure                                                |   |
| SECTION 2.04. Evidence of Debt;  Repayment of Loans                         |   |
| SECTION 2.05. Fees                                                               |   |
| SECTION 2.06. Interest on Loans                                                  |   |
| SECTION 2.07. Default Interest                                                   |   |
| SECTION 2.08. Alternate Rate of  Interest                                        |   |
| SECTION 2.09. Termination and  Reduction of Commitments                          |   |
| SECTION 2.10. Conversion and Continuation  of Borrowings                         |   |
| SECTION 2.11. Optional Prepayment                                                |   |
| SECTION 2.12. Mandatory Prepayments                                              |   |
| SECTION 2.13. Reserve Requirements;  Change in Circumstances                     |   |
| SECTION 2.14. Change in Legality                                                 |   |
| SECTION 2.15. Indemnity                                                          |   |
| SECTION 2.16. Pro Rata Treatment                                                 |   |
| SECTION 2.17. Sharing of Setoffs                                                 |   |
| SECTION 2.18. Payments                                                           |   |
| SECTION 2.19. Taxes                                                              |   |
| SECTION 2.20. Assignment of Loans Under  Certain Circumstances; Duty to Mitigate |   |
|                                                                                  |   |
| ARTICLE III                                                                      |   |
|                                                                                  |   |
| Representations and Warranties                                                        |   |
|                                                                                  |   |
| SECTION 3.01. Corporate Existence;  Compliance with Law; FEIN                    |   |
| SECTION 3.02. Executive Offices,  Collateral Locations                           |   |
| SECTION 3.03. Corporate Power,  Authorization, Enforceable Obligations           |   |
| SECTION 3.04. Financial Statements                                               |   |
| SECTION 3.05. Material Adverse Effect                                            |   |
| SECTION 3.06. Ownership of Property;  Liens                                      |   |

 

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| SECTION 3.07. Labor Matters                                                                               |   |
|----------------------------------------------------------------------------------------------------------------|--------|
| SECTION 3.08. Ventures, Subsidiaries  and Affiliates; Outstanding Stock and Indebtedness                  |   |
| SECTION 3.09. Government Regulation                                                                       |   |
| SECTION 3.10. Margin Regulations                                                                          |   |
| SECTION 3.11. Taxes                                                                                       |   |
| SECTION 3.12. ERISA                                                                                       |   |
| SECTION 3.13. Litigation                                                                                  |   |
| SECTION 3.14. Brokers                                                                                     |   |
| SECTION 3.15. Intellectual Property                                                                       |   |
| SECTION 3.16. Full Disclosure                                                                             |   |
| SECTION 3.17. Environmental Matters                                                                       |   |
| SECTION 3.18. Insurance                                                                                   |   |
| SECTION 3.19. Deposit and Disbursement  Accounts                                                          |   |
| SECTION 3.20. Government Contracts                                                                        |   |
| SECTION 3.21. Customer and Trade  Relations                                                               |   |
| SECTION 3.22. Bonding; Licenses                                                                           |   |
| SECTION 3.23. Solvency                                                                                    |   |
| SECTION 3.24. Status of Holdings                                                                          |   |
| SECTION 3.25. Collateral Documents                                                                        |   |
|                                                                                                           |   |
| ARTICLE IV                                                                                                |   |
|                                                                                                           |   |
| Conditions of Lending                                                                                          |   |
|                                                                                                           |   |
| ARTICLE V                                                                                                 |   |
|                                                                                                           |   |
| Affirmative Covenants                                                                                          |   |
|                                                                                                           |   |
| SECTION 5.01. Maintenance of Existence  and Conduct of Business                                           |   |
| SECTION 5.02. Payment of Charges.                                                                         |   |
| SECTION 5.03. Financial Statements,  Reports, etc.                                                        |   |
| SECTION 5.04. Insurance; Damage to or  Destruction of Collateral.                                         |   |
| SECTION 5.05. Compliance with Laws                                                                        |   |
| SECTION 5.06. [Intentionally Omitted]                                                                     |   |
| SECTION 5.07. Intellectual Property                                                                       |   |
| SECTION 5.08. Environmental Matters                                                                       |   |
| SECTION 5.09. Landlords’ Agreements,  Mortgagee Agreements, Bailee Letters and Real Estate Purchases |   |
| SECTION 5.10. Use of Proceeds                                                                             |   |
| SECTION 5.11. Cash Management Systems                                                                     |   |
| SECTION 5.12. Further Assurances                                                                          |   |
|                                                                                                           |   |
| ARTICLE VI                                                                                                |   |
|                                                                                                           |   |
| Negative Covenants                                                                                             |   |

 

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| SECTION 6.01. Mergers, Subsidiaries,  Etc.                                                         |   |
|---------------------------------------------------------------------------------------------------------|--------|
| SECTION 6.02. Investments; Loans and Advances                                                      |   |
| SECTION 6.03. Indebtedness                                                                         |   |
| SECTION 6.04. Employee Loans and  Affiliate Transactions                                           |   |
| SECTION 6.05. Capital Structure and  Business                                                      |   |
| SECTION 6.06. Guaranteed Indebtedness                                                              |   |
| SECTION 6.07. Liens                                                                                |   |
| SECTION 6.08. Sale of Stock and Assets                                                             |   |
| SECTION 6.09. ERISA                                                                                |   |
| SECTION 6.10. Maximum Leverage Ratio                                                               |   |
| SECTION 6.11. Sale Leasebacks                                                                      |   |
| SECTION 6.12. Cancellation of Indebtedness                                                         |   |
| SECTION 6.13. Restricted Payments                                                                  |   |
| SECTION 6.14. Change of Corporate  Name, State of Incorporation or Location; Change of Fiscal Year |   |
| SECTION 6.15. No Impairment of  Intercompany Transfers                                             |   |
| SECTION 6.16. Real Estate Purchases                                                                |   |
| SECTION 6.17. Changes Relating to High  Yield Notes                                                |   |
| SECTION 6.18. Holdings                                                                             |   |
|                                                                                                    |   |
| ARTICLE VII                                                                                        |   |
|                                                                                                    |   |
| Events of Default; Rights and Remedies                                                                  |   |
|                                                                                                    |   |
| SECTION 7.01. Events of Default                                                                    |   |
| SECTION 7.02. Remedies                                                                             |   |
| SECTION 7.03. Waivers by Credit  Parties                                                           |   |
|                                                                                                    |   |
| ARTICLE VIII                                                                                       |   |
|                                                                                                    |   |
| The  Agents                                                                                             |   |
|                                                                                                    |   |
| ARTICLE IX                                                                                         |   |
|                                                                                                    |   |
| Miscellaneous                                                                                           |   |
|                                                                                                    |   |
| SECTION 9.01. Notices                                                                              |   |
| SECTION 9.02. Survival of Agreement                                                                |   |
| SECTION 9.03. Binding Effect                                                                       |   |
| SECTION 9.04. Successors and Assigns                                                               |   |
| SECTION 9.05. Expenses; Indemnity                                                                  |   |
| SECTION 9.06. Right of Setoff                                                                      |   |
| SECTION 9.07. Applicable Law                                                                       |   |
| SECTION 9.08. Waivers; Amendment                                                                   |   |
| SECTION 9.09. Interest Rate Limitation                                                             |   |
| SECTION 9.10. Entire Agreement                                                                     |   |

 

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| SECTION 9.11. WAIVER OF JURY TRIAL                                 |   |
|-------------------------------------------------------------------------|--------|
| SECTION 9.12. Severability                                         |   |
| SECTION 9.13. Counterparts                                         |   |
| SECTION 9.14. Headings                                             |   |
| SECTION 9.15. Jurisdiction; Consent to  Service of Process         |   |
| SECTION 9.16. Confidentiality                                      |   |
| SECTION 9.17. USA Patriot Act Notice                               |   |
| SECTION 9.18. Intercreditor Agreement                              |   |
|                                                                    |   |
| ARTICLE X                                                          |   |
|                                                                    |   |
| Cross-Guaranty                                                          |   |
|                                                                    |   |
| SECTION 10.01. Cross-Guaranty                                      |   |
| SECTION 10.02. Waivers by Credit  Parties                          |   |
| SECTION 10.03. Benefit of Guaranty                                 |   |
| SECTION 10.04. Waiver of Subrogation,  Etc.                        |   |
| SECTION 10.05. Election of Remedies                                |   |
| SECTION 10.06. Limitation                                          |   |
| SECTION 10.07. Contribution with  Respect to Guaranty Obligations. |   |
| SECTION 10.08. Liability Cumulative                                |   |

 

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SCHEDULES

 
| Schedule 1.01    | - | Guarantors                                                |   |
|-----------------------|---|-----------------------------------------------------------|--------|
| Schedule 2.01    | - | Lenders, Lender Accounts and Commitments                  |   |
| Schedule 3.01    | - | Type of Entity; State of Organization; FEIN               |   |
| Schedule 3.02    | - | Executive Offices, Collateral Locations                   |   |
| Schedule 3.06    | - | Real Estate and Leases                                    |   |
| Schedule 3.07    | - | Labor Matters                                             |   |
| Schedule 3.08    | - | Ventures, Subsidiaries and Affiliates;  Outstanding Stock |   |
| Schedule 3.11    | - | Tax Matters                                               |   |
| Schedule 3.12    | - | ERISA Plans                                               |   |
| Schedule 3.13    | - | Litigation                                                |   |
| Schedule 3.14    | - | Brokers                                                   |   |
| Schedule 3.15    | - | Intellectual Property                                     |   |
| Schedule 3.17    | - | Hazardous Materials                                       |   |
| Schedule 3.18    | - | Insurance                                                 |   |
| Schedule 3.19    | - | Deposit and Disbursement Accounts                         |   |
| Schedule 3.20    | - | Government Contracts                                      |   |
| Schedule 3.22    | - | Bonds; Licenses                                           |   |
| Schedule 5.01    | - | Trade Names                                               |   |
| Schedule 6.03    | - | Indebtedness                                              |   |
| Schedule 6.04(a) | - | Transactions with Affiliates                              |   |
| Schedule 6.07    | - | Existing Liens                                            |   |

 

EXHIBITS

 
| Exhibit A | - | Form of Administrative Questionnaire       |   |
|-----------|---|--------------------------------------------|--------|
| Exhibit B | - | Form of Assignment and Acceptance          |   |
| Exhibit C | - | Form of Pledge Agreement                   |   |
| Exhibit D | - | Form of Security Agreement                 |   |
| Exhibit E | - | Form of  Opinion of Armstrong Teasdale LLP |   |

 

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SECOND LIEN CREDIT AGREEMENT (this “***Agreement***”) dated asof July 29, 2004, among THERMADYNE INDUSTRIES, INC., a Delawarecorporation (“***Industries***”),THERMAL DYNAMICS CORPORATION, a Delaware corporation (“***Dynamics***”), TWECO PRODUCTS, INC., a Delawarecorporation (“***Tweco***”),VICTOR EQUIPMENT COMPANY, a Delaware corporation (“***Victor***”), C & G SYSTEMS, INC., anIllinois corporation (“***C & G***”), STOODY COMPANY, a Delaware corporation (“***Stoody***”), THERMALARC, INC., a Delaware corporation (“***Thermal Arc***”), PROTIP CORPORATION, a Missouricorporation (“***ProTip***”),and THERMADYNE INTERNATIONAL CORP., a Delaware corporation (“***International***” and,together with ProTip, Thermal Arc, Stoody, C & G, Victor, Tweco, Dynamicsand Industries, the “***Borrowers***”), the Guarantors (as defined inArticle I) party hereto, the Lenders (as defined in Article I) fromtime to time party hereto and CREDIT SUISSE FIRST BOSTON, as administrativeagent (in such capacity, the “***Administrative Agent***”) and collateral agent (in suchcapacity, the “***Collateral Agent***”).

 

The Borrowers have requested the Lenders tomake Loans (such term and each other capitalized term used but not defined inthis introductory statement having the meaning given it in Article I) onthe Closing Date, in an aggregate principal amount not in excess of$20,000,000.  The proceeds of the Loansare to be used solely to prepay a portion of the outstanding Revolving Loan.

 

The Lenders are willing to extend such creditto the Borrowers on the terms and subject to the conditions set forthherein.  Accordingly, the parties heretoagree as follows:

 

# ***ARTICLE I***

# *** ***

# ***Definitions***

# *** ***

## **SECTION 1.01****.  ***Defined Terms*****.  As used in this Agreement, the followingterms shall have the meanings specified below:

##  

“***ABR***”, when used in reference to any Loan or Borrowing,refers to whether such Loan, or the Loans comprising such Borrowing, arebearing interest at a rate determined by reference to the Alternate Base Rate.

 

“***Account Debtor***” shall mean any Person who may becomeobligated to any Credit Party under, with respect to, or on account of, anAccount, Chattel Paper or General Intangibles (including a payment intangible).

 

“***Accounts***” shall mean all “accounts”, as such term isdefined in the Code, now owned or hereafter acquired by any Credit Party,including (a) all accounts receivable,

 

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other receivables, book debtsand other forms of obligations (other than forms of obligations evidenced byChattel Paper, or Instruments), (including any such obligations that may becharacterized as an account or contract right under the Code), (b) all of eachCredit Party’s rights in, to and under all purchase orders or receipts forgoods or services, (c) all of each Credit Party’s rights to any goodsrepresented by any of the foregoing (including unpaid sellers’ rights ofrescission, replevin, reclamation and stoppage in transit and rights toreturned, reclaimed or repossessed goods), (d) all rights to payment due to anyCredit Party for property sold, leased, licensed, assigned or otherwise disposedof, for a policy of insurance issued or to be issued, for a secondaryobligation incurred or to be incurred, for energy provided or to be provided,for the use or hire of a vessel under a charter or other contract, arising outof the use of a credit card or charge card, or for services rendered or to berendered by such Credit Party or in connection with any other transaction(whether or not yet earned by performance on the part of such Credit Party),(e) all health care insurance receivables and (f) all collateral security ofany kind, given by any Account Debtor or any other Person with respect to anyof the foregoing.

 

“***Adjusted LIBO Rate***” shall mean, with respect to anyEurodollar Borrowing for any Interest Period, an interest rate per annum equalto the product of (a) the LIBO Rate in effect for such Interest Period and(b) Statutory Reserves.

 

“***Administrative Agent***” shall have the meaning assigned tosuch term in the preamble to this Agreement.

 

“***Administrative Questionnaire***” shall mean an AdministrativeQuestionnaire in the form of Exhibit A, or such other form as may besupplied from time to time by the Administrative Agent.

 

“***Affiliate***” shall mean, with respect to any Person, (a)each Person that, directly or indirectly, owns or controls, whether beneficially,or as a trustee, guardian or other fiduciary, 10% or more of the Stock havingordinary voting power in the election of directors of such Person, (b) eachPerson that controls, is controlled by or is under common control with suchPerson, (c) each of such Person’s officers, directors, joint venturers andpartners and (d) in the case of Borrowers, the immediate family members,spouses and lineal descendants of individuals who are Affiliates of anyBorrower.  For the purposes of thisdefinition, “control” of a Person shall mean the possession, directly orindirectly, of the power to direct or cause the direction of its management orpolicies, whether through the ownership of voting securities, by contract orotherwise; *provided*,*however*,that neither the Administrative Agent, the Collateral Agent nor any Lendershall be deemed to be an Affiliate of the Credit Parties.

 

“***Agents***” shall have the meaning assigned to such term inArticle X.

 

“***Agreement***” shall have the meaning assigned to such termin the preamble to this Agreement.

 

“***Alternate Base Rate***” shall mean, for any day, a floatingrate per annum equal to the greater of (a) the Prime Rate in effect onsuch day and (b) the Federal Funds Effective

 

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Rate in effect on such dayplus 1/2 of 1.00%.  If theAdministrative Agent shall have determined (which determination shall beconclusive absent manifest error) that it is unable to ascertain the FederalFunds Effective Rate for any reason, the Alternate Base Rate shall bedetermined without regard to clause (b) of the preceding sentence untilthe circumstances giving rise to such inability no longer exist.  Any change in the Alternate Base Rate due toa change in the Prime Rate or the Federal Funds Effective Rate shall beeffective on the effective date of such change in the Prime Rate or the FederalFunds Effective Rate, as the case may be.

 

“***Applicable Percentage***” shall mean, (a) for any day on orprior to October 26, 2004, (i) with respect to any Eurodollar Loan,5.50%, and (ii) with respect to any ABR Loan, 4.50%, and (b) for any daythereafter, (i) with respect to any Eurodollar Loan, 6.00%, and(ii) with respect to any ABR Loan, 5.00%.

 

“***Arranger***” shall mean Credit Suisse First Boston.

 

“***Asset Sale Side Letter***” shall have the meaning assignedto such term in Section 6.08.

 

“***Assignment and Acceptance***” shall mean an assignment andacceptance entered into by a Lender and an assignee, and accepted by theAdministrative Agent, in the form of Exhibit B or such other formas shall be approved by the Administrative Agent.

 

“***Australian Subsidiary***” shall mean each Subsidiary of anyBorrower organized under the laws of Australia.

 

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

 

“***Board***” shall mean the Board of Governors of the FederalReserve System of the United States of America.

 

“***Borrowers***” shall have the meaning assigned to such termin the preamble to this Agreement.

 

“***Borrowing***” shall mean Loans of the same Type made,converted or continued on the same date and, in the case of Eurodollar Loans,as to which a single Interest Period is in effect.

 

“***Borrowing Request***” shall mean a request by a Borrowerfor a Borrowing in accordance with the terms of Section 2.03.

 

“***Business Day***” shall mean any day other than a Saturday,Sunday or day on which banks in New York City are authorized or required by lawto close; *provided*,*however*,that when used in connection with a Eurodollar Loan, the term “*Business Day*”shall mean any such day that is also a day on which banks are generally open inthe City of London for dealings in interbank or foreign exchange transactions.

 

3

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“***C & G***” shall have the meaning assigned tosuch term in the preamble to this Agreement.

 

“***C&G Holding***” shall mean C&G SystemsHolding, Inc., a Delaware corporation.

 

“***Capital Lease***” shall mean, with respect to any Person,any lease of any property (whether real, personal or mixed) by such Person as lesseethat, in accordance with GAAP, would be required to be classified and accountedfor as a capital lease on a balance sheet of such Person.

 

“***Capital Lease Obligation***” shall mean, with respect toany Capital Lease of any Person, the amount of the obligation of the lesseethereunder that, in accordance with GAAP, would appear on a balance sheet ofsuch lessee in respect of such Capital Lease.

 

“***CERCLA***” shall have the meaning assigned to such term inthe definition of Environmental Laws.

 

“***Change in Law***” shall mean (a) the adoption of anylaw, rule or regulation after the date of this Agreement, (b) any changein any law, rule or regulation or in the interpretation or application thereofby any Governmental Authority after the date of this Agreement or (c) complianceby any Lender (or, for purposes of Section 2.13, by any lending office ofsuch Lender or by such Lender’s holding company, if any) with any request,guideline or directive (whether or not having the force of law) of anyGovernmental Authority made or issued after the date of this Agreement.

 

A “***Change of Control***” shall mean any of the following:  (a) any person or group of persons (withinthe meaning of the Securities Exchange Act of 1934), other than the holders ofthe High Yield Notes, shall have acquired beneficial ownership (within themeaning of Rule 13d-3 promulgated by the Securities and Exchange Commissionunder the Securities Exchange Act of 1934) of 30% or more of the issued andoutstanding shares of capital Stock of Holdings having the right to vote forthe election of directors of Holdings under ordinary circumstances; (b) duringany period of twelve consecutive calendar months, individuals who at thebeginning of such period constituted the board of directors of Holdings(together with any new directors whose election by the board of directors ofHoldings or whose nomination for election by the Stockholders of Holdings wasapproved by a vote of at least two-thirds of the directors then still in officewho either were directors at the beginning of such period or whose election ornomination for election was previously so approved) cease for any reason otherthan death or disability to constitute a majority of the directors then inoffice; or (c) a “Change of Control” as defined in the Indenture.

 

“***Chapter 11 Cases***” shall mean, the cases under Chapter 11of the Bankruptcy Code commenced by, among others, the Borrowers, styled *In reThermadyne Holdings Corporation, et al.,*Chapter 11 Case No.01-52840-399.

 

“***Charges***” shall mean all federal, state, county, city,municipal, local, foreign or other governmental taxes (including taxes owed tothe PBGC at the time due and payable), levies, assessments, charges, liens,claims or encumbrances upon or relating to

 

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(a) the Collateral, (b) theObligations, (c) the employees, payroll, income or gross receipts of any CreditParty, (d) any Credit Party’s ownership or use of any properties or otherassets, or (e) any other aspect of any Credit Party’s business.

 

“***Chattel Paper***” shall mean any “chattel paper”, as suchterm is defined in the Code, including electronic chattel paper, now owned orhereafter acquired by any Credit Party.

 

“***Closing Date***” shall mean July 29, 2004.

 

“***Code***” shall mean the Uniform Commercial Code as the samemay, from time to time, be enacted and in effect in the State of New York; *provided*that to the extent that the Code is used to define any term herein or in anyLoan Document and such term is defined differently in different Articles orDivisions of the Code, the definition of such term contained in Article orDivision 9 shall govern; *provided**further*, that in the eventthat, by reason of mandatory provisions of law, any or all of the attachment,perfection or priority of, or remedies with respect to, the AdministrativeAgent’s, the Collateral Agent’s or any Lender’s Lien on any Collateral isgoverned by the Uniform Commercial Code as enacted and in effect in ajurisdiction other than the State of New York, the term “Code” shall mean theUniform Commercial Code as enacted and in effect in such other jurisdictionsolely for purposes of the provisions thereof relating to such attachment,perfection, priority or remedies and for purposes of definitions related tosuch provisions.

 

“***Collateral***” shall mean the property covered by theSecurity Agreement, the Pledge Agreement and the other Collateral Documents andany other property, real or personal, tangible or intangible, now existing orhereafter acquired, that may at any time be or become subject to a securityinterest or Lien in favor of the Administrative Agent or the Collateral Agent,in their individual capacity and on behalf of the Lenders, to secure theObligations.

 

“***Collateral Agent***” shall have the meaning assigned tosuch term in the preamble to this Agreement.

 

“***Collateral Documents***” shall mean the Security Agreement,the Pledge Agreement, the Guaranties, the Intercreditor Agreement, and allsimilar agreements entered into guaranteeing payment of, or granting a Lienupon property as security for payment of, the Obligations.

 

“***Commitment***” shall mean, with respect to any Lender, thecommitment of such Lender to make a Loan hereunder as set forth on Schedule 2.01.

 

“***Contracts***” shall mean all “contracts”, as such term isdefined in the Code, now owned or hereafter acquired by any Credit Party, inany event, including all contracts, undertakings, or agreements (other thanrights evidenced by Chattel Paper, Documents or Instruments) in or under whichany Credit Party may now or hereafter have any right, title or interest,including any agreement relating to the terms of payment or the terms ofperformance of any Account.

 

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“***Control Letter***” shall mean a letter agreement betweenthe Collateral Agent and (i) the issuer of uncertificated securities withrespect to uncertificated securities in the name of any Credit Party, (ii) asecurities intermediary with respect to securities, whether certificated oruncertificated, securities entitlements and other financial assets held in asecurities account in the name of any Credit Party, (iii) a futures commissionmerchant or clearing house, as applicable, with respect to commodity accountsand commodity contracts held by any Credit Party, whereby, among other things,the issuer, securities intermediary or futures commission merchant limits anysecurity interest in the applicable financial assets in a manner reasonablysatisfactory to the First Lien Agent or the Collateral Agent, acknowledges theLien of the First Lien Agent or the Collateral Agent, on behalf of itself andthe Lenders, on such financial assets, and agrees to follow the instructions orentitlement orders of the First Lien Agent or the Collateral Agent withoutfurther consent by the affected Credit Party.

 

“***Copyright License***” shall mean rights under any writtenagreement now owned or herein after acquired by any Credit Party granting anyright to use any Copyright.

 

“***Copyrights***” shall mean all of the following now owned orhereafter adopted or acquired by any Credit Party: (a) all copyrights and worksof authorship (whether registered or unregistered), all registrations andrecordings thereof, and all applications in connection therewith, including allregistrations, recordings and applications in the United States CopyrightOffice or in any similar office or agency of the United States, any state orterritory thereof, or any other country or any political subdivision thereof,and (b) all reissues, extensions or renewals thereof.

 

“***Credit Parties***” shall mean the Borrowers and theGuarantors; *provided*that for purposes of Article VI of this Agreement, Thermadyne WeldingProducts Canada Ltd. shall also be a Credit Party.

 

“***Default***” shall mean any event or condition which uponnotice, lapse of time or both would constitute an Event of Default.

 

“***Deposit Accounts***” shall mean all “deposit accounts” assuch term is defined in the Code, now or hereafter held in the name of anyCredit Party.

 

“***Documents***” shall mean all “documents”, as such term isdefined in the Code, now owned or hereafter acquired by any Credit Party,wherever located.

 

“***Dollars***” or “***$***” shall mean lawful money of the United States ofAmerica.

 

“***Domestic Subsidiaries***” shall mean all Subsidiariesincorporated or organized under the laws of the United States of America, anyState thereof or the District of Columbia.

 

“***Dynamics***” shall have the meaning assigned to such termin the preamble to this Agreement.

 

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“***EBITDA***” shall mean, with respect to any Person for anyfiscal period, without duplication, an amount equal to (a) consolidated netincome of such Person for such period determined in accordance with GAAP, *minus*(b) the sum of (i) income tax credits, (ii) interest income, (iii) gain fromextraordinary items for such period, (iv) any aggregate net gain (but not anyaggregate net loss) during such period arising from the sale, exchange or otherdisposition of capital assets by such Person (including any fixed assets,whether tangible or intangible, all inventory sold in conjunction with thedisposition of fixed assets and all securities) and (v) any other non-cashgains that have been added in determining consolidated net income, in each caseto the extent included in the calculation of consolidated net income of suchPerson for such period in accordance with GAAP, but without duplication, *plus*(c) the sum of (i) any provision for income taxes, (ii) Interest Expense(including commitment, agency and letter of credit fees) and deferred financingcosts, (iii) depreciation and amortization for such period, (iv) amortized debtdiscount for such period, (v) the amount of any deduction to consolidated netincome as the result of any grant to the management or employees of such Personor its Subsidiaries of any Stock or stock options, in each case to the extentincluded in the calculation of consolidated net income of such Person for suchperiod in accordance with GAAP, but without duplication, (vi) the accrual netof any payment in cash related to the net periodic post retirement benefits,(vii) losses from extraordinary items for such period, (viii) the non-cashportion of any non-recurring expenses, (ix) restructuring expenses related to,arising out of or in connection with the Chapter 11 Cases, (x) anynon-recurring employee severance expenses and non-recurring cash expensesrelated to plant reorganizations, not to exceed $10,000,000 in the aggregate,incurred prior to January 1, 2005, (xi) the non-cash portion of anyexpense or loss attributable to any interest rate agreement or arrangementpermitted under Section 6.03(a)(xii) in any such case prior to thetermination or expiration of such agreement or arrangement, and (xii)$8,900,000 of non-cash reserves to be recorded at December 31, 2003, relatedsolely to the implementation of a new reserve methodology for Inventory andAccounts and implementation of an initial accrual for warranty obligations, *plus*or *minus*as applicable (d) the amount of cash received or expended in such period inrespect of any amount which, under clauses (c)(viii) and (xii) above, was takeninto account in determining EBITDA for such period or any prior period.  For purposes of this definition, thefollowing items shall be excluded in determining consolidated net income of aPerson: (1) the income (or deficit) of any other Person accrued prior to thedate it became a Subsidiary of, or was merged or consolidated into, such Personor any of such Person’s Subsidiaries; (2) the income (or deficit) of any otherPerson (other than a Subsidiary) in which such Person has an ownershipinterest, except to the extent any such income has actually been received bysuch Person in the form of cash dividends or distributions; (3) theundistributed earnings of any Subsidiary of such Person to the extent that thedeclaration or payment of dividends or similar distributions by such Subsidiaryis not at the time permitted by the terms of any contractual obligation orrequirement of law applicable to such Subsidiary; (4) any restoration to incomeof any contingency reserve, except to the extent that provision for suchreserve was made out of income accrued during such period; (5) any write-up ofany asset; (6) any net gain from the collection of the proceeds of lifeinsurance policies; (7) any net gain arising from the acquisition of anysecurities, or the extinguishment, under GAAP, of any Indebtedness, of suchPerson;

 

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(8) in the case of a successorto such Person by consolidation or merger or as a transferee of its assets, anyearnings of such successor prior to such consolidation, merger or transfer ofassets; and (9) any deferred credit representing the excess of equity in anySubsidiary of such Person at the date of acquisition of such Subsidiary overthe cost to such Person of the investment in such Subsidiary.

