-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, m4d4K5+y0oeXrMI5Boh//Df01YuIQ2rEwBmQZQ1n+VgSDr/lW8XVPVM6Poh1l7pS MiM/yf4HCX2UT2l8y5yCLg== 0000804212-95-000006.txt : 19950612 0000804212-95-000006.hdr.sgml : 19950612 ACCESSION NUMBER: 0000804212-95-000006 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950609 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGAS INC CENTRAL INDEX KEY: 0000804212 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-CHEMICALS & ALLIED PRODUCTS [5160] IRS NUMBER: 560732648 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09344 FILM NUMBER: 95546236 BUSINESS ADDRESS: STREET 1: 100 MATSONFORD RD STE 550 STREET 2: 5 RADNOR CORPORATE CENTER CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 2156875253 MAIL ADDRESS: STREET 1: 5 RADNOR CORPORATE CENTER, STE 550 STREET 2: 100 MATSONFORD ROAD CITY: RADNOR STATE: PA ZIP: 19087 10-K 1 FORM 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ Form 10-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File No. 1-9344 AIRGAS, INC. (Exact name of registrant as specified in its charter) Delaware 56-0732648 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5 Radnor Corporate Center, Suite 550 100 Matsonford Road, Radnor, Pennsylvania 19087-4579 (Address of principal executive offices) (Zip Code) (610) 687-5253 (Registrant's telephone number, including area code) Securities Registered Pursuant to Section 12 (b) of the Act: Name of Each Exchange Title of Each Class on Which Registered ______________________________________ _____________________ Common Stock, par value $.01 per share New York Stock Exchange Securities registered pursuant to Section 12 (g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO _________ ________ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the 26,086,772 shares of voting stock held by non-affiliates of the registrant on May 22, 1995 was $694.6 million. For purposes of this calculation, only executive officers and directors were deemed to be affiliates. The number of shares of Common Stock outstanding as of May 22, 1995 was 30,784,645. DOCUMENTS INCORPORATED BY REFERENCE The Company's Proxy Statement for the Annual Meeting of Stockholders to be held August 7, 1995 is partially incorporated by reference into Part III. Those portions of the Proxy Statement included in response to Item 402(k) and Item 402(l) of Regulation S-K are not incorporated by reference into Part III. 2 AIRGAS, INC. TABLE OF CONTENTS PART I ITEM PAGE NO. _____ ________ 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . .10 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . .10 PART II 5. Market for the Company's Common Stock and Related Stockholder Matters . 11 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . 12 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . 19 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . 19 PART III 10. Directors and Executive Officers of the Company . . . . . . . . . . . . 20 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 20 12. Security Ownership of Certain Beneficial Owners and Management. . . . . 20 13. Certain Relationships and Related Transactions. . . . . . . . . . . . . 20 PART IV 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K . . . . 21 3 PART I ITEM 1. BUSINESS. General Airgas, Inc. ("Airgas" or the "Company") classifies its operations in two business segments: distribution and manufacturing. Distribution revenues currently represent 95% of total revenues and 92% of the Company's operating income. Financial information by business segment can be found in note 20 to the Company's consolidated financial statements. The distribution business is conducted through approximately 400 locations in 37 states and Canada. Principal products distributed include: industrial, medical and specialty gases and a wide selection of name-brand welding equipment, accessories and industrial protective equipment ("hardgoods"), including electrode holders, welding wire, cable lugs and connectors, hard hats, welding helmets, hearing protectors, goggles, face shields, safety glasses, welding machines and electrodes. In connection with the distribution of gases, the Company rents industrial gas cylinders and bulk storage tanks to its customers. Additionally, acetylene gas is manufactured and sold as part of the Company's distribution business. Since its formation, the Company's strategy has been to expand through a program of acquiring independent distributors. The Company believes that its industrial gas distribution network is the largest and fastest growing industrial gas distribution system in the United States. Manufacturing operations include the production of carbon products, calcium carbide and nitrous oxide. THE DISTRIBUTION BUSINESS Industry Background and Company Strategy The industrial gas distribution market is broad and includes most major industries. The Company sells nitrogen, oxygen, argon, helium, acetylene, carbon dioxide, nitrous oxide, hydrogen and welding gases plus a variety of medical and specialty gases to a diverse customer base. Gases are distributed and stored in industrial gas cylinders and bulk storage tanks. Hardgoods sold through its distribution network include: protective equipment such as hard hats, welding helmets, goggles, face shields and protective glasses, welding machines and welding consumables and accessories, such as electrodes, electrode holders and cable connectors. The United States market for industrial gases is approximately $6 billion. Sales to major users of industrial gases that have the capacity to accept large bulk shipments or pipeline deliveries are generally serviced directly by industrial gas producers and account for approximately $3 billion of sales. Historically, industrial gas producers have focused on this segment of the market which is very capital intensive. The remaining $3 billion of industrial gas sales are made to small bulk users and cylinder gas customers. These small bulk users and cylinder gas customers are also believed to purchase $3 billion annually of hardgoods. Small bulk users and cylinder gas customers are served by a fragmented distribution system of approximately 1,000 distributors, the majority of which are independently owned. The Company concentrates on the small bulk, cylinder gas, welding and protective equipment segment of the market. This segment is less capital intensive because of the long useful lives of the fixed assets acquired, principally cylinders. 4 Acquisition Program Since May 1986, the Company has acquired over 165 industrial gas distributors. These distributors are organized into four operating divisions with approximately 400 locations in 37 states and Canada. The four operating divisions provide the Company with a national industrial gas distribution network that is unique to the industry. The Company's principal business strategy is to continue to expand its distribution network through a program of acquiring independent distributors. The industrial gas distribution industry continues to undergo a consolidation process which the Company believes will continue to present it with opportunities to acquire industrial gas distributors. The Company believes that its principal competitive advantages in acquiring distributors are its operating expense discipline, its well-organized acquisition program, flexibility in structuring acquisitions to meet sellers' needs and ability to offer sellers a continuing role in management. In seeking to acquire distributors, the Company competes with industrial gas producers and other large independent distributors. Management identifies acquisition candidates with the assistance of the Company's Advisory Board which consists of individuals with extensive experience in the industrial gas industry and through contacts made by the Company's nationwide network of subsidiary managers. Management believes the Company's return on capital can be maximized by financing distributor acquisitions primarily with internally generated funds and debt. The Company has been able to obtain debt financing due, in part, to its ability to generate cash flow from operating activities and the long useful lives and relatively stable market values of the acquired assets, principally cylinders. Foreign Investments During fiscal 1995, the Company entered into agreements to acquire interests in certain foreign distribution operations in Poland, India and Indonesia. At March 31, 1995, the total investment in foreign operations was less than 1% of total assets. The Company will continue to evaluate foreign distribution opportunities, however, its principal focus remains on North American expansion. Operating Policies The Company believes that industrial gas distributors are best managed at the local level by entrepreneurial, incentive-driven executives with backgrounds in the industrial gas industry. The president of each distribution subsidiary is typically a former owner or key employee of the acquired business or an experienced industrial gas executive recruited by management. The continuity afforded by retaining the key employees of an acquired business combined with local management is essential because the industrial gas distribution business is local in nature and is dependent upon satisfied repeat customers. 5 While managers are given a high degree of autonomy and operating control, the Company has developed standardized management reporting and operations review systems to monitor profitability and internal growth. Operations personnel and the Company's internal audit department perform in-depth reviews of subsidiary operations and prepare reports containing, among other things, recommendations regarding operating efficiencies, financial controls, personnel and safety. These personnel monitor the implementation of their recommendations through follow-up systems and visits. Customer Base The majority of the Company's gases are stored in bulk tanks at the Company's "cylinder fill" facilities and are compressed into cylinders for distribution to customers or, in the case of bulk customers, in tank trucks for storage in bulk tanks at the customer's business location. The Company emphasizes sales to cylinder and small bulk gas customers. The distribution of industrial gases historically has been to customers engaged in the business of welding and metal fabrication. In order to better serve these customers, industrial gas distributors have traditionally sold hardgood items through their distribution branch locations. As certain sectors of the economy have grown, such as the electronics and chemicals industries, and as new applications for gases have developed, the customer base of the gas distribution business has broadened significantly to include businesses in almost every major industry, from medical and high technology to consumer and basic industries. For example, the food and beverage industry uses carbon dioxide and nitrogen; the electronics industry uses oxygen, nitrogen, argon and hydrogen; the healthcare industry uses oxygen, nitrogen and nitrous oxide; and the chemical and fiber industries use nitrogen. Specialty gases, including ultra high purity gases, are used in many industries. The Company currently operates 22 specialty gas mini-labs in 18 states, capable of filling high purity gases, blending multi-component gas mixtures and providing quality control services. The Company anticipates continuing growth in this product area. The principal drivers for market growth include: (1) environmental regulations, such as the Clean Air Act, water testing and pollution remediation and testing and monitoring (2) quality control services where in-line chromatography and spectrography are used to analyze samples and (3) growth of environmental, research and clinical laboratories. The Company also concentrates its efforts in the small bulk gas market. The primary gases that the Company sells in bulk are liquid oxygen, nitrogen, argon, carbon dioxide, and sales of hydrogen, helium and nitrogen in high- pressure tube trailers. The Company charges customers rent for the use of bulk tanks and tube trailers which are placed on the customer's property. As large industrial gas producers continue to shift their focus from small bulk customers to large bulk shipments, the Company believes there are growth opportunities in marketing to these small bulk customers, which it can serve more effectively than industrial gas producers. Management believes that the gas portion of the distribution business is partially resistant to downturns in the business cycle due to the following factors: 1) gases frequently represent a fixed cost of operations that do not necessarily decline with production levels; 2) gases are required for maintenance and renovation activities which tend to increase during an economic downturn; 3) industries less subject to the effects of an economic downturn are major purchasers of gases; and 4) gas purchases represent a small 6 portion of a typical user's overall cost of operation and, therefore, do not represent a large cost-cutting item. Management believes the Company's broad customer base and the geographic diversity of its gas distribution business also help to reduce the adverse effects of an economic downturn on the Company. Products Gases distributed by the Company include oxygen, nitrogen, hydrogen, argon, helium, acetylene, carbon dioxide, nitrous oxide and specialty gases. In addition to gases, the Company distributes a wide selection of name-brand hardgoods, including electrode holders, welding wire, cable lugs and connectors, hard hats, welding helmets, hearing protectors, goggles, face shields, safety glasses, welding machines and electrodes. Of the Company's fiscal 1995 sales from distribution, approximately 52 percent represent sales of gases and rentals of cylinders and bulk tanks, and 48 percent represent hardgood sales. Airgas has concentrated on growing its gas and cylinder rental revenues through the implementation of gas oriented marketing programs and by focusing on small bulk customers. Suppliers The Company purchases industrial, medical and specialty gases pursuant to requirements contracts from all four of the major producers of industrial gases in the United States and three regional producers. The Company believes that if a contractual arrangement with any supplier of gases were terminated, it would be able to locate alternative sources of supply without significant cost increases and with no disruption of service. The Company purchases hardgoods from name-brand manufacturers and suppliers. For certain products, the Company has negotiated favorable pricing based on national purchasing arrangements and is reducing its investment in hardgood inventories by consolidating vendors. MANUFACTURING AND RELATED BUSINESSES Nitrous Oxide The Company's subsidiary, Nitrous Oxide Corp. ("Nitrous Oxide"), produces nitrous oxide which is used in various medical and commercial applications. Nitrous oxide is used as an anesthetic in the medical and dental fields, as a propellant in the packaged food business and is utilized in the manufacturing process of certain high technology electronic industries. Nitrous Oxide operates manufacturing facilities located in Yazoo City, Mississippi and Donora, Pennsylvania. Carbon Products Through its Midwest Carbide subsidiary located in Keokuk, Iowa, the Company manufacturers carbon electrode paste, carbon ramming mix ("Ramblox") and electrically calcined anthracite ("ECA"). Midwest Carbide is the nation's primary manufacturer of carbon electrode paste which is used as a consumable electrode in the production of special alloy steel, nickel and other metals. Ramblox is a carbon mixture used in the lining of non-ferrous metals furnaces. ECA is used as an ingredient in carbon mixes used in the aluminum industry as an additive in the production of certain metals. Sales of electrode paste, Ramblox and ECA are conducted through a marketing organization which owns more 7 than five percent of the Company's outstanding common stock (see Item 13. Certain Relationships and Related Transactions). Calcium Carbide The Company is a partner with Elkem Metals Company ("Elkem") in a joint venture (Elkem-American Carbide Company) which primarily sells calcium carbide which is used in the production of acetylene gas. The Company and Elkem have equal control over activities of the joint venture. The Company accounts for its investment in the joint venture using the equity method of accounting. Earnings and losses are allocated 55% to the Company and 45% to Elkem. The Company and Elkem receive certain fees, based on net sales, for acting as agents for the joint venture. Additionally, as general manager of the joint venture, Elkem receives a management fee based on net sales. The Company also operates a manufacturing facility in Pryor, Oklahoma. COMPETITION Each of the major business areas in which the Company participates is highly competitive. Some competitors are larger than the Company and have greater resources. The Company's industrial gas distribution operations compete with independent distributors and vertically integrated gas producers such as Air Products and Chemicals, Praxair, Liquid Air Corporation of America, BOC Gases Group and others; all of which have distribution operations. Competition in the industrial gas distribution market is based primarily on customer service and price. The Company also purchases industrial gases pursuant to requirement contracts from all four of the above major producers of industrial gases. Management believes that competition for the Company's manufactured products is based primarily on product quality, price and quality of customer service. REGULATORY AND ENVIRONMENTAL MATTERS The businesses of the Company's subsidiaries are subject to federal and state laws and regulations adopted for the protection of the environment and the health and safety of employees and users of the Company's products. The Company has programs for the operation and design of its facilities which meet or exceed applicable environmental rules and regulations. The Company believes that it is in compliance in all material respects with applicable environmental laws and regulations. The Company is in varying stages of investigation or remediation of potential, alleged or acknowledged contamination of current or former facilities. Expenditures for environmental purposes during 1995 were not material. 8 INSURANCE The Company maintains liability and property insurance which is usual and customary for companies operating in its business segments. As of March 31, 1995, the Company had a liability insurance limit of $51 million. The liability insurance is subject to per occurrence deductible amounts of $1 million for product liability, general liability and workers' compensation claims, and $500 thousand for motor vehicle liability. The nature of the Company's business may subject it to product and general liability lawsuits. To the extent that the Company is subject to claims which exceed its liability insurance coverages, such suits could have a material adverse effect on the Company's financial position, results of operations or liquidity. No such material lawsuits are pending against the Company or any of its subsidiaries (see Item 3. Legal Proceedings). EMPLOYEES On March 31, 1995, the Company employed approximately 4,100 persons of whom approximately 5% were covered by collective bargaining agreements. The Company believes it has good relations with its employees and has not experienced a strike or work stoppage in the past eight years. PATENTS, TRADEMARKS AND LICENSES The Company holds trademark registrations for "Airgas," "ECA", "Ramblox", "Dyna-Switch", "Va-Weld", and a method for purification of acetonitrile. The Company believes that its businesses as a whole are not materially dependent upon any single patent, trademark or license. EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES OF THE COMPANY The executive officers of the Company are listed below: Name Age Position ____ ___ ________ Peter McCausland (1)(2) 45 Chairman of the Board, President and Chief Executive Officer E. Pat Baker (2) 55 Division President - Eastern Division Alfred B. Crichton (2) 47 Division President - Western Division Kenneth A. Keeley (2) 54 Division President - Central Division Hermann Knieling (2) 57 Division President - Southern Division William A. Rice, Jr. (2) 48 Division President -Industrial Distribution and Purchasing Britton H. Murdoch (2) 37 Vice President - Finance and Chief Financial Officer Gordon L. Keen, Jr. (2) 50 Vice President - Corporate Development William E. Sanford (2) 35 Vice President - Sales and Marketing Scott M. Melman (2) 38 Vice President - Chief Administrative Officer Ronald W. Beebe (2) 46 Vice President - Chief Information Officer Rudi G. Endres (2) 51 Vice President - International _____________ (1) Member of the Board of Directors (2) Executive Officer 9 Mr. McCausland has been a Director of the Company since June 1986, the Chairman of the Board and Chief Executive Officer of the Company since May 1987, President since April 1, 1993 and from June 1986 to August 1988 and Chairman and Chief Executive Officer of US Airgas since its organization in February 1982. From January 1982 until June 1990, Mr. McCausland was a partner in the law firm of McCausland, Keen & Buckman, Radnor, Pennsylvania, which provides legal services to the Company. Mr. Baker has been the Company's Division President - Eastern Division since April 1, 1995. Mr. Baker served as a Regional Vice President from May 1991 to February 1993 and President of Lone Star Airgas since the acquisition of Lone Star Airgas (formerly West Texas Welders Supply) in October 1988 to March 1995. Prior to joining Airgas, Mr. Baker was President and owner of West Texas Welders Supply from August 1981 to October 1988. Mr. Crichton has been the Company's Division President - Western Division since February 3, 1993. Mr. Crichton served as a Regional Vice President from May 1991 to February 1993 and as President of Sierra Airgas since the acquisition of Sierra Airgas (formerly Moore Bros.) in January 1987. Mr. Crichton was employed by Union Carbide Industrial Gases (UCIG) from 1969 through 1986, and prior to joining Moore Bros., was President of a subsidiary of UCIG. Mr. Keeley has been the Company's Division President - Central Division since February 3, 1993. Mr. Keeley served as a Regional Vice President from April 1989 to February 1993 and as President of Michigan Airgas from March 1984 to March 1989. Prior to 1984, Mr. Keeley owned and operated an industrial gas distributor which was sold to the Company. Mr. Knieling has been the Company's Division President - Southern Division since April 1, 1995. Mr. Knieling served as Division President - Eastern Division from February 3, 1993 to March 1995. Mr. Knieling served as a Regional Vice President from June 1990 to February 1993 and as President of Gulf States Airgas from June 1989 to February 1993. Mr. Knieling owned and operated an industrial gas distributor which was sold to the Company in 1989. Also, Mr. Knieling served in various capacities for Hoechst AG during a period of 18 years, and, prior to his leaving Hoechst in 1982 was President and Chief Executive Officer of its subsidiary, MG Burdett Gas Products Company. Mr. Rice has been the Company's Division President - Industrial Distribution and Purchasing since April 1, 1995 and served as Vice President - Purchasing from August 1, 1993 to March 1995. Until August 1993, he was President of Virginia Welding Supply, an industrial gas distributor which was acquired by the Company in July 1992. Prior to joining Airgas, Mr. Rice was President and a majority owner of Virginia Welding Supply. Mr. Rice has over 20 years of industry experience and serves on the boards of various companies. Mr. Murdoch has been the Vice President - Finance and Chief Financial Officer of the Company since June 1, 1990 and served as Vice President - Corporate Development from September 1987 until May 1990. Mr. Murdoch served as a Vice President of Philadelphia National Bank from 1983 to September 1987. Mr. Keen has been the Vice President - Corporate Development since January 1, 1992. From January 1982 until December 1991, Mr. Keen was a partner in the law firm of McCausland, Keen & Buckman, Radnor, Pennsylvania, which provides legal services to the Company. 10 Mr. Sanford has been Vice President - Sales and Marketing since February 3, 1993 and served as President of Cascade Airgas from March 1989 to February 1993. From May 1984 to February 1989 Mr. Sanford served as Vice President -- Sales and Marketing for American Carbide and Carbon Corp., another subsidiary of the Company. Mr. Melman has been Vice President - Chief Administrative Officer since April 1, 1995. Mr. Melman served as Vice President - Corporate Controller from August 1994 to March 1995 and Corporate Controller from August 1986 to July 1994. Prior to joining Airgas, Mr. Melman was the Controller for Integrated Circuit Systems, Inc. from November 1983 to July 1986, and prior to joining Integrated Circuit Systems, Inc., was a Tax Manager for KPMG Peat Marwick LLP. Mr. Beebe has been Vice President - Chief Information Officer since April 1, 1995 and Vice President - Administration from May 1991 to March 1995 and served as Group Controller from August 1988 to April 1991. Mr. Beebe was controller of Michigan Airgas from April 1985 to July 1988. Prior to that, Mr. Beebe served in key management positions for several emerging businesses. Mr. Endres has been the Vice President - International since January 1993. Mr. Endres served as Vice President - Marketing from July 1991 until December 1992. From February 1987, Mr. Endres served as General Manager and Vice President for the western region of Airgas. Prior to joining Airgas, Mr. Endres served for 18 years in various positions nationally and internationally for Messer Griesheim, a major producer of industrial gases headquartered in Germany. His last position was Vice President for Specialty Gases and Chemicals at MG Industries in Valley Forge, PA. ITEM 2. PROPERTIES. The Company has offices, manufacturing and distribution facilities in 37 states and Canada. The principal executive offices of Airgas are located in leased space in Radnor, Pennsylvania. The Company's manufacturing segment produces carbon products at its Keokuk, Iowa, facility; calcium carbide at its Pryor, Oklahoma, facility; and nitrous oxide at its Donora, Pennsylvania and Yazoo City, Mississippi facilities. Manufacturing facility utilization during 1995, based on market demand, has ranged from 65 to 100 percent. The Keokuk and Pryor facilities are owned by the Company. The Donora plant is located on property leased through the year 1996. The Yazoo City property is owned by the Company, however, it will revert to the local municipality if the plant terminates operations. The Keokuk, Pryor and Donora facilities are pledged as collateral under Industrial Development Board revenue bonds (see note 8 to the Company's consolidated financial statements). The Company's distribution segment conducts business from its 400 industrial gas and welding supply locations in 37 states and Canada. These locations are either owned or are leased from third parties or from employees of the Company who were previous owners of businesses acquired on terms consistent with commercial rental rates prevailing in the surrounding rental market. Nineteen distribution locations in 12 states include acetylene manufacturing plants. The Company's acetylene plants operated at approximately 60 percent of capacity during 1995. 11 The Company believes that its facilities are adequate for its present needs and that its properties are generally in good condition, well maintained and suitable for their intended use. ITEM 3. LEGAL PROCEEDINGS. The Company and its subsidiaries are parties to pending legal proceedings arising out of their business operations. The proceedings involve claims for personal injuries, breach of contract, product warranty and product design, and claims involving employee relations and certain administrative proceedings. Management does not believe that the eventual outcome of any litigation to which the Company or its subsidiaries are parties would have a material adverse effect on the consolidated financial position, results of operations or liquidity. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. 12 PART II ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS. The Company's Common Stock is listed on the New York Stock Exchange (ticker symbol: ARG). The following table sets forth, for each quarter during the last two fiscal years, the high and low sales prices as reported by the New York Stock Exchange. High Low ---- --- 1995 Fiscal First Quarter $27.63 $20.63 Second Quarter 28.50 23.50 Third Quarter 29.88 20.50 Fourth Quarter 26.50 19.63 1994 Fiscal First Quarter (1) $16.31 $11.19 Second Quarter (1) 19.75 15.63 Third Quarter (1) 23.00 17.75 Fourth Quarter 26.00 19.75 ________________ (1) Adjusted to reflect a two-for-one stock split effective on November 9, 1993 (See note 9 to the Company's consolidated financial statements). On April 30, 1995, there were approximately 11,000 holders of record of the Company's Common Stock. The present policy of the Company is to retain earnings to provide funds for the operation and expansion of its business. Accordingly, the Company has not paid cash dividends on its Common Stock. Any payment of future dividends and the amounts thereof will depend upon the Company's earnings, financial condition, loan covenants, capital requirements and other factors deemed relevant by the Board of Directors (see note 8 to the Company's consolidated financial statements). ITEM 6. SELECTED FINANCIAL DATA Selected financial data for the Company is presented in the table below and should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 and the Company's consolidated financial statements included in Item 8 herein. 13 (amounts in thousands except per share data): Years Ended March 31, (6) ___________________________________________ (3) 1995 1994 1993 1992 1991 ____ ____ ____ ____ ____ Operating Results: Net sales $687,983 $519,349 $410,771 $351,491 $322,478 Depreciation & amortization(2) 36,868 30,571 28,045 23,670 21,410 Operating income 72,600 48,667 34,367 26,316 17,286 Interest expense, net 17,625 12,486 11,403 12,838 15,179 Income taxes(1) 23,894 16,027 10,811 7,718 3,400 Net earnings 31,479 20,290 12,469 7,292 1,166 Earnings Per Share(4): Primary: Net earnings $ .96 $ .63 $ .40 $ .27 $ .05 Fully Diluted: Net earnings $ .96 $ .63 $ .39 $ .26 $ .05 Balance Sheet Data: Working capital $ 54,084 $ 47,071 $ 40,253 $ 39,425 $ 48,774 Total assets 645,637 514,897 399,477 338,218 307,576 Current portion of long-term debt 11,780 10,304 9,923 10,026 7,383 Long-term debt 259,970 205,311 158,629 151,098 149,826 Stockholders' equity(5) 189,652 156,867 127,571 104,931 91,779 _______________ (1) The Company has retroactively adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" as of April 1, 1992. See additional information in note 13 to the consolidated financial statements. (2) Effective April 1, 1993, the Company changed its estimate of the useful lives of its acetylene and high pressure cylinders from 20 to 30 years. This change was made to better reflect the estimated periods during which these assets will remain in service. The change had the effect of reducing depreciation expense in 1994 by approximately $3.1 million and increasing net earnings by $1.9 million or $.06 per share. (3) During 1991, the Company recorded a $4.2 million pre-tax restructuring charge related to the disposal of certain businesses and severance costs associated with downsizing of the Company. Including the restructuring charge, operating losses of these businesses totalled $5.3 million during 1991. During 1992 and 1993, the restructured businesses were sold. (4) See notes 3 and 9 to the Company's consolidated financial statements for information regarding earnings per share calculations and stock split information. (5) The Company has not paid any dividends. (6) During the fiscal years 1991 through 1995, the Company acquired 99 industrial gas distributors. 14 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Item 7. FINANCIAL REVIEW OVERVIEW The Company's financial results for the year ended March 31, 1995 reflect substantial growth compared with 1994. Net sales of $688 million, net earnings of $31.5 million and earnings per share of $.96 represent increases over 1994 of 32%, 55% and 52%, respectively. During 1995, the Company benefited from an improved economy, the acquisition and consolidation of industrial gas distributors and from continuing improvement efforts. Same-store sales, a comparison of current period sales to the prior period's sales, adjusted for acquisitions, increased 5% over 1994. The Company's industrial gas distribution acquisition program continued during 1995 with the acquisition of 25 distributors with annual sales of approximately $108 million. This follows 18 acquisitions in 1994 with annual sales of approximately $137 million. Consolidation of acquisitions is enabling economies of scale both nationally and at the local level, which is resulting in better purchasing power and more cost effective programs for safety, compliance, training and quality. The Company expects to achieve improvements in operating results through the future acquisition of industrial gas distributors, improvement in operating margins by operating more efficiently and from expanding markets for its existing products. The industrial gas distribution industry continues to undergo a consolidation process which the Company believes will present it with opportunities to acquire distributors. In seeking to acquire distributors, the Company anticipates increased competition with industrial gas producers and with certain other large independent distributors. The Company believes it will continue to be successful in acquiring distributors since it is the largest distributor and has the greatest geographic scope combined with the ability to offer sellers and their employees a continuing management role in a decentralized entrepreneurial environment. The Company continues to concentrate on growing its gas and cylinder rental revenues through the implementation of gas oriented marketing programs, such as specialty gases, and by focusing on the small bulk business. Sales related to gas and rent represent 52% or $340.3 million of total distribution net sales in 1995. The Company has established 22 specialty gas mini-labs which benefit customers by providing them with approximately 80% of specialty gas products in their local market. In connection with hardgoods, the Company is focused on strategically reducing its investment in inventories by consolidating vendors and negotiating favorable pricing based on national purchasing arrangements. Hardgoods sales in 1995 account for 48% or $314.1 million of total distribution net sales. Airgas remains focused on cash flow growth. Historically, operations have generated sufficient cash flow to finance the Company's operating requirements while borrowings have been incurred largely to finance acquisitions. Over the past three years, cash flow from operations has totalled $201.3 15 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) million. This strong cash flow has substantially funded the Company's investment, excluding debt assumed, in acquisitions and capital expenditures which, for the past three years totalled $222.8 million and $72.7 million, respectively. At March 31, 1995, The Company had $148.0 million in unsecured lines of credit available at favorable rates. The Company's debt-to-equity ratio of 1.43 at March 31, 1995 was up slightly from the prior year of 1.37 primarily as a result of the repurchases of Company stock. RESULTS OF OPERATIONS: 1995 COMPARED TO 1994 Net sales increased 32% in 1995 compared to 1994: (in thousands)
1995 1994 Increase ____ ____ __________ Distribution $654,381 $486,836 $167,545 Manufacturing 33,602 32,513 1,089 _______ _______ _______ $687,983 $519,349 $168,634 ======= ======= =======
In 1995, distribution sales increased approximately $136 million resulting from the acquisition of 40 industrial gas distributors since April 1, 1993 and approximately $32 million from same-store sales. Based on unaudited historical pro forma data, the Company estimates that had all 1995 acquisitions been consummated on April 1, 1994, distribution sales for 1995 would have been approximately $49 million higher. The increase in same-store sales of approximately 5% is primarily the result of increased volume of hardgoods sales and increases in gas and rental businesses. The Company estimates same-store sales based on a comparison of current period sales to the prior period's sales, adjusted for acquisitions. Hardgoods and gas volumes have primarily increased as a result of the general improvement in the economy and certain gas marketing programs. Same-store sales have also increased slightly as a result of price increases initiated during the current and prior year. Future same-store sales growth is dependent on continued growth in the economy and the Company's ability to expand markets for existing products and to increase prices. The Company believes that sales of hardgoods are adversely impacted during a recession, and conversely, are typically the fastest to rebound during an economic recovery. Sales for the Company's manufacturing operations increased slightly compared to 1994 primarily as a result of an increase in the volume of lower margin products. Compared to 1994, distribution gross profit increases associated with acquisitions totalled an estimated $69 million. Gross profits associated with distribution same-store sales growth are estimated to total $16 million. The same-store gross profit growth is attributable to increased hardgoods volumes combined with improved gross margins resulting from the Company's national 16 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) purchasing arrangements, success of gas marketing programs and improved gas and rental gross margins due to price increases to customers. On a same-store basis, considering the impact of the change in the Company's sales mix slightly towards lower margin hardgoods sales, distribution gross margins increased an estimated .6% compared to 1994. Selling, distribution and administrative expenses as a percentage of sales decreased to 34.3% compared to 34.8% in 1994. The decrease is a result of acquisition consolidation efforts during the past year and from controlling certain operating costs, such as business insurance through improved claims management and reduced incident rates. Through improved billing and collection efforts, the Company has also reduced its bad debt expense and lowered its accounts receivable days sales outstanding to 44 days compared to 49 days at March 31, 1994. Also, certain operating costs, such as occupancy costs, are relatively fixed even though the Company's same-store sales have increased over 1994. Partially offsetting these improvements were normal salary increases. Operating income increased 49% in 1995 compared to 1994: (in thousands)
1995 1994 Increase (Decrease) ____ ____ __________ Distribution $66,521 $42,399 $24,122 Manufacturing 6,079 6,268 (189) ______ ______ ______ $72,600 $48,667 $23,933 ====== ====== ======
Distribution operating income as a percentage of net distribution sales increased to 10.2% compared to 8.7% in 1994. The improvement in distribution operating income in 1995 was a result of the increase in gross profits from higher same-store sales, operating income provided by acquisitions and improved gross profit margins. Manufacturing operating income decreased $189,000 compared to the prior year due to a product shift towards lower margin export sales of carbon products, slightly lower profits from the sale of calcium carbide combined with higher raw material costs, principally ammonium nitrate, for the Company's nitrous oxide plants. Interest expense, net, increased $5.1 million compared to 1994 primarily as a result of the increase in average outstanding debt associated with the acquisition of industrial gas distributors since April 1, 1993 combined with slightly higher interest rates. As discussed in "Liquidity and Capital Resources" below, the Company has hedged floating interest rates under certain borrowings with interest rate swap agreements. 17 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Income tax expense represented 43.2% of pre-tax earnings in 1995 compared to 44.1% in 1994. The decrease in the effective income tax rate is primarily due to an increase in pre-tax earnings relative to permanent differences. Net earnings increased 55% to $31.5 million or $.96 per share in 1995 from $20.3 million or $.63 per share in 1994. After tax cash flow (net earnings plus depreciation, amortization and deferred income taxes) increased 35% to $79.9 million from $59.1 million in 1994. After tax cash flow is an important measurement of the Company's ability to repay debt through operations and provides the Company with the ability to pursue investment alternatives such as acquisitions and the repurchase of Company stock. RESULTS OF OPERATIONS: 1994 COMPARED WITH 1993 Net Sales increased 26% in 1994 compared to 1993: (in thousands) 1994 1993 Increase ____ ____ ________ Distribution $486,836 $379,899 $106,937 Manufacturing 32,513 30,872 1,641 _______ _______ ______ $519,349 $410,771 $108,578 ======= ======= ======= In 1994, distribution sales increased approximately $93 million resulting from the acquisition of 35 industrial gas distributors since April 1, 1992 and approximately $14 million from same-store sales. Based on unaudited historical pro forma data, the Company estimates that had all 1994 acquisitions been consummated on April 1, 1993, distribution sales for 1994 would have been approximately $75 million higher. The increase in same-store sales of approximately 3% is primarily a result of increased volume in hardgoods sales combined with a slight increase in gas sales. The Company estimates same-store sales based on a comparison of current period sales to the prior period's sales, adjusted for acquisitions. Hardgoods and gas volumes have primarily increased as a result of the general improvement in the economy. The growth in 1994 reverses the negative same-store sales trend exhibited during the previous three years. Compared to 1993, distribution gross profit increases associated with acquisitions total an estimated $49 million. Gross profits associated with distribution same-store sales growth are estimated to total $8 million. The same-store gross profit growth is attributable to increased hardgoods volumes, the success in gas marketing programs and improved gas and rental gross margins due to price increases to customers. 18 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Sales for the Company's manufacturing operations increased approximately 5% as a result of an increase in the volume of nitrous oxide gases and export sales of carbide and carbon products. Operating income increased 42% in 1994 compared to 1993: (in thousands) 1994 1993 Increase ____ ____ ________ Distribution $42,399 $28,443 $13,956 Manufacturing 6,268 5,924 344 ______ ______ _____ $48,667 $34,367 $14,300 ====== ====== ====== Distribution operating income as a percentage of net distribution sales increased to 8.7% compared to 7.5% in 1993 as a result of the increase in gross profits from higher same-store sales, a decrease in depreciation expense related to a change in the depreciable life of cylinders and operating income provided by acquisitions. Distribution operating income increased as a result of the operating income from business acquisitions, an increase in same-store sales, increased gross profit margins, a decrease in depreciation expense and cost containment efforts with respect to operating costs. Depreciation expense decreased as a result of a lengthening of the estimated service lives of industrial gas cylinders from 20 to 30 years. The effect of the change in cylinder lives was to decrease depreciation expense in 1994 by approximately $3.1 million. The Company changed the estimated useful life of cylinders as a result of thorough studies and analyses. The studies considered technological advances in cylinders, empirical data obtained from cylinder manufactures and other industry experts and experience gained from the Company's maintenance of a cylinder population of approximately two million cylinders. Interest expense, net, increased $1.1 million compared to 1993 primarily as a result of the increase in average outstanding debt associated with the acquisition of industrial gas distributors since April 1, 1992. Income tax expense represented 44.1% of pre-tax earnings in 1994 compared to 46.4% in 1993. The decrease in the effective income tax rate is primarily due to an increase in pre-tax earnings relative to permanent differences partially offset by the enactment of higher federal corporate income tax rates. Net earnings increased 63% to $20.3 million or $.63 per share in 1994 from $12.5 million or $.39 per share in 1993. As discussed above, the change in the estimated service lives of industrial gas cylinders increased 1994 earnings by $1.9 million or $.06 per share. After tax cash flow (earnings from continuing operations plus depreciation, amortization and deferred income taxes) increased 29% to $59.1 million from $45.7 million in 1993. After-tax cash flow, is an important measurement of the Company's ability to repay debt through operations and provides the Company with the ability to pursue investing alternatives such as acquisitions and the repurchase of Company stock. 19 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES _______________________________ The Company has financed its operations, capital expenditures and acquisitions with borrowings, funds provided by operating activities and through the issuance of common stock. Cash flows from operating activities totaled $84.7 million in 1995. Depreciation and amortization represent $36.9 million of cash flow from operating activities. Deferred income taxes of $11.5 million principally resulted from temporary differences and utilization of alternative minimum tax credit carryforwards. Working capital components of cash flow decreased $2.4 million as a result of an increase in accounts receivable based on higher sales, building inventory levels to meet increased hardgoods sales volumes offset by an increase in trade accounts payable and accrued expenses and other liabilities. Although accounts receivable and inventory levels have increased, days-sales outstanding and days-supply of inventory levels have improved since March 31, 1994. Cash used by investing activities totaled $119.5 million in 1995 which was primarily comprised of $36.7 million for capital expenditures and $86.3 million related to acquisitions. The Company's use of cash for capital expenditures was partially attributable to the continued assimilation of certain 1995 and 1994 acquisitions which required the Company to make capital expenditures in areas such as combining cylinder fill plants, improving truck fleets, purchasing cylinders in order to return cylinders rented from third parties and completing computer conversions. Additionally, capital expenditure costs have increased during 1995 as a result of the purchase of cylinders and bulk tanks, necessary to facilitate gas sales growth. The Company estimates that its maintenance capital expenditures are approximately 2% of net sales. The Company considers the replacement of existing capital assets to be maintenance capital expenditures. In 1996, subject to the effects of future acquisitions, the Company expects the level of capital expenditures to approximate 1995 amounts. During the third quarter of fiscal 1995, in contemplation of a transaction with CBI Industries, Inc. ("CBI") the Company purchased 740,000 shares of CBI common stock. During the fourth quarter, the Company sold its shares of CBI common stock for a gain of $560,000. Financing activities provided cash of $34.8 million in 1995 with total debt outstanding increasing by $56.1 million from March 31, 1994. Debt incurred in connection with the acquisition of industrial gas distribution businesses, including seller notes and assumed notes, totalled $107.5 million. In January 1995, the Company's Board of Directors approved the repurchase of up to one million shares of Airgas Common stock. Through May 22, 1995, the Company has purchased 749,000 shares at an aggregate cost of $18.1 million. The purchase of additional shares is dependent on prevailing market conditions. 20 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) One of the Company's primary sources of borrowings is an unsecured revolving credit facility with various commercial banks. At March 31, 1995, the facility provided for borrowings up to $250 million, with sub-limits for money market loans, bankers acceptances and the issuance of letters of credit. On March 31, 1995, the Company had approximately $105 million in borrowings under the facility and approximately $32 million committed under letters of credit, resulting in availability under the facility of approximately $113 million. The facility provides for quarterly interest payments payable currently with equal quarterly principal payments beginning in September 1996 and continuing through June 2001. In November 1994, the Company entered into a new $100 million unsecured revolving credit facility with various commercial banks to provide additional availability for the Company's ongoing acquisition and investment programs. The facility currently bears interest at the Libor rate plus an applicable margin and matures on July 1, 1996. On March 31, 1995, the Company had approximately $75 million in borrowings under the facility resulting in availability under the facility of approximately $25 million. The Company intends to terminate its $100 million facility in conjunction with an anticipated increase in the Company's $250 million revolving credit facility in August 1995, which will have terms and conditions similar to its existing $250 million facility. The Company also has unsecured line of credit agreements which provide for borrowings aggregating $25 million. At March 31, 1995, $15 million was outstanding under these agreements. At March 31, 1995, the effective interest rate related to the $195 million of outstanding borrowings under the above credit lines was approximately 6.6%. The Company had $27.9 million outstanding at March 31, 1995 related to senior subordinated notes which bear interest at a fixed rate of 11.375% and require principal payments through August 1998. The Company's loan agreements contain restrictive covenants which include the maintenance of a minimum equity level, maintenance of certain financial ratios and restrictions on additional borrowings and the level of dividend payments. In managing interest rate exposure, principally under the Company's floating rate revolving credit facilities, the Company has entered into thirteen interest rate swap agreements during the period from June 1992 through March 31, 1995. The swap agreements are with major financial institutions and have a total notional principal amount of $138 million at March 31, 1995. Approximately $119 million of the notional principal amount of the swap agreements require fixed interest payments based on an average effective rate of 7.3% for remaining periods ranging between 3 and 8 years. Two swap agreements require floating rates ($19.5 million notional amount at 6.5% at March 31, 1995). The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties. 21 AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Company will continue to look for appropriate acquisitions and expects to fund such acquisitions, future capital expenditure requirements and commitments related to foreign investments through cash flow from operations and with debt and other available sources. Subsequent to March 31, 1995, the Company has acquired, entered into agreements, or signed letters of intent to acquire industrial gas distribution businesses with an aggregate purchase price of approximately $42 million. The Company does not currently pay dividends. OTHER Environmental The Company believes that it is in compliance in all material respects with applicable environmental laws and regulations. The Company is in varying stages of investigation or remediation of potential, alleged or acknowledged contamination of current or former facilities. In conducting due diligence for prospective acquisitions, the Company completes Phase I environmental studies. Expenditures for environmental purposes during 1995 were not material. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade receivables. Concentrations of credit risk are limited due to the Company's large number of customers and their dispersion across many industries. Credit terms granted to customers are generally net 30 days. Effects of Inflation In the past, the Company has been able to adjust its sales price of products in response to market demand, cost of products, competitive factors and other industry trends. Consequently, the impacts of inflation have not had a materially adverse impact on the Company's financial position, results of operations, or liquidity. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The consolidated financial statements and financial statement schedule of the Company are set forth at pages F-1 to F-31 of the report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. The biographical information relating to the Company's directors appearing in the Proxy Statement relating to the Company's 1995 Annual Meeting of Stockholders is incorporated herein by reference. Biographical information relating to the Company's executive officers is set forth in Item 1 of Part I of this Report. 22 ITEM 11. EXECUTIVE COMPENSATION. The information under "Board of Directors and Committees" and "Certain Transactions" appearing in the Proxy Statement relating to the Company's 1995 Annual Meeting of Stockholders is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information required by this Item is set forth in the section headed "Security Ownership" appearing in the Company's Proxy Statement relating to the Company's 1995 Annual Meeting of Stockholders and such information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information under "Certain Transactions" appearing in the Proxy Statement relating to the Company's 1995 Annual Meeting of Stockholders is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a)(1) and (2): The response to this portion of Item 14 is submitted as a separate section of this report beginning on page F-1. All other schedules have been omitted as inapplicable, or not required, or because the required information is included in the Consolidated Financial Statements or notes thereto. (a)(3) Exhibits. The exhibits required to be filed as part of this annual report on Form 10-K are listed in the attached Index to Exhibits. (b) Reports on Form 8-K. None. (c) Index to Exhibits and Exhibits filed as a part of this report. 2.1 Acquisition of certain operations of The BOC Group, Inc. on February 8, 1994. (Incorporated by reference to the Company's Current Report, dated February 17, 1994, filed on Form 8-K). 3.1 Certificate of Incorporation of the Company, as amended. (Incorporated by reference to Exhibit 3.1 to the Company's June 30, 1987 Quarterly Report on Form 10-Q). 3.2 By-Laws of the Company, as amended. (Incorporated by reference to Exhibit 3.2 to the Company's June 30, 1987 Quarterly Report on Form 10-Q). 3.3 Amendments to the Certificate of Incorporation of the Company dated August 13, 1987, November 20, 1989 and August 3, 1994. 4.1 Sixth Amended and Restated Loan Agreement dated August 30, 1994 between Airgas, Inc. and certain banks and NationsBank of North Carolina, N.A. ($250,000,000 credit facility). 23 4.2 Amendment No. 1 to the Sixth Amended and Restated Loan Agreement dated as of November 8, 1994 between Airgas, Inc. and certain banks and NationsBank of North Carolina, N.A. 4.3 Loan Agreement dated November 8, 1994 between Airgas, Inc. and certain banks and Nationsbank of North Carolina, N.A. ($100,000,000 credit facility). There are no other instruments with respect to long-term debt of the Company that involve indebtedness or securities authorized thereunder exceeding 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to file a copy of any instrument or agreement defining the rights of holders of long- term debt of the Company upon request of the Securities and Exchange Commission. * 10.1 Agreement between the Company and Peter McCausland, dated January 8, 1991, and form of Common Stock Purchase Warrant. (Incorporated by reference to Exhibit 10.16 to the Company's March 31, 1992 report on Form 10-K). * 10.2 Common Stock Purchase Warrant held by Britton H. Murdoch and certain other employees and other persons (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the Common Stock Purchase Warrants, which are substantially identical in all material respects except as to the parties thereto, held by certain employees, including the following Executive Officers and a Director, and other persons are not being filed: Hermann Knieling, Kenneth A. Keeley, Alfred B. Crichton, Gordon L. Keen, Jr., William Sanford, Scott Melman and Ronald Beebe and a Director, Merril Stott). (Incorporated by reference to Exhibit 10.17 to the Company's March 31, 1993 report on Form 10-K). * 10.3 Amended and Restated 1984 Stock Option Plan. (Incorporated by reference to Exhibit "A" to Exhibit 10.6 to the Company's March 31, 1992 report on Form 10-K). * 10.4 Amendment to the Amended and Restated 1984 Stock Option Plan. (Incorporated by reference to exhibit 10.18 to the Company's March 31, 1993 report on Form 10-K). * 10.5 1989 Non-Qualified Stock Option Plan for Directors (Non-Employees), as amended. (Incorporated by reference to Exhibit 10.7 to the Company's March 31, 1992 report on Form 10-K). * 10.6 1994 Employee Stock Purchase Plan. (Incorporated by reference to exhibit 10.19 to the Company's March 31, 1993 report on Form 10-K). 