-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CRdkYxrkK5fiJN9xMWSSGC898hWxNkT/3NUYG8t8TZGf6Dilms2GWxTPLY/PDnMq unQeLiwrFmy8Xda+b5+g/A== 0000804212-98-000003.txt : 19980218 0000804212-98-000003.hdr.sgml : 19980218 ACCESSION NUMBER: 0000804212-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 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-Q SEC ACT: SEC FILE NUMBER: 001-09344 FILM NUMBER: 98535857 BUSINESS ADDRESS: STREET 1: 259 RADNOR-CHESETER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106875253 MAIL ADDRESS: STREET 1: 259 RADNOR-CHESTER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: December 31, 1997 _____________________________ Commission file number: 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.) 259 Radnor-Chester Road, Suite 100 Radnor, PA 19087-5240 _______________________________________ ________________ (Address of principal executive offices) (ZIP code) (610) 687-5253 __________________________________________________ (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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 ______ ______ Common Stock outstanding at January 30, 1998: 70,394,728 shares 2 AIRGAS, INC. FORM 10-Q December 31, 1997 INDEX PART I - FINANCIAL INFORMATION ______________________________ Consolidated Balance Sheets as of December 31, 1997 and March 31, 1997....................................................3 Consolidated Statements of Earnings for the Three Months Ended December 31, 1997 and 1996.................5 Consolidated Statements of Earnings for the Nine Months Ended December 31, 1997 and 1996..................6 Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 1997 and 1996..................7 Notes to Consolidated Financial Statements.................................8 Management's Discussion and Analysis of Financial Condition and Results of Operations..................................14 PART II - OTHER INFORMATION ___________________________ Legal Proceedings.........................................................26 Exhibits and Reports on Form 8-K..........................................27 Signatures................................................................28 3 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements. AIRGAS, INC. CONSOLIDATED BALANCE SHEETS (In thousands) December 31, March 31, 1997 1997 (Unaudited) _____________ ________ ASSETS ____________________________________________ Current Assets Trade receivables, less allowances for doubtful accounts of $5,780 at December 31, 1997 and $4,443 at March 31, 1997 $172,077 $151,053 Inventories 158,689 129,372 Prepaid expenses and other current assets 36,641 31,574 _________ _________ Total current assets 367,407 311,999 _________ _________ Plant and Equipment, at cost 901,032 736,083 Less accumulated depreciation and amortization (217,117) (183,922) _________ _________ Plant and equipment, net 683,915 552,161 Other Non-current Assets, net 166,437 132,257 Goodwill, net of accumulated amortization of $37,320 at December 31, 1997 and $29,503 at March 31, 1997 379,429 294,614 _________ _________ Total assets $1,597,188 $1,291,031 ========= ========= See accompanying notes to consolidated financial statements. 4 AIRGAS, INC. CONSOLIDATED BALANCE SHEETS (CONTINUED) (In thousands, except per share amounts) December 31, March 31, 1997 1997 (Unaudited) ___________ ________ LIABILITIES AND STOCKHOLDERS' EQUITY ____________________________________ Current Liabilities Current portion of long-term debt $ 18,433 $ 25,158 Accounts payable, trade 69,403 74,329 Accrued expenses and other current liabilities 107,090 87,663 _________ _________ Total current liabilities 194,926 187,150 _________ _________ Long-Term Debt 808,808 629,931 Deferred Income Taxes 134,267 104,266 Other Non-current Liabilities 36,888 29,565 Minority Interest in Subsidiaries 4,299 3,462 Stockholders' Equity Common stock $.01 par value, 200,000 shares authorized, 71,238 and 68,762 shares issued at December 31, 1997 and March 31, 1997, respectively 713 688 Capital in excess of par value 189,228 155,543 Retained earnings 242,353 196,626 Cumulative translation adjustment (752) (468) Treasury stock, 931 and 800 common shares at cost at December 31, 1997 and March 31, 1997 (13,542) (15,732) _________ _________ Total stockholders' equity 418,000 336,657 _________ _________ Total liabilities and stockholders' equity $1,597,188 $1,291,031 ========= ========= See accompanying notes to consolidated financial statements. 5 AIRGAS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands, except per share amounts) Three Months Ended Three Months Ended December 31, 1997 December 31, 1996 __________________ __________________ Net sales: Distribution $272,958 $251,582 Direct Industrial 61,372 29,556 Manufacturing 33,480 16,065 _______ _______ Total net sales 367,810 297,203 _______ _______ Costs and expenses: Cost of products sold (excluding depreciation, depletion and amortization) Distribution 136,309 126,363 Direct Industrial 43,795 20,481 Manufacturing 15,847 9,449 Selling, distribution and administrative expenses 118,939 94,991 Depreciation, depletion and amortization 20,218 16,540 _______ _______ Total costs and expenses 335,108 267,824 _______ _______ Operating income: Distribution 26,902 25,668 Direct Industrial 2,463 990 Manufacturing 3,337 2,721 _______ _______ 32,702 29,379 Interest expense, net (13,456) (10,385) Other income, net 442 213 Equity in earnings (loss) of unconsolidated affiliates 943 (106) Minority interest (219) (177) _______ _______ Earnings before income taxes 20,412 18,924 Income tax expense 8,586 7,964 _______ _______ Net earnings $ 11,826 $ 10,960 ======= ======= Net earnings per common and common equivalent share Basic $ .17 $ .16 ======= ======= Diluted $ .17 $ .16 ======= ======= Common and common equivalent shares outstanding Basic 69,580 67,350 ======= ======= Diluted 71,500 70,200 ======= ======= See accompanying notes to consolidated financial statements. 6 AIRGAS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands, except per share amounts) Nine Months Ended Nine Months Ended December 31, 1997 December 31, 1996 __________________ __________________ Net sales: Distribution $ 812,395 $ 741,309 Direct Industrial 159,433 66,445 Manufacturing 87,750 42,259 _________ _______ Total net sales 1,059,578 850,013 _________ _______ Costs and expenses: Cost of products sold (excluding depreciation, depletion and amortization) Distribution 408,783 372,811 Direct Industrial 114,766 49,450 Manufacturing 41,537 25,521 Selling, distribution and administrative expenses 338,481 270,722 Depreciation, depletion and amortization 56,809 45,801 Recovery of refrigerant losses (14,500) - _________ _______ Total costs and expenses 945,876 764,305 _________ _______ Operating income: Distribution 82,778 76,396 Direct Industrial 4,911 2,172 Manufacturing 11,513 7,140 Recovery of refrigerant losses 14,500 - _______ _______ 113,702 85,708 Interest expense, net (39,234) (28,419) Other income, net 2,488 564 Equity in earnings of unconsolidated affiliates 1,262 8 Minority interest (837) (558) _______ _______ Earnings before income taxes 77,381 57,303 Income taxes 31,654 23,883 _______ _______ Net earnings $ 45,727 $ 33,420 ======= ======= Net earnings per common and common equivalent share Basic $ .67 $ .51 ======= ======= Diluted $ .65 $ .49 ======= ======= Common and common equivalent shares outstanding Basic 68,240 65,400 ======= ======= Diluted 70,500 68,200 ======= ======= See accompanying notes to consolidated financial statements. 7 AIRGAS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended Nine Months Ended December 31, 1997 December 31, 1996 __________________ __________________ CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 45,727 $ 33,420 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, depletion and amortization 56,809 45,801 Deferred income taxes 13,778 7,165 Equity in earnings of unconsolidated affiliates (2,372) (988) (Gain) loss on sale of plant and equipment (398) 214 Gain on divestiture of non-core business (1,452) - Minority interest in earnings 837 558 Stock issued for employee benefit plan expense 4,483 3,720 Changes in assets and liabilities, excluding effects of business acquisitions and divestiture: Trade receivables, net 3,287 (854) Inventories (12,693) (15,877) Prepaid expenses and other current assets (2,098) (29,567) Accounts payable, trade (21,218) (5,805) Accrued expenses and other current liabilities 4,583 10,872 Other assets and liabilities, net (1,248) (10,196) _______ _______ Net cash provided by operating activities 88,025 38,463 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (93,579) (48,080) Proceeds from sale of plant and equipment 2,056 1,585 Proceeds from divestiture of a business 4,000 - Business acquisitions, net of cash acquired (101,210) (162,268) Business acquisitions-hold back settlements (4,130) (6,828) Investment in unconsolidated affiliates (16,086) (34,196) Dividends from unconsolidated affiliates 1,984 1,055 Other, net 2,732 (2,085) _______ _______ Net cash used by investing activities (204,233) (250,817) _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 309,949 801,048 Repayment of debt (172,011) (588,333) Financing costs (362) (1,793) Repurchase of treasury stock (31,905) (316) Exercise of options and warrants 3,217 2,846 Net overdraft 7,320 (1,098) _______ _______ Net cash provided by financing activities 116,208 212,354 _______ _______ CHANGE IN CASH $ 0 $ 0 Cash - beginning of period 0 0 _______ _______ Cash - end of period $ 0 $ 0 ======= ======= See accompanying notes to consolidated financial statements. 8 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) BASIS OF PRESENTATION _____________________ The consolidated financial statements include the accounts of Airgas, Inc. and its subsidiaries (the "Company"). Unconsolidated affiliates are accounted for on the equity method and generally consist of 20 - 50% owned operations where control does not exist or is considered temporary. The excess of the cost of these affiliates is being amortized over 40 years. Intercompany accounts and transactions are eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to interim financial statements. These statements do not include all disclosures required for annual financial statements. These financial statements should be read in conjunction with the more complete disclosures contained in the Company's audited consolidated financial statements for the year ended March 31, 1997. The financial statements reflect, in the opinion of management, all adjustments (normal recurring adjustments) necessary to present fairly the Company's consolidated balance sheets at December 31, 1997 and March 31, 1997; the consolidated statements of earnings for the three and nine months ended December 31, 1997 and 1996; and the consolidated statements of cash flows for the nine months ended December 31, 1997 and 1996. The interim operating results are not necessarily indicative of the results to be expected for an entire year. Certain reclassifications have been made to previously issued financial statements to conform to the current presentation. Four businesses with annual sales of approximately $40 million which were previously reported with the Distribution segment are now reported with the Manufacturing segment. (2) ACQUISITIONS ____________ From April 1, 1997 to December 31, 1997, the Company acquired seventeen industrial gas distributors with aggregate annual sales of approximately $60 million, including two large regional distributors, Industrial Gas Products ("IGP") and JWS Technologies, Inc. The Company has also acquired two industrial products distributors with combined annual sales of approximately $106 million and four carbon dioxide distributors with combined annual sales of approximately $74 million. The aggregate purchase price, which includes amounts related to non-competition and confidentiality agreements, amounted to approximately $249 million and includes real estate acquired of approximately $14 million. Included in the aggregate purchase price is the issuance of approximately 1.8 million treasury shares which were reissued in connection with the acquisition of Carbonic Industries Corporation ("CIC"). In addition, the Company issued approximately 1.2 million shares in connection with the acquisition of IGP. 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. Subsequent to December 31, 1997, the Company acquired four industrial gas distributors with annual sales of approximately $17 million, and one carbon dioxide distributor with annual sales of approximately $5 million. 9 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (Unaudited) (3) NON-RECURRING GAINS ___________________ On December 23, 1996, the Company announced it was the victim of a fraudulent breach of contract by a third-party supplier of refrigerant gas. In connection with the fraud, the Company recorded a non-recurring pre-tax charge during the fourth quarter of fiscal 1997 of $26.4 million (approximately $17 million after-tax) for product losses and costs associated with the Company's investigation into the fraud. The Distribution subsidiary which reported the special charge in fiscal 1997 is reported with the Manufacturing segment in fiscal 1998. On July 28, 1997, the Company reported that it had negotiated a comprehensive settlement with all the defendants in litigation brought by the Company to recover such losses. As a result of the recovery, the Company recorded a non-recurring pre-tax gain during the second quarter of $14.5 million (approximately $9.4 million after- tax). Aggregate recoveries to date of $20.1 million represent cash received, offset by additional costs and expenses incurred year-to-date, estimated future out-of- pocket costs and other reserves which total $5.6 million. The Company continues to pursue additional recoveries including proceeds from insurance policies. The Company also recorded a pre-tax gain, included in other income, in the second quarter of approximately $1.5 million (approximately $980 after- tax) related to the sale of a non-core business. (4) EARNINGS PER SHARE __________________ Basic earnings per share amounts were determined using the weighted average number of shares outstanding. Diluted earnings per share amounts were determined using the treasury stock method. In February 1997, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings per Share" ("SFAS No. 128"). SFAS No. 128 establishes new standards for computing and presenting earnings per share ("EPS") and requires the disclosure of Basic and Diluted EPS, effective for financial statements issued for periods ending after December 15, 1997, including interim periods. Effective with its third quarter ended December 31, 1997, the Company implemented SFAS No. 128. For the Company, Diluted EPS is the same as previously reported EPS amounts. All prior periods have been restated to conform to the new rules. The difference between the Basic and Diluted common equivalent shares outstanding is a result of common share equivalents related to stock options. 10 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (Unaudited) (5) INVENTORIES ___________ Inventories consist of: (In thousands) December 31, March 31, 1997 1997 ___________ ________ Finished goods $157,991 $127,765 Raw materials 2,194 2,979 _______ _______ 160,185 130,744 Less reduction to LIFO cost ( 1,496) (1,372) _______ _______ $158,689 $129,372 ======= ======= (6) PLANT AND EQUIPMENT ___________________ The major classes of plant and equipment are as follows: (In thousands) December 31, March 31, 1997 1997 _____________ _________ Land and land improvements $ 25,775 $ 21,676 Building and leasehold improvements 85,480 66,659 Cylinders 397,788 365,253 Machinery and equipment, including bulk tanks 310,536 241,275 Transportation equipment 46,882 39,264 Construction in progress 34,571 1,956 _______ _______ $901,032 $736,083 ======= ======= 11 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (Unaudited) (7) OTHER NON-CURRENT ASSETS _______________________ Other non-current assets include: (In thousands) December 31, March 31, 1997 1997 _____________ _________ Investment in unconsolidated affiliates $ 91,422 $ 64,992 Noncompete agreements and other intangible assets, at cost, net of accumulated amortization of $69.8 million at December 31, 1997 and $59.8 million at March 31, 1997 64,744 54,794 Other assets 10,271 12,471 _______ _______ $166,437 $132,257 ======= ======= (8) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES ______________________________________________ Accrued expenses and other current liabilities include: (In thousands) December 31, March 31, 1997 1997 _____________ _________ Cash overdraft $ 22,066 $ 14,746 Accrued interest 11,778 5,425 Insurance payable and related reserves 7,293 5,224 Customer cylinder deposits 8,706 8,185 Other accrued expenses and current liabilities 57,247 54,083 _______ _______ $107,090 $ 87,663 ======= ======= 12 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (Unaudited) (9) STOCKHOLDERS' EQUITY ____________________ Changes in stockholders' equity were as follows: (In thousands of shares) Shares of Common Treasury Stock $.01 Par Value Stock ____________________ _________ Balance--April 1, 1997 68,762 800 Common stock issuance (a) 2,476 Purchase of treasury stock -- 2,085 Reissuance of treasury stock (b) -- (1,954) ______ ______ Balance--December 31, 1997 71,238 931 ====== ====== (In thousands of dollars) Capital in Cumulative Common Excess of Retained Translation Treasury Stock Par Value Earnings Adjustment Stock ______ ___________ _________ ___________ ________ Balance--April 1, 1997 $688 $155,543 $196,626 $(468) $(15,732) Net earnings -- -- 45,727 -- -- Common stock issuance (a) 25 13,081 -- -- -- Translation adjustments -- -- -- (284) -- Purchase of treasury stock -- -- -- -- (30,592) Reissuance of treasury stock (b) -- 18,209 -- -- 32,782 Tax benefit from stock option exercises -- 2,395 -- -- -- ____ _______ _______ ____ ______ Balance--December 31,1997 $713 $189,228 $242,353 $(752) $(13,542) ==== ======= ======= ==== ====== (a) Related to the issuance of common stock for stock option exercises, (704 thousand shares) acquisitions (1,440 thousand shares) and the Company's Employee Stock Purchase Plan (332 thousand shares). (b) Reissued in connection with the acquisitions of CIC and IGP. (10) COMMITMENTS AND CONTINGENCIES _____________________________ On July 26, 1996, Praxair, Inc. ("Praxair") filed suit against the Company in the Circuit Court of Mobile County, Alabama. The complaint alleges tortious interference with business or contractual relations with respect to Praxair's Right of First Refusal contract with National Welders by the Company in connection with the Company's formation of a joint venture with the majority shareholders of National Welders. Praxair is seeking compensatory damages in excess of $100 million and punitive damages. The Company believes that Praxair's claims are without merit and intends to defend vigorously against such claims. 13 AIRGAS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (Unaudited) On September 9, 1996, the Company filed suit against Praxair in the Court of Common Pleas of Philadelphia County, Pennsylvania. The complaint alleges breach of contract, fraud, conversion and misappropriation of trade secrets with respect to an agreement between Praxair and the Company, pursuant to which Praxair induced the Company to provide Praxair valuable information and conclusions developed by the Company concerning CBI Industries, Inc. ("CBI") in exchange for Praxair's promise not to acquire CBI without the Company's participation. The Company has alleged that it became entitled, pursuant to such agreement, to acquire certain of CBI's assets having a value in excess of $800 million. The Company is seeking compensatory and punitive damages. The Company is involved in other various legal 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 financial condition, results of operations or liquidity. 14 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL REVIEW ________________ OVERVIEW ________ The Company's financial results for the third quarter ended December 31, 1997 reflect continued growth compared with the third quarter last year. Net sales increased 24% to $367.8 million from $297.2 million in the third quarter last year. After-tax cash flow (net earnings plus depreciation, depletion, amortization and deferred taxes) increased by 15% to a record $34.4 million, compared to $29.7 million for the same quarter last year. Net earnings were $11.8 million, or $.17 per share, compared to $11.0 million, or $.16 per share a year ago. Growth in the industrial gas distribution business continued with the acquisition of seventeen industrial gas distributors from April 1, 1997 to December 31, 1997, with annual sales of approximately $60 million, including two large regional distributors, Industrial Gas Products and JWS Technologies, Inc. Internal growth and expansion of existing product lines resulted in same-store sales growth of 3% and same-store gross profit growth of 3.6% compared to the same period in the prior year. Since April 1, 1997, Airgas Direct Industrial ("ADI") has acquired two strategic industrial products distributors: (1) Kendeco Industrial Supply, an "engineered-systems integrator" for the cutting tools and abrasives market with annual sales of approximately $16 million, and (2) Lyons Safety, Inc., a national marketer of safety and personal protection systems with annual sales of approximately $90 million. These two acquisitions strengthen ADI's position through the expansion of product lines (safety products and metalworking tools) in the largest geographical market for industrial supplies, and through additional marketing and service capabilities to larger customers. In addition, ADI realized same-store sales growth of 16%, and same-store gross profit growth of approximately 19%, compared to the same period in the prior year. The Manufacturing segment's expansion into carbon dioxide continued, with the acquisition of four carbon dioxide distributors since April 1, 1997, with aggregate annual sales of approximately $74 million. With these acquisitions, the Company's combined annual sales of carbon dioxide and dry ice products total in excess of $100 million. These acquisitions, combined with other businesses acquired in fiscal 1997, enhance the Company's ability to supply carbon dioxide and dry ice products through its distribution network. 15 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The fraudulent breach of contract by a third-party supplier of refrigerant gas was reported by the Company on December 23, 1996. In connection with the fraud, the Company recorded a non-recurring pre-tax charge during the fourth quarter of fiscal 1997 of $26.4 million (approximately $17 million after-tax) for product losses and costs associated with the Company's investigation into the fraud. On July 28, 1997, the Company reported that it had negotiated a comprehensive settlement with all defendants in the litigation described above. As a result of the recovery, the Company recorded a non-recurring gain in the second quarter of $14.5 million (approximately $9.4 million after-tax). The Company continues to pursue additional recoveries including proceeds from insurance policies. 16 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS: THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 1996 _____________________________________ Net sales increased 24% during the quarter ended December 31, 1997 compared to the same quarter in the prior year: (in thousands) 1997 1996 Increase ____ ____ __________ Distribution $272,958 $251,582 $ 21,376 Direct Industrial 61,372 29,556 31,816 Manufacturing 33,480 16,065 17,415 _______ _______ _______ $367,810 $297,203 $ 70,607 ======= ======= ======= For the quarter ended December 31, 1997, Distribution sales increased approximately $13 million from the acquisition of 30 distributors since October 1, 1996 and approximately $8 million from same-store sales. The increase in same-store Distribution sales of 3% was more heavily weighted towards lower margin hardgoods with internal growth primarily attributable to higher sales volumes. The prior period included the benefit of approximately $3 million in non-recurring large sales of refrigerants and sulfur hexafluoride. Excluding these sales, the Company realized same-store sales growth of approximately 4.3%. The Company continues to focus on internal sales growth through the development of new gas products and product-line extensions, including specialty gases, small bulk gases, carbon dioxide, replacement refrigerants in returnable containers, expansion of rental welder fleets and increased hardgoods business through ADI product lines. The Company believes its same-store sales growth is slightly understated since it does not reflect the Company's decision to cease unprofitable sales to certain customers and other sales lost during acquisition consolidation and integration activity. The Company estimates same-store sales based on a comparison of current period sales to the prior period's sales, adjusted for acquisitions. Future same-store sales growth is dependent on the economy and the Company's ability to expand markets for new and existing products and to increase prices. ADI's sales include welding, metalworking, safety and other Maintenance, Repair and Operations ("MRO") hardgoods. The internal sales growth rate for ADI was approximately 16% during the third quarter of fiscal 1998. In addition, ADI has completed two acquisitions in fiscal 1998 to expand product lines, geographic coverage and enhance marketing and service capabilities. Sales to the Distribution segment totaled approximately $700 thousand for the quarter ended December 31, 1997 compared to approximately $244 thousand in the same quarter in the prior year, and are eliminated in consolidation. 17 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Manufacturing segment's sales increased $17.4 million during the third quarter primarily as a result of recent acquisitions. Strong sales of calcium carbide and nitrous oxide were offset slightly by lower shipments of certain carbon products. Four businesses with annual sales of approximately $40 million which were previously reported with the Distribution segment are now reported with the Manufacturing segment. Sales to the Distribution segment totaled approximately $3 million for the quarter ended December 31, 1997 compared to approximately $2.3 million in the same quarter in the prior year, and are eliminated in consolidation. The increase in Distribution gross profits of approximately $11.4 million over the same quarter in the prior year resulted from acquisitions which contributed approximately $6.6 million and from same-store gross profit growth of 3.6% or approximately $4.8 million. Same-store gross profit growth resulted primarily from sales volume growth. On a same-store basis, the Distribution gross margin increased 30 basis points compared to the same period in the prior year primarily as a result of higher gas margins. Hardgoods and rent margins also improved slightly compared to the prior period. Hardgoods accounted for 51.1% of total sales compared to 49.9% in the same period last year. Finally, bulk tank rent related to small bulk installations, and an increased base of rental welding equipment and the return of third-party rented cylinders continued to help same-store gross profit growth. For the quarter, ADI's gross margin of 28.6% was down 210 basis points compared to the same quarter last year as a result of fiscal 1998 acquisitions. Same-store gross profit growth of approximately $2.7 million resulted primarily from sales volume growth. For the quarter, the Manufacturing gross margin of 52.7% compared favorably to the same quarter last year as a result of acquisitions completed since October 1, 1997. Selling, distribution, and administrative expenses ("SG&A") increased $23.9 million compared to the same quarter last year primarily due to acquisitions. SG&A expenses as a percentage of sales increased 30 basis points to 32.3% compared to the same period in the prior quarter. As a percentage of sales, increases in operating expenses were offset by ADI acquisitions which have a lower expense-to-sales ratio than the Distribution and Manufacturing segments. The Company anticipates additional operating costs resulting from the consolidation of operating companies and from the integration and standardization of information systems during fiscal years 1998, 1999 and 2000. Depreciation, depletion and amortization increased $3.7 million compared to the same period in the prior quarter due to acquisitions and from increased capital expenditures. 18 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Operating income increased 11% during the quarter ended December 31, 1997 compared to the same quarter in the prior year: (in thousands) 1997 1996 Increase ____ ____ __________ Distribution $ 26,902 $25,668 $ 1,234 Direct Industrial 2,463 990 1,473 Manufacturing 3,337 2,721 616 ______ ______ ______ $ 32,702 $29,379 $ 3,323 ====== ====== ====== The Distribution segment's operating margin decreased 30 basis points to 9.9% compared with the same period in the prior year. The decrease resulted primarily from slightly higher operating costs and expenses, recent new hub acquisitions which have lower operating margins and lower same-store gross profit growth. Subject to the effects of future acquisitions and the Company's ability to increase sales and expand gross margins, the Company continues to focus on improving its operating margin by implementing selective price increases, reducing costs by leveraging its national purchasing power and continuing to integrate acquisitions. The operating income margin for ADI increased 70 basis points to 4% compared with the same quarter last year. The increase resulted partially from higher same-store gross profits. The Company believes that ADI's operating income margin will continue to be impacted by expansion costs related to information systems, infrastructure and facility enhancements. ADI is establishing new distribution centers in Southern California and near Atlanta, Georgia, which will consolidate other ADI warehouses. Non-recurring moving costs associated with the new distribution centers will impact ADI's performance during the fourth quarter by approximately one-half penny per share. The Company expects the distribution center in California to be operational by March 31, 1998 and the distribution center in Georgia to be operational by the summer of 1998. The Manufacturing segment's operating income increased $616 thousand compared to the same quarter last year primarily as a result of acquisitions. Operating margin decreased to 10% compared to 17% in the same period in the prior year as a result of recent acquisitions which have a lower operating income margin. Interest expense, net, increased $3.1 million compared to the same quarter last year primarily as a result of the increase in average outstanding debt associated with the acquisition of businesses acquired since October 1, 1996, interest costs on debt associated with the refrigerant fraud and the repurchase of the Company's common stock. Income tax expense represented 42.1% of pre-tax earnings in 1998 and 1997. 