 

“***Engagement Letter***” shall mean the Engagement Letterdated July 22, 2004, between Holdings and the Arranger.

 

“***Environmental Laws***” shall mean all applicable federal,state, local and foreign laws, statutes, ordinances, codes, rules, standardsand regulations, now or hereafter in effect, and any applicable judicial oradministrative interpretation thereof, including any applicable judicial oradministrative order, consent decree, order or judgment, imposing liability orstandards of conduct for or relating to the regulation and protection of theenvironment and natural resources (including ambient air, surface water,groundwater, wetlands, land surface or subsurface strata, wildlife, aquaticspecies and vegetation) or human health and safety as it relates toenvironmental protection.  EnvironmentalLaws include any applicable provision of the Comprehensive EnvironmentalResponse, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 etseq.) (“***CERCLA***”);the Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C.§§ 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act(7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42 U.S.C.§§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601et seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal WaterPollution Control Act (33 U.S.C. §§ 1251 et seq.); and the Safe DrinkingWater Act (42 U.S.C. §§ 300(f) et seq.), and any and all applicableregulations promulgated thereunder, and all applicable analogous state, localand foreign counterparts or equivalents and any transfer of ownershipnotification or approval statutes.

 

“***Environmental Liability***” shall mean, with respect to anyPerson, all liabilities, obligations, responsibilities, response, remedial andremoval costs, investigation and feasibility study costs, capital costs,operation and maintenance costs, losses, damages, punitive damages, propertydamages, natural resource damages, consequential damages, treble damages, costsand expenses (including all reasonable fees, disbursements and expenses ofcounsel, experts and consultants), fines, penalties, sanctions and interestincurred as a result of or related to any claim, suit, action, investigation,proceeding or demand by any Person arising under or related to anyEnvironmental Laws, Environmental Permits, or in connection with any Release ofa Hazardous Material at, on, in, under, to or from any real or personalproperty whether based in contract, tort, implied or express warranty, strictliability, criminal or civil statute or common law.

 

“***Environmental Permits***” shall mean all permits, licenses,authorizations, certificates, approvals or registrations required by any GovernmentalAuthority under any Environmental Laws.

 

“***Equipment***” shall mean all “equipment”, as such term isdefined in the Code, now owned or hereafter acquired by any Credit Party,wherever located and, in any event, including all such Credit Party’s machineryand equipment, including processing

 

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equipment, conveyors, machinetools, data processing and computer equipment, including embedded software andperipheral equipment and all engineering, processing and manufacturingequipment, office machinery, furniture, materials handling equipment, tools,attachments, accessories, automotive equipment, trailers, trucks, forklifts,molds, dies, stamps, motor vehicles, rolling stock and other equipment of everykind and nature, trade fixtures and fixtures not forming a part of realproperty, together with all additions and accessions thereto, replacementstherefor, all parts therefor, all substitutes for any of the foregoing, fueltherefor, and all manuals, drawings, instructions, warranties and rights withrespect thereto, and all products and proceeds thereof and condemnation awardsand insurance proceeds with respect thereto.

 

“***ERISA***” shall mean the Employee Retirement IncomeSecurity Act of 1974, as amended from time to time, and any applicableregulations promulgated thereunder.

 

“***ERISA Affiliate***” shall mean, with respect to any CreditParty, any Person that, together with such Credit Party, are treated as asingle employer within the meaning of Sections 414(b), (c), (m) or (o) of theIRC.

 

“***ERISA Event***” shall mean, with respect to any CreditParty or any ERISA Affiliate, (a) with respect to a Title IV Plan, any eventdescribed in Section 4043(c) of ERISA for which notice to the PBGC has notbeen waived; (b) the withdrawal of any Credit Party or ERISA Affiliate from aTitle IV Plan subject to Section 4063 of ERISA during a plan year in whichit was a substantial employer, as defined in Section 4001(a)(2) of ERISA;(c) the complete or partial withdrawal of any Credit Party or any ERISAAffiliate from any Multiemployer Plan; (d) the filing of a notice of intent toterminate a Title IV Plan in a distress termination described inSection 4041(c) of ERISA or the treatment of a plan amendment as atermination under Section 4041 of ERISA; (e) the institution ofproceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f)with respect to a Title IV Plan, the existence of an “accumulated fundingdeficiency” (as defined in Section 412 of the IRC or Section 302 ofERISA) whether or not waived, or the failure to make by its due date a requiredinstallment under Section 412(m) of the Code or the failure to make anyrequired contribution to a Multiemployer Plan; (g) the filing pursuant toSection 412(d) of the Code or Section 303(d) of ERISA of anapplication for a waiver of the minimum funding standard with respect to aTitle IV Plan; (h) the making of any amendment to any Title IV Plan which couldresult in the imposition of a lien or the posting of a bond or other security;(i) with respect to a Title IV Plan an event described in Section 4062(e)of ERISA; (j) any other event or condition that would reasonably be expected toconstitute grounds under Section 4042 of ERISA for the termination of, orthe appointment of a trustee to administer, any Title IV Plan or MultiemployerPlan or for the imposition of liability under Section 4069 or 4212(c) ofERISA; (k) the termination of a Multiemployer Plan under Section 4041A ofERISA or the reorganization or insolvency of a Multiemployer Plan underSection 4241 or 4245 of ERISA; or (l) the loss of a Qualified Plan’squalification or tax exempt status.

 

“***Eurodollar***”, when used in reference to any Loan orBorrowing, refers to whether such Loan, or the Loans comprising such Borrowing,are bearing interest at a rate determined by reference to the Adjusted LIBORate.

 

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“***Event of Default***” shall have the meaning assigned tosuch term in Article VII.

 

“***Excluded Taxes***” shall mean, with respect to theAdministrative Agent, any Lender or any other recipient of any payment to bemade by or on account of any obligation of the Borrowers hereunder, (a) incomeor franchise taxes imposed on (or measured by) its net income by the UnitedStates of America, or by the jurisdiction under the laws of which suchrecipient is organized or in which its principal office is located or, in thecase of any Lender, in which its applicable lending office is located, (b) anybranch profits taxes imposed by the United States of America or any similar taximposed by any other jurisdiction described in clause (a) above and (c) inthe case of a Foreign Lender (other than an assignee pursuant to a request bythe Borrowers under Section 2.20(a)), any withholding tax that is imposedon amounts payable to such Foreign Lender at the time such Foreign Lenderbecomes a party to this Agreement (or designates a new lending office) or isattributable to such Foreign Lender’s failure to comply withSection 2.19(e), except to the extent that such Foreign Lender (or itsassignor, if any) was entitled, at the time of designation of a new lendingoffice (or assignment), to receive additional amounts from the Borrowers withrespect to such withholding tax pursuant to Section 2.19(a).

 

“***Federal Funds Effective Rate***” shall mean, for any day, afloating rate equal to the weighted average of the rates on overnight Federalfunds transactions with members of the Federal Reserve System, as determined bythe Administrative Agent in its sole discretion, which determination shall befinal, binding and conclusive absent manifest error.

 

“***Financial Officer***” of any Person shall mean the chieffinancial officer, principal accounting officer, treasurer or controller ofsuch Person.

 

“***First Lien Agent***” shall mean GE Capital, as Agent underthe First Lien Credit Agreement.

 

“***First Lien Credit Agreement***” shall mean the Amended andRestated Credit Agreement dated as of February 5, 2004, among theBorrowers, the other credit parties signatory thereto, the lenders from time totime party thereto and the First Lien Agent, as the same may be amended,restated, supplemented, refinanced, replaced, restructured or otherwisemodified from time to time in one or more agreements (in each case, with thesame or new lenders), including any agreement extending the maturity thereof orotherwise restructuring all or any portion of the Indebtedness thereunder orincreasing the amounts outstanding thereunder, in each case, subject to thelimitations set forth in the Intercreditor Agreement.

 

“***First Lien Facilities***” shall mean the senior securedfirst lien credit facilities provided to the Borrowers pursuant to the FirstLien Credit Agreement.

 

“***First Priority Liens***”******shall mean the Liens granted by the CreditParties

 

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

 

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“***Foreign Lender***” shall mean any Lender that is organizedunder the laws of a jurisdiction other than that in which any Borrower islocated. For purposes of this definition, the United States of America, eachState thereof and the District of Columbia shall be deemed to constitute asingle jurisdiction.

 

“***Foreign Subsidiary***” shall mean any Subsidiary that isnot a Domestic Subsidiary.

 

“***Funded Debt***” means, with respect to any Person, withoutduplication, all Indebtedness for borrowed money evidenced by notes, bonds,debentures, or similar evidences of Indebtedness, and specifically including CapitalLease Obligations, revolving credit and short-term debt, and also including, inthe case of Borrowers, the Obligations and, without duplication, GuaranteedIndebtedness consisting of guaranties of Funded Debt of other Persons, butexpressly excluding any obligation attributable to any hedging agreementrelated to currency values or commodity prices permitted underSection 6.03(a)(viii) or any interest rate agreement or arrangementpermitted under Section 6.03(a)(xii).

 

“***GAAP***” shall mean United States generally acceptedaccounting principles applied on a consistent basis.

 

“***GE Capital***” shall mean General Electric CapitalCorporation, a Delaware corporation.

 

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

 

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

 

 “***Granting Lender***”shall have the meaning assigned to such term in Section 9.04(i).

 

“***Guaranteed Indebtedness***” shall mean as to any Person,any obligation of such Person guaranteeing, providing comfort or otherwisesupporting any Indebtedness, lease, dividend, or other obligation (“***primary obligation***”)of any other Person (the “***primary obligor***”) in any manner, including anyobligation or arrangement of such Person to (a) purchase or repurchase any suchprimary obligation, (b) advance or supply funds (i) for the purchase or paymentof any such primary obligation or (ii) to maintain working capital or equitycapital of the primary obligor or otherwise to maintain the net worth orsolvency or any balance sheet condition of the primary obligor, (c) purchaseproperty, securities or services primarily for the purpose of assuring theowner of any such primary obligation of the ability of the primary obligor tomake payment of such primary obligation, (d) protect the beneficiary of sucharrangement from loss (other than product warranties given in the ordinarycourse of business) or (e) indemnify the owner of such primary obligationagainst loss in respect thereof.  Theamount of any Guaranteed Indebtedness at any time shall be deemed to be anamount equal to the lesser at such time of (x) the stated or determinableamount of the primary obligation in respect of which such GuaranteedIndebtedness is incurred and (y) the maximum amount for which such Person maybe liable pursuant to the terms of the instrument embodying such GuaranteedIndebtedness, or, if not stated or determinable, the maximum reasonablyanticipated liability (assuming full performance) in respect thereof.

 

“***Guaranties***” shall mean any guaranty executed by anyGuarantor in favor of the Administrative Agent, the Collateral Agent and theLenders in respect of the Obligations.

 

“***Guarantor Payment***” shall have the meaning assigned tosuch term in Section 10.07.

 

“***Guarantors***” shall mean Holdings, Thermadyne Receivables,MECO Holding, C&G Holding and each Domestic Subsidiary of a Borrower.  The Guarantors on the Closing Date arelisted on Schedule 1.01.

 

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

 

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“***High Yield Notes***” shall mean the 9.25% SeniorSubordinated Notes due 2014 issued by Holdings and guaranteed by the otherCredit Parties pursuant to that certain Indenture dated as of February 5,2004 (the “***Indenture***”)in an aggregate principal amount of $175,000,000.

 

“***Holdings***” shall mean Thermadyne Holdings Corporation, aDelaware corporation.

 

“***Indebtedness***” shall mean, with respect to any Person,without duplication, (a) all indebtedness of such Person for borrowed money orfor the deferred purchase price of property payment for which is deferred 6months or more, but excluding obligations to trade creditors incurred in theordinary course of business that are unsecured and not overdue by more than 6months unless being contested in good faith, (b) all reimbursement and otherobligations with respect to letters of credit, bankers’ acceptances and suretybonds, whether or not matured, (c) all obligations evidenced by notes, bonds,debentures or similar instruments, (d) all indebtedness created or arisingunder any conditional sale or other title retention agreement with respect toproperty acquired by such Person (even though the rights and remedies of theseller or lender under such agreement in the event of default are limited torepossession or sale of such property), (e) all Capital Lease Obligations andthe present value (discounted at the Index Rate as in effect on the ClosingDate) of future rental payments under all synthetic leases, (f) all obligationsof such Person under commodity purchase or option agreements or other commodityprice hedging arrangements, in each case whether contingent or matured, (g) allobligations of such Person under any foreign exchange contract, currency swapagreement, interest rate swap, cap or collar agreement or other similaragreement or arrangement designed to alter the risks of that Person arisingfrom fluctuations in currency values or interest rates, in each case whether contingentor matured, (h) all Indebtedness referred to above secured by (or for which theholder of such Indebtedness has an existing right, contingent or otherwise, tobe secured by) any Lien upon or in property or other assets (including accountsand contract rights) owned by such Person, even though such Person has notassumed or become liable for the payment of such Indebtedness, and (i) theObligations.

 

“***Indemnified Taxes***” shall mean Taxes other than ExcludedTaxes.

 

“***Indemnitee***” shall have the meaning assigned to such termin Section 9.05(b).

 

“***Indenture***” shall have the meaning assigned to such termin the definition of High Yield Notes.

 

“***Industries***” shall have the meaning assigned to such termin the preamble to this Agreement.

 

“***Instruments***” shall mean all “instruments”, as such termis defined in the Code, now owned or hereafter acquired by any Credit Party,wherever located, and, in any event, including all certificated securities, allcertificates of deposit, and all promissory

 

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notes and other evidences ofindebtedness, other than instruments that constitute, or are a part of a groupof writings that constitute, Chattel Paper.

 

“***Intellectual Property***” shall mean any and all Licenses,Patents, Copyrights, Trademarks, and the goodwill associated with suchTrademarks.

 

“***Intercreditor Agreement***” shall have the meaning assignedto such term in Section 9.18.

 

“***Interest Expense***” shall mean, with respect to any Personfor any fiscal period, interest expense (whether cash or non-cash) of suchPerson determined in accordance with GAAP for the relevant period ended on suchdate, including, without duplication, interest expense with respect to anyFunded Debt of such Person and interest expense for the relevant period thathas been capitalized on the balance sheet of such Person.

 

“***Interest Payment Date***” shall mean (a) with respectto any ABR Loan, the last Business Day of each calendar month, (b) withrespect to any Eurodollar Loan, the last day of the Interest Period applicableto the Borrowing of which such Loan is a part and (c) with respect to anyLoan, the Maturity Date or any other date on which all of the Loans have beenpaid in full.

 

“***Interest Period***” shall mean, with respect to anyEurodollar Borrowing, the period commencing on the date of such Borrowing andending on the numerically corresponding day (or, if there is no numericallycorresponding day, on the last day) in the calendar month that is 1, 2or 3 months thereafter, as the Borrowers may elect;  *provided*, *however*, that (i) ifany Interest Period would end on a day other than a Business Day, such InterestPeriod shall be extended to the next succeeding Business Day unless such nextsucceeding Business Day would fall in the next calendar month, in which casesuch Interest Period shall end on the next preceding Business Day and(ii) any Interest Period that begins on the last Business Day of acalendar month (or on a day for which there is no numerically corresponding dayin the calendar month at the end of such Interest Period) shall end on the lastBusiness Day of a calendar month. Interest shall accrue from and including the first day of an InterestPeriod to but excluding the last day of such Interest Period.  For purposes hereof, the date of a Borrowinginitially shall be the date on which such Borrowing is made and thereaftershall be the effective date of the most recent conversion or continuation ofsuch Borrowing.

 

“***International***” shall have the meaning assigned to suchterm in the preamble to this Agreement.

 

“***Inventory***” shall mean all “inventory”, as such term isdefined in the Code, now owned or hereafter acquired by any Credit Party,wherever located, and in any event including inventory, merchandise, goods andother personal property that are held by or on behalf of any Credit Party forsale or lease or are furnished or are to be furnished under a contract ofservice, or that constitute raw materials, work in process, finished goods,returned goods, or materials or supplies of any kind, nature or descriptionused or consumed or to be used or consumed in such Credit Party’s business orin the processing,

 

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production, packaging,promotion, delivery or shipping of the same, including all supplies andembedded software.

 

“***Investment Property***” shall mean all “investmentproperty” as such term is defined in the Code now owned or hereafter acquiredby any Credit Party, wherever located, including (i) all securities, whethercertificated or uncertificated, including stocks, bonds, interests in limitedliability companies, partnership interests, treasuries, certificates ofdeposit, and mutual fund shares; (ii) all securities entitlements of any CreditParty, including the rights of any Credit Party to any securities account andthe financial assets held by a securities intermediary in such securitiesaccount and any free credit balance or other money owing by any securitiesintermediary with respect to that account; (iii) all securities accounts of anyCredit Party; (iv) all commodity contracts of any Credit Party; and (v) allcommodity accounts held by any Credit Party.

 

“***IRC***” shall mean the Internal Revenue Code of 1986, asamended from time to time.

 

“***IRS***” shall mean the Internal Revenue Service.

 

**“*ItalianSubsidiary***” shall mean each Subsidiary ofany Borrower organized under the laws of Italy.

 

“***Lenders***” shall mean (a) the Persons listed on Schedule 2.01(other than any such Person that has ceased to be a party hereto pursuant to anAssignment and Acceptance) and (b) any Person that has become a partyhereto pursuant to an Assignment and Acceptance.

 

“***Leverage Ratio***” shall mean, with respect to Holdings andits Subsidiaries, on a consolidated basis, the ratio of (a) Funded Debt (lessall cash and cash equivalents on hand) (including the average daily closingbalance of the Revolving Loan for the 30 days preceding and including any dateof determination) as of any date of determination to (b) EBITDA for the twelvemonths ending on that date of determination.

 

“***LIBO Rate***” shall mean, with respect to any EurodollarBorrowing for any Interest Period, the rate per annum determined by theAdministrative Agent at approximately 11:00 a.m., London time, on the date thatis two Business Days prior to the commencement of such Interest Period byreference to the British Bankers’ Association Interest Settlement Rates fordeposits in dollars (as set forth by any service selected by the AdministrativeAgent that has been nominated by the British Bankers’ Association as anauthorized information vendor for the purpose of displaying such rates) for aperiod equal to such Interest Period; *provided* that, to the extent that aninterest rate is not ascertainable pursuant to the foregoing provisions of thisdefinition, the “LIBO Rate” shall be the interest rate per annum determined bythe Administrative Agent to be the average of the rates per annum at whichdeposits in dollars are offered for such relevant Interest Period to majorbanks in the London interbank market in London, England by the AdministrativeAgent at approximately 11:00 a.m., London time, on the date that is twoBusiness Days prior to the beginning of such Interest Period.

 

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“***License***” shall mean any Copyright License, PatentLicense, Trademark License or other license of rights or interests now held orhereafter acquired by any Credit Party.

 

“***Lien***” shall mean any mortgage or deed of trust, pledge,hypothecation, deposit arrangement, lien, charge, claim, security interest,easement or encumbrance, or preference, priority or other security agreement orpreferential arrangement of any kind or nature whatsoever (including any leaseor title retention agreement, any financing lease having substantially the sameeconomic effect as any of the foregoing, and the filing of, or agreement togive, any financing statement perfecting a security interest under the Code orcomparable law of any jurisdiction).

 

“***Litigation***” shall have the meaning assigned to such termin Section 3.13.

 

“***Loan Documents*”** shall mean this Agreement, theCollateral Documents, the promissory notes, if any, executed and deliveredpursuant to Section 2.04(e) and all other agreements, instruments,documents and certificates executed and delivered to, or in favor of, theAdministrative Agent, the Collateral Agent or any Lender and including allother written matter whether heretofore, now or hereafter executed by or onbehalf of the Credit Parties, or any authorized employee of the Credit Parties,and delivered to the Administrative Agent, the Collateral Agent or any Lenderin connection with this Agreement or the transactions contemplated thereby.

 

“***Loans***” shall mean the term loans made by the Lenders tothe Borrowers pursuant to Section 2.01.

 

“***Margin Stock***” shall have the meaning assigned to suchterm in Section 3.10.

 

“***Material Adverse Effect***” shall mean a material adverseeffect on (a) the business, assets, operations, prospects or financial or othercondition of the Credit Parties considered as a whole, (b) any Borrower’sability to pay any of the Loans or any of the other Obligations in accordancewith the terms of this Agreement, (c) the Collateral or the Collateral Agent’sLiens, on behalf of itself and the Lenders, on the Collateral or the priorityof such Liens, or (d) the Administrative Agent’s or any Lender’s rights andremedies under this Agreement and the other Loan Documents.  Without limiting the generality of theforegoing, any event or occurrence adverse to one or more Credit Parties whichresults or could reasonably be expected to result in losses, costs, damages,liabilities or expenditures in excess of $10,000,000 shall constitute aMaterial Adverse Effect.

 

“***Maturity Date***” shall mean January 24, 2005.

 

“***MECO Holding***” shall mean MECO Holding Company, aDelaware corporation.

 

“***Moody’s***” shall mean Moody’s Investors Service, Inc., orany successor thereto.

 

“***Multiemployer Plan***” shall mean a “multiemployer plan” asdefined in Sections 3(37) or 4001(a)(3) of ERISA, and to which any Credit Partyor ERISA Affiliate has or has had any obligation or liability, contingent orotherwise, is making, is obligated to

 

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make or has made or beenobligated to make, contributions on behalf of participants who are or wereemployed by any of them.

 

“***Obligations***” shall mean all loans, advances, debts,liabilities and obligations for the performance of covenants, tasks or dutiesor for payment of monetary amounts (whether or not such performance is thenrequired or contingent, or such amounts are liquidated or determinable) owingby any Credit Party to the Administrative Agent or any Lender, and allcovenants and duties regarding such amounts, of any kind or nature, present orfuture, whether or not evidenced by any note, agreement, letter of creditagreement or other instrument, arising under this Agreement or any of the otherLoan Documents.  This term includes allprincipal, interest (including all interest that accrues after the commencementof any case or proceeding by or against any Credit Party in bankruptcy, whetheror not allowed in such case or proceeding), fees, hedging obligations underswaps, caps and collar arrangements provided by any Lender, expenses,attorneys’ fees and any other sum chargeable to any Credit Party under thisAgreement or any of the other Loan Documents.

 

“***Other Taxes***” shall mean any and all present or futurestamp or documentary taxes or any other excise or property taxes, charges orsimilar levies arising from any payment made under any Loan Document or fromthe execution, delivery or enforcement of, or otherwise with respect to, anyLoan Document, other than any Excluded Taxes.

 

“***Patent License***” shall mean rights under any writtenagreement now owned or hereafter acquired by any Credit Party granting anyright with respect to any invention that is claimed in an existing Patent.

 

“***Patents***” shall mean all of the following in which anyCredit Party now holds or hereafter acquires any interest: (a) all letterspatent of the United States or of any other country, all registrations andrecordings thereof, and all applications for letters patent of the UnitedStates or of any other country, including registrations, recordings andapplications in the United States Patent and Trademark Office or in any similaroffice or agency of the United States or any other country, and (b) allreissues, continuations, continuations in part or extensions thereof.

 

“***PBGC***” shall mean the Pension Benefit GuarantyCorporation referred to and defined in ERISA.

 

“***Permitted Encumbrances***” shall mean the followingencumbrances: (a) Liens for taxes or assessments or other governmental Chargesnot yet due and payable or which are being contested in accordance withSection 5.02(b); (b) pledges or deposits of money securing statutoryobligations under workmen’s compensation, unemployment insurance, socialsecurity or public liability laws or similar legislation (excluding Liens underERISA); (c) pledges or deposits of money securing bids, tenders, contracts(other than contracts for the payment of money) or leases to which any CreditParty or Foreign Subsidiary is a party as lessee made in the ordinary course ofbusiness; (d) inchoate and unperfected workers’, mechanics’ or similar liensarising in the ordinary course of business, so long as such Liens attach onlyto Equipment, Fixtures and/or Real Estate; (e)

 

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carriers’, warehousemen’s,suppliers’ or other similar possessory liens arising in the ordinary course ofbusiness; (f) deposits securing, or in lieu of, surety, appeal or customs bondsin proceedings to which any Credit Party or Foreign Subsidiary is a party; (g)any attachment or judgment lien not constituting an Event of Default underSection 7.01(j); (h) zoning restrictions, easements, licenses, or otherrestrictions on the use of any Real Estate or other minor irregularities intitle (including leasehold title) thereto, so long as the same do notmaterially impair the use, value, or marketability of such Real Estate; (i)presently existing or hereafter created Liens in favor of the Collateral Agent,on behalf of the Lenders; (j) Liens expressly permitted under clauses (b) and(c) of Section 6.07 of this Agreement; (k) customary Liens and set-offrights in favor of banks maintaining accounts for the Credit Parties or otherForeign Subsidiaries; (l) the First Priority Liens; and (m) other customaryLiens imposed in the jurisdiction of a Foreign Subsidiary provided such Lien isnot reasonably expected to have a material adverse effect on such ForeignSubsidiary.

 

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

 

“***Plan***” shall mean, at any time, an “employee benefitplan”, as defined in Section 3(3) of ERISA, that any Credit Party or ERISAAffiliate has or has had any obligation or liability, contingent or otherwise,maintains, contributes to or has an obligation to contribute to or hasmaintained, contributed to or had an obligation to contribute to at any timewithin the past 7 years on behalf of participants who are or were employed byany Credit Party or ERISA Affiliate.

 

“***Plan of Reorganization***” shall mean, that certain FirstAmended and Restated Joint Plan of Reorganization under Chapter 11 of theBankruptcy Code dated January 17, 2003, filed in the Chapter 11 Casesincluding the First Amended and Restated Disclosure Statement filed inconjunction therewith.

 

“***Pledge Agreement***” shall mean the Second Lien PledgeAgreement, substantially in the form of Exhibit C, among the CreditParties and the Collateral Agent for the benefit of the Secured Parties.

 

“***Prime Rate***” shall mean the rate of interest per annumdetermined from time to time by Credit Suisse First Boston as its prime rate ineffect at its principal office in New York City; each change in the PrimeRate shall be effective from and including the date such change is announced asbeing effective.

 

“***ProTip***” shall have the meaning assigned to such term inthe preamble to this Agreement.

 

“***Qualified Plan***” shall mean a Plan that is intended to betax-qualified under Section 401(a) of the IRC.