10.7 Amended and Restated Joint Venture Agreement dated March 31, 1992 between American Carbide and Carbon Corporation and Elkem Metals Company. (Incorporated by reference to Exhibit 10.5 to the Company's March 31, 1992 report on Form 10-K). * 10.8 Exchange Rights Agreement dated October 1, 1989 between the Company and John Smith (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the Exchange Rights Agreements, which are substantially identical in all material respects except as to the parties thereto, between the Company and the following individuals are not being filed: Alfred B. Crichton, Rudi Endres, Ronald W. Savage, Mark A. Straka, William E. 24 Sanford, E. Pat Baker, Kenneth A. Keeley, Kenneth D. Morrison, Richard W. Johnson, Thomas J. Bennett, Hermann Knieling and John Musselman). (Incorporated by reference to Exhibit 10.13 to the Company's March 31, 1992 report on Form 10-K). * 10.9 First Amendment to Exchange Rights Agreement dated April 30, 1992 between the Company and John Smith (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the First Amendments, which are substantially identical in all material respects except as to the parties thereto, between the Company and the following individuals are not being filed: Alfred B. Crichton, Rudi Endres, Ronald W. Savage, Mark A. Straka, William E. Sanford, E. Pat Baker, Kenneth A. Keeley, Kenneth D. Morrison, Richard W. Johnson, Thomas J. Bennett, Hermann Knieling and John Musselman). (Incorporated by reference to Exhibit 10.14 to the Company's March 31, 1992 report on Form 10-K). * 10.10 Amended and Restated Exchange Rights Agreement between the Company and Ronald E. Arnold (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the Amended and Restated Exchange Rights Agreements, which are substantially identical in all material respects except as to the parties thereto, between the Company and the following individuals are not being filed: John T. Winn, Dennis B. Lee, Howard E. Wolfe, Charles Graves, I.C. Fortenberry, Henry B. Coker, Ronald B. Rush, William V. Accuosti, Dan L. Tatro, Theodore D. Erkenbrack, Geoffrey C. Pulford, Dale E. Hess, Jeff Allen and Barry W. Himes). (Incorporated by reference to Exhibit 10.15 to the Company's March 31, 1993 report on Form 10-K). * 10.11 First Amendment to Amended and Restated Exchange Rights Agreement between the Company and John T. Winn (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the First Amendment to the Amended and Restated Exchange Rights Agreements, which are substantially identical in all material respects except as to the parties thereto, between the Company and the following individuals are not being filed: I.C. Fortenberry, Hermann Knieling, William E. Sanford, Rudi Endres and Kenneth D. Morrison). (Incorporated by reference to Exhibit 10.11 to the Company's March 31, 1994 report on Form 10-K). * 10.12 Second Amendment to Amended and Restated Exchange Rights Agreement between the Company and Mark Straka (Pursuant to Instruction 2 to Item 601 of Regulation S-K, the Second Amendment to the Amended and Restated Exchange Rights Agreement, which are substantially identical in all material respects except as to the parties thereto, between the Company and the following individuals are not being filed: Rudi Endres, Alfred B. Crichton and E. Pat Baker). (Incorporated by reference to Exhibit 10.12 to the Company's March 31, 1994 report on Form 10-K). * 10.13 Amendment dated as of April 13, 1994 to the Amended and Restated 1984 Stock Option Plan. (Incorporated by reference to Exhibit 10.13 to the Company's March 31, 1994 report on Form 10-K). 25 (11) Statement re: computation of earnings per share. (21) Subsidiaries of the Company. (23.1) Consent of KPMG Peat Marwick LLP. (23.2) Consent of KPMG Peat Marwick LLP (to be filed by amendment) (23.3) Consent of KPMG Peat Marwick LLP (to be filed by amendment) (99.1) Form 11-K for the Registrant's 401(K) Plan (to be filed by amendment) (99.2) Form 11-K for the Registrant's Employee Stock Purchase Plan (to be filed by amendment) _____________ * A management contract or compensatory plan required to be filed by Item 14(c) of this Report. 26 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: June 9, 1995 Airgas, Inc. By: /s/ Peter McCausland _________________________ Peter McCausland Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date _________ _____ ____ /s/ Peter McCausland Director, Chairman of the June 9, 1995 ____________________________ Board, President and (Peter McCausland) Chief Executive Officer /s/ Britton H. Murdoch Vice President/Finance and June 9, 1995 ____________________________ Chief Financial Officer (Britton H. Murdoch) /s/ Jeffrey P. Cornwell Corporate Controller ____________________________ June 9, 1995 (Jeffrey P. Cornwell) /s/ W. Thacher Brown Director June 9, 1995 ____________________________ (W. Thacher Brown) Director ____________________________ (Frank B. Foster, III) Director ____________________________ (Dr. Robert E. Naylor) Director ____________________________ (James M. Hoak, Jr.) 27 /s/ Robert L. Yohe Director June 9, 1995 ____________________________ (Robert L. Yohe) /s/ John A.H. Shober Director June 9, 1995 ____________________________ (John A.H. Shober) /s/ Merril L. Stott Director June 9, 1995 ____________________________ (Merril L. Stott) /s/ Erroll C. Sult Director June 9, 1995 ____________________________ (Erroll Sult) 28 AIRGAS, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES Page Reference In Report on Form 10-K _________ Independent Auditors' Report . . . . . . . . . . . . . . . . . . F-2 Statement of Management's Financial Responsibility . . . . . . . F-3 Consolidated Balance Sheets at March 31, 1995 and 1994 . . . . . F-4 Consolidated Statements of Earnings for the Years Ended March 31, 1995, 1994 and 1993. . . . . . . . . . . . . . . . . F-5 Consolidated Statements of Stockholders' Equity for the Years Ended March 31, 1995, 1994 and 1993. . . . . . . . . . . F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 1995, 1994 and 1993. . . . . . . . . .. . . . . . . . F-7 Notes to Consolidated Financial Statements. . . . . . . . . . . . F-8 Financial Statement Schedule: Schedule II - Valuation and Qualifying Accounts . . . . . . F-31 All other schedules for which provision is made in the applicable accounting regulations promulgated by the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. F-1 29 INDEPENDENT AUDITORS' REPORT The Board of Directors Airgas, Inc.: We have audited the consolidated financial statements of Airgas, Inc. and subsidiaries as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Airgas, Inc. and subsidiaries as of March 31, 1995 and 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 1995, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth thereon. As discussed in notes 1 and 13 to the consolidated financial statements, the Company retroactively adopted in 1994 the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes." Philadelphia, Pennsylvania KPMG PEAT MARWICK LLP May 10, 1995 F-2 30 STATEMENT OF MANAGEMENT'S FINANCIAL RESPONSIBILITY Management has prepared and is responsible for the integrity and objectivity of the consolidated financial statements and related financial information in this Annual Report. The statements are prepared in conformity with generally accepted accounting principles. The financial statements reflect management's informed judgment and estimation as to the effect of events and transactions that are accounted for or disclosed. Management maintains a system of internal control at each business unit. This system, which undergoes periodic evaluation, is designed to provide reasonable assurance that assets are safeguarded and records are adequate for the preparation of reliable financial data. In determining the extent of the system of internal control, management recognizes that the cost should not exceed the benefits derived. The evaluation of these factors requires estimates and judgment by management. The Company's financial statements have been audited by KPMG Peat Marwick LLP, independent auditors. Their Independent Auditors' Report, which is based on an audit made in accordance with generally accepted auditing standards is presented on the previous page. In performing their audit, KPMG Peat Marwick LLP considers the Company's internal control structure to the extent they deem necessary in order to plan their audit, determine the nature, timing and extent of tests to be performed and issue their report on the consolidated financial statements. The Audit Committee of the Board of Directors meets with the independent auditors and management to satisfy itself that they are properly discharging their responsibilities. The auditors have direct access to the Audit Committee. Airgas, Inc. /s/ Britton H. Murdoch /s/ Peter McCausland ________________________ _______________________ Britton H. Murdoch Peter McCausland Vice President and Chairman, President and Chief Financial Officer Chief Executive Officer F-3 31 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, ________________ (In thousands, except per share amounts) 1995 1994 ________________________________________ ____ ____ ASSETS (NOTE 8) Current Assets Trade receivables, less allowances for doubtful accounts of $4,161 in 1995 and $4,207 in 1994 . . . . . .$ 93,423 $ 79,034 Inventories (Note 4) . . . . . . . . . . . . . . . . . . . 65,947 51,721 Prepaid expenses and other current assets. . . . . . . . . 10,467 8,367 _______ _______ Total current assets. . . . . . . . . . . . . . . . . 169,837 139,122 _______ _______ Plant and Equipment, at cost (Note 5). . . . . . . . . . . 464,983 390,832 Less accumulated depreciation. . . . . . . . . . . . . . (118,715) (96,201) _______ _______ Plant and equipment, net . . . . . . . . . . . . . . . . 346,268 294,631 _______ _______ Other Non-current Assets (Note 6) . . . . . . . . . . . . . 41,388 30,421 Goodwill, net of accumulated amortization of $15,094 in 1995 and $11,875 in 1994. . . . . . . . . . 88,144 50,723 _______ _______ $645,637 $514,897 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion of long-term debt (Note 8) . . . . . . . .$ 11,780 $ 10,304 Accounts payable, trade. . . . . . . . . . . . . . . . . . 43,782 34,644 Accrued expenses and other current liabilities (Note 7). . 60,191 47,103 _______ ______ Total current liabilities . . . . . . . . . . . . . . 115,753 92,051 _______ _______ Long-Term Debt (Note 8). . . . . . . . . . . . . . . . . . 259,970 205,311 Deferred Income Taxes (Note 13). . . . . . . . . . . . . . 67,540 53,096 Other Non-current Liabilities. . . . . . . . . . . . . . . 11,116 6,635 Minority Interest in Subsidiaries (Note 19). . . . . . . . 1,606 937 Commitments and Contingencies (Note 17) Stockholders' Equity (Note 9) Common Stock, par value $.01 per share, 200,000 shares authorized, 31,501 and 32,897 shares issued in 1995 and 1994, respectively . . . . . . . . . . . . . . . 315 329 Capital in Excess of Par Value . . . . . . . . . . . . . . 62,135 56,330 Retained Earnings. . . . . . . . . . . . . . . . . . . . . 133,640 102,161 Cumulative Translation Adjustments . . . . . . . . . . . . (469) (471) Treasury Stock, 236 and 1,877 common shares at cost in 1995 and 1994, respectively. . . . . . . . . . . . . . (5,969) (1,482) _______ _______ Total stockholders' equity. . . . . . . . . . . . . . 189,652 156,867 _______ _______ $645,637 $514,897 ======= ======= See accompanying notes to consolidated financial statements. F-4 32 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS Years Ended March 31, (In thousands, except per share amounts) ______________________________ _______________________________________ 1995 1994 1993 ____ ____ ____ Net Sales Distribution . . . . . . . . . . . . . . . . $654,381 $486,836 $379,899 Manufacturing . . . . . . . . . . . . . . . 33,602 32,513 30,872 _______ _______ _______ Total net sales . . . . . . . . . . . . 687,983 519,349 410,771 Costs and Expenses Cost of products sold (excluding depreciation and amortization) Distribution . . . . . . . . . . . . . . . 320,800 238,429 188,717 Manufacturing. . . . . . . . . . . . . . . 22,076 20,741 19,396 Selling, distribution and administrative expenses . . . . . . . . . . . . . . . . . 235,639 180,941 140,246 Depreciation and amortization. . . . . . . . 36,868 30,571 28,045 _______ _______ _______ Total costs and expenses. . . . . . . . 615,383 470,682 376,404 _______ _______ _______ Operating Income Distribution . . . . . . . . . . . . . . . . 66,521 42,399 28,443 Manufacturing. . . . . . . . . . . . . . . . 6,079 6,268 5,924 _______ _______ _______ Total operating income . . . . . . . . . 72,600 48,667 34,367 Interest expense, net (Note 11). . . . . . . (17,625) (12,486) (11,403) Other income, net (Note 12). . . . . . . . . 1,067 453 546 Minority interest (Note 19). . . . . . . . . (669) (317) (230) _______ _______ _______ Earnings before income taxes. . . . . . 55,373 36,317 23,280 Income taxes (Note 13) . . . . . . . . . . . . 23,894 16,027 10,811 _______ _______ _______ Net earnings. . . . . . . . . . . . . $ 31,479 $ 20,290 $ 12,469 ======= ======= ======= Earnings Per Share (Notes 3 and 9) Primary. . . . . . . . . . . . . . . . . . $ .96 $ .63 $ .40 _______ _______ _______ Fully diluted. . . . . . . . . . . . . . . $ .96 $ .63 $ .39 _______ _______ _______ Weighted average shares Primary. . . . . . . . . . . . . . . . . . 32,762 32,390 30,886 Fully diluted. . . . . . . . . . . . . . . 32,762 32,390 32,016 See accompanying notes to consolidated financial statements. F-5 33 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Years Ended March 31, 1995, 1994 and 1993 _________________________________________ Shares of Capital in Common Stock Common Excess of (In thousands) $.01 Par Value Stock Par Value ______________ ______________ _____ __________ Balance--April 1, 1992. . . . . . . . . 26,811.6 $268 $36,798 Net earnings . . . . . . . . . . . . . . Foreign currency translation adjustment. . . . . . . . . . . . . . . Stock warrants and options exercised . . 836.6 8 3,403 Tax benefit associated with exercise of stock options and warrants . . . . . 1,587 Shares issued upon acquisition of minority interests (Note 19). . . . . . 702.0 8 5,214 Shares issued in connection with Chairman's exercise of warrants (Note 9). . . . . . . . . . . . . . . . 3,649.4 36 (36) ________ ___ ______ Balance--March 31, 1993. . . . . . . . . 31,999.6 320 46,966 Net earnings . . . . . . . . . . . . . . Foreign currency translation adjustment. . . . . . . . . . . . . . . Stock warrants and options exercised . . 784.4 8 3,485 Tax benefit associated with exercise of stock options and warrants . . . . . 3,590 Shares issued upon acquisition of minority interests (Note 19). . . . . . 83.4 1 1,739 Shares issued in connection with Employee Stock Purchase Plan (Note 14). 29.7 550 ________ ___ ______ Balance--March 31, 1994. . . . . . . . . 32,897.1 329 56,330 Net earnings . . . . . . . . . . . . . . Foreign currency translation adjustment. . . . . . . . . . . . . . . Retirement of treasury stock . . . . . . (1,877.2) (19) (1,463) Purchase of treasury stock (Note 9). . . Issuance of stock in connection with acquisitions . . . . . . . . . . . 61.6 1 1,437 Stock warrants and options exercised . . 269.4 3 1,267 Tax benefit associated with exercise of stock options and warrants . . . . . 1,858 Shares issued in connection with Employee Stock Purchase Plan (Note 14). 150.1 1 2,706 ________ ___ ______ Balance--March 31, 1995. . . . . . . . . 31,501.0 $315 $62,135 ======== === ====== COLUMNS CONTINUED ON NEXT PAGE F-6 34 AIRGAS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - (Continued) Years Ended March 31, 1995, 1994 and 1993 _________________________________________ Cumulative Retained Translation Treasury (In thousands) Earnings Adjustments Stock ______________ _________ ___________ ________ Balance--April 1, 1992 . . . . . . . . . $69,402 $(55) $(1,482) Net earnings. . . . . . . . . . . . . . . 12,469 Foreign currency translation adjustment . . . . . . . . . . . . . . . (49) Stock warrants and options exercised. . . Tax benefit associated with exercise of stock options and warrants. . . . . . Shares issued upon acquisition of minority interests (Note 19) . . . . . . Shares issued in connection with Chairman's exercise of warrants (Note 9) . . . . . . . . . . . . . . . . ______ ___ _____ Balance--March 31, 1993 . . . . . . . . . 81,871 (104) (1,482) Net earnings. . . . . . . . . . . . . . . 20,290 Foreign currency translation adjustment . . . . . . . . . . . . . . . (367) Stock warrants and options exercised. . . Tax benefit associated with exercise of stock options and warrants. . . . . . Shares issued upon acquisition of minority interests (Note 19) . . . . . . Shares issued in connection with Employee Stock Purchase Plan (Note 14) . _______ ____ _____ Balance--March 31, 1994 . . . . . . . . . 102,161 (471) (1,482) Net earnings. . . . . . . . . . . . . . . 31,479 Foreign currency translation adjustment . . . . . . . . . . . . . . . 2 Retirement of treasury stock. . . . . . . 1,482 Purchase of treasury stock (Note 9) . . . (5,969) Issuance of stock in connection with acquisitions. . . . . . . . . . . . Stock warrants and options exercised. . . Tax benefit associated with exercise of stock options and warrants. . . . . . Shares issued in connection with Employee Stock Purchase Plan (Note 14) . _______ ____ ______ Balance--March 31, 1995 . . . . . . . . .$133,640 $(469) $(5,969) ======= ===== ======= See accompanying notes to consolidated financial statements. F-6, Continued 35 AIRGAS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended March 31, 1995 1994 1993 ____ ____ ____ Cash Flows From Operating Activities Net earnings . . . . . . . . . . . . . . . . . . $31,479 $20,290 $12,469 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization . . . . . . . . 36,868 30,571 28,045 Deferred income taxes . . . . . . . . . . . . 11,548 8,189 5,158 Equity in earnings of joint venture . . . . . (840) (1,258) (897) Gain on sale of investment. . . . . . . . . . (560) -- -- (Gain)/Loss on sale of plant and equipment. . 110 (63) (292) Minority interest in earnings . . . . . . . . 669 317 230 Stock issued for employee benefit plan expense 2,707 550 -- Changes in assets and liabilities, excluding effects of business acquisitions: Trade receivables, net. . . . . . . . . . . (1,179) (5,444) 1,552 Inventories . . . . . . . . . . . . . . . . (1,874) 1,626 3,909 Prepaid expenses and other current assets . 198 (546) 969 Accounts payable, trade. . . . . . . . . . 2,934 3,799 (845) Accrued expenses and other current liabilities. . . . . . . . . . . . . . . . 2,324 5,572 1,507 Other assets and liabilities, net . . . . . 298 (714) 1,928 _______ ______ ______ Net cash provided by operating activities. 84,682 62,889 53,733 _______ ______ ______ Cash Flows From Investing Activities Capital expenditures . . . . . . . . . . . . . . (36,712) (21,318) (14,702) Proceeds from sale of plant and equipment. . . . 2,563 1,914 2,259 Business acquisitions, net of cash acquired. . . (86,342) (93,375) (43,072) Purchase of investment . . . . . . . . . . . . . (17,026) -- -- Proceeds from sale of investment . . . . . . . . 17,892 -- -- Other, net . . . . . . . . . . . . . . . . . . . 116 (287) (502) _______ ______ ______ Net cash used by investing activities. . . .(119,509) (113,066) (56,017) _______ _______ ______ Cash Flows From Financing Activities Proceeds from borrowings . . . . . . . . . . . . 394,193 195,292 90,939 Repayment of debt. . . . . . . . . . . . . . . .(359,253) (150,844) (95,207) Repurchase of treasury stock . . . . . . . . . . (5,969) -- -- Exercise of options and warrants . . . . . . . . 1,270 3,493 3,411 Net overdraft. . . . . . . . . . . . . . . . . . 4,591 2,459 3,944 _______ ______ ______ Net cash provided by financing activities. . 34,832 50,400 3,087 _______ ______ ______ Effects of discontinued activities, net. . . . . (5) (223) (803) _______ ______ ______ Cash Increase (Decrease) . . . . . . . . . . . . -- -- -- Cash--beginning of year. . . . . . . . . . . . . -- -- -- ______ ______ ______ Cash--End of Year. . . . . . . . . . . . . . . . $ -- $ -- $ -- ====== ====== ====== For supplemental cash flow disclosures see Note 18. See accompanying notes to consolidated financial statements. F-7 36 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The consolidated financial statements include the accounts of Airgas, Inc. and its subsidiaries (the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. (b) Inventories Inventories are stated at the lower of cost or market with cost for approximately 77% and 79% percent of the inventories at March 31, 1995 and 1994, respectively, determined by the first-in, first-out (FIFO) method. Cost for the remainder of inventories was determined using the last-in, first-out (LIFO) method. (c) Plant and Equipment Plant and equipment are stated at cost. Depreciation is provided on the straight-line basis over the estimated useful lives of the related assets. Effective April 1, 1993, the Company changed its estimate of the useful lives of its acetylene and high pressure cylinders from 20 to 30 years. This change was made to better reflect the estimated periods during which these assets will remain in service. The change had the effect of reducing depreciation expense in 1994 by approximately $3.1 million and increasing net earnings by $1.9 million or $.06 per share. The Company changed the estimated useful life of cylinders as a result of thorough studies and analyses. The studies considered technological advances in cylinders, empirical data obtained from cylinder manufacturers and other industry experts and experience gained from the Company's maintenance of a cylinder population of approximately two million cylinders. (d) Other Assets Costs related to the acquisition of long-term debt are deferred and amortized over the term of the related debt. Costs and payments pursuant to noncompetition arrangements entered into in connection with business acquisitions are amortized over the terms of the arrangements which are principally over 5 years. On an ongoing basis, management reviews the valuation and amortization of intangible assets. (e) Goodwill Goodwill represents costs in excess of net assets of businesses acquired and is amortized on a straight-line basis over the expected periods to be benefited, which currently ranges from 20 to 40 years. The Company assesses the recoverability of this intangible asset by determining whether the amortization of the goodwill balance over its remaining life can be recovered through projected undiscounted future cash flows. F-8 37 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) (f) Joint Venture The Company is a partner in a joint venture which is accounted for using the equity method. (g) Income Taxes In fiscal 1994, the Company retroactively adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," (Statement No. 109), as of April 1, 1992. Statement No. 109 requires the use of the liability method of accounting for deferred income taxes. The adoption of Statement No. 109 had no material impact on the Company's results of operations or retained earnings. The provision for income taxes includes federal, foreign, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. (h) Foreign Currency Translation The functional currency of the Company's foreign operations is the applicable local currency. The translation of foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using average exchange rates during each reporting period. The gains or losses, net of applicable deferred income taxes, resulting from such translations are included in stockholders' equity. Gains and losses arising from foreign currency transactions are reflected in the consolidated statements of earnings as incurred. (i) Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade receivables. Concentrations of credit risk are limited due to the Company's large number of customers and their dispersion across many industries. Credit terms granted to customers are generally net 30 days. (j) Revenue Recognition Sales are recorded upon shipment to the customer. F-9 38 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (k) Financial Instruments In hedging interest rate exposure, the Company enters into interest rate swap agreements. These instruments are not entered into for trading purposes and the Company has the ability and intent to hold these instruments to maturity. The Company only uses non-leveraged instruments. When interest rates change, the difference to be paid or received is accrued and recognized as interest expense over the life of the agreement. The fair values of the Company's financial instruments are estimated based on quoted market prices for the same or similar issues. The carrying amounts for accounts receivable, accounts payable and current portion of long-term debt approximate fair value because of the short-term maturity of these financial instruments. (l) Reclassification Certain reclassifications have been made in previously issued financial statements to conform to the current presentation. (2) ACQUISITIONS The Company acquires businesses primarily engaged in the distribution of industrial, medical and specialty gases and related welding supplies and accessories. Acquisitions have been recorded using the purchase method of accounting, and, accordingly, results of their operations have been included in the Company's consolidated financial statements since the effective dates of the respective acquisitions. 1995--During 1995, the Company purchased twenty-five businesses. The largest of these acquisitions and their effective dates included The Jimmie Jones Company (August 1, 1994) and Post Welding Supply (November 1, 1994). The aggregate purchase price for these acquisitions amounted to approximately $83 million. The purchase price for the remaining twenty-three businesses amounted to approximately $41 million. On November 1, 1994, the Company entered into an agreement with Poligaz, S.A., (Poligaz), for the purchase of an interest in Poligaz for approximately $3.3 million. The Company's investment in Poligaz is accounted for at cost, and is included as other non-current assets. 1994--During 1994, the Company purchased eighteen businesses. The largest of these acquisitions and their effective dates included General Welding Supply Co. (July 1, 1993), PDI Western Distributing Group, Inc. (July 1, 1993), Phoenix Northeast Distributors Group, Inc. (September 1, 1993) and certain operations of The BOC Group, Inc. (February 1, 1994). The aggregate purchase price for these acquisitions amounted to approximately $90 million. The purchase price for the remaining fourteen businesses amounted to approximately $31 million. 1993--During 1993, the Company purchased seventeen businesses. The largest of these acquisitions and their effective dates included Virginia Welding Supply, Inc. (July 27, 1992), Cryodyne Corp. (January 1, 1993) and Presto Technologies, Inc. (January 29, 1993). The aggregate purchase price for these acquisitions amounted to approximately $45 million. The purchase price for the remaining fourteen businesses amounted to approximately $16 million. F-10 39 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (2) ACQUISITIONS - (Continued) In connection with the above business acquisitions, the total purchase price, fair value of assets acquired, cash paid and liabilities assumed were as follows: Years Ended March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ Cash paid . . . . . . . . . . . . . . . . . . $ 83,033 $ 89,782 $ 42,228 Notes issued to sellers . . . . . . . . . . . 14,518 6,208 6,381 Notes payable assumed and capital leases. . . 9,067 4,196 5,884 Other liabilities assumed and accrued acquisition costs. . . . . . . . . . . . . . 20,198 20,486 6,407 _______ _______ ______ Total purchase price allocated to assets acquired. . . . . . . . . . . . . . . . . . $126,816 $120,672 $ 60,900 ======= ======= ====== Also, as discussed in note 19, the Company has accounted for the acquisition of certain subsidiary minority interests in 1994 and 1993 using the purchase method of accounting. In connection with certain acquisitions, the Company is required to make future payments to sellers based on future earnings of the acquired business in excess of predetermined amounts. Such payments, if any, are capitalized as an additional cost of the acquisition. Amounts payable under contingent payment terms continue through 1997 and are limited to $3.4 million. To-date, the Company has made aggregate payments of $660 thousand under these contingent terms. The purchase price for business acquisitions and minority interests were allocated to the assets acquired and liabilities assumed based on their estimated fair values. Costs in excess of net assets acquired (goodwill) for 1995, 1994 and 1993 amounted to $40.8 million, $9.9 million and $7.7 million, respectively. The following presents unaudited estimated pro forma operating results as if the 1995 and 1994 acquisitions had been consummated on April 1, 1993. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of April 1, 1993 or of results which may occur in the future. Years Ended March 31, _____________________ (In thousands except per share amounts) 1995 1994 _______________________________________ ____ ____ Net sales . . . . . . . . . . . . . . . . . . . $737,104 $697,507 Net earnings. . . . . . . . . . . . . . . . . . 31,786 22,212 Earnings per share: Primary. . . . . . . . . . . . . . . . . . . . .97 .69 Fully diluted. . . . . . . . . . . . . . . . . .97 .69 F-11 40 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (2) ACQUISITIONS - (Continued) Subsequent to March 31, 1995, the Company has acquired, entered into agreements, or signed letters of intent to acquire industrial gas distribution businesses with an aggregate purchase price of approximately $42 million. (3) EARNINGS PER SHARE Primary and fully diluted earnings per share amounts were determined using the Treasury Stock method. (4) INVENTORIES Inventories consist of: March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Finished goods. . . . . . . . . . . . . . . . . . . $65,693 $51,263 Raw materials . . . . . . . . . . . . . . . . . . . 1,315 1,117 ______ ______ 67,008 52,380 Less reduction to LIFO cost . . . . . . . . . . . . (1,061) (659) ______ ______ $65,947 $51,721 ====== ====== (5) PLANT AND EQUIPMENT The major classes of plant and equipment, at cost, are as follows: March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Land and land improvements . . . . . . . . . . . . $ 17,571 $ 15,879 Buildings and leasehold improvements . . . . . . . 43,714 30,494 Machinery and equipment, including cylinders . . . 376,284 322,336 Transportation equipment . . . . . . . . . . . . . 25,944 20,830 Construction in progress . . . . . . . . . . . . . 1,470 1,293 _______ _______ $464,983 $390,832 ======= ======= Depreciation and amortization of plant and equipment charged to operations amounted to $26.3 million, $21.1 million and $19.7 million in 1995, 1994 and 1993, respectively. F-12 41 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (6) OTHER NONCURRENT ASSETS Other noncurrent assets include: March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Investment in a joint venture (Note 10). . . . . . $ 1,597 $ 1,308 Noncompete agreements and other intangible assets, at cost, net of accumulated amortization of $37.4 million in 1995 and $30.0 million in 1994 . . . . . . . . . . . . 31,955 26,673 Other assets. . . . . . . . . . . . . . . . . . . . 7,836 2,440 ______ ______ $41,388 $30,421 ====== ====== (7) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities include: March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Cash overdraft. . . . . . . . . . . . . . . . . . . $11,638 $ 7,047 Insurance payable and related reserves. . . . . . . 6,304 5,341 Customer cylinder deposits. . . . . . . . . . . . . 6,242 3,325 Other accrued expenses and current liabilities. . . 36,007 31,390 ______ ______ $60,191 $47,103 ====== ====== The cash overdraft is attributable to the float of the Company's outstanding checks. (8) INDEBTEDNESS (a) Long-term debt consists of the following: March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Revolving credit borrowings . . . . . . . . . . . . $195,000 $151,235 Senior subordinated notes . . . . . . . . . . . . . 27,857 35,714 Acquisition notes . . . . . . . . . . . . . . . . . 26,532 16,014 Industrial Development Board revenue bonds. . . . . 3,450 4,645 All other notes, at various rates and maturities. . 18,911 8,007 _______ _______ Total long-term debt. . . . . . . . . . . . . . . . 271,750 215,615 Less current installments . . . . . . . . . . . . . (11,780) (10,304) _______ _______ Long-term debt, excluding current installments. . . $259,970 $205,311 ======= ======= F-13 42 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (8) INDEBTEDNESS - (Continued) During 1995, the Company increased its unsecured revolving credit facility with various commercial banks from $200 million to $250 million and extended the maturity of the facility to August 2001. The revolving credit facility provides for the issuance of letters of credit up to $50 million. Under the terms of the revolving credit facility, interest is payable quarterly with equal quarterly principal payments beginning in September 1996 and continuing through June 2001. At March 31, 1995, $105 million of borrowings were outstanding under the revolving credit facility at money market rates of 6.5%. At the Company's option, borrowings under the revolving credit facility may bear interest at a rate per year equal to prime, the Libor rate, the Certificate of Deposit rate, or the Banker's Acceptance rate, in each case plus an applicable margin (for which no borrowings were outstanding at March 31, 1995). Also, during 1995, the Company entered into an additional $100 million unsecured line of credit with two commercial banks which matures in July 1996 and provides for borrowings at the Libor rate plus an applicable margin ($75 million outstanding at 6.7% as of March 31, 1995). The Company intends to terminate its $100 million facility in conjunction with an anticipated increase in the Company's $250 million revolving credit facility in August 1995, which will have terms and conditions similar to its existing $250 million facility. The Company also had a $25 million line of credit agreement with a commercial bank that provides for unsecured money market rate borrowings with no fixed date of maturity ($15 million outstanding at 6.36% as of March 31, 1995). Senior subordinated notes with an original face value aggregating $55 million require semi-annual interest payments at 11.375%. Equal annual principal payments of $4.3 million for $17.1 million of the senior subordinated notes continue through August 1998 and equal annual principal payments of $3.6 million for $10.7 million of the senior subordinated notes continue through July 1997. Acquisition notes represent notes issued to sellers of businesses acquired and are repayable in periodic installments including interest at an average rate of 7.4%. Some acquisition notes require balloon payments which are included in the aggregate maturity schedule. Industrial Development revenue bonds have variable interest rates ranging from 60% to 75% of the prime rate. The bonds mature at various dates between 1996 and 2006. Certain bonds are redeemable at the option of the issuer. The bonds are secured by mortgages on certain plant and equipment. Certain of the Company's credit facility agreements contain restrictive covenants which include the maintenance of a minimum equity level, maintenance of certain financial ratios and restrictions on additional borrowings and dividend payments. F-14 43 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (8) INDEBTEDNESS - (Continued) The aggregate maturities of long-term debt for the five years ending March 31, 2000 and thereafter are as follows (in thousands): Years Ending March 31, Aggregate Maturity ______________________ __________________ 1996 . . . . . . . . . . . . . . . . . . . $ 11,780 1997 . . . . . . . . . . . . . . . . . . . 104,332 1998 . . . . . . . . . . . . . . . . . . . 48,326 1999 . . . . . . . . . . . . . . . . . . . 31,292 2000 . . . . . . . . . . . . . . . . . . . 36,217 2001 and thereafter. . . . . . . . . . . . 39,803 _______ $271,750 ======= The fair value of long term debt as of March 31, 1995 was approximately $274 million. (b) Swap Agreements In managing interest rate exposure, principally under the Company's floating rate revolving credit facilities, the Company has entered into thirteen interest rate swap agreements during the period from June 1992 through March 31, 1995. The interest rate swap agreements are with major financial institutions having a total notional principal amount of $138 million at March 31, 1995. Approximately $119 million of the swap agreements require fixed interest payments based on an average effective rate of 7.3% for remaining periods ranging between 3 and 8 years. The remaining $19 million of swap agreements require floating rates (6.5% at March 31, 1995). The effect of the swap agreements were to increase interest expense $1.2 million and $1.4 million in 1995 and 1994, respectively. Under the terms of four of the swap agreements, the Company has elected to receive the discounted value of the counterparty's interest payments upfront. At March 31, 1995, approximately $2.0 million and $7.0 million of such payments were included in accrued expenses and other non-current liabilities, respectively. The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties. The net gain to settle all interest rate swap agreements at March 31, 1995 was approximately $900 thousand. The aggregate maturities of the Company's interest rate swaps by type of swap for the five years ending March 31, 2000 and thereafter are as follows (in thousands): Notional Principal Amounts __________________________ Years Ending March 31, Pay-Fixed Receive-Fixed ______________________ _________ _____________ 1998 . . . . . . . . . . . . . 30,000 0 1999 . . . . . . . . . . . . . 12,500 7,500 2000 and thereafter. . . . . . 76,074 12,000 _______ ______ $118,574 $19,500 ======= ====== F-15 44 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (9) STOCKHOLDERS' EQUITY (a) Common Stock In August 1994, the Company increased the number of authorized shares of common stock from 55 million to 200 million shares. On October 28, 1993, the Company's Board of Directors declared a two-for-one stock split to stockholders of record on November 9, 1993, payable on November 24, 1993. Stock options and other rights to acquire the Company's common stock reflect the split. All references to the number of shares, except shares authorized, reflect the stock split. (b) Preferred Stock and Redeemable Preferred Stock The Company is authorized to issue 20 million shares of preferred stock. At March 31, 1995 and 1994, no shares were outstanding. The preferred stock may be issued from time to time by the Board of Directors in one or more series, and the Board of Directors is authorized to fix the dividend rights and terms, conversion rights, voting rights, rights and terms of redemption, liquidation preferences, and any other rights, preferences, privileges and restrictions of any series of Preferred Stock, and the number of shares constituting each such series and designation thereof. Additionally, the Company is authorized to issue 30,000 shares of redeemable preferred stock. At March 31, 1995 and 1994, no shares were outstanding. (c) Treasury Stock In January 1995, the Company's Board of Directors approved the repurchase of up to one million shares of Airgas common stock. At March 31, 1995, the Company had purchased 235,900 shares of common stock. Through May 10, 1995, the Company has purchased an additional 420,200 shares. (d) Stock Options The Company has a stock option plan for officers and key employees and has reserved 7,040,000 shares under this plan. Options are granted on terms and conditions determined by a committee of the Board of Directors. At March 31, 1995, 2,367,038 options were available for issuance. F-16 45 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (9) STOCKHOLDERS' EQUITY - (Continued) The following table summarizes the activity of the plan during the three years ended March 31, 1995: Number Price Per of Shares Share __________ _________ March 31, 1993 Outstanding, beginning of year . . . . . . . . 2,274,408 $2.88 - $6.00 Granted. . . . . . . . . . . . . . . . . . . . 769,000 6.60 - 6.97 Exercised. . . . . . . . . . . . . . . . . . . (382,650) 2.88 - 5.79 Expired. . . . . . . . . . . . . . . . . . . . (144,112) 2.88 - 6.60 March 31, 1994 Outstanding, beginning of year . . . . . . . . 2,516,646 2.91 - 6.97 Granted. . . . . . . . . . . . . . . . . . . . 669,660 12.63 - 17.13 Exercised. . . . . . . . . . . . . . . . . . . (527,704) 2.91 - 6.97 Expired. . . . . . . . . . . . . . . . . . . . (33,152) 3.66 - 12.63 March 31, 1995 Outstanding, beginning of year . . . . . . . . 2,625,450 $ 2.91 -$17.13 Granted. . . . . . . . . . . . . . . . . . . . 502,300 22.63 - 29.41 Exercised. . . . . . . . . . . . . . . . . . . (212,030) 2.91 - 15.78 Expired. . . . . . . . . . . . . . . . . . . . (1,250) 6.60 - 12.63 Outstanding, end of year . . . . . . . . . . . 2,914,470 $ 3.66 -$29.41 The Company maintains a stock option plan covering Directors who are not employees which has 400,000 shares reserved. At March 31, 1995, 220,000 options were available for issuance. The following table summarizes the activity of the plan during the three years ended March 31, 1995: Number Price Per of Shares Share __________ _________ March 31, 1993 Outstanding, beginning of year . . . . . . . . 92,000 $4.19 - $4.41 Granted. . . . . . . . . . . . . . . . . . . . 32,000 4.19 - 8.31 March 31, 1994 Outstanding, beginning of year . . . . . . . . 124,000 4.19 - 8.31 Granted. . . . . . . . . . . . . . . . . . . . 28,000 17.13 Exercised. . . . . . . . . . . . . . . . . . . (16,000) 4.19 - 4.41 March 31, 1995 Outstanding, beginning of year . . . . . . . . 136,000 4.19 - 17.13 Granted. . . . . . . . . . . . . . . . . . . . 20,000 27.63 Outstanding, end of year . . . . . . . . . . . 156,000 4.19 - 27.63 (e) Stock Purchase Warrants The Company and the Chairman of the Company were parties to a Stock and Warrant Issuance Agreement, as amended (the "Warrant Agreement"), which was entered into in connection with the Company's acquisition of US Airgas, Inc., of which the Chairman was the majority shareholder, in May 1986. Pursuant to the Warrant Agreement, the Chairman received warrants to purchase a total of 7,063,716 shares of the Company's common stock. Subsequent to the grant dates, the Chairman transferred warrants to purchase 1,488,400 shares of common stock to employees of the Company and to certain other individuals. The expiration date of the warrants held by these individuals is May 1, 1996. F-17 46 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (9) STOCKHOLDERS' EQUITY - (Continued) During 1991, in connection with an amendment to the Warrant Agreement which extended the original expiration date and increased the exercise price of the warrants, the Chairman exercised warrants to purchase 605,864 shares of common stock for approximately $1.1 million. On February 17, 1993, the Chairman exchanged warrants to purchase 4,962,612 shares of common stock for a net issuance, as provided for under the Warrant Agreement, of 3,649,464 shares of common stock. The following table summarizes the activity of the stock purchase warrants during the three years ended March 31, 1995. Number Price Per of Shares Share __________ _________ March 31, 1993 Outstanding, beginning of year . . . . . . . . 6,461,452 2.52 - 6.00 Exercised. . . . . . . . . . . . . . . . . . . (446,000) 2.52 - 4.38 Chairman's net issuance exercise . . . . . . . (4,962,612) -- March 31, 1994 Outstanding, beginning of year . . . . . . . . 1,052,840 3.36 - 4.38 Exercised. . . . . . . . . . . . . . . . . . . (240,700) 3.52 - 4.38 March 31, 1995 Outstanding, beginning of year . . . . . . . . 812,140 $3.36 - $4.38 Exercised. . . . . . . . . . . . . . . . . . . 57,400 3.52 - 4.38 Outstanding, end of year . . . . . . . . . . . 754,740 $3.36 - $4.38 (f) Shareholder Rights Plan Under the terms of a Shareholder Rights Plan, preferred share purchase rights were distributed during 1988 as a dividend at the rate of one right for each common share. The number of rights outstanding is subject to adjustment under certain circumstances and all rights expire on August 1, 1998. The rights are not exercisable until a person or entity acquires twenty percent of the Company's common stock. Each right will entitle the holder to buy $32.50 worth of the Company's common stock at an exercise price of $16.25. (10) JOINT VENTURE The Company is a partner in a joint venture which primarily sells calcium carbide. The Company and its joint venture partner, Elkem Metals Company ("Elkem"), have equal control over activities of the joint venture. Based on a product sourcing arrangement, the joint venture purchases all of its calcium carbide needs from the venturers. Also, earnings and losses generated by the joint venture, are allocated 55 percent to the Company and 45 percent to Elkem. The Company's calcium carbide operations and equity in the earnings related to the joint venture are reported as components of manufacturing net sales and operating expenses. The Company and Elkem receive marketing fees, based on net sales, for acting as exclusive sales and marketing agents for the joint venture. Additionally, as general manager of the joint venture, Elkem receives a management fee based on net sales. F-18 47 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (10) JOINT VENTURE - (Continued) Condensed balance sheet information as of March 31, 1995 and statement of operations for the joint venture for the year ended March 31, 1995 are as follows: (In thousands) _____________ Balance Sheet Current assets . . . . . . . . . . . . . . . . . . . . . . $ 6,680 Property, plant and equipment, net . . . . . . . . . . . . 348 ______ $ 7,028 ===== Current liabilities. . . . . . . . . . . . . . . . . . . . $ 4,274 Partners' capital. . . . . . . . . . . . . . . . . . . . . 2,754 ______ Total liabilities and partners' capital. . . . . . . . . $ 7,028 ====== Statement of Operations Net sales. . . . . . . . . . . . . . . . . . . . . . . . . $40,239 Costs and expenses . . . . . . . . . . . . . . . . . . . . (38,836) Other income, net. . . . . . . . . . . . . . . . . . . . . 89 ______ Net earnings. . . . . . . . . . . . . . . . . . . . . $ 1,492 ====== (11) INTEREST EXPENSE, NET Interest expense, net, consists of: March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ Interest expense. . . . . . . . . . . . . . . $18,476 $13,189 $12,157 Interest and finance charge income. . . . . . (851) (703) (754) ______ ______ ______ $17,625 $12,486 $11,403 ====== ====== ====== (12) OTHER INCOME, NET Other income, net, consists of: March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ Net gain (loss) from plant and equipment sales. . . . . . . . . . . . . . . . . . . . $ (110) $ 63 $292 Gain on sale of investment. . . . . . . . . . 560 -- -- Other income,net . . . . . . . . . . . . . . 617 390 254 _____ ___ ___ $1,067 $453 $546 ===== === === F-19 48 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (13) INCOME TAXES Pre-tax earnings were derived from the following sources: Years Ended March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ United States . . . . . . . . . . . . . . . . $54,239 $35,621 $22,917 Foreign . . . . . . . . . . . . . . . . . . . 1,134 696 363 ______ ______ ______ $55,373 $36,317 $23,280 ====== ====== ====== Income tax expense consisted of: Years Ended March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ Current: Federal . . . . . . . . . . . . . . . . . $ 9,997 $ 6,515 $ 4,762 Foreign . . . . . . . . . . . . . . . . . 573 326 111 State . . . . . . . . . . . . . . . . . . 1,775 997 780 ______ ______ ______ 12,345 7,838 5,653 ______ ______ ______ Deferred: Federal . . . . . . . . . . . . . . . . . . 9,829 6,827 4,348 Foreign . . . . . . . . . . . . . . . . . . 47 61 96 State . . . . . . . . . . . . . . . . . . . 1,673 1,301 714 ______ ______ ______ 11,549 8,189 5,158 ______ ______ ______ $23,894 $16,027 $10,811 ====== ====== ====== F-20 49 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (13) INCOME TAXES - (Continued) Significant differences between taxes computed at the federal statutory rate and the provision for income taxes were: Years Ended March 31, ___________________________ 1995 1994 1993 ____ ____ ____ Taxes at U.S. federal statutory rate . . . . . . 35.0% 35.0% 34.0% Increase in income taxes resulting from: State income taxes, net of federal benefit . . . 4.0 4.1 4.2 Increase in statutory rate on deferred tax items -- 4.5 -- Amortization of non-deductible goodwill. . . . . 1.8 2.3 3.1 Adjustment of federal and state accruals . . . . -- (4.5) -- Other, net . . . . . . . . . . . . . . . . . . . 2.4 2.7 5.1 ____ ____ ____ 43.2% 44.1% 46.4% ==== ==== ==== The significant components of deferred income tax expense attributable to earnings for the years ended March 31, 1995 and 1994 are as follows: Years Ended March 31, ___________________________ (In thousands) 1995 1994 ______________ ____ ____ Deferred tax expense (exclusive of the effects of other components listed below). . . . $11,549 $ 8,189 Adjustments to deferred tax assets and liabilities for enacted changes in tax laws and rates. . . . . . . . . . . . . . . . . . . . -- 663 Adjustment of federal and state accruals. . . . . -- (663) ______ _____ $11,549 $ 8,189 ====== ===== F-21 50 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (13) INCOME TAXES - (Continued) The tax effects of cumulative temporary differences that gave rise to the significant portions of the deferred tax liability and deferred tax asset were as follows: Years Ended March 31, _______________________ (In thousands) 1995 1994 ______________ ____ ____ Deferred Tax Assets: ____________________ Inventories . . . . . . . . . . . . . . . . . . $ 1,368 $ 1,015 Accounts Receivable . . . . . . . . . . . . . . 885 997 Deferred Rental Income. . . . . . . . . . . . . 880 799 Insurance Reserves. . . . . . . . . . . . . . . 1,791 1,383 Other Reserves. . . . . . . . . . . . . . . . . 2,296 1,600 AMT Credit Carryforwards. . . . . . . . . . . . 3,079 5,656 Other . . . . . . . . . . . . . . . . . . . . . 1,185 835 ______ ______ 11,484 12,285 ______ ______ Deferred Tax Liabilities: _________________________ Property and equipment. . . . . . . . . . . . . (70,787) (57,975) Intangible Assets . . . . . . . . . . . . . . . (2,734) (3,258) Other . . . . . . . . . . . . . . . . . . . . . (286) (551) ______ ______ (73,807) (61,784) ______ ______ Net Deferred Tax Liability . . . . . . . . . . . $(62,323) $(49,499) ====== ====== The Company has recorded tax benefits amounting to $1.9 million, $3.6 million and $1.6 million in 1995, 1994 and 1993, respectively, resulting from the exercise of stock options and warrants. This benefit has been recorded in capital in excess of par value. The Internal Revenue Service (the "IRS") has completed an examination of the Company's consolidated income tax returns for the years ended March 31, 1988 through 1991. The results of the completed examination did not have a material effect on the Company's financial position, results of operations or liquidity. The IRS has also notified the Company that an examination will be conducted for the year ended March 31, 1993. Management believes that the results of the pending examination will not have a material effect on the Company's financial position, results of operations or liquidity. F-22 51 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (13) INCOME TAXES - (Continued) In fiscal 1994, the Company retroactively adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," (Statement No. 109) as of April 1, 1992. The adoption of Statement No. 109 had no material impact on the Company's results of operations or retained earnings. The effect of adopting Statement No. 109 at April 1, 1992 was to establish a current deferred tax asset of $2.3 million, increase net property and equipment and goodwill by $9.0 million and $100 thousand, respectively, and to increase deferred tax liabilities by $11.4 million. The restatement at March 31, 1993 resulted in a current deferred tax asset of $2.2 million, an increase in net property and equipment and goodwill of $10.9 million and $3.0 million, respectively, and an increase in deferred tax liabilities of $16.1 million. (14) BENEFIT PLANS (a) Pension and Profit Sharing Plans The Company has a defined contribution 401(k) plan covering substantially all full-time employees. Under the terms of the plan, the Company makes matching contributions up to two percent of participants' wages plus additional discretionary profit sharing contributions based upon the profitability of the Company. Amounts expensed under the plan for 1995, 1994 and 1993 were $4.7 million, $3.3 million and $2.3 million, respectively. During 1993, the Company authorized termination of two defined benefit pension plans effective December 31, 1992. At December 31, 1994, the plans' projected benefit obligations approximate the plans' net assets available for benefits. The settlement of the vested benefit obligations by the purchase of nonparticipating annuity contracts or lump-sum payments for covered employees is expected to be completed during 1996 or 1997. No significant gain or loss is anticipated when the plans' benefit obligations are settled. Certain subsidiaries of the Company participate in multi-employer pension plans which provide defined benefits to union employees. Contributions are made to the plans in accordance with negotiated labor contracts. The Company has not taken any action to terminate or withdraw from these plans. Management believes that the Company's liability, if any, for multi-employer plan withdraw liability will not have a material effect on the Company's financial position, results of operations, or liquidity. Amounts expensed under these plans for 1995 and 1994 were $418 thousand and $227 thousand, respectively. (b) Employee Stock Purchase Plan During January 1994, the Company established an employee stock purchase plan (the "Plan") to encourage and assist employees to acquire an equity interest in the Company. The Plan is authorized to issue 1 million shares of common stock. Generally, employees may elect to have 1 to 15 percent of their gross pay withheld to buy Airgas, Inc. common stock at 85 to 95 percent of the market value depending upon base salary levels. Market value under the Plan is either the employees' enrollment date market value or the quarterly purchase date market value, whichever is lower. An employee may lock-in a purchase price for up to 27 months. The Plan is designed to comply with the requirements of section 423 of the Internal Revenue Code. F-23 52 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (14) BENEFIT PLANS - (Continued) Under the Plan, 150,102 and 29,735 shares were issued at an average purchase price of $18.03 and $17.99 per share during 1995 and 1994, respectively. (c) Other Employee Benefits The Company sponsors a multi-employer postretirement medical benefit plan for certain employees of one subsidiary under a collective bargaining agreement. In accordance with SFAS 106 "Employers Accounting for Postretirement Benefits Other Than Pensions" and APB Opinion No. 16 "Business Combinations", the postretirement benefit obligation was recorded at the acquisition date. The net postretirement benefit expense for the year ended March 31, 1995 was $88 thousand. The Company's funded postretirement benefit obligation was $837 thousand at March 31, 1995. In determining the APBO, the discount rate used to estimate the actuarial present value of other postretirement benefits was 8.25% at March 31, 1995. The assumed rate of increase in the health care cost trend rate for employees less than age 65 was 9.75% for March 31, 1995, declining gradually to 6.0% over the next four years. For employees 65 and older, the assumed rate of increase is 6.62% for March 31, 1995, declining gradually to 5.5% over the next four years. A 1% increase in the healthcare cost trend rate would have increased net postretirement benefit expense approximately $17 thousand and the APBO approximately $124 thousand at March 31, 1995. The Company does not have any significant benefit arrangements related to SFAS No. 112 "Employers' Accounting for Postemployment Benefits," and accordingly, the effects of adopting Statement No. 112 were immaterial. (15) RELATED PARTIES The Chairman and Vice President -- Corporate Development, were partners in the law firm which provides legal services to the Company. During the years ended March 31, 1995, 1994 and 1993, fees paid to the law firm totalled $525 thousand, $551 thousand, and $395 thousand, respectively. The Company is a party to a sales agency agreement for the sale of carbon products with a company which is a greater than five percent stockholder and a director of which is a former director of the Company. The sales agency agreement expires in October 2003. During the years ended March 31, 1995, 1994 and 1993, the Company paid approximately $543 thousand, $515 thousand and $495 thousand, respectively, under this agreement. A member of the Company's board of directors is the president of a national producer and distributor of industrial gases, welding supplies and related equipment in the Southeastern United States. During the years ended March 31, 1995 and 1994, this company paid $914 thousand and $1.1 million, respectively to a joint venture of the Company for the purchase of calcium carbide. F-24 53 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (16) LEASES The Company leases certain distribution facilities and equipment under long-term operating leases with varying terms. Most leases contain renewal options and in some instances, purchase options. Rentals under these long-term leases (exclusive of real estate taxes, insurance, and other expenses payable under the terms of the leases) for the years ended March 31, 1995, 1994 and 1993, amounted to $12.9 million, $9.7 million and $7.6 million, respectively. Additionally, the Company leases certain operating facilities from employees of the Company who were previous owners of businesses acquired. During 1995, the Company entered into certain operating leases with a trust established by a commercial bank. The trust is committed to purchase real estate properties up to an aggregate amount of $25 million. The trust holds title to the properties and leases the properties to the Company. The rental payments are based on LIBOR plus an applicable margin and the cost of the property acquired by the trust. The Company has entered into interest rate swap agreements in a notional principal amount of $10 million to hedge the effects of fluctuations in the LIBOR based rental rate. At the expiration of the leases with the trust in 1999, the Company has the option to purchase the real properties at amortized cost or assist in the sale of the properties to a third party. The Company has guaranteed a portion of the debt outstanding against these properties in the event the proceeds of a sale are not sufficient to cover the trust's investment in the properties. At March 31, 1995, the Company had a contingent guarantee of approximately $4.2 million related to this lease facility. At March 31, 1995, future minimum lease payments under noncancellable operating leases are as follows: (in thousands) ______________ 1996 . . . . . . . . . . . . . . . . . . $13,561 1997 . . . . . . . . . . . . . . . . . . 10,784 1998 . . . . . . . . . . . . . . . . . . 8,719 1999 . . . . . . . . . . . . . . . . . . 5,900 2000 . . . . . . . . . . . . . . . . . . 3,523 2001 and thereafter. . . . . . . . . . . 5,533 ______ $48,020 ====== F-25 54 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (17) COMMITMENTS AND CONTINGENCIES The Company is involved in various legal and regulatory proceedings which have arisen in the ordinary course of its business and have not been finally adjudicated. These actions, when ultimately concluded and determined, will not, in the opinion of management, have a material adverse effect upon the Company's consolidated financial position, results of operations or liquidity. (18) CASH FLOWS Cash paid for interest expense and income taxes was as follows: Years Ended March 31, ___________________________ (In thousands) 1995 1994 1993 ______________ ____ ____ ____ Interest . . . . . . . . . . . . . . . . . . . $19,011 $13,502 $12,457 Income taxes (net of refunds). . . . . . . . . 