19 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS: NINE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE NINE MONTHS ENDED DECEMBER 31, 1996 ________________________________ Net sales increased 25% during the nine months ended December 31, 1997 compared to the prior year: (in thousands) 1997 1996 Increase ____ ____ __________ Distribution $ 812,395 $ 741,309 $ 71,086 Direct Industrial 159,433 66,445 92,988 Manufacturing 87,750 42,259 45,491 _________ ________ ________ $1,059,578 $ 850,013 $ 209,565 ========= ======== ======== For the nine months ended December 31, 1997, Distribution sales increased approximately $39 million resulting from the acquisition of 37 distributors since April 1, 1996 and approximately $32 million from same-store sales growth. The increase in same-store Distribution sales of approximately 4% was a result of sales volume growth in all three product groups: gases, hardgoods and rent. The Company continues to focus on internal sales growth through the development of new gas products and product-line extensions, including specialty gases, small bulk gases, carbon dioxide, replacement refrigerants in returnable containers, expansion of rental welder fleets and increased hardgoods business through ADI product lines. The Company believes its same-store sales growth is slightly understated since it does not reflect the Company's decision to cease unprofitable sales to certain customers and other sales lost during acquisition consolidation and integration activity. The Company estimates same-store sales based on a comparison of current period sales to the prior period's sales, adjusted for acquisitions. Future same-store sales growth is dependent on the economy and the Company's ability to expand markets for new and existing products and to increase prices. ADI's sales include welding, metalworking, safety and other MRO hardgoods. The internal sales growth rate for ADI was approximately 15% for the nine months ended December 31, 1997. Sales to the Distribution segment totaled approximately $1.6 million for the nine months ended December 31, 1997 compared to approximately $322 thousand in the prior year, and are eliminated in consolidation. The Manufacturing segment's sales increased approximately $45 million during the nine months ended December 31, 1997, primarily as a result of acquisitions. Strong sales of calcium carbide and nitrous oxide were offset slightly by lower sales of certain carbon products. Four businesses with annual sales of approximately $40 million which were previously reported with the Distribution segment are now reported with the Manufacturing segment. Sales to the Distribution segment totaled approximately $6.7 million for the nine months ended December 31, 1997 compared to approximately $5.2 million in the prior year, and are eliminated in consolidation. 20 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The increase in Distribution gross profits of approximately $35 million compared to the prior period resulted from acquisitions which contributed approximately $17 million and from same-store gross profit growth of 4.6% or approximately $18 million. Same-store gross profit growth resulted primarily from sales volume growth with same-store margins increasing slightly. On a same-store basis, the Distribution gross margin increased 20 basis points compared to the same period in the prior year, primarily as a result of higher gas margins. Hardgoods margins also improved slightly compared to the prior period. Hardgoods accounted for 51.6% of total sales compared to 50.7% in the prior period. The improvement in gas margins is attributable to non-recurring lower margin refrigerant and sulfur hexafluoride sales in the prior period and from selective price increases. For the nine months ended December 31, 1997, ADI's gross margin of 28% compared favorably to the prior year as a result of the September 1, 1996 acquisition of Rutland, which has a historical gross margin of approximately 40%. Same-store gross profit growth of approximately $6 million resulted primarily from sales volume growth. For the nine months ended December 31, 1997, the Manufacturing gross margin of 52.7% compared favorably to the prior period as a result of acquisitions. Selling, distribution, and administrative expenses ("SG&A") increased $67.8 million compared to the same period last year primarily due to acquisitions. SG&A expenses as a percentage of sales of 31.9% were essentially flat compared to the same period in the prior year. Subject to future acquisitions, the Company believes that as it continues to integrate acquisitions and complete start-up and expansion activities, SG&A expenses relative to net sales should improve. The Company anticipates additional operating costs resulting from the consolidation of operating companies and from the integration and standardization of information systems during fiscal years 1998, 1999 and 2000. Depreciation, depletion and amortization increased $11 million compared to the same period in the prior year due to acquisitions and from increased capital expenditures. 21 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Excluding a non-recurring gain of $14.5 million, operating income increased 15.7% in 1997 compared to 1996: (in thousands) 1997 1996 Increase ____ ____ __________ Distribution $82,778 $76,396 $ 6,382 Direct Industrial 4,911 2,172 2,739 Manufacturing 11,513 7,140 4,373 ______ ______ ______ $99,202 $85,708 $13,494 ====== ====== ====== The Distribution segment's operating margin was essentially flat at 10.2% compared with last year. Subject to the effects of future acquisitions and the Company's ability to increase sales and expand margins, the Company continues to focus on improving its operating margin by implementing selective price increases, reducing costs by leveraging its national purchasing power and continuing to integrate acquisitions. For the nine months ended December 31, 1997, the operating income margin for ADI decreased 20 basis points to 3.1% compared with last year. The Company believes that ADI's operating income margin will continue to be impacted by expansion costs related to information systems, infrastructure and facility enhancements. ADI is establishing new distribution centers in Southern California and near Atlanta, Georgia which will consolidate other ADI warehouses. Non-recurring moving costs associated with the new distribution centers will impact ADI's performance during the fourth quarter by approximately one-half penny per share. The Company expects the distribution center in California to be operational by March 31, 1998 and the distribution center in Georgia to be operational by the summer of 1998. The Manufacturing segment's operating income increased $4.4 million compared to last year primarily as a result of acquisitions. Operating margin decreased to 13% compared to 17% in the prior year as a result of recent acquisitions which have a lower operating income margin. During the second quarter ended of fiscal 1998, the Company recorded a non-recurring pre-tax gain of approximately $14.5 million (approximately $9.4 million after-tax). See Note 3 to the Company's consolidated financial statements for further discussion of the non-recurring gain. Interest expense, net, increased $10.8 million compared to the prior year primarily as a result of the increase in average outstanding debt associated with the acquisition of distribution businesses acquired since April 1, 1996, the joint venture investment in National Welders, interest costs and debt associated with the refrigerant fraud, and the repurchase of the Company's common stock. As discussed in "Liquidity and Capital Resources" below, the Company has hedged floating interest rates under certain borrowings with interest rate swap agreements. Income tax expense, excluding non-recurring gains, represented 42.5% of pre-tax earnings in the nine months ended December 31, 1997 compared to 41.7% in the prior year. The increase in the effective income tax rate was primarily a result of non-deductible goodwill from recent acquisitions. 22 Item 2. 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, stock repurchases, and acquisitions with borrowings, the issuance of common stock and funds provided by operating activities. Cash flows from operating activities totaled $88 million ($73.5 million excluding the non-recurring gain from partial recovery of refrigerant losses) for the nine months ended December 31, 1997. Depreciation, depletion and amortization represent $56.8 million of cash flows from operating activities. Deferred income taxes of $13.8 million resulted from temporary differences. Cash flows from working capital components decreased $28.1 million as a result of a decrease in accounts payable due to the timing of invoice payments, an increase in inventory levels to meet increased sales volumes, offset by an increase in accounts receivable associated with higher same-store sales. Days sales outstanding improved slightly compared to the March 31, 1997 levels and distribution hardgoods days' supply of inventory has improved approximately 8% since March 31, 1997. Cash used by investing activities totaled $204.2 million which was primarily comprised of $93.6 million for capital expenditures, and $121.4 million related to acquisitions and investments in unconsolidated affiliates. The Company's use of cash for capital expenditures was attributable to the construction of two air separation plants, the continued assimilation of acquisitions which require expenditures for combining cylinder fill plants, the improvement of truck fleets, the purchase of cylinders in order to return cylinders rented from third parties and the purchase of cylinders and bulk tanks necessary to facilitate gas sales growth. Through December 31, 1997, the Company incurred capital expenditures of approximately $30.1 million related to air separation plant construction and expects additional capital expenditures of approximately $5 million to complete the construction of the plants. Both plants became operational in January 1998. For the nine months ended December 31, 1997, approximately $29 million of capital expenditures were for the purchase of cylinders, bulk tanks and machinery and equipment. The Company estimates that its Distribution maintenance capital expenditures are approximately 1 to 2% of net sales. The Company considers the replacement of existing capital assets to be maintenance capital expenditures. Financing activities provided cash of $116.2 million with total debt outstanding increasing by $172 million from March 31, 1997. Funds from financing activities were used primarily for acquisitions, capital expenditures and the repurchase of Airgas common stock. Effective December 5, 1997, the Company entered into an amended credit facility which replaced and combined four previous bank credit facilities. This amended facility consists of a US$725 million and a C$100 million unsecured revolving credit facility with various commercial banks which matures on December 5, 2002. At December 31, 1997, the Company had approximately US$438 million in borrowings and approximately C$56 million (US$39 million) borrowings under the facility and approximately US$99 million committed under letters of credit, resulting in aggregate unused availability under the facility of approximately US$221 million. There were no other significant changes in the terms, conditions or covenants of the amended facility compared to the previous credit facilities. 23 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) In fiscal 1997, the Company commenced a medium-term note program which provides for the issuance of its securities with an aggregate public offering price of up to $450 million. During fiscal 1997, the Company issued the following long-term debt under the medium-term note program: $100 million of unsecured notes due September 2006 bearing interest at a fixed rate of 7.75%; $50 million of unsecured notes due September 2001 bearing interest at a fixed rate of 7.15%; and $75 million of unsecured notes due March 2004 at a fixed rate of 7.14%. The proceeds from the medium-term note issuances were used to repay bank debt. At December 31, 1997, the effective interest rate related to outstanding borrowings under all credit lines was approximately 6.38%. The Company's loan agreements contain covenants which include the maintenance of a minimum equity level, maintenance of certain financial ratios, restrictions on additional borrowings and limitations on dividends. In managing interest rate exposure, principally under the Company's floating rate revolving credit facilities, the Company has entered into 25 interest rate swap agreements during the period from June 1992 through December 31, 1997. The swap agreements are with major financial institutions and aggregate $403 million in notional principal amount at December 31, 1997. Approximately $253 million of the notional principal amount of the swap agreements require fixed interest payments based on an average effective rate of 6.63% for remaining periods ranging between 1 and 8 years. Six swap agreements require floating rates ($149.5 million notional amount at 5.72% at December 31, 1997). Under the terms of seven of the swap agreements, the Company has elected to receive the discounted value of the counterparty's interest payments upfront. At December 31, 1997, approximately $15.2 million of such payments were included in other liabilities. The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties. 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 primarily through the use of cash flow from operations, debt, common stock for certain acquisition candidates and other available sources. Subsequent to December 31, 1997, the Company acquired four industrial gas distributors with annual sales of approximately $17 million, and one carbon dioxide distributor with annual sales of approximately $5 million. As the Company integrates and standardizes certain information systems during fiscal 1998, 1999 and 2000, the Company expects to enter into obligations and purchase certain capital equipment aggregating an estimated $18 to $24 million. In October 1997, the Airgas Board of Directors approved the repurchase of up to an additional 2,000,000 shares of common stock from time-to-time to offset share issuances for stock options, the Employee Stock Purchase Plan, and acquisitions. Together with previously granted authority, this increases the total repurchase program to a potential 4.6 million shares. Through the nine months ended December 31, 1997, the Company has repurchased 2,885,200 shares under previous repurchase programs. Approximately 3 million shares were reissued in connection with the acquisition of Carbonic Industries Corporation and Industrial Gas Products. 24 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Company has initiated a project to integrate and standardize its financial general ledger information systems prior to the Year 2000. As a result of this information system standardization, the Company expects these systems to be Year 2000 compliant. The Company is also conducting a comprehensive review of its other information and operations systems to identify the systems that may not function properly in the Year 2000 and thereafter, and is developing an implementation plan to take appropriate corrective action if necessary. The Company has not yet assessed its Year 2000 compliance expense. The Company currently believes that, with modifications to existing software and converting to new software, the Year 2000 problem will not pose significant operational problems for the Company's information and operations systems so modified and converted. However, if such modifications and conversions are not completed timely, the Year 2000 problem may have a material impact on the operations of the Company. The Company does not currently pay dividends. OTHER _____ New Accounting Pronouncements In the first quarter of fiscal 1998, the Company adopted SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities based on consistent application of a financial- components approach that focuses on control. It distinguishes transfers of financial assets that are sales from transfers that are secured borrowings. This statement is effective for transfer and servicing of financial assets and extinguishments of liabilities for fiscal years beginning after December 15, 1996 and is to be applied prospectively. The adoption of this statement had no material impact on earnings, financial condition or liquidity of the Company. In the first quarter of fiscal 1998, the Company adopted Statement of Position 96-1 (SOP), which prescribes generally accepted accounting principles for environmental remediation liabilities. This SOP more specifically identifies future, long-term monitoring and administration expenditures as remediation liabilities that need to be accrued on the balance sheet as an existing obligation. This SOP is effective for fiscal years beginning after December 15, 1996. The adoption of this statement did not have a material impact on earnings, financial condition or liquidity of the Company. In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement No. 128 "Earnings Per Share" (SFAS No. 128). SFAS No. 128 establishes new standards for computing and presenting earnings per share, effective for financial statements issued for periods ending after December 15, 1997, including interim periods. Effective with its third quarter ended December 31, 1997, the Company implemented SFAS No. 128. For the Company, Diluted earnings per share is the same as previously reported earnings per share amounts. All prior periods have been restated to conform to the new rules. In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income." This statement requires that all items that are required to be recognized under accounting standards as components of comprehensive income be 25 Item 2. AIRGAS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) reported in a financial statement that is displayed with the same prominence as other financial statements. The Company plans to adopt this accounting standard in the first quarter of fiscal 1999, as required. The adoption of this standard will not impact earnings, financial condition, or liquidity, but will require the Company to classify items of other comprehensive income in a financial statement and display the accumulated balance of other comprehensive income separately in the equity section of the balance sheet. In June, 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." This statement establishes standards for reporting information about operating segments in annual financial statements and requires selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company will adopt this accounting standard in the first quarter of fiscal 1999, as required. The adoption of this standard will not impact earnings, financial condition or liquidity of the Company. Forward-looking Statements This report contains forward-looking statements. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, there are certain important factors that could cause the Company's actual results to differ materially from those included in such forward- looking statements. Some of the important factors which could cause actual results to differ materially from those projected include, but are not limited to: the Company's ability to continue to identify, complete and integrate strategic acquisitions to enter new markets and expand existing business; the ability to develop new products and product-line extensions; continued availability of financing to provide additional sources of funding for future acquisitions; capital expenditure requirements and foreign investments; expenses associated with the Company's new ADI Division; the effects of competition from independent distributors and vertically integrated gas producers on products and pricing and growth and acceptance of new product lines through the Company's sales and marketing programs; changes in product prices from gas producers and name-brand manufacturers and suppliers of hardgoods; uncertainties regarding accidents or litigation which may arise in the ordinary course of business; the Company's ability to pursue claims and recoveries in connection with the fraudulent breach of contract related to refrigerant R-12 purchases; the expenses associated with Year 2000 compliance; and the effects of, and changes in the economy, monetary and fiscal policies, laws and regulations, inflation and monetary fluctuations and fluctuations in interest rates, both on a national and international basis. The Company does not undertake to update any forward-looking statement made herein or that may be made from time to time by or on behalf of the Company. 26 PART II - OTHER INFORMATION Item 1. Legal Proceedings On July 26, 1996, Praxair, Inc. ("Praxair") filed suit against the Company in the Circuit Court of Mobile County, Alabama. The complaint alleges tortious interference with business or contractual relations with respect to Praxair's Right of First Refusal contract with the majority shareholders of National Welders Supply Company, Inc. ("National Welders") by the Company in connection with the Company's formation of a joint venture with National Welders. Praxair is seeking compensatory damages in excess of $100 million and punitive damages. On February 24, 1997, the court entered an order denying the Company's motion to dismiss for forum non conveniens. The Company believes that Praxair's claims are without merit and intends to defend vigorously against such claims. On September 9, 1996, the Company filed suit against Praxair in the Court of Common Pleas of Philadelphia County, Pennsylvania. The complaint alleges breach of contract, fraud, conversion and misappropriation of trade secrets with respect to an agreement between Praxair and the Company, pursuant to which Praxair induced the Company to provide Praxair valuable information and conclusions developed by the Company concerning CBI Industries, Inc. ("CBI") in exchange for Praxair's promise not to acquire CBI without the Company's participation. The Company has alleged that it became entitled, pursuant to such agreement, to acquire certain of CBI's assets having a value in excess of $800 million. The Company is seeking compensatory and punitive damages. On January 2, 1997, the court entered an order overruling Praxair's preliminary objections to the Company's complaint and ordering Praxair to file an answer to the complaint. Praxair has since filed an answer and asserted various defenses. Thereafter, Praxair filed a motion for judgement on the pleadings. On July 31, 1997, the Court entered an order denying that motion. The fraudulent breach of contract by a third-party supplier of refrigerant gas was reported by the Company on December 23, 1996. The Company continues to pursue additional recoveries including proceeds from insurance policies. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits ________ 4.1. Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 among Airgas, Inc., Airgas Canada Inc., Red-D-Arc Limited and Airgas Ontario Inc., Nationsbank, N.A. as U.S. Agent and Canadian Imperial Bank of Commerce, as Canadian Agent. 11. Calculation of earnings per share. 27. Financial Data schedule 27 b. Reports on Form 8-K ___________________ On October 9, 1997, the Company filed a Form 8-K pursuant to Item 5, commenting on its earnings estimates for the second quarter ended September 30, 1997. On October 24, 1997, the Company filed a Form 8-K pursuant to Item 5, reporting its earnings for the second quarter ended September 30, 1997. 28 SIGNATURES Pursuant to the requirements 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. February 12, 1998 /s/ Thomas C. Deas, Jr. _________________ _______________________ Date Thomas C. Deas, Jr. Vice President & Chief Financial Officer EX-4.1 2 CREDIT AGREEMENT BETWEEN AIRGAS, INC. AND CERTAIN BANKS AND NATIONSBANK, N.A. ($800 MILLION CREDIT FACILITY) EX-1 [EXECUTION COPY] NINTH AMENDED AND RESTATED CREDIT AGREEMENT Dated as of December 5, 1997 among AIRGAS, INC., AIRGAS CANADA INC., RED-D-ARC LIMITED and AIRGAS ONTARIO INC., THE SEVERAL LENDERS FROM TIME TO TIME PARTY HERETO, NATIONSBANK, N.A., as U.S. Agent AND CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian Agent EX-2 TABLE OF CONTENTS SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Computation of Time Periods. . . . . . . . . . . . . . . . . .25 1.3 Accounting Terms.. . . . . . . . . . . . . . . . . . . . . . .25 SECTION 2 U.S. DOLLAR CREDIT FACILITIES. . . . . . . . . . . . . . . .26 2.1 Revolving U.S. Loans.. . . . . . . . . . . . . . . . . . . . .26 2.2 Competitive U.S. Loan Subfacility. . . . . . . . . . . . . . .28 2.3 U.S. Letter of Credit Subfacility. . . . . . . . . . . . . . .30 2.4 U.S. Swingline Loan Subfacility. . . . . . . . . . . . . . . .35 2.5 364-Day Revolving Loans. . . . . . . . . . . . . . . . . . . .37 SECTION 3 CANADIAN DOLLAR CREDIT FACILITIES. . . . . . . . . . . . . .39 3.1 Revolving Canadian Loans.. . . . . . . . . . . . . . . . . . .39 3.2 Canadian Swingline Loan Subfacility. . . . . . . . . . . . . .41 3.3 Canadian Letter of Credit Subfacility. . . . . . . . . . . . .43 3.4 Bankers' Acceptances.. . . . . . . . . . . . . . . . . . . . .47 3.5 Guaranty of Canadian Borrowers' Obligations. . . . . . . . . .49 3.6 Reset Mechanism. . . . . . . . . . . . . . . . . . . . . . . .51 SECTION 4 OTHER PROVISIONS RELATING TO CREDIT FACILITIES . . . . . . .52 4.1 Default Rate.. . . . . . . . . . . . . . . . . . . . . . . . .52 4.2 Extension and Conversion.. . . . . . . . . . . . . . . . . . .52 4.3 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . .53 4.4 Termination and Reduction of Commitments; Increase of Commitments.54 4.5 Fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 4.6 Capital Adequacy.. . . . . . . . . . . . . . . . . . . . . . .60 4.7 Inability To Determine Interest Rate.. . . . . . . . . . . . .60 4.8 Illegality.. . . . . . . . . . . . . . . . . . . . . . . . . .61 4.9 Requirements of Law. . . . . . . . . . . . . . . . . . . . . .61 4.10 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . .63 4.11 Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . .65 4.12 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . .65 4.13 Sharing of Payments.. . . . . . . . . . . . . . . . . . . . .66 4.14 Payments, Computations, Etc.. . . . . . . . . . . . . . . . .67 SECTION 5 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . .68 5.1 Closing Conditions.. . . . . . . . . . . . . . . . . . . . . .68 5.2 Conditions to all Extensions of Credit.. . . . . . . . . . . .69 SECTION 6 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . .71 6.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . .71 6.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . .71 6.3 Organization; Existence; Compliance with Law.. . . . . . . . .72 6.4 Power; Authorization; Enforceable Obligations. . . . . . . . .72 6.5 No Legal Bar.. . . . . . . . . . . . . . . . . . . . . . . . .72 6.6 No Material Litigation.. . . . . . . . . . . . . . . . . . . .73 6.7 No Default.. . . . . . . . . . . . . . . . . . . . . . . . . .73 6.8 Ownership of Property; Liens.. . . . . . . . . . . . . . . . .73 6.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . .73 6.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . . .73 6.11 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . .74 6.12 ERISA.. . . . . . . . . . . . . . . . . . . . . . . . . . . .74 6.13 Governmental Regulations, Etc.. . . . . . . . . . . . . . . .75 6.14 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . .76 6.15 Purpose of Loans and Letters of Credit. . . . . . . . . . . .76 6.16 Environmental Matters.. . . . . . . . . . . . . . . . . . . .76 SECTION 7 AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . .77 7.1 Information Covenants. . . . . . . . . . . . . . . . . . . . .78 7.2 Preservation of Existence and Franchises.. . . . . . . . . . .80 7.3 Books and Records. . . . . . . . . . . . . . . . . . . . . . .80 7.4 Compliance with Law. . . . . . . . . . . . . . . . . . . . . .80 7.5 Payment of Taxes and Other Indebtedness. . . . . . . . . . . .80 7.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . .80 7.7 Maintenance of Property. . . . . . . . . . . . . . . . . . . .81 EX-3 7.8 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .81 7.9 Audits/Inspections.. . . . . . . . . . . . . . . . . . . . . .81 7.10 Financial Covenants.. . . . . . . . . . . . . . . . . . . . .81 7.11 Maintenance of Designation Rights - National Welders Board of Directors.82 SECTION 8 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . .82 8.1 Indebtedness.. . . . . . . . . . . . . . . . . . . . . . . . .82 8.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 8.3 Nature of Business.. . . . . . . . . . . . . . . . . . . . . .83 8.4 Consolidation, Merger, Amalgamation or Sale. . . . . . . . . .83 8.5 Restricted Payments. . . . . . . . . . . . . . . . . . . . . .84 8.6 Prepayments of Indebtedness, Etc.. . . . . . . . . . . . . . .84 8.7 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . .84 8.8 Limitation on Restrictions on Subsidiary Dividends and Other Distributions, Etc.84 8.9 Issuance and Sale of Subsidiary Stock. . . . . . . . . . . . .85 8.10 No Further Negative Pledges.. . . . . . . . . . . . . . . . .85 SECTION 9 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . .85 9.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . .85 9.2 Acceleration; Remedies.. . . . . . . . . . . . . . . . . . . .88 SECTION 10 AGENCY PROVISIONS . . . . . . . . . . . . . . . . . . . . .89 10.1 Appointment.. . . . . . . . . . . . . . . . . . . . . . . . .89 10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . .90 10.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . .90 10.4 Reliance on Communications. . . . . . . . . . . . . . . . . .91 10.5 Notice of Default.. . . . . . . . . . . . . . . . . . . . . .91 10.6 Non-Reliance on Agent and Other Lenders.. . . . . . . . . . .91 10.7 Indemnification.. . . . . . . . . . . . . . . . . . . . . . .92 10.8 Agents in their Individual Capacity.. . . . . . . . . . . . .93 10.9 Successor Agents. . . . . . . . . . . . . . . . . . . . . . .93 SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .94 11.1 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . .94 11.2 Right of Set-Off. . . . . . . . . . . . . . . . . . . . . . .96 11.3 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . .96 11.4 No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . .98 11.5 Payment of Expenses, Etc. . . . . . . . . . . . . . . . . . .99 11.6 Amendments, Waivers and Consents. . . . . . . . . . . . . . .99 11.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 100 11.8 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 101 11.9 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 101 11.10 Governing Law; Submission to Jurisdiction; Venue.. . . . . 101 11.11 Severability.. . . . . . . . . . . . . . . . . . . . . . . 103 11.12 Entirety.. . . . . . . . . . . . . . . . . . . . . . . . . 103 11.13 Binding Effect; Termination of Existing Credit Agreement and $125,000,000 Credit Facility; Termination of This Credit Agreement. . . . . . 103 11.14 Confidentiality. . . . . . . . . . . . . . . . . . . . . . 104 11.15 Conflict.. . . . . . . . . . . . . . . . . . . . . . . . . 