 

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“***Real Estate***” shall have the meaning assigned to suchterm in Section 3.06.

 

“***Register***” shall have the meaning assigned to such termin Section 9.04(d).

 

“***Regulation T***” shall mean Regulation T of the Boardas from time to time in effect and all official rulings and interpretationsthereunder or thereof.

 

“***Regulation U***” shall mean Regulation U of the Boardas from time to time in effect and all official rulings and interpretationsthereunder or thereof.

 

“***Regulation X***” shall mean Regulation X of theBoard as from time to time in effect and all official rulings andinterpretations thereunder or thereof.

 

“***Related Parties***” shall mean, with respect to anyspecified Person, such Person’s Affiliates and the respective directors,officers, employees, agents, trustees and advisors of such Person and suchPerson’s Affiliates.

 

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

 

“***Required Lenders***” shall mean, at any time, the Lendershaving Commitments or Loans representing more than 50% of the sum of allCommitments or Loans outstanding at such time.

 

“***Restricted Payment***” shall mean, with respect to anyCredit Party (a) the declaration or payment of any dividend or the incurrenceof any liability to make any other payment or distribution of cash or otherproperty or assets in respect of Stock; (b) any payment on account of thepurchase, redemption, defeasance, sinking fund or other retirement of suchCredit Party’s Stock or any other payment or distribution made in respectthereof, either directly or indirectly; (c) any payment or prepayment ofprincipal of, premium, if any, or interest, fees or other charges on or withrespect to, and any redemption, purchase, retirement, defeasance, sinking fundor similar payment and any claim for rescission with respect to, anySubordinated Debt; (d) any payment made to redeem, purchase, repurchase orretire, or to obtain the surrender of, any outstanding warrants, options orother rights to acquire Stock of such Credit Party now or hereafteroutstanding; (e) any payment of a claim for the rescission of the purchase or saleof, or for material damages arising from the purchase or sale of, any shares ofsuch Credit Party’s Stock or of a claim for reimbursement, indemnification orcontribution arising out of or related to any such claim for damages orrescission; (f) any payment, loan, contribution, or other transfer of funds orother property to any Stockholder of such Credit Party other than payment ofcompensation in the ordinary course of business to Stockholders who areemployees of such Person; and (g) any payment of management fees (or other feesof a similar nature) by such Credit Party to any Stockholder of such CreditParty or its Affiliates.

 

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“***Retiree Welfare Plan***” shall mean, at any time, a Planthat is a welfare plan (within the meaning of Section 3(1) of ERISA) andthat provides for continuing coverage or benefits for any participant or anybeneficiary of a participant after the last day of the calendar month followingsuch participant’s termination of employment, other than continuation coverageprovided pursuant to Section 4980B of the IRC or other similar state lawand at the sole expense of the participant or the beneficiary of theparticipant.

 

“***Revolving Loan***” shall have the meaning assigned to suchterm in the First Lien Credit Agreement.

 

“***Secured Parties***” shall mean (a) the Lenders,(b) the Administrative Agent, (c) the Collateral Agent, (d) the Arranger,(e) each other person to whom any of the Obligations is owed and(f) the successors and assigns of each of the foregoing.

 

“***Security Agreement***” shall mean the Second Lien SecurityAgreement, substantially in the form of Exhibit D, among the CreditParties and the Collateral Agent for the benefit of the Secured Parties.

 

“***Solvent***” shall mean, with respect to any Person on aparticular date, that on such date (a) the fair value of the property of suchPerson is greater than the total amount of liabilities, including contingentliabilities, of such Person; (b) the present fair salable value of the assetsof such Person is not less than the amount that will be required to pay theprobable liability of such Person on its debts as they become absolute andmatured; (c) such Person does not intend to, and does not believe that it will,incur debts or liabilities beyond such Person’s ability to pay as such debtsand liabilities mature; and (d) such Person is not engaged in a business ortransaction, and is not about to engage in a business or transaction, for whichsuch Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities (suchas litigation, guaranties and pension plan liabilities) at any time shall becomputed as the amount that, in light of all the facts and circumstances existingat the time, represents the amount that can be reasonably be expected to becomean actual or matured liability.

 

“***South African Subsidiary***” means each Subsidiary of anyBorrower organized under the laws of South Africa.

 

“***SPC***” shall have the meaning assigned to such term inSection 9.04(i).

 

“***S&P***” shall mean Standard & Poor’s RatingsService, or any successor thereto.

 

“***Statutory Reserves***” shall mean, for any Interest Period,a fraction (expressed as a decimal), the numerator of which is the number oneand the denominator of which is the number one minus the aggregate (but withoutduplication) of the maximum reserve percentages (including any basic, marginal,special, emergency or supplemental reserves) in effect on the second fullBusiness Day next preceding the first day of such Interest Period, expressed asa decimal, established by the Board and any other banking authority orGovernmental Authority, domestic or foreign, to which the Administrative Agentor any Lender (including any branch, Affiliate or other fronting office makingor holding a Loan) is subject for Eurocurrency funding (currently referred toas “Eurocurrency

 

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Liabilities” inRegulation D of the Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilitiesas defined in Regulation D of the Board) and to be subject to such reserverequirements without benefit of or credit for proration, exemptions or offsetsthat may be available from time to time to any Lender under suchRegulation D.  Statutory Reserves shallbe adjusted automatically on and as of the effective date of any change in anyreserve percentage.

 

“***Stock***” shall mean all shares, options, warrants, generalor limited partnership interests, membership interests or other equivalents(regardless of how designated) of or in a corporation, partnership, limitedliability company or equivalent entity whether voting or nonvoting, includingcommon stock, preferred stock or any other “equity security” (as such term isdefined in Rule 3a11 1 of the General Rules and Regulations promulgated by theSecurities and Exchange Commission under the Securities Exchange Act of 1934).

 

“***Stockholder***” shall mean, with respect to any Person,each holder of Stock of such Person.

 

“***Stoody***” shall have the meaning assigned to such term inthe preamble to this Agreement.

 

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

 

“***Subsidiary***” shall mean, with respect to any Person, (a)any corporation of which an aggregate of more than 50% of the outstanding Stockhaving ordinary voting power to elect a majority of the board of directors ofsuch corporation (irrespective of whether, at the time, Stock of any otherclass or classes of such corporation shall have or might have voting power byreason of the happening of any contingency) is at the time, directly or indirectly,owned legally or beneficially by such Person or one or more Subsidiaries ofsuch Person, or with respect to which any such Person has the right to vote ordesignate the vote of 50% or more of such Stock whether by proxy, agreement,operation of law or otherwise, and (b) any partnership or limited liabilitycompany in which such Person and/or one or more Subsidiaries of such Personshall have an interest (whether in the form of voting or participation inprofits or capital contribution) of more than 50% or of which any such Personis a general partner or may exercise the powers of a general partner.  Unless the context otherwise requires, eachreference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.

 

“***Taxes***” shall mean taxes, levies, imposts, deductions,charges or withholdings imposed by any Governmental Authority, and allliabilities with respect thereto, excluding franchise taxes and taxes imposedon or measured by the net income or overall gross receipts of the AdministrativeAgent or any Lender or similar taxes imposed on the Administrative Agent or anyLender by the jurisdictions under the laws of which the

 

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Administrative Agent or suchLender, as applicable, is organized, conducts business or has a present orformer connection or any political subdivision thereof.

 

“***Thermadyne Receivables***” shall mean ThermadyneReceivables, Inc., a Delaware corporation.

 

 “***Thermal Arc***” shallhave the meaning assigned to such term in the preamble to this Agreement.

 

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

 

“***Trademark License***” shall mean rights under any writtenagreement now owned or hereafter acquired by any Credit Party granting anyright to use any Trademark.

 

“***Trademarks***” shall mean all of the following now owned orhereafter existing or adopted or acquired by any Credit Party: (a) alltrademarks, trade names, corporate names, business names, trade styles, tradedress, service marks, logos, and other source or business identifiers (whetherregistered or unregistered), all registrations and recordings thereof, and allapplications in connection therewith, including registrations, recordings and applicationsin the United States Patent and Trademark Office or in any similar office oragency of the United States, any state or territory thereof, or any othercountry or any political subdivision thereof; (b) all reissues, extensions orrenewals thereof; and (c) all goodwill associated with or symbolized by any ofthe foregoing.

 

“***Transactions***” shall mean, collectively, (a) theexecution, delivery and performance by the Credit Parties of the Loan Documentsto which they are a party and, in the case of the Borrowers, the making of theBorrowings hereunder and the use of the proceeds thereof as required hereby,and (b) the payment of related fees and expenses.

 

“***Tweco***” shall have the meaning assigned to such term inthe preamble to this Agreement.

 

“***Tweco Mexico***” shall have the meaning assigned to suchterm in Section 5.09.

 

“***Type***”, when used in respect of any Loan or Borrowing,shall refer to the Rate by reference to which interest on such Loan or on theLoans comprising such Borrowing is determined. For purposes hereof, the term “***Rate***” shall include the Adjusted LIBO Rate and theAlternate Base Rate.

 

“***Unfunded Pension Liability***” shall mean, at any time, theaggregate amount, if any, of the sum of (a) the amount by which the presentvalue of all accrued benefits under each Title IV Plan exceeds the fair marketvalue of all assets of such Title IV Plan allocable to such benefits inaccordance with Title IV of ERISA, all determined as of the most recentvaluation date for each such Title IV Plan using the actuarial assumptions forfunding purposes in effect under such Title IV Plan, and (b) for a period offive (5) years following a transaction which might reasonably be expected to becovered by Section

 

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

 

 “***USA Patriot Act***”shall mean The Uniting and Strengthening America by Providing Appropriate ToolsRequired to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L.No. 107-56 (signed into law October 26, 2001)).

 

“***Victor***” shall have the meaning assigned to such term inthe preamble to this Agreement.

 

“***Victor Mexico***” shall have the meaning assigned to suchterm in Section 5.09.

 

## **SECTION 1.02****.  *Terms Generally***.  The definitions in Section 1.01 shallapply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, anypronoun shall include the corresponding masculine, feminine and neuterforms.  The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.  The word “will” shall beconstrued to have the same meaning and effect as the word “shall”; and thewords “asset” and “property” shall be construed as having the same meaning andeffect and to refer to any and all tangible and intangible assets andproperties, including cash, securities, accounts and contract rights.  All references herein to Articles, Sections,Exhibits and Schedules shall be deemed references to Articles and Sections of,and Exhibits and Schedules to, this Agreement unless the context shallotherwise require, and all references to this Agreement or any other LoanDocument shall include all exhibits, schedules and appendices hereto orthereto, as applicable.  Except asotherwise expressly provided herein, (a) any reference in this Agreementto any Loan Document shall mean such document as amended, restated,supplemented or otherwise modified from time to time and (b) all terms ofan accounting or financial nature shall be construed in accordance with GAAP,as in effect from time to time; *provided,however*, that if the Borrowers notify the Administrative Agent thatthe Borrowers wish to amend any covenant in Article VI or any relateddefinition to eliminate the effect of any change in GAAP occurring after thedate of this Agreement on the operation of such covenant (or if theAdministrative Agent notifies the Borrowers that the Required Lenders wish toamend Article VI or any related definition for such purpose), then theBorrowers’ compliance with such covenant shall be determined on the basis ofGAAP in effect immediately before the relevant change in GAAP became effective,until either such notice is withdrawn or such covenant is amended in a mannersatisfactory to the Borrowers and the Required Lenders.

##  

## **SECTION 1.03****.  *Senior Indebtedness***.  As the proceeds of the Loans will be usedsolely to prepay a portion of the outstanding Revolving Loan, this Agreementshall be a “Credit Agreement” (as defined in the Indenture), and the Loans andother Obligations shall be “Bank Indebtedness” and “Designated SeniorIndebtedness” for all purposes of the Indenture.

##  

## **SECTION 1.04****.  *Borrower Representative. ***The Administrative Agent and each Lendermay regard any notice or other communication pursuant to any Loan Document fromHoldings as a notice or communication from all the Borrowers, and may give any

 

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## notice or communication required or permitted to be given to anyBorrower or the Borrowers hereunder to Holdings on behalf of such Borrower orthe Borrowers.  Each Borrower agreesthat each notice, election, representation and warranty, covenant, agreementand undertaking made on its behalf by Holdings shall be deemed for all purposesto have been made by such Borrower and shall be binding upon and enforceableagainst such Borrower to the same extent as if the same had been made directlyby such Borrower.

##  

# ***ARTICLE II***

# *** ***

# ***The Credits***

# *** ***

## **SECTION 2.01****.  ***Commitments*****.  Subject to the terms and conditions andrelying upon the representations and warranties herein set forth, each Lenderagrees, severally and not jointly, to make a term loan to the Borrowers on the ClosingDate in an aggregate principal amount not to exceed its Commitment.  Amounts paid or prepaid in respect of Loansmay not be reborrowed.

##  

## **SECTION 2.02****.  ***Loans*****.  (a) Each Loan shall be made as part of a Borrowing consisting of Loans madeby the Lenders ratably in accordance with their respective Commitments; *provided*,*however*, that the failure of any Lender to make any Loan shall notin itself relieve any other Lender of its obligation to lend hereunder (itbeing understood, however, that no Lender shall be responsible for the failureof any other Lender to make any Loan required to be made by such other Lender).The Loans comprising any Borrowing shall be in an aggregate principal amountthat is an integral multiple of $1,000,000 and not less than $5,000,000.

##  

### (b) Subject to Sections 2.08 and 2.14, each Borrowing shall becomprised entirely of ABR Loans or Eurodollar Loans as the Borrowers mayrequest pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing anydomestic or foreign branch or Affiliate of such Lender to make such Loan; *provided*that any exercise of such option shall not affect the obligation of theBorrowers to repay such Loan in accordance with the terms of thisAgreement.  Borrowings of more than oneType may be outstanding at the same time; *provided*, *however*, that the Borrowersshall be entitled to request any Borrowing that, if made, would resultin more than two Eurodollar Borrowings outstanding hereunder at anytime.  For purposes of the foregoing,Borrowings having different Interest Periods, regardless of whether theycommence on the same date, shall be considered separate Borrowings.

###  

### Each Lender shall make each Loan to be made by it hereunder on theClosing Date by wire transfer of immediately available funds to the accountdesignated by the Administrative Agent, and the Administrative Agent shallpromptly credit the amounts so received to the account designated by theBorrowers in the Borrowing Request (or if a Borrowing shall not occur on theClosing Date because any condition precedent herein specified shall not havebeen met, return the amounts so received to the respective Lenders).

 

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### (c) Unless the Administrative Agent shall have received notice from a Lenderprior to the Closing Date that such Lender will not make available to theAdministrative Agent such Lender’s portion of the Borrowing, the AdministrativeAgent may assume that such Lender has made such portion available to theAdministrative Agent on the Closing Date in accordance with paragraph (c)of this Section and the Administrative Agent may, in its sole discretionand in reliance upon such assumption, make available to the Borrowers on theClosing Date a corresponding amount.  Ifthe Administrative Agent shall have so made funds available, then, to theextent that such Lender shall not have made such portion available to theAdministrative Agent, the Borrowers and such Lender severally agree to repay tothe Administrative Agent forthwith on demand such corresponding amount togetherwith interest thereon, for each day from the date such amount is made availableto the Borrowers to but excluding the date such amount is repaid to theAdministrative Agent at (i) in the case of the Borrowers, a rate per annumequal to the interest rate applicable at the time to the Loans comprising suchBorrowing and (ii) in the case of such Lender, a rate determined by theAdministrative Agent to represent its cost of overnight or short-term funds(which determination shall be conclusive absent manifest error).  If such Lender shall repay to theAdministrative Agent such corresponding amount, such amount shall constitutesuch Lender’s Loan as part of such Borrowing for purposes of this Agreement.

###  

## **SECTION 2.03****.  ***BorrowingProcedure*****. In order to request the Borrowing to be made on the Closing Date, theBorrowers shall have delivered or faxed to the Administrative Agent a dulycompleted Borrowing Request (a) in the case of a Eurodollar Borrowing, notlater than 11:00 a.m., New York City time, three Business Days prior tothe Closing Date, and (b) in the case of an ABR Borrowing, not later than10:00 a.m., New York City time, on the Closing Date.  Such Borrowing Request shall be irrevocable,shall be signed by or on behalf of the Borrowers and shall specify thefollowing information: (i) whether such Borrowing is to be a EurodollarBorrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shallbe a Business Day); (iii) the number and location of the account to whichfunds are to be disbursed; (iv) the amount of such Borrowing; and(v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Periodwith respect thereto; *provided, however*,that, notwithstanding any contrary specification in the Borrowing Request, eachrequested Borrowing shall comply with the requirements set forth inSection 2.02.  If no election as tothe Type of Borrowing is specified in any such request, then the requestedBorrowing shall be an ABR Borrowing.  Ifno Interest Period with respect to any Eurodollar Borrowing is specified in anysuch notice, then the Borrowers shall be deemed to have selected an InterestPeriod of one month’s duration.  TheAdministrative Agent shall promptly advise the applicable Lenders of anyrequest made pursuant to this Section (and the contents thereof), and ofeach Lender’s portion of the requested Borrowing.

##  

## **SECTION 2.04****.  ***Evidence ofDebt*****; ***Repayment of Loans***.  (a) The Borrowers hereby unconditionally promise, jointly and severally, topay on the Maturity Date to the Administrative Agent for the account of eachLender the outstanding principal amount of each Loan of such Lender.

 

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### (b) Each Lender shall maintain in accordance with its usual practice anaccount or accounts evidencing the indebtedness of the Borrowers to such Lenderresulting from the Loan made by such Lender, including the amounts of principaland interest payable and paid to such Lender from time to time under thisAgreement.

###  

### (c) The Administrative Agent shall maintain accounts in which it will record(i) the amount of each Loan made hereunder, the Type thereof and, ifapplicable, the Interest Period applicable thereto, (ii) the amount of anyprincipal or interest due and payable or to become due and payable from theBorrowers to each Lender hereunder and (iii) the amount of any sumreceived by the Administrative Agent hereunder from any Borrower or any Guarantorand each Lender’s share thereof.

###  

### (d) The entries made in the accounts maintained pursuant toparagraphs (b) and (c) of this Section shall be *prima facie*evidence of the existence and amounts of the obligations therein recorded; *provided*,*however*,that the failure of any Lender or the Administrative Agent to maintain suchaccounts or any error therein shall not in any manner affect the obligations ofthe Borrowers to repay the Loans in accordance with their terms.

###  

### (e) Any Lender may request that Loans made by it hereunder be evidenced by apromissory note.  In such event, theBorrowers shall execute and deliver to such Lender a promissory note payable tosuch Lender and its registered assigns and in a form and substance reasonablyacceptable to the Administrative Agent and the Borrowers. Notwithstanding anyother provision of this Agreement, in the event any Lender shall request andreceive such a promissory note, the interests represented by such note shall atall times (including after any assignment of all or part of such interestspursuant to Section 9.04) be represented by one or more promissory notespayable to the payee named therein or its registered assigns.

###  

## ***SECTION 2.05******. ******Fees***. The Borrowers agree, jointly and severally, to pay to the AdministrativeAgent, for its own account,the fees set forth in the Engagement Letter at the times and inthe amounts specified therein.  Oncepaid, such fees shall not be refundable under any circumstances.

##  

## **SECTION 2.06****.  ***Interest onLoans*****. (a)  Subject to the provisions ofSection 2.07, the Loans comprising each ABR Borrowing shall bearinterest (computed on the basis of the actual number of days elapsed over ayear of 365 or 366 days, as the case may be, when the Alternate Base Rateis determined by reference to the Prime Rate and over a year of 360 daysat all other times and calculated from and including the date of such Borrowingto but excluding the date of repayment thereof) at a rate per annum equal tothe Alternate Base Rate plus the Applicable Percentage.

##  

### (b) Subject to the provisions of Section 2.07, the Loans comprisingeach Eurodollar Borrowing shall bear interest (computed on the basis of theactual number of days elapsed over a year of 360 days) at a rate per annumequal to the Adjusted LIBO Rate for the Interest Period in effect for suchBorrowing plus the Applicable Percentage.

 

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### (c) Interest on each Loan shall be payable on the Interest Payment Datesapplicable to such Loan except as otherwise provided in this Agreement.  The applicable Alternate Base Rate orAdjusted LIBO Rate for each Interest Period or day within an Interest Period,as the case may be, shall be determined by the Administrative Agent, and suchdetermination shall be conclusive absent manifest error.

###  

## **SECTION 2.07****.  *Default Interest***.  If an Event of Default shall have occurredand be continuing, at the election of the Administrative Agent or the RequiredLenders, to the extent permitted by law, all amounts outstanding under thisAgreement and the other Loan Documents shall bear interest (after as well asbefore judgment), payable on demand, at the rate otherwise applicable to theLoans pursuant to Section 2.06 plus 2.00% per annum.

##  

## **SECTION 2.08****.  ***AlternateRate of Interest*****.  In the event, and on each occasion, that on the day two BusinessDays prior to the commencement of any Interest Period for a EurodollarBorrowing the Administrative Agent shall have determined that dollar deposits inthe principal amounts of the Loans comprising such Borrowing are not generallyavailable in the London interbank market, or that the rates at which suchdollar deposits are being offered will not adequately and fairly reflect thecost to any Lender of making or maintaining its Eurodollar Loan during suchInterest Period, or that reasonable means do not exist for ascertaining theAdjusted LIBO Rate, the Administrative Agent shall, as soon as practicablethereafter, give written or fax notice of such determination to the Borrowersand the Lenders.  In the event of anysuch determination, until the Administrative Agent shall have advised theBorrowers and the Lenders that the circumstances giving rise to such notice nolonger exist, any request by the Borrowers for a Eurodollar Borrowing pursuantto Section 2.03 or 2.10 shall be deemed to be a request for anABR Borrowing.  Each determinationby the Administrative Agent under this Section shall be conclusive absentmanifest error.

##  

## **SECTION 2.09****.  ***Terminationand Reduction of Commitments*****.  (a) The Commitments shall automatically terminate upon the earlier to occurof (i) the making of the Loans on the Closing Date and(ii) 5:00 p.m., New York City time, on August 13, 2004.

##  

### (b) Upon prior irrevocable written or fax notice to the Administrative Agent,the Borrowers may at any time in whole permanently terminate, or from time totime in part permanently reduce, the Commitments; *provided*, *however*,that each partial reduction of the Commitments shall be in an integral multipleof $1,000,000 and in a minimum amount of $5,000,000.  Each reduction in the Commitments hereunder shall be made ratablyamong the Lenders in accordance with their respective Commitments.

###  

## **SECTION 2.10****.  ***Conversionand Continuation of Borrowings*****.  The Borrowers shall have the right at anytime upon prior irrevocable notice to the Administrative Agent not later than1:00 p.m., New York City time, three Business Days prior thereto,(a) to convert any Eurodollar Borrowing into an ABR Borrowing, (b) toconvert any ABR Borrowing into a Eurodollar Borrowing or to continue anyEurodollar Borrowing as a Eurodollar Borrowing for an additional InterestPeriod and (c) to convert the Interest

 

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## Period with respect to any Eurodollar Borrowing to another permissibleInterest Period, subject in each case to the following:

##  

#### (i)  each conversion or continuation shall be made pro rata among theLenders in accordance with the respective principal amounts of the Loanscomprising the converted or continued Borrowing;

####  

#### (ii)  if less than all the outstanding principal amount of anyBorrowing shall be converted or continued, then each resulting Borrowing shallsatisfy the limitations specified in Sections 2.02(a) and (b) regardingthe principal amount and maximum number of Borrowings of the relevant Type;

####  

#### (iii)  each conversion shall be effected by each Lender and theAdministrative Agent by recording for the account of such Lender the new Loanof such Lender resulting from such conversion and reducing the Loan (or portionthereof) of such Lender being converted by an equivalent principal amount;accrued interest on any Eurodollar Loan (or portion thereof) being convertedshall be paid by the Borrowers at the time of conversion;

####  

#### (iv)  if any Eurodollar Borrowing is converted at a time other than theend of the Interest Period applicable thereto, the Borrowers shall pay, upondemand, any amounts due to the Lenders pursuant to Section 2.15;

####  

#### (v)  no Borrowing may be converted into or continued as a EurodollarBorrowing less than one month prior to the Maturity Date;

####  

#### (vi)  any portion of a Eurodollar Borrowing that cannot be convertedinto or continued as a Eurodollar Borrowing by reason of the immediatelypreceding clause shall be automatically converted at the end of the InterestPeriod in effect for such Borrowing into an ABR Borrowing; and

####  

#### (vii)  upon notice to the Borrowers from the Administrative Agent (orupon the written request of the Required Lenders), after the occurrence andduring the continuance of a Default or an Event of Default, no outstanding Loanmay be converted into, or continued as, a Eurodollar Loan.

####  

Each noticepursuant to this Section shall be irrevocable and shall refer to thisAgreement and specify (i) the identity and amount of the Borrowing that theBorrowers request be converted or continued, (ii) whether such Borrowing is tobe converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,(iii) if such notice requests a conversion, the date of such conversion (whichshall be a Business Day) and (iv) if such Borrowing is to be converted to orcontinued as a Eurodollar Borrowing, the Interest Period with respectthereto.  If no Interest Period isspecified in any such notice with respect to any conversion to or continuationas a Eurodollar Borrowing, the Borrowers shall be deemed to have selected anInterest Period of one month’s duration. The Administrative Agent shall advise the Lenders of any notice givenpursuant to this Section and of each Lender’s portion of any converted orcontinued Borrowing.  If the Borrowersshall not have given notice in accordance with this Section to continueany

 

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Borrowing into a subsequent Interest Period (and shall not otherwisehave given notice in accordance with this Section to convert suchBorrowing), such Borrowing shall, at the end of the Interest Period applicablethereto (unless repaid pursuant to the terms hereof), automatically becontinued into an ABR Borrowing.

 

## **SECTION 2.11****.  ***OptionalPrepayment*****. (a)  The Borrowers shall have theright at any time and from time to time to prepay any Borrowing, in whole or inpart, upon at least three Business Days’ prior written or fax notice (ortelephone notice promptly confirmed by written or fax notice) in the case ofEurodollar Loans, or same day written or fax notice (or telephone noticepromptly confirmed by written or fax notice) in the case of ABR Loans, to theAdministrative Agent before 10:00 a.m., New York City time; *provided, however*, that each partialprepayment shall be in an amount that is an integral multiple of $250,000 andnot less than $1,000,000.

##  

### (b) Each notice of prepayment shall specify the prepayment date and theprincipal amount of each Borrowing (or portion thereof) to be prepaid, shall beirrevocable and shall commit the Borrowers to prepay such Borrowing by theamount stated therein on the date stated therein.  All prepayments under this Section shall be subject toSection 2.15, but otherwise shall be without premium or penalty, and shallbe accompanied by accrued and unpaid interest on the principal amount to beprepaid to but excluding the date of payment.

###  

## **SECTION 2.12****.  ***MandatoryPrepayments*****. (a)  Immediately upon receipt byany Credit Party of any cash proceeds of any asset disposition, the Borrowersshall prepay the Loans in an amount equal to all such proceeds, net of (A)commissions and other reasonable and customary transaction costs, fees andexpenses properly attributable to such transaction and payable by the Borrowersin connection therewith (in each case, paid to non-Affiliates), (B) transfertaxes, (C) amounts payable to holders of senior Liens on such asset (to theextent such Liens constitute Permitted Encumbrances hereunder), if any, and (D)an appropriate reserve for income taxes in accordance with GAAP in connectiontherewith.  Notwithstanding theforegoing, if the Credit Parties notify the Administrative Agent of theirintent to reinvest such proceeds in replacement fixed assets, the CreditParties shall only be obligated to make prepayments to the extent that suchproceeds are not so reinvested.  Thefollowing shall not be subject to mandatory prepayment under this paragraph:(1) proceeds of sales of Inventory in the ordinary course of business and (2)the proceeds of any asset disposition or series of asset dispositions otherwisepermitted under Section 6.08 not in excess of $500,000.