11,411 5,333 4,450 ====== ====== ====== The total purchase price, fair value of assets acquired, cash paid and liabilities assumed for business acquisitions is described in note 2. During 1995 and 1994, the Company entered into capital lease obligations for approximately $3.7 million and $700 thousand, respectively. During 1995, the Company retired 1.9 million shares of treasury stock. (19) MINORITY INTEREST IN SUBSIDIARIES Minority interests in subsidiaries represent the minority shareholders' proportionate share of the equity and the results of operations of certain subsidiaries. Under the terms of exchange rights agreements between the Company and minority shareholders, the Company, under certain circumstances, may require or permit exchange of the minority interests of a subsidiary for common stock of the Company. The agreements provide the minority shareholders with the right to exchange their subsidiary shares for common stock of the Company on August 31, 1995 or any other exchange date designated by the Board of Directors. Each exchange will be based on the fair value of the subsidiary's shares and the market price of the Company's common stock as of valuation dates designated by the Board of Directors. F-26 55 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) On February 28, 1994 and July 1, 1992, in connection with optional exchanges, certain minority shareholders elected to exchange their minority interests for an aggregate of 83,366 and 702,000 shares of common stock, respectively. The market price of the Company's common stock on February 28, 1994 and July 1, 1992 was $20.875 and $7.438 per share, respectively . The acquisition of the minority interests has been recorded using the purchase method of accounting. During 1995, 1994 and 1993, the Company sold minority interests in certain of its subsidiaries to employees based on the estimated fair market value of the subsidiary shares. These sales of subsidiary shares were accounted for as capital transactions and, therefore, no gain or loss was recorded. (20) SUMMARY BY BUSINESS SEGMENT The Company, through its subsidiaries, is principally engaged in two related businesses: 1) the distribution of industrial, medical and specialty gases, and the distribution of protective and welding equipment; and 2) the manufacture of products for the industrial gas industry. Industrial, medical and specialty gases are distributed through the Company's subsidiaries which operate in four divisions with locations in 37 states and Canada. The industrial gas distribution market is broad and includes most major industries. F-27 56 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Products manufactured by the Company include nitrous oxide, a gas with applications in the medical, food packaging and certain high technology electronic industries and calcium carbide and carbon products for the production of acetylene gas and for the non-ferrous metal industry. (In thousands) Distribution Manufacturing Total ______________ ____________ _____________ _____ 1995 Net sales. . . . . . . . . . . . . . . . $654,381 $ 33,602 $687,983 Operating income . . . . . . . . . . . . 66,521 6,079 72,600 Assets . . . . . . . . . . . . . . . . . 613,320 32,317 645,637 Depreciation and amortization. . . . . . 35,548 1,320 36,868 Additions to plant and equipment excluding business acquisitions. . . . . 35,961 751 36,712 1994 Net sales . . . . . . . . . . . . . . . 486,836 32,513 519,349 Operating income . . . . . . . . . . . . 42,399 6,268 48,667 Assets . . . . . . . . . . . . . . . . . 487,701 27,196 514,897 Depreciation and amortization. . . . . . 29,101 1,470 30,571 Additions to plant and equipment excluding business acquisitions. . . . . 20,515 803 21,318 1993 Net sales . . . . . . . . . . . . . . . 379,899 30,872 410,771 Operating income . . . . . . . . . . . . 28,443 5,924 34,367 Assets . . . . . . . . . . . . . . . . . 375,718 23,759 399,477 Depreciation and amortization. . . . . . 26,540 1,505 28,045 Additions to plant and equipment excluding business acquisitions. . . . . 13,792 910 14,702 Corporate operating expenses are allocated between the Company's distribution and manufacturing business segments based on relative sales dollars. F-28 57 AIRGAS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (21) SUPPLEMENTARY INFORMATION (UNAUDITED) Summary By Quarter This table summarizes the unaudited results of operations for each quarter of 1995 and 1994: (In thousands, except per share data) First Second Third Fourth _____________________________________ _____ ______ _____ ______ 1995 Net sales . . . . . . . . . . . . . . . $159,462 $164,986 $174,112 $189,423 Operating income. . . . . . . . . . . . 15,701 17,115 18,577 21,207 Net earnings. . . . . . . . . . . . . . 6,789 7,460 7,790 9,440 Net earnings per share (1): Primary . . . . . . . . . . . . . . . $ .21 $ .23 $ .24 $ .29 Fully diluted . . . . . . . . . . . . $ .21 $ .23 $ .24 $ .29 1994 (2) Net sales . . . . . . . . . . . . . . . $115,934 $126,763 $130,081 $146,571 Operating income. . . . . . . . . . . . 10,233 11,645 12,041 14,748 Net earnings. . . . . . . . . . . . . . 4,192 4,633 5,055 6,410 Net earnings per share (1): Primary . . . . . . . . . . . . . . . $ .13 $ .14 $ .16 $ .20 Fully diluted . . . . . . . . . . . . $ .13 $ .14 $ .16 $ .20 __________________ (1) Earnings per share calculations for each of the quarters are based on the weighted average number of shares outstanding in each period. Therefore, the sum of the quarters do not necessarily equal the full year earnings per share. (2) Effective April 1, 1993, the Company changed its estimate of the useful lives of its acetylene and high pressure cylinders from 20 to 30 years. This change was made to better reflect the estimated periods during which these assets will remain in service. The change had the effect of reducing depreciation expense in 1994 by approximately $3.1 million and increasing net earnings by $1.9 million or $.06 per share. F-29 58 (21) SUPPLEMENTARY INFORMATION (UNAUDITED) - (Continued) Financial Summary Years Ended March 31, (6) ________________________________ (In thousands, except per share 1995 1994 1993 1992 1991 amounts) (3) _______________________________ ____ ____ ____ ____ ____ Operating Results Net sales . . . . . . . . . . .$687,983 $519,349 $410,771 $351,491 $322,478 Depreciation and amortization(1) 36,868 30,571 28,045 23,670 21,410 Operating income. . . . . . . . 72,600 48,667 34,367 26,316 17,286 Interest expense, net . . . . . 17,625 12,486 11,403 12,838 15,179 Income taxes(2) . . . . . . . . 23,894 16,027 10,811 7,718 3,400 Net earnings. . . . . . . . . . 31,479 20,290 12,469 7,292 1,166 Earnings Per Share (4): Primary: Net earnings . . . . . . . . .$ .96 $ .63 $ .40 $ .27 $ .05 Fully diluted: Net earnings . . . . . . . . .$ .96 $ .63 $ .39 $ .26 $ .05 ______________________________________________________________________________ Balance Sheet Data Working capital . . . . . . . .$ 54,084 $ 47,071 $ 40,253 $ 39,425 $ 48,774 Total assets. . . . . . . . . . 645,637 514,897 399,477 338,218 307,576 Current portion of long-term debt. . . . . . . . . . . . . . 11,780 10,304 9,923 10,026 7,383 Long-term debt. . . . . . . . . 259,970 205,311 158,629 151,098 149,826 Stockholders' equity (5). . . . 189,652 156,867 127,571 104,931 91,779 __________________ (1) Effective April 1, 1993, the Company changed its estimate of the useful lives of its acetylene and high pressure cylinders from 20 to 30 years. This change was made to better reflect the estimated periods during which these assets will remain in service. The change had the effect of reducing depreciation expense in 1994 by approximately $3.1 million and increasing net earnings by $1.9 million or $.06 per share. (2) The Company has retroactively adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," (Statement No. 109) as of April 1, 1992. Statement No. 109 required the use of the liability method of accounting for deferred income taxes. The adoption of Statement No. 109 had no material impact on the Company's results of operations or retained earnings. (3) During 1991, the Company recorded a $4.2 million pre-tax restructuring charge related to the disposal of certain businesses and severance costs associated with downsizing of the Company. Including the restructuring charge, operating losses of these businesses totalled $5.3 million during 1991. During 1992 and 1993, the restructured businesses were sold. (4) See notes 3 and 9 to the Company's consolidated financial statements for information regarding earnings per share calculations and stock split information. (5) The Company has not paid any dividends. (6) During the fiscal years 1991 through 1995, the Company acquired 99 industrial gas distributors. F-30 59 SCHEDULE II CONSOLIDATED AIRGAS, INC. AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS For the Years Ended March 31, 1995, 1994 and 1993 (In thousands of dollars) Column A Column B Column C ________ ________ ________ Additions _________ Charged Balance at Charged to (Credited) Beginning Cost and to Other Description of Period Expense Accounts ____________ _________ __________ ____________ 1995 Accounts Receivable -- Allowance for doubtful accounts . . $ 4,207 $ 3,102 $ 1,033 (1) LIFO cost reserve . . . . . . . . . 659 402 -- Insurance reserves. . . . . . . . . 5,341 17,038 132 1994 Accounts Receivable -- Allowance for doubtful accounts . . $ 3,392 $ 2,884 $ 1,155 (1) LIFO cost reserve . . . . . . . . . 465 194 -- Insurance reserves. . . . . . . . . 7,046 13,031 165 1993 Accounts Receivable -- Allowance for doubtful accounts . . $ 2,947 $ 2,185 $ 1,054 (1) LIFO cost reserve . . . . . . . . . 441 24 -- Insurance reserves. . . . . . . . . 5,087 10,998 106 (COLUMNS CONTINUED ON NEXT PAGE) F-31 60 SCHEDULE II CONSOLIDATED AIRGAS, INC. AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS For the Years Ended March 31, 1995, 1994 and 1993 (In thousands of dollars) (Columns Continued) Column A Column D Column E ________ ________ ________ Balance at End of Description Deductions Period ____________ ______________ ________ 1995 Accounts Receivable -- Allowance for doubtful accounts . . . $ (4,181) (2) $ 4,161 LIFO cost reserve . . . . . . . . . . -- 1,061 Insurance reserves. . . . . . . . . . (16,207) 6,304 1994 Accounts Receivable -- Allowance for doubtful accounts . . . $ (3,224) (2) $ 4,207 LIFO cost reserve . . . . . . . . . . -- 659 Insurance reserves. . . . . . . . . . (14,901) 5,341 1993 Accounts Receivable -- Allowance for doubtful accounts . . . $ (2,794) (2) $ 3,392 LIFO cost reserve . . . . . . . . . . -- 465 Insurance reserves. . . . . . . . . . (9,145) 7,046 ________ (1) Includes collections on accounts previously written-off and allowances for doubtful accounts of businesses acquired less the allowance for doubtful accounts of businesses sold. (2) Write-off of uncollectible accounts. F-31, Continued EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS EX-1 Exhibit 11 AIRGAS, INC. AND SUBSIDIARIES EARNINGS PER SHARE CALCULATIONS For the Years Ended March 31, 1995, 1994 and 1993
Years Ended March 31, ____________________________________________ 1995 1994 Primary/ Primary/ 1993 Fully Fully 1993 Fully Diluted Diluted Primary Diluted _______ _______ _______ _______ Adjustments of Shares Outstanding _________________________________ Shares of common stock outstanding-weighted 31,073,964 30,674,073 26,203,678 26,203,678 Net common stock equivalents 1,688,460 1,715,711 4,682,582 5,812,340 __________ __________ __________ __________ Adjusted shares outstanding 32,762,424 32,389,784 30,886,260 32,016,018 ========== ========== ========== ========== Actual Net Earnings ___________________ Actual net earnings $31,479,000 $20,290,000 $12,469,000 $12,469,000 ========== ========== ========== ========== Net Earnings Per Share $ .96 $ .63 $ .40 $ .39 ========== ========== ========== ==========
Primary and fully diluted earnings per share amounts for 1995, 1994 and 1993 were determined using the treasury stock method. EX-21 3 SUBSIDIARIES OF THE REGISTRANT EX-2 Exhibit 21 AIRGAS, INC. AND SUBSIDIARIES Airgas, Inc. (Parent) Airgas Breathing Air Systems, Inc. Airgas Canada, Inc. Airgas Holdings, Inc. Airgas Holdings Canada Limited Airgas Houston Airgas International, Inc. Airgas Management, Inc. Airgas New England Real Estate, Inc. Airgas Ontario, Inc. Airgas Realty, Inc. American Carbide and Carbon Corporation (d/b/a Midwest Carbide) Bay Airgas, Inc. Cascade Airgas, Inc. Cryodyne Technologies, Inc. Cylinder Leasing Corp. Empire Airgas, Inc. Florida Airgas,Inc. Great Lakes Airgas, Inc. Great Western Airgas, Inc. Gulf States Airgas, Inc. Keystone Airgas, Inc. Lone Star Airgas, Inc. Maritius Industrial Gases, Inc. Michigan Airgas, Inc. Mid America Airgas, Inc. Mid America Airgas Holdings Midwest Airgas, Inc. Mountain Airgas, Inc. Nitrous Oxide Corp. Northeast Airgas, Inc. Northern Gases, Inc. Pacific Airgas, Inc. G.S. Parsons Company Post Airgas, Inc. Potomac Airgas, Inc. Sierra Airgas, Inc. Sooner Airgas, Inc. Southeast Airgas, Inc. Southern California Airgas, Inc. Specialty Products and Equipment, Inc. Trinity Airgas U.S. Airgas, Inc. Westwind Company Virginia Welding Supply Airgas Polska SP.ZO.O. Poligaz, S.A. EX-23 4 CONSENT OF INDEPENDENT AUDITORS EX-3 Exhibit 23 Consent of Independent Auditors' The Board of Directors Airgas, Inc.: We consent to incorporation by reference in the Registration Statements (Nos. 33-39433, 33-39325, 33-48388 and 33-57893) on Form S-3 and (Nos. 33-25419, 33-21780, 33-33954, 33-64056, 33-64058, 33-64112 and 33-64114) on Form S-8 of Airgas, Inc. of our report dated May 10, 1995, relating to the consolidated balance sheets of Airgas, Inc. and subsidiaries as of March 31, 1995 and 1994, and the related consolidated statements of earnings, stockholders' equity, and cash flows and related schedule for each of the years in the three-year period ended March 31, 1995, which report is included in the March 31, 1995 Annual Report on Form 10-K of Airgas, Inc. Our report refers to a change in the accounting for income taxes. KPMG Peat Marwick LLP Philadelphia, Pennsylvania June 6, 1995 EX-3 5 AMENDED ARTICLES OF INCORPORATION EX-4 AIRGAS, INC. AMENDED CERTIFICATE OF INCORPORATION (1) ____________________ ARTICLE 1 The name of the Corporation is Airgas, Inc. ARTICLE 2 The address of the registered office of the Corporation in the State of Delaware is No. 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company. ARTICLE 3 The purpose of the Corporation is to engage in any lawful act or activity for which Corporations may be organized under the General Corporation Law of Delaware. ARTICLE 4 The total number of shares of capital stock of all classes which the Corporation has authority to issue is Two Hundred Twenty Million Thirty Thousand (220,030,000) shares, of which Two Hundred Million (200,000,000) shares shall be Common Stock, with a par value of One Cent ($0.01) per share, Twenty Million (20,000,000) shares shall be Preferred Stock, with a par value of One Cent ($0.01) per share, and Thirty Thousand (30,000) shares shall be Non-Voting Preferred Stock, with a par value of One Hundred Dollars ($100) per share. The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the shares of each class of stock are as follows: COMMON STOCK Subject to all the rights of the Preferred Stock and Non-Voting Preferred Stock, and except as may be expressly provided with respect to the Preferred herein, by law or by the Board of Directors pursuant to this Article 4, the holders of Common Stock shall have the exclusive right to vote for the election of directors and on all other matters requiring stockholder action, each share being entitled to one vote. (1) Includes three amendments filed on the following dates: August 13, 1987, November 12, 1989 and August 3, 1994. EX-5 PREFERRED STOCK The Preferred Stock may be issued from time to time by the Board of Directors as shares of one or more series. Subject to the provisions hereof and the limitations prescribed by law, the Board of Directors is expressly authorized, prior to issuance, by adopting resolutions providing for the issuance of, providing for a change in the number of, shares of any particular series and, to the extent from time to time required by law, by filing a certificate pursuant to the General Corporation Law or other law hereafter in effect relating to the same or substantially similar subject matter, to establish or change the number of shares to be included in each such series and to fix the designation and relative powers, preferences and rights and the qualifications and limitations or restrictions thereof relating to the shares of each such series. The authority of the Board of Directors with respect to each series include, but not limited to, determination of the following: (a) the distinctive serial designation of such series and the number of shares constituting such series provided that the aggregate number of shares constituting all series of Preferred Stock shall not exceed Twenty Million (20,000,000); (b) the annual dividend rate on shares of such series, whether dividends shall be cumulative and, if so, from which date or dates; (c) whether the shares of such series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon which such shares shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (d) the obligation, if any, of the Corporation to retire shares of such series pursuant to a sinking fund; (e) whether shares of such series shall be convertible into, or exchangeable for, shares of stock or any other class or classes and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any; (f) whether the shares of such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (g) the rights of the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and (h) any other relative rights, powers, preferences, qualification, limitations or restrictions thereof relating to such series. The share of Preferred Stock of any one series shall be identical with each other in all respects except as to the date from and after which the dividends thereon shall be cumulative, if cumulative. The number of authorized shares of Preferred Stock may be increased or decreased by the affirmative vote of a majority of the stock of the Corporation entitled to vote without the separate vote of holders of Preferred Stock as a class. EX-6 NON-VOTING PREFERRED STOCK The designations, powers, preferences, rights, qualifications, limitations and restrictions thereof, and the powers conferred upon the Board of Directors with respect to the fixing of the preferences, limitations and relative rights of the shares of Non-Voting Preferred Stock, are as follows: 1. The shares of Non-Voting Preferred Stock may be issued from time to time, in one or more series of any number of shares, as and when the Board of Directors shall determine, provided that the aggregate number of shares issued and not cancelled of any and all such shares of Non-Voting Preferred Stock shall not exceed the total number of shares of Non-Voting Preferred Stock herein authorized. 2. All shares of the Non-Voting Preferred Stock shall be of equal rank and shall be identical in all respects, except that, authority is hereby vested in the Board of Directors to issue the Non-Voting Preferred Stock in series, and in connection with the creation of such series to fix by resolution or resolutions providing for the issue of shares thereof the preferences, limitations and relative rights of such series to the extent permitted by this Certificate of Incorporation and the applicable law, in the following respects: (a) whether the shares of such series shall be subject to redemption and, if so, whether redemption shall be mandatory, optional, or both; the redemption price or prices; and such other terms and conditions on which shares of Non-Voting Preferred Stock may be redeemed; (b) whether the shares of such series shall be entitled to limited voting powers or other special rights upon the failure of the Corporation to pay dividends on the Non-Voting Preferred Stock. 3. The holders of the Non-Voting Preferred Stock at the time outstanding shall be entitled to receive, out of funds legally available for the payments of dividends, cumulative preferential dividends at the annual dividend rate of $6.00 per share, payable quarter-yearly in each year, on the dates fixed for the purpose by the Board of Directors, to shareholders of record on the respective dates, not exceeding 40 days preceding such dividend payment dates, fixed for the purpose by the Board of Directors, provided however, that commencing with the first quarter-yearly dividend payment date after four (4) years after the issuance thereof, annual dividend rate for the Non-Voting Preferred Stock thereafter shall be $8.00 per share. The dividends on shares of Non-Voting Preferred Stock shall be cumulative, so that unless the dividends on outstanding shares of the Non-Voting Preferred Stock, at the annual dividend rates, and from the dates for accumulative thereof, shall have been paid or declared set apart for payment for all past quarter-yearly dividends, but without interest on accrued dividends, no dividend shall be made on the Common Stock. Any accumulation of dividends on the Non-Voting Preferred Stock shall not bear interest. The holders on the Non-Voting Preferred Stock shall not be entitled to receive any dividends thereon other than the dividends referred to in this Paragraph 3. 4. The Corporation, by action of its Board of Directors may redeem the whole or any parts of any series of the Non-Voting Preferred Stock at any time or from time to time, except as may be otherwise provided in the resolutions providing for the issuance thereof, at the redemption price of the shares fixed therefore, together with a sum in the case of each share so to be redeemed, computed at the annual dividend rate above provided from the date from which dividends on such share became cumulative to the date fixed for EX-7 such redemption, less the aggregate of the dividends theretofore on such redemption date paid thereon. Whether any such redemption of the Non-Voting Preferred Stock shall be optional or mandatory, or both optional and mandatory, the redemption price or prices, and all other terms and conditions of any such redemption, shall be fixed by action of the Board of Directors in the resolution creating and issuing such series of such Non-Voting Preferred Stock. 5. Before any amount shall be paid to, or any assets distributed among, the holders of the Common Stock upon any liquidation, dissolution or winding up of the Corporation, and after paying or providing for the payment of all creditors of the Corporation, the holder of all shares of each series on Non- Voting Preferred Stock at the time outstanding shall be entitled to be paid $100 per share, together with a sum in the case of each such share, computed at the annual dividend rate herein provided, from the date from which dividends on such share became cumulative to the date fixed for the payment of such distributive amount, less the aggregate of the dividends theretofore or on such date paid thereon or declared and set aside for payment thereon, and no more. 6. Whenever the full dividends on the shares of all series of the Non- Voting Preferred Stock at the time outstanding for all past quarter-yearly dividend periods shall have been paid or declared and set apart for payment, then such dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors may be declared and paid on the Common Stock but only out of the funds legally available for payment of such dividends. 7. In the event of any liquidations, dissolution or winding up of the Corporation, all assets and funds of the Corporation remaining after paying or providing for the payment of all creditors of the Corporation remaining after paying or providing for payment to the holders of the shares of all series of the Non-Voting Preferred Stock of all the full distributive amounts to which they are respectively entitled, as herein provided, shall be divided among and paid to the holders of the Common Stock according to their respective shares. 8. (a) No holder or shares of the Common Stock shall be entitled as such a matter of rights to subscribe for or purchase any part of any new or additional issue of Common Stock, or securities convertible into Common Stock, whether issued for cash, property, services, by way of dividends or otherwise. 9. (a) At all meetings of the shareholders of the Corporation, the holders of shares of Common Stock shall be entitled to one vote for each share of Common Stock held by them respectively. The holders of shares of the Non- Voting Preferred Stock shall have a right to vote and shall not be entitled to notice of any meeting of shareholders of the Corporation, nor to participate in any such meeting except as herein otherwise expressly provided and except for those purposes, if any for which said rights cannot be denied or waived under any mandatory provision of law which shall be controlling. (b) If and when dividends payable on the Non-Voting Preferred Stock shall be in default in an amount equivalent to or exceeding four full quarter- yearly dividends on shares of any series of the Non-Voting Preferred Stock then outstanding, the holders of all shares of such series shall be entitled to elect the number of directors, and to exercise such limited voting powers, as shall be provided by action of the Board of Directors in the resolution creating and issuing the Non-Voting Preferred Stock. EX-8 10. The powers of the Board of Directors of the Corporation to fix the terms and conditions on which the shares of Non-Voting Preferred Stock may be redeemed, and to fix the limited voting powers of the holders of the shares of the Non-Voting Preferred Stock upon default of the payment of dividends payable on the Non-Preferred Stock, as authorized herein, shall be exercised by the Board of Directors, and may be exercised by the Executive Committee of the Board of Directors acting for the Board of Directors, by resolution duly adopted at or prior to the time of creating and issuing each series of Non- Voting Preferred Stock, by the vote of a majority of directors present at a duly convened meeting at which a quorum is present, or by unanimous consent in writing signed by all members of the Board of Directors or the Executive Committee, as the case may be. Nothing in this paragraph shall authorize the Board of Directors to change in any manner the rights and preferences of any outstanding shares of the Non-Voting Preferred Stock previously issued and outstanding or required, so long as any shares of the Non-Voting Preferred Stock are then outstanding. 11. So long as any shares of the Non-Voting Preferred Stock are outstanding, to the extent amendment would change in any manner the rights and preferences of any shares of the Non-Voting Preferred Stock, this Article IV may not be amended without the approval of the holders of a majority of the outstanding shares of the Non-Voting Preferred Stock voting as a single class. ARTICLE 5 All power of the Corporation shall be exercised by or under the direction of the Board of Directors except as otherwise provided herein or required by law. For the management of the business and for the conduct of the affairs of the Corporation, and in further creation, definition, limitation and regulation of the power of the Corporation and of its directors and of its stockholders, it is further provided: 1. Number, Election and Terms of Directors. Except as otherwise fixed pursuant to the provisions of Article 4 hereof relating to the rights of the holders of any class or series of stock having preference over the Common Stock as to dividends to elect additional directors under specified circumstances, the number of Directors of the Corporation shall [be fixed at nine (9)] consist of no less than seven and no more than thirteen members, as shall be specifically determined from time to time by resolution of the Board of Directors. The Directors, other than those who may be elected by the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible as shall be provided in the manner specified in the By-laws, one class to hold office initially for a term expiring at the annual meeting of stockholders to be held in 1987, another class to hold office initially for a term expiring at the annual meeting of stockholders to be held in 1988, and another class to hold office initially for a term expiring at the annual meeting of stockholders to be held in 1989, with the members of each class to hold office until their successors are elected and qualified. At each annual meeting of the stockholders of the Corporation, the successors to the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual EX-9 meeting of stockholders held in the third year following the year of their election. 2. Newly Created Directorships and Vacancies. Expect as otherwise fixed pursuant to the provisions of Article 4 hereof relating to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances, newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors. Any Director elected in accordance with the preceding sentence shall hold office until the next annual meeting of shareholders. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. 3. Removal of Directors. Subject to the rights of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation to elect Director under specified circumstances, any Director may be removed from office without cause only by the affirmative vote of the holders of 67% of the combined voting power of the then outstanding shares of stock entitled to vote generally in the election of Directors, voting together as a single class. 4. Stockholder Action. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. 5. Special Meetings. Except as otherwise required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, the President, the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors, or pursuant to the request of holders of 33% of the combined voting power of the then outstanding shares of stock entitled to vote generally in the election of Directors, voting together as a single class. 6. By-Law Amendments. The Board of Directors shall have power to make, alter, amend and repeal the By-Laws (except so far as the By-Laws adopted by the stockholders shall otherwise provide.) Any By-Laws made by the Directors under the powers conferred hereby may be altered, amended or repealed by the Directors or by the stockholders. Notwithstanding the foregoing and anything contained in this certificate of incorporation to the contrary, Article III of the By-Laws shall not be altered, amended or repealed and no provision inconsistent therewith shall be adopted without the affirmative vote of the holders of at least 67% of the voting power of all the shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. 7. Amendment, Repeal, etc. Notwithstanding anything contained in this certificate of incorporation to the contrary, the affirmative vote of the holders of at least 67% of the voting power of all shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with, or repeal, this Article 5 or any provision hereof. EX-10 Article 6 1. Vote Required for Certain Business Combinations. (a) Higher Vote for Certain Business Combinations. In addition to any affirmative vote required by law or this certificate of incorporation, and except as otherwise expressly provided in Section 2 of this Article 6: (i) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (a) any Interested Stockholder (as hereinafter defined) or (b) any other Corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interest Stockholder of any assets of the Corporation or any Subsidiary having an aggregate fair market value of $100 million or more; or (iii) The issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate fair market value of $100 million or more; or (iv) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or (v) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of Equity Security (as hereinafter defined) of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder; shall require the affirmative vote of the holders of at least 67% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"), voting together as a single class (it being understood that for the purpose of this Article 6, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article 4 of this certificate of incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise. (b) Definition of "Business Combination". The term "Business Combination" used in this Article 6 shall mean any transaction which is referred to in any one or more of clauses (i) through (v) of Paragraph A of this Section 1. EX-11 2. When the Higher Vote is Note Required. The provisions of Section 1 of this Article 6 shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this certificate of incorporation, if all of the conditions specified in either of the following paragraphs A and B are met: (a) Approval by Disinterested Directors. The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined). (b) Price and Procedure Requirements. All of the following conditions shall have been met: (i) The aggregate amount of the cash and the Fair Market Value (as hereinafter defined) as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following: (A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of Common stock acquired by it (1) within the two-year period immediately prior to the first public announcement of the terms of the proposed Business Combination (the "Announcement Date") or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; and (B) the fair market value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article 6 as the "Determination Date"), whichever is higher. (ii) The aggregate amount of the cash and the fair market value as of the date of the consummation of the business combination of consideration other than cash to be received per share by holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph b(ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock): (A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of Common stock acquired by it (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; (B) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and (C) the fair market value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher. EX-12 (iii) The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interest Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock previously acquired by it. The price determined in accordance with paragraphs B(i) and B(ii) of this Section 2 shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event. (iv) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (a) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefore any full quarterly dividends (whether or not cumulative) on any outstanding stock having preference over the Common Stock as to dividends or upon liquidation; (b) there shall have been (1) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (2) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to increase such annual rate is approved by a majority of the Disinterested Directors; and (c) such Interested Stockholder shall have not become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder. (v) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. (vi) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). 3. Certain Definitions. For the purpose of this Article 6: (a.) A "person" shall mean any individual, firm, Corporation or other entity. (b.) "Interested Stockholder" shall mean any person (other than the Corporation or any Subsidiary) who or which: (i) is the beneficial owner, directly or indirectly, of 20% or more of the voting power of the outstanding Voting Stock; or (ii) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial EX-13 owner, directly or indirectly, or 20% or more of the voting power of the then outstanding Voting Stock; or (iii) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (c.) A person shall be a "beneficial owner" of any Voting Stock: (i) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns directly or indirectly; or (ii) which such person or any of its Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock. (d.) For the purpose of determining whether a person is an Interested Stockholder pursuant to paragraph B of this Section 3, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph C of this Section 3 but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding upon exercise of conversion rights, warrants or options or otherwise. (e.) "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under the Securities Exchange Act of l934, as in effect on January l, l985. (f.) "Subsidiary" means any Corporation of which a majority of any class of Equity Security is owned, directly or indirectly, by the Corporation, provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph b of the Section 3, the term "Subsidiary" shall mean only a Corporation of which a majority of each class of Equity Security is owned, directly or indirectly, by the Corporation. (g.) "Disinterested Director" means any member of the Board of Directors who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with the Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board of Directors. (h.) "Fair Market Value" means: (i) in the case of stock, the highest closing sale price during the 30 day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange - Listed Stocks, or, if such stock is not quoted on the Composite EX-14 Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of l934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30 day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors in good faith; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors in good faith. (i.) In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used in paragraphs B(i) and (ii) of Section 2 of this Article 6 shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares. (j.) "Equity Security" shall have the meaning ascribed to such term in Section 3(a)(II) of the Securities Exchange Act of 1934, as in effect on January l, l985. 4. Powers of the Board of Directors. A majority of the Directors shall have the power and duty to determine for the purposes of this Article 6, on the basis of information known to them after reasonable inquiry, (a) whether a person is an Interested Stockholder, (b) the number of shares of Voting Stock beneficially owned by any person, (c) whether a person is an Affiliate or Associate of another, (d) whether the assets which are the object of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $l00 million or more. A majority of the Directors shall have the further power to interpret all of the terms and provisions of this Article 6. 5. No Effect on Fiduciary Obligations of Interested Shareholders. Nothing contained in this Article 6 shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. 6. Amendment, Repeal, etc. Notwithstanding any other provisions of this certificate of incorporation or the By-Laws (and notwithstanding the fact that a lesser percentage may be specified by law, this certificate of incorporation or the By-Laws) the affirmative vote of the holders of 67% or more of the outstanding Voting Stock, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with this Article 6 or any provision hereof. ARTICLE 7 1. Prevention of "Greenmail". Any direct or indirect purchase or other acquisition by the Corporation of any Equity Security (as hereinafter defined) of any class from any Interested Securityholder (as hereinafter defined) who has beneficially owned such securities for less than two years prior to the date of such purchase or any agreement in respect thereof shall, except as hereinafter expressly provided, require the affirmative vote of the holders of at least a majority of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"), excluding Voting Stock beneficially owned by EX-15 such Interested Securityholder, voting together as a single class (it being understood that for the purposes of this Article 7, each share of Voting Stock shall have the number of votes granted to it pursuant to Article 4 of this certificate of incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or any agreement with any national securities exchange, or otherwise, but no such affirmative vote shall be required with respect to any purchase or other acquisition of securities made as part of a tender or exchange offer by the Corporation to purchase securities of the same class made on the same terms to all holders of such securities and complying with the applicable requirements of the Securities Exchange Act of l934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations). 2. Certain Definitions. For the purposes of this Article 7: (a.) A "person" shall mean any individual, firm, Corporation or other entity. (b.) "Interested Securityholder" shall mean any person (other than the Corporation or any Corporation of which a majority of any class of Equity Security is owned, directly or indirectly, by the Corporation) who or which: (i) is the beneficial owner, directly or indirectly, of 20% or more of the class of securities to be acquired; or (ii) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 20% or more of the class of securities to be acquired; or (iii) is an assignee or has otherwise succeeded to any shares of the class of securities to be acquired which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Securityholder, if such assignment or succession shall have occurred in the course of a transaction or transactions not involving a public offering with the meaning of the Securities Act of l933. (c.) A person shall be a "beneficial owner" of any security of any class of the Corporation: (i) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or (ii) Which such person or any of its Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (B) any right to vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing any security of any class of the Corporation. EX-16 (d.) For the purposes of determining whether a person is an Interested Securityholder pursuant to paragraph b of this Section 2, the relevant class of securities outstanding shall be deemed to comprise all such securities deemed owned through application of paragraph c of this Section 2, but shall not include other securities of such class which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. (e.) "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under the Securities Exchange Act of l934, as in effect on January l, l985. (f.) "Equity Security" shall have the meaning ascribed to such term in Section 3(a)(ll) of the Securities Exchange Act of l934, as in effect on January l, l985. ARTICLE 8 The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute and this certificate of incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. Any such amendment, alteration, change or repeal shall be of no force and effect prior to the expiration of thirty (30) days after the affirmative vote of the holders of the appropriate majority of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors. ARTICLE 9 The name and address of each incorporator is as follows: Name Mailing Address McKinley C. McAdoo Five Radnor Corporate Center Suite 500 l00 Matsonford Road Radnor, Pennsylvania l9087 ARTICLE 10 The Corporation is to have perpetual existence. THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a Corporation pursuant to the General Corporation Law of Delaware does make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true and accordingly have hereunto set my hand and seal this l9th day of August, l986. ________________________(SEAL) /s/McKinley McAdoo EX-4 6 EXHIBIT 4.1- 6TH AMENDED & RESTATED LOAN AGREE. EX-17 [EXECUTION COPY] SIXTH AMENDED AND RESTATED LOAN AGREEMENT DATED AS OF AUGUST 30, 1994 BY AND AMONG AIRGAS, INC. AND AIRGAS HOLDINGS, INC. AS BORROWERS, THE BANKS NAMED HEREIN, AND NATIONSBANK OF NORTH CAROLINA, N.A., AS AGENT EX-18 Table of Contents Section Title Page ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . 2 1.01 Definitions . . . . . . . . . . . . . . . . . . . 2 1.02 Accounting Terms. . . . . . . . . . . . . . . . .15 ARTICLE II REVOLVING LOANS . . . . . . . . . . . . . . . . .15 2.01 Revolving Credit Loans. . . . . . . . . . . . . .15 2.02 (a) Minimum Amounts. . . . . . . . . . . . . . .15 (b) Types of Revolving Credit Loans. . . . . . .16 (c) Notice . . . . . . . . . . . . . . . . . . .16 (d) Limitation on Numbers of Revolving Credit Loans . . . . . . . . . .16 2.03 Revolving Credit Notes. . . . . . . . . . . . . .17 2.04 Revolving Credit Loan Interest Rates. . . . . . .17 2.05 (a) Commitment Fee . . . . . . . . . . . . . . .18 (b) Reduction of Revolving Credit Loan Commitments. . . . . . . . . . . . . . . .18 ARTICLE III TERM LOANS. . . . . . . . . . . . . . . . . . . .19 3.01 (a) Term Loans . . . . . . . . . . . . . . . . .19 (b) Types of Term Loans. . . . . . . . . . . . .19 (c) Notice . . . . . . . . . . . . . . . . . . .19 (d) Limitation on Numbers of Term Loans. . . . .20 3.02 Term Notes . . . . . . . . . . . . . . . . . . .20 3.03 Term Loan Interest Rates. . . . . . . . . . . . .20 ARTICLE IV LETTER OF CREDIT TERM LOANS . . . . . . . . . . .21 4.01 (a) Letter of Credit Term Loans. . . . . . . . .21 (b) Types of Letter of Credit Term Loans . . . .21 4.02 Repayment of Letter of Credit Term Loans . . . .22 4.03 Letter of Credit Term Notes . . . . . . . . . . .22 4.04 Letter of Credit Term Loan Interest Rates . . . .22 ARTICLE V LETTERS OF CREDIT . . . . . . . . . . . . . . . .23 5.01 Letters of Credit . . . . . . . . . . . . . . . .23 (a) General Provisions . . . . . . . . . . . . .23 (b) Requests for Letters of Credit . . . . . . .24 (c) Participations of Banks in Letters of Credit . . . . . . . . . . . . .24 (d) Reimbursement of Drawings. . . . . . . . . .24 (e) Indemnification of LC Agent. . . . . . . . .25 (f) Letter of Credit Fee(s). . . . . . . . . . .26 (g) Sharing of Letter of Credit Fees . . . . . .26 5.02 Additional Costs. . . . . . . . . . . . . . . . .27 5.03 Quarterly Reports Concerning Letters of Credit. .27 5.04 Guarantee Subsidiaries as Account Parties . . . .27 EX-19 ARTICLE VI BANKERS' ACCEPTANCES. . . . . . . . . . . . . . .27 6.01 Bankers' Acceptances. . . . . . . . . . . . . . .27 (a) General Provisions . . . . . . . . . . . . .27 (b) Requirements for Bankers' Acceptances; Ratable Creation . . . . . . . . . . . . .28 (c) Requests for and Creation of Bankers' Acceptances . . . . . . . . . . .29 (d) Reimbursement of Advances. . . . . . . . . .29 (e) Ineligible Bankers' Acceptances. . . . . . .30 (f) Records of Bankers' Acceptance Transactions.30 (g) Authorized Signatory . . . . . . . . . . . .30 (h) Guarantee Subsidiaries as Account Parties. .31 ARTICLE VII MONEY MARKET LOANS. . . . . . . . . . . . . . . .31 7.01 Money Market Loans. . . . . . . . . . . . . . . .31 (a) Money Market Loan Requests . . . . . . . . .31 (b) Money Market Quotes. . . . . . . . . . . . .31 (c) Acceptance of Money Market Quotes. . . . . .32 (d) Funding of Money Market Loans. . . . . . . .33 (e) Money Market Notes . . . . . . . . . . . . .33 (f) Limitations on Money Market Loans. . . . . .33 (g) Repayment of Money Market Loans. . . . . . .33 (h) Interest . . . . . . . . . . . . . . . . . .34 (i) Limitation on Money Market Loans . . . . . .34 (j) Money Market Loan Requests through Agent . .34 ARTICLE VIII ADDITIONAL PROVISIONS REGARDING REVOLVING CREDIT LOANS, TERM LOANS, LETTER OF CREDIT TERM LOANS, MONEY MARKET LOANS AND BANKERS' ACCEPTANCES . . .34 8.01 Additional Interest Rate Provisions . . . . . . .34 (a) Default Rate . . . . . . . . . . . . . . . .34 (b) LIBOR Base Rate Unascertainable. . . . . . .35 (c) CD Base Rate Unascertainable . . . . . . . .35 8.02 Conversion and Continuation of Loans. . . . . . .36 8.03 Prepayments . . . . . . . . . . . . . . . . . . .38 8.04 Additional Costs. . . . . . . . . . . . . . . . .39 8.05 Changes in Laws or Regulations. . . . . . . . . .41 8.06 Compensations . . . . . . . . . . . . . . . . . .42 8.07 Payments and Prepayments. . . . . . . . . . . . .42 8.08 Capital Adequacy Protection . . . . . . . . . . .44 8.09 HLT Classification. . . . . . . . . . . . . . . .44 8.10 Limitation of Liability of Holdings . . . . . . .45 ARTICLE IX CONDITIONS PRECEDENT AS OF CLOSING DATE . . . . .46 9.01 Conditions Precedent to Initial Loans . . . . . .46 ARTICLE X CONDITIONS OF LENDING . . . . . . . . . . . . . .47 10.01 Conditions of Lending . . . . . . . . . . . . . .47 10.02 Revolving Credit Loan Commitment Limitation; Reaffirmation . . . . . . . . . . .47 EX-20 ARTICLE XI REPRESENTATIONS AND WARRANTIES. . . . . . . . . .48 11.01 (a) Incorporation. . . . . . . . . . . . . . . .48 (b) Power and Authority to Own Properties and Assets . . . . . . .48 (c) Power and Authority to Execute, Deliver and Perform the Loan Documents . .48 (d) Loan Documents Valid and Binding Obligations. . . . . . . . . . . . . . . .48 (e) Execution, Delivery and Performance. . . . .48 (f) Title to Properties. . . . . . . . . . . . .49 (g) Subsidiaries . . . . . . . . . . . . . . . .49 (h) Interests in Other Person. . . . . . . . . .49 (i) Audited Balance Sheet. . . . . . . . . . . .49 (j) Litigation . . . . . . . . . . . . . . . . .49 (k) Compliance with Laws . . . . . . . . . . . .50 (l) Hazardous Materials. . . . . . . . . . . . .50 (m) Margin Stock; Regs G, U, T and X . . . . . .50 (n) Patents, Licenses and Trademarks . . . . . .50 (o) MEPP . . . . . . . . . . . . . . . . . . . .51 (p) "Investment" or "Holding" Company. . . . . .51 (q) (i) No Judgments, Orders, or Decrees. . . .51 (ii) No Defaults . . . . . . . . . . . . . .51 (r) Taxes. . . . . . . . . . . . . . . . . . . .51 (s) ERISA. . . . . . . . . . . . . . . . . . . .51 (t) Material Misstatement. . . . . . . . . . . .52 (u) No Governmental Approvals. . . . . . . . . .52 ARTICLE XII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . .52 12.01 Affirmative Covenants . . . . . . . . . . . . . .52 (a) (i) Annual Audited Financial Reports . . .52 (ii) Annual Projections. . . . . . . . . . .52 (b) Quarterly Financial Reports. . . . . . . . 52 (c) Financial Information Concerning Certain Acquired Companies. . . . . . . . . . . .53 (d) Officer's Certification. . . . . . . . . . .53 (e) Stockholder and SEC Reports. . . . . . . . .53 (f) Other Information. . . . . . . . . . . . . .54 (g) Primary Depository . . . . . . . . . . . . .54 (h) Fiscal Year . . . . . . . . . . . . . . . .54 (i) Use of Loan Proceeds . . . . . . . . . . . .54 (j) Maintenance of Properties . . . . . . . . .54 (k) Maintenance of Corporate Existence . . . . .54 (l) Compliance with Laws . . . . . . . . . . . .54 (m) Hazardous Materials. . . . . . . . . . . . .54 (n) Indemnification of Banks.. . . . . . . . . .55 (o) Insurance. . . . . . . . . . . . . . . . . .55 (p) Patents. . . . . . . . . . . . . . . . . . .55 (q) Books of Records and Accounts. . . . . . . .55 (r) Inspection . . . . . . . . . . . . . . . . .56 (s) Certified Public Accountants . . . . . . . .56 (t) Notice of Event of Default . . . . . . . . .56 (u) Agent's Fee. . . . . . . . . . . . . . . . .56 (v) Other Notices. . . . . . . . . . . . . . . .56 (w) ERISA. . . . . . . . . . . . . . . . . . . .56 (x) Further Assurances . . . . . . . . . . . . .57 (y) New Subsidiaries . . . . . . . . . . . . . .57 EX-21 ARTICLE XIII NEGATIVE COVENANTS. . . . . . . . . . . . . . . .58 13.01 Negative Covenants. . . . . . . . . . . . . . . .58 (a) Indebtedness . . . . . . . . . . . . . . . .58 (b) Liens. . . . . . . . . . . . . . . . . . . .59 (c) Acquisitions, Consolidations, Mergers. . . .60 (d) Asset Dispositions . . . . . . . . . . . . .60 (e) Sale/Leaseback Transactions. . . . . . . . .61 (f) Dissolution, Liquidation or Termination. . .61 (g) Guarantees . . . . . . . . . . . . . . . . .61 (h) Investments. . . . . . . . . . . . . . . . .61 (i) Accounts Receivable. . . . . . . . . . . . .63 (j) Insider Transactions . . . . . . . . . . . .63 (k) Loans and Advances . . . . . . . . . . . . .64 (l) Dividends. . . . . . . . . . . . . . . . . .64 (m) Partnerships, Joint Ventures . . . . . . . .64 (n) Line of Business . . . . . . . . . . . . . .64 (o) Accounting Practices . . . . . . . . . . . .65 (p) Leverage Ratio . . . . . . . . . . . . . . .65 (q) Current Ratio. . . . . . . . . . . . . . . .65 (r) Fixed Charge Coverage Ratio. . . . . . . . .65 (s) Book Net Worth . . . . . . . . . . . . . . .65 (t) Payment of Subordinated Debt . . . . . . . .65 (u) Amendment of Senior Subordinated Note Purchase Agreement. . . . . . . . . . .65 ARTICLE XIIIA INCORPORATION OF SUBORDINATED DEBT COVENANTS. . .66 ARTICLE XIV EVENTS OF DEFAULT AND ACCELERATION. . . . . . . .66 14.01 Events of Default and Acceleration. . . . . . . .66 ARTICLE XV THE AGENT . . . . . . . . . . . . . . . . . . . .69 15.01 Appointment and Authorization . . . . . . . . . .69 15.02 Reliance..... . . . . . . . . . . . . . . . . . .69 15.03 Responsibilities. . . . . . . . . . . . . . . . .69 15.04 Reliance Upon Communications. . . . . . . . . . .70 15.05 Event of Default. . . . . . . . . . . . . . . . .70 15.06 No Representations . . . . . . . . . . . . . . .70 15.07 Indemnification . . . . . . . . . . . . . . . . .71 15.08 Dealings with Credit Parties. . . . . . . . . . .71 15.09 Resignation . . . . . . . . . . . . . . . . . . .72 EX-22 ARTICLE XVI MISCELLANEOUS . . . . . . . . . . . . . . . . . .72 16.01 Notices . . . . . . . . . . . . . . . . . . . . .72 16.02 Waiver. . . . . . . . . . . . . . . . . . . . . .74 16.03 Survival. . . . . . . . . . . . . . . . . . . . .74 16.04 Costs . . . . . . . . . . . . . . . . . . . . . .74 16.05 Amendments. . . . . . . . . . . . . . . . . . . .75 16.06 Year . . . . . . . . . . . . . . . . . . . . . .76 16.07 Set-Off . . . . . . . . . . . . . . . . . . . . .76 16.08 Payment on Business Day . . . . . . . . . . . . .76 16.09 Counterparts . . . . . . . . . . . . . . . . . .76 16.10 Assignment . . . . . . . . . . . . . . . . . . .76 16.11 Term . . . . . . . . . . . . . . . . . . . . . .77 16.12 Joint and Several Obligations of Borrowers. . . .77 16.13 Governing Law . . . . . . . . . . . . . . . . . .77 16.14 Priority of Loans and Money Market Loans. . . . .78 16.15 Conversions to U.S. Currency. . . . . . . . . . .78 16.16 Return of Old Notes . . . . . . . . . . . . . . .78 16.17 Dealings by Banks With Credit Parties . . . . . .78 16.18 No Deduction for Foreign Taxes. . . . . . . . . .78 EX-23 Exhibits Exhibit A Banks' Commitment Levels Exhibit B Guaranty Agreement Exhibit C Form of Guaranty Joinder Agreement Exhibit D Contingent Liability Exhibit E Form of Revolving Credit Note Exhibit F Form of Term Note Exhibit G Form of Letter of Credit Term Note Exhibit H Form of Request for Bankers' Acceptances Exhibit I Form of Money Market Note Exhibit J Form of Legal Opinion Exhibit K Liens Exhibit L Airgas Subsidiaries Exhibit M Interest in Other Persons Exhibit N Litigation Exhibit O Form of Officer's Compliance Certificate Exhibit P Insurance Coverage Exhibit Q Existing Indebtedness EX-24 Schedules Schedule 1 $25,000,000 Senior Subordinated Note Purchase Agreement Schedule 2 $30,000,000 Senior Subordinated Note Purchase Agreement Schedule 3 Existing Letters of Credit Schedule 4 Loan Documents for $30,000,000 NationsBank Revolving Line of Credit EX-25 SIXTH AMENDED AND RESTATED LOAN AGREEMENT THIS SIXTH AMENDED AND RESTATED LOAN AGREEMENT, dated as of August 30, 1994 (the "Loan Agreement"), amends and restates that certain Fifth Amended and Restated Loan Agreement dated as of October 13, 1993 (as amended from time to time, the "Prior Loan Agreement") by and among Airgas, Inc. and certain of its Subsidiaries and the Banks hereinafter referred to and defined and NationsBank of North Carolina, N.A., as agent for such Banks, and is made by and among AIRGAS, INC., a Delaware corporation ("Airgas"); and AIRGAS HOLDINGS, INC., a Delaware corporation ("Holdings" - Airgas and Holdings may be referred to individually herein as a "Borrower" and collectively as the "Borrowers"); NATIONSBANK OF NORTH CAROLINA, N.A., a national banking association ("NationsBank"); THE BANK OF NEW YORK, a New York corporation ("BNY"); FIRST FIDELITY BANK, N.A., a national banking association ("Fidelity"); PHILADELPHIA NATIONAL BANK, INCORPORATED AS CORESTATES BANK, NA, a national banking association ("PNB"); CONTINENTAL BANK, an Illinois state bank ("Continental"); MERIDIAN BANK, a Pennsylvania state bank ("Meridian"); NBD BANK, N.A., a national banking association ("NBD"); CIBC INC. , a Delaware corporation ("CIBC"); and PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC" - hereinafter, NationsBank, BNY, Fidelity, PNB, Continental, Meridian, NBD, CIBC and PNC may be referred to individually as a "Bank" and collectively as the "Banks"); and NATIONSBANK NATIONAL BANK OF NORTH CAROLINA, N.A., a national banking association (in its capacity as agent for the Banks, hereinafter referred to in such capacity as the "Agent"). RECITALS: A. The Borrowers have requested that the Banks provide the Borrowers with a $250,000,000.00 credit facility for the purposes of (i) refinancing certain existing indebtedness of Airgas and certain of its Subsidiaries to the Banks, (ii) financing the acquisition of new Subsidiaries, (iii) financing other investments permitted under this Loan Agreement and (iv) satisfying capital expenditure, working capital and letter of credit needs of the Borrowers and the Guarantee Subsidiaries. EX-26 B. The Banks have agreed to provide the requested credit facility to the Borrowers on the terms and conditions hereinafter set forth. NOW, THEREFORE, the Borrowers, the Agent and the Banks agree as follows: ARTICLE I Definitions 1.01 For the purposes hereof: "Adjusted Net Worth" means, as of any date of determination thereof, the excess of (i) the amount of the "present fair saleable value" of the assets of Holdings as of such date of determination, over (ii) the amount of all "liabilities, contingent or otherwise", of Holdings as of such date of determination, as such quoted terms are determined in accordance with applicable Federal and state laws governing determinations of the insolvency of debtors. In determining the Adjusted Net Worth of Holdings for purposes of calculating Holdings' Maximum Obligated Amount in respect of any Extension of Credit, the liabilities of Holdings to be used in such determination pursuant to clause (ii) of the preceding sentence shall in any event include the liabilities of Holdings hereunder in respect of all Extensions of Credit other than the Extension of Credit in respect of which such calculation is being made; "Affiliate", with respect to any Person, means any other Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such first Person; or (ii) which beneficially owns or holds 5% or more of any class of the Voting Stock (or in the case of such first Person which is not a corporation, 5% or more of the equity interest) of such first Person; or (iii) of which 5% or more of the Voting Stock (or in the case of a Person which is not a corporation, 5% or more of the equity interest) is beneficially owned or held by such first Person; "Applicable Margin" means, at any time, the applicable margin corresponding to the ratios described below in effect as of the most recent Rate Determination Date (as hereinafter defined): EX-27 A. Revolving Credit Loans and Bankers' Acceptances Applicable Margin Applicable Applicable for Margin Margin Pricing Funded Debt Fixed Charge Eurodollar for for Bankers' Level Coverage Ratio Coverage Ratio Loans CD Loans Acceptances _______ ______________ ______________ _________ ________ ___________ V Equal to or Less than 1.50:1.00 1% 1 1/8% 1% greater than 3.50:1.00 IV Less than Equal to or greater 3.50:1.00 but than 1.50:1.00 but greater than less than 1.60:1.00 7/8% 1% 7/8% or equal to 3.00:1.00 III Less than Equal to or greater 3.00:1.00 but than 1.60:1.00 but greater than less than 2.00:1.00 3/4% 7/8% 3/4% or equal to 2.50:1.00 II Less than Equal to or greater 2.50:1.00 but than 2.00:1.00 but greater than less than 2.50:1.00 5/8% 3/4% 5/8% or equal to 2.00:1.00 I Less than Equal to or greater 2.00:1.00 than 2.50:1.00 1/2% 5/8% 1/2% B. Term Loans and Letter of Credit Term Loans Applicable Applicable Margin Margin Pricing Funded Debt Fixed Charge for for Level Coverage Ratio Coverage Ratio Eurodollar Loans CD Loans ______ ______________ _______________ ________________ _________ V Equal to or Less than 1.50:1.00 1 1/2% 1 5/8% greater than 3.50:1.00 IV Less than Equal to or greater 3.50:1.00 but than 1.50:1.00 but greater than less than 1.60:1.00 1 3/8% 1 1/2% or equal to 3.00:1.00 EX-28 III Less than Equal to or greater 3.00:1.00 but than 1.60:1.00 but greater than less than 2.00:1.00 1 1/4% 1 3/8% or equal to 2.50:1.00 II Less than Equal to or greater 2.50:1.00 but than 2.00:1.00 but greater than less than 2.50:1.00 1 1/8% 1 1/4% or equal to 2.00:1.00 I Less than Equal to or greater 2.00:1:00 than 2.50:1.00 1% 1 1/8% In the event that, as of any Rate Determination Date, the Leverage Ratio and the Fixed Charge Coverage Ratio then applicable are at different Pricing Levels, then the Applicable Margins in the