104 EX-4 SCHEDULES Schedule 1.1A Applicable Percentages Schedule 1.1B Existing Canadian Letters of Credit Schedule 1.1C Existing U.S. Letters of Credit Schedule 1.1D National Welders Liens Schedule 1.1E Liens Schedule 2.1(a) Lenders Schedule 2.1(b)(i)Form of Notice of U.S. Borrowing Schedule 2.1(e) Form of Revolving U.S. Note Schedule 2.2(i) Form of Competitive U.S. Note Schedule 2.4(d) Form of U.S. Swingline Note Schedule 2.5(e) Form of 364-Day Revolving Note Schedule 3.1(b)(i)Form of Notice of Canadian Borrowing Schedule 3.1(e) Form of Revolving Canadian Note Schedule 4.2 Form of Notice of Extension/Conversion Schedule 4.4 Form of New Commitment Agreement Schedule 5.1(c) Form of Legal Opinion of McCausland, Keen & Buckman Schedule 5.1(d) Form of Legal Opinion of Blaney, McMurtry, Stapells, Friedman Schedule 5.1(e) Form of Legal Opinion Moore & Van Allen, PLLC Schedule 6.6 Litigation Schedule 6.14 Subsidiaries Schedule 7.1(c) Form of Officer's Compliance Certificate Schedule 11.3 Form of Assignment and Acceptance EX-5 NINTH AMENDED AND RESTATED CREDIT AGREEMENT THIS NINTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 5, 1997 (the "Credit Agreement"), is by and among AIRGAS, INC., a Delaware corporation ("Airgas" and also a "Credit Party"), AIRGAS CANADA INC., RED-D-ARC LIMITED and AIRGAS ONTARIO INC. (each a "Canadian Borrower" and together with Airgas, the "Credit Parties"), the several lenders identified on the signature pages hereto as U.S. Lenders and such other lenders as may from time to time become a party hereto as U.S. Lenders (the "U.S. Lenders"), the several lenders identified on the signature pages hereto as Canadian Lenders and such other lenders as may from time to time become a party hereto as Canadian Lenders (the "Canadian Lenders"), NATIONSBANK, N.A., as administrative agent for the Lenders (in such capacity, the "U.S. Agent") and CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian administrative agent for the Lenders (in such capacity, the "Canadian Agent"). W I T N E S S E T H WHEREAS, the Credit Parties have requested that (i) the U.S. Lenders provide Airgas with a U.S.$100,000,000 short-term credit facility for the short-term general corporate needs of Airgas and its Subsidiaries, (ii) the U.S. Lenders provide Airgas with a separate U.S.$625,000,000 credit facility for additional general corporate needs of Airgas and its Subsidiaries and (iii) the Canadian Lenders provide the Canadian Borrowers with a C$100,000,000 credit facility for the general corporate needs of the Canadian Borrowers; WHEREAS, the U.S. Lenders and the Canadian Lenders have agreed to make the requested credit facility available to the Credit Parties on the terms and conditions hereinafter set forth; NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1 DEFINITIONS 1.1 Definitions. As used in this Credit Agreement, the following terms shall have the meanings specified below unless the context otherwise requires: "364-Day Revolving Commitment" means, with respect to each U.S. Lender, the commitment of such U.S. Lender in an aggregate principal amount at any time outstanding of up to such U.S. Lender's U.S. Commitment Percentage of the 364-Day Revolving Committed Amount, to make 364-Day Revolving Loans in accordance with the provisions of Section 2.5(a). "364-Day Revolving Committed Amount" shall have the meaning assigned to such term in Section 2.5(a). "364-Day Revolving Loans" shall have the meaning assigned to such term in Section 2.5(a). EX-6 "364-Day Revolving Note" means a promissory note of Airgas in favor of a U.S. Lender delivered pursuant to Section 2.5(e) and evidencing the 364-Day Revolving Loans of such U.S. Lender, as such promissory note may be amended, modified, restated or replaced from time to time. "Acceptance Fee" means an amount equal to the product of (a) the Applicable Percentage for Bankers' Acceptances as of the date of acceptance; (b) the aggregate Face Amount of Bankers' Acceptances accepted by a Canadian Lender on the date of acceptance of the requested Bankers' Acceptances; and (c) a fraction (i) the numerator of which is the term to maturity in days of such Bankers' Acceptances, and (ii) the denominator of which is 365 days. "Additional Commitment" means, with respect to any Lender which executes a New Commitment Agreement in accordance with Section 4.4(c), the commitment of such Lender in an aggregate principal amount up to the amount specified in such New Commitment Agreement either (i) to (A) make Revolving U.S. Loans in accordance with the provisions of Section 2.1(a), (B) make 364-Day Revolving Loans in accordance with the provisions of Section 2.5(a), as applicable, (C) purchase participation interests in U.S. Letters of Credit in accordance with the provisions of Section 2.3(c) and (D) to purchase participation interests in the U.S. Swingline Loans in accordance with the provisions of Section 2.4(b)(iii) or (ii) to (A) to make Revolving Canadian Loans in accordance with the provisions of Section 3.1(a), (B) purchase participation interests in Canadian Letters of Credit in accordance with the provisions of Section 3.3(c) and (C) to accept Bankers' Acceptances in accordance with the provisions of Section 3.4. "Affiliate" means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agents" means the U.S. Agent and the Canadian Agent. "Airgas" shall have the meaning assigned to such term in the heading hereof, together with any successors or assigns "Applicable Percentage" means, for purposes of calculating the applicable interest rate for any day for any Eurodollar Loan, the applicable rate of the Acceptance Fee for any day for purposes of Section 3.4(a), the applicable rate of the Unused Revolving U.S. Commitment Fee for any day for purposes of Section 4.5(a)(i), the applicable rate of the Unused 364-Day Revolving Commitment Fee for any day for purposes of Section 4.5(a)(ii), the applicable rate of the Unused Revolving Canadian Commitment Fee for any day for purposes of Section 4.5(a)(iii), the applicable rate of the Standby U.S. Letter of Credit Fee for any day for purposes of Section 4.5(b)(i), the applicable rate of the Trade U.S. Letter of Credit Fee for any day for purposes of Section 4.5(b)(ii), the applicable rate of the Standby Canadian Letter of Credit Fee for any day for purposes of Section 4.5(c)(i), the applicable rate of the Trade Canadian Letter of Credit Fee for any day for the purposes of Section 4.5(c)(ii), the appropriate applicable percentage, as shown on Schedule 1.1A, corresponding to the higher of the long term credit ratings of Airgas by S&P and Moody's in effect as of such date; provided, however, in the event that the long term credit ratings of Airgas by S&P and Moody's for any day differ by more than one Pricing Level, the Applicable Percentage for such day shall be the appropriate applicable percentage EX-7 corresponding to the Pricing Level which is one Pricing Level higher than the Pricing Level corresponding to the lower of the long term credit ratings of Airgas by S&P and Moody's in effect as of such date. The initial Applicable Percentages shall be based on Pricing Level IV (as shown on Schedule 1.1A). "BA Outstandings" means, at any time, the sum of the Face Amount of all Bankers' Acceptances outstanding at such time. "Bankers' Acceptance" means a draft (a) drawn by a Canadian Borrower under the Revolving Canadian Commitment for acceptance by a Canadian Lender, (b) denominated in Canadian Dollars and (c) issued and payable only in Canada. "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time. "Bankruptcy Event" means, with respect to any Person, the occurrence of any of the following with respect to such Person: (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or ordering the winding up or liquidation of its affairs; or (ii) a court or governmental agency having jurisdiction in the premises shall enter a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property and such decree or order shall remain undismissed for a period of sixty (60) consecutive days; or (iii) there shall be commenced against such Person an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded for a period of sixty (60) consecutive days; or (iv) such Person shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or make any general assignment for the benefit of creditors; or (v) such Person shall be unable to, or shall admit in writing its inability to, pay its debts generally as they become due. "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina are authorized or required by law to close, except that, (a) when used in connection with a Eurodollar Loan, such day shall also be a day on which dealings between banks are carried on in U.S. dollar deposits in London, England, Charlotte, North Carolina and New York, New York and (b) when used in connection with a Loan made by any of the Canadian Lenders, the term Business Day shall not include any day on which banking institutions in Toronto, Ontario are authorized by law or other governmental actions to close. "Calculation Date" means the last day of each fiscal quarter of Airgas. "Canadian Agent" shall have the meaning assigned to such term in the heading hereof, together with any successors or assigns. EX-8 "Canadian Agent's Fee Letter" means that certain letter agreement, dated as of the Closing Date, between the Canadian Agent and Airgas, as amended, modified, restated or supplemented from time to time. "Canadian Agent's Fees" shall have the meaning assigned to such term in Section 4.5(d)(ii). "Canadian Base Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the higher of (i) the fluctuating rate of interest per annum equal to the rate of interest established and publicly announced by CIBC, from time to time, as its prime rate for Canadian Dollar commercial loans made in Canada (with each change in such prime rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the such prime rate is a reference rate used by CIBC in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by CIBC to any debtor)) and (ii) CDOR for such day plus the Applicable Percentage for Bankers' Acceptances. "Canadian Base Rate Loan" means any Loan bearing interest at a rate determined by reference to the Canadian Base Rate. "Canadian Borrowers" shall have the meaning assigned to such term in the heading hereof, together with any successors or assigns. "Canadian Borrowers' Obligations" means without duplication, all of the obligations of the Canadian Borrowers to the Canadian Lenders and the Agents, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents. "Canadian Commitment Percentage" means, for any Canadian Lender, the percentage identified as its Canadian Commitment Percentage on Schedule 2.1(a), as such percentage may be modified in connection with any increase in the Revolving Canadian Committed Amount pursuant to Section 4.4(c) or any assignment made in accordance with the provisions of Section 11.3; provided, however, at any time that any Canadian Swingline Loan is outstanding (except to the extent that the Canadian Swingline Lender has demanded repayment of a particular Canadian Swingline Loan by way of a Revolving Canadian Loan as provided in Section 3.2(b)), (i) the Canadian Commitment Percentage of the Canadian Swingline Lender shall be reduced by an amount equal to the percentage amount of the Revolving Canadian Committed Amount then comprised of outstanding Canadian Swingline Loans and (ii) the Canadian Commitment Percentage of each other Canadian Lender shall be increased by an amount equal to the product of (A) the amount determined pursuant to clause (i) above multiplied by (B) the fraction determined from the ratio that the Canadian Commitment Percentage of such Canadian Lender bears to the total Canadian Commitment Percentages of all the Canadian Lenders other than the Canadian Swingline Lender. "Canadian Dollar Equivalent" means, on any date of computation, with respect to an amount denominated in U.S. Dollars, the amount of Canadian Dollars using an exchange rate equal to the Bank of Canada noon rate. "Canadian Dollars" means and "C$" means dollars in lawful currency of Canada. "Canadian Issuing Lender" means CIBC. "Canadian Issuing Lender Fees" shall have the meaning assigned to such term in Section 4.5(c)(iii). EX-9 "Canadian Lenders" means (i) those Lenders identified as Canadian Lenders on the signature pages attached hereto and (ii) any Person which becomes a Canadian Lender by executing a New Commitment Agreement pursuant to Section 4.4(c), together with their successors and assigns. "Canadian Letter of Credit" means (i) any letter of credit issued by the Canadian Issuing Lender for the account of a Canadian Borrower in accordance with the terms of Section 3.3 and (ii) any Existing Canadian Letter of Credit. "Canadian LOC Commitment" means the commitment of the Canadian Issuing Lender to issue Canadian Letters of Credit in an aggregate face amount at any time outstanding (together with the amounts of any unreimbursed drawings thereon) of up to the Canadian LOC Committed Amount. "Canadian LOC Committed Amount" shall have the meaning assigned to such term in Section 3.3. "Canadian LOC Documents" means, with respect to any Canadian Letter of Credit, such Canadian Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Canadian 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. "Canadian LOC Obligations" 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 Canadian Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Canadian Letters of Credit plus (ii) the aggregate amount of all drawings under Canadian Letters of Credit honored by the Canadian Issuing Lender but not theretofore reimbursed. "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. "Canadian Swingline Commitment" means the commitment of the Canadian Swingline Lender to make Canadian Swingline Loans in an aggregate principal amount at any time outstanding of up to the Canadian Swingline Committed Amount. "Canadian Swingline Committed Amount" shall have the meaning assigned to such term in Section 3.2(a). "Canadian Swingline Lender" means CIBC. "Canadian Swingline Loan" means a loan made pursuant to and defined in Section 3.2(a). "Capital Lease" means, as applied to any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. "CDOR" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) quoted by CIBC as the rate for its 30 day Canadian Dollar bankers' acceptances appearing on the Reuters Screen CDOR page as of 10:00 A.M. (Toronto, Canada time) on such day, provided that if such rate does not appear on the Reuters Screen CDOR page at EX-10 such time on such day, the rate for such day, will be the average of all of the bankers' acceptances discount rates posted on the Reuters Screen CDOR page for 30 day Canadian Dollar bankers' acceptances at such time on such day with respect to the Schedule I chartered banks of Canada. "CIBC" means Canadian Imperial Bank of Commerce and its successors. "Closing Date" means the date hereof. "Code" means the Internal Revenue Code of 1986, as amended, and any successor thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections. "Commitment" means (i) with respect to each U.S. Lender, (a) the Revolving U.S. Commitment of such Lender and (b) the 364-Day Revolving Commitment of such Lender, (ii) with respect to each Canadian Lender, the Revolving Canadian Commitment of such Lender, (iii) with respect to the U.S. Swingline Lender, the U.S. Swingline Commitment, (iv) with respect to the Canadian Swingline Lender, the Canadian Swingline Commitment, (v) with respect to the U.S. Issuing Lender, the U.S. LOC Commitment and (vi) with respect to the Canadian Issuing Lender, the Canadian LOC Commitment. "Competitive U.S. Bid" means an offer by a U.S. Lender to make a Competitive U.S. Loan pursuant to the terms of Section 2.2. "Competitive U.S. Bid Rate" means, as to any Competitive U.S. Bid made by a U.S. Lender in accordance with the provisions of Section 2.2, the fixed rate of interest offered by the Lender making the Competitive U.S. Bid. "Competitive U.S. Loan" means a loan made by a U.S. Lender in its discretion pursuant to the provisions of Section 2.2. "Competitive U.S. Note" means a promissory note of Airgas in favor of a U.S. Lender delivered pursuant to Section 2.2(f) and evidencing the Competitive U.S. Loans, if any, of such U.S. Lender, as such promissory note may be amended, modified, restated or replaced from time to time. "Consolidated EBITDA" means, for any period, the sum of (i) Consolidated Net Income for such period, plus (ii) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (A) Consolidated Interest Expense, (B) total federal, state, local and foreign income, value added and similar taxes and (C) depreciation and amortization expense, all as determined in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" means, as of any Calculation Date, the ratio of (i) Consolidated EBITDA for the four-quarter period ended as of such Calculation Date to (ii) Consolidated Interest Expense for the four-quarter period ended as of such Calculation Date. "Consolidated Funded Indebtedness Coverage Ratio" means, as of any Calculation Date, the ratio of (i) total Funded Indebtedness of the Consolidated Parties on a consolidated basis as of such Calculation Date to (ii) Consolidated EBITDA for the four-quarter period ended as of such Calculation Date. "Consolidated Interest Expense" means, for any period, (i) interest expense (including the amortization of debt discount and premium and the interest component under Capital Leases) of the Consolidated Parties on a EX-11 consolidated basis, plus (ii) on and after such time, if ever, as National Welders is required to be consolidated with Airgas in accordance with GAAP and to the extent not included in the amount determined pursuant to clause (i) above, interest expense (including the amortization of debt discount and premium, the interest component under Capital Leases) of National Welders, plus (iii) to the extent not included in the amount determined pursuant to clause (i) above, interest expense (including the amortization of debt discount and premium, the interest component under Capital Leases) of any Person which became a direct or indirect Subsidiary of Airgas as the result of a Material Acquisition during such period, all as determined in accordance with GAAP. "Consolidated Long Term Debt" means, at any time, all items which, in accordance with GAAP, would be classified as long term debt on a consolidated balance sheet of the Consolidated Parties. "Consolidated Net Income" means, for any period, the sum of (i) the sum, without duplication, of net income (excluding extraordinary items) after taxes for such period of the Consolidated Parties, plus (ii) on and after such time, if ever, as National Welders is required to be consolidated with Airgas in accordance with GAAP and to the extent not included in the amount determined pursuant to clause (i) above, net income (excluding extraordinary items) after taxes for such period of National Welders, plus (iii) to the extent not included in the amount determined pursuant to clause (i) above, net income (excluding extraordinary items) after taxes for such period of any Person which became a direct or indirect Subsidiary of Airgas as the result of a Material Acquisition during such period, all as determined in accordance with GAAP, but excluding (a) the effect of (1) the non-recurring pre-tax charge of approximately $26 million to be taken by Airgas in the fourth fiscal quarter of 1997 in connection with the alleged fraudulent breach of contract by a third-party supplier to Airgas and (2) any recoveries by Airgas or any of its Subsidiaries relating to the breach of contract referred in clause (1) above and (b) the effect of the non-recurring pre-tax, non-cash charge of approximately $5 million to be taken by Airgas in the fourth fiscal quarter of 1997 relating to the writedown by Airgas of certain machinery and equipment, goodwill and other intangible assets of Airgas Breathing Air Systems, Inc. and Red-D-Arc Limited. "Consolidated Net Worth" means, at any time, consolidated net stockholders' equity of the Consolidated Parties determined in accordance with GAAP but excluding any capital stock or other equity interests to which an outstanding Redemption Obligation relates. "Consolidated Parties" means a collective reference to each of Airgas and its Subsidiaries. "Consolidated Total Assets" means, at any time, all items which would, in accordance with GAAP, be classified as assets (other than intangible assets) on a consolidated balance sheet of the Consolidated Parties. "Credit Documents" means a collective reference to this Credit Agreement, the Notes, the U.S. LOC Documents, the Canadian LOC Documents, Bankers' Acceptances, the U.S. Agent's Fee Letter, the Canadian Agent's Fee Letter and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto. "Credit Parties" means a collective reference to each of Airgas and the Canadian Borrowers. EX-12 "Credit Party Obligations" means, without duplication, all of the obligations of the Credit Parties to the Lenders (including the U.S. Issuing Lender, the U.S. Swingline Lender, the Canadian Swingline Lender and the Canadian Issuing Lender) and the Agents, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents. "Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Discount Rate" means (i) in respect of any Bankers' Acceptances to be acquired pursuant to Section 3.4 by a Canadian Lender which is a Schedule I chartered bank, the discount rate quoted by the principal office of such Canadian Lender at approximately 10:00 a.m. (Toronto time) (or such other time as may be practicable for the determination of the Discount Rate) as the discount rate at which such Canadian Lender would purchase bankers' acceptances accepted by such Canadian Lender and with a term to maturity the same as the Bankers' Acceptances to be acquired by such Canadian Lender on the date of acceptance of such Bankers' Acceptances, and (ii) in respect of any Bankers' Acceptances to be acquired pursuant to Section 3.4 by a Canadian Lender which is a Schedule II chartered bank, the lesser of (a) the discount rate quoted by the principal office of such Canadian Lender at approximately 10:00 a.m (Toronto time) (or such other time as may be practicable for the determination of the Discount Rate) as the discount rate at which such Canadian Lender would purchase bankers' acceptances accepted by such Canadian Lender and with a term to maturity the same as the Bankers' Acceptances to be acquired by such Canadian Lender on the date of acceptance of such Bankers' Acceptances and (b) the discount rate calculated pursuant to clause (i) plus 7.5 basis points. "Environmental Laws" means any and all lawful and applicable Federal, state, local, Canadian and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections. "ERISA Affiliate" means an entity which is under common control with Airgas or any Subsidiary of Airgas within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes Airgas or any Subsidiary of Airgas and which is treated as a single employer under Sections 414(b), (c), (m), or (o) of the Code. "Eurodollar Loan" means any Loan bearing interest at a rate determined by reference to the Eurodollar Rate. EX-13 "Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate determined pursuant to the following formula: Eurodollar Rate = Interbank Offered Rate 1 - Eurodollar Reserve Percentage "Eurodollar Reserve Percentage" means for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage. "Event of Default" shall have the meaning assigned to such term in Section 9.1. "Executive Officer" means, in respect of any Person, the chief executive officer, chief operating officer or chief financial officer of such Person. "Existing Credit Agreement" means that certain Eighth Amended and Restated Loan Agreement dated as of September 27, 1996, as amended from time to time thereafter, among Airgas, the lenders party thereto and NationsBank, N.A., as agent for such lenders. "Existing Canadian Letters of Credit" means the letters of credit described by date of issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on Schedule 1.1B hereto. "Existing U.S. Letters of Credit" means the letters of credit described by date of issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on Schedule 1.1C hereto. "Face Amount" means, in respect of a Bankers' Acceptance, the amount payable to the holder thereof on maturity. "Fees" means all fees payable pursuant to Section 4.5. "Federal Funds Rate" means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (A) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day and (B) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the U.S. Agent on such day on such transactions as determined by the U.S. Agent. EX-14 "Funded Indebtedness" means, with respect to any Person, without duplication, (i) all Indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person issued or assumed as the deferred purchase price of Property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (iv) the principal portion of all obligations of such Person under Capital Leases, (v) all Guaranty Obligations of such Person with respect to Funded Indebtedness of another Person, (vi) all net obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements, (vii) the maximum available amount of, and all unreimbursed drawings under, all standby letters of credit or acceptances issued or created for the account of such Person (provided, however, in connection with any calculation hereunder of Funded Indebtedness of the Consolidated Parties on a consolidated basis, there shall be excluded any standby letter of credit or acceptance (together with any unreimbursed drawings under such letter of credit or acceptance) which supports any Funded Indebtedness of any Consolidated Party that would otherwise be included in such calculation) and (viii) all Funded Indebtedness of another Person secured by a Lien on any Property of such Person, whether or not such Funded Indebtedness has been assumed. The Funded Indebtedness of any Person shall include the Funded Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent that such Person is legally liable for such Funded Indebtedness. "GAAP" means generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3 hereof. "Governmental Authority" means any Federal, state, provincial, local or foreign court or governmental agency, authority, instrumentality or regulatory body. "Guarantor" means Airgas in its capacity as guarantor as pursuant to Section 3.5 hereof. "Guaranty Obligations" means, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any Property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements to the extent such agreements or arrangements constitute a legally binding monetary obligation) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made. EX-15 "Indebtedness" of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to Property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations of such Person issued or assumed as the deferred purchase price of Property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (v) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, Property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vi) all Guaranty Obligations of such Person, (vii) the principal portion of all obligations of such Person under Capital Leases, (viii) all net obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements, (ix) the maximum available amount of, and all unreimbursed drawings under, all standby letters of credit or acceptances issued or created for the account of such Person (provided, however, in connection with any calculation hereunder of Indebtedness of the Consolidated Parties on a consolidated basis, there shall be excluded any standby letter of credit or acceptance (together with any unreimbursed drawings under such letter of credit or acceptance) which supports any Indebtedness of Airgas or any of its Subsidiaries that would otherwise be included in such calculation) and (x) all preferred stock issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date (other than the preferred stock issued under the National Welders Joint Venture Agreement). The Indebtedness of any Person (i) shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent that such Person is legally liable for such Indebtedness and (ii) shall not include any Indebtedness of such Person owing to any Consolidated Party. "Interbank Offered Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of interest, determined by the U.S. Agent on the basis of the offered rates for deposits in U.S. Dollars for a period of time corresponding to such Interest Period (and commencing on the first day of such Interest Period), appearing on Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time) two (2) Business Days before the first day of such Interest Period. As used herein, "Telerate Page 3750" means the display designated as page 3750 by Dow Jones Telerate, Inc. (or such other page as may replace such page on that service for the purpose of displaying the British Bankers Association London interbank offered rates) and "Reuters Screen LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks). "Interest Payment Date" means (i) as to any U.S. Base Rate Loan, the last day of each March, June, September and December, the date of repayment of principal of such Loan and the Termination Date, (ii) as to any Revolving Canadian Loan, the first Business Day of each calendar month, the date of repayment of principal of such Loan and the Termination Date and (iii) EX-16 as to any Eurodollar Loan, any Competitive U.S. Loan, any U.S. Swingline Loan or any Canadian Swingline Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and the Termination Date, and in addition where the applicable Interest Period is more than 3 months, then also on the date 3 months from the beginning of the Interest Period, and each 3 months thereafter. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day. "Interest Period" means (i) as to any Eurodollar Loan, a period of one, two, three, six or twelve month's duration, as Airgas may elect, commencing in each case, on the date of the borrowing (including conversions, extensions and renewals), (ii) as to any Competitive U.S. Loan, a period commencing in each case on the date of the borrowing and ending on the date specified in the applicable Competitive U.S. Bid whereby the offer to make such Competitive U.S. Loan was extended (such ending date in any event to be not more than 180 days from the date of the borrowing), (iii) as to any U.S. Swingline Loan, a period commencing in each case on the date of the borrowing and ending on the date agreed to by Airgas and the U.S. Swingline Lender in accordance with the provisions of Section 2.4(b)(i) (such ending date in any event to be not more than thirty (30) days from the date of borrowing) and (iv) as to any Canadian Swingline Loan, a period commencing in each case on the date of the borrowing and ending on the date agreed to by the applicable Canadian Borrower and the Canadian Swingline Lender; provided, however, (A) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (B) no Interest Period shall extend beyond the Termination Date, and (C) in the case of Eurodollar Loans, where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last day of such calendar month. "Lenders" means each of the Persons identified as a "Lender" on the signature pages hereto, and each Person which may become a Lender by way of assignment in accordance with the terms hereof, together with their successors and permitted assigns. "Letter of Credit" means any U.S. Letter of Credit or any Canadian Letter of Credit. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction, the Personal Property Security Act (Ontario) or other similar recording or notice statute, and any lease in the nature thereof). "Loan" or "Loans" means the Revolving U.S. Loans (or a portion of any Revolving U.S. Loan bearing interest at the U.S. Base Rate or the Eurodollar Rate and referred to as a U.S. Base Rate Loan or a Eurodollar Loan), the 364-Day Revolving Loans (or a portion of any 364-Day Revolving Loan bearing interest at the U.S. Base Rate or the Eurodollar Rate and referred to as a U.S. Base Rate Loan or a Eurodollar Loan), the Competitive U.S. Loans (or any portion of any Competitive U.S. Loan), the Revolving Canadian Loans (or any portion of any Revolving Canadian Loan), the BA Outstandings, the U.S. EX-17 Swingline Loans (or any U.S. Swingline Loan bearing interest at the U.S. Base Rate or the Quoted Rate and referred to as a U.S. Base Rate Loan or a Quoted Rate U.S. Swingline Loan) and/or the Canadian Swingline Loans, individually or collectively, as appropriate. "Material Acquisition" means any acquisition involving an aggregate purchase price (including cash and non-cash consideration) paid or payable by Airgas and/or any of its Subsidiaries in excess of U.S.