##  

### (b) If Holdings or any Borrower issues Stock or any debt security in apublic offering or in a private placement underwritten, placed or initiallypurchased by an investment bank, no later than the Business Day following thedate of receipt of the proceeds thereof, all Borrowers (in the case of anissuance by Holdings) or the issuing Borrower shall prepay the Loans in anamount equal to all such proceeds, net of underwriting discounts andcommissions and other reasonable costs and expenses (including legal fees) paidto non-Affiliates in connection therewith; *provided*, that no such prepayment shall berequired with respect to an amount equal to such proceeds that (A) are receivedpursuant to any employee or stock option plan, (B) are received in

 

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### connection with any refinancing of Indebtedness or (C) are required toprepay loans and other extensions of credit under the First Lien Facilities.

###  

### (c) The Borrowers shall deliver to the Administrative Agent, at the time ofeach prepayment required under this Section, (i) a certificate signed by aFinancial Officer of such Borrower setting forth in reasonable detail thecalculation of the amount of such prepayment and (ii) to the extentpracticable, at least three days prior written notice of such prepayment.  Each notice of prepayment shall specify theprepayment date and the Type of each Loan being prepaid and the principalamount of each Loan (or portion thereof) to be prepaid.  All prepayments of Borrowings under thisSection shall be subject to Section 2.15, but otherwise shall bewithout premium or penalty, and shall be accompanied by accrued and unpaidinterest on the principal amount to be prepaid to but excluding the date ofpayment.

###  

## **SECTION 2.13****.  ***ReserveRequirements; Change in Circumstances*****.  (a) Notwithstanding any other provision of this Agreement, if any Change inLaw shall impose, modify or deem applicable any reserve, special deposit orsimilar requirement against assets of, deposits with or for the account of orcredit extended by any Lender (except any such reserve requirement which isreflected in the Adjusted LIBO Rate) or shall impose on such Lender or theLondon interbank market any other condition affecting this Agreement orEurodollar Loans made by such Lender, and the result of any of the foregoingshall be to increase the cost to such Lender of making or maintaining anyEurodollar Loan or to reduce the amount of any sum received or receivable bysuch Lender hereunder (whether of principal, interest or otherwise) by anamount deemed by such Lender to be material, then the Borrowers shall pay tosuch Lender upon demand such additional amount or amounts as will compensatesuch Lender for such additional costs incurred or reduction suffered.

##  

### (b) If any Lender shall have determined that any Change in Law regardingcapital adequacy has or would have the effect of reducing the rate of return onsuch Lender’s capital or on the capital of such Lender’s holding company, ifany, as a consequence of this Agreement or the Loans made by such Lenderpursuant hereto to a level below that which such Lender or such Lender’sholding company could have achieved but for such Change in Law (taking intoconsideration such Lender’s policies and the policies of such Lender’s holdingcompany with respect to capital adequacy) by an amount deemed by such Lender tobe material, then from time to time the Borrowers shall pay to such Lender suchadditional amount or amounts as will compensate such Lender or such Lender’sholding company for any such reduction suffered.

###  

### (c)  Acertificate of a Lender setting forth a reasonably detailed calculation of theamount or amounts necessary to compensate such Lender or its holding company,as applicable, as specified in paragraph (a) or (b) of thisSection shall be delivered to the Borrowers and shall be conclusive absentmanifest error.  The Borrowers shall paysuch Lender the amount shown as due on any such certificate delivered by itwithin 10 days after its receipt of the same.

 

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### (d) Failure or delay on the part of any Lender to demand compensation forany increased costs or reduction in amounts received or receivable or reductionin return on capital shall not constitute a waiver of such Lender’s right todemand such compensation; *provided* that the Borrowers shall be underno obligation to compensate any Lender under paragraph (a) or (b) of thisSection with respect to increased costs or reductions with respect to anyperiod prior to the date that is 120 days prior to such request if such Lenderknew or could reasonably have been expected to know of the circumstances givingrise to such increased costs or reductions and of the fact that suchcircumstances would result in a claim for increased compensation by reason ofsuch increased costs or reductions; *provided further* that the foregoing limitationshall not apply to any increased costs or reductions arising out of theretroactive application of any Change in Law within such 120-day period.  The protection of this Section shall beavailable to each Lender regardless of any possible contention of theinvalidity or inapplicability of the Change in Law that shall have occurred orbeen imposed.

###  

## **SECTION 2.14****.  ***Change inLegality*****. (a)  Notwithstanding any otherprovision of this Agreement, if any Change in Law shall make it unlawfulfor any Lender to make or maintain any Eurodollar Loan or to give effect to itsobligations as contemplated hereby with respect to any Eurodollar Loan, then,by written notice to the Borrowers and to the Administrative Agent:

##  

#### (i)  such Lender may declare that Eurodollar Loans will not thereafter(for the duration of such unlawfulness) be made by such Lender hereunder (or becontinued for additional Interest Periods and ABR Loans will not thereafter(for such duration) be converted into Eurodollar Loans), whereupon any requestfor a Eurodollar Borrowing (or to convert an ABR Borrowing to a EurodollarBorrowing or to continue a Eurodollar Borrowing for an additional InterestPeriod) shall, as to such Lender only, be deemed a request for an ABR Loan (ora request to continue an ABR Loan as such for an additional Interest Period orto convert a Eurodollar Loan into an ABR Loan, as the case may be), unless suchdeclaration shall be subsequently withdrawn; and

####  

#### (ii)  such Lender may require that all outstanding Eurodollar Loans madeby it be converted to ABR Loans, in which event all such Eurodollar Loans shallbe automatically converted to ABR Loans as of the effective date of such noticeas provided in paragraph (b) of this Section.

####  

In the event any Lender shall exercise its rightsunder clause (i) or (ii) above, all payments and prepayments ofprincipal that would otherwise have been applied to repay the Eurodollar Loansthat would have been made by such Lender or the converted Eurodollar Loans ofsuch Lender shall instead be applied to repay the ABR Loans made by such Lenderin lieu of, or resulting from the conversion of, such Eurodollar Loans.

 

### (b) For purposes of this Section, a notice to the Borrowers by any Lendershall be effective as to each Eurodollar Loan made by such Lender, if lawful,on the last day of the Interest Period then applicable to such Eurodollar Loan;in all other cases such notice shall be effective on the date of receipt by theBorrowers.

 

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## **SECTION 2.15****.  ***Indemnity*****.  Each Borrower shall, jointly and severally,indemnify each Lender against (a) any loss, expense or liability that suchLender may sustain or incur as a consequence of any event, other than a defaultby such Lender in the performance of its obligations hereunder, which resultsin (i) such Lender receiving or being deemed to receive any amount onaccount of the principal of any Eurodollar Loan prior to the end of theInterest Period in effect therefor, (ii) the conversion of any EurodollarLoan to an ABR Loan, or the conversion of the Interest Period with respect toany Eurodollar Loan, in each case other than on the last day of the InterestPeriod in effect therefor, or (iii) any Eurodollar Loan to be made by suchLender (including any Eurodollar Loan to be made pursuant to a conversion orcontinuation under Section 2.10) not being made after notice of such Loanshall have been given by any Borrower hereunder (any of the foregoing eventsreferred to in this clause (a) being called a ***“BreakageEvent”***) or (b) any expense that such Lender may sustain or incuras a consequence of any default in the making of any payment or prepaymentrequired to be made hereunder.  In thecase of any Breakage Event, such loss shall include an amount equal to the excess,as reasonably determined by such Lender, of (i) its cost of obtainingfunds for the Eurodollar Loan that is the subject of such Breakage Event forthe period from the date of such Breakage Event to the last day of the InterestPeriod in effect (or that would have been in effect) for such Loan over(ii) the amount of interest likely to be realized by such Lender inredeploying the funds released or not utilized by reason of such Breakage Eventfor such period.  A certificate of anyLender setting forth any amount or amounts which such Lender is entitled toreceive pursuant to this Section shall be delivered to the Borrowers andshall be conclusive absent manifest error.

##  

## **SECTION 2.16****.  ***Pro RataTreatment*****. Except as required under Section 2.14, each Borrowing shall beallocated pro rata among the Lenders in accordance with their respectiveCommitments and each payment or prepayment of principal of any Borrowing, eachpayment of interest on the Loans and each conversion of any Borrowing to orcontinuation of any Borrowing as a Borrowing of any Type shall be allocated prorata among the Lenders in accordance with the respective principal amounts oftheir outstanding Loans.  Each Lenderagrees that in computing such Lender’s portion of any Borrowing to be madehereunder, the Administrative Agent may, in its discretion, round each Lender’spercentage of such Borrowing to the next higher or lower whole dollar amount.

##  

## **SECTION 2.17****.  ***Sharing ofSetoffs*****. Each Lender agrees that if it shall, through the exercise of a right ofbanker’s lien, setoff or counterclaim against any Borrower or any other CreditParty, or pursuant to a secured claim under Section 506 of Title 11of the United States IRC or other security or interest arising from, or in lieuof, such secured claim, received by such Lender under any applicablebankruptcy, insolvency or other similar law or otherwise, or by any othermeans, obtain payment (voluntary or involuntary) in respect of any Loan as aresult of which the unpaid principal portion of its Loan shall beproportionately less than the unpaid principal portion of the Loan of any otherLender, it shall be deemed simultaneously to have purchased from such otherLender at face value, and shall promptly pay to such other Lender the purchaseprice for, a participation in the Loan of such other Lender, so that theaggregate unpaid principal amount of the Loan and participations in Loans heldby each Lender shall be in the same

 

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## proportion to the aggregate unpaid principal amount of all Loans thenoutstanding as the principal amount of its Loan prior to such exercise ofbanker’s lien, setoff or counterclaim or other event was to the principalamount of all Loans outstanding prior to such exercise of banker’s lien, setoffor counterclaim or other event; *provided,however*, that if any such purchase or purchases or adjustments shallbe made pursuant to this Section and the payment giving rise thereto shallthereafter be recovered, such purchase or purchases or adjustments shall berescinded to the extent of such recovery and the purchase price or prices oradjustment restored without interest. Each Borrower expressly consents to the foregoing arrangements and agreesthat any Lender holding a participation in a Loan deemed to have been sopurchased may exercise any and all rights of banker’s lien, setoff orcounterclaim with respect to any and all moneys owing by such Borrower to suchLender by reason thereof as fully as if such Lender had made a Loan directly tosuch Borrower in the amount of such participation.

##  

## **SECTION 2.18****.  ***Payments*****.  (a) The Borrowers shall make each payment (including principal of orinterest on any Borrowing or any fees or other amounts) hereunder and under anyother Loan Document not later than 12:00 noon, New York City time, onthe date when due in immediately available Dollars, without setoff, defense orcounterclaim.  Each such payment shallbe made to the Administrative Agent at its principal office or such otheroffice as the Administrative Agent may designate in writing.

##  

### (b) Except as otherwise expressly provided herein, whenever any payment(including principal of or interest on any Borrowing or any fees or otheramounts) hereunder or under any other Loan Document shall become due, orotherwise would occur, on a day that is not a Business Day, such payment may bemade on the next succeeding Business Day, and such extension of time shall insuch case be included in the computation of interest or fees, if applicable.

###  

### (c) If the Administrative Agent pays any amount to a Lender under thisAgreement in the belief or expectation that a related payment has been or willbe received by the Administrative Agent from the Borrowers and such relatedpayment is not received by the Administrative Agent, then the AdministrativeAgent shall be entitled to recover such amount from such Lender on demandwithout setoff, counterclaim or deduction of any kind.

###  

### (d) If the Administrative Agent determines at any time that any amountreceived by the Administrative Agent under this Agreement must be returned to aBorrower or paid to any other Person pursuant to any insolvency law orotherwise, then, notwithstanding any other term or condition of this Agreementor any other Loan Document, the Administrative Agent will not be required todistribute any portion thereof to any Lender. In addition, each Lender will repay to the Administrative Agent ondemand any portion of such amount that the Administrative Agent has distributedto such Lender, together with interest at such rate, if any, as theAdministrative Agent is required to pay to such Borrower or such other Person,without setoff, counterclaim or deduction of any kind.

 

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## **SECTION 2.19****.  ***Taxes*****.  (a) Any and all payments by or on account of any obligation of any Borroweror any other Credit Party hereunder or under any other Loan Document shall bemade free and clear of and without deduction for any Indemnified Taxes or OtherTaxes; ***provided***that if a Borrower or any other Credit Party shall be required to deduct anyIndemnified Taxes or Other Taxes from such payments, then (i) the sumpayable shall be increased as necessary so that after making all requireddeductions (including deductions applicable to additional sums payable underthis Section) the Administrative Agent or Lender (as the case may be) receivesan amount equal to the sum it would have received had no such deductions beenmade, (ii) such Borrower or such Credit Party shall make such deductionsand (iii) such Borrower or such Credit Party shall pay the full amount deductedto the relevant Governmental Authority in accordance with applicable law.

##  

### (b) In addition, the Borrowers shall pay any Other Taxes to the relevantGovernmental Authority in accordance with applicable law.

###  

### (c) The Borrowers shall indemnify the Administrative Agent and each Lender,within 10 days after written demand therefor, for the full amount of anyIndemnified Taxes or Other Taxes paid by the Administrative Agent or suchLender, as the case may be, on or with respect to any payment by or on accountof any obligation of any Borrower or any other Credit Party hereunder or underany other Loan Document (including Indemnified Taxes or Other Taxes imposed orasserted on or attributable to amounts payable under this Section) and anypenalties, interest and reasonable expenses arising therefrom or with respectthereto, whether or not such Indemnified Taxes or Other Taxes were correctly orlegally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of suchpayment or liability delivered to the Borrowers by a Lender, or by theAdministrative Agent on behalf of itself or a Lender, shall be conclusiveabsent manifest error.

###  

### (d) As soon as practicable after any payment of Indemnified Taxes or OtherTaxes by any Borrower or any other Credit Party to a Governmental Authority,such Borrower shall deliver to the Administrative Agent the original or acertified copy of a receipt issued by such Governmental Authority evidencingsuch payment, a copy of the return reporting such payment or other evidence ofsuch payment reasonably satisfactory to the Administrative Agent.

###  

### (e) Any Foreign Lender that is entitled to an exemption from or reduction ofwithholding tax under the law of the jurisdiction in which a Borrower islocated, or any treaty to which such jurisdiction is a party, with respect topayments under this Agreement shall deliver to such Borrower (with a copy tothe Administrative Agent), at the time or times prescribed by applicable law,such properly completed and executed documentation prescribed by applicable lawor reasonably requested by such Borrower as will permit such payments to bemade without withholding or at a reduced rate.

###  

## **SECTION 2.20****.  ***Assignment ofLoans Under Certain Circumstances; Duty to Mitigate*****.  (a) In the event (i) any Lender delivers a certificate requestingcompensation pursuant to Section 2.13, (ii) any Lender delivers anotice described in Section 2.14,

 

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## (iii) any Borrower is required to pay any additional amount to anyLender or any Governmental Authority on account of any Lender pursuant toSection 2.19 or (iv) any Lender refuses to consent to any amendment,waiver or other modification of any Loan Document requested by the Borrowersthat requires the consent of a greater percentage of the Lenders than theRequired Lenders and such amendment, waiver or other modification is consentedto by the Required Lenders, the Borrowers may, at their expense and effort(including with respect to the processing and recordation fee referred to inSection 9.04(b)), upon notice to such Lender and the Administrative Agent,require such Lender to transfer and assign, without recourse (in accordancewith and subject to the restrictions contained in Section 9.04), all ofits interests, rights and obligations under this Agreement to an assignee thatshall assume such assigned obligations (which assignee may be another Lender,if a Lender accepts such assignment); *provided*that (x) such assignment shall not conflict with any law, rule orregulation or order of any court or other Governmental Authority havingjurisdiction, (y) the Borrowers shall have received the prior written consentof the Administrative Agent, which consent shall not unreasonably be withheldor delayed, and (z) the Borrowers or such assignee shall have paid to theaffected Lender in immediately available funds an amount equal to the sum ofthe principal of and interest accrued to the date of such payment on theoutstanding Loans of such Lender, plus all other amounts accrued for theaccount of such Lender hereunder (including any amounts underSections 2.13 and 2.15); ***provided**********further*** that, if prior to any such transferand assignment the circumstances or event that resulted in such Lender’s claimfor compensation under Section 2.13 or notice under Section 2.14 orthe amounts paid pursuant to Section 2.19, as the case may be, cease tocause such Lender to suffer increased costs or reductions in amounts receivedor receivable or reduction in return on capital, or cease to have theconsequences specified in Section 2.14, or cease to result in amountsbeing payable under Section 2.19, as the case may be (including as aresult of any action taken by such Lender pursuant to paragraph (b) ofthis Section), or if such Lender shall waive its right to claim furthercompensation under Section 2.13 in respect of such circumstances or eventor shall withdraw its notice under Section 2.14 or shall waive its rightto further payments under Section 2.19 in respect of such circumstances orevent or shall consent to the proposed amendment, waiver, consent or othermodification, as the case may be, then such Lender shall not thereafter berequired to make any such transfer and assignment hereunder.  Each Lender hereby grants to theAdministrative Agent an irrevocable power of attorney (which power is coupledwith an interest) to execute and deliver, on behalf of such Lender as assignor,any Assignment and Acceptance necessary to effectuate any assignment of suchLender’s interests hereunder in the circumstances contemplated by thisparagraph.

##  

### (b) If (i) any Lender shall request compensation underSection 2.13, (ii) any Lender delivers a notice described inSection 2.14 or (iii) any Borrower is required to pay any additionalamount to any Lender or any Governmental Authority on account of any Lenderpursuant to Section 2.19, then such Lender shall use reasonable efforts (whichshall not require such Lender to incur an unreimbursed loss or unreimbursedcost or expense or otherwise take any action inconsistent with its internalpolicies or legal or regulatory restrictions or suffer any disadvantage orburden deemed by it to be significant) (x) to file any certificate ordocument reasonably requested in writing by the Borrowers or (y) to assignits rights and delegate and transfer its obligations hereunder to

 

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### another of its offices, branches or affiliates, if such filing orassignment would reduce its claims for compensation under Section 2.13 orenable it to withdraw its notice pursuant to Section 2.14 or would reduceamounts payable pursuant to Section 2.19, as the case may be, in the future.  The Borrowers hereby agrees to pay allreasonable costs and expenses incurred by any Lender in connection with anysuch filing or assignment, delegation and transfer.

###  

# ***ARTICLE III***

# *** ***

# ***Representations and Warranties***

# *** ***

To induce the Lenders to make the Loans, theCredit Parties executing this Agreement, jointly and severally, make thefollowing representations and warranties to the Administrative Agent, theCollateral Agent and each Lender with respect to all Credit Parties, each andall of which shall survive the execution and delivery of this Agreement.

 

## **SECTION 3.01****.  *Corporate Existence; Compliance with Law; FEIN***.  Each Credit Party (a) is a corporation,limited liability company or limited partnership duly organized, validlyexisting and in good standing under the laws of its respective jurisdiction ofincorporation or organization and each Credit Party’s name as it appears inofficial filings in its state of incorporation or organization, organizationtype, organization number, if any, issued by its state incorporation ororganization, and federal employer identification number are set forth on Schedule 3.01;(b) is duly qualified to conduct business and is in good standing in each otherjurisdiction where its ownership or lease of property or the conduct of itsbusiness requires such qualification, except where the failure to be soqualified could not reasonably be expected to have a Material Adverse Effect;(c) has the requisite power and authority and the legal right to own, pledge,mortgage or otherwise encumber and operate its properties, to lease theproperty it operates under lease and to conduct its business as now conductedor proposed to be conducted; (d) subject to specific representations regardingEnvironmental Laws, has all licenses, permits, consents or approvals from orby, and has made all material filings with, and has given all notices to, allGovernmental Authorities having jurisdiction, to the extent required for suchownership, operation and conduct, except where the failure to do so could notreasonably be expected to have a Material Adverse Effect; (e) is in compliancewith its charter and bylaws or partnership or operating agreement, asapplicable; and (f) subject to specific representations set forth hereinregarding ERISA, Environmental Laws, tax and other laws, is in compliance withall applicable provisions of law, except where the failure to comply,individually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect.

##  

## **SECTION 3.02****.  *Executive Offices, Collateral Locations.***  As of the Closing Date, the current locationof each Credit Party’s chief executive office and the warehouses and premisesat which any Collateral with a fair market value in excess of $20,000 islocated are set forth on Schedule 3.02, none of such locations haschanged within the one (1) month preceding the Closing Date and each CreditParty has only one state of incorporation or organization.

 

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## **SECTION 3.03****.  ***CorporatePower, Authorization, Enforceable Obligations.*****  The execution, delivery and performance byeach Credit Party of the Loan Documents to which it is a party and the creationof all Liens provided for therein: (a) are within such Person’s power; (b) havebeen duly authorized by all necessary corporate, limited liability company orlimited partnership action, as applicable; (c) do not contravene any provisionof such Person’s charter, bylaws or partnership or operating agreement, asapplicable; (d) do not violate any law or regulation, or any order or decree ofany court or Governmental Authority; (e) do not conflict with or result in thebreach or termination of, constitute a default under or accelerate or permitthe acceleration of any performance required by, any indenture, mortgage, deedof trust, lease, agreement or other instrument to which such Person is a partyor by which such Person or any of its property is bound; (f) do not result inthe creation or imposition of any Lien upon any of the property of such Person,other than those in favor of Administrative Agent, on behalf of itself and theLenders, pursuant to the Loan Documents; and (g) do not require the consent orapproval of any Governmental Authority or any other Person.  Each of the Loan Documents shall be dulyexecuted and delivered by each Credit Party that is a party thereto and eachsuch Loan Document shall constitute a legal, valid and binding obligation ofsuch Credit Party enforceable against it in accordance with its terms, exceptas enforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

##  

## ***SECTION 3.04******. ******Financial Statements.*** ***Holdingshas heretofore furnished to the Lenders its consolidated balance sheets andrelated statements of operations, stockholders’ equity and cash flows (i) as ofand for the fiscal year ended December 31, 2003, audited by andaccompanied by the opinion of Ernst & Young LLP, independent publicaccountants, and (ii) as of and for the fiscal quarter and the portion of thefiscal year ended March 31, 2004, certified by its chief financialofficer.  Such financial statements wereprepared in accordance with GAAP (other than, in the case of quarterlyfinancial statements, the absence of footnotes and subject to the normalyear-end adjustments) and present fairly in all material respects theconsolidated financial condition and results of operations and cash flows ofHoldings and its consolidated Subsidiaries as of such dates and for suchperiods.  Such balance sheets and thenotes thereto disclose all material liabilities, direct or contingent, of theHoldings and its consolidated Subsidiaries as of the dates thereof.***

##  

## **SECTION 3.05****.  *Material Adverse Effect.*** Between December 31, 2003 and theClosing Date: (a) no Credit Party has incurred any obligations, contingent ornoncontingent liabilities, liabilities for Charges, long-term leases or unusualforward or long-term commitments that are not reflected in the financialstatements referred to in Section 3.04 and that, alone or in theaggregate, could reasonably be expected to have a Material Adverse Effect, (b)no material contract, lease or other agreement or instrument has been enteredinto by any Credit Party or has become binding upon any Credit Party’s assetsand to the Borrowers’ knowledge no law or regulation applicable to any CreditParty has been adopted that has had or could reasonably be expected to have aMaterial Adverse Effect, and (c) no Credit Party is in default and to the bestof the Borrowers’ knowledge no third party is in default under any materialcontract, lease or other

 

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## agreement or instrument, that alone or in the aggregate couldreasonably be expected to have a Material Adverse Effect.  Since December 31, 2003, no event hasoccurred, that alone or together with other events, could reasonably be expectedto have a Material Adverse Effect.