higher of the two Pricing Levels shall apply. Determination of the appropriate Applicable Margin based on the Funded Debt Coverage Ratio and the Fixed Charge Coverage Ratio shall be made as of the Closing Date and as of each March 31, June 30, September 30 and December 31 thereafter (each such date a "Rate Determination Date"). The Funded Debt Coverage Ratio and the Fixed Charge Coverage Ratio in effect as of a Rate Determination Date (as calculated by the chief financial officer of Airgas and set forth in the related statement of such chief financial officer delivered to the Banks in accordance with Section 12.01(d) hereof) shall establish the Applicable Margins for the second calendar quarter immediately following such Rate Determination Date. A change in the Applicable Margins shall be effective as of the first day of the second calendar quarter after the Rate Determination Date giving rise to such change and shall be applicable thereafter until the effective date of any subsequent change. The Agent shall (i) verify the calculations of the Funded Debt Coverage Ratio and the Fixed Charge Coverage Ratio provided by the chief financial officer of Airgas as described above for each Rate Determination Date and (ii) determine the Applicable Margins as of each Rate Determination Date. The Agent shall promptly notify the Borrowers and the Banks of the Applicable Margins so determined. Such determinations by the Agent of the Applicable Margins shall be conclusive absent manifest error. The Applicable Margins as of the Closing Date are 3/4% for Revolving Credit Loans which are Eurodollar Loans, 7/8% for Revolving Credit Loans which are CD Loans and 3/4% for Bankers' Acceptances. "BA Discount Rate" means, with respect to any Bankers' Acceptance, the rate per annum (computed on the basis of a year of 360 days) equal to the sum of (i) the rate determined by the Agent to be the average (rounded upward to the nearest whole multiple of 1/100 of 1%) of the current quoted discount rates for bankers' acceptances of each of the Reference Banks on the date of creation of such Bankers' Acceptance for bankers' acceptances in an amount substantially equal to the face amount of the related Bankers' Acceptance to be created by each such Reference Banks and having the same maturity as such Bankers' Acceptance plus (ii) the Applicable Margin for Bankers' Acceptances at such time determined in accordance with the definition of "Applicable Margin" set forth in this Section 1.01; EX-29 "BA Documents" means, with respect to any Bankers' Acceptance, such documents and agreements as the applicable accepting Bank reasonably may require in connection with the creation of such Bankers' Acceptance; "BA Outstandings" means, at any time with respect to the Bankers' Acceptances created by any Bank, the sum of (i) the maximum aggregate amount which is, or at any time thereafter may become, payable by such Bank under all Bankers' Acceptances of such Bank then outstanding, plus (ii) the aggregate BA Reimbursement Obligations of such Bank at such time; "BA Reimbursement Obligation" means, at any time with respect to any Bankers' Acceptance of any Bank, any unpaid obligation of the Borrowers to reimburse such Bank for amounts theretofore advanced by such Bank under such Bankers' Acceptance; "Bankers' Acceptance" means a draft drawn by the Borrowers (or by either of them, or, as contemplated by Section 6.01(h) hereof, by a Guarantee Subsidiary) on, and accepted and discounted by, a Bank pursuant to Section 6.01 hereof; "Bankers' Acceptance Commitment", for each Bank, means the commitment of such Bank to create Bankers' Acceptances in a maximum face amount equal to the amount set forth beside the name of such Bank on Exhibit A hereto; "Book Net Worth" means, at any time, consolidated net stockholders' equity of Airgas and its Subsidiaries determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis excluding any Capital Stock to which a Redemption Obligation relates so long as such Redemption Obligation is outstanding; "Borrowers' Obligations" means, without duplication, the obligations of the Borrowers to the Banks, the Agent and the LC Agent (including the obligations to pay principal of and interest on the Loans, the Money Market Loans, the LC Reimbursement Obligations and the BA Reimbursement Obligations and to pay all fees and other amounts payable by the Borrowers) hereunder and under the Notes and the Money Market Notes; "Business Day" means any day not a Saturday, Sunday or legal holiday on which each of the Banks is open for business; provided, however, that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London Interbank Market; "Canadian Lender" means a bank or other financial institution organized and existing under the laws of Canada or any province or other political subdivision thereof, or any subsidiary of such a Bank or other financial institution; "Canadian Subsidiary" means a direct or indirect Subsidiary of Airgas which is organized and existing under the laws of Canada or any province or other political subdivision thereof; "Capital Base" means, at any time, the sum of (i) Funded Debt at such time, plus (ii) Book Net Worth at such time; "Capital Stock" means common stock and any class or series of preferred stock; EX-30 "CD Base Rate" means the rate, on the day of borrowing, bid by New York certificate of deposit dealers of recognized standing for the purchase of NationsBank's negotiable certificates of deposit at face value in the requested amount and maturity, such rate being adjusted for the cost of (i) reserve requirements as prescribed by the Board of Governors of the Federal Reserve System and (ii) insurance premiums on certificates of deposit paid to the Federal Deposit Insurance Corporation; "CD Letter of Credit Term Loan" means a Letter of Credit Term Loan that is a CD Loan; "CD Loan" means a Loan bearing interest based on the CD Base Rate in accordance with the provisions of Articles II, III, IV and VIII hereof; "CD Revolving Credit Loan" means a Revolving Credit Loan that is a CD Loan; "CD Term Loan" means a Term Loan that is a CD Loan; "Closing Date" means the date as of which this Loan Agreement is executed by the Borrowers, the Banks and the Agent and all of the conditions precedent set forth in Article IX hereof have been satisfied; "Commitment Fee" shall have the meaning assigned to such term in Section 2.05(a) hereof; "Consistent Basis", in reference to the application of Generally Accepted Accounting Principles, means that the accounting principles observed in the period referred to are comparable in all material respects to those applied in the most recent preceding period; "Controlled Group" means the group of trades or businesses under common control as defined in Section 414(c) of the Internal Revenue Code of 1986 (as the same may be amended from time to time) and the applicable regulations thereunder, of which Airgas or any of its Subsidiaries is a part or may become a part; "Credit Party" means any of the Borrowers and the Guarantee Subsidiaries; "Current Assets" means, at any time, all items which, according to Generally Accepted Accounting Principles, would be classified as current assets on a consolidated balance sheet of Airgas and its Subsidiaries; "Current Liabilities" means, at any time, all items which, according to Generally Accepted Accounting Principles, would be classified as current liabilities on a consolidated balance sheet of Airgas and its Subsidiaries; "Current Maturities" means, at any time, (i) current maturities of Long Term Debt as of such time and (ii) short term notes payable by Airgas or any of its Subsidiaries as of such time, all as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Current Ratio" means, at any time such calculation is made, the ratio obtained by dividing Current Assets by Current Liabilities; EX-31 "EBITDA" means, with respect to the twelve-month period ending on the date such calculation is made, the sum of (i) Net Income for such period, plus (ii) an amount which, in the determination of Net Income for such period, has been deducted for (A) Interest Expense, (B) total Federal, state, local and foreign income and similar taxes of Airgas and its Subsidiaries on a consolidated basis and (C) depreciation and amortization expense of Airgas and its Subsidiaries on a consolidated basis, all as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "ERISA" shall have the meaning given to said term in Section 12.01(w) hereof; "Eurodollar Letter of Credit Term Loan" means a Letter of Credit Term Loan that is a Eurodollar Loan; "Eurodollar Loan" means a Loan bearing interest based on the LIBOR Base Rate in accordance with the provisions of Articles II, III, IV and VIII hereof; "Eurodollar Revolving Credit Loan" means a Revolving Credit Loan that is a Eurodollar Loan; "Eurodollar Term Loan" means a Term Loan that is a Eurodollar Loan; "Event of Default" shall have the meaning given to said term in Section 14.01 hereof; "Executive Officer" means the chief executive officer, chief operating officer or chief financial officer of the Person in question; "Existing Letters of Credit" means the letters of credit set forth on Schedule 3 attached hereto; "Extension of Credit" means any Loan or Money Market Loan advanced hereunder, any Letter of Credit issued hereunder (and obligations to make advances thereunder) and any Bankers' Acceptance created hereunder (and obligations to make advances thereunder); "Federal Funds Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions, with members of the Federal Reserve System only, arranged by Federal funds brokers, as published for such day by the Federal Reserve Bank of New York (or, in the absence of such publication, as reasonably determined by the Agent); "Fixed Charge Coverage Ratio" means, with respect to the twelve-month period ending on the date such calculation is made, the ratio of (i) Operating Income for such period to (ii) Fixed Charges for such period; "Fixed Charges" means, for any period, the sum of (i) Interest Expense for such period, plus (ii) Current Maturities as of the first day of such period; "Funded Debt" means, at any time, the sum, without duplication, of (i) the aggregate principal balance of all outstanding Loans, Money Market Loans and BA Outstandings at such time, plus (ii) the aggregate amount of Current Maturities at such time, plus (iii) the aggregate principal balance of all Long Term Debt at such time; EX-32 "Funded Debt Coverage Ratio" means, at any time such calculation as is made, the ratio of (i) Funded Debt at such time to (ii) EBITDA for the twelve-month period ending on the date of such calculation; "Generally Accepted Accounting Principles" means those principles of accounting set forth in pronouncements of the Financial Accounting Standards Board of the American Institute of Certified Public Accountants, as such principles are from time to time supplemented and amended; "Guarantee Subsidiary" means each of the direct and indirect Subsidiaries of Airgas which is a party to the Guaranty Agreement, including each direct or indirect Subsidiary of Airgas which becomes a party to the Guaranty Agreement pursuant to a Guaranty Joinder Agreement; "Guaranty Agreement" means the Guaranty Agreement in the form of Exhibit B attached hereto; "Guaranty Joinder Agreement" means a Guaranty Joinder Agreement substantially in the form of Exhibit C attached hereto; "Holdings' Maximum Obligated Amount" means, as of any date of determination thereof, the sum of (i) with respect to each Extension of Credit (or portion thereof) which is used (or the proceeds of which are used) to make a Valuable Transfer to Holdings, the outstanting amount of such Extension of Credit (or such portion thereof) as of such date, plus (ii) with respect to each Extension of Credit (or portion thereof) which is not used (or the proceeds of which are not used) to make a Valuable Transfer to Holdings, the lesser of (a) the outstanding amount of such Extension of Credit (or such portion thereof) as of such date of determination or (b) the greater of (1) 95% of the Adjusted Net Worth of Holdings at the time of such Extension of Credit or (2) 95% of the Adjusted Net Worth of Holdings as of such date; "Interest Expense" means, for any period, consolidated interest expense of Airgas and its Subsidiaries for such period, as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Interest Payment Date" means, (i) as to any CD Loan having an Interest Period of 30, 60 or 90 days, any Eurodollar Loan having an Interest Period of 1, 2 or 3 months or any Money Market Loan, the last day of the applicable Interest Period, and (ii) as to any CD Loan having an Interest Period longer than 90 days or any Eurodollar Loan having an Interest Period longer than 3 months, the last day of June, September, December and March in each year and the last day of the applicable Interest Period and (iii) as to any Prime Loan, the last day of June, September, December and March in each year. If any Interest Payment Date falls on a day which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day (unless, in case of a Eurodollar Loan, the same would fall in a succeeding month, in which case such Interest Payment Date shall be deemed to be the first preceding Business Day); "Interest Period" means, (i) as to any CD Loan, a period of 30, 60, 90 or 180 days' duration or, unless unavailable pursuant to the terms of Section 8.01(c) hereof, of 270 or 360 days, as the Borrowers may elect, commencing on the date such CD Loan shall have been made or immediately upon expiration of the Interest Period of the preceding CD Loan; (ii) as to any Eurodollar Loan, the period commencing on the date of such Eurodollar Loan and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter or, unless EX-33 unavailable pursuant to the terms of Section 8.01(b) hereof, in the calendar month that is 9 or 12 months thereafter, as the Borrowers may elect; or (iii) as to any Money Market Loan, such period as a Bank shall offer and the Borrowers may select, in any event not to be less than 1 nor more than 90 days; provided, however, that (A) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, with respect to Eurodollar Loans, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (B) no Interest Period with respect to a Money Market Loan or to a Revolving Credit Loan constituting a CD Loan or a Eurodollar Loan shall end later than the Termination Date and no Interest Period with respect to a Term Loan or a Letter of Credit Term Loan constituting a CD Loan or a Eurodollar Loan shall end later than the Maturity Date; and (C) with respect to the Term Loans and Letter of Credit Term Loans, no Interest Period may be selected for a CD Loan or a Eurodollar Loan comprising such Term Loan or Letter of Credit Term Loan or any portion thereof which expires later than the next date for payment of an installment of principal unless either that portion of the Term Loan or Letter of Credit Term Loan comprised of a Prime Loan is at least equal to such installment or the last day of an Interest Period for a CD Loan or a Eurodollar Loan occurs on or prior to such installment payment date and such Loan or Loans are in an amount which, when added to the Prime Loan portion, is at least equal to such installment at the due date thereof; "Jackson" means Jackson Products, Inc., a former Delaware corporation and Subsidiary of Airgas; "LC Agent" means the Agent; provided, however, that with respect to each Existing Letter of Credit, the term "LC Agent" means the Bank which is the issuer of such Letter of Credit; "LC Documents" means, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered thereunder, any application therefor, and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or at risk or (ii) any collateral security for such obligations; "LC Outstandings" means, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under all Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (ii) the aggregate LC Reimbursement Obligations at such time; "LC Reimbursement Obligations" means, at any time with respect to any Letter of Credit, any unpaid obligation of the Borrowers to reimburse the LC Agent for amounts theretofore paid by the LC Agent pursuant to a drawing under such Letter of Credit; "Letter of Credit" means (i) any letter of credit issued by the LC Agent for the account of a Borrower (or, as contemplated by Section 5.04 hereof, a Guarantee Subsidiary) in accordance with the terms of Section 5.01 hereof and (ii) any Existing Letter of Credit; "Letter of Credit Term Loan" means a loan or loans made pursuant to Section 4.01 hereof; EX-34 "Letter of Credit Term Note" or "Letter of Credit Term Notes" means a promissory note or promissory notes, as the case may be, of the Borrowers executed and delivered as provided in Section 4.03 hereof; "Leverage Ratio" means, at any time such calculation is made, the ratio of (i) Funded Debt at such time to (ii) the Capital Base at such time; "LIBOR Base Rate" means the rate at which deposits in the requested aggregate amount and maturity are offered to NationsBank by prime banks in the London Interbank Market as of 11:00 a.m. London time, on the second Business Day prior to the applicable Interest Period, such rate being adjusted for the cost of reserve requirements as prescribed by the Board of Governors of the Federal Reserve System; "Loan" or "Loans" means any Revolving Credit Loans, Term Loans or Letter of Credit Term Loans; "Loan Documents" means this Loan Agreement, the Notes, the Money Market Notes and the Guaranty Agreement (together with any Guaranty Joinder Agreement); "Long Term Debt" means, at any time, all items which, in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, would be classified as long term debt (including Subordinated Debt, purchase money indebtedness, indebtedness permitted under Section 13.01(a)(v) hereof, and capitalized leases) on a consolidated balance sheet of Airgas and its Subsidiaries; "Majority Banks" means, at any time, (i) the holders of at least 67% of the sum of (A) the aggregate unpaid principal amount of the Notes at such time, plus (B) the LC Outstandings at such time, plus (C) the BA Outstandings at such time, or (ii) if no amounts are outstanding under any of the Notes and there are no LC Outstandings or BA Outstandings, Banks having at least 67% of the aggregate amount of the Revolving Credit Loan Commitments at such time, or (iii) if an Event of Default shall have occurred and be continuing, the holders (in any event not to be less than five (5) of the Banks) of at least 67% of the sum of (A) the aggregate unpaid principal amount of the Notes at such time, plus (B) the aggregate unpaid principal amount of the Money Market Notes at such time, plus (C) the LC Outstandings at such time, plus (D) the BA Outstandings at such time; "Material Plan" shall have the meaning given to said term in Section 14.01(i) hereof; "Maturity Date" means a date five (5) years after the Termination Date (as the Termination Date may be extended from time to time in accordance with the terms hereof); "Money Market Loan" means a loan made pursuant to Section 7.01 hereof; "Money Market Note" or "Money Market Notes" means a promissory note or promissory notes, as the case may be, of the Borrowers, executed and delivered as provided in Section 7.01(e) hereof; "Money Market Quote" means an offer by a Bank to make a Money Market Loan in accordance with Section 7.01(b) hereof; EX-35 "Money Market Rate" means that fixed rate of interest equal to the rate quoted for such amounts and for such time periods specified by a Bank to the Borrowers upon a request for a Money Market Quote pursuant to Section 7.01(b) hereof; "Multiemployer Plan" means an employee pension benefit plan within the meaning of Section 3(37) of ERISA to which a member of the Controlled Group is making, or accruing an obligation to make, contributions or has within the preceding 5 plan years made contributions, including for these purposes any Person which ceased to be a member of the Controlled Group during such 5 year period; "Net Income" means, for any period, net income after taxes of Airgas and its Subsidiaries on a consolidated basis for such period, as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Note" or "Notes" means any Revolving Credit Note or Notes, Letter of Credit Term Note or Notes or Term Note or Notes, as the case may be, of the Borrowers, executed and delivered under this Loan Agreement; "Operating Income" means, for any period, the sum of (i) the amount by which total operating revenues exceed total operating expenses for such period as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and as reported in the related consolidated financial statements for such period of Airgas and its Subsidiaries described in Sections 12.01(a)(i) and (b) hereof, plus (ii) consolidated cash income of Airgas and its Subsidiaries for such period from investments in partnerships, joint venturers or similar investments permitted under Section 13.01(m) hereof, plus (iii) consolidated depreciation and amortization expense of Airgas and its Subsidiaries for such period, minus (iv) consolidated capital expenditures of Airgas and its Subsidiaries for such period other than capital expenditures related to (A) an acquisition permitted under Section 13.01(h)(iv) or (vi) hereof and (B) purchases of property and/or equipment at the time of acquisition leased to any acquired company as permitted under Section 13.01(h)(v) hereof, all as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "PBGC" shall have the meaning given to said term in Section 12.01(w) hereof; "Person" means an individual, partnership, corporation, trust, unincorporated organization, association, joint venture or a government or agency or political subdivision thereof; "Plan" shall have the meaning given to said term in Section 12.01(w) hereof; "Prime Letter of Credit Term Loan" means a Letter of Credit Term Loan that is a Prime Loan; "Prime Loan" means a Loan bearing interest based on the Prime Rate in accordance with the provisions of Articles II, III, IV and VIII hereof; "Prime Rate" means the rate of interest per annum as announced publicly in Charlotte, North Carolina by NationsBank as its Prime Rate in effect from time to time, which is not necessarily the best or lowest rate of interest offered by NationsBank to its customers; EX-36 "Prime Revolving Credit Loan" means a Revolving Credit Loan that is a Prime Loan; "Prime Term Loan" means a Term Loan that is a Prime Loan; "Redemption Obligation" means (i) the contingent liability of Airgas or any of its Subsidiaries with respect to cash redemption obligations relating to Capital Stock issued by Airgas or any of its Subsidiaries to any officer, director, shareholder or other principal of any Subsidiary created or acquired after the Closing Date and (ii) the contingent liability described on Exhibit D attached hereto; "Reference Banks" means NationsBank, Continental and Fidelity; "REIT" shall have the meaning given to said term in Section 13.01(d)(ii) hereof; "Reportable Event" shall have the meaning given to said term in Section 12.01(w) hereof; "Revolving Credit Loan" means a loan made pursuant to Sections 2.01 and 2.02 hereof; "Revolving Credit Loan Commitment", for each Bank, means the commitment of such Bank to make Revolving Credit Loans in a maximum principal amount equal to the amount set forth beside the name of such Bank on Exhibit A hereto; "Revolving Credit Note" or "Revolving Credit Notes" or "Revolving Notes" shall mean a promissory note or promissory notes, as the case may be, of the Borrowers, executed and delivered as provided in Section 2.03 hereof; "Sale/Leaseback Transaction" shall have the meaning given to such term in Section 13.01(e) hereof; "Senior Subordinated Note Purchase Agreements" means a collective reference to (i) the agreement, as amended, in the form attached hereto as Schedule 1 whereby Airgas has issued $25,000,000.00 of its 11.375% senior subordinated notes due June 1, 1997 and (ii) the agreement, as amended, in the form attached hereto as Schedule 2 whereby Airgas has issued $30,000,000.00 of its 11.375% senior subordinated notes due August 1, 1998; "Subordinated Debt" means (i) the indebtedness of up to $55,000,000.00 incurred by Airgas pursuant to the terms of the Senior Subordinated Note Purchase Agreements, the repayment of which is subordinated to the repayment of the indebtedness of Airgas to the Banks hereunder on terms described in the Senior Subordinated Note Purchase Agreements, and (ii) additional subordinated indebtedness incurred by Airgas provided that (A) no Event of Default specified in Article XIV hereof, nor any event which upon notice or lapse of time or both, would constitute such an Event of Default, exists immediately prior to or would exist immediately after such additional subordinated indebtedness is incurred and (B) all of the terms and conditions of such additional subordinated indebtedness (including the terms relating to the subordination of such indebtedness to the indebtedness of Airgas hereunder) are consented to by the Majority Banks prior to the time such indebtedness is incurred; provided, however, the aggregate outstanding principal balance of all indebtedness permitted to be incurred pursuant to subsections (i) and (ii) of this definition shall not exceed $105,000,000.00 at any one time; EX-37 "Subsidiary" or "Subsidiaries" means any Person of which more than fifty percent (50%) of the equity interest in such Person at the time of computation is owned, directly or indirectly, by a Credit Party or a Subsidiary of a Credit Party; "Term Loan" means a loan or loans made pursuant to Section 3.01 hereof; "Term Note" or "Term Notes" means a promissory note or promissory notes, as the case may be, of the Borrowers, executed and delivered as provided in Section 3.02 hereof; "Termination Date" shall mean August 31, 1996; provided that, on August 31, 1995 and on each August 31 thereafter, the Termination Date may be extended for an additional one year period as requested in writing to the Banks at least 30 days in advance by the Borrowers and agreed to in writing by all of the Banks in their sole discretion; "Total Assets" means, at any time, all items which would, in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, be classified as assets (other than intangible assets) on a consolidated balance sheet of Airgas and its Subsidiaries; "Unutilized Revolving Credit Loan Commitments" means, at any time, the excess of (i) the aggregate Revolving Credit Loan Commitments at such time over (ii) the sum of (A) the aggregate outstanding principal balance of the Revolving Credit Loans at such time, plus (B) the LC Outstandings at such time, plus (C) the BA Outstandings at such time plus (D) the aggregate outstanding principal amount of the Money Market Loans at such time; "U.S. currency" and "U.S." shall each mean freely transferable lawful money of the United States; "Valuable Transfer" means (i) all loans, advances or capital contributions made to or for the benefit of, or letters of credit issued for the account or benefit of, Holdings with any Extension of Credit (or with any proceeds thereof), (ii) all debt securities or other obligations of Holdings acquired from Holdings, retired by Holdings or collateralized by Holdings with any Extension of Credit (or with any proceeds thereof), (iii) the fair market value of all property acquired with any Extension of Credit (or with any proceeds thereof) and transferred, absolutely and not as collateral, to Holdings and (iv) all equity securities of Holdings acquired from Holdings with any Extension of Credit (or with any proceeds thereof); and "Voting Stock" means common stock of a corporation, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of the corporate directors (or Persons performing similar functions). 1.02 All accounting terms not specifically defined herein shall be construed in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. EX-38 ARTICLE II Revolving Loans 2.01 Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make Revolving Credit Loans to the Borrowers, or either of them, at any time or from time to time on or after the date hereof and until the Termination Date, in an aggregate principal amount at any time outstanding not exceeding the amount of its then applicable Revolving Credit Loan Commitment; provided that, at no time shall (i) the sum of (A) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (B) the aggregate LC Outstandings, plus (C) the aggregate BA Outstandings of all of the Banks, plus (D) the aggregate principal balance of all outstanding Money Market Loans, exceed (ii) the aggregate Revolving Credit Loan Commitments of all of the Banks. The Borrowers may borrow, repay and reborrow hereunder on or after the date hereof and prior to the Termination Date, subject to the terms, provisions and limitations set forth herein. 2.02 (a) The Revolving Credit Loans made by the Banks on any one date shall be in a minimum aggregate principal amount of $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof. Revolving Credit Loans shall be made ratably from the Banks in accordance with their respective Revolving Credit Loan Commitments; provided, however, that the failure of any Bank to make its Revolving Credit Loan shall not in itself relieve any other Bank of its obligation to lend hereunder. The initial Revolving Credit Loan by each Bank shall be made against delivery to such Bank of an appropriate Revolving Credit Note, payable to the order of such Bank, as referred to in Section 2.03 hereof. In the event any Bank shall fail to make a Revolving Credit Loan to the Borrowers in accordance with the terms hereof, any other Bank may, but shall not be obligated to, make such Revolving Credit Loan to the Borrowers. (b) Each Revolving Credit Loan shall be either a CD Loan, a Eurodollar Loan or a Prime Loan (or a combination thereof) as the Borrowers may request subject to and in accordance with this Section. Subject to other provisions of this Section and the provisions of Section 8.02 hereof, Revolving Credit Loans of more than one type may be outstanding at the same time. (c) Except for Revolving Credit Loans made pursuant to the terms of Section 5.01 or Section 6.01 hereof, the Borrowers shall give the Agent prior written, telefax or telephonic notice, no later than the Business Day of the proposed borrowing in the case of a Prime Loan, no later than two Business Days prior to the Business Day of the proposed borrowing in the case of a CD Loan and no later than three Business Days prior to the Business Day of the proposed borrowing in the case of a Eurodollar Loan, of each borrowing under Section 2.01 hereof. In each case, such notice shall be irrevocable and shall specify the aggregate amount of the proposed borrowing and the date thereof (which shall be a Business Day). Such notice, to be effective, must be received by the Agent not later than 10:00 a.m. (or 1:00 p.m. with respect to a Eurodollar Loan), Charlotte, North Carolina time, on the Business Day specified for a borrowing consisting of a Prime Loan, on the second Business Day prior to the date specified for a borrowing consisting of a CD Loan and on the third Business Day prior to the date specified for a borrowing consisting of a Eurodollar Loan. Such notice shall specify whether the Revolving Credit Loan then being requested is to be (or what portion or portions thereof are to be) a Prime Loan, a CD Loan, or a Eurodollar Loan and, if such Loan or any portion or portions thereof is to be a CD Loan or a Eurodollar Loan, the Interest Period with respect thereto. If no election is specified in such EX-39 notice, such Revolving Credit Loan (or the portion thereof as to which no election is specified) shall be a Prime Loan. The Agent shall promptly on the same day provide the Banks notice that it has received notice from the Borrowers pursuant to this paragraph. On the borrowing date specified in such notice, each Bank shall make its ratable share of the borrowing available to the Borrowers at Account No. 001-641-844 maintained at the offices of NationsBank, no later than 5:00 p.m., Charlotte, North Carolina time, in Federal or other immediately available funds. (d) Notwithstanding any provision to the contrary in this Loan Agreement, the Borrowers shall not in any notice of borrowing under this Section 2.02 request any CD Revolving Credit Loan or any Eurodollar Revolving Credit Loan which, if made, would result in an aggregate of more than nine separate CD Revolving Credit Loans of any Bank or nine separate Eurodollar Revolving Credit Loans of any Bank or nine separate CD Revolving Credit Loans of any Bank, Eurodollar Revolving Credit Loans of any Bank and Bankers' Acceptances being outstanding hereunder at any one time. For purposes of the foregoing, (i) Loans made ratably by the Banks pursuant to a discrete borrowing request shall be considered a single Loan, (ii) Loans of any single type having different Interest Periods, regardless of whether they commence or expire on the same date, shall be considered separate Loans and (iii) Bankers' Acceptances created ratably by the Banks pursuant to a discrete bankers' acceptance request shall be considered a single Bankers' Acceptance. The Borrowers may continue any CD Revolving Credit Loan or Eurodollar Revolving Credit Loan, or convert all or any part of any Prime Revolving Credit Loans, CD Revolving Credit Loans or Eurodollar Revolving Credit Loans into Loans of another type, in accordance with Section 8.02 hereof and subject to the limitations set forth therein. 2.03 The Revolving Credit Loans by each Bank shall be evidenced by a Revolving Credit Note duly executed on behalf of each of the Borrowers, dated the date hereof, in substantially the form of Exhibit E attached hereto, payable to the order of such Bank in a principal amount equal to the Revolving Credit Loan Commitment of such Bank. Each Revolving Credit Note shall bear interest from its date on the outstanding principal balance thereof as set forth in Section 2.04 hereof. The aggregate unpaid principal amount of the Revolving Credit Loans of each Bank at any time shall be the principal amount owing on the Revolving Credit Note of such Bank at such time. The principal amount of each Revolving Credit Loan, as evidenced by a Revolving Credit Note, shall be due and payable on the Termination Date. All accrued and unpaid interest on the outstanding principal balance of each Revolving Credit Note shall be payable on each Interest Payment Date; provided that, if any such day is not a Business Day, such interest shall be payable on the next succeeding Business Day (unless, in case of a Eurodollar Loan, the same would fall in a succeeding month, in which case such principal shall be payable on the first preceding Business Day). All payments under the Revolving Credit Notes shall be made in accordance with Section 8.07 hereof. 2.04 (a) Subject to the provisions of Section 8.01 hereof, each Prime Revolving Credit Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the Prime Rate. Interest shall be payable on each Prime Revolving Credit Loan quarterly on each Interest Payment Date, commencing with the first of such dates to occur after the date of such Prime Revolving Credit Loan, and on the Termination Date or the date of conversion of such Prime Revolving Credit Loan to a Loan of a different type. EX-40 (b) Subject to the provisions of Section 8.01 hereof, each CD Revolving Credit Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the CD Base Rate plus the Applicable Margin. Interest shall be payable on each CD Revolving Credit Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such CD Revolving Credit Loan to a Loan of a different type. The Agent shall determine the applicable CD Base Rate for each Interest Period at 10:00 A.M., or as soon as practicable thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the CD Base Rate so determined. Such determination shall be conclusive absent manifest error. (c) Subject to the provisions of Section 8.01 hereof, each Eurodollar Revolving Credit Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the LIBOR Base Rate plus the Applicable Margin. Interest shall be payable on each Eurodollar Revolving Credit Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such Eurodollar Revolving Credit Loan to a Loan of a different type. The Agent shall determine the applicable LIBOR Base Rate for each Interest Period at 11:00 a.m., London time, or as soon as practicable thereafter,on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the LIBOR Base Rate so determined. Such determination shall be conclusive absent manifest error. 2.05 (a) The Borrowers jointly and severally agree to pay in immediately available funds to the Agent (without offset or counterclaim), for the account of the Banks, in consideration of the Revolving Credit Loan Commitments hereunder, on the last day of each June, September, December and March, commencing with the first such date after the date hereof, and on the date of any reduction or termination of the Revolving Credit Loan Commitments of the Banks hereunder, a commitment fee (hereinafter called for the purpose of this Section 2.05(a) the "Commitment Fee") of (i) one-fourth of one percent (1/4%) per annum (computed on the basis of the actual number of days elapsed in a year of 365 days) on the average daily Unutilized Revolving Credit Loan Commitments during the preceding period or quarter, and (ii) one-eighth of one percent (1/8%) per annum (computed on the basis of the actual number of days elapsed in a year of 365 days) on the average daily amount of Money Market Loans outstanding pursuant to Article VII hereof during the preceding period or quarter. The Commitment Fee shall commence to accrue as of the date hereof, and shall cease to accrue, with respect to subsection (i) above, on the earlier of the Termination Date or the termination of the Revolving Credit Loan Commitments of the Banks hereunder, and, with respect to subsection (ii) above, on the Termination Date. (b) (i) The Borrowers may in full permanently terminate, or from time to time in part permanently reduce, the Revolving Credit Loan Commitments, in each case upon at least three Business Days' prior written, telefax or telephonic notice to the Agent. Reductions of the Revolving Credit Loan Commitments pursuant to the terms of Section 5.01, Section 6.01 or Section 7.01 hereof shall not be considered permanent reductions of the Revolving Credit Loan Commitments. Each partial reduction of the Revolving Credit Loan Commitments shall be in an aggregate principal amount of $5,000,000.00 or in an integral multiple of $1,000,000.00 in excess thereof. The Agent shall promptly on the same day provide the Banks notice that it has received notice from the Borrowers pursuant to this subparagraph. EX-41 (ii) In the case of any termination or reduction of the Revolving Credit Loan Commitments pursuant to subparagraph (i) above, immediately after giving effect to such termination or reduction, (A) the sum of (1) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (1) the aggregate LC Outstandings, plus (3) the aggregate BA Outstandings of all of the Banks, plus (4) the aggregate principal balance of all outstanding Money Market Loans, shall not exceed (B) the aggregate Revolving Credit Loan Commitments of all of the Banks. Each reduction in the aggregate Revolving Credit Loan Commitments pursuant to subparagraph (i) above shall be made ratably among the Banks in accordance with each Bank's Revolving Credit Loan Commitment. ARTICLE III Term Loans 3.01 (a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make a Term Loan to the Borrowers on the Termination Date in an amount equal to the then outstanding principal balance of such Bank's Revolving Credit Note, the proceeds of which will be used to repay the outstanding principal balance under such Revolving Credit Note. Each Bank shall make its Term Loan hereunder against delivery to such Bank of an appropriate Term Note, payable to the order of such Bank, as referred to in Section 3.02 hereof. Each Bank shall make its Term Loan by making the principal amount of such Term Loan available to the Borrowers at the Borrowers' Account No. 001-641-844 maintained at the offices of NationsBank, no later than 5:00 p.m., Charlotte, North Carolina time, on the Termination Date, in Federal or other immediately available funds. (b) Each Term Loan shall be either a Prime Loan, a CD Loan or a Eurodollar Loan (or a combination thereof) as the Borrowers may request pursuant to this Section. Subject to the other provisions of this Section and the provisions of Section 8.02 hereof, Term Loans of more than one type may be outstanding at the same time. (c) The Borrowers shall give the Agent prior irrevocable written, telefax or telephonic notice, no later than the Business Day of the proposed borrowing in the case of a Prime Loan, no later than two Business Days prior to the Business Day of the proposed borrowing in the case of a CD Loan and no later than three Business Days' prior to the Business Day of the proposed borrowing in the case of a Eurodollar Loan (which notice, to be effective, must be received by the Agent not later than 10:00 a.m. (or 1:00 p.m. with respect to a Eurodollar Loan), Charlotte, North Carolina time, on the Business Day prior to the Termination Date, in the case of a Prime Loan, on the second Business Day prior to the Termination Date, in the case of a CD Loan, and on the third Business Day prior to the Termination Date, in the case of a Eurodollar Loan) specifying whether such Term Loans are to be (or what portion or portions thereof are to be) Prime Loans, CD Loans or Eurodollar Loans, and if such Loans or any portion or portions thereof are to be CD Loans or Eurodollar Loans, the Interest Period with respect thereto. If no election is specified in such notice, such Term Loans (or the portion thereof as to which no election is specified) shall be Prime Loans. The Agent shall promptly on the same day provide the Banks notice that it has received notice from the Borrowers pursuant to this paragraph. EX-42 (d) Notwithstanding any provision to the contrary in this Loan Agreement, the Borrowers shall not in any notice of borrowing under this Section 3.01 request any CD Term Loan or any Eurodollar Term Loan which, if made, would result in an aggregate of more than nine separate CD Term Loans or nine separate Eurodollar Term Loans or nine separate CD Term Loans and Eurodollar Term Loans of any Bank being outstanding hereunder at any one time. For purposes of the foregoing, (i) Loans made ratably by the Banks pursuant to a discrete borrowing request shall be considered a single Loan and (ii) Loans of any single type having different Interest Periods, regardless of whether they commence or expire on the same date, shall be considered separate Loans. The Borrowers may continue any CD Term Loans or Eurodollar Term Loans or convert all or any part of any Prime Term Loans, CD Term Loans or Eurodollar Term Loans into Term Loans of another type in accordance with Section 8.02 hereof and subject to the limitations set forth therein. 3.02 The Term Loan by each Bank shall be evidenced by a Term Note duly executed on behalf of each of the Borrowers, dated as of the Termination Date, in substantially the form of Exhibit F attached hereto, payable to the order of such Bank in the outstanding principal amount of such Bank's Revolving Credit Note as of the Termination Date. The principal amount of each Term Note shall be payable in twenty (20) consecutive equal quarterly installments, such installments being due on the last day of each June, September, December and March beginning with the principal installment due on the first such date to occur following the Termination Date. Except in the case of the final installment, which shall be exact and in an amount equal to the outstanding principal balance of such Term Note, all installment payments of principal shall be rounded up to the next whole dollar. Each Term Note shall bear interest from its date on the outstanding principal balance thereof as set forth in Section 3.03 hereof. 3.03 (a) Subject to the provisions of Section 8.01 hereof, each Prime Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the Prime Rate plus one-half of one percent (1/2%). Interest shall be payable on each Prime Term Loan quarterly on each Interest Payment Date, commencing with the first of such dates after the date of such Prime Term Loan, and at maturity or the date of conversion of such Prime Term Loan to a Loan of a different type. (b) Subject to the provisions of Section 8.01 hereof, each CD Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the CD Base Rate plus the Applicable Margin. Interest shall be payable on each CD Term Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such CD Term Loan to a Loan of a different type. The Agent shall determine the applicable CD Base Rate for each Interest Period at 10:00 A.M., or as soon as practicable thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the CD Base Rate so determined. Such determination shall be conclusive absent manifest error. (c) Subject to the provisions of Section 8.01 hereof, each Eurodollar Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the LIBOR Base Rate plus the Applicable Margin. Interest shall be payable on each Eurodollar Term Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such Eurodollar Term Loan to a Loan of a different type. The Agent shall determine the applicable LIBOR Base Rate for each Interest Period at 11:00 a.m., London time, or as soon as practicable EX-43 thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the LIBOR Base Rate so determined. Such determination shall be conclusive absent manifest error. ARTICLE IV Letter of Credit Term Loans 4.01 (a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make a Letter of Credit Term Loan on the date specified in Section 5.01(d) hereof on account of a drawing under a standby Letter of Credit after the Termination Date but prior to the Maturity Date in an amount equal to such Bank's ratable share of such drawing. Each Letter of Credit Term Loan will be made in accordance with the terms of Section 5.01(d) hereof. In the event any Bank shall fail to make a Letter of Credit Term Loan in accordance with the terms hereof, any other Bank may, but shall not be obligated to, make such Letter of Credit Term Loan. (b) Each Letter of Credit Term Loan shall be a Prime Loan unless and until later converted to a Loan of a different type pursuant to Section 8.02 hereof. Subject to the other provisions of this Section and the provisions of Section 8.02 hereof, Letter of Credit Term Loans of more than one type may be outstanding at the same time. 4.02 The principal amount of each Letter of Credit Term Loan shall be payable in consecutive equal quarterly installments, such installments being due on the last day of each June, September, December and March, beginning with the principal installment due on the first such date to occur following the making of such Letter of Credit Term Loan and continuing thereafter until the Maturity Date. The amount of each such installment shall equal the amount of the Letter of Credit Term Loan divided by the number of quarterly installments. Except in the case of the final installment, which shall be exact and in an amount equal to the outstanding principal balance of the applicable Letter of Credit Term Loan, all installment payments of principal shall be rounded up to the next whole dollar. 4.03 The Letter of Credit Term Loans by each Bank shall be evidenced by a Letter of Credit Term Note duly executed on behalf of each of the Borrowers, dated the Termination Date, in substantially the form of Exhibit G attached hereto, payable to the order of such Bank in a face amount equal to such Bank's ratable share of the aggregate undrawn amount of the then outstanding Letters of Credit. 4.04 (a) Subject to the provisions of Section 8.01 hereof, each Prime Letter of Credit Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed in a year of 365 days) equal to the Prime Rate plus one-half of one percent (1/2%). Interest shall be payable on each Prime Letter of Credit Term Loan quarterly on each Interest Payment Date, commencing with the first of such dates after the date of making of such Prime Letter of Credit Term Loan, and at maturity or the date of conversion of such Prime Letter of Credit Term Loan to a Loan of a different type. EX-44 (b) Subject to the provisions of Section 8.01 hereof, each CD Letter of Credit Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the CD Base Rate plus the Applicable Margin. Interest shall be payable on each CD Letter of Credit Term Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such CD Letter of Credit Term Loan to a Loan of a different type. The Agent shall determine the applicable CD Base Rate for each Interest Period at 10:00 A.M., or as soon as practicable thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the CD Base Rate so determined. Such determination shall be conclusive absent manifest error. (c) Subject to the provisions of Section 8.01 hereof, each Eurodollar Letter of Credit Term Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the LIBOR Base Rate plus the Applicable Margin. Interest shall be payable on each Eurodollar Letter of Credit Term Loan on each applicable Interest Payment Date and at maturity or the date of conversion of such Eurodollar Letter of Credit Term Loan to a Loan of a different type. The Agent shall determine the applicable LIBOR Base Rate for each Interest Period at 11:00 a.m., London time, or as soon as practicable thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the LIBOR Base Rate so determined. Such determination shall be conclusive absent manifest error. ARTICLE V Letters of Credit 5.01 (a) Subject to the terms and conditions and relying upon the representations and warranties set forth herein and in the LC Documents, if any, executed in connection with the issuance of each Letter of Credit and any other terms and conditions which the LC Agent may reasonably require, the LC Agent will, at any time and from time to time from the Closing Date until the day five (5) Business Days prior to the Termination Date, issue such Letters of Credit as the Borrowers, or either of them, may request in a form acceptable to the LC Agent; provided, however, that (i) at no time shall the LC Outstandings exceed $50,000,000.00, (ii) at no time shall the LC Outstandings with respect to all documentary Letters of Credit exceed $10,000,000.00, (iii) no Letter of Credit shall be issued hereunder if, after giving effect to the issuance of such Letter of Credit, (A) the sum of (1) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (2) the aggregate LC Outstandings, plus (3) the aggregate BA Outstandings of all of the Banks, plus (4) the aggregate principal balance of all outstanding Money Market Loans, would exceed (B) the aggregate Revolving Credit Loan Commitments of all of the Banks, (iv) no Letter of Credit shall be issued hereunder if it would support any tax exempt obligations of the applicable account party, (v) the stated expiry date of each standby Letter of Credit shall be a date falling on or before the Maturity Date and the stated expiry date of each documentary Letter of Credit shall be a date falling on or before the Termination Date, (vi) the aggregate undrawn amount of issued and outstanding standby Letters of Credit having an expiration date later than the date one year from the date of issuance thereof shall not at any time exceed $5,000,000.00 and (vii) the expiration date of any documentary Letter of Credit shall be not more than 180 days from the date of issuance thereof. Subject to the limitations set forth in the preceding EX-45 sentence, the Borrowers shall be permitted to request the issuance of annually renewable standby Letters of Credit. Each Letter of Credit shall comply with the related LC Documents. The issuance and expiration dates of each Letter of Credit shall be a Business Day. (b) The request for the issuance of a Letter of Credit shall be submitted in writing to the LC Agent not later than 10:00 a.m., Charlotte, North Carolina time, three (3) Business Days prior to the requested date of issuance and shall be accompanied by such documents as are specified therein and in the related LC Documents. Upon issuance of a Letter of Credit, the LC Agent shall promptly and on the same day notify the Banks of the amount and terms thereof. (c) (i) Upon the issuance of each Letter of Credit, each Bank shall automatically acquire a participation in the liability of the LC Agent under such Letter of Credit in an amount equal to such Bank's pro rata share (based on such Bank's portion of the total Revolving Credit Loan Commitments) of such liability and shall thereby absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the LC Agent and discharge when due in accordance with subsection (d) below, its pro rata share of the LC Agent's liability under such Letter of Credit. (ii) On the Closing Date, (A) each Bank shall automatically acquire a participation in the liability of the applicable issuing Bank under each Existing Letter of Credit in an amount equal to such Bank's pro rata share (based on such Bank's portion of the total Revolving Credit Loan Commitments) of such liability and shall thereby absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such issuing Bank and discharge when due in accordance with subsection (d) below, its pro rata share of such issuing Bank's liability under such Existing Letters of Credit and (B) each Existing Letter of Credit shall be deemed for all purposes of this Loan Agreement and the other Loan Documents to be a Letter of Credit. (d) In the event of any drawing under any Letter of Credit, the LC Agent will promptly and on the same day notify the Borrowers. Unless the Borrowers shall immediately notify the LC Agent of their intent to otherwise reimburse the LC Agent (i) any drawing under a Letter of Credit prior to the Termination Date shall be considered a request by the Borrowers for a Revolving Credit Loan in an amount equal to such drawing pursuant to the terms hereof and (ii) any drawing under a standby Letter of Credit after the Termination Date shall be considered a request by the Borrowers for a Letter of Credit Term Loan pursuant to the terms hereof. Each Revolving Credit Loan or Letter of Credit Term Loan made pursuant to the foregoing sentence shall be a Prime Loan (unless and until later converted to a Loan of a different type pursuant to the terms hereof) and shall be applied to satisfy the related LC Reimbursement Obligation. The Borrowers shall reimburse the LC Agent on the date of drawing under any Letter of Credit for the full amount of the related LC Reimbursement Obligation (either with proceeds of a Revolving Credit Loan or a Letter of Credit Term Loan, as applicable, as provided above, or otherwise) in accordance with Section 8.07 hereof. If the Borrowers shall fail to reimburse the LC Agent as provided hereinabove, the related LC Reimbursement Obligation shall bear interest at a per annum rate equal to the Prime Rate plus three percent (3%). The Borrowers' reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrowers (or any other applicable account party as permitted by Section 5.04 hereof) may claim or have against the LC Agent, the Agent, the Banks, the beneficiary of the Letter EX-46 of Credit drawn upon or any other Person, including without limitation any defense based on any failure of the Borrowers (or any other applicable account party as permitted by Section 5.04 hereof) to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit or any related LC Documents. The LC Agent will promptly notify the other Banks of the amount of any unpaid LC Reimbursement Obligation, and each Bank shall promptly pay to the Agent for the account of the LC Agent the amount of such Bank's pro rata share of such unpaid LC Reimbursement Obligation by means of a Loan made pursuant to this Section 5.01(d) or otherwise. Such payment shall be made on the day such notice is received by such Bank from the LC Agent if such notice is received at or before 2:00 p.m., Charlotte, North Carolina time, otherwise such payment shall be made at or before 5:00 p.m., Charlotte, North Carolina time, on the Business Day next succeeding the day such notice is received. Each Bank's obligation to make such payment to the LC Agent, and the right of the LC Agent to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a Bank to the LC Agent, such Bank shall, automatically and without any further action on the part of the LC Agent or such Bank, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the LC Agent) in the related LC Reimbursement Obligation, in the interest thereon and in the related LC Documents, and shall have a claim against the Borrowers with respect thereto. In allocating to the Banks interest payments received from the Borrowers on the Revolving Credit Loans and Letter of Credit Term Loans, the Agent is hereby directed to consider the date of reimbursements to the Agent for the account of the LC Agent as described in this Section 5.01(d). (e) The Borrowers hereby agree, jointly and severally, to indemnify and hold harmless the LC Agent, each other Bank, the Agent and each of their respective officers, directors, affiliates, employees or agents (the "Indemnitees") from and against any and all claims and damages, losses, liabilities, costs and expenses which the Indemnitees may incur (or which may be claimed against any Indemnitee) by any Person by reason of or in connection with the issuance or transfer of or payment or failure to pay under any Letter of Credit; provided that the Borrowers shall not be required to indemnify the Indemnitees for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, (i) caused by the willful misconduct or gross negligence of any Indemnitee in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (ii) caused by the LC Agent's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit (unless such payment is prohibited by any law, regulation, court order or decree). The provisions of this Section 5.01(e) shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. (f) (i) The Borrowers agree jointly and severally to pay (without offset or counterclaim) to the Agent or, in the case of an Existing Letter of Credit, to the applicable issuing Bank, for the account of the Banks, a per annum fee equal to the Applicable Margin for Eurodollar Loans (as determined from time to time as provided in the definition of "Applicable Margin" set forth in Section 1.01 hereof) on the maximum amount then available to be drawn under each standby Letter of Credit from the date of issuance of such Letter of Credit until the expiration of such Letter of Credit. This standby Letter of Credit fee shall be payable quarterly in advance beginning on the date of issuance of such Letter of Credit and on the last day of each March, June, EX-47 September and December in each year thereafter until the expiration of such Letter of Credit. (ii) The Borrowers agree jointly and severally to pay to the Agent (without offset or counterclaim) for the account of the Banks (A) an issuance fee equal to twenty-five (25) basis points on the face amount of each documentary Letter of Credit and (B) a drawing fee equal to fifteen (15) basis points on the amount of each drawing under any documentary Letter of Credit. The issuance fee described in subclause (A) above shall be payable on the date of issuance of each documentary Letter of Credit, and the drawing fee described in subclause (B) above shall be payable on each date of drawing under a documentary Letter of Credit. (iii) In addition to the fees payable pursuant to clauses (i) and (ii) above, the Borrowers hereby agree jointly and severally to pay to the Agent, for the account of the LC Agent, (A) a negotiation fee equal to ten (10) basis points on the amount of each drawing under a documentary Letter of Credit and (B) the customary charges from time to time of the LC Agent with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, any Letters of Credit. (g) Any fee paid in connection with a Letter of Credit (including an Existing Letter of Credit) other than the fees and other amounts payable pursuant to subsection (f)(iii) above, shall be shared by the LC Agent with the Banks pro rata in accordance with Section 8.07 hereof; provided, however, the Banks shall not be entitled to any such fee for an Existing Letter of Credit which has been deemed to be earned during the period prior to June 19, 1987; provided further, any such fee shall be deemed to be earned evenly throughout the period for which it is paid regardless of when it was paid. 5.02 In the event of the imposition hereafter of, or changes hereafter in, the reserve or capital allocation requirements promulgated by the Board of Governors of the Federal Reserve System of the United States or any public body or governmental agency having jurisdiction over any Bank with respect to the issuance of or the participation in letters of credit or the maintenance of loan commitments, the Borrowers will pay to the Agent for the benefit of such Bank such additional amount or amounts as will compensate such Bank for the effect of such reserve or capital allocation requirements as determined by such Bank on the basis of such reserve or capital allocation requirements applicable to it, which determination shall be conclusive absent manifest error. The provisions of this Section shall survive termination of this Loan Agreement. 