$25,000,000. "Material Adverse Effect" means a material adverse effect on (i) the condition (financial or otherwise), operations, business, assets, liabilities or prospects of the Consolidated Parties taken as a whole, (ii) the ability of the Credit Parties taken as a whole to perform any material obligation under the Credit Documents or (iii) the material rights and remedies of the Lenders under the Credit Documents. "Materials of Environmental Concern" means any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Laws, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation. "Moody's" means Moody's Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities. "Multiemployer Plan" means a Plan which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA. "Multiple Employer Plan" means a Plan which a Consolidated Party or any ERISA Affiliate and at least one employer other than a Consolidated Party or any ERISA Affiliate are contributing sponsors. "National Welders" means National Welders Supply Company, Inc., a North Carolina corporation. "National Welders Joint Venture Agreement" means that certain joint venture agreement dated June 28, 1996 by and among Airgas, National Welders, J. A. Turner, Jr., Judith Carpenter, J. A. Turner, III and Linerieux B. Turner. "National Welders Liens" means the liens and security interests on the assets of National Welders as described on Schedule 1.1D hereto. "NationsBank" means NationsBank, N.A. and its successors. "Net Proceeds" means cash proceeds received by a Consolidated Party from time to time in connection with any sale of Property made pursuant to Section 8.4(b)(iv), net of the actual costs and taxes incurred by such Person in connection with and attributable to such sale. "New Commitment Agreement" shall have the meaning assigned to such term in Section 4.4. "Non-Excluded Taxes" shall have the meaning assigned to such term in Section 4.10. "Note" or "Notes" means any Revolving U.S. Note, any Competitive U.S. Note, the U.S. Swingline Note, any 364-Day Revolving Note or any Revolving Canadian Note, as the context may require. EX-18 "Notice of Borrowing" means (a) in the case of Revolving U.S. Loans or 364-Day Revolving Loans, a written notice of borrowing in substantially the form of Schedule 2.1(b)(i), as required by Sections 2.1(b)(i) and 2.5(b)(i) or (b) in the case of Revolving Canadian Loans, a written notice of borrowing in substantially the form of Schedule 3.1(b)(i). "Notice of Extension/Conversion" means the written notice of extension or conversion in substantially the form of Schedule 4.2, as required by Section 4.2. "Operating Accounts" shall have the meaning assigned to such term in Section 3.2(a). "Participation Interest" means, the extension of credit by a Lender by way of a purchase of a participation in any U.S. Letters of Credit or U.S. LOC Obligations as provided in Section 2.3(c), in any U.S. Swingline Loans as provided in Section 2.4(b)(iii), in any Canadian Letters of Credit or Canadian LOC Obligations as provided in Section 3.3(c) or in any Loans or BA Outstandings as provided in Section 4.13. "PBGC" means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA and any successor thereof. "Permitted Liens" means: (i) Liens in favor of the Agents on behalf of the Lenders; (ii) Liens (other than Liens created or imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof); (iii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof); (iv) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by the Consolidated Parties in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (v) Liens in connection with attachments or judgments (including judgment or appeal bonds) provided that the judgments secured shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay; (vi) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar EX-19 charges or encumbrances not, in any material respect, impairing the use of the encumbered Property for its intended purposes; (vii) Liens on Property securing Indebtedness to the extent permitted under Section 8.1; (viii) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (ix) the National Welders Liens; and (x) Liens existing as of the Closing Date and set forth on Schedule 1.1E. "Person" means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated) or any Governmental Authority. "Plan" means any employee benefit plan (as defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to which Airgas, any Subsidiary of Airgas or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of ERISA. "Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. "Quoted Rate" means, with respect to any Quoted Rate U.S. Swingline Loan, the fixed percentage rate per annum offered by the U.S. Swingline Lender and accepted by Airgas with respect to such U.S. Swingline Loan as provided in accordance with the provisions of Section 2.4. "Quoted Rate U.S. Swingline Loan" means a U.S. Swingline Loan bearing interest at a Quoted Rate. "Redemption Obligation" means the contingent liability of any Consolidated Party with respect to cash redemption obligations relating to any capital stock or other equity interests issued by a Consolidated Party to any officer, director, shareholder or other principal of any Subsidiary created or acquired after the Closing Date. "Regulation D, G, U, or X" means Regulation D, G, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Materials of Environmental Concern). "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the post-event notice requirement is waived under subsections .13, .14, .18, .19, or .20 of PBGC Reg. ' 2615. "Required Canadian Lenders" means, at any time, Canadian Lenders which are then in compliance with their obligations hereunder (as determined by the U.S. Agent) and holding in the aggregate at least 51% of (i) the Revolving Canadian Commitments or (ii) if the Commitments have been EX-20 terminated, the sum of (A) the outstanding Revolving Canadian Loans, (B) the BA Outstandings, (C) the outstanding Canadian Swingline Loans, (D) the Canadian LOC Obligations and (E) the outstanding Participation Interests in Revolving Canadian Loans, Canadian Letters of Credit and BA Outstandings (including the Participation Interests of the Canadian Issuing Lender in any Canadian Letters of Credit). "Required Lenders" means, at any time, Lenders which are then in compliance with their obligations hereunder (as determined by the U.S. Agent) and holding in the aggregate at least 51% of (i) the sum of the U.S. Dollar Amount of (A) the Revolving U.S. Commitments, (B) the 364-Day Revolving Commitments, (C) the Revolving Canadian Commitments, and (D) the outstanding principal amount of any 364-Day Revolving Loans which have been converted to term loans pursuant to Section 2.5(f) (and Participation Interests therein) or (ii) if the Commitments have been terminated, the sum of the U.S. Dollar Amount of (A) the outstanding Loans, (B) the outstanding Participation Interests (including the Participation Interests of the U.S. Issuing Lender in any U.S. Letters of Credit, the Participation Interests of the U.S. Swingline Lender in any U.S. Swingline Loans and the Participation Interests of the Canadian Issuing Lender in any Canadian Letters of Credit) and (C) the Canadian LOC Obligations. "Required U.S. Lenders" means, at any time, U.S. Lenders which are then in compliance with their obligations hereunder (as determined by the U.S. Agent) and holding in the aggregate at least 51% of (i) the sum of (A) the Revolving U.S. Commitments, (B) the 364-Day Revolving Commitments and (C) the outstanding principal amount of any 364-Day Revolving Loans which have been converted to term loans pursuant to Section 2.5(f) (and Participation Interests therein) or (ii) if the Commitments have been terminated, the sum of (A) the outstanding Revolving U.S. Loans, 364-Day Revolving Loans, Competitive U.S. Loans and U.S. Swingline Loans and (B) the outstanding Participation Interests in Revolving U.S. Loans, 364-Day Revolving Loans, U.S. Swingline Loans and U.S. Letters of Credit (including the Participation Interests of the U.S. Issuing Lender in any U.S. Letters of Credit and the Participation Interests of the U.S. Swingline Lender in any U.S. Swingline Loans). "Requirement of Law" means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property is subject. "Restricted Payment" means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Airgas or any of its Subsidiaries, now or hereafter outstanding, (ii) any redemption (including, without limitation, in connection with any Redemption Obligation), retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Airgas or any of its Subsidiaries, now or hereafter outstanding or (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Airgas or any of its Subsidiaries, now or hereafter outstanding. "Revolving Canadian Loans" shall have the meaning assigned to such term in Section 3.1(a). "Revolving Canadian Commitment" means, with respect to each Canadian Lender, the commitment of such Canadian Lender in an aggregate principal amount at any time outstanding of up to such Canadian Lender's Canadian Commitment Percentage of the Revolving Canadian Committed Amount, (i) to make Revolving Canadian Loans in accordance with the provisions of Section EX-21 3.1(a), (ii) to purchase Participation Interests in Canadian Letters of Credit in accordance with the provisions of Section 3.3(c) and (iii) to accept Bankers' Acceptances in accordance with the provisions of Section 3.4(a). "Revolving Canadian Committed Amount" shall have the meaning assigned to such term in Section 3.1(a). "Revolving Canadian Note" means a promissory note of a Canadian Borrower in favor of a Canadian Lender delivered pursuant to Section 3.1(e) and evidencing the Revolving Canadian Loans of such Canadian Lender to such Canadian Borrower, as such promissory note may be amended, modified, restated or replaced from time to time. "Revolving U.S. Commitment" means, with respect to each U.S. Lender, the commitment of such U.S. Lender in an aggregate principal amount at any time outstanding of up to such U.S. Lender's U.S. Commitment Percentage of the Revolving U.S. Committed Amount, (i) to make Revolving U.S. Loans in accordance with the provisions of Section 2.1(a), (ii) to purchase Participation Interests in U.S. Letters of Credit in accordance with the provisions of Section 2.3(c), and (iii) to purchase Participation Interests in the U.S. Swingline Loans in accordance with the provisions of Section 2.4(b)(iii). "Revolving U.S. Committed Amount" shall have the meaning assigned to such term in Section 2.1(a). "Revolving U.S. Loans" shall have the meaning assigned to such term in Section 2.1(a). "Revolving U.S. Note" means a promissory note of Airgas in favor of a U.S. Lender delivered pursuant to Section 2.1(e) and evidencing the Revolving U.S. Loans of such U.S. Lender, as such promissory note may be amended, modified, restated or replaced from time to time. "S&P" means Standard & Poor's Ratings Services Group, a division of The McGraw-Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities. "Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Standby Canadian Letter of Credit Fee" shall have the meaning assigned to such term in Section 4.5(c)(i). "Standby U.S. Letter of Credit Fee" shall have the meaning assigned to such term in Section 4.5(b)(i). "Subsidiary" means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than 50% equity interest at any time. The term "Subsidiary" or "Subsidiaries" shall include National Welders at such time, if ever, as National Welders is required to be consolidated with Airgas in accordance with GAAP. EX-22 "Termination Date" means (i) with respect to the Revolving U.S. Loans, the Competitive U.S. Loans, the U.S. Swingline Loans, the Canadian Swingline Loans, the Revolving Canadian Loans, the U.S. Letters of Credit, the Canadian Letters of Credit and the Bankers' Acceptances, December 5, 2002 and (ii) with respect to the 364-Day Revolving Loans, December 4, 1998 (unless extended pursuant to Section 2.5(f)). "Termination Event" means (i) with respect to any Plan, the occurrence of a Reportable Event or the substantial cessation of operations (within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal by Airgas, any Subsidiary of Airgas or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution of a notice of intent to terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; or (vi) the complete or partial withdrawal of any Consolidated Party or any ERISA Affiliate from a Multiemployer Plan. "Trade Canadian Letter of Credit Fee" shall have the meaning assigned to such term in Section 4.5(c)(ii). "Trade U.S. Letter of Credit Fee" shall have the meaning assigned to such term in Section 4.5(b)(ii). "Unused 364-Day Revolving Commitment Fee" shall have the meaning assigned to such term in Section 4.5(a)(ii). "Unused 364-Day Revolving Commitment Fee Calculation Period" shall have the meaning assigned to such term in Section 4.5(a)(ii). "Unused 364-Day Revolving Committed Amount" means, for any period, the amount by which (a) the then applicable 364-Day Revolving Committed Amount exceeds (b) the daily average for such period of the outstanding aggregate principal amount of all 364-Day Revolving Loans. "Unused Revolving Canadian Commitment Fee" shall have the meaning assigned to such term in Section 4.5(a)(iii). "Unused Revolving Canadian Commitment Fee Calculation Period" shall have the meaning assigned to such term in Section 4.5(a)(iii). "Unused Revolving Canadian Committed Amount" means, for any period, the amount by which (a) the then applicable Revolving Canadian Committed Amount exceeds (b) the daily average sum for such period of (i) the outstanding aggregate principal amount of all Revolving Canadian Loans plus (ii) the outstanding aggregate principal amount of all Canadian LOC Obligations plus (iii) the aggregate BA Outstandings. "Unused Revolving U.S. Commitment Fee" shall have the meaning assigned to such term in Section 4.5(a)(i). "Unused Revolving U.S. Commitment Fee Calculation Period" shall have the meaning assigned to such term in Section 4.5(a)(i). "Unused Revolving U.S. Committed Amount" means, for any period, the amount by which (a) the then applicable Revolving U.S. Committed Amount exceeds (b) the daily average sum for such period of (i) the outstanding EX-23 aggregate principal amount of all Revolving U.S. Loans plus (ii) the outstanding aggregate principal amount of all U.S. LOC Obligations plus (iii) 50% of the outstanding aggregate principal amount of all Competitive U.S. Loans. "U.S. Agent" shall have the meaning assigned to such term in the heading hereof, together with any successors or assigns. "U.S. Agent's Fee Letter" means that certain letter agreement, dated as of the Closing Date, between the U.S. Agent and Airgas, as amended, modified, supplemented or replaced from time to time. "U.S. Agent's Fees" shall have the meaning assigned to such term in Section 4.5(c)(i). "U.S. Base Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater of (a) the Federal Funds Rate in effect on such day plus 2 of 1% or (b) the U.S. Prime Rate in effect on such day. If for any reason the U.S. Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable after due inquiry to ascertain the Federal Funds Rate for any reason, including the inability or failure of the U.S. Agent to obtain sufficient quotations in accordance with the terms hereof, the U.S. Base Rate shall be determined without regard to clause (a) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the U.S. Base Rate due to a change in the U.S. Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the U.S. Prime Rate or the Federal Funds Rate, respectively. "U.S. Base Rate Loan" means any Loan bearing interest at a rate determined by reference to the U.S. Base Rate. "U.S. Commitment Percentage" means, for any U.S. Lender, the percentage identified as its U.S. Commitment Percentage on Schedule 2.1(a), as such percentage may be modified in connection with any increase in the Revolving U.S. Committed Amount pursuant to Section 4.5(c) or any assignment made in accordance with the provisions of Section 11.3. "U.S. Dollars" and "U.S.$" means dollars in lawful currency of the United States of America. "U.S. Dollar Amount" means on any date of computation, (a) with respect to U.S. Dollars or an amount denominated in Dollars, such amount and (b) with respect to an amount of Canadian Dollars or an amount denominated in Canadian Dollars, the U.S. Dollar Equivalent of such amount. "U.S. Dollar Equivalent" means, on any date of computation, with respect to an amount denominated in Canadian Dollars, the amount of U.S. Dollars into which the U.S. Agent could, in accordance with its practice from time to time in the interbank foreign exchange market, convert such amount of Canadian Dollars at its spot rate of exchange (inclusive of all reasonable related costs of conversion) applicable to the relevant transaction at or about 10:00 A.M., Charlotte, North Carolina time. "U.S. Issuing Lender" means NationsBank. "U.S. Issuing Lender Fees" shall have the meaning assigned to such term in Section 4.5(b)(iii). EX-24 "U.S. Lenders" means (i) those Lenders identified as U.S Lenders on the signature pages attached hereto and (ii) any Person which becomes a U.S. Lender by executing a New Commitment Agreement pursuant to Section 4.4(c), together with their successors and assigns. "U.S. Letter of Credit" means (i) any letter of credit issued by the U.S. Issuing Lender for the account of Airgas in accordance with the terms of Section 2.3 and (ii) any Existing U.S. Letter of Credit. "U.S. LOC Commitment" means the commitment of the U.S. Issuing Lender to issue U.S. Letters of Credit in an aggregate face amount at any time outstanding (together with the amounts of any unreimbursed drawings thereon) of up to the U.S. LOC Committed Amount. "U.S. LOC Committed Amount" shall have the meaning assigned to such term in Section 2.3. "U.S. LOC Documents" means, with respect to any U.S. Letter of Credit, such U.S. Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such U.S. 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. "U.S. LOC Obligations" 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 U.S. Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such U.S. Letters of Credit plus (ii) the aggregate amount of all drawings under U.S. Letters of Credit honored by the U.S. Issuing Lender but not theretofore reimbursed. "U.S. Prime Rate" means the rate of interest per annum publicly announced from time to time by NationsBank as its prime rate in effect at its principal office in Charlotte, North Carolina, with each change in the U.S. Prime Rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the U.S. Prime Rate is a reference rate used by NationsBank in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by NationsBank to any debtor). "U.S. Swingline Commitment" means the commitment of the U.S. Swingline Lender to make U.S. Swingline Loans in an aggregate principal amount at any time outstanding of up to the U.S. Swingline Committed Amount. "U.S. Swingline Committed Amount" shall have the meaning assigned to such term in Section 2.4(a). "U.S. Swingline Lender" means NationsBank. "U.S. Swingline Loan" means a loan made pursuant to and defined in Section 2.4(a). "U.S. Swingline Note" means the promissory note of Airgas in favor of the U.S. Swingline Lender in the original principal amount of U.S.$15,000,000, as such promissory note may be amended, modified, restated or replaced from time to time. "Voting Stock" means, with respect to any Person, capital stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons EX-25 performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency. 1.2 Computation of Time Periods. For purposes of computation of periods of time hereunder, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding." 1.3 Accounting Terms. Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Credit Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 7.1 hereof (or, prior to the delivery of the first financial statements pursuant to Section 7.1 hereof, consistent with the financial statements as at March 31, 1997); provided, however, if (a) Airgas shall object to determining such compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (b) the Agents or the Required Lenders shal l so object in writing within 30 days after delivery of such financial statements, then such calculations shall be made on a basis consistent with the most recent financial statements delivered by Airgas to the Lenders as to which no such objection shall have been made. Notwithstanding the above, it is understood and agreed that, for purposes of all calculations made in determining compliance with the financial covenants set forth in Section 7.10, the amount determined pursuant to clause (iii) of the definition of "Consolidated Net Income" set forth in this Section 1.1 shall be calculated so as to give effect to any Material Acquisition occurring during any period applicable in such calculations occurring after the date of such Material Acquisition. SECTION 2 U.S. DOLLAR CREDIT FACILITIES 2.1 Revolving U.S. Loans. (a) Revolving U.S. Commitment. Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each U.S. Lender severally agrees to make available to Airgas such U.S. Lender's U.S. Commitment Percentage of revolving credit loans requested by Airgas in U.S. Dollars ("Revolving U.S. Loans") from time to time from the Closing Date until the Termination Date, or such earlier date as the Revolving U.S. Commitments shall have been terminated as provided herein for the purposes hereinafter set forth; provided, however, that the aggregate principal amount of outstanding Revolving U.S. Loans shall not exceed SIX HUNDRED TWENTY-FIVE MILLION U.S. DOLLARS (U.S.$625,000,000) (as such aggregate maximum amount may be increased or reduced from time to time as provided in Section 4.4, the "Revolving U.S. Committed Amount"); provided, further, (i) with regard to each U.S. Lender individually, such U.S. Lender's outstanding Revolving U.S. Loans shall not exceed such U.S. Lender's U.S. Commitment Percentage of the Revolving U.S. Committed Amount and (ii) with regard to the U.S. Lenders collectively, the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding EX-26 Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not exceed the Revolving U.S. Committed Amount. Revolving U.S. Loans may consist of U.S. Base Rate Loans or Eurodollar Loans, or a combination thereof, as Airgas may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided, however, that no more than 11 Eurodollar Loans shall be outstanding hereunder at any time. For purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period. Revolving U.S. Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof. (b) Revolving U.S. Loan Borrowings. (i) Notice of Borrowing. Airgas (by its duly authorized officers or representatives) shall request a Revolving U.S. Loan borrowing by written notice (or telephone notice promptly confirmed in writing) to the U.S. Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of the requested borrowing in the case of U.S. Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of Eurodollar Loans. Each such request for borrowing shall be irrevocable and shall specify (A) that a Revolving U.S. Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, and (D) whether the borrowing shall be comprised of U.S. Base Rate Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are requested, the Interest Period(s) therefor. If Airgas shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a Eurodollar Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving U.S. Loan requested, then such notice shall be deemed to be a request for a U.S. Base Rate Loan hereunder. The U.S. Agent shall give notice to each affected U.S. Lender promptly upon receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i), specifying the contents thereof and each such U.S. Lender's share of any borrowing to be made pursuant thereto. (ii) Minimum Amounts. Each Eurodollar Loan or U.S. Base Rate Loan that is a Revolving U.S. Loan shall be in a minimum aggregate principal amount of U.S.$5,000,000 and integral multiples of U.S.$1,000,000 in excess thereof (or the remaining amount of the Revolving U.S. Committed Amount, if less). (iii) Advances. Each U.S. Lender will make its U.S. Commitment Percentage of each Revolving U.S. Loan borrowing available to the U.S. Agent for the account of Airgas as specified in Section 4.14, or in such other manner as the U.S. Agent may specify in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in U.S. Dollars and in funds immediately available to the U.S. Agent. Such borrowing will then be made available to Airgas by the U.S. Agent by crediting the account of Airgas on the books of the main office of the U.S. Agent in Charlotte, North Carolina with the aggregate of the amounts made available to the U.S. Agent by the U.S. Lenders and in like funds as received by the U.S. Agent. (c) Repayment. The principal amount of all Revolving U.S. Loans shall be due and payable in full on the Termination Date. (d) Interest. Subject to the provisions of Section 4.1, EX-27 (i) U.S. Base Rate Loans. During such periods as Revolving U.S. Loans shall be comprised in whole or in part of U.S. Base Rate Loans, such U.S. Base Rate Loans shall bear interest at a per annum rate equal to the U.S. Base Rate; and (ii) Eurodollar Loans. During such periods as Revolving U.S. Loans shall be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans shall bear interest at a per annum rate equal to the Eurodollar Rate plus the Applicable Percentage. Interest on Revolving U.S. Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein). (e) Revolving U.S. Notes. The Revolving U.S. Loans made by each U.S. Lender shall be evidenced by a duly executed promissory note of Airgas to such U.S. Lender in an original principal amount equal to such U.S. Lender's U.S. Commitment Percentage of the Revolving U.S. Committed Amount and in substantially the form of Schedule 2.1(e). 2.2 Competitive U.S. Loan Subfacility. (a) Competitive U.S. Loans. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, Airgas may, from time to time from the Closing Date until the Termination Date, request and each U.S. Lender may, in its sole discretion, agree to make, Competitive U.S. Loans in U.S. Dollars to Airgas; provided, however, that (i) the aggregate principal amount of outstanding Competitive U.S. Loans shall not at any time exceed the Revolving U.S. Committed Amount and (ii) the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not at any time exceed the Revolving U.S. Committed Amount. Each Competitive U.S. Loan shall be not less than U.S.$2,000,000 in the aggregate and integral multiples of U.S.$1,000,000 in excess thereof (or the remaining portion of the Revolving U.S. Committed Amount, if less). (b) Competitive U.S. Bid Requests. Airgas (by its duly authorized officers or representatives) may solicit by making a written, telefax or telephonic request to all of the U.S. Lenders for a Competitive U.S. Loan. To be effective, such request must be received by each of the U.S. Lenders by such time as determined by each such U.S. Lender in accordance with such U.S. Lender's customary practices (in any event not to be later than 12:00 NOON (Charlotte, North Carolina time)) on the date of the requested borrowing and must specify (i) that a Competitive U.S. Loan is requested, (ii) the amount of such Competitive U.S. Loan and (iii) the Interest Period for such Competitive U.S. Loan. (c) Competitive U.S. Bids. Upon receipt of a request by Airgas for a Competitive U.S. Loan, each U.S. Lender may, in its sole discretion, submit a Competitive U.S. Bid containing an offer to make a Competitive U.S. Loan in an amount up to the amount specified in the related request for Competitive U.S. Loans. Such Competitive U.S. Bid shall be submitted to Airgas by telephone notice by such time as determined by such U.S. Lender in accordance with such U.S. Lender's customary practices (in any event not to be later than 1:00 P.M. (Charlotte, North Carolina time)) on the date of the requested Competitive U.S. Loan. Competitive U.S. Bids so made shall be irrevocable. Each Competitive U.S. Bid shall specify (i) the date of the proposed Competitive U.S. Loan, (ii) the maximum and minimum principal amounts of the Competitive U.S. Loan for which such offer is being made (which may be for all or a part EX-28 of (but not more than) the amount requested by Airgas), (iii) the applicable Competitive U.S. Bid Rate, and (iv) the applicable Interest Period. (d) Acceptance of Competitive U.S. Bids. Airgas (by its duly authorized officers or representatives) may, before such time as determined by the applicable U.S. Lender in accordance with such U.S. Lender's customary practices (in any event until 2:00 P.M. (Charlotte, North Carolina time)) on the date of the requested Competitive U.S. Loan, accept any Competitive U.S. Bid by giving the applicable U.S. Lender and the U.S. Agent telephone notice (immediately confirmed in writing) of (i) the U.S. Lender or U.S. Lenders whose Competitive U.S. Bid(s) is/are accepted, (ii) the principal amount of the Competitive U.S. Bid(s) so accepted and (iii) the Interest Period of the Competitive U.S. Bid(s) so accepted. Airgas may accept any Competitive U.S. Bid in whole or in part; provided, however, that (a) the principal amount of each Competitive U.S. Loan may not exceed the maximum amount offered in the Competitive U.S. Bid and may not be less than the minimum amount offered in the Competitive U.S. Bid, (b) the principal amount of each Competitive U.S. Loan may not exceed the total amount requested pursuant to subsection (a) above, (c) Airgas shall not accept a Competitive U.S. Bid made at a particular Competitive U.S. Bid Rate if it has decided to reject a Competitive U.S. Bid made at a lower Competitive U.S. Bid Rate and (d) if Airgas shall accept a Competitive U.S. Bid or Bids made at a particular Competitive U.S. Bid Rate but the amount of such Competitive U.S. Bid or Bids shall cause the total amount of Competitive U.S. Bids to be accepted by Airgas to exceed the total amount requested pursuant to subsection (a) above, then Airgas shall accept a portion of such Competitive U.S. Bid or Bids in an amount equal to the total amount requested pursuant to subsection (a) above less the amount of other Competitive U.S. Bids accepted with respect to such request, which acceptance, in the case of multiple Competitive U.S. Bids at the same Competitive U.S. Bid Rate, shall be made pro rata in accordance with each such Competitive U.S. Bid at such Competitive U.S. Bid Rate. Competitive U.S. Bids so accepted by Airgas shall be irrevocable. (e) Funding of Competitive U.S. Loans. Upon acceptance by Airgas pursuant to subsection (d) above of all or a portion of any U.S. Lender's Competitive U.S. Bid, such U.S. Lender shall, before such time as determined by such U.S. Lender in accordance with such U.S. Lender's customary practices, on the date of the requested Competitive U.S. Loan, make such Competitive U.S. Loan available to the U.S. Agent in Federal or other immediately available funds. Upon receipt of such funds, the U.S. Agent will promptly make such funds available to Airgas at Account No. 001-641-844 maintained at the offices of NationsBank; provided, however, that if on the date of such Competitive U.S. Loan Airgas is to repay all or any part of an outstanding Revolving U.S. Loan, then the U.S. Agent shall apply such Competitive U.S. 