##  

## ***SECTION 3.06******. ******Ownership of Property; Liens******.  As of the Closing Date, thereal estate (“******Real Estate******”) listed on***Schedule 3.06)***constitutes all of the real property owned, leased, subleased, or usedby any Credit Party.  Each Credit Partyowns good and marketable fee simple title to all of its owned Real Estate, andvalid and marketable leasehold interests in all of its leased Real Estate, allas described on***Schedule 3.06***, and, if requested by Administrative Agent, copies of all such leasesor a summary of terms thereof reasonably satisfactory to Administrative Agenthave been delivered to the Administrative Agent. ***Schedule 3.06***further describes any Real Estate with respect to which any CreditParty is a lessor, sublessor or assignor as of the Closing Date.  Each Credit Party also has good andmarketable title to, or valid leasehold interests in, all of its personalproperty and assets.  As of the ClosingDate, none of the properties and assets of any Credit Party are subject to anyLiens other than Permitted Encumbrances and Liens in existence on the datehereof and summarized on Schedule 6.07, and there are no facts,circumstances or conditions known to any Credit Party that may result in anyLiens (including Liens arising under Environmental Laws) other than PermittedEncumbrances.  Each Credit Party hasreceived all deeds, assignments, waivers, consents, nondisturbance andattornment or similar agreements, bills of sale and other documents, and hasduly effected all recordings, filings and other actions necessary to establish,protect and perfect such Credit Party’s right, title and interest in and to allsuch Real Estate and other properties and assets.  Schedule 3.06 also describes any purchase options,rights of first refusal or other similar contractual rights pertaining to anyReal Estate.  As of the Closing Date, noportion of any Credit Party’s Real Estate has suffered any material damage byfire or other casualty loss that has not heretofore been repaired and restoredin all material respects to its original condition or otherwise remedied.  As of the Closing Date, all material permitsrequired to have been issued or appropriate to enable the Real Estate to belawfully occupied and used for all of the purposes for which it is currentlyoccupied and used have been lawfully issued and are in full force and effect.***

##  

## ***SECTION 3.07******. ******Labor Matters******.  Except as set forth on Schedule 3.07,as of the Closing Date (a) no strikes or other material labor disputes againstany Credit Party are pending or, to any Credit Party’s knowledge, threatened;(b) hours worked by and payment made to employees of each Credit Partymaterially comply with the Fair Labor Standards Act and each other federal,state, local or foreign law applicable to such matters; (c) all payments duefrom any Credit Party for employee health and welfare insurance have been paidor accrued as a liability on the books of such Credit Party; (d) no CreditParty is a party to or bound by any collective bargaining agreement, managementagreement, consulting agreement, employment agreement, bonus, restricted stock,stock option, or stock appreciation plan or agreement or any similar plan,agreement or arrangement (and, if requested by the Administrative Agent, true andcomplete copies of any agreements described on Schedule 3.07 havebeen delivered to the Administrative Agent); (e) there is no organizingactivity involving any Credit Party pending or, to any Credit Party’sknowledge, threatened by any labor union or group of***

 

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*** ***

## ***employees; (f) there are no representationproceedings pending or, to any Credit Party’s knowledge, threatened with theNational Labor Relations Board, and no labor organization or group of employeesof any Credit Party has made a pending demand for recognition; and (g) thereare no material complaints or charges against any Credit Party pending or, tothe knowledge of any Credit Party, threatened to be filed with any GovernmentalAuthority or arbitrator based on, arising out of, in connection with, orotherwise relating to the employment or termination of employment by any CreditParty of any individual.***

##  

## ***SECTION 3.08******. ******Ventures, Subsidiaries and Affiliates;Outstanding Stock and Indebtedness******.  Except as set forth on Schedule 3.08,as of the Closing Date, no Credit Party has any Subsidiaries, is engaged in anyjoint venture or partnership with any other Person, or is an Affiliate of anyother Person.  All of the issued andoutstanding Stock of each Credit Party (other than Holdings) is owned by eachof the Stockholders and in the amounts set forth on Schedule 3.08.  Except as set forth on Schedule 3.08,there are no outstanding rights to purchase, options, warrants or similarrights or agreements pursuant to which any Credit Party may be required toissue, sell, repurchase or redeem any of its Stock or other equity securitiesor any Stock or other equity securities of its Subsidiaries.  All outstanding Indebtedness and GuaranteedIndebtedness of each Credit Party as of the Closing Date (except for theObligations) is described in Section 6.03 (including Schedule 6.03).***

##  

## ***SECTION 3.09******. ******Government Regulation.******  No Credit Party is an“investment company” or an “affiliated person” of, or “promoter” or “principalunderwriter” for, an “investment company”, as such terms are defined in theInvestment Company Act of 1940.  NoCredit Party is subject to regulation under the Public Utility Holding CompanyAct of 1935, the Federal Power Act, or any other federal or state statute thatrestricts or limits its ability to incur Indebtedness or to perform itsobligations hereunder. The making of the Loans by Lenders to Borrowers, theapplication of the proceeds thereof and repayment thereof and the consummationof the Transactions will not violate any provision of any such statute or anyrule, regulation or order issued by the Securities and Exchange Commission.***

##  

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

 

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## ***SECTION 3.11******. ******Taxes******.  All federal and othermaterial tax returns, reports and statements, including information returns,required by any Governmental Authority to be filed by any Credit Party havebeen filed with the appropriate Governmental Authority, and all Charges havebeen paid prior to the date on which any fine, penalty, interest or late chargemay be added thereto for nonpayment thereof (excluding (i) Charges or otheramounts being contested in accordance with Section 5.02(b) and (ii) anyCharges discharged in the Chapter 11 Cases or payable over time in accordancewith the Plan of Reorganization), unless the failure to so file or pay wouldnot reasonably be expected to result in fines, penalties or interest in excessof $100,000 in the aggregate.  Properand accurate amounts have been withheld by each Credit Party from itsrespective employees for all periods in compliance in all material respectswith all applicable federal, state, local and foreign laws and suchwithholdings have been timely paid to the respective Governmental Authorities(except to the extent discharged in the Chapter 11 Cases or payable over timein accordance with the Plan of Reorganization).  Schedule 3.11 sets forth as of the Closing Date thosetaxable years for which any Credit Party’s tax returns are currently beingaudited by the IRS or any other applicable Governmental Authority, and anyassessments or threatened assessments in connection with such audit, or otherwisecurrently outstanding.  Except asdescribed on Schedule 3.11, as of the Closing Date, no Credit Partyhas executed or filed with the IRS or any other Governmental Authority anyagreement or other document extending, or having the effect of extending, theperiod for assessment or collection of any Charges for any open periods.  Except as set forth on Schedule 3.11,none of the Credit Parties and their respective predecessors are liable for anyCharges: (a) under any agreement (including any tax sharing agreements) or (b)to each Credit Party’s knowledge, as a transferee.  As of the Closing Date, no Credit Party has agreed or beenrequested to make any adjustment under IRC Section 481(a), by reason of achange in accounting method or otherwise, which would reasonably be expected tohave a Material Adverse Effect.***

##  

## ***SECTION 3.12******. ******ERISA******.****** ******(a)  Schedule 3.12lists, as of the Closing Date, (i) all ERISA Affiliates and (ii) all Plans,including Title IV Plans, Multiemployer Plans, and all Retiree Welfare Plans.  Copies of all such listed Plans, ifrequested by the Administrative Agent, together with a copy of the latest formIRS/DOL 5500-series, as applicable, for each such Plan, have been delivered tothe Administrative Agent.  Except withrespect to Multiemployer Plans, each Qualified Plan has been determined by theIRS to qualify under Section 401 of the IRC, the trusts created thereunderhave been determined to be exempt from tax under the provisions ofSection 501 of the IRC, and nothing has occurred that would cause the lossof such qualification or tax exempt status. Each Plan is in compliance in all respects with the applicableprovisions of ERISA, the IRC and its terms, including the timely filing of allreports required under the IRC or ERISA, except for non-compliance which wouldnot have a Material Adverse Effect. Neither any Credit Party nor ERISA Affiliate has failed to make anymaterial contribution or pay any material amount due as required by either Section 412of the IRC or Section 302 of ERISA or the terms of any such Plan, exceptfor non-compliance which would not have a Material Adverse Effect.  No “prohibited transaction”, as defined inSection 406 of ERISA and Section 4975 of the IRC, has occurred withrespect to any Plan, that would subject any Credit Party to a tax on prohibitedtransactions imposed by Section 502(i) of ERISA or Section 4975 ofthe IRC, which would have a Material Adverse Effect.***

 

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### ***(b) Except as set forth on Schedule 3.12 or in Holdings’financial statements provided to the Lenders from time to time or as would nothave a Material Adverse Effect: (i) no Title IV Plan has any material UnfundedPension Liability; (ii) no ERISA Event has occurred or is reasonably expected tooccur; (iii) there are no pending, or to the knowledge of any Credit Party,threatened material claims (other than claims for benefits in the normalcourse), sanctions, actions or lawsuits, asserted or instituted against anyPlan or any Credit Party or ERISA Affiliate as fiduciary or sponsor of anyPlan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonablyexpects to incur any material liability as a result of a complete or partialwithdrawal from a Multiemployer Plan; (v) within the last five years no TitleIV Plan of any Credit Party or ERISA Affiliate has been terminated, whether ornot in a “standard termination” as that term is used in Section 4041 ofERISA, nor has any Title IV Plan of any Credit Party or any ERISA Affiliate(determined at any time within the last five years) with material UnfundedPension Liabilities been transferred outside of the “controlled group” (withinthe meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISAAffiliate (determined at such time); and (iv) no Credit Party or ERISAAffiliate has any material liability with respect to post-retirement benefitobligations within the meaning of the FASB 106.***

###  

## ***SECTION 3.13******. ******Litigation******.  No action, claim, lawsuit,demand, investigation or proceeding is now pending or, to the knowledge of anyCredit Party, threatened against any Credit Party, before any GovernmentalAuthority or before any arbitrator or panel of arbitrators (collectively, “******Litigation******”), (a) that challenges any Credit Party’s right or power to enter intoor perform any of its obligations under the Loan Documents to which it is aparty, or the validity or enforceability of any Loan Document or any actiontaken thereunder, or (b) that has a reasonable risk of being determinedadversely to any Credit Party and that, if so determined, could reasonably beexpected to have a Material Adverse Effect. Except as set forth on Schedule 3.13, as of the Closing Datethere is no Litigation pending or, to any Credit Party’s knowledge, threatened,that seeks damages in excess of $250,000 or injunctive relief against, oralleges criminal misconduct of, any Credit Party.***

##  

## ***SECTION 3.14******. ******Brokers******.  Except as set forth on Schedule 3.14,no broker or finder brought about the obtaining, making or closing of the Loansor the Transactions, and no Credit Party or Affiliate thereof has anyobligation to any Person in respect of any finder’s or brokerage fees inconnection therewith.***

##  

## ***SECTION 3.15******. ******Intellectual Property******.  As of the Closing Date, eachCredit Party owns or has rights to use all Intellectual Property necessary tocontinue to conduct its business as now conducted by it or presently proposedto be conducted by it. Each Patent, Trademark, and registered Copyrightexisting as of the Closing Date and each material License in effect as of theClosing Date is listed, together with application or registration numbers, asapplicable, on Schedule 3.15. To its knowledge, each Credit Party conducts its business and affairswithout infringement of or interference with any Intellectual Property of anyother Person in any material respect. Except as set forth on Schedule 3.15, no Credit Party isaware of any material infringement claim by any other Person with respect toany Intellectual Property.***

 

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## ***SECTION 3.16******. ******Full Disclosure******.  No information contained inthis Agreement, any of the other Loan Documents, the financial statements orother written reports from time to time prepared by any Credit Party anddelivered hereunder or any written statement prepared by any Credit Party andfurnished by or on behalf of any Credit Party to the Administrative Agent orany Lender pursuant to the terms of this Agreement contains or will contain anyuntrue statement of a material fact or omits or will omit to state a materialfact necessary to make the statements contained herein or therein, taken as awhole, not misleading in light of the circumstances under which they were made.***

##  

## ***SECTION 3.17******. ******Environmental Matters******.  (a)  Except as set forth on Schedule 3.17, as of theClosing Date: (i) the Real Estate is free of contamination from any HazardousMaterial except for such contamination that would not adversely impact thevalue or marketability of such Real Estate and that would not result inEnvironmental Liabilities that could reasonably be expected to exceed $100,000;(ii) no Credit Party has caused or suffered to occur any material Release ofHazardous Materials on, at, in, under, above, to, from or about any of its RealEstate; (iii) the Credit Parties are and have been in compliance with allEnvironmental Laws, except for such noncompliance that would not result inEnvironmental Liabilities which could reasonably be expected to exceed$100,000; (iv) the Credit Parties have obtained, and are in compliance with,all Environmental Permits required by Environmental Laws for the operations oftheir respective businesses as presently conducted or as proposed to beconducted, except where the failure to so obtain or comply with such EnvironmentalPermits would not result in Environmental Liabilities that could reasonably beexpected to exceed $100,000, and all such Environmental Permits are valid,uncontested and in good standing; (v) no Credit Party is involved in operationsor knows of any facts, circumstances or conditions, including any Releases ofHazardous Materials, that are likely to result in any Environmental Liabilitiesof such Credit Party which could reasonably be expected to exceed $100,000;(vi) there is no Litigation arising under or related to any Environmental Laws,Environmental Permits or Hazardous Material that seeks damages, penalties,fines, costs or expenses in excess of $100,000 or injunctive relief against, orthat alleges criminal misconduct by, any Credit Party; (vii) no notice has beenreceived by any Credit Party identifying it as a “potentially responsibleparty” or requesting information under CERCLA or analogous state statutes, andto the knowledge of the Credit Parties, there are no facts, circumstances orconditions that may result in any Credit Party being identified as a“potentially responsible party” under CERCLA or analogous state statutes; and(viii) the Credit Parties have made available to the Administrative Agentcopies of all existing material environmental reports, reviews and audits andall written information pertaining to actual or potentially materialEnvironmental Liabilities, in each case relating to any Credit Party.***

##  

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

 

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## ***SECTION 3.18******. ******Insurance******.  Schedule 3.18lists all insurance policies of any nature maintained, as of the Closing Date,for current occurrences by each Credit Party, as well as a summary of the termsof each such policy.***

##  

## ***SECTION 3.19******. ******Deposit and Disbursement Accounts******.  Schedule 3.19lists all banks and other financial institutions at which any Credit Partymaintains deposit or other accounts as of the Closing Date, including anydisbursement accounts, and such Schedule correctly identifies the name,address and telephone number of each depository, the name in which the accountis held, a description of the purpose of the account, and the complete accountnumber therefor.***

##  

## ***SECTION 3.20******. ******Government Contracts.******  Except as set forth on Schedule 3.20,as of the Closing Date, no Credit Party is a party to any contract or agreementwith any Governmental Authority and no Credit Party’s Accounts are subject tothe Federal Assignment of Claims Act (31 U.S.C. Section 3727) or anysimilar state or local law.***

##  

## ***SECTION 3.21******. ******Customer and Trade Relations******.  As of the Closing Date, thereexists no actual or, to the knowledge of any Credit Party, threatenedtermination or cancellation of, or any material adverse modification or changein: the business relationship of any Credit Party with any customer or group ofcustomers whose purchases during the preceding 12 months caused them to beranked among the ten largest customers of such Credit Party; or the businessrelationship of any Credit Party with any supplier essential to its operations.***

##  

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

##  

## ***SECTION 3.23******. ******Solvency******.  Before and after givingeffect to (a) the Loans to be made or incurred on the Closing Date, (b) thedisbursement of the proceeds of such Loans pursuant to the instructions of theBorrowers; (c) the consummation of the Transactions; and (d) the payment andaccrual of all transaction costs in connection with the foregoing, each CreditParty is and will be Solvent.***

##  

## ***SECTION 3.24******. ******Status of Holdings******.  Holdings has not engaged inany trade or business other than holding the Stock of the other Credit Partiesand activities incidental thereto.***

##  

## **SECTION 3.25****.  ***CollateralDocuments*****. The Security Agreement, the Pledge Agreement and the other CollateralDocuments, upon execution and delivery thereof by the parties thereto, will createin favor of the Collateral Agent, for the ratable benefit of the SecuredParties, a legal, valid and enforceable security interest in the Collateral andthe proceeds thereof, and when financing statements in appropriate form arefiled in the jurisdictions specified on Schedule 3.02(a), the Liencreated under the Collateral Documents will constitute a fully perfected Lienon, and security interest in, all right, title and interest of the CreditParties in such Collateral, in each case prior and superior in

 

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## right to any other Person, other than with respect to Liens expresslypermitted by Section 6.07 (including, pursuant to the terms of theIntercreditor Agreement, the First Priority Liens).

##  

# ***ARTICLE IV***

# *** ***

# ***Conditions of Lending***

# *** ***

The obligations of the Lenders to make Loanshereunder are subject to the satisfaction of the following conditions:

 

### (a) The Administrative Agent shall have received a Borrowing Request asrequired by Section 2.03.

###  

### (b) The representations and warranties set forth in Article III and ineach other Loan Document shall be true and correct in all material respects onand as of the Closing Date, except to the extent such representations andwarranties expressly relate to an earlier date.

###  

### (c) The Borrowers and each other Credit Party shall be in compliance withall the terms and provisions set forth herein and in each other Loan Documenton its part to be observed or performed, and at the time of and immediatelyafter such Borrowing, no Default or Event of Default shall have occurred and becontinuing.

###  

### (d) The Administrative Agent shall have received, on behalf of themselvesand the Lenders, a favorable written opinion of Armstrong Teasdale LLP, counselfor the Borrowers, substantially to the effect set forth in Exhibit E,which opinion shall (i) be dated the Closing Date, (ii) beaddressed to the Lenders and the Administrative Agent, and (iii) coversuch other matters relating to the Loan Documents and the Transactions as theAdministrative Agent shall reasonably request. The Borrowers hereby request such counsel to deliver such opinions.

###  

### (e) All legal matters incident to this Agreement, the Borrowings andextensions of credit hereunder and the other Loan Documents shall be satisfactoryto the Lenders and the Administrative Agent.

###  

### (f) The Administrative Agent shall have received (i) a copy of thecertificate or articles of incorporation, including all amendments thereto, ofeach Credit Party, certified as of a recent date by the Secretary of State ofthe State of its organization, and a certificate as to the good standing ofeach Credit Party as of a recent date, from such Secretary of State;(ii) a certificate of the Secretary or Assistant Secretary of each CreditParty dated the Closing Date and certifying (A) that attached thereto is atrue and complete copy of the by-laws of such Credit Party as in effect on theClosing Date and at all times since a date prior to the date of the resolutionsdescribed in clause (B) below, (B) that attached thereto is a trueand complete copy of resolutions duly adopted by the Board of Directors of suchCredit Party authorizing the execution, delivery and performance of the LoanDocuments to which such Person is a party and, in the case of the Borrowers,the borrowings hereunder, and that such resolutions have not been

 

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### modified, rescinded or amended and are in full force and effect,(C) that the certificate or articles of incorporation of such Credit Partyhave not been amended since the date of the last amendment thereto shown on thecertificate of good standing furnished pursuant to clause (i) above, and(D) as to the incumbency and specimen signature of each officer executingany Loan Document or any other document delivered in connection herewith onbehalf of such Credit Party; (iii) a certificate of another officer as tothe incumbency and specimen signature of the Secretary or Assistant Secretaryexecuting the certificate pursuant to clause (ii) above; and(iv) such other documents as the Lenders or the Administrative Agent mayreasonably request.

###  

### (g) The Administrative Agent shall have received a certificate, dated theClosing Date and signed by a Financial Officer of the Borrowers confirmingcompliance with the conditions precedent set forth in paragraphs (b), (c),(l) and (m) of this Article.

###  

### (h) The Administrative Agent shall have received all fees and other amountsdue and payable on or prior to the Closing Date, including, to the extentinvoiced, reimbursement or payment of all out-of-pocket expenses required to bereimbursed or paid by the Borrowers hereunder or under any other Loan Document.

###  

### (i) The Collateral Documents shall have been duly executed by each Personthat is to be a party thereto and shall be in full force and effect on theClosing Date.  The Collateral Agent onbehalf of the Secured Parties shall have a security interest in the Collateralof the type and priority described in each Collateral Document.

###  

### (j) The Collateral Agent shall have received (i) the results of asearch of the Uniform Commercial Code filings (or equivalent filings) made withrespect to the Credit Parties in the States (or other jurisdictions) offormation of such Persons, in which the chief executive office of each suchPerson is located and in the other jurisdictions in which such Persons maintainproperty, in each case as indicated on such Perfection Certificate, togetherwith copies of the financing statements (or similar documents) disclosed bysuch search, and accompanied by evidence satisfactory to the Collateral Agentthat the Liens indicated in any such financing statement (or similar document)would be permitted under Section 6.07 or have been or will becontemporaneously released or terminated and (ii) bailee letters in favor ofthe Collateral Agent with respect to material leased properties of the CreditParties.

###  

### (k) The Administrative Agent shall have received a copy of, or a certificateas to coverage under, the insurance policies required by Section 5.04 andthe applicable provisions of the Collateral Documents, each of which shall beendorsed or otherwise amended to include a customary lender’s loss payableendorsement and to name the Collateral Agent as additional insured, in form andsubstance satisfactory to the Administrative Agent, and non-renewal,cancellation and amendment riders providing thirty days’ advance notice to theCollateral Agent.

###  

### (l) The Administrative Agent shall be satisfied that the Leverage Ratioshall be no more than 5.00 to 1.00 as of June 30, 2004, calculated aftergiving pro forma effect to the Transactions to occur on the Closing Date.

 

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### (m) Immediately after giving effect to the Transactions and the othertransactions contemplated hereby, the Credit Parties shall have outstanding noIndebtedness or preferred stock other than (a) Indebtedness outstandingunder this Agreement, (b) Indebtedness outstanding under the First LienCredit Agreement, (c) the High Yield Notes and (d) Indebtedness set forthon Schedule 6.03.

###  

### (n) The Lenders shall have received the financial statements, certificatesand opinion referred to in Section 3.04, which financial statements shallnot be materially inconsistent with the financial statements or forecastspreviously provided to the Lenders.

###  

### (o) The Lenders shall have received financial projections of Holdings andits Subsidiaries for the years 2004 through 2006, in form and substancesatisfactory to the Administrative Agent.

###  

### (p) All requisite Governmental Authorities and third parties shall haveapproved or consented to the Transactions and the other transactionscontemplated hereby to the extent required, all applicable appeal periods shallhave expired and there shall not be any pending or threatened litigation,governmental, administrative or judicial action that could reasonably beexpected to restrain, prevent or impose burdensome conditions on theTransactions or the other transactions contemplated hereby.

###  

### (q) The Lenders shall be satisfied that the Transactions will not violate(i) any provision of law, statute, rule or regulation applicable to theCredit Parties or the articles of organization or other constitutive documentsof the Credit Parties or any order of any governmental authority or (ii) anyprovision of any indenture or other material instrument or agreement to whichany Credit Party is a party or by which any of them or any of their property isbound.

###  

### (r) The Lenders shall have received, to the extent requested, alldocumentation and other information required by regulatory authorities underapplicable “know your customer” and anti-money laundering rules andregulations, including the USA Patriot Act.

###  

# ***ARTICLE V***

# *** ***

# ***Affirmative Covenants***

# *** ***

Each Credit Party executingthis Agreement jointly and severally agrees as to all Credit Parties that untilthe Commitments have been terminated and the principal of and interest on eachLoan, all fees and all other expenses or amounts then accrued or payable underany Loan Document shall have been paid in full, unless the Required Lendersshall otherwise consent in writing:

 

## ***SECTION 5.01******. ******Maintenance of Existence and Conduct of Business.***  ***EachCredit Party shall:  except as permittedby Section 6.01, do or cause to be done all things necessary to preserveand keep in full force and effect its corporate existence in its jurisdictionof formation or organization, as applicable, and its material rights andfranchises; continue to conduct its business substantially as now conducted oras***

 

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*** ***

## ***otherwise permitted hereunder;  at all times take all reasonable action tomaintain, preserve and protect all of its assets and properties used or usefulin the conduct of its business, and keep the same in good repair, working orderand condition in all material respects (taking into consideration ordinary wearand tear) and from time to time make, or cause to be made, all necessary orappropriate repairs, replacements and improvements thereto consistent withindustry practices; and transact business only in such corporate and tradenames as are set forth on Schedule 5.01.  Notwithstanding the foregoing, in the event that Victordetermines in its commercially reasonable judgment to dissolve ThermadyneReceivables, nothing in this Agreement shall prohibit Victor from taking suchaction.***

##  

## **SECTION 5.02****.  *Payment of Charges.***

##  

### ***(a) Subject to Section 5.02(b), each Credit Party shall pay anddischarge or cause to be paid and discharged promptly all Charges payable byit, including (i) Charges imposed upon it, its income and profits, or any ofits property (real, personal or mixed) and all Charges with respect to tax,social security and unemployment withholding with respect to its employees,(ii) lawful claims for labor, materials, supplies and services or otherwise,and (iii) all storage or rental charges payable to warehousemen or bailees, ineach case, before any thereof shall become past due, except in the case ofclauses (ii) and (iii) where the failure to pay or discharge such Charges wouldnot result in aggregate liabilities in excess of $200,000.***

###  

### ***(b) Each Credit Party may in good faith contest, by appropriate proceedings,the validity or amount of any Charges, Taxes or claims described in Section 5.02(a);******provided******that(i) adequate reserves with respect to such contest are maintained on the booksof such Credit Party, in accordance with GAAP; (ii) no Lien shall be imposed tosecure payment of such Charges in excess of $1,000,000 (other than payments towarehousemen and/or bailees) that is superior to any of the Liens securing theObligations and such contest is maintained and prosecuted continuously and withdiligence and operates to suspend collection or enforcement of such Charges;(iii) none of the Collateral becomes subject to forfeiture or loss as a resultof such contest; and (iv) such Credit Party shall promptly pay or dischargesuch contested Charges, Taxes or claims and all additional charges, interest,penalties and expenses, if any, and shall deliver to the Administrative Agentevidence reasonably acceptable to the Administrative Agent of such compliance,payment or discharge, if such contest is terminated or discontinued adverselyto such Credit Party or the conditions set forth in this Section 5.02(b)are no longer met.***

###  

## ***SECTION 5.03******. ******Financial Statements, Reports, etc.***  ***EachCredit Party shall keep adequate books and records with respect to its businessactivities in which proper entries, reflecting all financial transactions, aremade in accordance with GAAP, and in the case of Holdings, furnish to theAdministrative Agent and each Lender:***

##  

### ***(a) within 30 days after the end of each fiscal month of each fiscal year,its unaudited consolidated (and, for the third fiscal month of each of thefirst three fiscal quarters, unaudited consolidating) balance sheet and relatedstatements of operations and***

 

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*** ***

### ***cash flows (consolidated only) showing thefinancial condition of Holdings and its consolidated Subsidiaries as of theclose of such fiscal month and the results of its operations and the operationsof such Subsidiaries during such fiscal month and the then elapsed portion ofthe fiscal year, and comparative figures for the same periods in theimmediately preceding fiscal year, all certified by a Financial Officer ofHoldings as presenting fairly, in all material respects, the financialcondition and results of operations of Holdings and its consolidatedSubsidiaries on a consolidated basis in accordance with GAAP (other than theabsence of footnotes, and subject to normal year-end adjustments);***

###  

### ***(b) concurrently with any delivery of financial statements under paragraph(a) of this Section, a certificate of a Financial Officer of Holdings opiningon or certifying such statements (i) certifying that no Default or Event ofDefault has occurred or, if such a Default or an Event of Default has occurred,specifying the nature and extent thereof and any corrective action taken orproposed to be taken with respect thereto and (ii) setting forth computationsin reasonable detail satisfactory to the Administrative Agent demonstratingcompliance with the covenant contained in Section 6.10;***

###  

### ***(c) concurrently with any delivery of financial statements under paragraph(a) of this Section with respect to the third fiscal month of each fiscalquarter, a management report (i) describing the operations and financialcondition of Holdings and its Subsidiaries for the quarter then ended and theportion of the current fiscal year then elapsed and (ii) discussing the reasonsfor any significant variations, which information shall be presented inreasonable detail and shall be certified by a Financial Officer of Holdings tothe effect that such information presents fairly, in all material respects, theresults of operations and financial condition of Holdings and its Subsidiariesas at the dates and for the periods indicated;***

###  

### ***(d) promptly after the same become publicly available, copies of allperiodic and other reports, proxy statements and other materials filed byHoldings or any Subsidiary with the Securities and Exchange Commission, or anyGovernmental Authority succeeding to any or all of the functions of saidCommission, or with any national securities exchange, or distributed to itsshareholders, as the case may be;***

###  

### ***(e) promptly after the receipt thereof by Holdings or any Subsidiary, a copyof any final written “management letter” received by any such Person from itscertified public accountants and the management’s response thereto;***

###  

### ***(f) as soon as practicable, copies of all material written notices given orreceived by any Credit Party with respect to the First Lien Facilities or anySubordinated Debt or Stock of such Person, and, within two (2) Business Daysafter any Credit Party obtains knowledge of any matured or unmatured event ofdefault with respect to the First Lien Facilities or any Subordinated Debt,notice of such event of default;***

###  

### ***(g) promptly after the request by any Lender, all documentation and otherinformation that such Lender reasonably requests in order to comply with itsongoing obligations under applicable “know your customer” and anti-moneylaundering rules and regulations, including the USA Patriot Act; and***

 

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### ***(h) promptly, from time to time, such other information regarding theoperations, business affairs and financial condition of Holdings, the Borrowersor any Subsidiary, or compliance with the terms of any Loan Document, as the AdministrativeAgent or any Lender may reasonably request.***

###  

## ***SECTION 5.04******. ******Insurance; Damage to or Destruction ofCollateral.***

##  

### ***(a) The Credit Parties shall, at their sole cost and expense, maintain thepolicies of insurance described on Schedule 3.18 as in effect onthe date hereof or otherwise in form and amounts and with insurers reasonablyacceptable to the Administrative Agent. Such policies of insurance (or the loss payable and additional insuredendorsements delivered to the Administrative Agent) shall contain provisionspursuant to which the insurer agrees to provide thirty (30) days prior writtennotice to the Administrative Agent in the event of any non-renewal,cancellation or amendment of any such insurance policy.  If any Credit Party at any time or timeshereafter shall fail to obtain or maintain any of the policies of insurancerequired above, or to pay all premiums relating thereto, the AdministrativeAgent may at any time or times thereafter obtain and maintain such policies ofinsurance and pay such premiums and take any other action with respect theretothat the Administrative Agent deems advisable. The Administrative Agent shall have no obligation to obtain insurancefor any Credit Party or pay any premiums therefor.  By doing so, the Administrative Agent shall not be deemed to havewaived any Event of Default arising from any Credit Party’s failure to maintainsuch insurance or pay any premiums therefor. All sums so disbursed, including reasonable attorneys’ fees, court costsand other charges related thereto, shall be payable on demand by Borrowers tothe Administrative Agent and shall be additional Obligations hereunder securedby the Collateral.***