5.03 Each Bank agrees to provide the Agent with quarterly reports of all outstanding Existing Letters of Credit issued by such Bank. Such reports shall be delivered within 15 days of the end of each March, June, September and December, commencing with the quarterly period ending September 30, 1993, and shall specify the following with respect to each outstanding Existing Letter of Credit issued by such Bank: (i) the letter of credit number for such Letter of Credit, (ii) the beneficiary of such Letter of Credit, (iii) the original face amount of such Letter of Credit, (iv) the then current available amount of such Letter of Credit, (v) the amortization schedule for such Letter of Credit, (vi) the Letter of Credit fee applicable to such Letter of Credit and (vii) the total amount of the Letter of Credit fee accrued with respect to such Letter of Credit during the preceding quarterly period. Each Bank further agrees to provide the Agent with prompt notice of any change (prior to the end of the then current quarterly period) affecting the most recent report of such Bank to the Agent pursuant to this Section 5.03. EX-48 5.04 Notwithstanding anything to the contrary set forth in this Loan Agreement, including without limitation Section 5.01(a) hereof, a Letter of Credit issued hereunder may contain a statement to the effect that such Letter of Credit is issued for the account of any Guarantee Subsidiary, provided that notwithstanding such statement, the Borrowers shall be the actual account parties for all purposes of this Loan Agreement for such Letter of Credit and such statement shall not affect the Borrowers' obligations hereunder with respect to such Letter of Credit. ARTICLE VI Bankers' Acceptances 6.01 (a) Subject to the terms and conditions and relying upon the representations and warranties set forth herein and in the BA Documents, if any, executed in connection with the creation of each Bankers' Acceptance, each Bank, severally and not jointly, agrees to create Bankers' Acceptances for the account of the Borrowers, or either of them, at any time or from time to time on or after the date hereof until the date thirty-five (35) Business Days prior to the Termination Date; provided, however, that (i) at no time shall the BA Outstandings with respect to all Bankers' Acceptances created by any Bank exceed such Bank's Bankers' Acceptance Commitment, (ii) at no time shall the BA Outstandings with respect to all Bankers' Acceptances created by all of the Banks exceed $100,000,000.00, (iii) the Borrowers shall not be entitled to request any Bankers' Acceptance which, if created would result in an aggregate of more than nine separate CD Loans, Eurodollar Loans and Bankers' Acceptances being outstanding hereunder at any one time (it being understood that, for purposes of the foregoing, (A) Loans made ratably by the Banks pursuant to a discrete borrowing request shall be considered a single Loan, (B) Loans of any single type having different Interest Periods, regardless of whether they commence or expire on the same date, shall be considered separate Loans and (C) Bankers' Acceptances created ratably by the Banks pursuant to a discrete bankers' acceptance request shall be considered a single Bankers' Acceptance), (iv) the Borrowers shall not be entitled to request any Bankers' Acceptances if, after giving effect to the Bankers' Acceptances to be created by all of the Banks pursuant to such request, (A) the sum of (1) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (2) the aggregate LC Outstandings, plus (3) the aggregate BA Outstandings of all of the Banks, plus (4) the aggregate principal balance of all Money Market Loans, would exceed (B) the aggregate Revolving Credit Loan Commitments of all of the Banks and (v) the Borrowers shall not be entitled to request any Bankers' Acceptances if (A) creation by any Bank of its related Bankers' Acceptance pursuant to such request would cause such Bank to exceed the maximum amount of outstanding bankers' acceptances permitted by applicable law or (B) in the reasonable opinion of the Agent or the Majority Banks, general conditions in the public market for rediscounting bankers' acceptances render it inadvisable to create or discount bankers' acceptances. (b) The Bankers' Acceptances created by the Banks in connection with each bankers' acceptance transaction shall be in a minimum aggregate principal amount of $10,000,000.00 or in an integral multiple of $1,000,000.00 in excess thereof. Bankers' Acceptances shall be created ratably by the Banks in accordance with their respective Bankers' Acceptance Commitments; provided, however, that the failure of any Bank to create its Bankers' Acceptance shall not in itself relieve any other Bank of its obligation to create a Bankers' Acceptance hereunder. In the event any Bank shall fail to create a Bankers' Acceptance in accordance with the terms hereof, any other Bank may, but shall EX-49 not be obligated to, create such Bankers' Acceptance. Each Bankers' Acceptance shall comply with the related BA Documents and shall be executed on behalf of the applicable Borrower (or other applicable account party as permitted by Section 6.01(h) hereof) and presented to the accepting Bank pursuant to such procedures as are provided for in such BA Documents or otherwise provided or required by such accepting Bank. The Borrowers shall supply to each Bank on the Closing Date, and thereafter from time to time upon the request of such Bank, a sufficient number of blank drafts conforming to the requirements of the related BA Documents for such Bank and duly executed on behalf of the Borrowers (or other applicable account party as permitted by Section 6.01(h) hereof), to be held in safekeeping by such Bank and used as provided herein and in such related BA Documents. The maturity of any Bankers' Acceptance shall be the date 30, 60, 90 or 180 days after the creation thereof, as the Borrowers may elect; provided that, no such maturity shall extend beyond the date falling five (5) Business Days before the Termination Date. The creation and maturity dates of each Bankers' Acceptance shall be a Business Day. (c) The Borrowers shall give the Agent prior written, telefax or telephonic notice, no later than 10:00 a.m., Charlotte, North Carolina time, one (1) Business Day prior to the requested date of creation of the requested Bankers' Acceptances. In each case, such notice shall be irrevocable, shall be in the form of Exhibit H attached hereto and shall specify (i) the aggregate amount of Bankers' Acceptances requested, (ii) the date of creation of such Bankers' Acceptances, (iii) the date of maturity of such Bankers' Acceptances and (iv) the nature of the transaction to be financed with the proceeds of such Bankers' Acceptances. The Agent shall promptly on the same day provide the Banks with a telefax copy of any notice that it has received from the Borrowers pursuant to this paragraph. On the date of creation for Bankers' Acceptances specified in such notice, each Bank shall create a Bankers' Acceptance having a face amount equal to its ratable share of the aggregate Bankers' Acceptances requested by the Borrowers. Upon the creation by each Bank of a Bankers' Acceptance in accordance with the foregoing provisions of this subsection (c), such Bank shall discount such Bankers' Acceptance by deducting from the face amount thereof a discount equal to the BA Discount Rate then in effect applied against the face amount of such Bank's Bankers' Acceptance for the term thereof, and such Bank shall make the net amount available to the Borrowers for the account of the applicable Borrower (or other applicable account party as permitted by Section 6.01(h) hereof) at Account No. 001-641-844 maintained at the offices of NationsBank, no later than 5:00 p.m., Charlotte, North Carolina time, in Federal or other immediately available funds. Each Bank may retain or rediscount, at its election, any Bankers' Acceptance created by such Bank, and the amount received by such Bank upon payment thereof at maturity or upon rediscounting shall be solely for the account of such Bank. In connection with each request for Bankers' Acceptances pursuant to this Section 6.01, the Agent shall determine the applicable BA Discount Rate at 11:00 a.m., Charlotte, North Carolina time, on the date of creation of the related Bankers' Acceptances and shall promptly notify the Borrowers and the Banks of the BA Discount Rate so determined. Such determination shall be conclusive absent manifest error. (d) Unless the Borrowers previously shall have notified the Agent of their intent to otherwise reimburse the Banks for advances made by the Banks upon maturity of any Bankers' Acceptances created hereunder, the Borrowers shall be deemed to have requested a Revolving Credit Loan pursuant to the terms hereof in order to satisfy the related BA Reimbursement Obligations on the date of such maturity. Each Revolving Credit Loan made pursuant to the foregoing sentence shall be a Prime Loan (unless and until later converted to EX-50 a Loan of a different type pursuant to the terms hereof) and shall be applied to satisfy such related BA Reimbursement Obligations. The Borrowers shall reimburse the accepting Bank on the maturity date of any Bankers' Acceptances created by such Bank hereunder for the full amount of the related BA Reimbursement Obligation (either with proceeds of a Revolving Credit Loan as provided above, or otherwise) in accordance with Section 8.07 hereof. If the Borrowers shall fail to reimburse any accepting Bank as provided hereinabove, the related BA Reimbursement Obligations shall bear interest at a per annum rate equal to the Prime Rate plus three percent (3%). The Borrowers' reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrowers (or any other applicable account party as permitted by Section 6.01(h) hereof) may claim or have against the accepting Bank, the Agent, the other Banks or any other Person. (e) The Borrowers agree that, in the event that any Bankers' Acceptance created (or to be created) hereunder shall not, in the reasonable opinion of the accepting Bank, meet all requirements for "eligible" bankers' acceptances (as determined in accordance with paragraph 7 of Section 13 of the Federal Reserve Act (12 U.S.C. 372) (or any successor statute) and/or any other law, rule or regulation applicable to such Bank), the Borrowers shall, upon demand by such Bank, pay to the Agent for the account of such Bank additional amounts sufficient to compensate such Bank for any increased costs resulting therefrom (including without limitation costs resulting from any reserve requirement, premium liability to the Federal Deposit Insurance Corporation, or a higher discount rate). A detailed statement as to the amount of such increased costs, prepared in good faith and submitted by the applicable accepting Bank to the Borrowers, shall be conclusive and binding for all purposes, absent manifest error in computation. The provisions of this Section 6.01(e) shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. (f) The Borrowers shall maintain detailed records and accounts in which full, true and correct entries will be made of all transactions financed with proceeds of Bankers' Acceptances created hereunder. (g) In the event that any signatory whose signature appears on any draft accepted and discounted by Bank shall cease to be an authorized signatory on or prior to the date on which the related Bankers' Acceptance is created by such Bank, the obligations of the Borrowers hereunder and under the related BA Documents and with respect to such Bankers' Acceptance shall nevertheless be valid and enforceable as if such signatory has been an authorized signatory on such date. (h) Notwithstanding anything to the contrary set forth in this Loan Agreement, including without limitation Section 6.01(a) hereof, the Borrowers may request the creation of Bankers' Acceptances for the account of any Guarantee Subsidiary, provided that the Borrowers shall be the actual account parties for all purposes of this Loan Agreement for such Bankers' Acceptances and the fact that any Bankers' Acceptance shall have been so created for the account of a Guarantee Subsidiary shall not affect the Borrowers' obligations hereunder with respect to such Bankers' Acceptance. EX-51 ARTICLE VII Money Market Loans 7.01 The Banks agree that the Borrowers, or either of them, may at any time or from time to time on or after the date hereof and until the Termination Date request the Banks to make Money Market Loans in an aggregate principal amount at any time outstanding not exceeding the aggregate Revolving Credit Loan Commitments of all the Banks; provided, however, that the aggregate principal amount of the outstanding Money Market Loans of any Bank (individually or taken together with the outstanding Revolving Credit Loans of such Bank) may (but shall not be required to) exceed such Bank's Revolving Credit Loan Commitment. The Banks may, but shall have no obligation to, make Money Market Loans and the Borrowers may, but shall have no obligation to, accept Money Market Quotes, pursuant to the following terms and conditions: (a) The Borrowers, or either of them, may at any time and from time to time on or after the Closing Date and until the Termination Date make a written, telefax or telephonic request to all of the Banks for a Money Market Loan. To be effective, such request must be received by each of the Banks by such time as determined by each such Bank in accordance with such Bank's customary practices (in any event not to be later than 12:00 noon Eastern Standard (or Daylight) Time) on the date of the requested borrowing and must specify (i) that a Money Market Loan is requested, (ii) the amount of such Money Market Loan, which amount shall be not less than $5,000,000.00 or an integral multiple of $1,000,000.00 in excess thereof, provided that the Borrowers may request and borrow up to two (2) Money Market Loans at any one time outstanding, each of which is in an amount of not less than $2,000,000.00 or an integral multiple of $1,000,000.00 in excess thereof, and (iii) the Interest Period for such Money Market Loan. (b) Upon receipt of a request by the Borrowers for a Money Market Loan, each Bank may, in its sole discretion, submit a Money Market Quote containing an offer to make a Money Market Loan in an amount up to the amount specified in the related request for Money Market Loans. Such Money Market Quote shall be submitted to the Borrowers by telephone notice by such time as determined by such Bank in accordance with such Bank's customary practices (in any event not to be later than 1:00 p.m. Eastern Standard (or Daylight) Time), on the date of the requested Money Market Loan. Money Market Quotes so made shall be irrevocable. Each Money Market Quote shall specify (i) the date of the proposed Money Market Loan, (ii) the maximum and minimum principal amounts of the Money Market Loan for which such offer is being made (which may be for all or a part of (but not more than) the amount requested by the Borrowers), (iii) the applicable Money Market Rate, and (iv) the applicable Interest Period. EX-52 (c) The Borrowers may, before such time as determined by the applicable Bank in accordance with such Bank's customary practices (in any event until 2:00 p.m. Eastern Standard (or Daylight) Time, on the date of the requested Money Market Loan, accept any Money Market Quote by giving the applicable Bank and the Agent telephone notice (immediately confirmed in writing) of (i) the Bank or Banks whose Money Market Quote(s) is/are accepted, (ii) the principal amount of the Money Market Quote(s) so accepted and (iii) the Interest Period of the Money Market Quote(s) so accepted. The Borrowers may accept any Money Market Quote in whole or in part; provided, however, that (a) the principal amount of each Money Market Loan may not exceed the maximum amount offered in the Money Market Quote and may not be less than the minimum amount offered in the Money Market Quote, (b) the principal amount of each Money Market Loan may not exceed the total amount requested pursuant to subsection (a) above, (c) the Borrowers shall not accept a Money Market Quote made at a particular Money Market Rate if they have decided to reject a Money Market Quote made at a lower Money Market Rate and (d) if the Borrowers shall accept a Money Market Quote or Quotes made at a particular Money Market Rate but the amount of such Money Market Quote or Quotes shall cause the total amount of Money Market Quotes to be accepted by the Borrowers to exceed the total amount requested pursuant to subsection (a) above, then the Borrowers shall accept a portion of such Money Market Quote or Quotes in an amount equal to the total amount requested pursuant to subsection (a) above less the amount of other Money Market Quotes accepted with respect to such request, which acceptance, in the case of multiple Money Market Quotes at the same Money Market Rate, shall be made pro rata in accordance with each such Money Market Quote at such Money Market Rate. Money Market Quotes so accepted by the Borrowers shall be irrevocable. (d) Upon acceptance by the Borrowers pursuant to subsection (c) above of all or a portion of any Bank's Money Market Quote, such Bank shall, before such time as determined by such Bank in accordance with such Bank's customary practices, on the date of the requested Money Market Loan, make such Money Market Loan available to the Agent in Federal or other immediately available funds. Upon receipt of such funds, the Agent will promptly make such funds available to the Borrowers at Account No. 001- 641-844 maintained at the offices of NationsBank; provided, however, that if on the date of such Money Market Loan the Borrowers are to repay all or any part of an outstanding Revolving Credit Loan, then the Agent shall apply such Money Market Loan first to such repayment, and only an amount equal to the excess (if any) of the amount borrowed over the amount being repaid shall be made available to the Borrowers. EX-53 (e) The Money Market Loans of each Bank shall be evidenced by a single Money Market Note duly executed on behalf of each of the Borrowers, dated the date hereof, in substantially the form of Exhibit I attached hereto, payable to the order of such Bank in the original principal amount of up to $250,000,000.00 with interest on the unpaid principal amount from time to time outstanding of each Money Market Loan evidenced thereby as prescribed in subparagraph (h). Each Bank is hereby authorized to record the date and amount of each Money Market Loan made by such Bank, the maturity date thereof, the date and amount of each payment of principal thereof and interest thereon and the interest rate with respect thereto on the schedule annexed to and constituting a part of its Money Market Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided, however, that the failure to make any such recordation shall not affect the obligations of the Borrowers hereunder or under such Money Market Note. Each Money Market Loan shall bear interest for the period from and including the date of such Money Market Loan on the principal amount thereof from time to time outstanding at the applicable Money Market Rate determined as provided in subparagraph (h), and such interest shall be payable as specified in subparagraph (h). (f) Within the limits and the conditions set forth in this Section 7.01, the Borrowers may from time to time borrow under this Section 7.01, repay pursuant to subparagraph (g) below, and reborrow under this Section 7.01. (g) The Borrowers shall repay to each Bank which has made a Money Market Loan on the last day of the Interest Period for such Money Market Loan the then unpaid principal amount of such Money Market Loan. The Borrowers may not prepay any Money Market Loan unless such prepayment is accompanied by payment of amounts specified in Section 8.06 hereof. Money Market Loans may not be converted into Loans of a different type. (h) The Borrowers shall pay interest to each Bank on the unpaid principal amount of each Money Market Loan from and including the date of such Money Market Loan to but excluding the stated maturity date thereof, at the applicable Money Market Rate for such Money Market Loan (calculated on the basis of a year of 360 days), payable on the last day of the Interest Period therefor. (i) The Borrowers shall not request a Money Market Loan if, assuming the maximum amount of Money Market Loans so requested is borrowed as of the date of such request, (i) the sum of (A) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (B) the aggregate LC Outstandings, plus (C) the aggregate BA Outstandings of all of the Banks, plus (D) the aggregate principal balance of all EX-54 outstanding Money Market Loans, would exceed (ii) the aggregate Revolving Credit Loan Commitments of all of the Banks. (j) The Borrowers and the Banks hereby agree that, notwithstanding any other provision to the contrary contained in this Loan Agreement, at the written direction of the Agent in its sole discretion to the Borrowers and the Banks, all further requests by the Borrowers for Money Market Loans shall be made by the Borrowers to the Banks through the Agent in accordance with such procedures as shall be prescribed by the Agent and acceptable to the Borrowers and the Banks. ARTICLE VIII Additional Provisions Regarding Revolving Credit Loans, Term Loans, Letter of Credit Term Loans, Money Market Loans and Bankers' Acceptances 8.01 (a) Upon the occurrence and during the continuance of any Event of Default, the Borrowers, jointly and severally, shall on demand from time to time pay interest on the principal balance of the Loans and the Money Market Loans and, to the extent permitted by law, on overdue payments of interest and any other amounts payable hereunder or under any of the other Loan Documents up to the date of actual payment (after as well as before judgment): (i) in the case of principal of or interest on a Loan, at a rate determined by the Agent to be 3% per annum plus the rate which would otherwise be payable under Section 2.04, Section 3.03 or Section 4.04 hereof, as the case may be; (ii) in the case of principal of or interest on a Money Market Loan, at a rate 3% per annum plus the rate which would otherwise be payable under Section 7.01(h) hereof with respect to such Money Market Loan; and (iii) in the case of any other amount payable hereunder or under any of the other Loan Documents (other than amounts referred to in clause (i) or (ii) above), at a rate 3% per annum plus the Prime Rate. (b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, any Bank shall have determined that dollar deposits in the amount of the principal amount of and/or for the Interest Period for such Eurodollar Loan are not generally available to such Bank in the London Interbank Market, or that the rate at which such dollar deposits are being offered will not adequately and fairly reflect the cost of such Bank of making or maintaining the principal amount of such Eurodollar Loan during such Interest Period, or reasonable means do not exist for ascertaining the LIBOR Base Rate for such Eurodollar Loan for such Interest Period, such Bank shall, as soon as practicable thereafter, give written, telefax or telephonic notice of such determination to the Borrowers and to the Agent and each other Bank, and any request by the Borrowers for a Eurodollar Loan or for conversion to or maintenance of a Eurodollar Loan pursuant to Section 2.02, 3.01 or 8.02 hereof EX-55 shall be deemed a request for a Prime Loan. After such notice shall have been given and until the circumstances giving rise to such notice no longer exist, each request for a Eurodollar Loan in such principal amount and/or for such Interest Period shall be deemed to be a request for a Prime Loan. Each determination by any of the Banks hereunder shall be conclusive absent manifest error. (c) In the event, and on each occasion, that on or before the day on which the CD Base Rate for a CD Loan is to be determined, any Bank shall have determined that such CD Base Rate for such CD Loan for the related Interest Period cannot be ascertained for any reason, or if any Bank shall determine that the CD Base Rate for such CD Loan will not adequately and fairly reflect the cost to such Bank of making or maintaining the principal amount of such CD Loan during the related Interest Period, such Bank shall, as soon as practicable thereafter, give written, telefax or telephonic notice of such determination to the Borrowers and to the Agent and each other Bank, and any request by the Borrowers for a CD Loan or for conversion to or maintenance of a CD Loan pursuant to Section 2.02, 3.01 or 8.02 hereof shall be deemed to be a request for a Prime Loan. After such notice shall have been given and until the circumstances giving rise to such notice no longer exist, each request for a CD Loan in such principal amount and/or for such Interest Period shall be deemed to be a request for a Prime Loan. Each determination by any of the Banks hereunder shall be conclusive absent manifest error. 8.02 The Borrowers shall have the right, at any time, upon prior written, telefax or telephonic notice to the Agent (which notice shall be irrevocable and, to be effective, must be received by the Agent not later than 10:00 a.m., Charlotte, North Carolina time, in the case of Prime Loans, on the Business Day of any conversion, in the case of CD Loans, on the second Business Day preceding the date of any continuation or conversion, and in the case of Eurodollar Loans, on the third Business Day preceding the date of any continuation or conversion), (i) to continue any CD Loan or Eurodollar Loan or portion thereof into a subsequent Interest Period and (ii) to convert any Loan (but not a Money Market Loan) or portion thereof into a Loan (but not a Money Market Loan) of a different type, subject to the following: (a) no Event of Default shall have occurred and be continuing at the time of such continuation or conversion, and the representations and warranties set forth in Article XI hereof shall be true and correct in all material respects on and as of the date of such continuation or conversion with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date; (b) if less than all Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Banks in accordance with the respective principal amounts of the Loans held by the Banks immediately prior to such continuation or conversion and the notice given to the Banks by the Borrowers shall specify the aggregate amount of Loans to be continued or converted; EX-56 (c) in the case of a continuation or conversion of less than all Loans, the aggregate principal amount of Loans continued or converted shall not be less than $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof; (d) each conversion shall be effected by each Bank by applying the proceeds of the new Prime Loan, Eurodollar Loan or CD Loan, as the case may be, to the Loan (or portion thereof) being converted, and accrued interest on the Eurodollar Loan or CD Loan (or portion thereof) being converted shall be paid by the Borrowers at the time of conversion; (e) if the new Loan made in respect of a conversion shall be a Eurodollar or a CD Loan, the first Interest Period with respect thereto shall commence on the date of conversion; (f) no Revolving Credit Loan may be converted to a Eurodollar Loan or a CD Loan less than one (1) month or thirty (30) days, respectively, before the Termination Date and no Term Loan or Letter of Credit Term Loan may be converted to a Eurodollar Loan or a CD Loan less than one (1) month or thirty (30) days, respectively, before the Maturity Date; (g) any portion of a Eurodollar Loan or a CD Loan required to be repaid on any installment repayment date of a Term Loan or a Letter of Credit Term Loan which installment repayment date occurs less than one (1) month or thirty (30) days, respectively, after the end of the then current Interest Period applicable to such Eurodollar Loan or CD Loan shall be automatically converted after the end of such Interest Period to a Prime Loan; (h) no Interest Period shall be selected by the Borrowers for a Loan converted to or continued as a Eurodollar Loan or a CD Loan if such Interest Period is not available to the Borrowers pursuant to the terms of the definition of "Interest Period" set forth in Section 1.01 and/or Section 8.01(b) or (c) hereof, as the case may be; (i) a Eurodollar Loan or a CD Loan may be converted to another type of Loan only on the last day of an Interest Period; (j) each request for a Eurodollar Loan or a CD Loan or a continuation thereof which shall fail to state an applicable Interest Period shall be deemed to be a request for an Interest Period of a thirty (30) day duration with respect to a CD Loan and a one (1) month duration with respect to a Eurodollar Loan; EX-57 (k) Money Market Loans may not be converted into Loans of any type and Loans may not be converted into Money Market Loans; and (l) no more than nine separate CD Loans or nine separate Eurodollar Loans or nine separate CD Loans, Eurodollar Loans and Bankers' Acceptances shall be outstanding hereunder at any one time (it being understood that, for purposes of the foregoing, (i) Loans made ratably by the Banks pursuant to a discrete borrowing request shall be considered a single Loan, (ii) Loans of any single type having different Interest Periods, regardless of whether they commence or expire on the same date, shall be considered separate Loans and (iii) Bankers' Acceptances created ratably by the Banks pursuant to a discrete bankers' acceptance request shall be considered a single Bankers' Acceptance). In the event that the Borrowers shall not give notice to continue any Eurodollar Loan or CD Loan into a subsequent Interest Period or convert any such Loan into a Loan of the other type, such Loan (unless repaid) shall automatically become a Prime Loan at the expiration of the then current Interest Period. 8.03 (a) The Borrowers shall have the right at any time and from time to time to prepay any Prime Loan, in whole or in part, without premium or penalty, upon prior written, telefax or telephonic notice to the Agent no later than 10:00 a.m., Charlotte, North Carolina time, on the Business Day of the proposed prepayment; provided, however, that each such partial prepayment shall be in the aggregate principal amount of at least $1,500,000.00 (or in an integral multiple of $100,000.00 in excess thereof) or the balance of such Loan, if less. (b) The Borrowers shall have the right to prepay any Eurodollar Loan, in whole or in part, upon at least three Business Days' prior written, telefax or telephonic notice to the Agent; provided, however, that (i) each such partial prepayment shall be in the aggregate principal amount of at least $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof and (ii) no such prepayment made before the last day of the Interest Period in effect for such Loan shall be permitted unless accompanied by payment of amounts specified in Section 8.06 hereof. (c) The Borrowers shall have the right to prepay any CD Loan, in whole or in part upon at least three Business Days' prior written, telefax or telephonic notice to the Agent; provided, however, that (i) each such partial prepayment shall be in the aggregate principal amount of at least $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof and (ii) no such prepayment made before the last day of the Interest Period in effect for such Loan shall be permitted unless accompanied by payment of amounts specified in Section 8.06 hereof. (d) The Borrowers may not prepay any Bankers' Acceptance or Money Market Loan unless such prepayment is accompanied by payment of amounts specified in Section 8.06 hereof. EX-58 (e) Each notice of prepayment shall specify the prepayment date and the principal amount to be prepaid, shall be irrevocable and shall commit the Borrowers to prepay such Loan by the amount stated therein. All prepayments under this Section shall be shared pro rata by the Banks (except in the case of prepayment of a Money Market Loan) and shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment. Amounts prepaid under the Revolving Credit Notes pursuant to this Section prior to the Termination Date shall be available to be reborrowed from the Banks under this Loan Agreement in accordance with the terms hereof. Amounts of Term Loans prepaid may not be reborrowed. All partial prepayments of Term Loans shall be applied to installments of principal in the inverse order of maturity. All partial prepayments of Letter of Credit Term Loans shall be applied to installments of principal thereof in the inverse order of maturity. 8.04 (a) The cost to any Bank of making or maintaining any Eurodollar Loans or CD Loans, of issuing or maintaining, or participating in, any Letters of Credit, of creating or maintaining any Bankers' Acceptances or of maintaining its Revolving Credit Loan Commitment may fluctuate as a result of imposition hereafter of, or changes hereafter in, the reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States. Accordingly, the Borrowers shall pay to each Bank such additional amount or amounts as will compensate it for the effect of such reserve requirements applicable to it, which determination shall be conclusive absent manifest error. For purposes hereof, the aforesaid reserve requirements shall include any reserve on Eurocurrency Liabilities as defined by Regulation D of said Board at the ratios provided in such Regulation D from time to time. It is hereby agreed that Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency Liabilities (as defined in such Regulation D). Such Bank shall promptly refund any amounts received by it pursuant to this Section 8.04(a) that were erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. The provisions of this subsection shall survive termination of this Loan Agreement. (b) In the event that after the date hereof any change in applicable law or regulations or in the interpretation or administration thereof (including, without limitation, any request, guideline or policy not having the force of law) by any authority charged with the administration or interpretation thereof shall occur which shall: (i) subject any Bank to any tax with respect to any Eurodollar Loan, CD Loan, Money Market Loan, Letter of Credit (including participations therein) or Bankers' Acceptance (other than any tax on the overall net income of such Bank imposed by the United States of America or by the jurisdiction in which such Bank has its principal office or political subdivision or taxing authority therein); or (ii) change the basis of taxation of any payment to any Bank of principal of or interest on any Eurodollar Loan, CD Loan, Money Market Loan, LC Reimbursement Obligation or BA Reimbursement Obligation or fees and other amounts payable hereunder, or any combination of the foregoing; or EX-59 (iii) impose, modify or deem applicable any reserve, deposit or similar requirement against any assets held by, deposits with or for the account of or loans or commitments by an office of such Bank as it relates to Eurodollar Loans, CD Loans, Money Market Loans, Letters of Credit (including participations therein), Bankers' Acceptances or the Revolving Credit Loan Commitment of such Bank; or (iv) impose upon such Bank any other condition with respect to the Eurodollar Loans, CD Loans, Money Market Loans, Letters of Credit (including participations therein) or Bankers' Acceptances, or upon such Bank any other condition with respect to this Loan Agreement as it relates to Eurodollar Loans, CD Loans, Money Market Loans, Letters of Credit (including participations therein), Bankers' Acceptances or the Revolving Credit Loan Commitment of such Bank; and the result of any of the foregoing shall be to increase the cost to such Bank of making or maintaining any Eurodollar Loan, CD Loan or Money Market Loan, of issuing or maintaining, or participating in, any Letter of Credit, of creating or maintaining any Bankers' Acceptance hereunder or of maintaining its Revolving Credit Loan Commitment or to reduce the amount of any payment (whether of principal, interest or otherwise) received or receivable by such Bank, or to require such Bank to make any payment in connection with any Eurodollar Loan, CD Loan, Money Market Loan, Letter of Credit (or participation therein) or Bankers' Acceptance, in each case by or in an amount which such Bank in its sole reasonable judgment shall deem material, then and in each such case the Borrowers agree to pay to such Bank, as provided in paragraph (c) below (but without duplication of the payments required under paragraph (a) above), such amounts as shall be necessary to compensate such Bank for such cost, reduction or payment; provided, however, that if any Bank shall request compensation under this Section 8.04(b) with respect to any Eurodollar Loan or CD Loan, the Borrowers may, at their option and upon written notice to the Banks, elect to convert such Loan of such Bank into a Prime Loan upon the payment by the Borrowers of the increased costs described above incurred prior to such conversion and any amount owing in respect of Section 8.06 hereof, it being understood that (A) for purposes of Sections 8.02 and 8.03 hereof, such Prime Loan, until the expiration of the Interest Period of the Eurodollar Loan or CD Loan so converted into a Prime Loan, shall be subject to prepayment or conversion only at such times and on such conditions as the Loan from which it was converted and (B) upon such increased costs being eliminated, or reduced by an amount deemed sufficient by the Borrowers, such Prime Loan may be reconverted into a Eurodollar Loan or CD Loan, as the case may be, having an Interest Period expiring on the same date as the Eurodollar Loan or CD Loan previously converted into such Prime Loan; provided further, however, that if the result of any the foregoing shall be to decrease the cost to any Bank of making or maintaining any Eurodollar Loan, CD Loan or Money Market Loan, of issuing or maintaining or participating in any Letter of Credit or of creating or maintaining any Bankers' Acceptance hereunder by a material amount, then such Bank will credit to the Borrowers an amount equal to such decreased costs. Promptly after actual notice to any Bank that a change referred to in this paragraph has occurred, such Bank will give notice of such occurrence to the Borrowers and the Agent. Each Bank agrees that it will promptly refund any amounts received by it pursuant to this Section 8.04(b) that were erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. The provisions of this EX-60 subsection shall survive termination of this Loan Agreement. (c) Each Bank shall promptly deliver to the Borrowers from time to time one or more certificates setting forth the amounts due to such Bank under paragraph (a) or (b) above, the reserve requirements or changes as a result of which such amounts are due and the manner of computing such amounts. Each such certificate shall be conclusive in the absence of manifest error. The Borrowers shall pay to each Bank the amounts shown as due on any such certificate within 10 days after their receipt of the same. No failure on the part of any Bank to demand compensation under paragraph (a) or (b) above on any one occasion shall constitute a waiver of its right to demand such compensation on any other occasion with respect to any other event. The protection of this Section shall be available to each Bank regardless of any possible contention of the invalidity or inapplicability of any law, regulation or other condition which shall give rise to any demand by such Bank for compensation hereunder; provided, however, if such law, regulation or other condition giving rise to such demand is determined to be invalid or inapplicable, the Bank will promptly refund any amount erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. 8.05 (a) Notwithstanding anything to the contrary contained elsewhere in this Loan Agreement, if any change after the date hereof in any law or regulation or in the interpretation thereof by any governmental authority charged with the administration thereof shall make it unlawful for a Bank to make or maintain a Eurodollar Loan or to effect to its obligations as contemplated hereby with respect to a Eurodollar Loan, then, by written notice to the Borrowers, such Bank may: (i) declare that Eurodollar Loans will not thereafter be made by such Bank hereunder, whereupon the Borrowers shall be prohibited from requesting Eurodollar Loans from such Bank hereunder unless such declaration is subsequently withdrawn; and (ii) require that all outstanding Eurodollar Loans made by it be converted to Prime Loans, whereupon all of such Eurodollar Loans shall be automatically converted to Prime Loans as of the effective date of such notice as provided in paragraph (b) below (notwithstanding the provisions of Section 8.07 hereof but subject to the provisions of Section 8.06 hereof). (b) For purposes of this Section 8.05, a notice to the Borrowers by any Bank pursuant to paragraph (a) above shall be effective with respect to outstanding Eurodollar Loans, if lawful, on the last day of the then current Interest Period; in all other cases, such notice shall be effective on the date of receipt by the Borrowers. 8.06 The Borrowers shall reimburse each Bank on demand for any actual out-of-pocket loss incurred by it in the reemployment of the funds released by any prepayment or conversion of any Eurodollar Loan, CD Loan or Money Market Loan required or permitted by any other provision of this Loan Agreement if such Loan or Money Market Loan is prepaid or converted other than on the last day of any Interest Period for such Loan or Money Market Loan or upon any failure by the Borrowers to borrow or convert or continue any Loan or Money Market Loan or cause creation of Bankers' Acceptance after giving notice thereof. If any prepayment hereunder makes it necessary to apply any installment payment on a Term Note or Letter of Credit Term Note to a EX-61 Eurodollar Loan or CD Loan with an Interest Period extending beyond the date of such installment payment, the Borrowers shall reimburse each Bank upon demand for any actual out-of-pocket loss incurred or to be incurred by such Bank (determined in accordance with the immediately preceding sentence) in the reemployment of funds realized on such installment payment and applied to such Eurodollar Loan or CD Loan, as the case may be. Determinations by any Bank under this Section 8.06 shall be conclusive absent manifest error. The provisions of this Section shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. 8.07 Except as required in connection with the payment of interest on Revolving Credit Loans and Letter of Credit Term Loans made in connection with drawings under Letters of Credit as described in Section 5.01(d) hereof, all payments and prepayments of principal, interest and fees (other than the agent's fee payable to the Agent and other than the fees and other amounts payable to the LC Agent pursuant to Section 5.01(f)(iii) hereof) in respect of the Loans, the Letters of Credit and the Bankers' Acceptances shall be made pro rata among the Banks in accordance with the then outstanding principal amount of the Notes (or in accordance with the Revolving Credit Loan Commitments if there are no amounts then outstanding under the Notes). Except as otherwise expressly provided in Article VII hereof, all payments by the Borrowers hereunder (other than payments in respect of Money Market Loans) and under the Notes shall be made to the Agent at its offices at Charlotte, North Carolina, for the account of each Bank in dollars in Federal or other immediately available funds by 11:00 a.m. Charlotte, North Carolina time, on the date on which such payment shall be due. All payments received by the Agent for the account of a Bank shall be promptly on the same day remitted by the Agent to such Bank. Upon receipt by a Bank of more than its pro rata share of any such principal or interest payment (after taking into account any adjustment necessary to compensate the LC Agent for the situation referred to in the first sentence of this Section 8.07), whether voluntary or involuntary, or of any proceeds of collateral securing the Loans, it is hereby agreed among the Banks and the Borrowers that the Bank receiving such excess payment or proceeds (the "Receiving Bank") shall be obligated to pay to the other Banks for application to such Banks' Notes and/or BA Reimbursement Obligations, an amount necessary to reduce the outstanding principal and interest balances on such Banks' Notes and/or BA Reimbursement Obligations to the balances that would be outstanding on such Banks' Notes and/or BA Reimbursement Obligations if the Receiving Bank had not received more than its pro rata share of such payment; provided, however, that in the event any amount paid by any Receiving Bank to any other Bank pursuant to the immediately preceding sentence is rescinded or must otherwise be returned by the Receiving Bank, each other Bank shall, upon request of the Receiving Bank, repay to the Receiving Bank the amount so paid by the Receiving Bank to such Bank, with interest for the period commencing on date such payment is returned by the Receiving Bank until the date the Receiving Bank receives such repayment at the Federal Funds Rate. Interest in respect of any Loan or Money Market Loan hereunder shall accrue from and including the date of such Loan or Money Market Loan to but excluding the date on which such Loan or Money Market Loan is paid in full. All payments of principal and interest under the Money Market Notes shall be in accordance with the terms of Article VII hereof. Notwithstanding anything to the contrary contained in this Section 8.07 or elsewhere in this Loan Agreement or any other of the Loan Documents, each Bank agrees with respect to all payments, whether voluntary or involuntary, on account of any Money Market Loan of such Bank received by such Bank during any period following the occurrence of an event or condition which is, or upon lapse of a cure period specified in this Loan Agreement would constitute, an Event of Default and until such event or condition shall have been cured (as EX-62 determined by the Agent), that such payments shall be shared pro rata among the Banks in accordance with the then outstanding principal amounts of the Notes and the Money Market Notes and each Bank's pro rata share of the LC Outstandings and BA Outstandings at such time. The portion of any such payment referred to in the preceding sentence required pursuant to such preceding sentence to be allocated to the aggregate undrawn amount of issued and outstanding Letters of Credit and/or to the aggregate unadvanced amount of outstanding Bankers' Acceptances shall be paid to the Agent and, subject to the immediately succeeding sentence, held by the Agent as cash collateral in an interest bearing account for the benefit of the Banks until such time, if ever, as the event or condition referred to above shall have been cured (as determined by the Agent), at which time such proceeds shall be distributed by the Agent to the Banks on a pro rata basis based on the then outstanding principal amounts of the Notes and the Money Market Notes. If, at any time that the Agent is holding any such proceeds on account of issued and outstanding Letters of Credit and/or outstanding Bankers' Acceptances, any amounts are drawn under any such Letter of Credit or any amounts are advanced under any such Bankers' Acceptances, then the Agent shall distribute the proceeds so held by the Agent to the extent of such drawing to the Banks based on the pro rata shares of the Banks in the related LC Reimbursement Obligation or BA Reimbursement Obligations, as the case may be. To the extent that aggregate proceeds held by the Agent on account of issued and outstanding Letters of Credit and/or outstanding Bankers' Acceptances at any time exceed the aggregate undrawn amount of Letters of Credit and the unadvanced amount of Bankers' Acceptances at such time, the Agent shall distribute the proceeds so held by the Agent to the extent of such excess to the Banks on a pro rata basis based on the then outstanding principal amounts of the Notes and the Money Market Notes. All payments and prepayments of principal, interest and fees in respect of the Loans, the Money Market Loans, the Letters of Credit and the Bankers' Acceptances shall be without deduction for on account of any present or future taxes, duties or other charges levied or imposed by the nation of Canada or any political subdivision or taxing authority thereof. 8.08 In the event that any Bank shall have determined that the adoption hereafter of or any change hereafter in any applicable law, rule, regulation or guideline regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or by any court, or compliance by such Bank (or any lending office of such Bank) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank's capital or on the capital of such Bank's holding company as a consequence of its obligations hereunder to a level below that which such Bank or such Bank's holding company could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies or the policies of such Bank's holding company, as the case may be, with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time the Borrowers shall pay to such Bank such additional amount or amounts as will compensate such Bank or such Bank's holding company for any such reduction suffered. Within a reasonable time after making a request for such additional amount hereunder, such Bank will furnish to the Borrowers a statement certifying the amount of such reduction and describing the event giving rise to such reduction, which determination shall be conclusive absent manifest error. Failure on the part of such Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any period shall not constitute a waiver of such Bank's rights to demand compensation for any EX-63 increased costs or reduction in amounts received or receivable or reduction in return on capital in such period or in any other period. The protection of this Section 8.08 shall be available to the Bank regardless of any possible conflict or invalidity or inapplicability of the law, regulation or condition which shall have been impaired. The provisions of this Section shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. 8.09 Notwithstanding anything to the contrary set forth in this Loan Agreement, the Notes, the Money Market Notes or any other of the Loan Documents, if at any time the credit facilities contemplated hereby shall be classified (i) by the Agent or the Majority Banks in its or their reasonable discretion based on criteria established by any government agency involved in the regulation or oversight of the banking industry or (ii) by any governmental authority, central bank or comparable agency charged with the administration thereof (including, without limitation, any retroactive classification based on financial information subsequently made available to the Agent and the Banks or any such governmental authority, central bank or comparable agency) as a "highly leveraged transaction" or any term substituted therefor (a "HLT Classification"), then, unless and until such HLT Classification shall have been terminated by the Agent or the Majority Banks or such other entity upon written notice from the Agent to the Borrowers and the Banks thereof, (A) commencing with the first day of the fiscal quarter immediately succeeding the fiscal quarter with respect to which the determination of such HLT Classification first becomes applicable, (1) the Applicable Margin for all Loans and the applicable interest rates under the Money Market Notes (including without limitation the Applicable Margin for Loans then outstanding and the interest rates on Money Market Loans then outstanding) shall be increased by one-half of one percent (1/2%), (2) the standby Letter of Credit fee described in Section 5.01(f)(i) hereof shall be increased to one and one-half of one percent (1 1/2%) and the documentary Letter of Credit fee described in Section 5.01(f)(ii)(B) hereof shall be increased to twenty-five (25) basis points and (3) the applicable BA Commission shall be increased by one-half of one percent (1/2%) and (B) commencing with the first day of the third fiscal quarter immediately succeeding the fiscal quarter with respect to which the determination of such HLT Classification first becomes applicable, the Applicable Margin for all Loans, the applicable interest rates under the Money Market Notes (including without limitation the Applicable Margin for Loans then outstanding and the interest rates on Money Market Loans then outstanding), the applicable BA Commission and the standby Letter of Credit fee described in Section 5.01(f)(i) hereof shall be increased by the amount set forth in clause (A) above plus one-fourth of one percent (1/4%). Each Bank shall credit against the additional interest payable with respect to its Loans and Money Market Loans pursuant to the terms of the preceding sentence any amounts previously paid to such Bank by the Borrowers pursuant to Section 8.08 hereof with respect to the related HLT Classification. The Agent shall promptly notify the Borrowers and the Banks of any HLT Classification. 