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 Airgas. (f) Competitive U.S. Notes. The Competitive U.S. Loans of each U.S. Lender shall be evidenced by a single Competitive U.S. Note duly executed on behalf of Airgas, dated the date hereof, in substantially the form of Schedule 2.2(f), payable to the order of such U.S. Lender. (g) Repayment of Competitive U.S. Loans. Airgas shall repay to each U.S. Lender which has made a Competitive U.S. Loan on the last day of the Interest Period for such Competitive U.S. Loan the then unpaid principal amount of such Competitive U.S. Loan. Airgas may not prepay any Competitive U.S. Loan unless such prepayment is accompanied by payment of amounts specified in Section 4.1. (h) Interest. Airgas shall pay interest to each U.S. Lender on the unpaid principal amount of each Competitive U.S. Loan of such U.S. Lender from EX-29 and including the date of such Competitive U.S. Loan to but excluding the stated maturity date thereof, at the applicable Competitive U.S. Bid Rate for such Competitive U.S. Loan (computed on the basis of the actual number of days elapsed over a year of 360 days). Interest on Competitive U.S. Loans shall be payable in arrears on each applicable Interest Payment Day (or at such other times as may be specified herein). (i) Limitation on Number of Competitive U.S. Loans. Airgas shall not request a Competitive U.S. Loan if, assuming the maximum amount of Competitive U.S. Loans so requested is borrowed as of the date of such request, the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding would exceed the aggregate Revolving U.S. Committed Amount. (j) Change in Procedures for Requesting Competitive U.S. Loans. Airgas and the U.S. Lenders hereby agree that, notwithstanding any other provision to the contrary contained in this Credit Agreement, upon mutual agreement of the U.S. Agent and Airgas and written notice by the U.S. Agent to the U.S. Lenders, all further requests by Airgas for Competitive U.S. Loans shall be made by Airgas to the U.S. Lenders through the U.S. Agent in accordance with such procedures as shall be prescribed by the U.S. Agent and acceptable to Airgas and each U.S. Lender. 2.3 U.S. Letter of Credit Subfacility. (a) Issuance. Subject to the terms and conditions hereof and of the U.S. LOC Documents, if any, and any other terms and conditions which the U.S. Issuing Lender may reasonably require, the U.S. Lenders will participate in the issuance by the U.S. Issuing Lender from time to time of such U.S. Letters of Credit in U.S. Dollars from the Closing Date until the Termination Date as Airgas may request, in a form acceptable to the U.S. Issuing Lender; provided, however, that (i) the U.S. LOC Obligations outstanding shall not at any time exceed TWO HUNDRED FIFTY MILLION U.S. DOLLARS (U.S.$250,000,000) (the "U.S. LOC Committed Amount") and (ii) the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not at any time exceed the aggregate Revolving U.S. Committed Amount. No U.S. Letter of Credit shall (x) have an original expiry date more than one year from the date of issuance or (y) as originally issued or as extended, have an expiry date extending beyond the Termination Date. Each U.S. Letter of Credit shall comply with the related U.S. LOC Documents. The issuance and expiry date of each U.S. Letter of Credit shall be a Business Day. (b) Notice and Reports. The request for the issuance of a U.S. Letter of Credit shall be submitted by Airgas (by its duly authorized officers or representatives) to the U.S. Issuing Lender at least three (3) Business Days prior to the requested date of issuance. The U.S. Issuing Lender will, at least quarterly and more frequently upon request, disseminate to each of the U.S. Lenders a detailed report specifying the U.S. Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of the prior report, and including therein, among other things, the beneficiary, the face amount, expiry date as well as any payment or expirations which may have occurred. (c) Participation. Each U.S. Lender, upon issuance of a U.S. Letter of Credit (or, in the case of each Existing U.S. Letter of Credit, on the Closing Date), shall be deemed to have purchased without recourse a risk participation from the U.S. Issuing Lender in such U.S. Letter of Credit and the obligations EX-30 arising thereunder, in each case in an amount equal to its pro rata share of the obligations under such U.S. Letter of Credit (based on the respective U.S. Commitment Percentages of the U.S. Lenders) and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the U.S. Issuing Lender therefor and discharge when due, its pro rata share of the obligations arising under such U.S. Letter of Credit. Without limiting the scope and nature of each U.S. Lender's participation in any U.S. Letter of Credit, to the extent that the U.S. Issuing Lender has not been reimbursed as required hereunder or under any such U.S. Letter of Credit, each such U.S. Lender shall pay to the U.S. Issuing Lender its pro rata share of such unreimbursed drawing in same day funds on the day of notification by the U.S. Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of each U.S. Lender to so reimburse the U.S. Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Airgas to reimburse the U.S. Issuing Lender under any U.S. Letter of Credit, together with interest as hereinafter provided. (d) Reimbursement. In the event of any drawing under any U.S. Letter of Credit, the U.S. Issuing Lender will promptly notify Airgas. Unless Airgas shall immediately notify the U.S. Issuing Lender that Airgas intends to otherwise reimburse the U.S. Issuing Lender for such drawing, Airgas shall be deemed to have requested that the U.S. Lenders make a Revolving U.S. Loan in the amount of the drawing as provided in subsection (e) hereof on the related U.S. Letter of Credit, the proceeds of which will be used to satisfy the related reimbursement obligations. Airgas promises to reimburse the U.S. Issuing Lender on the day of drawing under any U.S. Letter of Credit (either with the proceeds of a Revolving U.S. Loan obtained hereunder or otherwise) in same day funds. If Airgas shall fail to reimburse the U.S. Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the U.S. Base Rate plus the sum of (i) the Applicable Percentage and (ii) two percent (2%). Airgas' reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of setoff, counterclaim or defense to payment Airgas may claim or have against the U.S. Issuing Lender, the U.S. Agent, the U.S. Lenders, the beneficiary of the U.S. Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of Airgas to receive consideration or the legality, validity, regularity or unenforceability of the U.S. Letter of Credit. The U.S. Issuing Lender will promptly notify the other U.S. Lenders of the amount of any unreimbursed drawing under any U.S. Letter of Credit and each U.S. Lender shall promptly pay to the U.S. Agent for the account of the U.S. Issuing Lender in U.S. Dollars and in immediately available funds, the amount of such U.S. Lender's pro rata share of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such U.S. Lender from the U.S. Issuing Lender 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 12:00 NOON (Charlotte, North Carolina time) on the Business Day next succeeding the day such notice is received. If such U.S. Lender does not pay such amount to the U.S. Issuing Lender in full upon such request, such U.S. Lender shall, on demand, pay to the U.S. Agent for the account of the U.S. Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such U.S. Lender pays such amount to the U.S. Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date that such U.S. Lender is required to make payments of such amount pursuant to the preceding sentence, the Federal Funds Rate and thereafter at a rate equal to the U.S. Base Rate. Each U.S. Lender's obligation to make such payment to the U.S. Issuing Lender, and the right of the U.S. Issuing Lender to receive the same, shall be absolute and EX-31 unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Credit Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the obligations of Airgas hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a U.S. Lender to the U.S. Issuing Lender, such U.S. Lender shall, automatically and without any further action on the part of the U.S. Issuing Lender or such U.S. Lender, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the U.S. Issuing Lender) in the related unreimbursed drawing portion of the U.S. LOC Obligation and in the interest thereon and in the related U.S. LOC Documents, and shall have a claim against Airgas with respect thereto. (e) Repayment with Revolving U.S. Loans. On any day on which Airgas shall have requested, or shall be deemed to have requested, a Revolving U.S. Loan advance to reimburse a drawing under a U.S. Letter of Credit, the U.S. Agent shall give notice to the U.S. Lenders that a Revolving U.S. Loan has been requested or deemed requested by Airgas to be made in connection with a drawing under a U.S. Letter of Credit, in which case a Revolving U.S. Loan advance comprised of U.S. Base Rate Loans (or Eurodollar Loans to the extent Airgas has complied with the procedures of Section 2.1(b)(i) with respect thereto) shall be immediately made to Airgas by all U.S. Lenders (notwithstanding any termination of the Commitments pursuant to Section 9.2) pro rata based on the respective U.S. Commitment Percentages of the U.S. Lenders (determined before giving effect to any termination of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be paid directly to the U.S. Issuing Lender for application to the respective U.S. LOC Obligations. Each such U.S. Lender hereby irrevocably agrees to make its pro rata share of each such Revolving U.S. Loan immediately upon any such request or deemed request in the amount, in the manner and on the date specified in the preceding sentence notwithstanding (i) the amount of such borrowing may not comply with the minimum amount for advances of Revolving U.S. Loans otherwise required hereunder, (ii) whether any conditions specified in Section 5.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for Revolving U.S. Loan to be made by the time otherwise required hereunder, (v) whether the date of such borrowing is a date on which Revolving U.S. Loans are otherwise permitted to be made hereunder or (vi) any termination of the Commitments relating thereto immediately prior to or contemporaneously with such borrowing. In the event that any Revolving U.S. Loan cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to Airgas), then each such U.S. Lender hereby agrees that it shall forthwith purchase (as of the date such borrowing would otherwise have occurred, but adjusted for any payments received from Airgas on or after such date and prior to such purchase) from the U.S. Issuing Lender such participation in the outstanding U.S. LOC Obligations as shall be necessary to cause each such U.S. Lender to share in such U.S. LOC Obligations ratably (based upon the respective U.S. Commitment Percentages of the U.S. Lenders (determined before giving effect to any termination of the Commitments pursuant to Section 9.2)), provided that at the time any purchase of participation pursuant to this sentence is actually made, the purchasing U.S. Lender shall be required to pay to the U.S. Issuing Lender, to the extent not paid to the Issuer by Airgas in accordance with the terms of subsection (d) hereof, interest on the principal amount of participation purchased for each day from and including the day upon which such borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to, if paid within two (2) Business Days of the date of the Revolving U.S. Loan advance, the Federal Funds Rate, and thereafter at a rate equal to the U.S. Base Rate. EX-32 (f) Designation of Subsidiaries as Account Parties. Notwithstanding anything to the contrary set forth in this Credit Agreement, including without limitation Section 2.3(a) hereof, a U.S. Letter of Credit issued hereunder may contain a statement to the effect that such U.S. Letter of Credit is issued for the account of a Subsidiary of Airgas, provided that notwithstanding such statement, Airgas shall be the actual account party for all purposes of this Credit Agreement for such U.S. Letter of Credit and such statement shall not affect Airgas' reimbursement obligations hereunder with respect to such U.S. Letter of Credit. (g) Renewal, Extension. The renewal or extension of any U.S. Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new U.S. Letter of Credit hereunder. (h) Uniform Customs and Practices. The U.S. Issuing Lender may have the U.S. Letters of Credit be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated therein and deemed in all respects to be a part thereof. (i) Indemnification; Nature of U.S. Issuing Lender's Duties. (i) Airgas agrees to indemnify and hold harmless the U.S. Issuing Lender, each other U.S. Lender, the U.S. 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 U.S. Letter of Credit; provided that Airgas 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, (A) caused by the willful misconduct or gross negligence of any Indemnitee in determining whether a request presented under any U.S. Letter of Credit complied with the terms of such U.S. Letter of Credit or (B) caused by the U.S. Issuing Lender's failure to pay under any U.S. Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such U.S. Letter of Credit (unless such payment is prohibited by any law, regulation, court order or decree). (ii) Airgas agrees, as between Airgas and the U.S. Issuing Lender, Airgas shall assume all risks of the acts, omissions or misuse of any U.S. Letter of Credit by the beneficiary thereof. (iii) The U.S. Issuing Lender shall not, in any way, be liable for any failure by the U.S. Issuing Lender or anyone else to pay any drawing under any U.S. Letter of Credit as a result of any Government Acts or any other cause beyond the control of the U.S. Issuing Lender. (iv) Nothing in this subsection (i) is intended to limit the reimbursement obligations of Airgas contained in subsection (d) above. The obligations of Airgas under this subsection (i) shall survive the termination of this Credit Agreement. No act or omissions of any current or prior beneficiary of a U.S. Letter of Credit shall in any way affect or impair the rights of the U.S. Issuing Lender to enforce any right, power or benefit under this Credit Agreement. (v) Notwithstanding anything to the contrary contained in this subsection (i), Airgas shall have no obligation to indemnify the U.S. Issuing Lender in respect of any liability incurred by the U.S. Issuing Lender (A) arising out of the gross negligence or willful misconduct of the U.S. Issuing Lender, or (B) caused by the U.S. Issuing Lender's failure to pay EX-33 under any U.S. Letter of Credit after presentation to it of a request strictly complying with the terms and conditions of such U.S. Letter of Credit, as determined by a court of competent jurisdiction, unless such payment is prohibited by any law, regulation, court order or decree. (j) Responsibility of U.S. Issuing Lender. It is expressly understood and agreed that the obligations of the U.S. Issuing Lender hereunder to the U.S. Lenders are only those expressly set forth in this Credit Agreement and that the U.S. Issuing Lender shall be entitled to assume that the conditions precedent set forth in Section 5.2 have been satisfied unless it shall have acquired actual knowledge that any such condition precedent has not been satisfied; provided, however, that nothing set forth in this Section 2.3 shall be deemed to prejudice the right of any U.S. Lender to recover from the U.S. Issuing Lender any amounts made available by such U.S. Lender to the U.S. Issuing Lender pursuant to this Section 2.3 in the event that it is determined by a court of competent jurisdiction that the payment with respect to a U.S. Letter of Credit constituted gross negligence or willful misconduct on the part of the U.S. Issuing Lender. (k) Conflict with U.S. LOC Documents. In the event of any conflict between this Credit Agreement and any U.S. LOC Document (including any letter of credit application), this Credit Agreement shall control. 2.4 U.S. Swingline Loan Subfacility. (a) U.S. Swingline Commitment. Subject to the terms and conditions hereof and in reliance upon the representations and warranties herein set forth, the U.S. Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans requested by Airgas in U.S. Dollars to Airgas (each a "U.S. Swingline Loan" and, collectively, the "U.S. Swingline Loans") from time to time from the Closing Date until the Termination Date for the purposes hereinafter set forth; provided, however, (i) the aggregate principal amount of U.S. Swingline Loans outstanding at any time shall not exceed FIFTEEN MILLION U.S. DOLLARS (U.S.$15,000,000) (the "U.S. Swingline Committed Amount"), and (ii) the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not exceed the Revolving U.S. Committed Amount. U.S. Swingline Loans hereunder shall be made as U.S. Base Rate Loans or Quoted Rate U.S. Swingline Loans as Airgas may request in accordance with the provisions of this Section 2.4, and may be repaid and reborrowed in accordance with the provisions hereof. (b) U.S. Swingline Loan Advances. (i) Notices; Disbursement. Whenever Airgas desires a U.S. Swingline Loan advance hereunder its duly authorized officer or representative shall give written notice (or telephone notice promptly confirmed in writing) to the U.S. Swingline Lender not later than 2:00 P.M. (Charlotte, North Carolina time) on the Business Day of the requested U.S. Swingline Loan advance. Each such notice shall be irrevocable and shall specify (A) that a U.S. Swingline Loan advance is requested, (B) the date of the requested U.S. Swingline Loan advance (which shall be a Business Day) and (C) the principal amount of the U.S. Swingline Loan advance requested. Each U.S. Swingline Loan shall be made as a U.S. Base Rate Loan or a Quoted Rate U.S. Swingline Loan and shall have such maturity date as the U.S. Swingline Lender and Airgas shall agree upon receipt by the U.S. Swingline Lender of any such notice from Airgas. The U.S. Swingline Lender shall credit the funds requested to an Airgas account maintained with the Swingline Lender by 3:00 P.M. (Charlotte, North Carolina time) on the Business Day of the requested borrowing. EX-34 (ii) Minimum Amounts. Each U.S. Swingline Loan advance shall be in a minimum principal amount of U.S.$100,000 and in integral multiples thereof (or the remaining amount of the U.S. Swingline Committed Amount, if less). (iii) Repayment of U.S. Swingline Loans. The principal amount of all U.S. Swingline Loans shall be due and payable on the earlier of (A) the maturity date agreed to by the U.S. Swingline Lender and Airgas with respect to such U.S. Swingline Loan (which maturity date shall not be a date more than thirty (30) days from the date of advance thereof) or (B) the Termination Date. The U.S. Swingline Lender may, at any time, in its sole discretion, by written notice to Airgas and the U.S. Lenders, demand repayment of its U.S. Swingline Loans by way of a Revolving U.S. Loan advance, in which case Airgas shall be deemed to have requested a Revolving U.S. Loan advance comprised solely of U.S. Base Rate Loans in the amount of such U.S. Swingline Loans; provided, however, that any such demand shall be deemed to have been given one Business Day prior to the Termination Date and on the date of the occurrence of any Event of Default described in Section 9.1 (or if such date is not a Business Day, the first Business Day succeeding such date) and upon acceleration of the indebtedness hereunder and the exercise of remedies in accordance with the provisions of Section 9.2. Each U.S. Lender hereby irrevocably agrees to make its pro rata share of each such Revolving U.S. Loan in the amount, in the manner and on the date specified in the preceding sentence notwithstanding (I) the amount of such borrowing may not comply with the minimum amount for advances of Revolving U.S. Loans otherwise required hereunder, (II) whether any conditions specified in Section 5.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for Revolving U.S. Loan to be made by the time otherwise required hereunder, (V) whether the date of such borrowing is a date on which Revolving U.S. Loans are otherwise permitted to be made hereunder or (VI) any termination of the Commitments relating thereto immediately prior to or contemporaneously with such borrowing. In the event that any Revolving U.S. Loan cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to Airgas), then each U.S. Lender hereby agrees that it shall forthwith purchase (as of the date such borrowing would otherwise have occurred, but adjusted for any payments received from Airgas on or after such date and prior to such purchase) from the U.S. Swingline Lender such participations in the outstanding U.S. Swingline Loans as shall be necessary to cause each such U.S. Lender to share in such U.S. Swingline Loans ratably based upon its U.S. Commitment Percentage of the Revolving U.S. Committed Amount (determined before giving effect to any termination of the Commitments pursuant to Section 4.4), provided that (A) all interest payable on the U.S. Swingline Loans shall be for the account of the U.S. Swingline Lender until the date as of which the respective participation is purchased and (B) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing U.S. Lender shall be required to pay to the U.S. Swingline Lender, to the extent not paid to the U.S. Swingline Lender by Airgas in accordance with the terms of subsection (c)(ii) hereof, interest on the principal amount of participation purchased for each day from and including the day upon which such borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to the Federal Funds Rate. (c) Interest on U.S. Swingline Loans. (i) Subject to the provisions of Section 4.1, each U.S. Swingline Loan shall bear interest as follows: (A) U.S. Base Rate Loans. If such U.S. Swingline Loan is a U.S. Base Rate Loan, at a per annum rate (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the U.S. Base Rate; and EX-35 (B) Quoted Rate U.S. Swingline Loans. If such U.S. Swingline Loan is a Quoted Rate U.S. Swingline Loan, at a per annum rate (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the Quoted Rate applicable thereto. Notwithstanding any other provision to the contrary set forth in this Credit Agreement, in the event that the principal amount of any Quoted Rate U.S. Swingline Loan is not repaid on the last day of the Interest Period for such Loan, then such Loan shall be automatically converted into a U.S. Base Rate Loan at the end of such Interest Period. (ii) Payment of Interest. Interest on U.S. Swingline Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein). (d) U.S. Swingline Note. The U.S. Swingline Loans shall be evidenced by a duly executed promissory note of Airgas to the U.S. Swingline Lender in an original principal amount equal to the U.S. Swingline Committed Amount substantially in the form of Schedule 2.4(d). 2.5 364-Day Revolving Loans. (a) 364-Day Revolving Commitment. Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each U.S. Lender severally agrees to make available to Airgas such U.S. Lender's U.S. Commitment Percentage of 364-Day revolving credit loans requested by Airgas in U.S. Dollars ("364-Day Revolving Loans") from time to time from the Closing Date until the Termination Date, or such earlier date as the 364-Day Revolving Commitments shall have been terminated as provided herein for the purposes hereinafter set forth; provided, however, that the sum of the aggregate principal amount of outstanding 364-Day Revolving Loans shall not exceed ONE HUNDRED MILLION U.S. DOLLARS (U.S.$100,000,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 4.4, the "364-Day Revolving Committed Amount"); provided, further, (i) with regard to each U.S. Lender individually, such U.S. Lender's outstanding 364-Day Revolving Loans shall not exceed such U.S. Lender's U.S. Commitment Percentage of the 364-Day Revolving Committed Amount and (ii) the aggregate principal amount of outstanding 364-Day Revolving Loans shall not exceed the 364-Day Revolving Committed Amount. 364-Day Revolving Loans may consist of U.S. Base Rate Loans or Eurodollar Loans, or a combination thereof, as Airgas may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided, however, that no more than 11 Eurodollar Loans shall be outstanding hereunder at any time. For purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period. 364-Day Revolving Loans hereunder (other than any 364-Day Revolving Loans which have been converted to term loans pursuant to Section 2.5(f)) may be repaid and reborrowed in accordance with the provisions hereof. (b) 364-Day Revolving Loan Borrowings. (i) Notice of Borrowing. Airgas (by its duly authorized officers or representatives) shall request a 364-Day Revolving Loan borrowing by written notice (or telephone notice promptly confirmed in writing) to the U.S. Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of the requested borrowing in the case of U.S. Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of Eurodollar Loans. Each such request for borrowing shall be EX-36 irrevocable and shall specify (A) that a 364-Day Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, and (D) whether the borrowing shall be comprised of U.S. Base Rate Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are requested, the Interest Period(s) therefor. If Airgas shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a Eurodollar Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of 364-Day Revolving Loan requested, then such notice shall be deemed to be a request for a U.S. Base Rate Loan hereunder. The U.S. Agent shall give notice to each affected U.S. Lender promptly upon receipt of each Notice of Borrowing pursuant to this Section 2.5(b)(i), specifying the contents thereof and each such U.S. Lender's share of any borrowing to be made pursuant thereto. (ii) Minimum Amounts. Each Eurodollar Loan or U.S. Base Rate Loan that is a 364-Day Revolving Loan shall be in a minimum aggregate principal amount of U.S.$5,000,000 and integral multiples of U.S.$1,000,000 in excess thereof (or the remaining amount of the 364-Day Revolving Committed Amount, if less). (iii) Advances. Each U.S. Lender will make its U.S. Commitment Percentage of each 364-Day Revolving Loan borrowing available to the U.S. Agent for the account of Airgas as specified in Section 4.14, or in such other manner as the U.S. Agent may specify in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in U.S. Dollars and in funds immediately available to the U.S. Agent. Such borrowing will then be made available to Airgas by the U.S. Agent by crediting the account of Airgas on the books of the main office of the U.S. Agent in Charlotte, North Carolina with the aggregate of the amounts made available to the U.S. Agent by the U.S. Lenders and in like funds as received by the U.S. Agent. (c) Repayment. The principal amount of all 364-Day Revolving Loans shall be due and payable in full on the Termination Date applicable to Revolving U.S. Loans. (d) Interest. Subject to the provisions of Section 4.1, (i) U.S. Base Rate Loans. During such periods as 364-Day Revolving Loans shall be comprised in whole or in part of U.S. Base Rate Loans, such U.S. Base Rate Loans shall bear interest at a per annum rate equal to the U.S. Base Rate; and (ii) Eurodollar Loans. During such periods as 364-Day Revolving Loans shall be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans shall bear interest at a per annum rate equal to the Eurodollar Rate plus the Applicable Percentage. Interest on 364-Day Revolving Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein). (e) 364-Day Revolving Notes. The 364-Day Revolving Loans made by each U.S. Lender shall be evidenced by a duly executed promissory note of Airgas to such U.S. Lender in an original principal amount equal to such U.S. Lender's U.S. Commitment Percentage of the 364-Day Revolving Committed Amount and in substantially the form of Schedule 2.5(e). EX-37 (f) Extension of 364-Day Revolving Loan Facility. Upon written request of Airgas delivered to the U.S. Agent not more than 60 days nor less than 30 days prior to the then current Termination Date for 364-Day Revolving Loans, each U.S. Lender in its sole discretion may (but shall not be obligated to) agree by not more than 30 days prior to the then current Termination Date to extend the then effective Termination Date with respect to such U.S. Lender's 364-Day Revolving Commitment for a period of 364-days (an "Extending U.S. Lender"). Any failure to respond or failure to provide an affirmative response shall be deemed to be a response in the negative to such request. In the event that any U.S. Lender chooses to extend the Termination Date for such a 364-day period, notice shall be given by the U.S. Agent to Airgas no more than 30 nor less than 25 days prior to the then effective Termination Date. The principal amounts of all outstanding 364-Day Revolving Loans representing 364-Day Revolving Commitments of U.S. Lenders not extending their respective Commitments pursuant to this Section 2.5(f) shall convert into term loans which shall be due and payable in accordance with Section 2.5(c). The principal amounts of all outstanding 364-Day Revolving Loans representing 364-Day Revolving Commitments of U.S. Lenders electing to extend their respective Commitments pursuant to this Section 2.5(f) shall, at the end of the extension period, convert into term loans which shall be due and payable in accordance with Section 2.5(c). SECTION 3 CANADIAN DOLLAR CREDIT FACILITIES 3.1 Revolving Canadian Loans. (a) Revolving Canadian Commitment. Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Canadian Lender severally and not jointly agrees to make available to each Canadian Borrower, for its own account, such Canadian Lender's Canadian Commitment Percentage of revolving credit loans requested by the Canadian Borrowers in Canadian Dollars ("Revolving Canadian Loans") from time to time from the Closing Date until the Termination Date, or such earlier date as the Revolving Canadian Commitments shall have been terminated as provided herein for the purposes hereinafter set forth; provided, however, that the sum of the aggregate principal amount of outstanding Revolving Canadian Loans shall not exceed ONE HUNDRED MILLION CANADIAN DOLLARS (C$100,000,000) (as such aggregate maximum amount may be increased or reduced from time to time as provided in Section 4.4, the "Revolving Canadian Committed Amount"); provided, further, (i) with regard to each Canadian Lender individually, outstanding Revolving Canadian Loans of such Canadian Lender plus the Participation Interests in Canadian LOC Obligations of such Canadian Lender plus the BA Outstandings of such Canadian Lender shall not exceed such Canadian Lender's Canadian Commitment Percentage of the Revolving Canadian Committed Amount and (ii) with regard to the Canadian Lenders collectively, the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus the BA Outstandings shall not exceed the Revolving Canadian Committed Amount. Revolving Canadian Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof. (b) Revolving Canadian Loan Borrowings. (i) Notice of Borrowing. Each Canadian Borrower (by its duly authorized officers or representatives) shall request a Revolving Canadian Loan borrowing by Notice of Borrowing (or telephone notice promptly confirmed by delivery of a Notice of Borrowing) to the Canadian Agent not later than 11:00 A.M. (Toronto, Ontario time) on the Business Day prior to the date of EX-38 the requested borrowing. Each such request for borrowing shall be irrevocable and shall specify (A) that a Revolving Canadian Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day) and (C) the aggregate principal amount to be borrowed. The Canadian Agent shall give notice to each affected Canadian Lender promptly upon receipt of each Notice of Borrowing pursuant to this Section 3.1(b)(i), specifying the contents thereof and each such Canadian Lender's share of any borrowing to be made pursuant thereto. (ii) Minimum Amounts. Each Revolving Canadian Loan shall be in a minimum aggregate principal amount of C$1,500,000 and integral multiples of C$100,000 in excess thereof (or the remaining amount of the Revolving Canadian Committed Amount, if less). (iii) Advances. Each Canadian Lender will make its Canadian Commitment Percentage of each Revolving Canadian Loan borrowing available to the Canadian Agent for the account of the particular Canadian Borrower as specified in Section 4.14, or in such other manner as the Canadian Agent may specify in writing, by 1:00 P.M. (Toronto, Ontario time) on the date specified in the applicable Notice of Borrowing in Canadian Dollars and in funds immediately available to the Canadian Agent. Such borrowing will then be made available to the particular Canadian Borrower by the Canadian Agent by crediting the account of such Canadian Borrower on the books of the main office of the Canadian Agent in Toronto, Ontario with the aggregate of the amounts made available to the Canadian Agent by the Canadian Lenders and in like funds as received by the Canadian Agent. (c) Repayment. The principal amount of all Revolving Canadian Loans shall be due and payable in full on the Termination Date. (d) Interest. Subject to the provisions of Section 4.1, Revolving Canadian Loans shall bear interest at a per annum rate equal to the Canadian Base Rate. Interest on Revolving Canadian Loans shall be payable monthly in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein). (e) Revolving Canadian Notes. The Revolving Canadian Loans made by each Canadian Lender shall be evidenced by a duly executed promissory note of the particular Canadian Borrower to such Canadian Lender in an original principal amount equal to such Canadian Lender's Canadian Commitment Percentage of the Revolving Canadian Committed Amount and in substantially the form of Schedule 3.1(e). 