###  

### ***(b) Each Credit Party shall deliver to the Administrative Agent, in form andsubstance reasonably satisfactory to the Administrative Agent, endorsements to(i) all “All Risk” and business interruption insurance naming theAdministrative Agent, on behalf of itself and the Lenders, as loss payee, and(ii) all general liability and other liability policies naming theAdministrative Agent, on behalf of itself and the Lenders, as additionalinsured.  Each Credit Party irrevocablymakes, constitutes and appoints the Administrative Agent (and all officers,employees or agents designated by the Administrative Agent), so long as anyEvent of Default has occurred and is continuing or the anticipated insuranceproceeds exceed $1,000,000, as such Credit Party’s true and lawful agent andattorney in fact for the purpose of making, settling and adjusting claims undersuch “All Risk” policies of insurance, endorsing the name of such Credit Partyon any check or other item of payment for the proceeds of such “All Risk”policies of insurance and for making all determinations and decisions withrespect to such “All Risk” policies of insurance.  The Administrative Agent shall have no duty to exercise anyrights or powers granted to it pursuant to the foregoing power-of-attorney andshall have no right to exercise such powers except as permitted under theIntercreditor Agreement.  The Borrowersshall promptly notify the Administrative Agent of any loss, damage, ordestruction to the Collateral in the amount of $1,000,000 or more, whether ornot covered by insurance.***

 

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## ***SECTION 5.05******. ******Compliance with Laws.******  Each Credit Party shall complywith all federal, state, local and foreign laws and regulations applicable toit, including those relating to ERISA, labor laws, and Environmental Laws andEnvironmental Permits, except to the extent that the failure to comply,individually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect.***

##  

## ***SECTION 5.06******. ******[IntentionallyOmitted]***

##  

## ***SECTION 5.07******. ******Intellectual Property******.  Each Credit Party willconduct its business and affairs without infringement of or interference withany Intellectual Property of any other Person in any material respect and shallcomply in all material respects with the terms of its Licenses.***

##  

## ***SECTION 5.08******. ******Environmental Matters.******  Each Credit Party shall andshall cause each Person within its control to: (a) conduct its operations andkeep and maintain its Real Estate in compliance with all Environmental Laws andEnvironmental Permits other than noncompliance that could not reasonably beexpected to have a Material Adverse Effect; (b) implement any and allinvestigation, remediation, removal and response actions that are necessary tocomply with Environmental Laws and Environmental Permits pertaining to thepresence, generation, treatment, storage, use, disposal, transportation orRelease of any Hazardous Material on, at, in, under, above, to, from or aboutany of its Real Estate in all material respects; (c) notify the AdministrativeAgent promptly after such Credit Party becomes aware of any violation ofEnvironmental Laws or Environmental Permits or any Release on, at, in, under,above, to, from or about any Real Estate that is reasonably likely to result inEnvironmental Liabilities in excess of $250,000; and (d) promptly forward to theAdministrative Agent a copy of any order, notice, request for information orany communication or report received by such Credit Party in connection withany such violation or Release or any other matter relating to any EnvironmentalLaws or Environmental Permits that could reasonably be expected to result inEnvironmental Liabilities in excess of $250,000, in each case whether or notthe Environmental Protection Agency or any Governmental Authority has taken orthreatened any action in connection with any such violation, Release or othermatter.  If the Administrative Agent atany time has a reasonable basis to believe that there may be a violation of anyEnvironmental Laws or Environmental Permits by any Credit Party or anyEnvironmental Liability arising thereunder, or a Release of Hazardous Materialson, at, in, under, above, to, from or about any of its Real Estate, that, ineach case, could reasonably be expected to have a Material Adverse Effect, theneach Credit Party shall, upon the Administrative Agent’s written request (i)cause the performance of such environmental audits including subsurfacesampling of soil and groundwater, and preparation of such environmentalreports, at Borrowers’ expense, as the Administrative Agent may from time totime reasonably request, which shall be conducted by reputable environmentalconsulting firms reasonably acceptable to the Administrative Agent and shall bein form and substance reasonably acceptable to the Administrative Agent, and(ii) permit the Administrative Agent or its representatives to have access toall Real Estate for the purpose of conducting such environmental audits andtesting as the Administrative Agent deems appropriate, including subsurfacesampling of soil and***

 

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*** ***

## ***groundwater. Borrowers shall reimburse the Administrative Agent for the costs of suchaudits and tests and the same will constitute a part of the Obligations securedhereunder.***

##  

## ***SECTION 5.09******. ******Landlords’ Agreements, Mortgagee Agreements,Bailee Letters and Real Estate Purchases.******  Each Credit Party shall usecommercially reasonable efforts to obtain a landlord’s agreement, mortgageeagreement or bailee letter, as applicable, from the lessor of each leasedproperty, mortgagee of owned property or bailee with respect to any warehouseor manufacturing, processor or converter facility where Collateral is stored orlocated that has an aggregate fair market value or purchase price (whichever ishigher, as determined by the Administrative Agent) in excess of $75,000 at anytime from and after the date of this Agreement, which agreement or letter shallcontain a waiver or subordination of all Liens or claims that the landlord,mortgagee or bailee may assert against the Collateral at that location, andshall otherwise be reasonably satisfactory in form and substance to theAdministrative Agent.  After the ClosingDate, no new real property or new warehouse space shall be leased by any CreditParty and no Inventory shall be shipped to a processor or converter underarrangements established after the Closing Date if the Collateral to be storedor located at such location (i) has an aggregate fair market value or purchaseprice (whichever is higher, as determined by the Administrative Agent) in excessof $75,000 or (ii) has an aggregate fair market value or purchase price(whichever is higher, as determined by the Administrative Agent) whenaggregated with Collateral which has been stored at new real property or newwarehouse spaces leased after the Closing Date or shipped to a processor orconverter under arrangements established after the Closing Date in excess of$500,000, without the prior written consent of the Administrative Agent or,unless and until a reasonably satisfactory landlord agreement or bailee letter,as appropriate, shall first have been obtained with respect to suchlocation.  Each Credit Party shalltimely and fully pay and perform its obligations in all material respects underall leases and other agreements with respect to each leased location or publicwarehouse where any Collateral is or may be located.  In addition to the foregoing, each of Tweco and Victor may store,keep or otherwise maintain (i) Inventory in an amount not to exceed $12,000,000in the aggregate, and (ii) other Collateral in an amount not to exceed$6,000,000 in the aggregate, at any warehouse or facility operated in Mexico byeither Victor Equipment de Mexico S.A. de C.V. (“******Victor Mexico******”) or Tweco de Mexico, S.A. de C.V. (“******Tweco Mexico******”) so long as each of Victor Mexico and Tweco Mexico, as applicable, isa wholly owned direct Subsidiary of any Borrower.  To the extent otherwise permitted hereunder, if any Credit Partyproposes to acquire a fee ownership interest in Real Estate after the ClosingDate, it shall first provide to the Collateral Agent a mortgage or deed oftrust granting the Collateral Agent a first priority (or second priority, ifthe Intercreditor Agreement shall still be in effect) Lien on such Real Estate,together with environmental audits, mortgage title insurance commitment, realproperty survey, local counsel opinion(s), and, if required by theAdministrative Agent, supplemental casualty insurance and flood insurance, andsuch other documents, instruments or agreements reasonably requested by theAdministrative Agent, in each case, in form and substance reasonablysatisfactory to the Administrative Agent.***

##  

## ***SECTION 5.10******. ******Use of Proceeds. ******TheBorrowers shall utilize the proceeds of the Loans only for the purposespecified in the introductory statement to this Agreement.***

 

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## ***SECTION 5.11******. ******Cash Management Systems.******  The Borrowers will maintainuntil the Maturity Date the cash management systems described in the First LienCredit Agreement.***

##  

## **SECTION 5.12****.  ***FurtherAssurances.******** Each Credit Party executing this Agreementagrees that it shall and shall cause each other Credit Party to, at such CreditParty’s expense and upon the reasonable request of the Administrative Agent,duly execute and deliver, or cause to be duly executed and delivered, to theAdministrative Agent such further instruments and do and cause to be done suchfurther acts as may be necessary or proper in the reasonable opinion of theAdministrative Agent to carry out more effectively the provisions and purposesof this Agreement and each Loan Document.***

##  

# ***ARTICLE VI***

# *** ***

# ***Negative Covenants***

# *** ***

Each Credit Party executing this Agreementjointly and severally agrees as to all Credit Parties that until theCommitments have been terminated and the principal of and interest on eachLoan, all fees and all other expenses or amounts then accrued or payable underany Loan Document shall have been paid in full, unless the Required Lendersshall otherwise consent in writing:

 

## **SECTION 6.01****.  *Mergers, Subsidiaries, Etc.***  No Credit Party shall, by operation of lawor otherwise, (a) form a new Subsidiary, unless otherwise permitted hereunder,or (b) merge with, consolidate with, acquire all or substantially all of theassets or Stock of, or otherwise combine with or acquire, any Person, except(i) any Borrower may merge or consolidate with, or acquire the assets or Stockof any other Borrower, (ii) any Subsidiary of Holdings that is not a CreditParty may merge or consolidate with, or acquire the assets or Stock of anotherSubsidiary of Holdings that is not a Credit Party, (iii) any Borrower may mergeor consolidate with, or acquire the Stock or assets of any other Subsidiary ofHoldings that is a Credit Party, (iv) any Credit Party that is not a Borrowermay merge or consolidate with, or acquire the assets or Stock of any otherCredit Party that is not a Borrower, and (v) for transactions otherwisepermitted under Sections 6.02 or 6.08; *provided*,that in the case of clause (iii) above, the continuing or surviving Person, orthe transferee, as the case may be, shall be a Borrower.

##  

## **SECTION 6.02****.  *Investments; Loans and Advances.***  Except as otherwise expressly permitted bythis Article VI, no Credit Party shall, or shall cause or permit itsForeign Subsidiaries to, make or permit to exist any investment in, or make,accrue or permit to exist loans or advances of money to, any Person, throughthe direct or indirect lending of money, holding of securities or otherwise,except:

##  

### (a) that Borrowers and Foreign Subsidiaries may hold investments comprisedof notes payable issued by Account Debtors to any Borrower or any ForeignSubsidiary pursuant to negotiated agreements with respect to settlement of suchAccount Debtor’s Accounts in the ordinary course of business consistent withpast practices;

 

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### (b) each Credit Party and Foreign Subsidiary may maintain its existinginvestments in its Subsidiaries as of the Closing Date;

###  

### (c) any Borrower may make investments in any other Borrower;

###  

### (d) any Foreign Subsidiary may make investments in any other ForeignSubsidiaries;

###  

### (e) any Borrower may make investments in any Credit Party (other thanHoldings) that is not a Borrower; *provided* that such investments in theCredit Parties shall not exceed $100,000 in the aggregate;

###  

### (f) any Borrower may make investments in, or create, any wholly-ownedDomestic Subsidiary, provided that such Subsidiary becomes a Borrower, theStock of such Subsidiary is pledged to the Administrative Agent, and suchSubsidiary grants Liens to the Administrative Agent on all of its assets tosecure the Obligations, subject only to Permitted Encumbrances;

###  

### (g) the Credit Parties (other than Holdings) may make loans to Holdings, inlieu of distributions permitted under Section 6.13(d), the proceeds ofwhich shall be used by Holdings solely to pay out of pocket expenses foradministrative, legal and accounting services provided by third parties thatare reasonable and customary and incurred in the ordinary course of businessfor such professional services, or to pay franchise fees, costs and expensesassociated with the issuance and maintenance of its capital stock and similarcosts and expenses, in an annual aggregate amount not to exceed $3,000,000 perfiscal year after the Closing Date;

###  

### (h) the Credit Parties (other than Holdings) may make loans to Holdings, inlieu of distributions permitted under Section 6.13(e), the proceeds ofwhich shall be used by Holdings solely to pay taxes as part of a consolidated,combined or unitary group;

###  

### (i) any Borrower may make investments in, or create, any wholly-ownedForeign Subsidiary, such that the aggregate amount of all investments in suchdirect Foreign Subsidiaries funded since May 23, 2003, shall not exceed $5,000,000(exclusive of investments permitted in clause (k) of this Section 6.02); *provided*that 65% of such stock of such direct Foreign Subsidiary shall be pledged tosecure the Obligations;

###  

### (j) any Credit Party or Foreign Subsidiary may maintain advances, loans andinvestments in any of their Foreign Subsidiaries that are in existence as ofthe date hereof, provided such advances, loans and investments are notincreased;

###  

### (k) any Credit Party or Foreign Subsidiary may make investments in any ofits Foreign Subsidiaries consisting of the conversion of intercompany loans(but not intercompany accounts payable, except for $1,100,000 of intercompanyaccounts payable owed by South African Subsidiaries) outstanding as of theClosing Date into equity;

###  

### (l) so long as no Event of Default has occurred and is continuing, theBorrowers may make investments, subject to Control Letters in favor of theAdministrative Agent

 

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### for the benefit of the Lenders or otherwise subject to a perfectedsecurity interest in favor of the Administrative Agent for the benefit of theLenders, in (i) marketable direct obligations issued or unconditionallyguaranteed by the United States of America or any agency thereof maturingwithin one year from the date of acquisition thereof, (ii) commercial papermaturing no more than one year from the date of creation thereof and currentlyhaving the highest rating obtainable from either S&P or Moody’s, (iii)certificates of deposit maturing no more than one year from the date ofcreation thereof issued by commercial banks incorporated under the laws of theUnited States of America, each having combined capital, surplus and undividedprofits of not less than $300,000,000 and having a senior unsecured rating of“A” or better by a nationally recognized rating agency (an “***A Rated Bank***”), (iv) time deposits maturing no more thanthirty (30) days from the date of creation thereof with A Rated Banks and (v)mutual funds that invest solely in one or more of the investments described inclauses (i) through (iv) above;

###  

### (m) other investments by Credit Parties and Foreign Subsidiaries notexceeding $100,000 in the aggregate at any time outstanding;

###  

### (n) other investments by Credit Parties and Foreign Subsidiaries notexceeding $2,000,000 in the aggregate at any time outstanding with theAdministrative Agent’s prior written approval;

###  

### (o) transactions permitted pursuant to Section 6.04;

###  

### (p) the Credit Parties may hold investments comprised of one or more promissorynotes equal to all or a portion of the purchase price paid by the buyer inconnection with the disposition of those certain assets set forth in the AssetSale Side Letter as permitted pursuant to Section 6.08(g); and

###  

### (q) capital expenditures in the ordinary course of business.

###  

## **SECTION 6.03****.  *Indebtedness***.  (a) No Credit Party shall, or shall cause or permit its Foreign Subsidiariesto, create, incur, assume or permit to exist any Indebtedness, except (withoutduplication):

##  

#### (i)  Indebtedness secured by purchase money security interests andCapital Leases permitted in Section 6.07;

####  

#### (ii)  the Loans and the other Obligations;

####  

#### (iii)  unfunded pension fund and other employee benefit plan obligationsand liabilities to the extent they are permitted to remain unfunded underapplicable law;

####  

#### (iv)  existing Indebtedness described on Schedule 6.03 andrefinancings thereof or amendments or modifications thereto that do not havethe effect of increasing or decreasing the principal amount thereof or changingthe amortization thereof (other than to extend the same) and that are otherwiseon

 

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#### terms and conditions no less favorable to anyCredit Party, Foreign Subsidiary, the Administrative Agent or any Lender, asreasonably determined by the Administrative Agent, than the terms of theIndebtedness being refinanced, amended or modified;

####  

#### (v)  Indebtedness arising from investments, loans or advances amongthe Credit Parties and any other Subsidiary of Holdings that are permittedunder Section 6.02 (including extensions of the maturity thereof);

####  

#### (vi)  Indebtedness consisting of Guaranteed Indebtedness permittedpursuant to Section 6.06;

####  

#### (vii)  Indebtedness owed to Bank One, N.A. or any of its bankingaffiliates in respect of any liabilities arising from treasury, depository andcash management services or in connection with any automated clearing housetransfers of funds not to exceed $500,000 in the aggregate at any timeoutstanding;

####  

#### (viii)  Indebtedness consisting of hedgingagreements providing protection against fluctuations in currency values orcommodity prices in connection with any Borrower’s or any of its Subsidiaries’operations, so long as management of such Borrower or such Subsidiary, as thecase may be, has determined that the entering into of any such hedgingagreement is a bona fide hedging activity (and is not for speculativepurposes);

####  

#### (ix)  Indebtedness of Foreign Subsidiaries (excluding Capital LeaseObligations) in an aggregate outstanding principal amount not to exceed$10,000,000 for Australian Subsidiaries and $11,000,000 for all other ForeignSubsidiaries;

####  

#### (x)  Indebtedness consisting of intercompany loans and advances madeby any Borrower to any other Borrower; *provided* that (A) each Borrower shallrecord all intercompany transactions on its books and records in a mannerreasonably satisfactory to the Administrative Agent; (B) the obligations ofeach Borrower under any such intercompany loans and advances shall besubordinated in right of payment to the Obligations of such Borrower hereunder;(C) at the time any such intercompany loan or advance is made by any Borrowerto any other Borrower and after giving effect thereto, each such Borrower shallbe Solvent; and (D) no Event of Default would occur and be continuing aftergiving effect to any such proposed intercompany loan;

####  

#### (xi)  Indebtedness consisting of intercompany loans and advances madeby any Foreign Subsidiary to any other Foreign Subsidiary;

####  

#### (xii)  obligations of any Credit Party under any interest rate swap, capor collar agreement or similar agreement or arrangement related to exposure tointerest rates with respect to not more than $50,000,000 principal amount ofIndebtedness; and

 

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#### (xiii)  Indebtedness under the First Lien Facilitiesand Indebtedness incurred to refinance, extend, renew, restructure or replace,or in exchange for, such Indebtedness, in whole or in part.

####  

### (b) No Credit Party shall, directly or indirectly, voluntarily purchase,redeem, defease or prepay any principal of, premium, if any, interest or otheramount payable in respect of any Indebtedness prior to its scheduledamortization dates, other than:

###  

#### (i)  the Obligations and the obligations under the First Lien Facilities;

####  

#### (ii)  Indebtedness secured by a Permitted Encumbrance if the assetsecuring such Indebtedness has been sold or otherwise disposed of in accordancewith Sections 6.08(b) or (c);

####  

#### (iii)  Indebtedness permitted by Section 6.03(a)(iv) upon any refinancingthereof in accordance with Section 6.03(a)(iv); and

####  

#### (iv)  other prepayments of Indebtedness (excluding any SubordinatedDebt) not in excess of $250,000 in the aggregate.

####  

## **SECTION 6.04****.  *Employee Loans and Affiliate Transactions. ***(a)  No Borrower shall enter into or be a partyto any transaction with any other Credit Party (other than other Borrowers) orany Affiliate thereof except in the ordinary course of and pursuant to thereasonable requirements of such Borrower’s business and upon fair and reasonableterms that are no less favorable to such Borrower than would be obtained in acomparable arm’s length transaction with a Person not an Affiliate of suchBorrower (except for transactions otherwise expressly permitted hereunder).  In addition, if any such transaction orseries of related transactions (other than purchases and sales of Inventory inthe ordinary course of business) involves payments in excess of $500,000 in theaggregate, the terms of these transactions must be disclosed in advance to theAdministrative Agent and the Lenders. All such transactions in excess of $500,000 existing as of the datehereof are described on Schedule 6.04(a).

##  

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

###  

## **SECTION 6.05****.  *Capital Structure and Business.*** If all or part of a Credit Party’s Stock ispledged to the Administrative Agent, that Credit Party shall not issueadditional Stock.  No Credit Party shallamend its charter or bylaws in a manner that would adversely affect theAdministrative Agent or the Lenders or such Credit Party’s duty or ability torepay the Obligations.  No Credit Partyshall engage in any business other than the businesses currently engaged in byit or businesses reasonably related thereto.

 

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## **SECTION 6.06****.  *Guaranteed Indebtedness. ***No Credit Party shall, or shall cause orpermit its Foreign Subsidiaries to, create, incur, assume or permit to existany Guaranteed Indebtedness except (a) by endorsement of instruments or itemsof payment for deposit to the general account of any Credit Party, (b) forGuaranteed Indebtedness incurred for the benefit of any other Credit Party ifthe primary obligation is expressly permitted by this Agreement and (c)Guaranteed Indebtedness incurred for the benefit of any Foreign Subsidiary byany other Foreign Subsidiary if the primary obligation is permitted by thisAgreement.

##  

## **SECTION 6.07****.  *Liens***.  No Credit Party shall, or shall cause orpermit its Foreign Subsidiaries to, create, incur, assume or permit to existany Lien on or with respect to its Accounts or any of its other properties orassets (whether now owned or hereafter acquired) except for:

##  

### (a)  PermittedEncumbrances;

###  

### (b) Liens in existence on the date hereof and summarized on Schedule 6.07securing the Indebtedness described on Schedule 6.03 and permittedrefinancings, extensions and renewals thereof, including extensions or renewalsof any such Liens; provided that the principal amount of the Indebtedness sosecured is not increased and the Lien does not attach to any other property;

###  

### (c) any Liens granted by Foreign Subsidiaries to secure Indebtednesspermitted by Section 6.03(a);

###  

### (d) Liens under any conditional sale or other title retention agreements(including Capital Leases) or in connection with purchase money Indebtednesswith respect to Equipment and Fixtures acquired by (i) any Credit Party in theordinary course of business, involving the incurrence of an aggregate amount ofpurchase money Indebtedness and Capital Lease Obligations of not more than$23,000,000 outstanding at any one time for all such Liens and (ii) any ForeignSubsidiary in the ordinary course of business, involving the incurrence of anaggregate amount of purchase money Indebtedness and Capital Lease Obligationsof not more than $6,500,000 (excluding any sale leaseback transaction permittedunder Section 6.11) outstanding at any one time for all such Liens; *provided*that, in each case, such Liens attach only to the assets subject to suchpurchase money debt and such Indebtedness is incurred within twenty (20) daysfollowing such purchase and does not exceed 100% of the purchase price of thesubject assets; and

###  

### (e)  otherLiens securing Indebtedness not exceeding $250,000 in the aggregate at any timeoutstanding, so long as such Liens do not attach to any Accounts or Inventory.

###  

### In addition, no Credit Party shall become a party to any agreement,note, indenture or instrument, or take any other action, that would prohibitthe creation of a Lien on any of its properties or other assets in favor of theAdministrative Agent, on behalf of itself and the Lenders, as additionalcollateral for the Obligations, except operating leases, Capital Leases orLicenses which prohibit Liens upon the assets that are subject thereto.

 

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## **SECTION 6.08****.  *Sale of Stock and Assets.***  No Credit Party shall sell, transfer,convey, assign or otherwise dispose of any of its properties or other assets,including the Stock of any of its Subsidiaries (whether in a public or aprivate offering or otherwise) or any of its Accounts, other than:

##  

### (a) the sale of Inventory in the ordinary course of business;

###  

### (b) the sale or other disposition by a Credit Party of Equipment andFixtures that are obsolete or no longer used or useful in such Credit Party’sbusiness and having a book value not exceeding (i) $1,000,000 in the aggregatein any fiscal year without the Administrative Agent’s consent and (ii)$2,000,000 in the aggregate in any fiscal year without the consent of theRequired Lenders;

###  

### (c) the sale or discount of overdue accounts receivable arising in theordinary course of business, but only in connection with the compromise orcollection thereof;

###  

### (d) sales of Stock or assets of any Subsidiary of Holdings in connectionwith a transaction permitted under Section 6.01(b) or Sections 6.02(f) or(h);

###  

### (e) the sale of Equipment and Fixtures by Tweco in connection with themoving of its facilities in Wichita, Kansas to Denton, Texas, in an amount notto exceed $500,000;

###  

### (f) the sale or other disposition of other Equipment and Fixtures having abook value not exceeding $1,000,000 in the aggregate in any fiscal year;

###  

### (g) the disposition of those certain assets related to that certain divisionof a Borrower identified to the Administrative Agent in that certainconfidential letter (the “***Asset Sale Side Letter***”)dated as of the date hereof with a fair market value not to exceed $2,000,000pursuant to a single transaction consummated on or prior to the Maturity Date;and

###  

### (h) as permitted in Section 6.02(k).

###  

## **SECTION 6.09****.  *ERISA.*** No Credit Party shall, or shall cause orpermit any ERISA Affiliate to, cause or permit to occur (i) an event that couldresult in the imposition of a Lien under Section 412 of the IRC orSection 302 or 4068 of ERISA or (ii) an ERISA Event to the extent suchERISA Event would reasonably be expected to result in taxes, penalties andother liabilities in an aggregate amount in excess of $250,000 in theaggregate.

##  

## **SECTION 6.10****.  ***MaximumLeverage Ratio*****.  Permit the Leverage Ratio at the end of any period set forthbelow to be greater than the ratio set forth opposite such period below:

 
| **Date or  Period**                                  |   | **Ratio**    |   |
|------------------------------------------------------|--------|--------------|--------|
| Closing Date  through September 30, 2004        |   | 5.50 to 1.00 |   |
| October 1,  2004 through December 31, 2004 |   | 5.25 to 1.00 |   |

 

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## **SECTION 6.11****.  *Sale Leasebacks.***  No Credit Party shall, or shall cause orpermit its Foreign Subsidiaries to, engage in any sale leaseback or syntheticlease transaction involving any of its assets, except for such transactions notin excess of $6,000,000 for Italian Subsidiaries, $2,000,000 for AustralianSubsidiaries and $2,000,0000 for all other Foreign Subsidiaries.

##  

## **SECTION 6.12****.  *Cancellation of Indebtedness.*** No Credit Party shall cancel any claim ordebt owing to it, except for reasonable consideration negotiated on an arm’slength basis and in the ordinary course of its business consistent with pastpractices (other than as permitted under Section 6.02(k)).

##  

## **SECTION 6.13****.  *Restricted Payments.***  No Credit Party shall make any RestrictedPayment, except:

##  

### (a) intercompany loans and advances between Borrowers to the extentpermitted by Sections 6.02 and 6.03;

###  

### (b) dividends and distributions by Subsidiaries of any Borrower paid to suchBorrower;

###  

### (c) employee loans permitted under Section 6.04(b);

###  

### (d) payments of principal and interest on intercompany loans issued inaccordance with Section 6.03;

###  

### (e) distributions to Holdings, the proceeds of which shall be applied byHoldings directly to pay out of pocket expenses, for administrative, legal andaccounting services provided by third parties that are reasonable and customaryand incurred in the ordinary course of business for such professional services,or to pay franchise fees, costs and expenses associated with the issuance andmaintenance of its capital stock and similar costs and expenses, in an annualaggregate amount not in excess of $3,000,000 per fiscal year;

###  

### (f) distributions to Holdings in such amounts as are necessary to enableHoldings to pay income taxes as part of a consolidated group when and as suchincome taxes are due; *provided* that the aggregate amountdistributed to pay such income taxes by Credit Parties shall not exceed theirproportionate share of such income taxes based on the taxable income generatedby the Credit Parties as compared to the taxable income generated by all ofHoldings’ Subsidiaries; and

###  

### (g) distributions to Holdings, the proceeds of which will be used byHoldings to make payments of interest on the High Yield Notes to the extentsuch payments are not barred under Article X of the Indenture.