8.10 Notwithstanding any other provision to the contrary contained in this Loan Agreement, the Notes or the Money Market Notes, the liability of Holdings with respect to the Borrowers' Obligations shall not exceed Holdings' Maximum Obligated Amount as determined at the earlier of the date of the commencement of a case under the U.S. Bankruptcy Code in which Holdings is a debtor or the date enforcement is sought against Holdings under Section 14.01 hereof with respect to the Borrowers' Obligations. EX-64 ARTICLE IX Conditions Precedent as of Closing Date 9.01 The obligations as of the Closing Date of the Banks to make any Loans or Money Market Loans or to create any Bankers' Acceptances and of the LC Agent to issue Letters of Credit, are subject to the conditions precedent that the Agent shall have received on or before such day the following, in form and substance satisfactory to the Agent: (a) fully executed copies of this Loan Agreement (including exhibits), the Notes and the Money Market Notes; (b) a fully executed copy of the Guaranty Agreement; (c) resolutions of the directors of each Credit Party and the shareholders of each Credit Party (other than Airgas) certified by an officer of such Credit Party as of the Closing Date, approving and adopting the documents described in subparagraphs (a) and (b) above to be executed by each such Credit Party and authorizing the execution, delivery and performance thereof; (d) a certificate of the corporate secretary or an assistant secretary of each Credit Party certifying the names and true signatures of the officers of such Credit Party authorized to sign the documents described in subparagraphs (a) and (b) above on behalf of such Credit Party and the other documents to be delivered hereunder; (e) (i) the charter documents of Industrial Gases of Wichita, Inc., The Jimmie Jones Company, Range Arc, Inc. and Westwind Company, certified as of the Closing Date by the Secretary of State of each such corporation's state of incorporation and (ii) a certificate of the corporate secretary or an assistant secretary of each other Credit Party, certifying that the charter documents and bylaws of such Credit Party previously delivered to the Agent have not been amended through the Closing Date except as provided therein; (f) certificates of good standing for each of Industrial Gases of Wichita, Inc., The Jimmie Jones Company, Range Arc, Inc. and Westwind Company, issued as of a recent date by the applicable jurisdiction of incorporation and each other jurisdiction where any such corporation by the nature of its business, is required to qualify as a foreign corporation; (g) the favorable opinion of Messrs. McCausland, Keen & Buckman, counsel to the Credit Parties, substantially in the form of Exhibit J hereto; (h) the Agent shall have received a facility fee of $125,000, to be shared ratably by the Banks based on their respective Revolving Credit Loan Commitments; and (i) such other information and documents as the Agent may reasonably request. EX-65 ARTICLE X Conditions of Lending Except with respect to Revolving Credit Loans and Letter of Credit Term Loans made pursuant to the terms of Section 5.01(d) or 6.01(d) hereof, the obligations of the Banks to make any Loans or Money Market Loans or to create any Bankers' Acceptances and of the LC Agent to issue any Letters of Credit, are subject to the satisfaction of the conditions precedent set forth in Article IX hereof on the Closing Date and to the satisfaction of the following further conditions: 10.01 In the case of each Loan or Money Market Loan to be made hereunder (other than a Revolving Credit Loan or a Letter of Credit Term Loan made pursuant to the terms of Section 5.01(d) or 6.01(d) hereof), each Letter of Credit to be issued hereunder and each Bankers' Acceptance to be created hereunder: (a) proper notice of such Loan, Letter of Credit or Bankers' Acceptance, as the case may be, shall have been given in accordance with Section 2.02(c), Section 3.01(c), Section 5.01(b), Section 6.01(c) or Section 7.01(a)-(c) hereof, as applicable; (b) the representations and warranties set forth in Article XI hereof shall be true and correct in all material respects on and as of the date of such Loan, Money Market Loan, Letter of Credit or Bankers' Acceptance, as the case may be, with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date; and (c) at the time of and immediately after giving effect to each such Loan (other than Revolving Credit Loans and Letter of Credit Term Loans made pursuant to the terms of Section 5.01(d) or 6.01(d) hereof), Money Market Loan, Letter of Credit or Bankers' Acceptance, as the case may be, no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing. 10.02 In the case of each Revolving Credit Loan to be made hereunder, each Money Market Loan to be made hereunder, each Letter of Credit to be issued hereunder and each Bankers' Acceptance to be created hereunder, immediately after giving effect to such Revolving Credit Loan, Money Market Loan, Letter of Credit or Bankers' Acceptance, as the case may be, (i) the sum of (A) the aggregate principal balance of all outstanding Revolving Credit Loans made by all of the Banks, plus (B) the aggregate LC Outstandings, plus (C) the aggregate BA Outstandings of all of the Banks, plus (D) the aggregate principal balance of all outstanding Money Market Loans, shall not exceed (ii) the aggregate Revolving Credit Loan Commitments of all of the Banks. EX-66 Each borrowing hereunder, each issuance of a Letter of Credit hereunder and each creation of a Bankers' Acceptance hereunder shall be deemed to be a representation and warranty by each of the Borrowers on the date of such borrowing, issuance or creation, as the case may be, as to the matters specified in Sections 10.01(b) and (c) hereof and each borrowing hereunder that is a Revolving Credit Loan or a Money Market Loan, each issuance of a Letter of Credit hereunder and each creation of a Bankers' Acceptance hereunder also shall be deemed to be a representation and warranty by each of the Borrowers on the date of such borrowing, issuance or creation, as the case may be, as to the matters specified in Section 10.02 hereof. ARTICLE XI Representations and Warranties 11.01 Each of the Borrowers represents and warrants that: (a) each of the Credit Parties is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and is duly authorized and qualified to carry on its business in the manner now being conducted by it in states in which failure to so qualify would or might have a material adverse effect on the business or operations of such Credit Party; (b) each of the Credit Parties has the legal power and authority to own its properties and assets and to carry on its businesses as now being conducted and as contemplated by this Loan Agreement and the other Loan Documents; (c) each of the Credit Parties has the power and authority to execute, deliver and perform the Loan Documents to which such Credit Party is a party; (d) when executed and delivered, the Loan Documents will be valid and binding obligations of each Credit Party executing such Loan Documents and will be enforceable in accordance with their respective terms; (e) the execution, delivery and performance of the Loan Documents: (i) have been duly authorized by all requisite corporate action of each Credit Party executing such Loan Documents required for the lawful creation and issuance thereof; (ii) do not violate any material provision of law, any order of any court or other agency of government or the corporate charter, certificate of incorporation or by-laws of any Credit Party, or any provisions of any indenture, agreement or other instrument to which such Credit Party or its properties or assets are or will become bound; (iii) will not be in conflict with, result in a breach of or constitute an event of default or an event which, upon notice or lapse of time, or both, would constitute such an event of default under any indenture, agreement or other instrument to which such Credit Party is a party; EX-67 (iv) do not and will not result in the creation of any lien on any assets of any Credit Party; (f) except as set forth in Exhibit K attached hereto and except for minor defects in title that do not reduce in any material respect the value of such property, each of Airgas and its Subsidiaries has good and marketable title in fee simple to all of its real property and good title to all of its other property, and none of such property is subject to any mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever except as may be permitted hereunder or contemplated hereby; (g) all of the direct and indirect Subsidiaries of Airgas as of the Closing Date are set forth in Exhibit L attached hereto; (h) except as set forth in Exhibit M attached hereto, neither Airgas nor any of its Subsidiaries owns any interest in any Person; (i) the audited consolidated balance sheet, income statement and statement of cash flows of Airgas and its Subsidiaries prepared as of March 31, 1994, copies of each of which have been furnished to each Bank, fairly present the assets, liabilities and financial condition of Airgas and its Subsidiaries as at the date thereof, all in accordance with Generally Accepted Accounting Principles, and since such date to and including the date of this Loan Agreement there has been no material adverse change in such condition or in the operations of Airgas and its Subsidiaries taken as a whole; (j) except as set forth in Exhibit N attached hereto, there is no pending or, to either Borrower's knowledge following due inquiry, threatened action or proceeding affecting Airgas or any of its Subsidiaries before any court, governmental agency or arbitrator, specifically including without limitation any federal, state or local environmental agency, (i) which would, if adversely determined, materially adversely affect the financial condition or operations of Airgas and its Subsidiaries taken as a whole, or (ii) challenging the execution, delivery, validity or enforceability of any of the Loan Documents; (k) each of Airgas and its Subsidiaries is in material compliance with all statutes, governmental regulations, and applicable judgments, specifically including without limitation all federal, state, and local requirements relating to protection of health or the environment in connection with the operation of such corporation's business; (l) during the time in which Airgas or any of its Subsidiaries has owned any real property, no Hazardous Materials were disposed of on, under or about such real property in such a manner as would give rise to a liability which would have a material adverse effect on Airgas and its Subsidiaries taken as a whole, and that, to the extent that Airgas or any of its Subsidiaries generated, stored or transported Hazardous Materials, such activities were done in such a manner as would not give rise to a liability for failure to comply with any applicable federal, state and local laws, ordinances and regulations which would have a material adverse effect on Airgas and its Subsidiaries taken as a whole. For purposes hereof, "Hazardous Materials" shall be defined as "hazardous substances" or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; Hazardous Materials Transportation Act, 42 U.S.C. Section 6901 et seq.; and thosesubstances defined as "hazardous wastes" in any state or local laws, rules or regulations applicable to Airgas EX-68 or any of its Subsidiaries; (m) none of Airgas or its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan or Money Market Loan nor any Letter of Credit or Bankers' Acceptance will be used whether directly or indirectly, incidentally or ultimately (i) to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock, or to refund indebtedness incurred for such purpose, or (ii) for any purpose which entails a violation of, or which is inconsistent with, the provisions of the regulations of the Board of Governors of the Federal Reserve System, including without limitation Regulation G, U, T or X thereof. If requested by the Agent, each Borrower agrees that it will (and will cause each of its Subsidiaries to) furnish to the Banks a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in said Regulation U; (n) each of Airgas and its Subsidiaries possesses all necessary patents, licenses, trademarks, trademark rights, tradenames, tradename rights and copyrights to conduct its business without known conflict with any patent, license, trademark, tradename or copyrights of any other Person; (o) each of Airgas and its Subsidiaries is in compliance with the Multi-Employer Pension Plan Amendments Act of 1980 ("MEPP") and has no liability from pension contributions pursuant to MEPP; (p) none of Airgas or its Subsidiaries is an "investment company" as that term is defined in, or otherwise subject to regulation under, the Investment Company Act of 1940. None of Airgas or its Subsidiaries is a "Holding Company" as that term is defined in, and is not otherwise subject to regulation under, the Public Utility Holding Company Act of 1935; (q) none of Airgas or its Subsidiaries is (i) a party to any judgment, order, decree or any agreement or instrument or subject to corporate restrictions materially adversely affecting its business, properties or assets, operation or condition (financial or otherwise); or (ii) in default (except where waived) in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which such corporation is a party, which default would or might have a material adverse effect on the business, properties or assets of Airgas and its Subsidiaries as a whole; (r) each of Airgas and its Subsidiaries has filed all United States federal tax returns and all other tax returns that are required to be filed and has paid all taxes due pursuant to said returns or pursuant to any assessment received by such corporation, except such taxes, if any, as are being contested in good faith and as to which adequate reserves in accordance with Generally Accepted Accounting Principles have been provided. No tax liens have been filed, and no claims are being asserted with respect to any such taxes. The charges, accruals and reserves on the books of each of Airgas and its Subsidiaries in respect of any taxes or other governmental EX-69 charges are reasonably adequate; (s) (i) each of Airgas and its Subsidiaries is in compliance in all material respects with those provisions of ERISA and the regulations and public interpretations thereunder which are applicable to such corporation; (ii) No Reportable Event (as defined in ERISA) has occurred and is continuing with respect to any Plan; (iii) no proceedings have been instituted, or, to the knowledge of the Borrowers, planned, to terminate any Plan or to cause a trustee to be appointed to administer any Plan; (iv) neither any Credit Party, any other member of the Controlled Group, nor any duly-appointed administrator of a Plan has instituted or intends to institute proceedings to withdraw from any Multiemployer Plan; and (v) each Plan has been maintained and funded in all material respects with its terms and with the provisions of ERISA applicable thereto. (t) the information, exhibits and reports furnished by the Credit Parties, and each of them, to the Banks in connection with the negotiation of the Loan Documents did not, taken as a whole, contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading; and (u) no consent, approval or authorization of, or filing, registration or qualification with, any governmental agency, authority, instrumentality or regulatory body on the part of any Credit Party is required in conjunction with the execution, delivery or performance by the Credit Parties, or for the validity or enforceability, of the Loan Documents. ARTICLE XII Affirmative Covenants 12.01 Each of the Borrowers covenants and agrees with the Banks and the Agent that, so long as this Loan Agreement shall remain in effect or any Letter of Credit or Bankers' Acceptance shall be outstanding or the principal of or interest on any Note, Money Market Note, LC Reimbursement Obligation or BA Reimbursement Obligation or any other expense or amount payable hereunder remains unpaid, and until the Revolving Credit Loan Commitments are terminated and the Banks are no longer obligated to make any Letter of Credit Term Loans, unless the Majority Banks shall otherwise consent in writing, it will and will cause each of its Subsidiaries to: (a) (i) as soon as practical and in any event not later than 90 days after the end of each fiscal year ending after the Closing Date, deliver to each of the Banks a financial report of Airgas and all of its Subsidiaries including a balance sheet of Airgas and all of its Subsidiaries as at the end of such fiscal year, and the notes thereto, and the related statements of income and retained earnings and the notes thereto and of cash flows for such fiscal year, prepared on a consolidated and consolidating basis setting forth in each case comparative financial statements for the corresponding date or period in the preceding year, all prepared in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and containing, with respect to such consolidated financial reports an unqualified opinion of KPMG Peat Marwick, or other independent certified public accountants selected by Airgas and acceptable to the Banks; (ii) as soon as practical and in any event not later than June 30 of each fiscal year, deliver to each of the Banks projections of profit and EX-70 loss statements, balance sheets and cash flow reports for Airgas and all of its Subsidiaries on a consolidated basis for such fiscal year; (b) as soon as practical and in any event not later than 60 days after the end of each of the first three quarters of each fiscal year of Airgas deliver to each of the Banks a financial report of Airgas and all of its Subsidiaries including a balance sheet of Airgas and all of its Subsidiaries as at the end of such quarterly period and the related statements of income and retained earnings and of cash flows for the quarter then ended and for the period from the beginning of the current fiscal year to the end of such quarter, prepared on a consolidated and consolidating basis and setting forth in each case comparative financial statements for the corresponding date or period in the preceding year, all prepared in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and certified by the chief financial officer or other Executive Officer of Airgas (acting for Airgas and not as an individual) as presenting fairly the financial condition and the results of operations of Airgas and all of its Subsidiaries; (c) as soon as practical and in any event not later than 90 days after the end of any fiscal quarter during which there occurs an acquisition of a company permitted by Section 13.01(h)(iv) hereof for a purchase price greater than 10% of Book Net Worth as at the quarter end immediately preceding the date of such acquisition, to make available to any Bank upon its request therefor (i) historical financial information consisting of a balance sheet of such acquired company prepared as of a recent date and income statements of such company for the two immediately preceding fiscal years and (ii) a projected income statement of Airgas, its Subsidiaries and the acquired company, prepared on a consolidated basis, for the twelve-month period immediately following such acquisition; (d) together with each delivery of the financial reports required by Section 12.01(a)(i) and (b) hereof, deliver to each of the Banks a statement signed by the chief financial officer or other Executive Officer of Airgas (acting for Airgas and not as an individual) substantially in the form of Exhibit O hereto, setting forth (i) that, to the best of his knowledge, each of the Borrowers has kept, observed, performed and fulfilled each and every agreement (including without limitation any covenant incorporated herein by reference pursuant to Section 13A.01 hereof) binding on it contained in the Loan Documents (and containing calculations demonstrating compliance by Airgas and its Subsidiaries with the financial covenants set forth in Section 13.01(p), (q), (r) and (s) hereof as at such quarter end) and is not at the time in default in the keeping, observance, performance or fulfillment of any of the terms, provisions and conditions of any of the Loan Documents, (ii) a calculation of the Funded Debt Coverage Ratio as at such quarter end and (iii) that no Event of Default, nor any event, which upon notice or lapse of time or both, would constitute an Event of Default, has occurred, or if such Event of Default exists or would occur as the case may be, stating the nature thereof, the period of existence thereof and what action the Borrowers propose to take with respect thereto; (e) promptly upon becoming available, deliver to each Bank a copy of all financial statements, reports, notices and proxy statements sent by Airgas or any of its Subsidiaries to stockholders, and a copy of all regular, periodic and special reports filed by Airgas or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission ("SEC") or any governmental authority succeeding to any or all of the functions of the SEC; EX-71 (f) promptly, from time to time, deliver to the Banks such information regarding its (and its Subsidiaries') operations, business affairs and financial condition as the Banks may reasonably request. The Banks are hereby authorized to deliver a copy of any such financial information delivered hereunder to the Banks to any regulatory authority having jurisdiction over any of the Banks pursuant to any request therefor; (g) use any Bank as its primary depository; (h) for the purpose of financial reporting maintain its fiscal year as one ending on March 31; (i) use the proceeds of the Loans, Money Market Loans and Bankers' Acceptances for the purposes set forth in RECITAL A hereof; (j) maintain all properties and assets used or useful in the conduct of its businesses in good working order and condition and make all needed repairs, replacements, betterments, improvements, and renewals as are necessary to conduct its business in accordance with prudent business practices; (k) except to the extent otherwise provided in Section 13.01(f) hereof, do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, trademarks, tradenames, material rights, franchises and licenses; (l) (i) comply with or contest in good faith all statutes, governmental regulations and applicable judgments, specifically including without limitation all federal, state and local environmental laws, rules, and regulations, and (ii) pay all taxes, assessments, governmental charges, claims for labor, supplies, rent and any other obligations which, if unpaid, might become a lien against any of its property except (A) liabilities being contested in good faith and by appropriate proceedings and against which reserves in accordance with Generally Accepted Accounting Principles have been established and (B) taxes that are due but not yet payable; (m) (i) if the failure to do so would have a material adverse effect on any Credit Party, conduct and complete all investigations, studies, sampling, and testing and all remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials on, from, or affecting its real property (A) in accordance with all applicable federal, state, and local laws, regulations, rules, and policies, (B) to the satisfaction of the Banks, and (C) in accordance with the orders and directives of all federal, state, and local governmental authorities, and (ii) defend, indemnify, and hold harmless the Banks, the Agent, their employees, agents, officers, affiliates and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs, and expenses (including, without limitation, attorney and consultant fees, investigation and laboratory fees, court costs, and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to (A) the presence, disposal, release, or threatened release of any Hazardous Materials which are on, from, or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise in or on its real property; (B) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to Hazardous Materials on, from or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise in or on its real property; (C) any lawsuit brought or threatened, settlement reached, or government order EX-72 relating to Hazardous Materials on, from or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise in or on its real property; and/or (D) any violation of laws, orders, regulations, requirements, or demands of governmental authorities, or any policies or requirements of the Banks, which are based upon or in any way related to Hazardous Materials on, from or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise in or on its real property; (n) defend, indemnify and hold harmless the Banks, the Agent, their employees, agents, officers, affiliates and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses (including without limitation attorney and consultant fees, court costs and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to any acquisition permitted by Section 13.01(h)(iv), (v) or (vi) hereof including, without limitation, all claims of the seller or sellers of any acquired company; (o) at all times keep its insurable properties insured to such extent and against such risks, including, without limitation, general comprehensive liability insurance, product liability insurance, worker's compensation and other insurance required by law, as is customary with companies of comparable size in the same or similar businesses. The coverage as of the Closing Date of each of Airgas and its Subsidiaries is outlined as to carrier, policy number, expiration date, type and amount in Exhibit P hereto; (p) preserve and protect its patents, licenses, trademarks, trademark rights, tradenames, tradename rights and copyrights; (q) keep true books of records and accounts in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, and in which full, true and correct entries will be made of all of its dealings and transactions; (r) permit any officer of any of the Banks designated in writing by such Bank, to visit and inspect any of its properties, corporate books and financial records at such times as such Bank may reasonably request upon reasonable notice and during ordinary business hours; (s) upon the written request of any of the Banks, authorize any officer of such Bank to discuss its financial statements and financial affairs at any time from time to time with the independent certified public accountants of Airgas and its Subsidiaries upon reasonable notice and during ordinary business hours; (t) deliver to the Banks forthwith, upon any Executive Officer of Airgas obtaining knowledge of an Event of Default or an event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, a certificate of the chief financial officer or other Executive Officer of Airgas specifying the nature and period of existence thereof and what action the Borrowers propose to take with respect thereto; (u) pay the fee to the Agent as set forth in agent's fee agreement of even date herewith; EX-73 (v) notify the Agent in writing within five (5) Business Days after any Executive Officer of any Credit Party knows or has reason to know of the occurrence of any of the following with respect to Airgas or any of its Subsidiaries: (i) the pendency or commencement of any material action, suit or proceeding at law or in equity wherein the opposing party either seeks damages of more than $250,000.00 in excess of applicable insurance coverage or damages of more than $3,000,000.00 in any instance; (ii) any event or condition which shall constitute an event of default under any other agreement for borrowed money in excess of $500,000.00; (iii) any levy of an attachment, execution or other process against a significant part of its assets; or (iv) any change in any existing agreement or contract which would likely materially adversely affect the business or affairs, financial or otherwise, of Airgas and its Subsidiaries taken as a whole; The Agent shall promptly notify the Banks of any notice received by the Agent pursuant to this Section 12.01(v). (w) (i) comply with the applicable provisions of the Employee Retirement Income Security Act of 1974 as amended ("ERISA") where the failure so to comply might reasonably be expected materially to impair the right of Airgas or any of its Subsidiaries to carry on business as now being conducted or to affect materially adversely the financial condition of such corporation and (ii) furnish to the Banks, (A) as soon as possible, and in any event within five (5) Business Days after any Executive Officer of any Credit Party knows or has reason to know that any Reportable Event with respect to any Plan has occurred, a statement of the chief financial officer of Airgas setting forth details as to such Reportable Event and the action that the Borrowers propose to take with respect thereto, together with a copy of the notice of such Reportable Event, if any, given to the Pension Benefit Guaranty Corporation or any successor thereto ("PBGC"), and (B) promptly after the receipt or filing thereof, a copy of any notice Airgas or any of its Subsidiaries may receive from the PBGC relating to the intention of PBGC to terminate any Plan or to appoint a trustee to administer any Plan and all reports and notices relating to any Reportable Event or Prohibited Transaction (as defined in ERISA). For purposes hereof, (1) "Plan" shall mean any employee plan which is subject to the provisions of Title IV of ERISA and which is maintained for employees of Airgas or any of its Subsidiaries or any other trade or business which is under common control with Airgas or any of its Subsidiaries within the meaning of Section 414(c) of the Internal Revenue Code of 1986, as amended, or the regulations thereunder; and (2) "Reportable Event" shall mean any Reportable Event as defined in Section 4043 of ERISA or the regulations thereunder for which the 30-day notice requirement has not been waived by PBGC; EX-74 (x) execute any and all further documents, agreements and instruments, and take all further actions which may be required under applicable law, or which the Majority Banks may reasonably request, in order to effectuate the transactions contemplated by this Loan Agreement; and (y) cause (i) each of Mauritius Industrial Gases, Inc., Poligaz, S.A. and Polska Airgas, S.A. at such time as any such Subsidiary shall have total assets of at least $3,000,000 and (ii) each other Subsidiary hereafter acquired by any Credit Party prior to the Maturity Date (A) to become a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement and (B) to deliver to the Agent such other documentation as the Agent may reasonably request in connection with the foregoing, including, without limitation, certified corporate resolutions and other corporate documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the obligations of such Subsidiary under the Guaranty Agreement); provided, however, with respect to any such Subsidiary described above which is a Canadian Subsidiary (1) such Canadian Subsidiary shall not be obligated to so guarantee the obligations of the Borrowers during the 90 day period immediately succeeding the date of acquisition of such Canadian subsidiary and (2) if, subsequent to such Canadian Subsidiary becoming a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement, any Canadian Lender has agreed to provide financing to such Canadian Subsidiary to provide for the working capital, capital expenditure, acquisition costs and/or letter of credit needs of such Canadian Subsidiary, then, promptly upon the request of the Borrowers, the Agent (on behalf of the Banks) shall thereupon release such Canadian Subsidiary from the Guaranty Agreement. The provisions of subsections (m)(ii) and (n) of this Section 12.01 shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. ARTICLE XIII Negative Covenants 13.01 Each of the Borrowers covenants and agrees with the Banks and the Agent that, so long as this Loan Agreement shall remain in effect or any Letter of Credit or Bankers' Acceptance shall be outstanding or the principal of or interest on any Note, Money Market Note, LC Reimbursement Obligation or BA Reimbursement Obligation or any other expense or amount payable hereunder remains unpaid, and until the Revolving Credit Loan Commitments are terminated and the Banks are no longer obligated to make any Letter of Credit Term Loans, without the prior written consent of the Majority Banks, it will not nor will it enter into any binding agreement to or permit any Subsidiary to: (a) incur, create, assume or permit to exist any indebtedness for borrowed money, however evidenced, or its equivalent, except (i) the Loans, the Letters of Credit (and the related LC Reimbursement Obligations), the Bankers' Acceptances (and the related BA Reimbursement Obligations) and the Money Market Loans; EX-75 (ii) existing indebtedness set forth in Exhibit Q hereto (and renewals, refinancings or extensions (but not any increases in the outstanding principal amount) thereof on terms and conditions no less favorable to such Borrower or Subsidiary than the terms and conditions of such existing indebtedness); (iii) indebtedness evidenced by endorsement of negotiable instruments for collection and done in the ordinary course of business; (iv) the Subordinated Debt; (v) unsecured indebtedness incurred in favor of the sellers of the companies described in Section 13.01(h)(iv) and (v) hereof in order to finance the acquisition of such companies; (vi) standby letters of credit (other than standby Letters of Credit issued pursuant to Section 5.01 hereof) provided that the full amount available to be drawn thereunder is at all times backed or secured by a Letter of Credit issued pursuant to Section 5.01 hereof; (vii) indebtedness to NationsBank of up to $30,000,000 under the Promissory Note dated January 31, 1994 and attached hereto as Schedule 4, incurred from time to time on or after the date of acquisition by Airgas (directly or indirectly through one or more of its Subsidiaries) of certain assets of the retail, industrial, medical and specialty gas businesses of The BOC Group, Inc. (Airco) in California and Nevada; and (viii) other present or future indebtedness of Airgas or any of its Subsidiaries, provided that the aggregate amount of such indebtedness at any time outstanding shall not exceed $20,000,000.00; provided, however, that nothing contained in this Section 13.01(a) or any other provision of this Loan Agreement shall prevent any Credit Party from entering into, as lessee, any real estate leases (other than capitalized leases) or operating leases of equipment in the ordinary course of such Credit Party's business; (b) incur, create, assume or permit to exist any mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets, now or hereafter owned, other than (i) liens in favor of the Agent, on behalf of the Banks, arising after the Closing Date; (ii) existing liens as set forth in Exhibit K hereto; (iii) any unfiled lien of materialmen, mechanics, workmen, warehousemen, carriers, landlords or repairmen; provided that if such a lien shall be perfected and shall not be contested in good faith, it shall be discharged of record immediately by payment, bond or otherwise; EX-76 (iv) tax liens for taxes which are not yet due and payable or which are being contested in good faith and by appropriate proceedings and against which reserves in accordance with Generally Accepted Accounting Principles have been established; (v) condemnation actions; (vi) easements, rights-of-way, restrictions and other similar encumbrances that do not reduce in any material respect the value of the applicable real property; and (vii) purchase money liens granted in connection with indebtedness permitted by Section 13.01(a)(viii) hereof; (c) acquire, consolidate, merge or combine with any Person; provided, however, (i) any Credit Party may acquire, by purchase, consolidation, merger, combination or otherwise, the companies described in Section 13.01(h)(iv) or (v) hereof so long as such Credit Party is the surviving corporation; (ii) either Borrower may merge with any Guarantee Subsidiary so long as such Borrower is the surviving corporation; and (iii) any Guarantee Subsidiary may merge with another Guarantee Subsidiary; (d) sell, transfer or otherwise dispose of any of its properties and assets (including without limitation any Capital Stock in any of its Subsidiaries) except (i) sales or leases in the ordinary course of business; (ii) transfers of assets to an Airgas-affiliated real estate investment trust (the "REIT") provided that (A) such transfers are made prior to the first anniversary date of the Closing Date, (B) the terms and conditions of the REIT structure, the associated investments in the REIT stock and the leaseback agreements regarding assets contributed to the REIT shall be acceptable to the Majority Banks in their sole reasonable discretion, (C) the fair market value of assets contributed to the REIT and the corresponding fair market value of the compensation received therefor shall be equivalent, as evidenced by appraisals acceptable to the Majority Banks in their sole reasonable discretion, (D) non-cash assets received as compensation for contributions to the REIT shall be in a form satisfactory to the Majority Banks in their sole reasonable discretion and (E) at no time shall (1) the sum of (I) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under this clause (d)(ii) and the aggregate amount of investments (other than asset contributions otherwise permitted by this clause (d)(ii)) made in the REIT as permitted under Section 13.01(h)(vii) hereof plus (II) the aggregate outstanding principal amount guaranteed pursuant to all guarantees permitted under Section 13.01(g)(iv) hereof, plus (III) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, plus (IV) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, plus (V) the aggregate outstanding amount of investments permitted under Section 13.01(m)(ii) hereof, exceed (2) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; and (iii) other non-ordinary course of business sales (including Sale/Leaseback Transactions permitted by Section 13.01(e) hereof) provided that (A) the aggregate net book value of the assets sold by Airgas or any of its Subsidiaries in all such transactions in any fiscal year does not exceed 10% of Total Assets as of the end of the immediately preceding fiscal year, (B) the aggregate net book value of the assets sold by Airgas or any of its Subsidiaries in all such transactions after the Closing Date does not exceed 25% of Total Assets as of the end of EX-77 the fiscal year immediately preceding the then current fiscal year, (C) the sale price for any asset sold in any such transaction shall not be less than the fair market value of such asset, (D) each such transaction involving assets having a net book value of $500,000 or more shall be on an arms-length basis with a wholly independent third party and (E) no Event of Default nor any event or condition which, with the giving of notice or lapse of time or both, would constitute an Event of Default, shall have occurred and be continuing at the time of any such sale or shall result upon giving effect thereto; provided, however, that any Credit Party may enter into leases as lessor in the ordinary course of such Credit Party's business. (e) enter into any arrangement (a "Sale/Leaseback Transaction"), directly or indirectly, with any Person whereby Airgas or any of its Subsidiaries shall sell or transfer any property, real or personal, whether now owned or hereafter acquired, and used or useful in such Person's business, and thereafter rent or lease such property or other property which such Person intends to use for substantially the same purpose or purposes as the property being sold or transferred; provided that Airgas or any of its Subsidiaries may enter into any Sale/Leaseback Transaction if (i) such transaction would be permitted under Section 13.01(d) hereof; and (ii) the net cash proceeds of each such transaction are applied immediately to repay or prepay the Borrowers' Obligations (which repayments and/or prepayments shall not reduce the Revolving Credit Loan Commitments of the Banks hereunder); (f) seek or permit dissolution, liquidation, or termination in whole or in part; provided, however, any corporation 85% or more of the Capital Stock of which is owned by any Credit Party may be dissolved, liquidated or terminated without the consent of the Banks; (g) guarantee directly or indirectly the obligations of any Person except for (i) the guarantee of a Guarantee Subsidiary pursuant to the Guaranty Agreement, (ii) endorsements of negotiable instruments in the ordinary course of business, (iii) the unsecured guarantee by Airgas of any indebtedness permitted under Section 13.01(a) hereof and (iv) additional guarantees provided that at no time shall (A) the sum of (1) the aggregate outstanding principal amount guaranteed pursuant to all such guarantees permitted under this clause (iv), plus (2) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under Section 13.01(h)(vii) hereof, plus (3) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, plus (4) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, plus (5) the aggregate outstanding amount of investments permitted under Section 13.01(m)(ii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; (h) purchase, own, invest in or otherwise acquire, directly or indirectly, any stock or other securities, or make or permit to exist any investment or capital contribution or acquire any interest whatsoever in any other Person or permit to exist any loans or advances for such purposes; provided, however, any Credit Party may maintain existing investments in the other Credit Parties and any Credit Party may maintain investments in or invest in: EX-78 (i) direct obligations of the United States of America, or any agency thereof or obligations guaranteed by the United States of America; provided, that such obligations mature within one year from the date of acquisition thereof; (ii) certificates of deposit maturing within one year from the date of acquisition issued by one of the Banks, or by any other bank or trust company organized under the laws of the United States or any state thereof having a long term debt rating of A or better by Moody's Investors Service, Inc. and/or Standard and Poor's Corporation and not known by the Borrowers to be having financial difficulties; (iii) commercial paper rated P-1 or P-2 by Moody's Investors Service, Inc. (Commercial Paper Record) and rated A-1 or A-2 by Standard and Poors Corporation (Commercial Paper Ratings Guide); (iv) companies (including Canadian companies) conducting a line of business similar to and compatible with (A) the business formerly conducted by Jackson, (B) the business of US Cryogenics, Inc. prior to its sale by US Airgas, Inc. or (C) the business of Nitrous Oxide, Leasing and those other Credit Parties which conduct a gas distribution business, including the distribution of equipment and/or supplies related thereto; (v) capital assets for companies described in clause (iv) above, acquired incidental to and within 12 months after the acquisition of such company; (vi) companies having a business involving the financing of customers and suppliers of any of Airgas and its Subsidiaries, provided that at no time shall (A) the sum of (1) the aggregate outstanding amount of investments permitted under this clause (vi), plus (2) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under Section 13.01(h)(vii) hereof, plus (3) the aggregate outstanding principal amount guaranteed pursuant to all guarantees permitted under Section 13.01(g)(iv) hereof, plus (4) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, plus (5) the aggregate outstanding amount of investments permitted under Section 13.01(m)(ii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; EX-79 (vii) investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) in the REIT described in Section 13.01(d)(ii) hereof, provided that at no time shall (A) the sum of (1) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under this clause (vii), plus (2) the aggregate outstanding principal amount guaranteed pursuant to all guarantees permitted under Section 13.01(g)(iv) hereof, plus (3) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, plus (4) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, plus (5) the aggregate outstanding amount of investments permitted under Section 13.01(m)(ii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; and (viii) investments permitted by Section 13.01(m) hereof; (i) discount or sell any of its notes or accounts receivable; provided, however, Airgas or any of its Subsidiaries may discount or sell installment sales contracts relating to the sale of cylinders or equipment held for sale in the normal course of business; (j) enter into any transaction, including, without limitation, the purchase, sale, leasing or exchange of property, real or personal, or the rendering of any service, with any Affiliate, any Subsidiary which is not a Credit Party, or any stockholder, officer or director of Airgas or any of its Subsidiaries, except in the ordinary course of and pursuant to the reasonable requirements of such Person's business and upon fair and reasonable terms no less favorable as a whole to such Person than would obtain in a comparable arm's-length transaction with a Person not an Affiliate, Subsidiary, stockholder, officer or director of Airgas or any of its Subsidiaries; provided, however, that any Subsidiary of Airgas may issue, sell and/or distribute to officers of such Subsidiary additional shares of stock in such Subsidiary not to exceed 15% in the aggregate of any class of stock of such Subsidiary for all such officers; (k) make any loans or advances to any Person except (i) loans or advances in the ordinary course of business including any loans or advances made in connection with the sale of cylinders on an installment basis; (ii) loans or advances to any Credit Party; and (iii) additional loans and investments provided that at no time shall (A) the sum of (1) the aggregate outstanding principal amount of loans and advances permitted under this clause (iii), plus (2) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under Section 13.01(h)(vii) hereof, plus (3) the aggregate outstanding principal amount guaranteed pursuant to all guarantees permitted under Section 13.01(g)(iv) hereof, plus (4) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, EX-80 plus (5) the aggregate outstanding amount of investments permitted under Section 13.01(m)(ii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding quarter; (l) declare or pay any cash dividends (other than stock dividends) or redeem or retire any of its capital stock at any time when there exists, or if, as a consequence thereof, there would occur, any Event of Default or any event or condition which, with the giving of notice or lapse of time or both, would constitute such an Event of Default; (m) create or permit to exist any partnerships or joint ventures or make any similar substantial investment other than (i) the existing joint venture interest of Midwest in Elkem Metals Company and (ii) additional investments provided that at no time shall (A) the sum of (1) the aggregate outstanding amount of investments permitted under this clause (ii), plus (2) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under Section 13.01(h)(vii) hereof, plus (3) the aggregate outstanding principal amount guaranteed pursuant to all guarantees permitted under Section 13.01(g)(iv) hereof, plus (4) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, plus (5) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; (n) enter into a line of business other than (i) a line of business which is similar to and compatible with (A) the business formerly conducted by Jackson, (B) the business of US Cryogenics, Inc. prior to its sale to US Airgas, Inc. or (C) the business of Nitrous Oxide, Leasing and those other Credit Parties which conduct a gas distribution business, including the distribution of equipment and/or supplies related thereto, (ii) a business involving the financing of customers and suppliers of any of Airgas and its Subsidiaries or (iii) any other business conducted by Airgas or any of its Subsidiaries as of the Closing Date; (o) change its current accounting practices regarding recognition of income except in connection with changes in Generally Accepted Accounting Principles; (p) permit the Leverage Ratio at any time to be greater than 0.7 to 1.0; (q) permit the Current Ratio at any time to be less than 1.3 to 1.0; (r) permit the Fixed Charge Coverage Ratio as of the last day of any fiscal quarterly period to be less than 1.45 to 1.00; (s) permit Book Net Worth at any time to be less than $140,000,000.00; provided, however, (i) such amount shall be increased at the end of each fiscal year (commencing with the end of the fiscal year ending March 31, 1995) by an amount equal to the greater of $3,000,000.00 or 75% of Airgas and its Subsidiaries' net income for the fiscal year then ending (computed on a consolidated basis in accordance with Generally Accepted Accounting Principles) and (ii) in addition to any increases pursuant to clause (i) above, such amount shall also be increased by 75% of the net proceeds received by Airgas or any of its Subsidiaries in connection with (A) any private or public sale or placement of its common or preferred stock EX-81 (including, without limitation, any placement of stock in connection with the exercise of warrants or options), (B) the conversion of any Subordinated Debt into equity or (C) any other transaction which, in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, increases the owners' equity accounts of Airgas or any of its Subsidiaries; provided further, such amount shall be reduced to the extent recommended by the independent certified public accountants of Airgas and its Subsidiaries (and concurred in by the Banks) in connection with adjustments made in accordance with Statements on Financial Accounting Standards (SFAs) #106 and #109; (t) except as otherwise permitted in writing by the Majority Banks, make any payment of principal or interest on any Subordinated Debt if at the time of the proposed payment the documents evidencing such Subordinated Debt provide that the holders thereof shall not be entitled to receive payment thereof until the term of this Loan Agreement shall have expired in accordance with the provisions of Section 16.11 hereof; or (u) except as otherwise permitted in writing by the Majority Banks, enter into any modification or amendment of the terms or provisions of either Senior Subordinated Note Purchase Agreement or any other document executed in connection with the Subordinated Debt. ARTICLE XIIIA Incorporation of Subordinated Debt Covenants 13A.01 The covenants contained in Section 10 of each of the Senior Subordinated Note Purchase Agreements, as such covenants may be amended or modified from time to time (the "Incorporated Covenants"), are hereby incorporated herein by reference and shall be as binding on the Borrowers as if set forth fully herein. In the event that both of the Senior Subordinated Note Purchase Agreements are terminated, the provisions of this Section 13A.01 shall have no further force or effect. ARTICLE XIV Events of Default and Acceleration 14.01 If any of the following events (the "Events of Default") shall occur and be continuing: (a) (i) the failure of the Borrowers to make when due any payment of interest, fees or other amounts required by this Loan Agreement and/or any of the other Loan Documents (other than a payment of principal) and the continuation of such failure for five (5) days; or (ii) the failure of the Borrowers to make when due any payment of principal required by this Loan Agreement and/or any of the Notes or Money Market Notes; (b) the failure of any Credit Party to comply with any other terms and conditions in this Loan Agreement (including without limitation any covenant incorporated herein by reference pursuant to Section 13A.01 hereof) or the other Loan Documents within 30 days after the earlier to occur of (i) written notice from the Agent specifying the default and requesting that it be remedied; or (ii) an Executive Officer of Airgas becomes aware of such violation; EX-82 (c) any representation or warranty made by the Credit Parties, or any of them, herein or in any of the other Loan Documents or in any certificate, statement or report heretofore or hereafter made (or deemed made pursuant to Article X hereof) shall be untrue in any material respect when made (or deemed made); (d) any Credit Party: (i) shall make an assignment for the benefit of creditors; or (ii) has a petition initiating a proceeding under any section or chapter of the Bankruptcy Code or its amendments, filed by or against such Credit Party, and, if against such Credit Party, such petition is not set aside or dismissed within sixty (60) days after such filing; or (iii) shall file any judicial proceedings for dissolution or liquidation; or (iv) has a receiver, trustee or custodian appointed for all or a material part of its assets which, if involuntary, is not dismissed within 60 days of such appointment; or (v) seeks to make an adjustment, settlement or extension of its debts with its creditors generally; or (vi) shall consent to or acquiesce in any of the events specified in this subsection (d) which are commenced or instituted against such Credit Party; (e) one or more judgments or decrees shall be entered against any Credit Party involving in the aggregate liabilities (to the extent not paid or to the extent not fully covered by insurance or by adequate reserves (as determined by the Majority Banks in their sole reasonable discretion) provided by such Person) of $500,000.00 or more and all or some of such judgments and decrees (to the extent necessary to reduce the aggregate liability to less than $500,000.00) shall not have been vacated, discharged or stayed within 30 days from the entry thereof; (f) any Credit Party defaults in the performance of any recourse obligation incurred in connection with the sale of conditional sales contracts relating to the sale of cylinders, unless such default is in connection with a bona fide dispute and the applicable Credit Party shall have made adequate provision (as determined by the Majority Banks in their sole reasonable discretion) for such obligation on its books of account; (g) any Credit Party in the performance of any other agreement between it and any other lender (including without limitation one of the Banks) fails to pay when due any indebtedness for borrowed money having a principal balance (alone or in the aggregate) in excess of $500,000.00 or otherwise defaults with respect to any such indebtedness and such default results in or would permit the acceleration thereof, unless, with respect to any indebtedness permitted by Section 13.01(a)(v) hereof, such default is in connection with a bona fide dispute as to the right of the applicable Credit Party to offset such indebtedness against indemnification obligations of the holder of such EX-83 indebtedness to such Credit Party and such Credit Party shall have made adequate provision (as determined by the Majority Banks in their sole reasonable discretion) for such indebtedness on its books of account; (h) any Person and/or its Affiliates shall own in the aggregate more than 35% of the Voting Stock of Airgas; provided, however, such occurrence shall not constitute an Event of Default hereunder until a period of 30 days has elapsed from the date of the acquisition by such Person and/or its Affiliates of Voting Stock of Airgas which gives such Person and/or its Affiliates an aggregate ownership of more than 35% of the Voting Stock of Airgas; provided further, if such Person and/or its Affiliates have filed a tender offer statement with the Securities and Exchange Commission in connection with such acquisition, the 30 day period referenced above in the foregoing proviso shall commence on the date of the filing with the Securities and Exchange Commission of such tender offer statement; (i) any Credit Party or other member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $500,000.00 which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Plan or Plans which in the aggregate have unfunded liabilities in excess of $500,000.00 (individually and collectively, a "Material Plan") shall be filed under Title IV of ERISA by any member of the Controlled Group, any plan administrator or any combination of the above; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer, any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default (within the meaning of Section 4219(c)(5) of ERISA) with respect to, one or more Multiemployer Plans which could cause one or more members of the Controlled Group to incur a current payment obligation in excess of $500,000.00; (j) an event of default shall occur under any of the other Loan Documents; then, and in every such event (other than an event described in paragraph (d) above) and at any time thereafter during the continuance of such event, the Agent may and shall upon request of any Bank with respect to an event described in subparagraph (a) above or upon the request of the Majority Banks with respect to an event described in subparagraph (b), (c), (e), (f), (g), (h), (i) or (j) above, by written notice to the Borrowers, take any or all of the following actions, at the same or different times: (i) terminate forthwith the commitments of all the Banks and the LC Agent hereunder to make Extensions of Credit; (ii) declare the Notes, the Money Market Notes, the LC Reimbursement Obligations and the BA Reimbursement Obligations and all fees and other amounts payable hereunder to be forthwith due and payable, whereupon the Notes, the Money Market Notes, the LC Reimbursement Obligations and the BA Reimbursement Obligations, both as to principal and interest, and all fees and other amounts payable hereunder, shall become forthwith due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by each of the Borrowers, anything contained herein or in the Notes or the Money Market Notes to the contrary notwithstanding; and (iii) pursue any other remedy under this Loan Agreement or any other Loan Document or otherwise; and, in any event described in paragraph (d) above, the commitments of all the Banks and of the LC Agent hereunder to make Extensions of Credit shall automatically terminate and the EX-84 Notes, the Money Market Notes, the LC Reimbursement Obligations and the BA Reimbursement Obligations, both as to principal and interest, and all fees and other amounts payable hereunder, shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each of the Borrowers, anything contained herein or in the Notes or the Money Market Notes to the contrary notwithstanding, and the Agent may pursue any other remedy under this Loan Agreement or any other Loan Document or otherwise. ARTICLE XV The Agent 15.01 Each Bank hereby irrevocably designates and appoints the Agent as the agent of such Bank under this Loan Agreement and the other Loan Documents, and each Bank hereby irrevocably authorizes the Agent, as the agent for such Bank, to take such action on its behalf under the provisions of this Loan Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Loan Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Loan Agreement, or any of the other Loan Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Loan Agreement or the other Loan Documents or otherwise exist against the Agent. 15.02 The Agent may execute any of its duties under this Loan Agreement or the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 15.03 Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with any of the Loan Documents (except for its or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Credit Parties contained in any of the Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, the Loan Documents or enforceability or sufficiency of any of the Loan Documents, or for any failure of any Credit Party to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, any of the Loan Documents or to inspect the properties, books or records of the Credit Parties. 15.04 The Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, Money Market Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Credit Parties), EX-85 independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note or Money Market Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall be fully justified in failing or refusing to take any action under any of the Loan Documents unless it shall first receive such advice or concurrence of the Banks as it deems appropriate or it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under any of the Loan Documents in accordance with a request of the Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the Notes or the Money Market Notes. 15.05 The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default hereunder unless the Agent has received notice from a Bank or a Credit Party referring to the applicable Loan Document and describing such Event of Default. In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Banks. The Agent shall take such action with respect to such Event of Default as shall be directed in accordance with Section 14.01 or Section 16.05 hereof; provided that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Banks. 15.06 Each Bank expressly acknowledges that neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent or any affiliate thereof hereafter taken, including any review of the affairs of the Credit Parties, shall be deemed to constitute any representation or warranty by the Agent to any Bank. Each Bank represents to the Agent that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of each of the Credit Parties and made its own decision to make its loans hereunder and enter into this Loan Agreement. Each Bank also represents that it will, independently and without reliance upon the Agent or the other Banks, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Loan Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of each of the Credit Parties. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Credit Parties which may come into the possession of the Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 15.07 The Banks agree to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Borrowers, or either of them, and without limiting the obligation of the Borrowers, and each of them, to do so), ratably according to the respective amounts outstanding to the Borrowers, from and against any and all liabilities, obligations, losses, damages, penalties, EX-86 actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Notes and the Money Market Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct; provided, further, no Bank shall be obligated for the ratable share of such indemnity obligations of any other Bank. The agreements in this subsection shall survive the payment of the Notes and the Money Market Notes and all other amounts payable hereunder. 15.08 The Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any of the Credit Parties as though the Agent were not the Agent hereunder. With respect to its Loans made or renewed by it, any Letters of Credit, any Bankers' Acceptances created by it and any Note or Money Market Note issued to it, the Agent shall have the same rights and powers under this Loan Agreement as any Bank and may exercise the same as though it were not the Agent. 15.09 The Agent may resign at any time by giving written notice thereof to the Banks and the Borrowers and may be removed at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Agent, then the retiring Agent shall select a successor Agent provided such successor Agent is a commercial bank organized under the laws of the United States of America or of any State thereof and has a combined capital and surplus of at least $400,000,000.00. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Loan Agreement and the other Loan Documents. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article XV shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Loan Agreement and the other Loan Documents. ARTICLE XVI Miscellaneous 16.01 All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing or by telefax and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or when deposited in the mail, first-class postage prepaid, or, in the case of telefax notice, when sent, addressed as follows, or to such address or other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes: EX-87 (a) if to the Borrowers: Airgas, Inc. Five Radnor Corporate Center 100 Matsonford Road Radnor, Pennsylvania 19087 Attention: Britton H. Murdoch [Courtesy Copy to: McCausland, Keen & Buckman Five Radnor Corporate Center 100 Matsonford Road Radnor, Pennsylvania 19087 Attention: Melvin J. Buckman, Esq.] (b) if to the Banks (i) NationsBank of North Carolina, N.A. NationsBank Corporate Center, 8th Floor Charlotte, North Carolina 28255 Attention: M. Gregory Seaton Eastern Corporate Group (ii) The Bank of New York One Wall Street New York, New York 10286 Attention: Michael V. Flannery, Jr. (iii) First Fidelity Bank, N.A. Broad & Walnut Streets Philadelphia, Pennsylvania 19109 Attention: Carl Goelz (iv) Philadelphia National Bank, Incorporated as Corestates Bank, NA Broad & Chestnut Streets, FC1-8-3-16 P.O. Box 7618 Philadelphia, Pennsylvania 19101-7618 Attention: Matthew T. Panarese (v) Continental Bank 231 South LaSalle Street Chicago, Illinois 60697 Attention: Patrick Canning (vi) Meridian Bank One Liberty Place 1650 Market Street, Suite 3600 Philadelphia, Pennsylvania 19103 Attention: David W. Mills (vii) NBD Bank, N.A. 611 Woodward Avenue Detroit, Michigan 48226 Attention: Nancy L. Russell EX-88 (viii) (A) For credit matters: CIBC Inc. 425 Lexington Avenue New York, New York 10017 Attention: Paul T. LaHiff (B) For operations matters: CIBC Inc. Two Paces West 2727 Paces Ferry Road Suite 1200 Atlanta, Georgia 30339 Attention: Vice President Credit Operations (ix) PNC Bank, National Association Land Title Building Broad & Chestnut Streets Philadelphia, Pennsylvania 19101 Attention: Todd Dissinger (c) if to the Agent NationsBank of North Carolina, N.A. NationsBank Corporate Center, 8th Floor Charlotte, North Carolina 28255 Attention: M. Gregory Seaton Eastern Corporate Group 16.02 No failure or delay on the part of any of the Banks in the exercise of any right, power or privilege hereunder or under any other Loan Document shall operate as a waiver of any such right, power or privilege nor shall any such failure or delay preclude any other or further exercise thereof. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 16.03 All covenants, agreements, representations and warranties made herein and in the other Loan Documents shall survive the making by the Banks of all Extensions of Credit and the execution and delivery to the Banks of the Loan Documents and shall continue in full force and effect so long as any of the indebtedness of any of the Borrowers to the Banks or any obligations of the Banks under the Revolving Credit Loan Commitments remain outstanding. Whenever in this Loan Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party and all covenants, provisions and agreements by or on behalf of the Credit Parties, and each of them, which are contained in the Loan Documents or this Loan Agreement shall inure to the benefit of the successors and assigns of the Banks. 16.04 The Borrowers jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of the Agent in connection with the preparation, execution and delivery of the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of special counsel to the Agent, and out-of-pocket costs and expenses of the Banks in connection with the enforcement of this Loan Agreement and the other Loan Documents and to hold the Banks harmless from any and all such costs, expenses and EX-89 liabilities. In addition, the Borrowers jointly and severally agree to pay to each Bank an amendment fee of not less than $3,000.00 on the effective date of each agreement hereafter entered into among the Borrowers and the Banks (or the Agent on behalf of the Banks) effecting any material amendment, modification or waiver of the terms of this Loan Agreement, including without limitation any such agreement relating to any provision set forth in Article X, Article XI, Article XII, Article XIII or Article XIV hereof. The Banks hereby acknowledge and agree that no amendment fee (other than the upfront fees payable on the Closing Date as described in Section 9.01(j) hereof) shall be payable pursuant to this Section 16.04 in connection with the amendment of the Prior Loan Agreement as of the date hereof pursuant to this document. The provisions of this Section shall survive the termination of this Loan Agreement. 16.05 With the written consent of the Majority Banks, the Agent and the Borrowers may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Loan Agreement, the Notes, the Money Market Notes or any of the other Loan Documents or changing in any manner the rights of the Banks or of the Borrowers hereunder or thereunder, and with the consent of the Majority Banks the Agent on behalf of the Banks may execute and deliver to the Borrowers a written instrument waiving, on such terms and conditions as the Agent or Majority Banks may specify in such instrument, any of the requirements of this Loan Agreement or any other Loan Document or any Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (a) extend the maturity of any Note or Money Market Note or any installment thereof or of any LC Reimbursement Obligation or BA Reimbursement Obligation, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or change the amount or terms of any Commitment, or change the amount or time for payment of any fee required hereunder, or amend, modify or waive any provision of this Section 16.05 or reduce the percentage specified in the definition of "Majority Banks" set forth in Section 1.01 hereof, or amend or modify the definition of "Reference Banks" set forth in Section 1.01 hereof, or amend, modify or waive any provision of any Loan Document requiring action or approval by all of the Banks, or waive an Event of Default specified in Section 14.01(a) hereof, or consent to the assignment or transfer by either Borrower of any of its rights and obligations under this Loan Agreement, or release either Borrower from its obligations under this Loan Agreement or release any Guarantee Subsidiary from its obligations under the Guaranty Agreement (except as otherwise permitted by such Section 12.01(y)), or amend, modify or waive any provision of the Loan Documents if such amendment, modification or waiver would have the effect of releasing any collateral security (including, without limitation, any guarantee) granted thereby or the obligations to the Agent and the Banks of the parties thereof (it being expressly understood and agreed by the Borrowers and the Banks that nothing set forth in this Section 16.05 shall be deemed to require any further action or approval of the Banks in connection with the release of collateral contemplated by Section 16.16 hereof), in each case without the written consent of all the Banks, or (b) amend, modify or waive any provision of Article XV hereof without the written consent of the then Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Borrowers, and each of them, the Banks, the Agent and all future holders of the Notes and the Money Market Notes. In the case of any waiver of the requirements of this Loan Agreement, any other Loan Document, the Notes or the Money Market Notes, the parties thereto shall be restored to their former position and rights thereunder, and any Event of Default waived shall be deemed to be cured and EX-90 not continuing; but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon. 16.06 Except as otherwise provided for hereunder, interest, fees and premiums hereunder shall be computed on the basis of a three hundred sixty-five (365) day year for the actual number of days in the billing period. 16.07 Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 14.01 hereof to authorize the Agent to declare the Notes, the Money Market Notes, the LC Reimbursement Obligations and the BA Reimbursement Obligations due and payable pursuant to the provisions of Section 14.01 hereof, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing at such Bank to or for the credit or the account of either of the Borrowers against any and all of the obligations of the Borrowers now or hereafter existing under this Loan Agreement or such Note and although such obligations may be unmatured. 16.08 Except as otherwise provided for hereunder with respect to Eurodollar Loans, should any installment or other payment of the principal of or interest on the Notes, the Money Market Notes, the LC Reimbursement Obligations or the BA Reimbursement Obligations become due and payable on other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day thereafter and in the case of an installment of principal, interest shall be payable thereon at the rate per annum herein specified during such extension. 16.09 This Loan Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be necessary in making proof of this Loan Agreement to produce or account for more than one such counterpart. 16.10 (a) Any Bank may, at any time upon written notice thereof to the Agent and the Borrowers, transfer or assign all or any portion of the indebtedness evidenced by the Notes or Money Market Notes held by such Bank and the Revolving Credit Loan Commitment of such Bank hereunder and the terms hereof shall extend to any subsequent holder of the Notes or Money Market Notes; provided, however, that any assignment by a Bank hereunder shall be subject to the prior written consent of Airgas and the Agent (in either case not to be unreasonably withheld). (b) Any Bank may at any time sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Loan Agreement; provided, however, that (1) such Bank's obligations under this Loan Agreement shall remain unchanged, (2) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (3) each participating bank or other entity shall be entitled to the benefit of the cost protection provisions contained in Sections 8.04, 8.05, 8.06, 8.08 and 8.09 hereof, except that all claims and petitions for payment and payments made pursuant to such Sections shall be made through such selling Bank and except that a participant shall not be entitled to receive pursuant to such provisions an amount larger than its share of the amount to which the selling Bank would have been entitled had no such sale been made, and (iv) the Borrowers, the Agent and the other Banks shall continue to deal solely and directly with such selling Bank in connection with such Bank's rights and obligations under this Loan Agreement, and such Bank shall retain EX-91 the sole right (and participating banks or other entities shall have no right) to enforce the obligations of any Credit Party under the Loan Documents and to approve any amendment, modification or waiver of any provision of this Loan Agreement or any of the other Loan Documents (other than amendments, modifications or waivers requiring, pursuant to the terms of Section 16.05 hereof, unanimous consent of the Lenders). (c) Any Bank may pledge all or any portion of its rights under this Loan Agreement, its Notes and/or its Money Market Note to a Federal Reserve Bank. No such pledge shall release any Bank from its obligations hereunder or substitute any such Federal Reserve Bank for such Bank as a party hereto. 16.11 The term of this Loan Agreement shall be until the commitments of the Banks and of the LC Agent to make Extensions of Credit hereunder shall have terminated and the Banks have received payment in full of the unpaid principal and interest of the Notes, the Money Market Notes, the LC Reimbursement Obligations, the BA Reimbursement Obligations and all other amounts payable hereunder. 16.12 All obligations of the Borrowers hereunder and under the Notes and the Money Market Notes shall be joint and several obligations of the Borrowers. 16.13 All documents executed pursuant to the transactions contemplated herein including without limitation this Loan Agreement, the Notes, the Money Market Notes and the other Loan Documents shall be deemed to be contracts made under, and for all purposes shall be construed in accordance with, the internal laws and judicial decisions of the State of North Carolina. Each of the Borrowers hereby submits to the nonexclusive jurisdiction and venue of the state and federal courts of North Carolina for the purpose of resolving disputes hereunder or under the other Loan Documents or for the purposes of collection. Each of the Borrowers hereby agrees that both the federal and state courts in Mecklenburg County, North Carolina are a convenient forum and agrees not to raise as a defense that such courts are not a convenient forum. 16.14 The payment of the indebtedness of the Borrowers to the Banks hereunder and under the Notes and the Money Market Notes is senior to the payment of the indebtedness of the Borrowers under the Senior Subordinated Note Purchase Agreements and each Note Guaranty (as defined in the Senior Subordinated Note Purchase Agreements) in accordance with the terms thereof. 16.15 Wherever in this Loan Agreement the conversion of an amount in any foreign currency into its U.S. currency equivalent is required, such U.S. currency equivalent amount shall be realized by using the exchange rate for such foreign currency as set forth in the Wall Street Journal published on the date on which a computation thereof is required to be made hereunder, or if the Wall Street Journal is not published on such date of computation, then as set forth in the most recently published issue of the Wall Street Journal as of such date. 16.16 Promptly following the Closing Date, each Bank which was a party to the Prior Loan Agreement shall return to Airgas all promissory notes delivered to such Bank in connection with the Prior Loan Agreement. 16.17 Nothing contained herein shall be deemed to limit the right of any Bank (or any of its affiliates) to make loans to, accept deposits from and generally engage in any kind of business with any Credit Party. EX-92 16.18 The Borrowers hereby agree that all payments and prepayments of principal, interest and fees required to be made hereunder or under any of the other Loan Documents shall be without deduction for or on account of any present or future taxes, duties or other charges levied or imposed by any foreign nation or any political subdivision or taxing authority thereof. [The remainder of this page has been left blank intentionally.] EX-93 IN WITNESS WHEREOF, each of the parties hereto has caused this Sixth Amended and Restated Loan Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written. AIRGAS, INC. By: /s/Britton H. Murdoch _____________________________________ Britton H. Murdoch Vice President AIRGAS HOLDINGS, INC. By: /s/Britton H. Murdoch _____________________________________ Britton H. Murdoch Vice President (Signatures Continued) EX-94 NATIONSBANK OF NORTH CAROLINA, N.A. By: /s/Michael A. Crabb, III _________________________________ Title: Vice President ______________________________ THE BANK OF NEW YORK By: /s/Michael Flannery _________________________________ Title: Vice President ______________________________ FIRST FIDELITY BANK, N.A. By: /s/Carl Goelz _________________________________ Title: Vice President ______________________________ PHILADELPHIA NATIONAL BANK, INCORPORATED AS CORESTATES BANK, NA By: /s/Matthew T. Panarese _________________________________ Title: Vice President ______________________________ CONTINENTAL BANK By: /s/Russ Covode _________________________________ Title: Vice President ______________________________ MERIDIAN BANK By: /s/David Mills _________________________________ Title: Vice President ______________________________ (Signatures Continued) EX-95 NBD BANK, N.A. By: /s/Nancy Russell _________________________________ Title: Vice President ______________________________ CIBC INC. By: /s/Paul T. LaHiff, Jr. _________________________________ Title: Vice President ______________________________ PNC BANK, NATIONAL ASSOCIATION By: /s/H. Todd Dissinger _________________________________ Title: Vice President ______________________________ NATIONSBANK OF NORTH CAROLINA, N.A., as Agent for the Banks By: /s/Michael A. Crabb, III _________________________________ Title: Vice President ______________________________ EX-4 7 EXHIBIT 4.2- AMENDMENT NO. 1 TO EXHIBIT 4.1 EX-96 AMENDMENT NO. 1 TO SIXTH AMENDED AND RESTATED LOAN AGREEMENT THIS AMENDMENT NO. 1 TO SIXTH AMENDED AND RESTATED LOAN AGREEMENT (the "Amendment"), dated as of November 8, 1994, is by and among AIRGAS, INC., a Delaware corporation with its principal place of business in Wilmington, Delaware ("Airgas"); and AIRGAS HOLDINGS, INC., a Delaware corporation with its principal place of business in Wilmington, Delaware ("Holdings" - Airgas and Holdings may be referred to individually herein as a "Borrower" and collectively as the "Borrowers"); NATIONSBANK OF NORTH CAROLINA, N.A., a national banking association ("NationsBank"); THE BANK OF NEW YORK, a New York corporation ("BNY"); FIRST FIDELITY BANK, N.A., a national banking association ("Fidelity"); PHILADELPHIA NATIONAL BANK, INCORPORATED AS CORESTATES BANK, NA, a national banking association ("PNB"); BANK OF AMERICA ILLINOIS, an Illinois state bank ("BANK OF AMERICA"); MERIDIAN BANK, a Pennsylvania state bank ("Meridian"); NBD BANK, N.A., a national banking association ("NBD"); CIBC INC. , a Delaware corporation ("CIBC"); and PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC" - hereinafter, NationsBank, BNY, Fidelity, PNB, Bank of America, Meridian, NBD, CIBC and PNC may be referred to individually as a "Bank" and collectively as the "Banks"); and NATIONSBANK NATIONAL BANK OF NORTH CAROLINA, N.A., a national banking association (in its capacity as agent for the Banks, hereinafter referred to in such capacity as the "Agent"). W I T N E S S E T H : WHEREAS, pursuant to a Sixth Amended and Restated Loan Agreement dated as of August 30, 1994 (the "Existing Loan Agreement") among the Borrowers, the Banks and the Agent, the Banks have extended commitments to make certain credit facilities available to the Borrowers; and WHEREAS, the Borrowers desire to make certain amendments to the Existing Loan Agreement. NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereby agree as follows: EX-97 PART I DEFINITIONS SUBPART 1.1. Certain Definitions. Unless other- wise defined herein or the context otherwise requires, terms used in this Amendment, including its preamble and recitals, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof): "Amended Loan Agreement" means the Existing Loan Agreement as amended hereby. "Amendment Effective Date" is defined in Subpart 3.1 hereof. SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Amendment, including its preamble and recitals, have the meanings provided in the Amended Loan Agreement. PART II AMENDMENTS TO EXISTING LOAN AGREEMENT Effective on (and subject to the occurrence of) the Amendment Effective Date, the Existing Loan Agreement is hereby amended in accordance with this Part II. Except as so amended, the Existing Loan Agreement and all other Loan Documents shall continue in full force and effect. SUBPART 2.1. Amendments to Section 1.01. The definition of "Subordinated Debt" set forth in Section 1.01 of the Existing Loan Agreement is hereby amended to read in its entirety as follows: "Subordinated Debt" means (i) the indebtedness of up to $55,000,000.00 incurred by Airgas pursuant to the terms of the Senior Subordinated Note Purchase Agreements, the repayment of which is subordinated to the repayment of the indebtedness of Airgas to the Banks hereunder on terms described in the Senior Subordinated Note Purchase Agreements, (ii) indebtedness incurred by Airgas on substantially the terms and conditions as provided in the Confidential Direct Placement Memorandum set forth as Schedule 5 attached hereto and subordinated to the obligations of the Borrowers and the Guarantee Subsidiaries under the Loan Documents on terms substantially similar to the terms of subordination under the Subordinated Note Purchase Agreements, provided that no Event of Default specified in Article XIV hereof, nor any event which upon notice or lapse of time or both, would constitute such an Event of Default, exists immediately prior to or would exist immediately after such indebtedness is incurred, and (iii) additional subordinated indebtedness incurred by Airgas provided that (A) no Event of Default specified in Article XIV hereof, nor any event which upon notice or lapse of time or both, EX-98 would constitute such an Event of Default, exists immediately prior to or would exist immediately after such additional subordinated indebtedness is incurred and (B) all of the terms and conditions of such additional subordinated indebtedness (including the terms relating to the subordination of such indebtedness to the indebtedness of Airgas hereunder) are consented to by the Majority Banks prior to the time such indebtedness is incurred; provided, however, the aggregate outstanding principal balance of all indebtedness referred to in subsections (i), (ii) and (iii) of this definition shall not exceed $105,000,000.00 at any one time; SUBPART 2.2. Amendments to Section 13.01. Subsection (a), subsection (g) and subsection (y) of Section 13.01 of the Existing Loan Agreement are hereby amended to read in their entireties as follows: 13.01 Each of the Borrowers covenants and agrees with the Banks and the Agent that, so long as this Loan Agreement shall remain in effect or any Letter of Credit or Bankers' Acceptance shall be outstanding or the principal of or interest on any Note, Money Market Note, LC Reimbursement Obligation or BA Reimbursement Obligation or any other expense or amount payable hereunder remains unpaid, and until the Revolving Credit Loan Commitments are terminated and the Banks are no longer obligated to make any Letter of Credit Term Loans, without the prior written consent of the Majority Banks, it will not nor will it enter into any binding agreement to or permit any Subsidiary to: (a) incur, create, assume or permit to exist any indebtedness for borrowed money, however evidenced, or its equivalent, except (i) the Loans, the Letters of Credit (and the related LC Reimbursement Obligations), the Bankers' Acceptances (and the related BA Reimbursement Obligations) and the Money Market Loans; (ii) existing indebtedness set forth in Exhibit Q hereto (and renewals, refinancings or extensions (but not any increases in the outstanding principal amount) thereof on terms and conditions no less favorable to such Borrower or Subsidiary than the terms and conditions of such existing indebtedness); (iii) indebtedness evidenced by endorsement of negotiable instruments for collection and done in the ordinary course of business; (iv) the Subordinated Debt; EX-99 (v) unsecured indebtedness incurred in favor of the sellers of the companies described in Section 13.01(h)(iv) and (v) hereof in order to finance the acquisition of such companies; (vi) standby letters of credit (other than standby Letters of Credit issued pursuant to Section 5.01 hereof) provided that the full amount available to be drawn thereunder is at all times backed or secured by a Letter of Credit issued pursuant to Section 5.01 hereof; (vii) indebtedness of Airgas and Holdings of up to $100,000,000 arising under the Loan Agreement dated as of November 8, 1994 attached hereto as Schedule 4; and (viii) other present or future indebtedness of Airgas or any of its Subsidiaries, provided that the aggregate amount of such indebtedness at any time outstanding shall not exceed $20,000,000.00; provided, however, that nothing contained in this Section 13.01(a) or any other provision of this Loan Agreement shall prevent any Credit Party from entering into, as lessee, any real estate leases (other than capitalized leases) or operating leases of equipment in the ordinary course of such Credit Party's business; ************* (g) guarantee directly or indirectly the obligations of any Person except for (i) the guarantee of a Guarantee Subsidiary (A) pursuant to the Guaranty Agreement or (B) of any indebtedness permitted under Section 13.01(a)(vii) hereof, (ii) endorsements of negotiable instruments in the ordinary course of business, (iii) the unsecured guarantee by Airgas of any indebtedness permitted under Section 13.01(a) hereof and (iv) additional guarantees provided that at no time shall (A) the sum of (1) the aggregate outstanding principal amount guaranteed pursuant to all such guarantees permitted under this clause (iv), plus (2) the aggregate fair market value of all assets contributed to the REIT by Airgas and its Subsidiaries as permitted under Section 13.01(d)(ii) hereof and the aggregate amount of investments (other than asset contributions otherwise permitted by Section 13.01(d)(ii) hereof) made in the REIT as permitted under Section 13.01(h)(vii) hereof, plus (3) the aggregate outstanding amount of investments permitted under Section 13.01(h)(vi) hereof, plus (4) the aggregate outstanding principal amount of loans and advances permitted under Section 13.01(k)(iii) hereof, plus (5) the aggregate outstanding amount of EX-100 investments permitted under Section 13.01(m)(ii) hereof, exceed (B) 20% of Book Net Worth as of the end of the then immediately preceding fiscal quarter; ************* (y) cause (i) each of Mauritius Industrial Gases, Inc. and Airgas Polska sp. z oo at such time as any such Subsidiary shall have total assets of at least $3,000,000 and (ii) each other Subsidiary hereafter acquired by any Credit Party prior to the Maturity Date (A) to become a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement and (B) to deliver to the Agent such other documentation as the Agent may reasonably request in connection with the foregoing, including, without limitation, certified corporate resolutions and other corporate documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the obligations of such Subsidiary under the Guaranty Agreement); provided, however, with respect to any such Subsidiary described above which is a Canadian Subsidiary (1) such Canadian Subsidiary shall not be obligated to so guarantee the obligations of the Borrowers during the 90 day period immediately succeeding the date of acquisition of such Canadian Subsidiary and (2) if, subsequent to such Canadian Subsidiary becoming a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement, any Canadian Lender has agreed to provide financing to such Canadian Subsidiary to provide for the working capital, capital expenditure, acquisition costs and/or letter of credit needs of such Canadian Subsidiary, then, promptly upon the request of the Borrowers, the Agent (on behalf of the Banks) shall thereupon release such Canadian Subsidiary from the Guaranty Agreement. SUBPART 2.3. Amendments to Section 13A.01. Section 13A.01 of the Existing Loan Agreement is hereby amended to read in its entirety as follows: 13A.01 The covenants of Airgas (i) contained in Section 10 of each of the Senior Subordinated Note Purchase Agreements, as such covenants may be amended or modified from time to time and (ii) contained in any documentation evidencing or executed in connection with any other Subordinated Debt as such documents may be amended or modified from time to time (collectively, the "Incorporated Covenants"), are (until termination of the applicable Subordinated Note Purchase Agreement or the applicable documentation evidencing or executed in connection with such other Subordinated Debt, as the case may be) hereby incorporated herein by reference and shall be as binding on the Borrowers as if set forth fully herein. EX-101 SUBPART 2.4. Replacement of Schedule 4. Existing Schedule 4 to the Existing Loan Agreement is deleted in its entirety and a new schedule in the form of Schedule 4 attached hereto is added to the Existing Loan Agreement in replacement therefor and substitution thereof. SUBPART 2.5. New Schedule 5. A new schedule in the form of Schedule 5 is added to the Existing Loan Agreement immediately following existing Schedule 4 attached thereto. PART III CONDITIONS TO EFFECTIVENESS SUBPART 3.1. Amendment Effective Date. This Amendment shall be and become effective as of the date hereof (the "Amendment Effective Date") when the Agent shall have received counterparts of this Amendment, each of which shall have been duly executed on behalf of the Borrowers and the Majority Banks. The Banks hereby acknowledge and agree that no amendment fee shall be payable pursuant to Section 16.04 of the Existing Credit Agreement in connection with this Amendment. PART IV MISCELLANEOUS SUBPART 4.1. Cross-References. References in this Amendment to any Part or Subpart are, unless otherwise specified, to such Part or Subpart of this Amendment. SUBPART 4.2. Instrument Pursuant to Existing Loan Agreement. This Amendment is a Loan Document executed pursuant to the Existing Loan Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Existing Loan Agreement. SUBPART 4.3. References in Other Loan Documents. At such time as this Amendment shall become effective pursuant to the terms of Subpart 3.1 hereof, all references in the Loan Documents to the "Loan Agreement" shall be deemed to refer to the Loan Agreement as amended by this Amendment. SUBPART 4.4. Expenses. The Borrowers agree to pay all reasonable out-of-pocket expenses (including fees and expenses of counsel) incurred by the Agent in connection with the preparation, execution and delivery of this Amendment. SUBPART 4.5. Counterparts, Effectiveness, Etc. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. EX-102 SUBPART 4.6. Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA. [The remainder of this page has been left blank intentionally.] EX-103 IN WITNESS WHEREOF, each of the parties hereto has caused this First Amendment to be duly executed by their duly authorized officers, all as of the day and year first above written. AIRGAS, INC. By /s/Britton H. Murdoch ________________________________ Britton H. Murdoch Vice President AIRGAS HOLDINGS, INC. By /s/Britton H. Murdoch ________________________________ Britton H. Murdoch Vice President (Signatures Continued) EX-104 NATIONSBANK OF NORTH CAROLINA, N.A. By: /s/M. Gregory Seaton ____________________________ Title: Vice President ____________________________ THE BANK OF NEW YORK By: /s/Michael V. Flannery ____________________________ Title: Vice President ____________________________ FIRST FIDELITY BANK, N.A. By: /s/Carl Goelz ____________________________ Title: Vice President ____________________________ PHILADELPHIA NATIONAL BANK, INCORPORATED AS CORESTATES BANK, NA By: /s/Matthew T. Panarese ____________________________ Title: Vice President ____________________________ BANK OF AMERICA ILLINOIS By: /s/Nancy J. McGaw ____________________________ Title: Vice President ____________________________ MERIDIAN BANK By: /s/Patrick B. Trainor ____________________________ Title: Assistant Vice President ____________________________ [Signatures continued] EX-105 NBD BANK, N.A. By: /s/John W. Fischer, III ____________________________ Title: Senior Vice President ____________________________ CIBC INC. By: /s/Paul T. LaHiff, Jr. ____________________________ Title: Vice President ____________________________ PNC BANK, NATIONAL ASSOCIATION By: /s/H. Todd Dissinger ____________________________ Title: Vice President ____________________________ NATIONSBANK OF NORTH CAROLINA, N.A., as Agent for the Banks By: /s/M. Gregory Seaton ____________________________ Title: Vice President ____________________________ [Signatures continued] EX-106 The undersigned, as Guarantee Subsidiaries under the Guaranty Agreement dated as of August 30, 1994 executed by each of the undersigned in favor of the Agent and the Banks referred to above for the benefit of the Borrowers referred to above, hereby acknowledge and consent to the terms of the foregoing Amendment No. 1 to Sixth Amended and Restated Loan Agreement. AIRGAS BREATHING AIR SYSTEMS, INC. AIRGAS HOLDINGS CANADA LIMITED AIRGAS INTERNATIONAL, INC. AIRGAS MANAGEMENT, INC. AIRGAS NEW ENGLAND REAL ESTATE, INC. AIRGAS REALTY, INC. AMERICAN CARBIDE AND CARBON CORPORATION (d/b/a MIDWEST CARBIDE) BAY AIRGAS, INC. CASCADE AIRGAS, INC. CRYODYNE TECHNOLOGIES, INC. CYLINDER LEASING CORP. EMPIRE AIRGAS, INC. FLORIDA AIRGAS, INC. G.S. PARSONS, CO. GREAT LAKES AIRGAS, INC. GREAT WESTERN AIRGAS, INC. GULF STATES AIRGAS, INC. INDUSTRIAL GASES OF WICHITA, INC. KEYSTONE AIRGAS, INC. LONE STAR AIRGAS, INC. MICHIGAN AIRGAS, INC. MIDAMERICA AIRGAS, INC. MIDAMERICA HOLDINGS, INC. MIDWEST AIRGAS, INC. MOUNTAIN AIRGAS, INC. NITROUS OXIDE CORP. NORTHEAST AIRGAS, INC. NORTHERN GASES, INC. PACIFIC AIRGAS, INC. POST AIRGAS, INC. POTOMAC AIRGAS, INC. RANGE ARC, INC. SIERRA AIRGAS, INC. SOONER AIRGAS, INC. SOUTHEAST AIRGAS, INC. SOUTHERN CALIFORNIA AIRGAS, INC. SPECIALTY PRODUCTS AND EQUIPMENT, INC. US AIRGAS, INC. VIRGINIA WELDING SUPPLY CO. WESTWIND COMPANY By /s/Britton H. Murdoch _____________________________________ Britton H. Murdoch Vice President of each of the Companies listed above EX-107 SCHEDULE 4 [Loan Documents for $100,000,000 Revolving Credit Facility] EX-108 SCHEDULE 5 [Summary of Terms and Conditions for New Subordinated Debt] EX-4 8 EXHIBIT 4.3-NEW LOAN FACILITY EX-109 LOAN AGREEMENT DATED AS OF NOVEMBER 8, 1994 BY AND AMONG AIRGAS, INC. AND AIRGAS HOLDINGS, INC. AS BORROWERS, THE BANKS NAMED HEREIN, NATIONSBANK OF NORTH CAROLINA, N.A., AS STRUCTURING AND DOCUMENTATION AGENT, AND THE BANK OF NEW YORK, AS ADMINISTRATIVE AGENT EX-110 Table of Contents Section Title Page ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . 1 1.01 Definitions . . . . . . . . . . . . . . . . . . . 1 1.02 Incorporated Definitions. . . . . . . . . . . . . 5 1.03 Accounting Terms. . . . . . . . . . . . . . . . . 6 ARTICLE II LOANS . . . . . . . . . . . . . . . . . . . . . . 6 2.01 Loans . . . . . . . . . . . . . . . . . . . . . . 6 2.02 (a) Minimum Amounts. . . . . . . . . . . . . . . 6 (b) Types of Loans . . . . . . . . . . . . . . . 6 (c) Notice . . . . . . . . . . . . . . . . . . . 7 (d) Limitation on Numbers of Eurodollar Loans . . . . . . . . . . . . . 7 2.03 Notes . . . . . . . . . . . . . . . . . . . . . . 7 2.04 Loan Interest Rates . . . . . . . . . . . . . . . 8 2.05 (a) Commitment Fee . . . . . . . . . . . . . . . 8 (b) Reduction of Loan Commitments. . . . . . . . 8 ARTICLE III ADDITIONAL PROVISIONS REGARDING LOANS . . . . . . 9 3.01 Additional Interest Rate Provisions . . . . . . . 9 (a) Default Rate . . . . . . . . . . . . . . . . 9 (b) LIBOR Base Rate Unascertainable. . . . . . . 9 3.02 Conversion and Continuation of Loans. . . . . . .10 3.03 Prepayments . . . . . . . . . . . . . . . . . . .11 3.04 Additional Costs. . . . . . . . . . . . . . . . .12 3.05 Changes in Laws or Regulations. . . . . . . . . .14 3.06 Compensations . . . . . . . . . . . . . . . . . .14 3.07 Payments and Prepayments. . . . . . . . . . . . .15 3.08 Capital Adequacy Protection . . . . . . . . . . .15 3.09 Limitation of Liability of Holdings . . . . . . .16 ARTICLE IV CONDITIONS PRECEDENT AS OF CLOSING DATE . . . . .16 4.01 Conditions Precedent to Initial Loans . . . . . .16 ARTICLE V CONDITIONS OF LENDING . . . . . . . . . . . . . .17 5.01 Conditions of Lending . . . . . . . . . . . . . .17 5.02 Commitment Limitation; Reaffirmation. . . . . . .18 ARTICLE VI REPRESENTATIONS AND WARRANTIES. . . . . . . . . .18 6.01 Representations and Warranties. . . . . . . . . .18 (a) Incorporation. . . . . . . . . . . . . . . .18 (b) Power and Authority to Own Properties and Assets . . . . . . .18 (c) Power and Authority to Execute, Deliver and Perform the Loan Documents . .18 (d) Loan Documents Valid and Binding Obligations. . . . . . . . . . . . . . . .18 (e) Execution, Delivery and Performance. . . . .18 (f) Subsidiaries . . . . . . . . . . . . . . . .19 EX-111 (g) Interests in Other Persons . . . . . . . . .19 (h) Audited Balance Sheet. . . . . . . . . . . .19 (i) Margin Stock; Regs G, U, T and X . . . . . .19 (j) No Governmental Approvals. . . . . . . . . .19 6.02 Incorporated Representations and Warranties From Existing Loan Agreement. . . . . . . . . .20 ARTICLE VII COVENANTS . . . . . . . . . . . . . . . . . . . .20 7.01 Covenants . . . . . . . . . . . . . . . . . . . .20 (a) Use of Loan Proceeds . . . . . . . . . . . .20 (b) Indemnification. . . . . . . . . . . . . . .20 (c) Notice of Event of Default . . . . . . . . .21 (d) Agents' Fees . . . . . . . . . . . . . . . .21 (e) Further Assurances . . . . . . . . . . . . .21 (f) New Subsidiaries . . . . . . . . . . . . . .21 7.02 Incorporated Covenants From Existing Loan Agreements. . . . . . . . . . . .22 7.03 Incorporation of Subordinated Debt Covenants. . .22 ARTICLE VIII EVENTS OF DEFAULT AND ACCELERATION. . . . . . . .23 8.01 Events of Default; Acceleration . . . . . . . . .23 ARTICLE IX THE ADMINISTRATIVE AGENT. . . . . . . . . . . . .24 9.01 Appointment and Authorization . . . . . . . . . .24 9.02 Reliance. . . . . . . . . . . . . . . . . . . . .25 9.03 Responsibilities. . . . . . . . . . . . . . . . .25 9.04 Reliance Upon Communications. . . . . . . . . . .25 9.05 Event of Default. . . . . . . . . . . . . . . . .26 9.06 No Representations. . . . . . . . . . . . . . . .26 9.07 Indemnification . . . . . . . . . . . . . . . . .27 9.08 Dealings with Credit Parties. . . . . . . . . . .27 9.09 Resignation . . . . . . . . . . . . . . . . . . .27 9.10 Agent . . . . . . . . . . . . . . . . . . . . . .28 ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . .28 10.01 Notices . . . . . . . . . . . . . . . . . . . . .28 10.02 Waiver. . . . . . . . . . . . . . . . . . . . . .29 10.03 Survival. . . . . . . . . . . . . . . . . . . . .29 10.04 Costs . . . . . . . . . . . . . . . . . . . . . .29 10.05 Amendments. . . . . . . . . . . . . . . . . . . .29 10.06 Year . . . . . . . . . . . . . . . . . . . . . .30 10.07 Set-Off . . . . . . . . . . . . . . . . . . . . .30 10.08 Payment on Business Day . . . . . . . . . . . . .31 10.09 Counterparts. . . . . . . . . . . . . . . . . . .31 10.10 Assignment. . . . . . . . . . . . . . . . . . . .31 10.11 Term . . . . . . . . . . . . . . . . . . . . . .32 10.12 Joint and Several Obligations of Borrowers. . . .32 10.13 Governing Law; Severability; Merger . . . . . . .32 10.14 Priority of Loans . . . . . . . . . . . . . . . .33 10.15 Dealings by Banks With Credit Parties . . . . . .33 10.16 No Deduction for Foreign Taxes. . . . . . . . . .33 EX-112 Exhibits Exhibit A Bank Commitments Exhibit B Form of Guaranty Agreement Exhibit C Form of Guaranty Joinder Agreement Exhibit D Form of Note Exhibit E Form of Legal Opinion of Counsel to Borrowers and Guarantee Subsidiaries Exhibit F Subsidiaries Exhibit G Interests in Other Persons Exhibit H Existing Indebtedness EX-113 LOAN AGREEMENT THIS LOAN AGREEMENT, dated as of November 8, 1994 (the "Loan Agreement"), is made by and among AIRGAS, INC., a Delaware corporation ("Airgas"); and AIRGAS HOLDINGS, INC., a Delaware corporation ("Holdings" - Airgas and Holdings may be referred to individually herein as a "Borrower" and collectively as the "Borrowers"); NATIONSBANK OF NORTH CAROLINA, N.A., a national banking association ("NationsBank"); THE BANK OF NEW YORK, a New York corporation ("BNY" - hereinafter NationsBank and BNY, together with their respective successors and assigns, may be referred individually as a "Bank" and collectively as the "Banks"); NATIONSBANK OF NORTH CAROLINA, N.A., a national banking association (in its capacity as structuring and documentation agent, hereinafter referred to in such capacity as the "Agent"); and THE BANK OF NEW YORK, a New York corporation (in its capacity as administrative agent for the Banks, hereinafter referred to in such capacity as the "Administrative Agent"). RECITALS: A. The Borrowers have requested that the Banks provide the Borrowers with a $100,000,000.00 credit facility for the purposes of (i) financing the acquisition of new Subsidiaries, (ii) financing other investments permitted under this Loan Agreement and (iii) satisfying capital expenditure and working capital needs of the Borrowers and the Guarantee Subsidiaries. B. The Banks have agreed to provide the requested credit facility to the Borrowers on the terms and conditions hereinafter set forth. NOW, THEREFORE, the Borrowers, the Agent, the Administrative Agent and the Banks agree as follows: ARTICLE I Definitions 1.01 For the purposes hereof: "Adjusted Net Worth" means, as of any date of determination thereof, the excess of (i) the amount of the "present fair saleable value" of the assets of Holdings as of such date of determination, over (ii) the amount of all "liabilities, contingent or otherwise", of Holdings as of such date of determination, as such quoted terms are determined in accordance with applicable Federal and state laws governing determinations of the insolvency of debtors. In determining the Adjusted Net Worth for purposes of calculating Holdings' Maximum Obligated Amount in respect of any Loan, the liabilities of Holdings to be used in such determination pursuant to clause (ii) of the preceding sentence shall in any event include the liabilities of Holdings hereunder in respect of all Loans other than the Loan in respect of which such calculation is being made; EX-114 "Applicable Margin" means, with respect to any Eurodollar Loan, (i) for each day of the Interest Period for such Eurodollar Loan occurring during the period from the Closing Date through and including August 31, 1995, 1/2%, and (ii) for each day of the Interest Period for such Eurodollar Loan occurring on and after September 1, 1995, 3/4%; "Borrowers' Obligations" means, without duplication, the obligations of the Borrowers to the Banks, the Agent and the Administrative Agent (including the obligations to pay principal of and interest on the Loans and to pay all fees and other amounts payable by the Borrowers) hereunder and under the Notes; "Business Day" means any day not a Saturday, Sunday or legal holiday on which each of the Banks is open for business; provided, however, that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London Interbank Market; "Closing Date" means the date as of which this Loan Agreement is executed by the Borrowers, the Banks, the Agent and the Administrative Agent and all of the conditions precedent set forth in Article IV hereof have been satisfied; "Commitment", for each Bank, means the commitment of such Bank to make Loans in a maximum principal amount equal to the amount set forth beside the name of such Bank on Exhibit A hereto, as the same may be reduced from time to time in accordance with the terms of Section 2.05(b) hereof; "Commitment Fee" has the meaning assigned to such term in Section 2.05(a) hereof; "Credit Party" means any of the Borrowers and the Guarantee Subsidiaries; "Eurodollar Loan" means a Loan bearing interest based on the LIBOR Base Rate; "Event of Default" has the meaning given to said term in Section 8.01 hereof; "Existing Loan Agreement" means that certain Sixth Amended and Restated Loan Agreement dated as of August 30, 1994, as amended as of the date hereof, by and among the Borrowers, the banks parties thereto and NationsBank, as agent for such banks; "Federal Funds Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions, with members of the Federal Reserve System only, arranged by Federal funds brokers, as published for such day by the Federal Reserve Bank of New York (or, in the absence of such publication, as reasonably determined by the Administrative Agent); "Guarantee Subsidiary" means each of the direct and indirect Subsidiaries of Airgas which is a party to the Guaranty Agreement, including each direct or indirect Subsidiary of Airgas which becomes a party to the Guaranty Agreement pursuant to a Guaranty Joinder Agreement; "Guaranty Agreement" means the Guaranty Agreement in the form of Exhibit B attached hereto; EX-115 "Guaranty Joinder Agreement" means a Guaranty Joinder Agreement substantially in the form of Exhibit C attached hereto; "Holdings' Maximum Obligated Amount" means, as of any date of determination thereof, the sum of (i) with respect to each Loan (or portion thereof) which is used (or the proceeds of which are used) to make a Valuable Transfer, the outstanding amount of such Loan (or such portion thereof) as of such date, plus (ii) with respect to each Loan (or portion thereof) which is not used (or the proceeds of which are not used) to make a Valuable Transfer, the lesser of (a) the outstanding amount of such Loan (or such portion thereof) as of such date of determination or (b) the greater of (1) 95% of the Adjusted Net Worth at the time of such Loan or (2) 95% of the Adjusted Net Worth as of such date; "Incorporated Covenants" has the meaning assigned to such term in Section 7.02 hereof; "Incorporated Definitions" has the meaning assigned to such term in Section 1.02 hereof; "Incorporated Events of Default" has the meaning assigned to such term in Section 8.01(e) hereof; "Incorporated Representations and Warranties" has the meaning assigned to such term in Section 6.01 hereof; "Interest Payment Date" means, (i) as to any Eurodollar Loan having an Interest Period of 1, 2 or 3 months, the last day of such Interest Period, (ii) as to any Eurodollar Loan having an Interest Period longer than 3 months, the last day of June, September, December and March in each year and the last day of such Interest Period, and (iii) as to any Prime Loan, the last day of March, June, September and December in each year. If any Interest Payment Date falls on a day which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day (unless the same would fall in a succeeding month, in which case such Interest Payment Date shall be deemed to be the first preceding Business Day); "Interest Period" means, as to any Eurodollar Loan, the period commencing on the date of such Eurodollar Loan and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrowers may elect; provided, however, that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) no Interest Period shall end later than the Termination Date; "LIBOR Base Rate" means the rate at which deposits in the requested aggregate amount and maturity are offered to BNY by prime banks in the London Interbank Market as of 11:00 a.m. London time, on the second Business Day prior to the applicable Interest Period, such rate being adjusted for the cost of reserve requirements as prescribed by the Board of Governors of the Federal Reserve System; "Loan" means a loan made pursuant to Sections 2.01 and 2.02 hereof; EX-116 "Loan Documents" means this Loan Agreement, the Notes and the Guaranty Agreement (together with any Guaranty Joinder Agreement); "Majority Banks" means, at any time, (i) the holders of at least 67% of the aggregate unpaid principal amount of the Notes at such time, or (ii) if no amounts are outstanding under any of the Notes, Banks having at least 67% of the aggregate amount of the Commitments at such time; "Note" or "Notes" means a promissory note or promissory notes, as the case may be, of the Borrowers, executed and delivered as provided in Section 2.03 hereof; "Prime Loan" means a Loan bearing interest based on the Prime Rate; "Prime Rate" means the rate of interest per annum as announced publicly in New York City by BNY as its prime commercial lending rate in effect from time to time, which is not necessarily the best or lowest rate of interest offered by BNY to its customers; "Subordinated Debt" means (i) the indebtedness of up to $55,000,000.00 incurred by Airgas pursuant to the terms of the Senior Subordinated Note Purchase Agreements, the repayment of which is subordinated to the repayment of the indebtedness of Airgas to the Banks hereunder on terms described in the Senior Subordinated Note Purchase Agreements, (ii) indebtedness incurred by Airgas on substantially the terms and conditions as provided in the Confidential Direct Placement Memorandum set forth as Schedule 5 attached hereto and subordinated to the obligations of the Borrowers and the Guarantee Subsidiaries under the Loan Documents on terms substantially similar to the terms of subordination under the Subordinated Note Purchase Agreements, provided that no Event of Default specified in Article VIII hereof, nor any event which upon notice or lapse of time or both, would constitute such an Event of Default, exists immediately prior to or would exist immediately after such indebtedness is incurred, and (iii) additional subordinated indebtedness incurred by Airgas provided that (A) no Event of Default specified in Article VIII hereof, nor any event which upon notice or lapse of time or both, would constitute such an Event of Default, exists immediately prior to or would exist immediately after such additional subordinated indebtedness is incurred and (B) all of the terms and conditions of such additional subordinated indebtedness (including the terms relating to the subordination of such indebtedness to the indebtedness of Airgas hereunder) are consented to by the Majority Banks prior to the time such indebtedness is incurred; provided, however, the aggregate outstanding principal balance of all indebtedness referred to in subsections (i), (ii) and (iii) of this definition shall not exceed $105,000,000.00 at any one time; "Termination Date" means July 1, 1996; "Unutilized Commitments" means, at any time, the excess of (i) the aggregate Commitments at such time over (ii) the aggregate outstanding principal balance of the Loans at such time; and "Valuable Transfer" means (i) all loans, advances or capital contributions made to or for the benefit of Holdings with any Loan (or with any proceeds thereof), (ii) all debt securities or other obligations of Holdings acquired from Holdings, retired by Holdings or collateralized by Holdings with any Loan (or with any proceeds thereof), (iii) the fair market value of all property acquired with any Loan (or with any proceeds thereof) and transferred, absolutely and not as collateral, to Holdings and (iv) all EX-117 equity securities of Holdings acquired from Holdings with any Loan (or with any proceeds thereof). 1.02 All capitalized terms not otherwise defined herein shall have the respective meanings assigned to such terms in the Existing Loan Agreement, as in effect as of the date hereof (the "Incorporated Definitions"). The incorporation by reference to the Existing Loan Agreement of the Incorporated Definitions pursuant to this Section 1.02 shall survive the termination of the Existing Loan Agreement. For purposes of the incorporation of the Incorporated Definitions pursuant to this Section 1.02, all references in the Incorporated Definitions to the "Agent" shall be deemed to refer to the Administrative Agent hereunder, all references in the Incorporated Definitions to a "Bank" or the "Banks" shall be deemed to refer to one or more of the Banks hereunder, all references in the Incorporated Definitions to the "Majority Banks" shall be deemed to refer to the Majority Banks hereunder, all references in the Incorporated Definitions to a "Guarantee Subsidiary" or the "Guarantee Subsidiaries" shall be deemed to refer to one or more of the Guarantee Subsidiaries hereunder, all references in the Incorporated Definitions to the "Loan Agreement," or any similar references, shall be deemed to refer to this Loan Agreement, all references in the Incorporated Definitions to a "Note" or the "Notes" shall be deemed to refer to one or more of the Notes issued pursuant to Section 2.03 hereof and all references in the Incorporated Definitions to a "Loan Document" or the "Loan Documents," or any similar references, shall be deemed to refer to one or more of the Loan Documents as defined in Section 1.01 hereof. 1.03 All accounting terms not specifically defined herein shall be construed in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. ARTICLE II Revolving Loans 2.01 Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make Loans to the Borrowers, or either of them, at any time or from time to time on or after the date hereof and until the Termination Date, in an aggregate principal amount at any time outstanding not exceeding the amount of its then applicable Commitment; provided that, at no time shall the aggregate principal balance of all outstanding Loans made by all of the Banks exceed the aggregate Commitments of all of the Banks. The Borrowers may borrow, repay and reborrow hereunder on or after the date hereof and prior to the Termination Date, subject to the terms, provisions and limitations set forth herein. 2.02 (a) The Loans made by the Banks on any one date shall be in a minimum aggregate principal amount of $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof. Loans shall be made ratably from the Banks in accordance with their respective Commitments; provided, however, that the failure of any Bank to make its Loan shall not in itself relieve any other Bank of its obligation to lend hereunder. The initial Loan by each Bank shall be made against delivery to such Bank of an appropriate Note, payable to the order of such Bank, as referred to in Section 2.03 hereof. In the event any Bank shall fail to make a Loan to the Borrowers in accordance with the terms hereof, any other Bank may, but shall not be obligated to, make such Loan to the Borrowers. EX-118 (b) Each Loan shall be either a Eurodollar Loan or a Prime Loan (or a combination thereof) as the Borrowers may request subject to and in accordance with this Section. Subject to other provisions of this Section and the provisions of Section 3.02 hereof, Loans of more than one type may be outstanding at the same time. (c) The Borrowers shall give the Administrative Agent prior written, telefax or telephonic notice, no later than the Business Day of the proposed borrowing in the case of a Prime Loan, and no later than three Business Days prior to the Business Day of the proposed borrowing in the case of a Eurodollar Loan, of each borrowing under Section 2.01 hereof. In each case, such notice shall be irrevocable and shall specify the aggregate amount of the proposed borrowing and the date thereof (which shall be a Business Day). Such notice, to be effective, must be received by the Administrative Agent not later than 10:00 a.m. (or 11:00 a.m. with respect to a Eurodollar Loan), New York City time, on the Business Day specified for a borrowing consisting of a Prime Loan and on the third Business Day prior to the date specified for a borrowing consisting of a Eurodollar Loan. Such notice shall specify whether the Loan then being requested is to be (or what portion or portions thereof are to be) a Prime Loan or a Eurodollar Loan and, if such Loan or any portion or portions thereof is to be a Eurodollar Loan, the Interest Period with respect thereto. If no election is specified in such notice, such Loan (or the portion thereof as to which no election is specified) shall be a Prime Loan. The Administrative Agent shall promptly on the same day provide the Banks notice that it has received notice from the Borrowers pursuant to this paragraph. On the borrowing date specified in such notice, each Bank shall make its ratable share of the borrowing available to the Borrowers at Bank of New York ABA No. 021-0000-18 Agency Function Administration Account No. 8900065508 reference: Airgas, Inc., no later than 3:00 p.m., New York City time, in Federal or other immediately available funds. (d) Notwithstanding any provision to the contrary in this Loan Agreement, the Borrowers shall not in any notice of borrowing under this Section 2.02 request any Eurodollar Loan which, if made, would result in an aggregate of more than nine (9) separate Eurodollar Loans of any Bank being outstanding hereunder at any one time. For purposes of the foregoing, (i) Eurodollar Loans made ratably by the Banks pursuant to a discrete borrowing, conversion or continuation request shall be considered a single Loan and (ii) Eurodollar Loans having different Interest Periods, regardless of whether they commence or expire on the same date, shall be considered separate Loans. The Borrowers may continue any Eurodollar Loan, or convert all or any part of any Prime Loans or Eurodollar Loans into Loans of another type, in accordance with Section 3.02 hereof and subject to the limitations set forth therein. 2.03 The Loans by each Bank shall be evidenced by a Note duly executed on behalf of each of the Borrowers, dated the date hereof, in substantially the form of Exhibit D attached hereto, payable to the order of such Bank in a principal amount equal to the Commitment of such Bank. Each Note shall bear interest from its date on the outstanding principal balance thereof as set forth in Section 2.04 hereof. The aggregate unpaid principal amount of the Loans of each Bank at any time shall be the principal amount owing on the Note of such Bank at such time. The principal amount of each Loan, as evidenced by a Note, shall be due and payable on the Termination Date. All accrued and unpaid interest on the outstanding principal balance of each Note shall be payable as provided in Section 2.04 and Section 3.03(c) hereof; provided that, if any such day is not a Business Day, such interest shall be payable on the next succeeding Business Day (unless, in case of a Eurodollar Loan, the same would fall in a succeeding month, in which case such principal shall be EX-119 payable on the first preceding Business Day). All payments under the Notes shall be made in accordance with Section 3.07 hereof. 2.04 (a) Subject to the provisions of Section 3.01 hereof, each Prime Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the Prime Rate. Interest shall be payable on each Prime Loan quarterly on each Interest Payment Date, commencing with the first of such dates to occur after the date of such Prime Loan, and on the Termination Date or the date of conversion of such Prime Loan to a Eurodollar Loan. (b) Subject to the provisions of Section 3.01 hereof, each Eurodollar Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the LIBOR Base Rate plus the Applicable Margin. Interest shall be payable on each Eurodollar Loan on each applicable Interest Payment Date, and on the Termination Date, the date of conversion of such Eurodollar Loan to a Prime Loan or the date of continuation of such Eurodollar Loan for a subsequent Interest Period. The Administrative Agent shall determine the applicable LIBOR Base Rate for each Interest Period at 11:00 a.m., London time, or as soon as practicable thereafter, on the date when such determination is to be made in respect of such Interest Period and shall promptly and on the same day notify the Borrowers and the Banks of the LIBOR Base Rate so determined. Such determination shall be conclusive absent manifest error. 