3.2 Canadian Swingline Loan Subfacility. (a) Canadian Swingline Commitment. Subject to the terms and conditions hereof and in reliance upon the representations and warranties herein set forth, each Canadian Borrower may, in its individual capacity, obtain revolving credit loans in Canadian Dollars from the Canadian Swingline Lender, in its individual capacity (each a "Canadian Swingline Loan" and, collectively, the "Canadian Swingline Loans"), from time to time from the Closing Date until the Termination Date (i) by written notice (or telephone notice promptly confirmed in writing) from such Canadian Borrower (by its duly authorized officers or representatives) to the Canadian Swingline Lender not later than 2:00 P.M. (Toronto, Canada time) on the Business Day of the requested Canadian Swingline Loan advance (in which case the Canadian Swingline Lender shall credit the funds requested to the applicable Operating Account by 3:00 P.M. (Toronto, Canada time) on the Business Day of the requested borrowing) or (ii) by way of overdraft in the Canadian Dollar operating accounts maintained by such Canadian Borrower with the Canadian Swingline Lender (collectively, the "Operating Accounts"), for the purposes EX-39 hereinafter set forth; provided, however, (A) the aggregate principal amount of Canadian Swingline Loans outstanding at any time shall not exceed FIVE MILLION CANADIAN DOLLARS (C$5,000,000) (the "Canadian Swingline Committed Amount"), and (B) the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus the BA Outstandings shall not exceed the Revolving Canadian Committed Amount. Unless the Canadian Borrowers have made prior arrangements with the Canadian Swingline Lender (including without limitation by requesting a Revolving Canadian Loan), the Canadian Swingline Lender may return any debit from an Operating Account that, if paid, would result in the aggregate principal amount of outstanding Canadian Swingline Loans exceeding the Canadian Swingline Committed Amount if (1) any Default or Event of Default then exists or (2) if the applicable Canadian Borrower does not, on or before the first Business Day after receipt by such Canadian Borrower of notice of such excess from the Canadian Swingline Lender, deposit money or request a Revolving Canadian Loan sufficient to cover such debit. Canadian Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof. (b) Repayment of Canadian Swingline Loans. Each Canadian Borrower hereby promises to repay the principal amount of each Canadian Swingline Loan taken by such Canadian Borrower on the earlier of (A) the maturity date agreed to by the Canadian Swingline Lender and such Canadian Borrower with respect to such Canadian Swingline Loan or (B) the Termination Date. The Canadian Swingline Lender may, at any time, in its sole discretion, by written notice to the Canadian Borrower and the Canadian Lenders, demand repayment of its Canadian Swingline Loans by way of a Revolving Canadian Loan advance, in which case the Canadian Borrower shall be deemed to have requested a Revolving Canadian Loan advance in the amount of such Canadian Swingline Loans; provided, however, that such a demand shall be deemed to have been given one Business Day prior to the Termination Date and on the date of the occurrence of any Event of Default described in Section 9.1 (or if such date is not a Business Day, the first Business Day succeeding such date) and upon acceleration of the indebtedness hereunder and the exercise of remedies in accordance with the provisions of Section 9.2. Each Canadian Lender hereby irrevocably agrees to make its pro rata share of each such Revolving Canadian Loan in the amount, in the manner and on the date specified in the preceding sentence notwithstanding (I) the amount of such borrowing may not comply with the minimum amount for advances of Revolving Canadian Loans otherwise required hereunder, (II) whether any conditions specified in Section 5.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for a Revolving Canadian Loan to be made by the time otherwise required hereunder, (V) whether the date of such borrowing is a date on which Revolving Canadian Loans are otherwise permitted to be made hereunder or (VI) any termination of the Commitments relating thereto immediately prior to or contemporaneously with such borrowing. (c) Interest on Canadian Swingline Loans. (i) Interest Rate. Subject to the provisions of Section 4.1, each Canadian Swingline Loan shall bear interest at a per annum rate (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the Canadian Base Rate; and (ii) Payment of Interest. With respect to each Canadian Swingline Loan taken by a Canadian Borrower, such Canadian Borrower hereby promises to pay all interest on the outstanding principal amount of such Canadian Swingline Loan in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein). EX-40 3.3 Canadian Letter of Credit Subfacility. (a) Issuance. Subject to the terms and conditions hereof and of the Canadian LOC Documents, if any, and any other terms and conditions which the Canadian Issuing Lender may reasonably require, the Canadian Lenders will participate in the issuance by the Canadian Issuing Lender from time to time of such Canadian Letters of Credit in Canadian Dollars from the Closing Date until the Termination Date as a Canadian Borrower may request, in a form acceptable to the Canadian Issuing Lender; provided, however, that (i) the Canadian LOC Obligations outstanding shall not at any time exceed FIFTY MILLION CANADIAN DOLLARS (C$50,000,000) (the "Canadian LOC Committed Amount") and (ii) the sum of the aggregate principal amount of outstanding Canadian Revolving Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus BA Outstandings shall not at any time exceed the aggregate Revolving Canadian Committed Amount. No Canadian Letter of Credit shall (x) have an original expiry date more than one year from the date of issuance or (y) as originally issued or as extended, have an expiry date extending beyond the Termination Date. Each Canadian Letter of Credit shall comply with the related Canadian LOC Documents. The issuance and expiry date of each Canadian Letter of Credit shall be a Business Day. (b) Notice and Reports. The request for the issuance of a Canadian Letter of Credit shall be submitted by the applicable Canadian Borrower (by its duly authorized officers or representatives) to the Canadian Issuing Lender at least three (3) Business Days prior to the requested date of issuance. The Canadian Issuing Lender will, at least quarterly and more frequently upon request, disseminate to each of the Canadian Lenders a detailed report specifying the Canadian Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of the prior report, and including therein, among other things, the beneficiary, the face amount and expiry date as well as any payments or expirations which may have occurred. (c) Participation. Each Canadian Lender, upon issuance of a Canadian Letter of Credit (or, in the case of each Existing Canadian Letter of Credit, on the Closing Date), shall be deemed to have purchased without recourse a risk participation from the Canadian Issuing Lender in such Canadian Letter of Credit and the obligations arising thereunder, in each case in an amount equal to its pro rata share of the obligations under such Canadian Letter of Credit (based on the respective Canadian Commitment Percentages of the Canadian Lenders) and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Canadian Issuing Lender therefor and discharge when due, its pro rata share of the obligations arising under such Canadian Letter of Credit. Without limiting the scope and nature of each Canadian Lender's participation in any Canadian Letter of Credit, to the extent that the Canadian Issuing Lender has not been reimbursed as required hereunder or under any such Canadian Letter of Credit, each such Canadian Lender shall pay to the Canadian Issuing Lender its pro rata share of such unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of each Canadian Lender to so reimburse the Canadian Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of each Canadian Borrower to reimburse the Canadian Issuing Lender under any Canadian Letter of Credit issued for the account of such Canadian Borrower, together with interest as hereinafter provided. (d) Reimbursement. In the event of any drawing under any Canadian Letter of Credit, the Canadian Issuing Lender will promptly notify the applicable Canadian Borrower. Unless the applicable Canadian Borrower shall EX-41 immediately notify the Canadian Issuing Lender that such Canadian Borrower intends to otherwise reimburse the Canadian Issuing Lender for such drawing, such Canadian Borrower shall be deemed to have requested that the Canadian Lenders make a Revolving Canadian Loan in the amount of the drawing as provided in subsection (e) hereof on the related Canadian Letter of Credit, the proceeds of which will be used to satisfy the related reimbursement obligations. Each Canadian Borrower promises to reimburse the Canadian Issuing Lender on the day of drawing under any Canadian Letter of Credit issued for the account of such Canadian Borrower (either with the proceeds of a Revolving Canadian Loan obtained hereunder or otherwise) in same day funds. If the applicable Canadian Borrower shall fail to reimburse the Canadian Issuing Lender (either with the proceeds of a Revolving Canadian Loan obtained hereunder or otherwise), the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Canadian Base Rate plus two percent (2%). The reimbursement obligations of each Canadian Borrower hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of setoff, counterclaim or defense to payment such Canadian Borrower may claim or have against the Canadian Issuing Lender, the U.S. Agent, the Canadian Agent, the Canadian Lenders, the beneficiary of the Canadian Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of such Canadian Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Canadian Letter of Credit. The Canadian Issuing Lender will promptly notify the other Canadian Lenders of the amount of any unreimbursed drawing under any Canadian Letter of Credit and each Canadian Lender shall promptly pay to the Canadian Agent for the account of the Canadian Issuing Lender in Canadian Dollars and in immediately available funds, the amount of such Canadian Lender's pro rata share of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Canadian Lender from the Canadian Issuing Lender if such notice is received at or before 2:00 P.M. (Toronto, Canada time) otherwise such payment shall be made at or before 12:00 NOON (Toronto, Canada time) on the Business Day next succeeding the day such notice is received. If such Canadian Lender does not pay such amount to the Canadian Issuing Lender in full upon such request, such Canadian Lender shall, on demand, pay to the Canadian Agent for the account of the Canadian Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Canadian Lender pays such amount to the Canadian Issuing Lender in full at a rate per annum equal to the Canadian Base Rate. Each Canadian Lender's obligation to make such payment to the Canadian Issuing Lender, and the right of the Canadian Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Credit Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the obligations of Airgas hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a Canadian Lender to the Canadian Issuing Lender, such Canadian Lender shall, automatically and without any further action on the part of the Canadian Issuing Lender or such Canadian Lender, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the Canadian Issuing Lender) in the related unreimbursed drawn portion of the Canadian LOC Obligation and in the interest thereon and in the related Canadian LOC Documents, and shall have a claim against the Canadian Borrower with respect thereto. (e) Repayment with Revolving Canadian Loans. On any day on which a Canadian Borrower shall have requested, or shall be deemed to have requested, a Revolving Canadian Loan advance to reimburse a drawing under a Canadian Letter of Credit, the Canadian Agent shall give notice to the Canadian Lenders that a Revolving Canadian Loan advance has been requested or deemed requested by such Canadian Borrower to be made in connection with a drawing under a EX-42 Canadian Letter of Credit, in which case a Revolving Canadian Loan shall be immediately made to such Canadian Borrower by all Canadian Lenders (notwithstanding any termination of the Commitments pursuant to Section 9.2) pro rata based on the respective Canadian Commitment Percentages of the Canadian Lenders (determined before giving effect to any termination of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be paid directly to the Canadian Issuing Lender for application to the respective Canadian LOC Obligations. Each such Canadian Lender hereby irrevocably agrees to make its pro rata share of each such Revolving Canadian Loan immediately upon any such request or deemed request in the amount, in the manner and on the date specified in the preceding sentence notwithstanding (i) the amount of such borrowing may not comply with the minimum amount for advances of Revolving Canadian Loans otherwise required hereunder, (ii) whether any conditions specified in Section 5.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) that any such request or deemed request for Revolving Canadian Loan is not made by the time otherwise required hereunder, (v) whether the date of such borrowing is a date on which Revolving Canadian Loans are otherwise permitted to be made hereunder or (vi) any termination of the Commitments relating thereto immediately prior to or contemporaneously with such borrowing. In the event that any Revolving Canadian Loan cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to a Canadian Borrower or Airgas), then each such Canadian Lender hereby agrees that it shall forthwith purchase (as of the date such borrowing would otherwise have occurred, but adjusted for any payments received from any Canadian Borrower on or after such date and prior to such purchase) from the Canadian Issuing Lender such participation in the outstanding Canadian LOC Obligations as shall be necessary to cause each such Canadian Lender to share in such Canadian LOC Obligations ratably (based upon the respective Canadian Commitment Percentages of the Canadian Lenders (determined before giving effect to any termination of the Commitments pursuant to Section 9.2)), provided that at the time any purchase of participation pursuant to this sentence is actually made, the purchasing Canadian Lender shall be required to pay to the Canadian Issuing Lender, to the extent not paid to the Issuer by Airgas in accordance with the terms of subsection (d) hereof, interest on the principal amount of participation purchased for each day from and including the day upon which such borrowing would otherwise have occurred to but excluding the date of payment for such participation, at a rate equal to the Canadian Base Rate. (f) Renewal, Extension. The renewal or extension of any Canadian Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Canadian Letter of Credit hereunder. (g) Uniform Customs and Practices. The Canadian Issuing Lender may have the Canadian Letters of Credit be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (the "UCP"), in which case the UCP shall be expressly incorporated therein and deemed in all respects to be a part thereof. (h) Indemnification; Nature of Canadian Issuing Lender's Duties. (i) Each Canadian Borrower agrees to indemnify and hold harmless the Canadian Issuing Lender, each other Canadian Lender, the Canadian Agent, the U.S. 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 Canadian Letter of Credit issued for the account of such EX-43 Canadian Borrower; provided that the Canadian 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, (A) caused by the willful misconduct or gross negligence of any Indemnitee in determining whether a request presented under any Canadian Letter of Credit complied with the terms of such Canadian Letter of Credit or (B) caused by the Canadian Issuing Lender's failure to pay under any Canadian Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Canadian Letter of Credit (unless such payment is prohibited by any law, regulation, court order or decree). (ii) Each Canadian Borrower agrees, as between such Canadian Borrower and the Canadian Issuing Lender, such Canadian Borrower shall assume all risks of the acts, omissions or misuse by the beneficiary of any Canadian Letter of Credit issued for the account of such Canadian Borrower. (iii) The Canadian Issuing Lender shall not, in any way, be liable for any failure by the Canadian Issuing Lender or anyone else to pay any drawing under any Canadian Letter of Credit as a result of any action by any Governmental Authority or any other cause beyond the control of the Canadian Issuing Lender. (iv) Nothing in this subsection (h) is intended to limit the reimbursement obligations of the Canadian Borrowers contained in subsection (d) above. The obligations of the Canadian Borrowers under this subsection (h) shall survive the termination of this Credit Agreement. No acts or omissions of any current or prior beneficiary of a Canadian Letter of Credit shall in any way affect or impair the rights of the Canadian Issuing Lender to enforce any right, power or benefit under this Credit Agreement. (v) Notwithstanding anything to the contrary contained in this subsection (h), the Canadian Borrowers shall have no obligation to indemnify the Canadian Issuing Lender in respect of any liability incurred by the Canadian Issuing Lender (A) arising out of the gross negligence or willful misconduct of the Canadian Issuing Lender, or (B) caused by the Canadian Issuing Lender's failure to pay under any Canadian Letter of Credit after presentation to it of a request strictly complying with the terms and conditions of such Canadian Letter of Credit, as determined by a court of competent jurisdiction, unless such payment is prohibited by any law, regulation, court order or decree. (i) Responsibility of Canadian Issuing Lender. It is expressly understood and agreed that the obligations of the Canadian Issuing Lender hereunder to the Canadian Lenders are only those expressly set forth in this Credit Agreement and that the Canadian Issuing Lender shall be entitled to assume that the conditions precedent set forth in Section 5.2 have been satisfied unless it shall have acquired actual knowledge that any such condition precedent has not been satisfied; provided, however, that nothing set forth in this Section 3.3 shall be deemed to prejudice the right of any Canadian Lender to recover from the Canadian Issuing Lender any amounts made available by such Canadian Lender to the Canadian Issuing Lender pursuant to this Section 3.3 in the event that it is determined by a court of competent jurisdiction that the payment with respect to a Canadian Letter of Credit constituted gross negligence or willful misconduct on the part of the Canadian Issuing Lender. (j) Conflict with Canadian LOC Documents. In the event of any conflict between this Credit Agreement and any Canadian LOC Document (including any letter of credit application), this Credit Agreement shall control. EX-44 3.4 Bankers' Acceptances. (a) Issuance. Subject to the terms and conditions hereof and any other terms and conditions which a Canadian Lender may reasonably require (so long as such terms and conditions do not impose any financial obligation on or require any Lien (not otherwise contemplated by this Credit Agreement) to be given by any Consolidated Party or conflict with any obligation of, or detract from any action which may be taken by, any Canadian Borrower under this Credit Agreement), each Canadian Lender agrees, severally and not jointly, at any time and from time to time from the Closing Date to the Termination Date, to create Bankers' Acceptances by accepting drafts of a Canadian Borrower presented to it for acceptance in an amount equal to such Canadian Lender's Commitment Percentage of such Bankers' Acceptances as a Canadian Borrower may request on such date; provided, however, that the aggregate amount of Revolving Canadian Loans outstanding plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus the BA Outstandings may not exceed the Revolving Canadian Committed Amount. Upon the acceptance of any draft of a Canadian Borrower pursuant hereto, such Canadian Borrower shall pay to the Canadian Lender accepting the same, in advance, the Acceptance Fee. Forthwith after each request for drawdown of, continuation of or conversion into Banker's Acceptances, the Canadian Agent shall notify each Canadian Lender of the amount and denomination of the Bankers' Acceptances to be accepted by such Canadian Lender. Canadian Borrower shall as soon as practical deliver to the Canadian Agent a notice confirming the issuance of Bankers' Acceptances drawn by it and specifying the net proceeds derived therefrom. For greater certainty, with respect to each extension of credit by way of Bankers' Acceptances from the Canadian Lenders, each Bankers' Acceptance shall have the same term. (b) General Provisions regarding Bankers' Acceptances. (i) Any draft tendered by a Canadian Borrower for acceptance by a Canadian Lender shall be payable in Canada, shall be in the standard form of bankers' acceptance accepted by such Canadian Lender and shall have a term ending on a Business Day not less than 30 days (or any earlier date, subject to availability) or more than 180 days from the date of acceptance. Each extension of credit by way of Bankers' Acceptances from the Canadian Lenders shall be for the minimum aggregate principal amount of C$1,500,000 and in multiples of C$100,000. (ii) On presentation of a draft for acceptance the applicable Canadian Borrower shall pay to the applicable Canadian Lender a stamping fee calculated on the principal amount and for the term of the draft equal to the Applicable Percentage. (iii) All Bankers' Acceptances to be accepted by the Canadian Lenders shall be obtained through the Canadian Agent. Each Canadian Lender agrees to purchase at the Discount Rate each Bankers' Acceptance accepted by it and to provide to the Canadian Agent for the account of the applicable Canadian Borrower the discount proceeds less the stamping fee. A Canadian Lender may hold, sell, rediscount or otherwise dispose of any or all Bankers' Acceptances accepted and purchased by it. (iv) The applicable Canadian Borrower shall provide for each of the Bankers' Acceptances at their respective maturities at the Canadian Agent's main branch in Toronto, Canada (either with the proceeds of a Revolving Canadian Loan obtained hereunder or otherwise). The Canadian Borrowers will continue to be required to provide as aforesaid for each of the Bankers' Acceptances at maturity notwithstanding the fact that the applicable Canadian Lender may be the holder of a Bankers' Acceptance previously issued EX-45 by that Canadian Lender. Any amount owing in respect of any Bankers' Acceptance which is not paid in accordance with the foregoing shall be subject to the same terms as are applicable to Canadian Base Rate Loans, but be payable on demand. (v) In the event that demand is made on the Canadian Borrowers pursuant to Section 9.2, the Canadian Borrowers who have then outstanding any Bankers' Acceptance(s) shall forthwith pay to the Canadian Lenders an amount equal to each such Canadian Lender's maximum potential liability under outstanding Bankers' Acceptances stamped by it on behalf of the applicable Canadian Borrower. Such amount shall be held by the Canadian Lenders for set-off against future indebtedness owing by the applicable Canadian Borrower to the Canadian Lenders in respect of such Bankers' Acceptance(s). (vi) Each Canadian Borrower shall supply the Canadian Lenders with such number of drafts executed and endorsed on behalf of such Canadian Borrower (by its duly authorized officers or other representatives) (or by duly authorized officers or other representatives of Airgas) as the Canadian Lenders may from time to time reasonably request. The signatures of such officers may be mechanically reproduced in facsimile and such facsimile signatures shall be valid and binding on such Canadian Borrower as if they had been manually signed by such officers. Notwithstanding that any of the individuals whose manual or facsimile signature appears on any draft may no longer hold office at the date thereof or at the date of its acceptance by a Canadian Lender hereunder or at any time thereafter, any draft or Bankers' Acceptance signed as provided for in this Section 3.4 shall be valid and binding on the applicable Canadian Borrower. The Canadian Lenders will not be liable for their failure to accept drafts pursuant to this Credit Agreement if such failure is, in whole or in part, due to the failure of a Canadian Borrower to provide drafts to a Canadian Lender in accordance with this Section 3.4. The responsibility of a Canadian Lender in respect of the safekeeping of executed drafts which are delivered to it for acceptance hereunder shall be limited to the exercise of the same degree of care which such Canadian Lender gives to its own property, provided that such Canadian Lender shall not be deemed to be an insurer thereof. Each of the Canadian Borrowers hereby confirms each of the Canadian Lenders shall be entitled to rely upon instructions provided by Airgas regarding the completion of drafts which are delivered to it for acceptance on behalf of any Canadian Borrower hereunder. (vii) Each Canadian Borrower shall ensure that no Bankers' Acceptance it draws has a maturity date beyond the Termination Date. 3.5 Guaranty of Canadian Borrowers' Obligations. (a) Guaranty. The Guarantor hereby guarantees to each Lender and the Agents as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Canadian Borrowers' Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantor hereby further agrees that if any of the Canadian Borrowers' Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Canadian Borrowers' Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal. EX-46 (b) Obligations Unconditional. The obligations of the Guarantor under Section 3.5(a) are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Credit Documents, or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Canadian Borrower Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 3.5(b) that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. The Guarantor agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against any Canadian Borrower or any other guarantor of the Canadian Borrower Obligations for amounts paid under this Section 3.5 until such time as the Lenders have been paid in full, all Commitments under this Credit Agreement have been terminated and no Person or Governmental Authority shall have any right to request any return or reimbursement of funds from the Lenders in connection with monies received under the Credit Documents. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantor hereunder which shall remain absolute and unconditional as described above: (i) at any time or from time to time, without notice to the Guarantor, the time for any performance of or compliance with any of the Canadian Borrowers' Obligations shall be extended, or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents shall be done or omitted; (iii) the maturity of any of the Canadian Borrower Obligations shall be accelerated, or any of the Canadian Borrower Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents shall be waived or any other guarantee of any of the Canadian Borrower Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with; (iv) any of the Canadian Borrowers' Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of the Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of the Guarantor). With respect to its obligations hereunder, the Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents, or against any other Person under any other guarantee of, or security for, any of the Canadian Borrowers' Obligations. (c) Reinstatement. The obligations of the Guarantor under this Section 3.5 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Canadian Borrowers' Obligations is rescinded or must be otherwise restored by any holder of any of the Canadian Borrowers' Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the EX-47 Guarantor agrees that it will indemnify the Canadian Agent and each Canadian Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by the Canadian Agent or such Canadian Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. (d) Certain Additional Waivers. Without limiting the generality of the provisions of this Section 3.5, the Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sections 26-7 through 26-9, inclusive, to the extent applicable. The Guarantor further agrees that it shall have no right of recourse to security for the Canadian Borrowers' Obligations, except through the exercise of the rights of subrogation pursuant to Section 3.5(b). (e) Remedies. The Guarantor agrees that, to the fullest extent permitted by law, as between the Guarantor, on the one hand, and the Canadian Agent and the Canadian Lenders, on the other hand, the Canadian Borrowers' Obligations may be declared to be forthwith due and payable as provided in Section 9.2 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.2) for purposes of Section 3.5(a) notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Canadian Borrowers' Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Canadian Borrowers' Obligations being deemed to have become automatically due and payable), the Canadian Borrowers' Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantor for purposes of Section 3.5(a). (f) Guarantee of Payment; Continuing Guarantee. The guarantee in this Section 3.5 is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Canadian Borrowers' Obligations whenever arising. 