###  

## **SECTION 6.14****.  *Change of Corporate Name, State of Incorporation orLocation; Change of Fiscal Year.***  Without altering the restrictions on mergersinvolving

 

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## Credit Parties herein contained, no Credit Party shall (a) change itsname as it appears in official filings in the state of its incorporation orother organization, (b) change its chief executive office, principal place ofbusiness, corporate offices or warehouses or locations at which Collateral isheld or stored, or the location of its records concerning the Collateral, (c)change the type of entity that it is, (d) change its organizationidentification number, if any, issued by its state of incorporation or otherorganization, or (e) change its state of incorporation or organization orincorporate or organize in any additional jurisdictions, in each case withoutat least thirty (30) days prior written notice to the Administrative Agent andafter the Administrative Agent’s written acknowledgment that any reasonableaction requested by the Administrative Agent in connection therewith, includingto continue the perfection of any Liens in favor of the Administrative Agent,on behalf of the Lenders, in any Collateral, has been completed or taken, andprovided that any such new location shall be in the continental UnitedStates.  No Credit Party shall changeits fiscal year.

##  

## **SECTION 6.15****.  *No Impairment of Intercompany Transfers.***  No Credit Party shall, or shall cause orpermit its Foreign Subsidiaries to, directly or indirectly enter into or becomebound by any agreement, instrument, indenture or other consensual obligation(other than this Agreement, the other Loan Documents, the High Yield Notes andany loan documents executed in connection therewith and any other documents reflectingIndebtedness permitted pursuant to Section 6.03) that could directly orindirectly restrict, prohibit or require the consent of any Person with respectto the payment of dividends or distributions or the making or repayment ofintercompany loans by a Subsidiary of any Borrower to any Borrower or betweenBorrowers.

##  

## **SECTION 6.16****.  *Real Estate Purchases.*** No Credit Party shall purchase a fee simpleownership interest in Real Estate with an aggregate purchase price in excess of$500,000.

##  

## **SECTION 6.17****.  *Changes Relating to High Yield Notes.*** No Credit Party shall change or amend theterms of any Subordinated Debt (or any indenture or agreement in connectiontherewith) including, without limitation, the High Yield Notes, if the effectof such amendment is to: (a) increase the interest rate on such SubordinatedDebt; (b) change the dates upon which payments of principal or interest are dueon such Subordinated Debt other than to extend such dates; (c) change anydefault or event of default other than to delete or make less restrictive anydefault provision therein, or add any covenant with respect to suchSubordinated Debt; (d) change the redemption or prepayment provisions of suchSubordinated Debt other than to extend the dates therefor or to reduce the premiumspayable in connection therewith; (e) grant any security or collateral to securepayment of such Subordinated Debt; or (f) change or amend any other term ifsuch change or amendment would materially increase the obligations of theCredit Party thereunder or confer additional material rights on the holder ofsuch Subordinated Debt in a manner adverse to any Credit Party, theAdministrative Agent or any Lender.

##  

## **SECTION 6.18****.  *Holdings***.  Holdings shall not engage in any trade orbusiness other than as a holding company for its Subsidiaries, or own anyassets (other than Stock of its Subsidiaries) or incur any Indebtedness orGuaranteed Indebtedness (other than the

 

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## Obligations and the High Yield Notes); *provided*,that Holdings may guarantee leases and other contractual obligations of itsSubsidiaries.

##  

# ***ARTICLE VII***

# *** ***

# ***Events of Default; Rights and Remedies***

# *** ***

## **SECTION 7.01****.  *Events of Default.*** The occurrence of any one or more of thefollowing events (regardless of the reason therefor) shall constitute an “Eventof Default” hereunder:

##  

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

###  

### (b) Any Credit Party fails or neglects to perform, keep or observe any ofthe provisions of Sections 5.04(a), 5.10 or 5.11 or Article VI.

###  

### (c) Any Borrower fails or neglects to perform, keep or observe any of theprovisions of Section 5.03, and the same shall remain unremedied for three(3) Business Days or more.

###  

### (d) Any Credit Party fails or neglects to perform, keep or observe any otherprovision of this Agreement or of any of the other Loan Documents (other thanany provision embodied in or covered by any other clause of thisSection 7.01) and the same shall remain unremedied for twenty-five (25)days or more.

###  

### (e)  Adefault or breach occurs under any other agreement, document or instrument towhich any Credit Party is a party that is not cured within any applicable graceperiod therefor, and such default or breach (i) involves the failure to makeany payment when due in respect of any Indebtedness or Guaranteed Indebtedness(other than the Obligations) of any Credit Party in excess of $500,000 in theaggregate (including amounts owing to all creditors under any combined orsyndicated credit arrangements), or (ii) causes, or permits any holder of suchIndebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness orGuaranteed Indebtedness or a portion thereof in excess of $500,000 in theaggregate to become due prior to its stated maturity or prior to its regularlyscheduled dates of payment, or cash collateral in respect thereof to bedemanded, in each case, regardless of whether such default is waived, or suchright is exercised, by such holder or trustee (*provided* that, a defaultdescribed under this subclause (ii) with respect to the First Lien Facilitieswill not constitute an Event of

 

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### Default under this paragraph (e) until the acceleration of the loansunder the First Lien Credit Agreement.

###  

### (f) Any representation or warranty herein or in any Loan Document or in anywritten statement, report, financial statement or certificate made or deliveredto the Administrative Agent, the Collateral Agent or any Lender by any CreditParty is untrue or incorrect in any material respect as of the date when madeor deemed made.

###  

### (g) Assets of any Credit Party with a fair market value of $250,000 or moreare attached, seized, levied upon or subjected to a writ or distress warrant,or come within the possession of any receiver, trustee, custodian or assigneefor the benefit of creditors of any Credit Party and such condition continuesfor twenty (20) days or more.

###  

### (h)  Acase or proceeding is commenced against any Credit Party seeking a decree ororder in respect of such Credit Party (i) under the Bankruptcy Code, or anyother applicable federal, state or foreign bankruptcy or other similar law,(ii) appointing a custodian, receiver, liquidator, assignee, trustee orsequestrator (or similar official) for such Credit Party or for any substantialpart of any such Credit Party’s assets, or (iii) ordering the winding-up orliquidation of the affairs of such Credit Party, and such case or proceedingshall remain undismissed or unstayed for sixty (60) days or more or a decree ororder granting the relief sought in such case or proceeding is granted by acourt of competent jurisdiction.

###  

### (i) Any Credit Party (i) files a petition seeking relief under theBankruptcy Code, or any other applicable federal, state or foreign bankruptcyor other similar law, (ii) consents to or fails to contest in a timely andappropriate manner the institution of proceedings thereunder or the filing ofany such petition or the appointment of or taking possession by a custodian,receiver, liquidator, assignee, trustee or sequestrator (or similar official)for such Credit Party or for any substantial part of any such Credit Party’sassets, (iii) makes an assignment for the benefit of creditors, (iv) takes anyaction in furtherance of any of the foregoing; or (v) admits in writing itsinability to, or is generally unable to, pay its debts as such debts becomedue.

###  

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

###  

### (k) Any material provision of any Loan Document for any reason ceases to bevalid, binding and enforceable in accordance with its terms (or any CreditParty shall challenge the enforceability of any Loan Document or shall assertin writing, or engage in any action or inaction based on any such assertion,that any provision of any of the Loan Documents has ceased to be or otherwiseis not valid, binding and enforceable in accordance with its terms), or anyLien created under any Loan Document ceases to be a valid and perfected firstpriority Lien (except as otherwise permitted herein or therein) in

 

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### any of the Collateral purported to be covered thereby other than as aresult of actions or omissions of the Administrative Agent or the CollateralAgent.

###  

### (l) Any Change of Control occurs.

###  

### (m) Any material uninsured claims relating to exposure to asbestos shall beasserted against any Credit Party, which claims have a reasonable likelihood ofsuccess.

###  

## **SECTION 7.02****.  *Remedies***.  If any Event of Default has occurred and iscontinuing, the Administrative Agent may (and at the written request of theRequired Lenders shall), declare all or any portion of the Obligations,including all or any portion of any Loan to be forthwith due and payable, allwithout presentment, demand, protest or further notice of any kind, all ofwhich are expressly waived by Borrowers and each other Credit Party, orexercise any rights and remedies provided to the Administrative Agent and theCollateral Agent under the Loan Documents or at law or equity, including allremedies provided under the Code; *provided*that upon the occurrence of an Event of Default specified in Sections 7.01(h)or (i), the Commitments shall be immediately terminated and all of theObligations, including all or any portion of any Loan, shall become immediatelydue and payable without declaration, notice or demand by any Person.

##  

## **SECTION 7.03****.  *Waivers by Credit Parties.*** Except as otherwise provided for in thisAgreement or by applicable law, each Credit Party waives (including forpurposes of Article X): (a) presentment, demand and protest and notice ofpresentment, dishonor, notice of intent to accelerate, notice of acceleration,protest, default, nonpayment, maturity, release, compromise, settlement,extension or renewal of any or all commercial paper, accounts, contract rights,documents, instruments, chattel paper and guaranties at any time held by theAdministrative Agent or the Collateral Agent on which any Credit Party may inany way be liable, and hereby ratifies and confirms whatever the AdministrativeAgent or Collateral Agent may do in this regard, (b) all rights to notice and ahearing prior to the Administrative Agent’s taking possession or control of, orto the Administrative Agent’s or the Collateral Agent’s replevy, attachment orlevy upon, the Collateral or any bond or security that might be required by anycourt prior to allowing the Administrative Agent to exercise any of itsremedies, and (c) the benefit of all valuation, appraisal, marshaling andexemption laws.

##  

# ***ARTICLE VIII***

# *** ***

# ***The Agents***

# *** ***

Each of the Lenders hereby irrevocablyappoints the Administrative Agent and the Collateral Agent (for purposes ofthis Article, the Administrative Agent and the Collateral Agent are referred tocollectively as the “***Agents***”) its agent and authorizes the Agents to takesuch actions on its behalf and to exercise such powers as are delegated to suchAgent by the terms of the Loan Documents, together with such actions and powersas are reasonably incidental thereto. Without limiting the generality of the foregoing, the Agents are herebyexpressly authorized to execute any and all documents (including

 

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releases) with respect to theCollateral and the rights of the Secured Parties with respect thereto, ascontemplated by and in accordance with the provisions of this Agreement and theCollateral Documents.

 

The bank serving as the Administrative Agentand/or the Collateral Agent hereunder shall have the same rights and powers inits capacity as a Lender as any other Lender and may exercise the same asthough it were not an Agent, and such bank and its Affiliates may acceptdeposits from, lend money to and generally engage in any kind of business withany Credit Party or other Affiliate thereof as if it were not an Agenthereunder.

 

Neither Agent shall have any duties orobligations except those expressly set forth in the Loan Documents.  Without limiting the generality of theforegoing, (a) neither Agent shall be subject to any fiduciary or other impliedduties, regardless of whether a Default has occurred and is continuing, (b)neither Agent shall have any duty to take any discretionary action or exerciseany discretionary powers, except discretionary rights and powers expresslycontemplated hereby that such Agent is instructed in writing to exercise by theRequired Lenders (or such other number or percentage of the Lenders as shall benecessary under the circumstances as provided in Section 9.08), and (c)except as expressly set forth in the Loan Documents, neither Agent shall haveany duty to disclose, nor shall it be liable for the failure to disclose, anyinformation relating to Credit Party that is communicated to or obtained by thebank serving as Administrative Agent and/or Collateral Agent or any of itsAffiliates in any capacity.  NeitherAgent shall be liable for any action taken or not taken by it with the consentor at the request of the Required Lenders (or such other number or percentageof the Lenders as shall be necessary under the circumstances as provided inSection 9.08) or in the absence of its own gross negligence or willfulmisconduct.  Neither Agent shall bedeemed to have knowledge of any Default unless and until written notice thereofis given to such Agent by a Credit Party or a Lender, and neither Agent shallbe responsible for or have any duty to ascertain or inquire into (i) anystatement, warranty or representation made in or in connection with any LoanDocument, (ii) the contents of any certificate, report or other documentdelivered thereunder or in connection therewith, (iii) the performance orobservance of any of the covenants, agreements or other terms or conditions setforth in any Loan Document, (iv) the validity, enforceability, effectiveness orgenuineness of any Loan Document or any other agreement, instrument ordocument, or (v) the satisfaction of any condition set forth in Article IVor elsewhere in any Loan Document, other than to confirm receipt of itemsexpressly required to be delivered to such Agent.

 

Each Agent shall be entitled to rely upon,and shall not incur any liability for relying upon, any notice, request,certificate, consent, statement, instrument, document or other writing believedby it to be genuine and to have been signed or sent by the proper person.  Each Agent may also rely upon any statementmade to it orally or by telephone and believed by it to have been made by theproper person, and shall not incur any liability for relying thereon.  Each Agent may consult with legal counsel(who may be counsel for the Borrowers), independent accountants and otherexperts selected by it, and shall not be liable for any action taken or nottaken by it in accordance with the advice of any such counsel, accountants orexperts.

 

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Each Agent may perform any and all its dutiesand exercise its rights and powers by or through any one or more sub-agentsappointed by it.  Each Agent and anysuch sub-agent may perform any and all its duties and exercise its rights andpowers by or through their respective Related Parties.  The exculpatory provisions of the precedingparagraphs shall apply to any such sub-agent and to the Related Parties of eachAgent and any such sub-agent, and shall apply to their respective activities inconnection with the syndication of the credit facilities provided for herein aswell as activities as Agent.

 

Subject to the appointment and acceptance ofa successor Agent as provided below, either Agent may resign at any time bynotifying the Lenders, the Issuing Bank and the Borrowers.  Upon any such resignation, the RequiredLenders shall have the right, subject, if no Event of Default shall haveoccurred and be continuing, to the consent of the Borrowers (not to beunreasonably withheld), to appoint a successor.  If no successor shall have been so appointed by the RequiredLenders and shall have accepted such appointment within 30 days after theretiring Agent gives notice of its resignation, then the retiring Agent may,subject, if no Event of Default shall have occurred and be continuing, to theconsent of the Borrowers (not to be unreasonably withheld), on behalf of theLenders and the Issuing Bank, appoint a successor Agent which shall be a bankwith an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment asAgent hereunder by a successor, such successor shall succeed to and becomevested with all the rights, powers, privileges and duties of the retiringAgent, and the retiring Agent shall be discharged from its duties andobligations hereunder. The fees payable by the Borrowers to a successor Agentshall be the same as those payable to its predecessor unless otherwise agreedbetween the Borrowers and such successor. After an Agent’s resignation hereunder, the provisions of thisArticle and Section 9.05 shall continue in effect for the benefit ofsuch retiring Agent, its sub-agents and their respective Related Parties inrespect of any actions taken or omitted to be taken by any of them while actingas Agent.

 

Each Lender acknowledges that it has,independently and without reliance upon the Agents or any other Lender andbased on such documents and information as it has deemed appropriate, made itsown credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,independently and without reliance upon the Agents or any other Lender andbased on such documents and information as it shall from time to time deemappropriate, continue to make its own decisions in taking or not taking actionunder or based upon this Agreement or any other Loan Document, any relatedagreement or any document furnished hereunder or thereunder.

 

# ***ARTICLE IX***

# *** ***

# ***Miscellaneous***

# *** ***

## **SECTION 9.01****.  ***Notices*****.  Notices and other communications providedfor herein shall be in writing and shall be delivered by hand or overnightcourier service, mailed by certified or registered mail or sent by fax, asfollows:

 

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##### (a) if to the Borrowers or anyother Credit Party, to Holdings at Thermadyne Holdings Corporation, 16052Swingley Ridge Rd., Suite 300, Chesterfield, Missouri 63017, Attention: JamesTate, Senior Vice President, Chief Financial Officer (Fax No.: (636) 728-3010),with copies (excluding notices and communications with respect to borrowingsand payments in the ordinary course of business under this Agreement) deliveredto (i) Patricia Williams, Vice President, General Counsel and CorporateSecretary, of the Borrowers at the address of the Borrowers set forth above(Fax No.: (636) 728-3011), and (ii) John Sullivan, Armstrong Teasdale LLP, OneMetropolitan Square, Suite 2600, St. Louis, Missouri 63102 (Fax No. (314)621-5065).

#####  

##### (b) if to the AdministrativeAgent or the Collateral Agent, to Credit Suisse First Boston at Eleven MadisonAvenue, New York, NY 10010, Attention of Joe Adipietro (Fax No. (212)325-8319); and;

#####  

##### (c) if to a Lender, to it atits address (or fax number) set forth in its Administrative Questionnaire.

#####  

All notices and other communications given toany party hereto in accordance with the provisions of this Agreement shall bedeemed to have been given on the date of receipt if delivered by hand orovernight courier service or sent by fax or on the date five Business Daysafter dispatch by certified or registered mail if mailed, in each casedelivered, sent or mailed (properly addressed) to such party as provided inthis Section or in accordance with the latest unrevoked direction fromsuch party given in accordance with this Section.  As agreed to among the Credit Parties, the Administrative Agent,the Collateral Agent and the applicable Lenders from time to time, notices andother communications may also be delivered by e-mail to the e-mail address of arepresentative of the applicable Person provided from time to time by suchPerson.

 

## **SECTION 9.02****.  *Survival of Agreement.***  All covenants, agreements, representationsand warranties made by any Credit Party herein and in the certificates or otherinstruments prepared or delivered in connection with or pursuant to thisAgreement or any other Loan Document shall be considered to have been reliedupon by the Lenders and shall survive the making by the Lenders of the Loans,regardless of any investigation made by the Lenders or on their behalf, andshall continue in full force and effect as long as the principal of or anyaccrued interest on any Loan or any fee or any other amount then accrued orpayable under this Agreement or any other Loan Document is outstanding andunpaid and so long as the Commitments have not been terminated; *provided, however*, that nothing in thissentence shall be deemed to affect the nature of any representation, warrantyor other statement made by any Credit Party in this Agreement and the otherLoan Documents.  The provisions ofSections 2.13, 2.15, 2.19 and 9.05 shall remain operative and in fullforce and effect regardless of the expiration of the term of this Agreement,the consummation of the transactions contemplated hereby, the repayment of anyof the Loans, the expiration of the Commitments, the invalidity orunenforceability of any term or provision of this Agreement or any other LoanDocument, or any investigation made by or on behalf of the AdministrativeAgent, the Collateral Agent or any Lender.

 

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## **SECTION 9.03****.  *Binding Effect.*** This Agreement shall become effective when itshall have been executed by each Credit Party and the Administrative Agent andwhen the Administrative Agent shall have received counterparts hereof which,when taken together, bear the signatures of each of the other parties hereto.

##  

## **SECTION 9.04****.  *Successors and Assigns.***  (a) Whenever in this Agreement any of the parties hereto is referred to,such reference shall be deemed to include the permitted successors and assignsof such party; and all covenants, promises and agreements by or on behalf ofthe Borrowers, the Administrative Agent, the Collateral Agent or the Lendersthat are contained in this Agreement shall bind and inure to the benefit oftheir respective successors and assigns.

##  

### (b) Each Lender may assign to one or more assignees all or a portion of itsinterests, rights and obligations under this Agreement (including all or aportion of its Loans at the time owing to it), with the prior written consentof the Administrative Agent (not to be unreasonably withheld or delayed); *provided*,*however*,that (i) the amount of the Loans of the assigning Lender subject to eachsuch assignment (determined as of the date the Assignment and Acceptance withrespect to such assignment is delivered to the Administrative Agent) shall notbe less than $1,000,000 (or, if less, the entire remaining amount of suchLender’s Loans), (ii) the parties to each such assignment shall(A) electronically execute and deliver to the Administrative Agent anAssignment and Acceptance via an electronic settlement system selected by theAdministrative Agent or (B) if no such system shall then be specified bythe Administrative Agent, manually execute and deliver to the AdministrativeAgent an Assignment and Acceptance, in either case, together with a processingand recordation fee of $3,500, and (iii) the assignee, if it shall not bea Lender, shall deliver to the Administrative Agent an AdministrativeQuestionnaire and all applicable tax forms. Upon acceptance and recording pursuant to paragraph (e) of thisSection, from and after the effective date specified in each Assignment andAcceptance, (A) the assignee thereunder shall be a party hereto and, tothe extent of the interest assigned by such Assignment and Acceptance, have therights and obligations of a Lender under this Agreement and (B) the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Acceptance, be released from its obligations under thisAgreement (and, in the case of an Assignment and Acceptance covering all or theremaining portion of an assigning Lender’s rights and obligations under thisAgreement, such Lender shall cease to be a party hereto but shall continue tobe entitled to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as wellas to any fees accrued for its account and not yet paid).

###  

### (c)  Byexecuting and delivering an Assignment and Acceptance, the assigning Lenderthereunder and the assignee thereunder shall be deemed to confirm to and agreewith each other and the other parties hereto as follows:  (i) such assigning Lender warrants thatit is the legal and beneficial owner of the interest being assigned therebyfree and clear of any adverse claim and that the outstanding balances of itsLoans without giving effect to assignments thereof which have not becomeeffective, are as set forth in such Assignment and Acceptance, (ii) exceptas set forth in clause (i) above, such assigning Lender makes norepresentation or warranty and assumes no responsibility with respect to anystatements, warranties or representations made in or in connection with this

 

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### Agreement, or the execution, legality, validity, enforceability,genuineness, sufficiency or value of this Agreement, any other Loan Document orany other instrument or document furnished pursuant hereto, or the financialcondition of the Credit Parties or the performance or observance by the CreditParties of any of its obligations under this Agreement, any other Loan Documentor any other instrument or document furnished pursuant hereto; (iii) suchassignee represents and warrants that it is legally authorized to enter intosuch Assignment and Acceptance; (iv) such assignee confirms that it hasreceived a copy of this Agreement, together with copies of the most recentfinancial statements referred to in Section 3.04 or delivered pursuant toSection 5.03, the Collateral Documents and such other documents andinformation as it has deemed appropriate to make its own credit analysis anddecision to enter into such Assignment and Acceptance; (v) such assigneewill independently and without reliance upon the Administrative Agent, theCollateral Agent, such assigning Lender or any other Lender and based on suchdocuments and information as it shall deem appropriate at the time, continue tomake its own credit decisions in taking or not taking action under thisAgreement; (vi) such assignee agrees to be bound by the terms of theCollateral Documents and the Intercreditor Agreement; (vii) such assigneeappoints and authorizes the Administrative Agent and the Collateral Agent totake such action as agent on its behalf and to exercise such powers under thisAgreement and the other Loan Documents as are delegated to the AdministrativeAgent and the Collateral Agent, respectively, by the terms hereof and thereof,together with such powers as are reasonably incidental thereto; and(viii) such assignee agrees that it will perform in accordance with theirterms all the obligations which by the terms of this Agreement and the otherLoan Documents are required to be performed by it as a Lender.

###  

### (d) The Administrative Agent, acting for this purpose as an agent of theBorrowers, shall maintain at its offices in The City of New York, a copy ofeach Assignment and Acceptance delivered to it and a register for the recordationof the names and addresses of the Lenders, and the Commitment of, and principalamount of the Loans owing to, each Lender pursuant to the terms hereof fromtime to time (the “***Register***”).  The entries in the Register shall beconclusive, absent manifest error, and the Borrowers, the Administrative Agent,the Collateral Agent and the Lenders may treat each Person whose name isrecorded in the Register pursuant to the terms hereof as a Lender hereunder forall purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by any Borrower, the Collateral Agent and any Lender, at anyreasonable time and from time to time upon reasonable prior notice.

###  

### (e) Upon its receipt of, and consent to, a duly completed Assignment andAcceptance executed by an assigning Lender and an assignee, an AdministrativeQuestionnaire completed in respect of the assignee (unless the assignee shallalready be a Lender hereunder), the processing and recordation fee referred toin paragraph (b) of this Section, if applicable, and any applicable taxforms, the Administrative Agent shall (i) accept such Assignment andAcceptance and (ii) record the information contained therein in theRegister.  No assignment shall beeffective unless it has been recorded in the Register as provided in thisparagraph.

 

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### (f) Each Lender may without the consent of any Borrower or theAdministrative Agent sell participations to one or more banks or other entitiesin all or a portion of its rights and obligations under this Agreement(including all or a portion of its Commitment and the Loans owing to it); *provided*,*however*,that (i) such Lender’s obligations under this Agreement shall remainunchanged, (ii) such Lender shall remain solely responsible to the otherparties hereto for the performance of such obligations, (iii) theparticipating banks or other entities shall be entitled to the benefit of thecost protection provisions contained in Sections 2.13, 2.15 and 2.19 tothe same extent as if they were Lenders (but, with respect to any particularparticipant, to no greater extent than the Lender that sold the participationto such participant) and (iv) the Borrowers, the Administrative Agent, theCollateral Agent and the Lenders shall continue to deal solely and directlywith, and be entitled to rely solely upon the statements and actions of, suchLender in connection with such Lender’s rights and obligations under thisAgreement, and such Lender shall retain the sole right to enforce theobligations of any Borrower relating to the Loans and the other Obligations andto approve any amendment, modification or waiver of any provision of thisAgreement (other than amendments, modifications or waivers decreasing any feespayable to such Participant hereunder or the amount of principal of or the rateat which interest is payable on the Loans of such Participant, extending anyscheduled principal payment date or date fixed for the payment of interest onthe Loans of such Participant, increasing or extending the Commitments of suchParticipant or releasing any Credit Party or all or substantially all theCollateral).  A statement from a Lenderthat it is giving its consent on behalf of its participants shall be sufficient,and none of the Borrowers, the Administrative Agent or the other Lenders shallbe required to investigate or obtain or confirm the consent or agreement of anyparticipant.

###  

### (g) Any Lender or participant may, in connection with any assignment orparticipation or proposed assignment or participation pursuant to this Section,disclose to the assignee or participant or proposed assignee or participant anyinformation relating to the Borrowers furnished to such Lender by or on behalfof any Borrower; *provided* that, prior to any such disclosure of information,each such assignee or participant or proposed assignee or participant shallexecute an agreement whereby such assignee or participant shall agree (subjectto customary exceptions) to preserve the confidentiality of such information onterms no less restrictive than those applicable to the Lenders pursuant toSection 9.16.  Each participantshall, by acquiring its participation hereunder, be deemed to have agreed thatits agreement to so preserve the confidentiality of such information shall befor the benefit of, and may be enforced by, the Borrowers.

###  

### (h) Any Lender may at any time pledge or assign a security interest in allor any portion of its rights under this Agreement to secure obligations of suchLender, including any pledge or assignment to secure obligations to a FederalReserve Bank, and this Section shall not apply to any such pledge orassignment of a security interest; *provided* that no such pledge or assignmentof a security interest shall release a Lender from any of its obligationshereunder or substitute any such pledgee or assignee for such Lender as a partyhereto.