2.05 (a) The Borrowers jointly and severally agree to pay in immediately available funds to the Administrative Agent (without offset or counterclaim), for the account of the Banks, in consideration of the Commitments hereunder, on the last day of each June, September, December and March, commencing with the first such date after the date hereof, and on the date of any reduction or termination of the Commitments of the Banks hereunder, a commitment fee (hereinafter called for the purpose of this Section 2.05(a) the "Commitment Fee") of 1/5% per annum (computed on the basis of the actual number of days elapsed in a year of 365 days) on the average daily Unutilized Commitments during the preceding period or quarter. The Commitment Fee shall commence to accrue as of the date hereof and shall cease to accrue on the earlier of the Termination Date or the date of termination of the Commitments of the Banks hereunder. (b) (i) The Borrowers may in full permanently terminate, or from time to time in part permanently reduce, the Commitments, in each case upon at least three Business Days' prior written, telefax or telephonic notice to the Administrative Agent. Each partial reduction of the Commitments shall be in an aggregate principal amount of $5,000,000.00 or in an integral multiple of $1,000,000.00 in excess thereof. The Administrative Agent shall promptly on the same day provide the Banks notice that it has received notice from the Borrowers pursuant to this subparagraph. (ii) In the case of any termination or reduction of the Commitments pursuant to subparagraph (i) above, immediately after giving effect to such termination or reduction the aggregate principal balance of all outstanding Loans made by all of the Banks shall not exceed the aggregate Commitments of all of the Banks. Each reduction in the aggregate Commitments pursuant to subparagraph (i) above shall be made ratably among the Banks in accordance with each Bank's Commitment. EX-120 ARTICLE III Additional Provisions Regarding Loans 3.01 (a) Upon the occurrence and during the continuance of any Event of Default, the Borrowers, jointly and severally, shall on demand from time to time pay interest on the principal balance of the Loans and, to the extent permitted by law, on overdue payments of interest and any other amounts payable hereunder or under any of the other Loan Documents up to the date of actual payment (after as well as before judgment): (i) in the case of principal of or interest on a Loan, at a rate determined by the Administrative Agent to be 2% per annum plus the rate which would otherwise be payable under Section 2.04 hereof; and (ii) in the case of any other amount payable hereunder or under any of the other Loan Documents (other than amounts referred to in clause (i) above), at a rate equal to 2% per annum plus the Prime Rate. (b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, any Bank shall have determined that dollar deposits in the amount of the principal amount of and/or for the Interest Period for such Eurodollar Loan are not generally available to such Bank in the London Interbank Market, or that the rate at which such dollar deposits are being offered will not adequately and fairly reflect the cost to such Bank of making or maintaining the principal amount of such Eurodollar Loan during such Interest Period, or reasonable means do not exist for ascertaining the LIBOR Base Rate for such Eurodollar Loan for such Interest Period, such Bank shall, as soon as practicable thereafter, give written, telefax or telephonic notice of such determination to the Borrowers and to the Administrative Agent and each other Bank, and, until the circumstances giving rise to such notice no longer exist, any request by the Borrowers for a Eurodollar Loan or for conversion to or continuation of a Eurodollar Loan pursuant to Section 2.02 or 3.02 hereof shall be deemed a request for a Prime Loan. Each determination by any of the Banks hereunder shall be conclusive absent manifest error. 3.02 The Borrowers shall have the right, at any time, upon prior written, telefax or telephonic notice to the Administrative Agent (which notice shall be irrevocable and, to be effective, must be received by the Administrative Agent not later than 11:00 a.m., New York City time, in the case of Prime Loans, on the Business Day of any conversion, and in the case of Eurodollar Loans, on the third Business Day preceding the date of any continuation or conversion), (i) to continue any Eurodollar Loan or portion thereof into a subsequent Interest Period and (ii) to convert any Loan or portion thereof into a Loan of a different type, subject to the following: (a) no Event of Default shall have occurred and be continuing at the time of such continuation or conversion, and the representations and warranties set forth in Article VI hereof shall be true and correct in all material respects on and as of the date of such continuation or conversion with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such EX-121 representations and warranties expressly relate to an earlier date; (b) if less than all Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Banks in accordance with the respective principal amounts of the Loans held by the Banks immediately prior to such continuation or conversion and the notice given to the Banks by the Borrowers shall specify the aggregate amount of Loans to be continued or converted; (c) in the case of a continuation or conversion of less than all Loans, the aggregate principal amount of Loans continued or converted shall not be less than $1,500,000.00 or shall be in an integral multiple of $100,000.00 in excess thereof; (d) each conversion or continuation shall be effected by each Bank by applying the proceeds of the new Prime Loan or Eurodollar Loan, as the case may be, to the Loan (or portion thereof) being converted or continued, and accrued interest on the Loan (or portion thereof) being converted or continued shall be paid by the Borrowers at the time of conversion or continuation, as the case may be; (e) if the new Loan made in respect of a conversion or continuation shall be a Eurodollar Loan, the first Interest Period with respect thereto shall commence on the date of conversion or continuation, as the case may be; (f) no Interest Period shall be selected by the Borrowers for a Loan converted to or continued as a Eurodollar Loan if such Interest Period is not available to the Borrowers pursuant to the terms of the definition of "Interest Period" set forth in Section 1.01 and/or pursuant to the terms of Section 3.01(b) or 3.05 hereof; (g) a Eurodollar Loan may be converted to a Prime Loan or continued as a Eurodollar Loan for a subsequent Interest Period only on the last day of the Interest Period therefor; (h) each request for a conversion to or continuation of a Eurodollar Loan which shall fail to state an applicable Interest Period shall be deemed to be a request for a Eurodollar Loan having an Interest Period of one (1) month duration; and (i) no more than nine (9) separate Eurodollar Loans shall be outstanding hereunder at any one time (it being understood that, for purposes of the foregoing, (i) Eurodollar Loans made ratably by the Banks pursuant to a discrete borrowing, conversion or continuation request shall be considered a single Loan and (ii) Eurodollar Loans having different Interest Periods, EX-122 regardless of whether they commence or expire on the same date, shall be considered separate Loans). In the event that the Borrowers shall not give notice to continue any Eurodollar Loan into a subsequent Interest Period or convert any such Loan into a Prime Loan, such Eurodollar Loan (unless repaid) shall automatically become a Prime Loan at the expiration of the then current Interest Period therefor. 3.03 (a) The Borrowers shall have the right at any time and from time to time to prepay any Prime Loan, in whole or in part, without premium or penalty, upon prior written, telefax or telephonic notice to the Administrative Agent no later than 10:00 a.m., New York City time, on the Business Day of the proposed prepayment; provided, however, that each such partial prepayment shall be in the aggregate principal amount of at least $1,500,000.00 (or in an integral multiple of $100,000.00 in excess thereof) or the balance of such Loan, if less. (b) The Borrowers shall have the right to prepay any Eurodollar Loan, in whole or in part, upon at least three Business Days' prior written or telephonic notice to the Administrative Agent; provided, however, that (i) each such partial prepayment shall be in the aggregate principal amount of at least $1,500,000.00 or in an integral multiple of $100,000.00 in excess thereof and (ii) no such prepayment made before the last day of the Interest Period in effect for such Eurodollar Loan shall be permitted unless accompanied by payment of amounts specified in Section 3.06 hereof. (c) Each notice of prepayment shall specify the prepayment date and the principal amount to be prepaid, shall be irrevocable and shall commit the Borrowers to prepay such Loan by the amount stated therein. All prepayments under this Section shall be shared pro rata by the Banks and shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment. Amounts prepaid under the Notes pursuant to this Section prior to the Termination Date shall be available to be reborrowed from the Banks under this Loan Agreement in accordance with the terms hereof. 3.04 (a) The cost to any Bank of making or maintaining any Eurodollar Loans or of maintaining its Commitment may fluctuate as a result of imposition hereafter of, or changes hereafter in, the reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States. Accordingly, the Borrowers shall pay to each Bank such additional amount or amounts as will compensate it for the effect of such reserve requirements applicable to it, which determination shall be conclusive absent manifest error. For purposes hereof, the aforesaid reserve requirements shall include any reserve on Eurocurrency Liabilities as defined by Regulation D of said Board at the ratios provided in such Regulation D from time to time. It is hereby agreed that Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency Liabilities (as defined in such Regulation D). Such Bank shall promptly refund any amounts received by it pursuant to this Section 3.04(a) that were erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. The provisions of this subsection shall survive termination of this Loan Agreement. (b) In the event that after the date hereof any change in applicable law or regulations or in the interpretation or administration thereof (including, without limitation, any request, guideline or policy not having the force of law) by any authority charged with the administration or interpretation thereof shall occur which shall: EX-123 (i) subject any Bank to any tax with respect to any Eurodollar Loan (other than any tax on the overall net income of such Bank imposed by the United States of America or by the jurisdiction in which such Bank has its principal office or political subdivision or taxing authority therein); or (ii) change the basis of taxation of any payment to any Bank of principal of or interest on any Eurodollar Loan or fees and other amounts payable hereunder, or any combination of the foregoing; or (iii) impose, modify or deem applicable any reserve, deposit or similar requirement against any assets held by, deposits with or for the account of or loans or commitments by an office of such Bank as it relates to Eurodollar Loans or the Commitment of such Bank; or (iv) impose upon such Bank any other condition with respect to this Loan Agreement as it relates to Eurodollar Loans or the Commitment of such Bank; and the result of any of the foregoing shall be to increase the cost to such Bank of making or maintaining any Eurodollar Loan or of maintaining its Commitment or to reduce the amount of any payment (whether of principal, interest or otherwise) received or receivable by such Bank, or to require such Bank to make any payment in connection with any Eurodollar Loan by or in an amount which such Bank in its sole reasonable judgment shall deem material, then and in each such case the Borrowers agree to pay to such Bank, as provided in paragraph (c) below (but without duplication of the payments required under paragraph (a) above), such amounts as shall be necessary to compensate such Bank for such cost, reduction or payment; provided, however, that if any Bank shall request compensation under this Section 3.04(b) with respect to any Eurodollar Loan, the Borrowers may, at their option and upon written notice to the Banks, elect to convert such Eurodollar Loan of such Bank into a Prime Loan upon the payment by the Borrowers of the increased costs described above incurred prior to such conversion and any amount owing in respect of Section 3.06 hereof, it being understood that (A) for purposes of Sections 3.02 and 3.03 hereof, such Prime Loan, until the expiration of the Interest Period of the Eurodollar Loan so converted into a Prime Loan, shall be subject to prepayment or conversion or continuation only at such times and on such conditions as the Eurodollar Loan from which it was converted and (B) upon such increased costs being eliminated, or reduced by an amount deemed sufficient by the Borrowers, such Prime Loan may be reconverted into a Eurodollar Loan having an Interest Period expiring on the same date as the Eurodollar Loan previously converted into such Prime Loan; provided further, however, that if the result of any the foregoing shall be to decrease the cost to any Bank of making or maintaining any Eurodollar Loan hereunder by a material amount, then such Bank will credit to the Borrowers an amount equal to such decreased costs. Promptly after actual notice to any Bank that a change referred to in this paragraph has occurred, such Bank will give notice of such occurrence to the Borrowers and the Administrative Agent. Each Bank agrees that it will promptly refund any amounts received by it pursuant to this Section 3.04(b) that were erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. The provisions of this subsection shall survive termination of this Loan Agreement. EX-124 (c) Each Bank shall promptly deliver to the Borrowers from time to time one or more certificates setting forth the amounts due to such Bank under paragraph (a) or (b) above, the reserve requirements or changes as a result of which such amounts are due and the manner of computing such amounts. Each such certificate shall be conclusive in the absence of manifest error. The Borrowers shall pay to each Bank the amounts shown as due on any such certificate within 10 days after their receipt of the same. No failure on the part of any Bank to demand compensation under paragraph (a) or (b) above on any one occasion shall constitute a waiver of its right to demand such compensation on any other occasion with respect to any other event. The protection of this Section shall be available to each Bank regardless of any possible contention of the invalidity or inapplicability of any law, regulation or other condition which shall give rise to any demand by such Bank for compensation hereunder; provided, however, if such law, regulation or other condition giving rise to such demand is determined to be invalid or inapplicable, such Bank will promptly refund any amount erroneously billed to the Borrowers together with interest thereon at the Federal Funds Rate. 3.05 (a) Notwithstanding anything to the contrary contained elsewhere in this Loan Agreement, if any change after the date hereof in any law or regulation or in the interpretation thereof by any governmental authority charged with the administration thereof shall make it unlawful for a Bank to make or maintain a Eurodollar Loan or to effect to its obligations as contemplated hereby with respect to a Eurodollar Loan, then, by written notice to the Borrowers, such Bank may: (i) declare that Eurodollar Loans will not thereafter be made by such Bank hereunder, whereupon the Borrowers shall be prohibited from requesting Eurodollar Loans from such Bank hereunder unless such declaration is subsequently withdrawn; and (ii) require that all outstanding Eurodollar Loans made by it be converted to Prime Loans, whereupon all of such Eurodollar Loans shall be automatically converted to Prime Loans as of the effective date of such notice as provided in paragraph (b) below (notwithstanding the provisions of Section 3.07 hereof but subject to the provisions of Section 3.06 hereof). (b) For purposes of this Section 3.05, a notice to the Borrowers by any Bank pursuant to paragraph (a) above shall be effective with respect to outstanding Eurodollar Loans, if lawful, on the last day of the then current Interest Period; in all other cases, such notice shall be effective on the date of receipt by the Borrowers. 3.06 The Borrowers shall reimburse each Bank on demand for any actual out-of-pocket loss incurred by it in the reemployment of the funds released by any prepayment or conversion of any Eurodollar Loan required or permitted by any other provision of this Loan Agreement if such Eurodollar Loan is prepaid or converted other than on the last day of any Interest Period for such Eurodollar Loan or upon any failure by the Borrowers to borrow or convert or continue any Eurodollar Loan. Determinations by any Bank under this Section 3.06 shall be conclusive absent manifest error. The provisions of this Section shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. EX-125 3.07 All payments and prepayments of principal, interest and fees (other than the fees payable to the Administrative Agent or the Agent pursuant to Section 7.01(d) hereof), subject to distinctions in the interest rates applicable to any Loans as a consequence of the application of Section 3.04(b) or Section 3.05 hereof, shall be made pro rata among the Banks in accordance with the then outstanding principal amount of the Notes (or in accordance with the Commitments if there are no amounts then outstanding under the Notes). All payments by the Borrowers hereunder and under the Notes shall be made to the Administrative Agent at its offices at New York City, for the account of each Bank in dollars in Federal or other immediately available funds by 11:00 a.m. New York City time, on the date on which such payment shall be due. All payments received by the Administrative Agent for the account of a Bank shall be promptly on the same day remitted by the Administrative Agent to such Bank. Upon receipt by a Bank of more than its pro rata share of any such payment, whether voluntary or involuntary, it is hereby agreed among the Banks and the Borrowers that the Bank receiving such excess payment (the "Receiving Bank") shall be obligated to pay to the other Banks for application to the obligations owing to such Bank hereunder, under such Bank's Note and under the other Loan Documents an amount necessary to reduce the outstanding balances on such obligations owing to such Bank to the balances that would be outstanding on such obligations owing to such Bank if the Receiving Bank had not received more than its pro rata share of such payment; provided, however, that in the event any amount paid by any Receiving Bank to any other Bank pursuant to the immediately preceding sentence is rescinded or must otherwise be returned by the Receiving Bank, each other Bank shall, upon request of the Receiving Bank, repay to the Receiving Bank the amount so paid by the Receiving Bank to such Bank, with interbank compensation representing interest and adjustment penalty for the period commencing on date such payment is returned by the Receiving Bank until the date the Receiving Bank receives such repayment at the Federal Funds Rate. Interest in respect of any Loan hereunder shall accrue from and including the date of such Loan to but excluding the date on which such Loan is paid in full. 3.08 In the event that any Bank shall have determined that the adoption hereafter of or any change hereafter in any applicable law, rule, regulation or guideline regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or by any court, or compliance by such Bank (or any lending office of such Bank) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank's capital or on the capital of such Bank's holding company as a consequence of its obligations hereunder to a level below that which such Bank or such Bank's holding company could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies or the policies of such Bank's holding company, as the case may be, with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time the Borrowers shall pay to such Bank such additional amount or amounts as will compensate such Bank or such Bank's holding company for any such reduction suffered. Within a reasonable time after making a request for such additional amount hereunder, such Bank will furnish to the Borrowers a statement certifying the amount of such reduction and describing the event giving rise to such reduction, which determination shall be conclusive absent manifest error. Failure on the part of such Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any period shall not constitute a waiver of such Bank's rights to demand compensation for any increased costs EX-126 or reduction in amounts received or receivable or reduction in return on capital in such period or in any other period. The protection of this Section 3.08 shall be available to the Bank regardless of any possible conflict or invalidity or inapplicability of the law, regulation or condition which shall have been impaired. The provisions of this Section 3.08 shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement. 3.09 Notwithstanding any other provision to the contrary contained in this Loan Agreement or the Notes, the liability of Holdings with respect to the Borrowers' Obligations shall not exceed Holdings' Maximum Obligated Amount as determined at the earlier of the date of the commencement of a case under the U.S. Bankruptcy Code in which Holdings is a debtor or the date enforcement is sought against Holdings under Section 8.01 hereof with respect to the Borrowers' Obligations. ARTICLE IV Conditions Precedent as of Closing Date 4.01 The obligations as of the Closing Date of the Banks to make any Loans are subject to the conditions precedent that the Administrative Agent shall have received on or before such day the following, in form and substance satisfactory to the Administrative Agent: (a) fully executed copies of this Loan Agreement (including exhibits) and the Notes; (b) a fully executed copy of the Guaranty Agreement; (c) resolutions of the directors of each Credit Party and the shareholders of each Credit Party (other than Airgas) certified by an officer of such Credit Party as of the Closing Date, authorizing the execution, delivery and performance of the documents described in subparagraphs (a) and (b) above to be executed by each such Credit Party; (d) a certificate of the corporate secretary or an assistant secretary of each Credit Party certifying the names and true signatures of the officers of such Credit Party authorized to sign the documents described in subparagraphs (a) and (b) above on behalf of such Credit Party and the other documents to be delivered hereunder; (e) (i) the charter documents of Airgas Breathing Air Systems, Inc. and Post Airgas, Inc. certified as of the Closing Date by the Secretary of State of each such corporation's state of incorporation and (ii) a certificate of the corporate secretary or an assistant secretary of each other Credit Party, certifying that the charter documents and bylaws of such Credit Party previously delivered to NationsBank in its capacity as agent under the Existing Loan Agreement (and/or any prior agreement restated by the Existing Loan Agreement) have not been amended since August 30, 1994 and through the Closing Date except as provided therein; EX-127 (f) certificates of good standing for each of Airgas Breathing Air Systems, Inc. and Post Airgas, Inc., issued as of a recent date by the applicable jurisdiction of incorporation and each other jurisdiction where any such corporation by the nature of its business, is required to qualify as a foreign corporation; (g) the favorable opinion of Messrs. McCausland, Keen & Buckman, counsel to the Credit Parties, substantially in the form of Exhibit E hereto; and (h) such other information and documents as the Administrative Agent may reasonably request. ARTICLE V Conditions of Lending 5.01 The obligations of the Banks to make any Loans are subject to the satisfaction of the conditions precedent set forth in Article IV hereof on the Closing Date and to the satisfaction of the following further conditions: (a) proper notice of such Loan shall have been given in accordance with Section 2.02(c) hereof; (b) the representations and warranties of the Credite Parties set forth in Article VI hereof and in the other Loan Documents shall be true and correct in all material respects on and as of the date of such Loan with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date; (c) at the time of and immediately after giving effect to each such Loan, no Event of Default, or any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing; and (d) at the time of and immediately after giving effect to such Loan, the aggregate principal balance of all outstanding Loans made by all of the Banks shall not exceed the aggregate Commitments of all of the Banks. 5.02 Each borrowing hereunder shall be deemed to be a representation and warranty by each of the Borrowers on the date of such borrowing as to the matters specified in Sections 5.01(b), (c) and (d) hereof. ARTICLE VI Representations and Warranties 6.01 Each of the Borrowers represents and warrants that: EX-128 (a) each of the Credit Parties is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and is duly authorized and qualified to carry on its business in the manner now being conducted by it in states in which failure to so qualify would or might have a material adverse effect on the business or operations of such Credit Party; (b) each of the Credit Parties has the legal power and authority to own its properties and assets and to carry on its businesses as now being conducted and as contemplated by this Loan Agreement and the other Loan Documents; (c) each of the Credit Parties has the power and authority to execute, deliver and perform the Loan Documents to which such Credit Party is a party; (d) when executed and delivered, the Loan Documents will be valid and binding obligations of each Credit Party executing such Loan Documents and will be enforceable in accordance with their respective terms; (e) the execution, delivery and performance of the Loan Documents: (i) have been duly authorized by all requisite corporate action of each Credit Party executing such Loan Documents required for the lawful creation and issuance thereof; (ii) do not violate any material provision of law, any order of any court or other agency of government or the corporate charter, certificate of incorporation or by-laws of any Credit Party, or any provisions of any indenture, agreement or other instrument to which such Credit Party or its properties or assets are or will become bound; (iii) will not be in conflict with, result in a breach of or constitute an event of default or an event which, upon notice or lapse of time, or both, would constitute such an event of default under any indenture, agreement or other instrument to which such Credit Party is a party; and (iv) do not and will not result in the creation of any lien on any assets of any Credit Party; (f) all of the direct and indirect Subsidiaries of Airgas as of the Closing Date are set forth in Exhibit F attached hereto; (g) except as set forth in Exhibit G attached hereto, as of the Closing Date neither Airgas nor any of its Subsidiaries owns any interest in any Person; (h) the audited consolidated balance sheet, income statement and statement of cash flows of Airgas and its Subsidiaries prepared as of June 30, 1994, copies of each of which have been furnished to each Bank, fairly present the assets, liabilities and financial condition of Airgas and its Subsidiaries as at the date thereof, all in accordance with Generally Accepted Accounting Principles, and since such date to and including the date of this Loan Agreement there has been no material adverse change in such condition or in EX-129 the operations of Airgas and its Subsidiaries taken as a whole; (i) none of Airgas or its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan will be used whether directly or indirectly, incidentally or ultimately (i) to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock, or to refund indebtedness incurred for such purpose, or (ii) for any purpose which entails a violation of, or which is inconsistent with, the provisions of the regulations of the Board of Governors of the Federal Reserve System, including without limitation Regulation G, U, T or X thereof. If requested by the Administrative Agent, each Borrower agrees that it will (and will cause each of its Subsidiaries to) furnish to the Banks a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in said Regulation U; and (j) no consent, approval or authorization of, or filing, registration or qualification with, any governmental agency, authority, instrumentality or regulatory body on the part of any Credit Party is required in conjunction with the execution, delivery or performance by the Credit Parties, or for the validity or enforceability, of the Loan Documents. 6.02 Each of the Borrowers hereby agrees that the representations and warranties contained in Article XI (other than any of the representations and warranties set forth in Section 11.01(a), (b), (c), (d), (e), (g), (h), (i), (m) or (u)) of the Existing Loan Agreement, as in effect as of the date hereof (the "Incorporated Representations"), are hereby incorporated by reference and shall be as binding on the Borrowers as if set forth fully herein. The incorporation by reference to the Existing Loan Agreement of the Incorporated Representations pursuant to this Section 6.02 shall survive the termination of the Existing Loan Agreement. For purposes of the incorporation of the Incorporated Representations pursuant to this Section 6.02, all references in the Incorporated Representations to the "Agent" shall be deemed to refer to the Administrative Agent hereunder, all references in the Incorporated Representations to a "Bank" or the "Banks" shall be deemed to refer to one or more of the Banks hereunder, all references in the Incorporated Representations to the "Majority Banks" shall be deemed to refer to the Majority Banks hereunder, all references in the Incorporated Representations to a "Guarantee Subsidiary" or the "Guarantee Subsidiaries" shall be deemed to refer to one or more of the Guarantee Subsidiaries hereunder, all references in the Incorporated Representations to the "Loan Agreement," or any similar references, shall be deemed to refer to this Loan Agreement, all references in the Incorporated Representations to a "Note" or the "Notes" shall be deemed to refer to one or more of the Notes issued pursuant to Section 2.03 hereof and all references in the Incorporated Representations to a "Loan Document" or the "Loan Documents," or any similar references, shall be deemed to refer to one or more of the Loan Documents as defined in Section 1.01 hereof. ARTICLE VII Covenants 7.01 Each of the Borrowers covenants and agrees with the Banks, the Agent and the Administrative Agent that, so long as this Loan Agreement shall remain in effect or the principal of or interest on any Note or any other expense or amount payable hereunder remains unpaid, and until the Commitments EX-130 are terminated, unless the Majority Banks shall otherwise consent in writing, it will and will cause each of its Subsidiaries to: (a) use the proceeds of the Loans for the purposes set forth in RECITAL A hereof; (b) defend, indemnify and hold harmless the Banks, the Administrative Agent, their employees, agents, officers, affiliates and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses (including without limitation attorney and consultant fees, court costs and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to any acquisition permitted by, and/or financed with the proceeds of any borrowings made pursuant to, this Loan Agreement, including, without limitation, all claims of the seller or sellers of any acquired company; (c) deliver to the Banks forthwith, upon any Executive Officer of Airgas obtaining knowledge of an Event of Default or an event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, a certificate of the chief financial officer or other Executive Officer of Airgas specifying the nature and period of existence thereof and what action the Borrowers propose to take with respect thereto; (d) pay (i) to the Administrative Agent the fees set forth, and at the times specified, in the letter agreement of even date herewith between BNY and the Borrowers and (ii) to the Agent the fees set forth, and at the times specified, in the letter agreement of even date herewith between NationsBank and the Borrowers; (e) execute any and all further documents, agreements and instruments, and take all further actions which may be required under applicable law, or which the Majority Banks may reasonably request, in order to effectuate the transactions contemplated by this Loan Agreement; and (f) cause (i) each of Mauritius Industrial Gases, Inc., Poligaz, S.A. and Airgas Polska sp. z oo at such time as any such Subsidiary shall have total assets of at least $3,000,000 and (ii) each other Subsidiary hereafter acquired by any Credit Party prior to the Termination Date (A) to become a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement and (B) to deliver to the Administrative Agent such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, certified corporate resolutions and other corporate documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the obligations of such Subsidiary under the Guaranty Agreement); provided, however, with respect to any such Subsidiary described above which is a Canadian Subsidiary (1) such Canadian Subsidiary shall not be obligated to so guarantee the obligations of the Borrowers during the 90 day period immediately succeeding the date of acquisition of such Canadian Subsidiary and (2) if, subsequent to such Canadian Subsidiary becoming a Guarantee Subsidiary pursuant to a Guaranty Joinder Agreement, any Canadian Lender has agreed to provide financing to such Canadian Subsidiary to provide for the working capital, capital expenditure, acquisition costs and/or letter of credit needs of such Canadian Subsidiary, then, promptly upon the request of the Borrowers, the Administrative Agent (on behalf of the Banks) shall thereupon release such Canadian Subsidiary from the Guaranty Agreement. EX-131 The provisions of subsection (b) of this Section 7.01 shall remain operative and in full force and effect regardless of the expiration of this Loan Agreement, notwithstanding anything to the contrary set forth in this Loan Agreement or any other of the Loan Documents. 7.02 Each of the Borrowers hereby agrees that the affirmative and negative covenants contained in Articles XII and XIII of the Existing Loan Agreement, as in effect as of the date hereof (the "Incorporated Covenants"), are hereby incorporated by reference and shall be as binding on the Borrowers as if set forth fully herein, except that, for purposes hereof, Exhibit Q to the Existing Loan Agreement referred to in Section 13.01(a)(ii) of the Existing Loan Agreement shall be deemed to refer to Exhibit H attached hereto. The incorporation by reference to the Existing Loan Agreement of the Incorporated Covenants pursuant to this Section 7.02 shall survive the termination of the Existing Loan Agreement. For purposes of the incorporation of the Incorporated Covenants pursuant to this Section 7.02, all references in the Incorporated Covenants to the "Agent" shall be deemed to refer to the Administrative Agent hereunder, all references in the Incorporated Covenants to a "Bank" or the "Banks" shall be deemed to refer to one or more of the Banks hereunder, all references in the Incorporated Covenants to the "Majority Banks" shall be deemed to refer to the Majority Banks hereunder, all references in the Incorporated Covenants to a "Guarantee Subsidiary" or the "Guarantee Subsidiaries" shall be deemed to refer to one or more of the Guarantee Subsidiaries hereunder, all references in the Incorporated Covenants to the "Loan Agreement," or any similar reference, shall be deemed to refer to this Loan Agreement, all references in the Incorporated Covenants to a "Note" or the "Notes" shall be deemed to refer to one or more of the Notes issued pursuant to Section 2.03 hereof and all references in the Incorporated Covenants to a "Loan Document" or the "Loan Documents," or any similar reference, shall be deemed to refer to one or more of the Loan Documents as defined in Section 1.01 hereof. 7.03 The covenants of Airgas (i) contained in Section 10 of each of the Senior Subordinated Note Purchase Agreements, as such covenants may be amended or modified from time to time and (ii) contained in any documentation evidencing or executed in connection with any other Subordinated Debt as such documents may be amended or modified from time to time, are (until termination of the applicable Subordinated Note Purchase Agreement or the applicable documentation evidencing or executed in connection with such other Subordinated Debt, as the case may be) hereby incorporated herein by reference and shall be as binding on the Borrowers as if set forth fully herein. ARTICLE VIII Events of Default and Acceleration 8.01 If any of the following events (the "Events of Default") shall occur and be continuing: (a) (i) the failure of the Borrowers to make when due any payment of interest, fees or other amounts required by this Loan Agreement and/or any of the other Loan Documents (other than a payment of principal) and the continuation of such failure for five (5) days; or (ii) the failure of the Borrowers to make when due any payment of principal required by this Loan Agreement and/or any of the Notes; EX-132 (b) the failure of any Credit Party to comply with any other terms and conditions in this Loan Agreement (including without limitation any covenant incorporated herein by reference pursuant to Section 7.02 or Section 7.03 hereof) or the other Loan Documents within 30 days after the earlier to occur of (i) written notice from the Administrative Agent specifying the default and requesting that it be remedied; or (ii) an Executive Officer of Airgas becomes aware of such violation; (c) any representation or warranty made by the Credit Parties, or any of them, herein (including without limitation any representation or warranty incorporated herein by reference pursuant to Section 6.02 hereof) or in any of the other Loan Documents or in any certificate, statement or report heretofore or hereafter made (or deemed made pursuant to Article V hereof) shall be untrue in any material respect when made (or deemed made); (d) an event of default shall occur under any of the other Loan Documents; or (e) the occurrence of an "Event of Default" under and as defined in the Existing Loan Agreement, as in effect as of the date hereof, which "Events of Default" (the "Incorporated Events of Default"), are hereby incorporated herein by reference and shall be as binding on the Borrowers as if set forth fully herein, such incorporation by reference to survive termination of the Existing Loan Agreement. For purposes of the incorporation of the Incorporated Events of Default pursuant to this Section 8.01(e), all references in the Incorporated Events of Default to the "Agent" shall be deemed to refer to the Administrative Agent hereunder, all references in the Incorporated Events of Default to a "Bank" or the "Banks" shall be deemed to refer to one or more of the Banks hereunder, all references in the Incorporated Events of Default to the "Majority Banks" shall be deemed to refer to the Majority Banks hereunder, all references in the Incorporated Events of Default to a "Guarantee Subsidiary" or the "Guarantee Subsidiaries" shall be deemed to refer to one or more of the Guarantee Subsidiaries hereunder, all references in the Incorporated Events of Default to the "Loan Agreement," or any similar references, shall be deemed to refer to this Loan Agreement, all references in the Incorporated Events of Default to a "Note" or the "Notes" shall be deemed to refer to one or more of the Notes issued pursuant to Section 2.03 hereof and all references in the Incorporated Events of Default to a "Loan Document" or the "Loan Documents," or any similar references, shall be deemed to refer to one or more of the Loan Documents as defined in Section 1.01 hereof; then, during the continuance of any such event (other than an event described in Section 14.01(d) of the Incorporated Events of Default), the Administrative Agent may and shall upon request of any Bank with respect to an event described in subparagraph (a) above or upon the request of the Majority Banks with respect to any other Event of Default (other than an event described in Section 14.01(d) of the Incorporated Events of Default), by written notice to the Borrowers, take any or all of the following actions, at the same or different times: (i) terminate forthwith the Commitments of all the Banks hereunder; (ii) declare the Notes and all fees and other amounts payable hereunder to be forthwith due and payable, whereupon the Notes, both as toprincipal and interest, and all fees and other amounts payable hereunder, shall become forthwith due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by each of the Borrowers, anything contained herein or in the Notes to the contrary notwithstanding; and (iii) pursue any other remedy under this Loan Agreement or any other Loan Document or otherwise; and, in any event described in EX-133 Section 14.01(d) of the Incorporated Events of Default, the Commitments of all the Banks hereunder shall automatically terminate and the Notes, both as to principal and interest, and all fees and other amounts payable hereunder, shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each of the Borrowers, anything contained herein or in the Notes to the contrary notwithstanding, and the Administrative Agent may pursue any other remedy under this Loan Agreement or any other Loan Document or otherwise. ARTICLE IX The Administrative Agent 9.01 Each Bank hereby irrevocably designates and appoints the Administrative Agent as the agent of such Bank under this Loan Agreement and the other Loan Documents, and each Bank hereby irrevocably authorizes the Administrative Agent, as the agent for such Bank, to take such action on its behalf under the provisions of this Loan Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Loan Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Loan Agreement, or any of the other Loan Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Loan Agreement or the other Loan Documents or otherwise exist against the Administrative Agent. 9.02 The Administrative Agent may execute any of its duties under this Loan Agreement or the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 9.03 Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with any of the Loan Documents (except for its or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Credit Parties contained in any of the Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, the Loan Documents or the enforceability or sufficiency of any of the Loan Documents, or for any failure of any Credit Party to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, any of the Loan Documents or to inspect the properties, books or records of the Credit Parties. 9.04 The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been given, signed, sent EX-134 or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the credit Parties), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any of the Loan Documents unless it shall first receive such advice or concurrence of the Banks as it deems appropriate or it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under any of the Loan Documents in accordance with a request of the Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the Notes. 9.05 The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default (or of any event or condition which, upon notice or lapse of time, or both, would constitute such an Event of Default) unless the Administrative Agent has received notice from a Bank or a Credit Party referring to the applicable Loan Document and describing such Event of Default (or other such event or condition). In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Event of Default (or other event or condition) as shall be directed in accordance with Section 8.01 or Section 10.05 hereof; provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default (or other event or condition) as it shall deem advisable in the best interests of the Banks. 9.06 Each Bank expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent or any affiliate thereof hereafter taken, including any review of the affairs of the Credit Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of each of the Credit Parties and made its own decision to make its Loans hereunder and enter into this Loan Agreement. Each Bank also represents that it will, independently and without reliance upon the Administrative Agent or the other Banks, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Loan Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of each of the Credit Parties. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Credit Parties which may come into the EX-135 possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 9.07 The Banks agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrowers, or either of them, and without limiting the obligation of the Borrowers, and each of them, to do so), ratably according to the respective amounts outstanding to the Borrowers, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or willful misconduct; provided, further, no Bank shall be obligated for the ratable share of such indemnity obligations of any other Bank. The agreements in this subsection shall survive the payment of the Notes and all other amounts payable hereunder. 9.08 BNY and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any of the Credit Parties as though BNY were not the Administrative Agent hereunder. With respect to its Loans made or renewed by it and the Note issued to it, BNY shall have the same rights and powers under this Loan Agreement as any Bank and may exercise the same as though it were not the Administrative Agent. 9.09 The Administrative Agent may resign at any time by giving written notice thereof to the Banks and the Borrowers and may be removed at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Administrative Agent, then the retiring Administrative Agent shall select a successor Administrative Agent provided such successor Administrative Agent is a commercial bank organized under the laws of the United States of America or of any State thereof and has a combined capital and surplus of at least $400,000,000.00. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Loan Agreement and the other Loan Documents. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Loan Agreement and the other Loan Documents. 9.10 Except as otherwise expressly provided for herein, the Agent, in its capacity as such, shall have no duties or obligations under this Loan Agreement or any of the other Loan Documents. EX-136 ARTICLE X Miscellaneous 10.01 All notices, requests and demands to or upon the respective parties hereto shall be conclusively deemed to have been received by such party hereto and be effective on the day on which delivered to such party at the address set forth below or to such other address as such party shall specify to the other parties hereto in writing, or, if sent prepaid by registered mail, on the third day after the day on which mailed, addressed to such party at such address: (a) if to the Borrowers: Airgas, Inc. Airgas Holdings, Inc. Five Radnor Corporate Center, Suite 550 100 Matsonford Road Radnor, Pennsylvania 19087 Attention: Britton H. Murdoch [Courtesy Copy to: McCausland, Keen & Buckman Five Radnor Corporate Center, Suite 500 100 Matsonford Road Radnor, Pennsylvania 19087 Attention: Melvin J. Buckman, Esq.] (b) if to the Banks (i) NationsBank of North Carolina, N.A. NationsBank Corporate Center, 8th Floor Charlotte, North Carolina 28255 Attention: M. Gregory Seaton Eastern Corporate Group (ii) The Bank of New York One Wall Street New York, New York 10286 Attention: Michael V. Flannery, Jr. (c) if to the Administrative Agent The Bank of New York One Wall Street, 18th North New York, New York 10286 Attention: Ms. Kalyani Bose Telephone: 212/635-4693 Fax: 212/635-6365 EX-137 10.02 No failure or delay on the part of any of the Banks or the Administrative Agent in the exercise of any right, power or privilege hereunder or under any other Loan Document shall operate as a waiver of any such right, power or privilege nor shall any such failure or delay preclude any other or further exercise thereof. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 10.03 All covenants, agreements, representations and warranties made herein and in the other Loan Documents shall survive the making by the Banks of the Loans and the execution and delivery to the Banks of the Loan Documents and shall continue in full force and effect so long as any of the indebtedness of any of the Borrowers to the Banks or any obligations of the Banks under the Commitments remain outstanding. Whenever in this Loan Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party and all covenants, provisions and agreements by or on behalf of the Credit Parties, and each of them, which are contained in the Loan Documents shall inure to the benefit of the successors and assigns of the Banks. 10.04 The Borrowers jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of the Administrative Agent and the Agent in connection with the preparation, execution and delivery of the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of Moore & Van Allen, PLLC, special counsel to the Administrative Agent and the Agent, and out-of-pocket costs and expenses of the Banks in connection with the enforcement of this Loan Agreement and the other Loan Documents and to hold the Banks harmless from any and all such costs, expenses and liabilities. In addition, the Borrowers jointly and severally agree to pay to each Bank an amendment fee of not less than $3,000.00 on the effective date of each agreement hereafter entered into among the Borrowers and the Banks (or the Administrative Agent on behalf of the Banks) effecting any material amendment, modification or waiver of the terms of this Loan Agreement, including without limitation any such agreement relating to any provision set forth in Article V, Article VI, Article VII or Article VIII hereof. The provisions of this Section shall survive the termination of this Loan Agreement. 10.05 With the written consent of the Majority Banks, the Administrative Agent and the Borrowers may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Loan Agreement, the Notes or any of the other Loan Documents or changing in any manner the rights of the Banks or of the Borrowers hereunder or thereunder, and with the consent of the Majority Banks the Administrative Agent on behalf of the Banks may execute and deliver to the Borrowers a written instrument waiving, on such terms and conditions as the Administrative Agent or Majority Banks may specify in such instrument, any of the requirements of this Loan Agreement or any other Loan Document or any Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (a) extend the maturity of any Note, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or change the amount or term of any Commitment, or change the amount or time for payment of the Commitment Fee, or amend, modify or waive any provision of this Section 10.05 or reduce the percentage specified in the definition of "Majority Banks" set forth in Section 1.01 hereof, or amend, modify or waive any provision of any Loan Document requiring action or approval by all of the Banks, or waive an Event of Default specified in Section 8.01(a) hereof, or consent to the assignment EX-138 or transfer by either Borrower of any of its rights and obligations under this Loan Agreement, or release either Borrower from its obligations under this Loan Agreement or release any Guarantee Subsidiary from its obligations under the Guaranty Agreement (except as otherwise permitted by such Section 7.01(f) hereof), or amend, modify or waive any provision of the Loan Documents if such amendment, modification or waiver would have the effect of releasing any collateral security (including, without limitation, any guarantee) granted thereby or the obligations to the Administrative Agent, the Agent and the Banks of the parties thereof, in each case without the written consent of all the Banks, (b) amend, modify or waive any provision of Article IX hereof (other than Section 9.10 hereof) without the written consent of the then Administrative Agent or (c) amend, modify or waive the terms of Section 9.10 hereof without the written consent of the Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Borrowers, and each of them, the Banks, the Agent, the Administrative Agent and all future holders of the Notes. In the case of any waiver of the requirements of this Loan Agreement, any other Loan Document or the Notes, the parties thereto shall be restored to their former position and rights thereunder, and any Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon. 10.06 Except as otherwise provided for hereunder, interest, fees and premiums hereunder shall be computed on the basis of a three hundred sixty-five (365) day year for the actual number of days in the billing period. 10.07 Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 8.01 hereof to authorize the Administrative Agent to declare the Notes and all other obligations owing to the Banks, the Administrative Agent and the Agent hereunder and under the other Loan Documents due and payable pursuant to the provisions of Section 8.01 hereof, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set 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 owing at such Bank to or for the credit or the account of either of the Borrowers against any and all of the obligations of the Borrowers now or hereafter existing under this Loan Agreement, the Notes and the other Loan Documents and although such obligations may be unmatured. 10.08 Except as otherwise provided for hereunder, should any installment or other payment of the principal of or interest on the Notes become due and payable on other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day thereafter and in the case of an installment of principal, interest shall be payable thereon at the rate per annum herein specified during such extension. 10.09 This Loan Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be necessary in making proof of this Loan Agreement to produce or account for more than one such counterpart. EX-139 10.10 (a) Any Bank may, at any time upon written notice thereof to the Administrative Agent and the Borrowers, transfer or assign all or any portion of the indebtedness evidenced by the Note held by such Bank and the Commitment of such Bank hereunder and all of the other rights and obligations of such Bank hereunder and under the other Loan Documents and the terms hereof shall extend to any subsequent holder of the Note; provided, however, that any assignment by a Bank hereunder shall (i) be subject to the prior written consent of Airgas, the Agent and the Administrative Agent (in any case not to be unreasonably withheld) and (ii) be in a minimum principal amount of $5,000,000.00 or in an integral multiple of $1,000,000.00 in excess thereof. On the effective date of any assignment, Exhibit A is deemed amended to reflect such assignment. (b) Any Bank may at any time sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Loan Agreement and the other Loan Documents; provided, however, that (1) such Bank's obligations under this Loan Agreement shall remain unchanged, (2) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (3) each participating bank or other entity shall be entitled to the benefit of the cost protection provisions contained in Sections 3.04, 3.05, 3.06, 3.08 and 3.09 hereof, except that all claims and petitions for payment and payments made pursuant to such Sections shall be made through such selling Bank and except that a participant shall not be entitled to receive pursuant to such provisions an amount larger than its share of the amount to which the selling Bank would have been entitled had no such sale been made, and (iv) the Borrowers, the Administrative Agent and the other Banks shall continue to deal solely and directly with such selling Bank in connection with such Bank's rights and obligations under this Loan Agreement and the other Loan Documents, and such Bank shall retain the sole right (and participating banks or other entities shall have no right) to enforce the obligations of any Credit Party under the Loan Documents and to approve any amendment, modification or waiver of any provision of this Loan Agreement or any of the other Loan Documents (other than amendments, modifications or waivers requiring, pursuant to the terms of Section 10.05 hereof, unanimous consent of the Bank). (c) Any Bank may pledge all or any portion of its rights under this Loan Agreement and/or its Note to a Federal Reserve Bank. No such pledge shall release any Bank from its obligations hereunder or substitute any such Federal Reserve Bank for such Bank as a party hereto. 10.11 The term of this Loan Agreement shall be until the Commitments of the Banks hereunder shall have terminated and the Banks have received payment in full of the unpaid principal and interest of the Notes and all other amounts payable hereunder. 10.12 All obligations of the Borrowers hereunder and under the Notes shall be joint and several obligations of the Borrowers. 10.13 (a) All documents executed pursuant to the transactions contemplated herein including without limitation this Loan Agreement, the Notes and the other Loan Documents shall be deemed to be contracts made under, and for all purposes shall be construed in accordance with, the internal laws and judicial decisions of the State of North Carolina. Each of the Borrowers hereby submits to the nonexclusive jurisdiction and venue of the state and federal courts of North Carolina for the purpose of resolving disputes hereunder or under the other Loan Documents or for the purposes of collection. Each of the Borrowers hereby agrees that both the federal and state courts in EX-140 Mecklenburg County, North Carolina are a convenient forum and agrees not to raise as a defense that such courts are not a convenient forum. (b) In the event any one or more of the provisions contained in this Loan Agreement should be held invalid, illegal or unenforcable in any respect, the validity, legality and enforcability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. (c) This Loan Agreement and the other Loan Documents and agent's fee letters constitute the entire contract among the parties relative to the subject matter hereof and thereof. Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Loan Agreement. 10.14 The payment of the indebtedness of the Borrowers to the Banks hereunder and under the Notes is senior to the payment of the indebtedness of the Borrowers under the Senior Subordinated Note Purchase Agreements and each Note Guaranty (as defined in the Senior Subordinated Note Purchase Agreements) in accordance with the terms thereof. 10.15 Nothing contained herein shall be deemed to limit the right of any Bank (or any of its affiliates) to make loans to, accept deposits from and generally engage in any kind of business with any Credit Party. 10.16 The Borrowers hereby agree that all payments and prepayments of principal, interest and fees required to be made hereunder or under any of the other Loan Documents shall be without deduction for or on account of any present or future taxes, duties or other charges levied or imposed by any foreign nation or any political subdivision or taxing authority thereof. [The remainder of this page has been left blank intentionally.] EX-141 IN WITNESS WHEREOF, each of the parties hereto has caused this Loan Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written. AIRGAS, INC. By: /s/Britton H. Murdoch _____________________________________ Britton H. Murdoch Vice President AIRGAS HOLDINGS, INC. By: /s/Britton H. Murdoch _____________________________________ Britton H. Murdoch Vice President NATIONSBANK OF NORTH CAROLINA, N.A. By: /s/M.Gregory Seaton _____________________________________ Title: Vice President ___________________________________ THE BANK OF NEW YORK By: /s/Michael V. Flannery _____________________________________ Title: Vice President ___________________________________ NATIONSBANK OF NORTH CAROLINA, N.A., as Agent By: /s/M.Gregory Seaton _____________________________________ Title: Vice President ___________________________________ THE BANK OF NEW YORK, as Administrative Agent for the Banks By: /s/Michael V. Flannery _____________________________________ Title: Vice President ____________________________________ EX-142 EX-27 9 ART. 5 FDS FOR 1995 10-K
5 1000 12-MOS MAR-31-1995 MAR-31-1995 0 0 93,423 4,161 65,947 169,837 464,983 118,715 645,637 115,753 0 315 0 0 189,337 645,637 687,983 687,983 342,876 342,876 0 0 17,625 55,373 23,894 31,479 0 0 0 31,479 .96 .96
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