###  

### (i) Notwithstanding anything to the contrary contained herein, any Lender (a“***Granting Lender***”) may grant to a specialpurpose funding vehicle (an “***SPC***”),

 

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### identified as such in writing from time to time by the Granting Lenderto the Administrative Agent and the Borrowers, the option to provide to anyBorrower all or any part of any Loan that such Granting Lender would otherwisebe obligated to make to such Borrower pursuant to this Agreement; *provided*that (i) nothing herein shall constitute a commitment by any SPC tomake any Loan and (ii) if an SPC elects not to exercise such option orotherwise fails to provide all or any part of such Loan, the Granting Lendershall be obligated to make such Loan pursuant to the terms hereof; *providedfurther* that nothing herein shall make the SPC a “Lender” for thepurposes of this Agreement, obligate the Borrowers or the Administrative Agentto deal with such SPC directly, or obligate the Borrowers in any manner to anygreater extent than they were obligated to the Granting Lender (including withrespect to Sections 2.13, 2.15 and 2.19). The Borrowers and the Administrative Agent shall be entitled to dealsolely with, and obtain good discharge from, the Granting Lender and shall notbe required to investigate or otherwise seek the consent or approval of anySPC.  The making of a Loan by an SPChereunder shall utilize the Commitment of the Granting Lender to the sameextent, and as if, such Loan were made by such Granting Lender.  Each party hereto hereby agrees that no SPCshall be liable for any indemnity or similar payment obligation under thisAgreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each partyhereto hereby agrees (which agreement shall survive the termination of this Agreement)that, prior to the date that is one year and one day after the payment in fullof all outstanding commercial paper or other senior indebtedness of any SPC, itwill not institute against, or join any other Person in instituting against,such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidationproceedings under the laws of the United States of America or any Statethereof.  In addition, notwithstandinganything to the contrary contained in this Section, any SPC may (i) withnotice to, but without the prior written consent of, the Borrowers and theAdministrative Agent and without paying any processing fee therefor, assign allor a portion of its interests in any Loans to the Granting Lender or to anyfinancial institutions (consented to by the Borrowers and the AdministrativeAgent) providing liquidity and/or credit support to or for the account of suchSPC to support the funding or maintenance of Loans and (ii) disclose on aconfidential basis any non-public information relating to its Loans to anyrating agency, commercial paper dealer or provider of any surety, guarantee orcredit or liquidity enhancement to such SPC.

###  

### (j) No Borrower shall assign or delegate any of its rights or dutieshereunder without the prior written consent of the Administrative Agent andeach Lender, and any attempted assignment without such consent shall be nulland void.

###  

## **SECTION 9.05****.  *Expenses; Indemnity.*** (a) The Borrowers agree to pay all out-of-pocket expenses incurred by theAdministrative Agent and the Collateral Agent in connection with thesyndication of the credit facilities provided for herein and the preparation ofthis Agreement and the other Loan Documents, or in connection withadministration of this Agreement and the other Loan Documents, or in connectionwith any amendments, modifications or waivers of the provisions hereof orthereof (whether or not the transactions hereby or thereby contemplated shallbe consummated) or incurred by the Administrative Agent, the Collateral Agentor any Lender in connection with the enforcement or protection of its rights inconnection with this Agreement and the other

 

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## Loan Documents or the Loans made hereunder, including the reasonablefees, charges and disbursements of any legal counsel for any of theAdministrative Agent, the Collateral Agent or any Lender.

##  

### (b) The Borrowers agree to indemnify the Administrative Agent, theCollateral Agent, each Lender and each Related Party of any of the foregoingPersons (each such Person being called an “***Indemnitee***”)against, and to hold each Indemnitee harmless from, any and all losses, claims,damages, liabilities and related expenses, including reasonable counsel fees,charges and disbursements, incurred by or asserted against any Indemniteearising out of (i) the execution or delivery of this Agreement or anyother Loan Document or any agreement or instrument contemplated thereby, theperformance by the parties thereto of their respective obligations thereunderor the consummation of the Transactions and the other transactions contemplatedthereby, (ii) the use of the proceeds of the Loans, (iii) any claim,litigation, investigation or proceeding arising out of any of the foregoing,whether or not any Indemnitee is a party thereto, or (iv) any actual oralleged presence or Release of Hazardous Materials on any property currently orformerly owned or operated by any Loan Party or any offsite location to whichwastes were sent for disposal, or any Environmental Liability related in anyway to any Credit Party or their respective operations; *provided* that such indemnityshall not, as to any Indemnitee, be available to the extent that such losses,claims, damages, liabilities or related expenses are determined by a court ofcompetent jurisdiction by final and nonappealable judgment to have resultedfrom the gross negligence or willful misconduct of such Indemnitee.

###  

### (c) To the extent that the Borrowers fail to pay any amount required to bepaid by them to the Administrative Agent or the Collateral Agent underparagraph (a) or (b) of this Section, each Lender severally agrees to payto the Administrative Agent such Lender’s pro rata share (determined, in themanner provided below, as of the time that the applicable unreimbursed expenseor indemnity payment is sought) of such unpaid amount;*provided* that theunreimbursed expense or indemnified loss, claim, damage, liability or relatedexpense, as the case may be, was incurred by or asserted against theAdministrative Agent or the Collateral Agent in its capacity as such.  For purposes hereof, a Lender’s “pro ratashare” shall be determined based upon its share of the sum of the outstandingLoans at the time.

###  

### (d) To the extent permitted by applicable law, no Borrower shall assert, andeach Borrower hereby waives, any claim against any Indemnitee, on any theory ofliability, for special, indirect, consequential or punitive damages (as opposedto direct or actual damages) arising out of, in connection with, or as a resultof, this Agreement or any agreement or instrument contemplated hereby, theTransactions, any Loan or the use of the proceeds thereof.

###  

### (e) The provisions of this Section shall remain operative and in fullforce and effect regardless of the expiration of the term of this Agreement,the consummation of the transactions contemplated hereby, the repayment of anyof the Loans, the expiration of the Commitments, the invalidity orunenforceability of any term or provision of this Agreement or any other LoanDocument, or any investigation made by or on behalf of the

 

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### Administrative Agent, the Collateral Agent or any Lender.  All amounts due under thisSection shall be payable on written demand therefor.

###  

## **SECTION 9.06****.  *Right of Setoff.*** If an Event of Default shall have occurredand be continuing, each Lender and each of its Affiliates is hereby authorizedat any time and from time to time, except to the extent prohibited by law, toset off and apply any and all deposits (general or special, time or demand,provisional or final) at any time held and other indebtedness at any time owingby such Lender or such Affiliate to or for the credit or the account of anyBorrower against any of and all the obligations of any Borrower now orhereafter existing under this Agreement and other Loan Documents held by suchLender, irrespective of whether or not such Lender shall have made any demandunder this Agreement or such other Loan Document and although such obligationsmay be unmatured.  The rights of eachLender under this Section are in addition to other rights and remedies(including other rights of setoff) which such Lender may have.

##  

## **SECTION 9.07****.  *Applicable Law.*** THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS(OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUEDIN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

##  

## **SECTION 9.08****.  *Waivers; Amendment.***  (a) No failure or delay of the Administrative Agent, the Collateral Agent orany Lender in exercising any power or right hereunder or under any other LoanDocument shall operate as a waiver thereof, nor shall any single or partialexercise of any such right or power, or any abandonment or discontinuance ofsteps to enforce such a right or power, preclude any other or further exercisethereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, theCollateral Agent and the Lenders hereunder and under the other Loan Documentsare cumulative and are not exclusive of any rights or remedies that they wouldotherwise have.  No waiver of anyprovision of this Agreement or any other Loan Document or consent to anydeparture by any Borrower or any other Credit Party therefrom shall in anyevent be effective unless the same shall be permitted by paragraph (b) ofthis Section, and then such waiver or consent shall be effective only in thespecific instance and for the purpose for which given.  No notice or demand on any Borrower in anycase shall entitle any Borrower to any other or further notice or demand insimilar or other circumstances.

##  

### (b) Neither this Agreement nor any provision hereof may be waived, amendedor modified except pursuant to an agreement or agreements in writing enteredinto by the Borrowers and the Required Lenders; *provided*, *however*,that no such agreement shall (i) decrease the principal amount of, orextend the maturity of or any scheduled principal payment date or date for thepayment of any interest on any Loan, or waive or excuse any such payment or anypart thereof, or decrease the rate of interest on any Loan, without the priorwritten consent of each Lender affected thereby, (ii) increase or extendthe Commitment or decrease or extend the date for payment of any fees of anyLender without the prior written consent of such Lender, (iii) amend ormodify the pro rata requirements of Section 2.16, the provisions ofSection 9.04(j) or the provisions of this Section without the priorwritten consent of each Lender, (iv) modify the provisions of

 

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### Section 9.04(i) without the written consent of any SPC affectedthereby, (v) release any Credit Party from the Guaranties under this Agreementwithout the consent required under that Agreement, (vi) release all orsubstantially all of the Collateral from the Lien under the CollateralDocuments without the consent required under such documents or(vii) reduce the percentage contained in the definition of the term“Required Lenders” without the prior written consent of each Lender (it beingunderstood that with the consent of the Required Lenders, additional extensionsof credit pursuant to this Agreement may be included in the determination ofthe Required Lenders on substantially the same basis as the Commitments on thedate hereof); *provided further* that no such agreement shall amend, modifyor otherwise affect the rights or duties of the Administrative Agent or theCollateral Agent hereunder or under any other Loan Document without the priorwritten consent of the Administrative Agent or the Collateral Agent, asapplicable.

###  

## **SECTION 9.09****.  *Interest Rate Limitation.***  Notwithstanding anything herein to thecontrary, if at any time the interest rate applicable to any Loan, togetherwith all fees, charges and other amounts which are treated as interest on suchLoan under applicable law (collectively the “***Interest Charges***”), shall exceed themaximum lawful rate (the “***MaximumRate***”) which may be contracted for, charged, taken, received orreserved by the Lender holding such Loan in accordance with applicable law, therate of interest payable in respect of such Loan hereunder, together with allInterest Charges payable in respect thereof, shall be limited to the MaximumRate and, to the extent lawful, the interest and Interest Charges that wouldhave been payable in respect of such Loan but were not payable as a result ofthe operation of this Section shall be cumulated and the interest andInterest Charges payable to such Lender in respect of other Loans orparticipations or periods shall be increased (but not above the Maximum Ratetherefor) until such cumulated amount, together with interest thereon at theFederal Funds Effective Rate to the date of repayment, shall have been receivedby such Lender.

##  

## **SECTION 9.10****.  *Entire Agreement.*** This Agreement, the Engagement Letter and theother Loan Documents constitute the entire contract between the partiesrelative to the subject matter hereof. Any other previous agreement among the parties with respect to thesubject matter hereof is superseded by this Agreement and the other LoanDocuments.  Nothing in this Agreement orin the other Loan Documents, expressed or implied, is intended to confer uponany Person (other than the parties hereto and thereto, their respectivesuccessors and assigns permitted hereunder and, to the extent expresslycontemplated hereby, the Related Parties of each of the Administrative Agent,the Collateral Agent and the Lenders) any rights, remedies, obligations orliabilities under or by reason of this Agreement or the other Loan Documents.

##  

## **SECTION 9.11****.  *WAIVER OF JURY TRIAL.***  EACH PARTY HERETO HEREBY WAIVES, TO THEFULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BYJURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDEROR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS

 

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## REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TOENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

##  

## **SECTION 9.12****.  *Severability.***  In the event any one or more of theprovisions contained in this Agreement or in any other Loan Document should beheld invalid, illegal or unenforceable in any respect, the validity, legalityand enforceability of the remaining provisions contained herein and thereinshall not in any way be affected or impaired thereby (it being understood thatthe invalidity of a particular provision in a particular jurisdiction shall notin and of itself affect the validity of such provision in any otherjurisdiction).  The parties shallendeavor in good-faith negotiations to replace the invalid, illegal orunenforceable provisions with valid provisions the economic effect of whichcomes as close as possible to that of the invalid, illegal or unenforceableprovisions.

##  

## **SECTION 9.13****.  *Counterparts.*** This Agreement may be executed incounterparts (and by different parties hereto on different counterparts), eachof which shall constitute an original but all of which when taken togethershall constitute a single contract, and shall become effective as provided inSection 9.03.  Delivery of anexecuted signature page to this Agreement by facsimile transmission shall be aseffective as delivery of a manually signed counterpart of this Agreement.

##  

## **SECTION 9.14****.  *Headings***.  Article and Section headings andthe Table of Contents used herein are for convenience of reference only, arenot part of this Agreement and are not to affect the construction of, or to betaken into consideration in interpreting, this Agreement.

##  

## **SECTION 9.15****.  *Jurisdiction; Consent to Service of Process.***  (a) Each Borrower hereby irrevocably and unconditionally submits, for itselfand its property, to the nonexclusive jurisdiction of any New York Statecourt or Federal court of the United States of America sitting in New YorkCity, and any appellate court from any thereof, in any action or proceedingarising out of or relating to this Agreement or the other Loan Documents, orfor recognition or enforcement of any judgment, and each of the parties heretohereby irrevocably and unconditionally agrees that all claims in respect of anysuch action or proceeding may be heard and determined in such New YorkState or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that afinal judgment in any such action or proceeding shall be conclusive and may beenforced in other jurisdictions by suit on the judgment or in any other mannerprovided by law.  Nothing in thisAgreement shall affect any right that the Administrative Agent, the CollateralAgent or any Lender may otherwise have to bring any action or proceedingrelating to this Agreement or the other Loan Documents against the Borrowers ortheir properties in the courts of any jurisdiction.

 

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### (b) Each Borrower hereby irrevocably and unconditionally waives, to thefullest extent it may legally and effectively do so, any objection which it maynow or hereafter have to the laying of venue of any suit, action or proceedingarising out of or relating to this Agreement or the other Loan Documents in anyNew York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullestextent permitted by law, the defense of an inconvenient forum to themaintenance of such action or proceeding in any such court.

###  

### (c) Each party to this Agreement irrevocably consents to service of processin the manner provided for notices in Section 9.01.  Nothing in this Agreement will affect theright of any party to this Agreement to serve process in any other mannerpermitted by law.

###  

## **SECTION 9.16****.  *Confidentiality.***  Each of the Administrative Agent, theCollateral Agent and the Lenders agrees to maintain the confidentiality of theInformation (as defined below), except that Information may be disclosed(a) to its and its Affiliates’ officers, directors, employees and agents,including accountants, legal counsel and other advisors with a reasonable needto know such Information (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential), (b) tothe extent requested by any regulatory authority or quasi-regulatory authority(such as the National Association of Insurance Commissioners), the partydisclosing such Information shall use its commercially reasonable efforts tohave such Information communicated in a confidential manner, (c) to theextent required by applicable laws or regulations or by any subpoena or similarlegal process, (d) in connection with the exercise of any remedies hereunder orunder the other Loan Documents or any suit, action or proceeding relating tothe enforcement of its rights hereunder or thereunder, (e) subject to anagreement containing provisions substantially the same as those of thisSection, to (i) any actual or prospective assignee of or participant inany of its rights or obligations under this Agreement and the other LoanDocuments, (ii) to any pledgee referred to in Section 9.04(h) or(iii) any actual or prospective counterparty (or its advisors) to any swapor derivative transaction relating to any Credit Party or any of theirrespective obligations, (f) with the prior written consent of theBorrowers or (g) to the extent such Information becomes publicly availableother than as a result of a breach of this Section.  For the purposes of this Section, “Information” shall mean allinformation received from any Borrower and related to any Borrower or itsbusiness, other than any such information that was available to theAdministrative Agent, the Collateral Agent or any Lender on a non-confidentialbasis prior to its disclosure by any Borrower. Any Person required to maintain the confidentiality of Information asprovided in this Section shall be considered to have complied with itsobligation to do so if such Person has exercised the same degree of care (whichshall be at least reasonable care) to maintain the confidentiality of suchInformation as such Person would accord its own confidential information.

##  

## **SECTION 9.17****.  *USA Patriot Act Notice.*** Each Lender and the Administrative Agent (foritself and not on behalf of any Lender) hereby notifies each Borrower thatpursuant to the requirements of the USA Patriot Act, it is required to obtain,verify and

 

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## record information that identifies each Borrower, which information includesthe name and address of such Borrower and other information that will allowsuch Lender or the Administrative Agent, as applicable, to identify suchBorrower in accordance with the USA Patriot Act.

##  

## **SECTION 9.18****.  *Intercreditor Agreement. ***In the event of any inconsistency betweenthe terms of this Agreement with respect to the rights and remedies of theCollateral Agent and the terms of the Intercreditor Agreement dated as ofJuly 29, 2004, between the Collateral Agent, on behalf of the SecuredParties, and the First Lien Agent (the “***Intercreditor Agreement***”), the IntercreditorAgreement shall control at any time the Intercreditor Agreement is in effect.

##  

# ***ARTICLE X***

# *** ***

# ***Cross-Guaranty***

# *** ***

## **SECTION 10.01****.  *Cross-Guaranty.*** Each Credit Party hereby agrees that suchCredit Party is jointly and severally liable for, and hereby absolutely andunconditionally guarantees to the Administrative Agent, the Collateral Agentand the Lenders and their respective successors and assigns, the full andprompt payment (whether at stated maturity, by acceleration or otherwise) andperformance of, all Obligations owed or hereafter owing to the AdministrativeAgent, the Collateral Agent and the Lenders by each other Credit Party.  Each Credit Party agrees that its guarantyobligation hereunder is a continuing guaranty of payment and performance andnot of collection, that its obligations under this Article X shall not bedischarged until payment and performance, in full, of the Obligations hasoccurred, and that its obligations under this Article X shall be absoluteand unconditional, irrespective of, and unaffected by:

##  

### (a) the genuineness, validity, regularity, enforceability or any futureamendment of, or change in, this Agreement, any other Loan Document or anyother agreement, document or instrument to which any Credit Party is or maybecome a party;

###  

### (b) the absence of any action to enforce this Agreement (including thisArticle X) or any other Loan Document or the waiver or consent by theAdministrative Agent, the Collateral Agent and the Lenders with respect to anyof the provisions thereof;

###  

### (c) the existence, value or condition of, or failure to perfect its Lienagainst, any security for the Obligations or any action, or the absence of anyaction, by the Administrative Agent, the Collateral Agent and the Lenders inrespect thereof (including the release of any such security);

###  

### (d) the insolvency of any Credit Party; or

###  

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

###  

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

 

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## **SECTION 10.02****.  *Waivers by Credit Parties.*** Each Credit Party expressly waives all rightsit may have now or in the future under any statute, or at common law, or at lawor in equity, or otherwise, to compel the Administrative Agent, the CollateralAgent or the Lenders to marshal assets or to proceed in respect of theObligations guaranteed hereunder against any other Credit Party, any otherparty or against any security for the payment and performance of theObligations before proceeding against, or as a condition to proceeding against,such Credit Party.  It is agreed amongeach Credit Party, the Administrative Agent, the Collateral Agent and theLenders that the foregoing waivers are of the essence of the transactioncontemplated by this Agreement and the other Loan Documents and that, but forthe provisions of this Article X and such waivers, the AdministrativeAgent, the Collateral Agent and the Lenders would decline to enter into thisAgreement.

##  

## **SECTION 10.03****.  *Benefit of Guaranty.*** Each Credit Party agrees that the provisionsof this Article X are for the benefit of the Administrative Agent, theCollateral Agent and the Lenders and their respective successors, transferees,endorsees and assigns, and nothing herein contained shall impair, as betweenany other Credit Party and the Administrative Agent, the Collateral Agent orthe Lenders, the obligations of such other Credit Party under the LoanDocuments.

##  

## **SECTION 10.04****.  *Waiver of Subrogation, Etc.***  Notwithstanding anything to the contrary inthis Agreement or in any other Loan Document, and except as set forth inSection 10.07, each Credit Party hereby expressly and irrevocably waivesany and all rights at law or in equity to subrogation, reimbursement,exoneration, contribution, indemnification or set off and any and all defensesavailable to a surety, guarantor or accommodation co-obligor.  Each Credit Party acknowledges and agreesthat this waiver is intended to benefit the Administrative Agent. theCollateral Agent and the Lenders and shall not limit or otherwise affect suchCredit Party’s liability hereunder or the enforceability of thisArticle X, and that the Administrative Agent, the Collateral Agent, theLenders and their respective successors and assigns are intended third partybeneficiaries of the waivers and agreements set forth in thisSection 10.04.

##  

## **SECTION 10.05****.  *Election of Remedies.***  If the Administrative Agent, the CollateralAgent or any Lender may, under applicable law, proceed to realize its benefitsunder any of the Loan Documents giving the Administrative Agent, the CollateralAgent or such Lender a Lien upon any Collateral, whether owned by any CreditParty or by any other Person, either by judicial foreclosure or by non judicialsale or enforcement, the Administrative Agent, the Collateral Agent or anyLender may, at its sole option, determine which of its remedies or rights itmay pursue without affecting any of its rights and remedies under thisArticle X.  If, in the exercise ofany of its rights and remedies, the Administrative Agent or any Lender shallforfeit any of its rights or remedies, including its right to enter adeficiency judgment against any Credit Party or any other Person, whetherbecause of any applicable laws pertaining to “election of remedies” or thelike, each Credit Party hereby consents to such action by the AdministrativeAgent, the Collateral Agent or such Lender and waives any claim based upon suchaction, even if such action by the Administrative Agent, the Collateral Agentor such Lender shall result in a full or partial loss of any rights ofsubrogation that each Credit Party might

 

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## otherwise have had but for such action by the Administrative Agent, theCollateral Agent or such Lender.  Anyelection of remedies that results in the denial or impairment of the right ofthe Administrative Agent, the Collateral Agent or any Lender to seek adeficiency judgment against any Credit Parties shall not impair any otherCredit Party’s obligation to pay the full amount of the Obligations.  In the event the Administrative Agent, theCollateral Agent or any Lender shall bid at any foreclosure or trustee’s saleor at any private sale permitted by law or the Loan Documents, theAdministrative Agent, the Collateral Agent or such Lender may bid all or lessthan the amount of the Obligations and the amount of such bid need not be paidby the Administrative Agent, the Collateral Agent or such Lender but shall becredited against the Obligations.  Theamount of the successful bid at any such sale, whether the AdministrativeAgent, the Collateral Agent, the Lender or any other party is the successfulbidder, shall be conclusively deemed to be the fair market value of theCollateral and the difference between such bid amount and the remaining balanceof the Obligations shall be conclusively deemed to be the amount of theObligations guaranteed under this Article X, notwithstanding that anypresent or future law or court decision or ruling may have the effect ofreducing the amount of any deficiency claim to which the Administrative Agent,the Collateral Agent or any Lender might otherwise be entitled but for suchbidding at any such sale.

##  

## **SECTION 10.06****.  *Limitation. ***Notwithstandingany provision herein contained to the contrary, each Credit Party’s liabilityunder this Article X (which liability is in any event in addition toamounts for which such Credit Party is primarily liable under Article II)shall be limited to an amount not to exceed as of any date of determination thegreater of:

##  

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

###  

### (b) the amount that could be claimed by the Administrative Agent, theCollateral Agent and the Lenders from such Credit Party under thisArticle X without rendering such claim voidable or avoidable underSection 548 of Chapter 11 of the Bankruptcy Code or under any applicablestate Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act orsimilar statute or common law after taking into account, among other things,such Credit Party’s right of contribution and indemnification from each otherCredit Party under Section 10.07.

###  

## **SECTION 10.07****.  *Contribution with Respect to Guaranty Obligations.***

##  

### (a) To the extent that any Credit Party shall make a payment under thisArticle X of all or any of the Obligations (other than Loans made to thatCredit Party for which it is primarily liable) (a “***Guarantor Payment***”)that, taking into account all other Guarantor Payments then previously orconcurrently made by any other Credit Party, exceeds the amount that suchCredit Party would otherwise have paid if each Credit Party had paid theaggregate Obligations satisfied by such Guarantor Payment in the sameproportion that such Credit Party’s “Allocable Amount” (as defined below) (asdetermined

 

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### immediately prior to such Guarantor Payment) bore to the aggregateAllocable Amounts of each of the Credit Parties as determined immediately priorto the making of such Guarantor Payment, then, following indefeasible paymentin full in cash of the Obligations and termination of the Commitments, suchCredit Party shall be entitled to receive contribution and indemnificationpayments from, and be reimbursed by, each other Credit Party for the amount ofsuch excess, pro rata based upon their respective Allocable Amounts in effectimmediately prior to such Guarantor Payment.

###  

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

###  

### (c) This Section 10.07 is intended only to define the relative rightsof the Credit Parties and nothing set forth in this Section 10.07 isintended to or shall impair the obligations of the Credit Parties, jointly andseverally, to pay any amounts as and when the same shall become due and payablein accordance with the terms of this Agreement, includingSection 10.01.  Nothing containedin this Section 10.07 shall limit the liability of any Credit Party to paythe Loans made directly or indirectly to that Credit Party and accruedinterest, fees and expenses with respect thereto for which such Credit Partyshall be primarily liable.

###  

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

###  

### (e) The rights of the indemnifying Credit Parties against other CreditParties under this Section 10.07 shall be exercisable upon the full andindefeasible payment of the Obligations and the termination of the Commitments.

###  

## **SECTION 10.08****.  *Liability Cumulative.*** The liability of the Credit Parties underthis Article X is in addition to and shall be cumulative with allliabilities of each Credit Party to the Administrative Agent, the CollateralAgent and the Lenders under this Agreement and the other Loan Documents towhich such Credit Party is a party or in respect of any Obligations orobligation of the other Credit Party, without any limitation as to amount,unless the instrument or agreement evidencing or creating such other liabilityspecifically provides to the contrary.

 

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IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be duly executed by their respective authorizedofficers as of the day and year first above written.

 
|   | THERMADYNE INDUSTRIES, INC.,   |
|--------|--------------------------------|
|   |                           |
|   |                           | by |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |
|   |                           |
|   | THERMAL DYNAMICS  CORPORATION, |
|   |                           |
|   |                           | by |   |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |
|   |                           |
|   | TWECO PRODUCTS, INC.,          |
|   |                           |
|   |                           | by |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |
|   |                           |
|   | VICTOR EQUIPMENT COMPANY,      |
|   |                           |
|   |                           | by |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |
|   |                           |
|   | C & G SYSTEMS, INC.,       |
|   |                           |
|   |                           | by |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |
|   |                           |
|   | STOODY COMPANY,                |
|   |                           |
|   |                           | by |
|   |                           |   | /s/ James H.  Tate |
|   |                           |   | Name: James H. Tate |
|   |                           |   | Title: Senior Vice President & CFO |

 

80

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|   | THERMAL ARC, INC.,                |
|--------|-----------------------------------|
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |
|   |                              |
|   | PROTIP CORPORATION,               |
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |
|   |                              |
|   | THERMADYNE INTERNATIONAL  CORP.,  |
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |
|   |                              |
|   | THERMADYNE HOLDINGS  CORPORATION, |
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |
|   |                              |
|   | THERMADYNE RECEIVABLES, INC.,     |
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |
|   |                              |
|   | MECO HOLDING COMPANY,             |
|   |                              |
|   |                              | by |
|   |                              |   | /s/ James H.  Tate |
|   |                              |   | Name: James H. Tate |
|   |                              |   | Title: Senior Vice President & CFO |

 

81

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|   | C&G SYSTEMS HOLDING, INC.,            |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      | by |
|   |                                      |   | /s/ James H.  Tate |
|   |                                      |   | Name: James H. Tate |
|   |                                      |   | Title: Senior Vice President & CFO |
|   |                                      |
|   | THERMADYNE WELDING PRODUCTS  CANADA LTD., |
|   |                                      |
|   |                                      | by |
|   |                                      |   | /s/ James H.  Tate |
|   |                                      |   | Name: James H. Tate |
|   |                                      |   | Title: Senior Vice President & CFO |

 

82

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|   | CREDIT SUISSE FIRST BOSTON,  acting  through its Cayman Islands Branch,  individually and as Administrative Agent  and Collateral Agent, |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                     |
|   |                                                                                                                                     | by |
|   |                                                                                                                                     |   | /s/  Christopher G. Cunningham |
|   |                                                                                                                                     |   | Name: Christopher G. Cunningham |
|   |                                                                                                                                     |   | Title: Managing Director |
|   |                                                                                                                                     |
|   |                                                                                                                                     | by |
|   |                                                                                                                                     |   | /s/ Joseph  Adipietro |
|   |                                                                                                                                     |   | Name: Joseph Adipietro |
|   |                                                                                                                                     |   | Title: Director |

 

83

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