3.6 Reset Mechanism. Each Canadian Lender agrees that it will, at any time or from time to time, upon the request of the Canadian Agent, purchase portions of the outstanding Revolving Canadian Loans, Canadian Swingline Loans, Canadian LOC Obligations and BA Outstandings made available by the other Canadian Lenders hereunder and make any other adjustments which may be necessary or appropriate, in order that the amount of such outstanding Revolving Canadian Loans, Canadian Swingline Loans, Canadian LOC Obligations and BA Outstandings made available by the respective Canadian Lenders, as adjusted pursuant to this Section 3.6, will be in the same proportions as the amount which each Canadian Lender's Canadian Commitment Percentage bears to the total Canadian Commitment Percentages of all the Canadian Lenders. SECTION 4 OTHER PROVISIONS RELATING TO CREDIT FACILITIES 4.1 Default Rate. Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than EX-48 the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then 2% greater than the U.S. Base Rate). 4.2 Extension and Conversion. (a) Airgas. Subject to the terms of Section 5.2, Airgas shall have the option, on any Business Day, to extend existing Revolving U.S Loans or 364-Day Revolving Loans into a subsequent permissible Interest Period or to convert any such Loans into Loans of another interest rate type; provided, however, that (i) except as provided in Section 4.8, Eurodollar Loans may be converted into U.S. Base Rate Loans only on the last day of the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended, and U.S. Base Rate Loans may be converted into Eurodollar Loans, only if no Default or Event of Default is in existence on the date of extension or conversion, (iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to the terms of the definition of "Interest Period" set forth in Section 1.1 and shall be in such minimum amounts as provided in Sections 2.1(b)(ii), 2.5(b)(ii) and 3.1(b)(ii), (iv) no more than 11 Eurodollar Loans shall be outstanding hereunder at any time (it being understood that, for purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period), (v) any request for extension or conversion of a Eurodollar Loan which shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month and (vi) Competitive U.S. Loans and U.S. Swingline Loans may not be extended or converted pursuant to this Section 4.2. Each such extension or conversion shall be effected by Airgas by giving a Notice of Extension/Conversion (or telephone notice promptly confirmed in writing) to the U.S. Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in the case of the conversion of a Eurodollar Loan into a U.S. Base Rate Loan, and on the third Business Day prior to, in the case of the extension of a Eurodollar Loan as, or conversion of a U.S. Base Rate Loan into, a Eurodollar Loan, the date of the proposed extension or conversion, specifying the date of the proposed extension or conversion, the Loans to be so extended or converted, the types of Loans into which such Loans are to be converted and, if appropriate, the applicable Interest Periods with respect thereto. Each request for extension or conversion shall be irrevocable and shall constitute a representation and warranty by Airgas of the matters specified in subsections (ii), (iii), (iv) and (v) of Section 5.2. In the event Airgas fails to request extension or conversion of any Eurodollar Loan in accordance with this Section, or any such conversion or extension is not permitted or required by this Section, then such Eurodollar Loan shall be automatically converted into a U.S. Base Rate Loan at the end of the Interest Period applicable thereto. The U.S. Agent shall give each U.S. Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan. (b) Canadian Borrowers. Subject to the terms of Section 5.2, a Canadian Borrower shall have the option, on any Business Day, to convert a Canadian Base Rate Loan into a Bankers' Acceptance, to continue a maturing Bankers' Acceptance in accordance with Section 3.4 or to convert a maturing Bankers' Acceptance into a Canadian Base Rate Loan; provided, however, (i) each such continuation or conversion must be requested by such Canadian Borrower pursuant to a written Notice of Extension/Conversion, in the form of Schedule 4.2, in compliance with the terms set forth below and (ii) such Canadian Borrower must comply with all the requirements of Section 3.4, and (iii) failure by such Canadian Borrower to properly continue a Bankers' Acceptance shall be deemed a conversion to a Canadian Base Rate Loan. Each continuation EX-49 or conversion must be requested by such Canadian Borrower no later than 10:00 a.m., Toronto, Ontario time, (A) the date of a requested conversion of a Bankers' Acceptance to a Canadian Base Rate Loan or (B) three Business Days prior to the date of a requested continuation of a Bankers' Acceptance or conversion of a Canadian Base Rate Loan to a Bankers' Acceptance, in each case pursuant to a written Notice of Extension/Conversion submitted to the Canadian Agent which shall set forth (x) whether the Loans to be continued or converted are Revolving Canadian Loans, (y) whether the Canadian Borrower wishes to continue or convert such Loans and (z) if the request is to continue a Bankers' Acceptance or convert a Canadian Base Rate Loan to a Bankers' Acceptance, the maturity date applicable thereto. 4.3 Prepayments. (a) Voluntary Prepayments. Loans may be prepaid in whole or in part from time to time, subject to Section 4.11, but otherwise without premium or penalty; provided, however, that (i) Eurodollar Loans and Competitive U.S. Loans may only be prepaid on three Business Days' prior written notice to the U.S. Agent, and specifying the applicable Loans to be prepaid; (ii) any prepayment of Eurodollar Loans, Competitive U.S. Loans or Quoted Rate U.S. Swingline Loans will be subject to Section 4.11; (iii) any portion of the Revolving Canadian Committed Amount represented by a Bankers' Acceptance may not be prepaid prior to the maturity of such Bankers' Acceptance; (iv) each such partial prepayment of Loans shall be (A) in the case of Revolving U.S. Loans and Competitive U.S. Loans, in a minimum principal amount of U.S.$5,000,000 and integral multiples of U.S.$1,000,000 in excess thereof, (B) in the case of Revolving Canadian Loans, in a minimum principal amount of C$1,500,000 and integral multiples of C$100,000 in excess thereof and (C) in the case of U.S. Swingline Loans, in a minimum principal amount of U.S.$100,000 and integral multiples thereof. Subject to the foregoing terms, amounts prepaid under this Section 4.3(a) shall be applied as the applicable Credit Party may elect. (b) Mandatory Prepayments. (i) If at any time the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall exceed the Revolving U.S. Committed Amount, Airgas shall prepay immediately the outstanding principal balance on the Revolving U.S. Loans, Competitive U.S. Loans and/or U.S. Swingline Loans (and after all Revolving U.S. Loans, Competitive U.S. Loans and U.S. Swingline Loans have been repaid, pay to the U.S. Agent additional cash in respect of U.S. LOC Obligations, to be held by the U.S. Agent, for the benefit of the U.S. Lenders, in a cash collateral account) in an amount sufficient to eliminate such excess. (ii) If at any time the sum of the aggregate principal amount of outstanding 364-Day Revolving Loans shall exceed the 364-Day Revolving Committed Amount, Airgas shall prepay immediately the outstanding principal balance on the 364-Day Revolving Loans in an amount sufficient to eliminate such excess. (iii) If at any time the sum of the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations plus the BA Outstandings outstanding shall exceed the Revolving Canadian Committed Amount, the Canadian Borrowers shall prepay immediately the outstanding principal balance on the Revolving Canadian Loans or Canadian Swingline Loans (and, after all Revolving Canadian Loans and Canadian Swingline Loans have been repaid, pay to the Canadian Agent additional cash in respect of Canadian LOC EX-50 Obligations and BA Outstandings, to be held by the Canadian Agent, for the benefit of the Canadian Lenders, in a cash collateral account) in an amount sufficient to eliminate such excess. (c) General. All prepayments made pursuant to this Section 4.3 shall be subject to Section 4.11 and shall (i) in the case of Airgas, unless Airgas shall specify otherwise, be applied first to 364-Day Revolving Loans, second to U.S. Swingline Loans, third to Revolving U.S. Loans and fourth to Competitive U.S. Loans, and with respect to 364-Day Revolving Loans or Revolving U.S. Loans, first to U.S. Base Rate Loans, if any, and then to Eurodollar Loans in direct order of Interest Period maturities or (ii) in the case of the Canadian Borrowers, unless the Canadian Borrowers shall specify otherwise, be applied first to Canadian Swingline Loans, second to Revolving Canadian Loans and third to the BA Outstandings in direct order of maturities. Amounts prepaid may be reborrowed in accordance with the provisions hereof. 4.4 Termination and Reduction of Commitments; Increase of Commitments. (a) Voluntary Reductions; Terminations. (i) Airgas may from time to time permanently reduce or terminate the Revolving U.S. Committed Amount in whole or in part (in minimum aggregate amounts of U.S.$5,000,000 or in integral multiples of U.S.$1,000,000 in excess thereof (or, if less, the full remaining amount of the Revolving U.S. Committed Amount)) upon five Business Days' prior written notice to the U.S. Agent. The Revolving U.S. Commitments of the U.S. Lenders, the U.S. Swingline Commitment of the U.S. Swingline Lender and the U.S. LOC Commitment of the U.S. Issuing Lender shall automatically terminate on the Termination Date; (ii) Airgas may from time to time permanently reduce or terminate the 364-Day Revolving Committed Amount in whole or in part (in minimum aggregate amounts of U.S.$5,000,000 or in integral multiples of U.S.$1,000,000 in excess thereof (or, if less, the full remaining amount of the 364-Day Revolving Committed Amount)) upon five Business Days' prior written notice to the U.S. Agent. The 364-Day Revolving Commitments of the U.S. Lenders shall automatically terminate on the Termination Date except to the extent that any U.S. Lender has extended the Termination Date with respect to its 364-Day Revolving Commitment pursuant to Section 2.5(f) hereof; (iii) The Canadian Borrowers may from time to time permanently reduce or terminate the Revolving Canadian Committed Amount in whole or in part (in minimum aggregate amounts of C$1,500,000 or in integral multiples of C$100,000 in excess thereof (or, if less, the full remaining amount of the Revolving Canadian Committed Amount)) upon five Business Days' prior written notice to the U.S. Agent and the Canadian Agent. The Revolving Canadian Commitments of the Canadian Lenders, the Canadian Swingline Commitment of the Canadian Swingline Lender and the Canadian LOC Commitment of the Canadian Issuing Lender shall automatically terminate on the Termination Date; provided, however, no such termination or reduction shall be made which would cause (i) the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding to exceed the Revolving U.S. Committed Amount, (ii) the aggregate principal amount of outstanding 364-Day Revolving Loans to exceed the 364-Day Revolving Committed Amount or (iii) the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus the BA Outstandings to exceed the Revolving Canadian Committed Amount unless, concurrently with such termination or reduction, the respective Loans are repaid to the extent necessary to EX-51 eliminate such excess. The U.S. Agent shall promptly notify each affected Lender of receipt by such U.S. Agent of any notice pursuant to this Section 4.4(a). (b) Unused Fees. (i) Airgas shall pay to the U.S. Agent for the account of the U.S. Lenders in accordance with the terms of Section 4.5(a)(i), on the date of each termination or reduction of the Revolving U.S. Committed Amount, the Unused Revolving U.S. Commitment Fee accrued through the date of such termination or reduction on the amount of the Revolving U.S. Committed Amount so terminated or reduced. (ii) Airgas shall pay to the U.S. Agent for the account of the U.S. Lenders in accordance with the terms of Section 4.5(a)(ii), on the date of each termination or reduction of the 364-Day Revolving Committed Amount, the Unused 364-Day Revolving Commitment Fee accrued through the date of such termination or reduction on the amount of the 364-Day Revolving Committed Amount so terminated or reduced. (iii) The Canadian Borrowers shall pay to the Canadian Agent for the account of the Canadian Lenders in accordance with the terms of Section 4.5(a)(iii), on the date of each termination or reduction of the Revolving Canadian Committed Amount, the Unused Revolving Canadian Commitment Fee accrued through the date of such termination or reduction on the amount of the Revolving Canadian Committed Amount so terminated or reduced. (c) Increase in Commitments. The Credit Parties shall have the right upon at least fifteen (15) Business Days' prior written notice to the U.S. Agent to increase the Revolving U.S. Committed Amount and/or the Revolving Canadian Committed Amount by the U.S. Dollar Amount of up to U.S.$150,000,000 in the aggregate, in one or more increases, at any time and from time to time on or after the Closing Date, subject, however, in any such case, to satisfaction of the following conditions precedent: (i) no Default or Event of Default has occurred and is continuing on the date on which such increase is to become effective; (ii) the representations and warranties set forth in Section 6 of this Credit Agreement shall be true and correct in all material respects on and as of the date on which such increase is to become effective; (iii) such increase shall be (A) in respect of any increase in the Revolving U.S. Committed Amount, an integral multiple of U.S.$1,000,000 and shall in no event be less than U.S.$5,000,000 and (B) in respect of any increase in the Revolving Canadian Committed Amount, an integral multiple of the Canadian Dollar Equivalent of U.S.$1,000,000 and shall in no event be less than the Canadian Dollar Equivalent of U.S.$5,000,000; (iv) such requested increase shall be effective on such date only to the extent that, on or before such date, (A) the U.S. Agent shall have received and accepted a corresponding amount of Additional Commitment(s) pursuant to a commitment letter(s) acceptable to the U.S. Agent from one or more Lenders acceptable to the U.S. Agent and, with respect to any Lender that is not at such time a Lender hereunder, Airgas and (B) each such Lender has executed an agreement in the form of Schedule 4.4 hereto (each such agreement a "New Commitment Agreement"), accepted in writing therein by the U.S. Agent and, with respect to any Lender that is not at such time a Lender hereunder, Airgas, with respect to the Additional Commitment of such Lender; and EX-52 (v) the U.S. Agent shall have received all documents (including resolutions of the board of directors of Airgas) it may reasonably request relating to the corporate or other necessary authority for and the validity of such increase in the Revolving U.S. Committed Amount and/or the Revolving Canadian Committed Amount, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the U.S. Agent. 4.5 Fees. (a) Unused Fees. (i) Unused Revolving U.S. Commitment Fee. In consideration of the Revolving U.S. Commitments of the U.S. Lenders hereunder, Airgas agrees to pay to the U.S. Agent for the account of the U.S. Lenders a fee (the "Unused Revolving U.S. Commitment Fee") on the Unused Revolving U.S. Committed Amount, computed at a per annum rate for each day during the applicable Unused Revolving U.S. Commitment Fee Calculation Period (hereinafter defined) at a rate equal to the Applicable Percentage in effect from time to time. The Unused Revolving U.S. Commitment Fee shall commence to accrue on the Closing Date and shall be due and payable in arrears on the last Business Day of each March, June, September and December (and any date that the Revolving U.S. Committed Amount is reduced as provided in Section 4.4 and the Termination Date) for the immediately preceding quarter (or portion thereof) (each such quarter or portion thereof for which such Unused Fee is payable hereunder being herein referred to as an "Unused Revolving U.S. Commitment Fee Calculation Period"), beginning with the first of such dates to occur after the Closing Date. (ii) Unused 364-Day Revolving Commitment Fee. In consideration of the 364-Day Revolving Commitments of the U.S. Lenders hereunder, Airgas agrees to pay to the U.S. Agent for the account of the U.S. Lenders a fee (the "Unused 364-Day Revolving Commitment Fee") on the Unused 364-Day Revolving Committed Amount, computed at a per annum rate for each day during the applicable Unused 364-Day Revolving Commitment Fee Calculation Period (hereinafter defined) at a rate equal to the Applicable Percentage in effect from time to time. The Unused 364-Day Revolving Commitment Fee shall commence to accrue on the Closing Date and shall be due and payable in arrears on the last Business Day of each March, June, September and December (and any date that the 364-Day Revolving Committed Amount is reduced as provided in Section 4.4 and the Termination Date) for the immediately preceding quarter (or portion thereof) (each such quarter or portion thereof for which such Unused Fee is payable hereunder being herein referred to as an "Unused 364-Day Revolving Commitment Fee Calculation Period"), beginning with the first of such dates to occur after the Closing Date. (iii) Unused Revolving Canadian Commitment Fee. In consideration of the Revolving Canadian Commitments of the Canadian Lenders hereunder, the Canadian Borrowers agree to pay to the Canadian Agent for the account of the Canadian Lenders a fee (the "Unused Revolving Canadian Commitment Fee") on the Unused Revolving Canadian Committed Amount, computed at a per annum rate for each day during the applicable Unused Revolving Canadian Commitment Fee Calculation Period (hereinafter defined) at a rate equal to the Applicable Percentage in effect from time to time. The Unused Revolving Canadian Commitment Fee shall commence to accrue on the Closing Date and shall be due and payable in arrears on the first Business Day of each April, July, October and January (and any date that the Revolving Canadian Committed Amount is reduced as provided in Section 4.4 and the Termination Date) for the immediately preceding quarter (or portion thereof) (each such quarter or portion thereof for which such Unused Fee is payable hereunder being herein EX-53 referred to as an "Unused Revolving Canadian Commitment Fee Calculation Period"), beginning with the first of such dates to occur after the Closing Date. (b) U.S. Letter of Credit Fees. (i) Standby U.S. Letter of Credit Issuance Fee. In consideration of the issuance of standby U.S. Letters of Credit hereunder, Airgas promises to pay to the U.S. Agent for the account of each U.S. Lender a fee (the "Standby U.S. Letter of Credit Fee") on such U.S. Lender's U.S. Commitment Percentage of the average daily maximum amount available to be drawn under each such standby U.S. Letter of Credit computed at a per annum rate for each day from the date of issuance to the date of expiration equal to the Applicable Percentage. The Standby U.S. Letter of Credit Fee will be payable quarterly in arrears on the last Business Day of each March, June, September and December for the immediately preceding quarter (or a portion thereof). (ii) Trade U.S. Letter of Credit Drawing Fee. In consideration of the issuance of trade U.S. Letters of Credit hereunder, Airgas promises to pay to the U.S. Agent for the account of each U.S. Lender a fee (the "Trade U.S. Letter of Credit Fee") equal to the Applicable Percentage on such U.S. Lender's U.S. Commitment Percentage of the amount of each drawing under any such trade U.S. Letter of Credit. The Trade U.S. Letter of Credit Fee will be payable on each date of drawing under a trade U.S. Letter of Credit. (iii) U.S. Issuing Lender Fees. In addition to the Standby U.S. Letter of Credit Fee payable pursuant to clause (i) above and the Trade U.S. Letter of Credit Fee payable pursuant to clause (ii) above, Airgas promises to pay to the U.S. Issuing Lender for its own account without sharing by the other Lenders (A) an issuance fee of 25 basis points on the face amount of each trade U.S. Letter of Credit, payable on each date of issuance or extension of a trade U.S. Letter of Credit, (B) a drawing fee of 15 basis points on the amount of each drawing on any trade U.S. Letter of Credit, payable on each date of drawing under a trade U.S. Letter of Credit, (C) the letter of credit fronting and negotiation fees agreed to by Airgas and the U.S. Issuing Lender in the U.S. Agent's Fee Letter and (D) the customary charges from time to time of the U.S. Issuing Lender agreed to by Airgas with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such U.S. Letters of Credit (collectively, the "U.S. Issuing Lender Fees"). (c) Canadian Letter of Credit Fees. (i) Standby Canadian Letter of Credit Issuance Fee. In consideration of the issuance of standby Canadian Letters of Credit hereunder, each Canadian Borrower promises to pay to the Canadian Agent for the account of each Canadian Lender a fee (the "Standby Canadian Letter of Credit Fee") on such Canadian Lender's Canadian Commitment Percentage of the average daily maximum amount available to be drawn under each such standby Canadian Letter of Credit computed at a per annum rate for each day from the date of issuance to the date of expiration equal to the Applicable Percentage. The Standby Canadian Letter of Credit Fee will be payable quarterly in arrears on the last Business Day of each March, June, September and December for the immediately preceding quarter (or a portion thereof). (ii) Trade Canadian Letter of Credit Drawing Fee. In consideration of the issuance of trade Canadian Letters of Credit hereunder, each Canadian Borrower promises to pay to the Canadian Agent for the account of each Canadian Lender a fee (the "Trade Canadian Letter of Credit Fee") equal to the Applicable Percentage on such Lender's Canadian Commitment Percentage of the amount of each drawing under any such trade Canadian Letter EX-54 of Credit. The Trade Canadian Letter of Credit Fee will be payable on each date of drawing under a trade Canadian Letter of Credit. (iii) Canadian Issuing Lender Fees. In addition to the Standby Canadian Letter of Credit Fee payable pursuant to clause (i) above and the Trade Canadian Letter of Credit Fee payable pursuant to clause (ii) above, each Canadian Borrower promises to pay to the Canadian Issuing Lender for its own account without sharing by the other Lenders (A) an issuance fee of 25 basis points on the face amount of each trade Canadian Letter of Credit, payable on each date of issuance or extension of a trade Canadian Letter of Credit, (B) a drawing fee of 15 basis points on the amount of each drawing on any trade Canadian Letter of Credit, payable on each date of drawing under a trade Canadian Letter of Credit, (C) the letter of credit fronting and negotiation fees agreed to by Airgas and the Canadian Issuing Lender in the Canadian Agent's Fee Letter and (D) the customary charges from time to time of the Canadian Issuing Lender agreed to by Airgas with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such Canadian Letters of Credit (collectively, the "Canadian Issuing Lender Fees"). (d) Agent Fees. (i) U.S. Agent Fees. Airgas agrees to pay to the U.S. Agent, for its own account and for the account of NationsBanc Montgomery Securities, Inc., as applicable, the fees referred to in the U.S. Agent's Fee Letter (collectively, the "U.S. Agent's Fees"). (ii) Canadian Agent Fees. The Canadian Borrowers agree to pay to the Canadian Agent, for its own account, the fees referred to in the Canadian Agent's Fee Letter (collectively, the "Canadian Agent's Fees"). 4.6 Capital Adequacy. If any Lender has determined, after the date hereof, that the adoption of, or any change in, or any change by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule or regulation regarding capital adequacy, or compliance by such Lender 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 Lender's capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's policies with respect to capital adequacy), then, upon notice from such Lender to the applicable Credit Parties, the Credit Parties shall be obligated to pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Within a reasonable time after making a request for such additional amount hereunder, such Lender will furnish to the Credit Parties a statement certifying the amount of such reduction and describing the event giving rise to such reduction. Each determination by any such Lender of amounts owing under this Section shall, absent manifest error, be conclusive and binding on the parties hereto. 4.7 Inability To Determine Interest Rate. (a) If prior to the first day of any Interest Period, the U.S. Agent shall have determined (which determination shall be conclusive and binding upon Airgas) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar EX-55 Rate for such Interest Period, the U.S. Agent shall give telecopy or telephonic notice thereof to Airgas and the U.S. Lenders as soon as practicable thereafter. If such notice is given (a) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as U.S. Base Rate Loans and (b) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as U.S. Base Rate Loans. Until such notice has been withdrawn by the U.S. Agent, no further Eurodollar Loans shall be made or continued as such, nor shall Airgas have the right to convert U.S. Base Rate Loans to Eurodollar Loans. (b) If the Canadian Agent determines in good faith, which determination shall be final, conclusive and binding upon the Canadian Borrowers absent manifest error, and notifies the Canadian Borrowers and each of the Canadian Lenders that, by reason of circumstances affecting the money market (i) there is no market for Bankers' Acceptances; or (ii) the demand for Bankers' Acceptances is insufficient to allow the sale or trading of the Bankers' Acceptances created and purchased hereunder, then, (A) the right of the Canadian Borrowers to request a borrowing by way of Bankers' Acceptances shall be suspended until the Canadian Agent determines in good faith that the circumstances causing such suspension no longer exist and the Canadian Agent so notifies the Canadian Borrowers; and (B) any notice of requested Bankers' Acceptances which is outstanding shall be canceled and the Bankers' Acceptance requested therein shall not be made. (c) The Canadian Agent shall promptly notify the Canadian Borrowers of the suspension of the Canadian Borrowers' right to request a Bankers' Acceptance and of the termination of any such suspension. 4.8 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any U.S. Lender to make or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall promptly give written notice of such circumstances to Airgas and the U.S. Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert a U.S. Base Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it shall no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall then have a commitment only to make a U.S. Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to U.S. Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, Airgas shall pay to such Lender such amounts, if any, as may be required pursuant to Section 4.11. 4.9 Requirements of Law. If, after the date hereof, the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other EX-56 Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender): (a) shall subject such Lender to any tax of any kind whatsoever with respect to any U.S. Letter of Credit, any Canadian Letter of Credit, any Eurodollar Loans, Competitive U.S. Loans made by it, any Bankers' Acceptances accepted by it, or its obligation to make Eurodollar Loans, or change the basis of taxation of payments to such Lender in respect thereof (except for (i) Non-Excluded Taxes covered by Section 4.10 (including Non-Excluded Taxes imposed solely by reason of any failure of such Lender to comply with its obligations under Section 4.10(b)) and (ii) changes in taxes measured by or imposed upon the overall net income, or franchise tax (imposed in lieu of such net income tax), of such Lender or its applicable lending office, branch, or any affiliate thereof)); or (b) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining any Eurodollar Loan, Competitive U.S. Loan or Revolving Canadian Loan, issuing or participating in any U.S. Letter of Credit, of issuing or participating in any Canadian Letter of Credit or of accepting any Bankers' Acceptance or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice to the Credit Parties from such Lender, through an Agent, in accordance herewith, the Credit Parties shall be obligated to promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable, provided that, in any such case, Airgas may elect to convert the Eurodollar Loans made by such U.S. Lender hereunder to U.S. Base Rate Loans by giving the U.S. Agent at least one Business Day's notice of such election, in which case Airgas shall promptly pay to such U.S. Lender, upon demand, without duplication, such amounts, if any, as may be required pursuant to Section 4.11; provided further, however, that if the result of any the foregoing shall be to decrease the cost to any Lender of making or maintaining any Eurodollar Loan, Competitive U.S. Loan or Revolving Canadian Loan, of issuing or participating in any U.S. Letter of Credit, of issuing or participating in any Canadian Letter of Credit or of accepting any Bankers' Acceptance by a material amount, then such U.S. Lender will credit to Airgas an amount equal to such decreased costs. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall provide prompt notice thereof to the Credit Parties, through the appropriate Agent, certifying (x) that one of the events described in this paragraph (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender, through the appropriate Agent, to the Credit Parties shall be conclusive and binding on the parties hereto in the absence of manifest error. Each Lender agrees that it will promptly refund any amounts received by it pursuant to this Section 4.9 that were erroneously billed to the Credit Parties, together with interest thereon at the Base Rate. This covenant shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder. EX-57 4.10 Taxes. (a) Except as provided below in this subsection, all payments made by the Credit Parties under this Credit Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any court, or governmental body, agency or other official, excluding taxes measured by or imposed upon the overall net income of any Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise taxes, branch taxes, taxes on doing business or taxes on the overall capital or net worth of any Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under the laws of which such Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such tax and such Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Lender having executed, delivered or performed its obligations, or received payment under or enforced, this Credit Agreement or any Notes. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to an Agent or any Lender hereunder or under any Notes, (A) the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Credit Agreement and any Notes, provided, however, that the Credit Parties shall be entitled to deduct and withhold any Non-Excluded Taxes and shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof if such Lender fails to comply with the requirements of paragraph (b) of this subsection whenever any Non-Excluded Taxes are payable by the Credit Parties, and (B) as promptly as possible thereafter the Credit Parties shall send to such Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Credit Parties showing payment thereof. If the Credit Parties fail to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to such Agent the required receipts or other required documentary evidence, the Credit Parties shall indemnify such Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by such Agent or any Lender as a result of any such failure. Each Lender agrees that it will promptly refund any amounts received by it pursuant to this Section 4.9 that were erroneously billed to the Credit Parties, together with interest thereon at the Base Rate. The agreements in this subsection shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender that is not incorporated under the laws of the United States of America or a state thereof shall: (X)(i)on or before the date of any payment by Airgas under this Credit Agreement or Notes to such Lender, deliver to Airgas and the U.S. Agent (A) two (2) duly completed copies of United States Internal Revenue Service Form 1001 or 4224, or successor applicable form, as the case may be, certifying that it is entitled to receive payments under this Credit Agreement and any Notes without deduction or withholding of any United States federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor EX-58 applicable form, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax; (ii) deliver to Airgas and the U.S. Agent two (2) further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to Airgas; and (iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by Airgas or the U.S. Agent; or (Y) in the case of any such Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i) represent to Airgas (for the benefit of Airgas and the U.S. Agent) that it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii) agree to furnish to Airgas on or before the date of any payment by Airgas, with a copy to the U.S. Agent two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8, or successor applicable form certifying to such Lender's legal entitlement at the date of such certificate to an exemption from U.S. withholding tax under the provisions of Section 881(c) of the Internal Revenue Code with respect to payments to be made under this Credit Agreement and any Notes (and to deliver to Airgas and the U.S. Agent two (2) further copies of such form on or before the date it expires or becomes obsolete and after the occurrence of any event requiring a change in the most recently provided form and, if necessary, obtain any extensions of time reasonably requested by Airgas or the U.S. Agent for filing and completing such forms), and (iii) agree, to the extent legally entitled to do so, upon reasonable request by Airgas, to provide to Airgas (for the benefit of Airgas and the U.S. Agent) such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments under this Credit Agreement and any Notes; unless in any such case any change in treaty, law or regulation has occurred after the date such Person becomes a Lender hereunder which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises Airgas and the U.S. Agent. Each Person that shall become a Lender or a participant of a Lender pursuant to subsection 11.3 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this subsection, provided that in the case of a participant of a Lender the obligations of such participant of a Lender pursuant to this subsection (b) shall be determined as if the participant of a Lender were a Lender except that such participant of a Lender shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased. 4.11 Indemnity. Airgas promises to indemnify each U.S. Lender and to hold each U.S. Lender harmless from any loss or expense which such U.S. Lender may sustain or incur (other than through such U.S. Lender's breach of its obligations hereunder, gross negligence or willful misconduct) as a consequence of (a) default by Airgas in making a borrowing of, conversion into or continuation of Eurodollar Loans or Quoted Rate U.S. Swingline Loans after Airgas has given a notice requesting the same in accordance with the provisions of this Credit Agreement, (b) default by Airgas in making any prepayment of a Eurodollar Loan or a Quoted Rate U.S. Swingline Loan after Airgas has given a notice thereof in accordance with the provisions of this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans or Quoted Rate U.S. Swingline Loans EX-59 on a day which is not the last day of an Interest Period with respect thereto. With respect to Eurodollar Loans, such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Loans provided for herein (excluding, however, the Applicable Percentage included therein, if any) over (ii) the amount of interest (as reasonably determined by such U.S. Lender) which would have accrued to such U.S. Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. The covenants of Airgas set forth in this Section 4.11 shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder. 4.12 Pro Rata Treatment. Except to the extent otherwise provided herein: (a) Loans. (i) U.S. Dollar Loans. Each Revolving U.S. Loan or 364-Day Revolving Loan, each payment or prepayment of principal in respect of any Revolving U.S. Loan or 364-Day Revolving Loan or reimbursement obligations arising from drawings under U.S. Letters of Credit or from Participation Interests in U.S. Swingline Loans, each payment of interest on the Revolving U.S. Loans or 364-Day Revolving Loans or reimbursement obligations arising from drawings under U.S. Letters of Credit, each payment of the Unused Revolving U.S Commitment Fee or the Unused 364-Day Revolving Commitment Fees, each payment of the Standby U.S. Letter of Credit Fee, each payment of the Trade U.S. Letter of Credit Fee, each reduction of the Revolving U.S. Committed Amount or the 364-Day Revolving Committed Amount and each conversion or extension of any Revolving U.S. Loan or 364-Day Revolving Loan, shall be allocated pro rata among the U.S. Lenders in accordance with the respective principal amounts of their outstanding Revolving U.S. Loans and Participation Interests in Revolving U.S. Loans, U.S. Letters of Credit and U.S. Swingline Loans or their outstanding 364-Day Revolving Loans and Participation Interests in 364-Day Revolving Loans, as applicable. With respect to Competitive U.S. Loans, if Airgas fails to specify the particular Competitive U.S. Loan or Loans as to which any payment or other amount should be applied and it is not otherwise clear as to the particular Competitive U.S. Loan or Loans to which such payment or other amounts relate, or any such payment or other amount is to be applied to Competitive U.S. Loans without regard to any such direction by Airgas, then each payment or prepayment of principal on Competitive U.S. Loans and each payment of interest or other amount on or in respect of Competitive U.S. Loans, shall be allocated pro rata among the relevant U.S. Lenders in accordance with the then outstanding amounts of their respective Competitive U.S. Loans. (ii) Canadian Dollar Loans. Each Revolving Canadian Loan, each creation of a Bankers' Acceptance, each payment or prepayment of principal in respect of any Revolving Canadian Loan, BA Outstandings or reimbursement obligations arising from drawings under Canadian Letters of Credit, each payment of interest on the Revolving Canadian Loans or on reimbursement obligations arising from drawings under Canadian Letters of Credit, each payment of the Acceptance Fee on Bankers' Acceptances, each payment of the Unused Revolving Canadian Commitment Fee, each payment of the Standby Canadian Letter of Credit Fee, each payment of the Trade Canadian Letter of Credit Fee, each reduction of the Revolving Canadian Committed Amount and each conversion EX-60 or extension of any Revolving Canadian Loan, shall be allocated pro rata among the Canadian Lenders in accordance with the respective principal amounts of their outstanding Revolving Canadian Loans, BA Outstandings and Participation Interests in Revolving Canadian Loans, Canadian Letters of Credit and BA Outstandings. (b) Advances. Unless the U.S. Agent or the Canadian Agent, as appropriate, shall have been notified in writing by any Lender prior to any extension of credit that such Lender will not make the amount that would constitute its ratable share of such extension of credit available to such Agent, such Agent may assume that such Lender is making such amount available to such Agent, and such Agent may, in reliance upon such assumption, make available to the relevant Credit Party(ies) a corresponding amount. If such amount is not made available to the applicable Agent by such Lender within the time period specified therefor hereunder, such Lender shall pay to such Agent, on demand, such amount with interest thereon at a rate equal to, in the case of any extension of credit in U.S. Dollars, the Federal Funds Rate, or, in the case of any extension of credit in Canadian Dollars, the interbank rate (as defined in the Canadian Payment Association Rules), for the period until such Lender makes such amount immediately available to such Agent. A certificate of the U.S. Agent or the Canadian Agent, as applicable, submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. 4.13 Sharing of Payments. The Lenders agree among themselves that, in the event that any Lender shall obtain payment in respect of any Loan, LOC Obligations, BA Outstandings or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code (or similar provision of the Canadian bankruptcy laws) or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, in excess of its pro rata share of such payment as provided for in this Credit Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Loans, LOC Obligations, BA Outstandings and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise restored. The Credit Parties agree that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan, LOC Obligations, BA Outstandings or other obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender or an Agent shall fail to remit to an Agent or any other Lender an amount payable by such Lender or such Agent to an Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other similar EX-61 law, any Lender receives a secured claim in lieu of a setoff to which this Section 4.13 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 4.13 to share in the benefits of any recovery on such secured claim. 4.14 Payments, Computations, Etc. Except as otherwise specifically provided herein, (i) all payments in respect of Revolving Canadian Loans, Canadian Swingline Loans, Canadian Letters of Credit, Bankers' Acceptances, interest on Revolving Canadian Loans, the Acceptance Fee on Bankers' Acceptances or the Unused Revolving Canadian Commitment Fee shall be made to the Canadian Agent in Canadian Dollars in immediately available funds, without offset, deduction, counterclaim or withholding of any kind, at the Canadian Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M. (Toronto, Ontario time) on the date when due and (ii) all other payments hereunder (other than payments in respect of Competitive U.S. Loans) shall be made to the U.S. Agent in dollars in immediately available funds, without offset, deduction, counterclaim or withholding of any kind, at the U.S. Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina time) on the date when due. Payments received after such times shall be deemed to have been received on the next succeeding Business Day. The relevant Agent may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of the applicable Credit Parties maintained with such Agent (with notice to such Credit Parties). Each Credit Party shall, at the time it makes any payment under this Credit Agreement (other than payments in respect of Competitive U.S. Loans), specify to the relevant Agent the Loans, LOC Obligations, BA Outstandings, Fees, Acceptance Fees, interest or other amounts payable by the Credit Parties hereunder to which such payment is to be applied (and in the event that it fails so to specify, or if such application would be inconsistent with the terms hereof, such Agent shall distribute such payment to the Lenders in such manner as such Agent may determine to be appropriate in respect of obligations owing by the Credit Parties hereunder, subject to the terms of Section 4.12(a)). The U.S. Agent or the Canadian Agent, as applicable, will distribute such payments to such Lenders, if any such payment is received prior to 12:00 NOON (Charlotte, North Carolina time or Toronto, Ontario time, as applicable) on a Business Day in like funds as received prior to the end of such Business Day and otherwise such Agent will distribute such payment to such Lenders on the next succeeding Business Day. All payments of principal and interest in respect of Competitive U.S. Loans shall be in accordance with the terms of Section 2.2. Whenever any payment hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day (subject to accrual of interest and Fees for the period of such extension), except that in the case of Eurodollar Loans, if the extension would cause the payment to be made in the next following calendar month, then such payment shall instead be made on the next preceding Business Day. Except as expressly provided otherwise herein, all computations of interest and fees shall be made on the basis of actual number of days elapsed over a year of 360 days, except with respect to computation of interest on U.S. Base Rate Loans which (unless the U.S. Base Rate is determined by reference to the Federal Funds Rate) shall be calculated based on a year of 365 or 366 days, as appropriate. Interest shall accrue from and include the date of borrowing, but exclude the date of payment. EX-62 SECTION 5 CONDITIONS 5.1 Closing Conditions. The obligation of the Lenders to enter into this Credit Agreement and to make the initial extensions of credit hereunder shall be subject to satisfaction of the following conditions (in form and substance acceptable to the Lenders): (a) The U.S. Agent shall have received original counterparts of the Credit Documents executed by each of the parties thereto; (b) The U.S. Agent shall have received all documents it may reasonably request relating to the existence and good standing of each Credit Party, the corporate or other necessary authority for and the validity of the Credit Documents, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the U.S. Agent; (c) The U.S. Agent shall have received a legal opinion of McCausland, Keen & Buckman, U.S. counsel for the Credit Parties, dated as of the Closing Date and substantially in the form of Schedule 5.1(c); (d) The Canadian Agent shall have received a legal opinion of Blaney, McMurtry, Stapells, Friedman, Canadian counsel for the Credit Parties, dated as of the Closing Date and substantially in the form of Schedule 5.1(d); (e) The U.S. Agent shall have received a legal opinion of Moore & Van Allen, dated as of the Closing Date and substantially in the form of Schedule 5.1(e); (f) Each Agent shall have received, for its own account and for the accounts of the relevant Lenders, all fees and expenses required by this Credit Agreement or any other Credit Document to be paid to such Agent on or before the Closing Date; (g) The U.S. Agent shall have received a satisfactory pay-off and termination letter from CIBC in its capacity as agent under that certain Credit Agreement dated November 14, 1995 among the Canadian Borrowers, CIBC and the lenders (including CIBC) party thereto; and (h) The U.S. Agent shall have received such other documents, agreements or information which may be reasonably requested by either Agent. 5.2 Conditions to all Extensions of Credit. The obligations of each Lender to make, convert or extend any Loan or create any Bankers' Acceptance, of the U.S. Issuing Lender to issue or extend U.S. Letters of Credit and of the Canadian Issuing Lender to issue or extend Canadian Letters of Credit (including the initial Loans, the initial U.S. Letters of Credit and the initial Canadian Letters of Credit) are subject to satisfaction of the following conditions in addition to satisfaction on the Closing Date of the conditions set forth in Section 5.1: (i) The relevant Credit Party shall have properly delivered (A) in the case of any Loan or Bankers' Acceptance, an appropriate Notice of Borrowing or Notice of Extension/Conversion, (B) in the case of any U.S. Letter of Credit, an appropriate request for issuance or extension in accordance with the provisions of Section 2.3(b) or (C) in the case of any EX-63 Canadian Letter of Credit, an appropriate request for issuance or extension in accordance with the provisions of Section 3.3(b); (ii) The representations and warranties set forth in Section 6 shall be, subject to the limitations set forth therein, true and correct in all material respects as of such date (except for those which expressly relate to an earlier date) unless the failure to be so true and correct would not be reasonably expected to have a Material Adverse Effect; (iii) There shall not have been commenced against any Credit Party an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded; (iv) No Default or Event of Default shall exist and be continuing either prior to or after giving effect thereto; and (v) Immediately after giving effect to the making of such Loan (and the application of the proceeds thereof), the issuance or extension of such U.S. Letter of Credit, the issuance or extension of such Canadian Letter of Credit, or the creation of such Bankers' Acceptance as the case may be, (A) in the case of Revolving U.S. Loans, Competitive U.S. Loans, U.S. Swingline Loans and U.S. Letters of Credit, the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not exceed the Revolving U.S. Committed Amount, (B) in the case of U.S. Letters of Credit, the U.S. LOC Obligations outstanding shall not exceed the U.S. LOC Committed Amount, (C) in the case of U.S. Swingline Loans, the aggregate principal amount of outstanding U.S. Swingline Loans shall not exceed the U.S. Swingline Committed Amount, (D) in the case of 364-Day Revolving Loans, the sum of the aggregate principal amount of outstanding 364-Day Revolving Loans shall not exceed the 364-Day Revolving Committed Amount, (E) in the case of Revolving Canadian Loans, Canadian Swingline Loans, Canadian Letters of Credit and Bankers' Acceptances, the sum of the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus BA Outstandings shall not exceed the Revolving Canadian Committed Amount, (F) in the case of Canadian Swingline Loans, the aggregate principal amount of outstanding Canadian Swingline Loans shall not exceed the Canadian Swingline Committed Amount and (G) in the case of Canadian Letters of Credit, the aggregate principal amount of Canadian LOC Obligations outstanding shall not exceed the Canadian LOC Committed Amount. The delivery of each Notice of Borrowing, each Notice of Extension/Conversion, each request for a U.S. Swingline Loan, each request for a Canadian Swingline Loan, each request for the issuance or extension of a U.S. Letter of Credit pursuant to Section 2.3(b) and each request for the issuance or extension of a Canadian Letter of Credit pursuant to Section 3.3(b) shall constitute a representation and warranty by the Credit Parties of the correctness of the matters specified in subsections (ii), (iii), (iv) and (v) above. EX-64 SECTION 6 REPRESENTATIONS AND WARRANTIES Airgas hereby represents to the Agents and each Lender that: 6.1 Financial Condition. (a) The audited consolidated and consolidating balance sheet of the Consolidated Parties, and the related consolidated and consolidating statements of earnings and statements of cash flows, as of March 31, 1997 have heretofore been furnished to each Lender. Such financial statements (including the notes thereto) (i) have been audited by KPMG Peat Marwick, (ii) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby and (iii) present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated financial condition, results of operations and cash flows of the Consolidated Parties as of such date and for such periods. The unaudited interim balance sheets of the Consolidated Parties as at the end of, and the related unaudited interim statements of earnings and of cash flows for, each quarterly period ended after March 31, 1997 and prior to the Closing Date have heretofore been furnished to each Lender. Such interim financial statements for each such quarterly period, (i) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby and (ii) present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated financial condition, results of operations and cash flows of the Consolidated Parties as of such date and for such periods. During the period from March 31, 1997 to and including the Closing Date, there has been no sale, transfer or other disposition by the Consolidated Parties of any material part of the business or property of the Consolidated Parties, taken as a whole, and there has been no Material Acquisition, in each case, which, is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Agents on or prior to the Closing Date. (b) The projections of profit and loss statements, balance sheets and cash flow reports for the Consolidated Parties on a consolidated basis for fiscal year 1998, copies of which have heretofore been furnished to each Lender, are based upon reasonable assumptions made known to the Lenders and upon information not known to be incorrect or misleading in any material respect. 6.2 No Change. Since March 31, 1997, there has been no development or event relating to or affecting the Consolidated Parties which has had or would be reasonably expected to have a Material Adverse Effect. 6.3 Organization; Existence; Compliance with Law. Each Consolidated Party (a) is a corporation duly organized, validly existing and is in good standing under the laws of the jurisdiction of its incorporation or organization, (b) has the corporate or other necessary power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a EX-65 Material Adverse Effect, and (d) is in compliance with all material Requirements of Law. 6.4 Power; Authorization; Enforceable Obligations. Each Credit Party has the corporate or other necessary power and authority, and the legal right, to make, deliver and perform the Credit Documents and to borrow hereunder, and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Credit Agreement and to authorize the execution, delivery and performance of the Credit Documents to which it is a party. No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of any Credit Party in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents to which such Credit Party is a party. This Credit Agreement has been, and each other Credit Document to which any Credit Party is a party will be, duly executed and delivered on behalf of each such Credit Party. This Credit Agreement constitutes, and each other Credit Document when executed and delivered will constitute, a legal, valid and binding obligation of each Credit Party (with regard to each Credit Document to which it is a party) enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 6.5 No Legal Bar. The execution, delivery and performance of the Credit Documents by any Credit Party, the borrowings hereunder and the use of the proceeds thereof (a) will not violate any Requirement of Law or contractual obligation of such Credit Party or any of its Subsidiaries in any respect that would reasonably be expected to have a Material Adverse Effect, (b) will not result in, or require, the creation or imposition of any Lien on any of the properties or revenues of such Credit Party or any of its Subsidiaries pursuant to any such Requirement of Law or contractual obligation, and (c) will not violate or conflict with any provision of such Credit Party's articles of incorporation or by-laws. 6.6 No Material Litigation. Except as disclosed and described in Schedule 6.6 attached hereto, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the best knowledge of the Credit Parties, threatened by or against the Consolidated Parties or against any of their respective properties or revenues which (a) relates to any of the Credit Documents or any of the transactions contemplated hereby or thereby or (b) would be reasonably expected to have a Material Adverse Effect. 6.7 No Default. No Consolidated Party is in default under or with respect to any of its contractual obligations in excess of U.S.$10,000,000 in any respect which would be reasonably expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. EX-66 6.8 Ownership of Property; Liens. Each Consolidated Party has good record and marketable title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien, except for Permitted Liens. 6.9 Intellectual Property. Each Consolidated Party owns, or has the legal right to use, all trademarks, tradenames, copyrights, technology, know-how and processes, if any, necessary for each of them to conduct its business as currently conducted (the "Intellectual Property") except for those the failure to own or have such legal right to use would not be reasonably expected to have a Material Adverse Effect. No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does Airgas know of any such claim, and the use of such Intellectual Property by any Consolidated Party does not infringe on the rights of any Person, except for such claims and infringements that in the aggregate, would not be reasonably expected to have a Material Adverse Effect. 6.10 No Burdensome Restrictions. Except as previously disclosed in writing to the Lenders on or prior to the Closing Date, no Requirement of Law or contractual obligation of any Consolidated Party would be reasonably expected to have a Material Adverse Effect. 6.11 Taxes. Each Consolidated Party has filed or caused to be filed all income tax returns and all other material tax returns which, to the best knowledge of Airgas, are required to be filed and has paid (a) all taxes shown to be due and payable on said returns or (b) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (i) taxes, fees or other charges with respect to which the failure to pay, in the aggregate, would not have a Material Adverse Effect or (ii) taxes, fees or other charges the amount or validity of which are currently being contested and with respect to which reserves in conformity with GAAP have been provided on the books of such Person), and no tax Lien has been filed, and, to the best knowledge of Airgas, no claim is being asserted, with respect to any such tax, fee or other charge. 6.12 ERISA. Except as would not result in a Material Adverse Effect: (a) During the five-year period prior to the date on which this representation is made or deemed made: (i) no Termination Event has occurred, and, to the best knowledge of Airgas, no event or condition has occurred or exists as a result of which any Termination Event could reasonably be expected to occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Plan; (iii) each Single Employer Plan and, to the best knowledge of Airgas, each Multiemployer Plan has been maintained, operated, and funded in compliance with its own terms and in material compliance with the provisions of ERISA, the Code, and EX-67 any other applicable federal or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on account of any Plan. (b) The actuarial present value of all "benefit liabilities" under all Single Employer Plans (determined within the meaning of Section 401(a)(2) of the Code, utilizing the actuarial assumptions used to fund such Plans), whether or not vested, did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the current value of the assets of all such Plans. (c) No Consolidated Party or any ERISA Affiliate has incurred, or, to the best knowledge of Airgas, could be reasonably expected to incur, any withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan. No Consolidated Party or any ERISA Affiliate would become subject to any withdrawal liability under ERISA if any Consolidated Party or any ERISA Affiliate were to withdraw completely from all Multiemployer Plans and Multiple Employer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No Consolidated Party or any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of Airgas, reasonably expected to be in reorganization, insolvent, or terminated. (d) No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or may subject any Consolidated Party or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any Consolidated Party or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability. 6.13 Governmental Regulations, Etc. (a) No part of the proceeds of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation G or Regulation U, or for the purpose of purchasing or carrying or trading in any securities other than securities issued by Airgas. If requested by any Lender or the U.S. Agent, the Credit Parties will furnish to the U.S. Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. No indebtedness being reduced or retired out of the proceeds of the Loans was or will be incurred for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U or any "margin security" within the meaning of Regulation T other than securities issued by Airgas. "Margin stock" within the meanings of Regulation U does not constitute more than 25% of the value of the consolidated assets of the Consolidated Parties. None of the transactions contemplated by this Credit Agreement (including, without limitation, the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation G, T, U or X. (b) No Consolidated Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940, each as amended. In addition, no Consolidated Party is (i) an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, and is not controlled by such a EX-68 company, or (ii) a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. (c) No director, executive officer or principal shareholder of any Consolidated Party is a director, executive officer or principal shareholder of any Lender. For the purposes hereof the terms "director", "executive officer" and "principal shareholder" (when used with reference to any Lender) have the respective meanings assigned thereto in Regulation O issued by the Board of Governors of the Federal Reserve System. (d) Each Consolidated Party has obtained all material licenses, permits, franchises or other governmental authorizations necessary to the ownership of its respective Property and to the conduct of its business. (e) No Consolidated Party is in violation of any applicable statute, regulation or ordinance of the United States of America or Canada, or of any state, province, city, town, municipality, county or any other jurisdiction, or of any agency thereof (including without limitation, environmental laws and regulations), which violation could reasonably be expected to have a Material Adverse Effect. (f) Each Consolidated Party is current with all material reports and documents, if any, required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions. 6.14 Subsidiaries. Schedule 6.14 sets forth all the Subsidiaries of each Credit Party at the Closing Date, the jurisdiction of their incorporation and the direct or indirect ownership interest of such Credit Party therein. 6.15 Purpose of Loans and Letters of Credit. The proceeds of the Loans hereunder shall be used solely by the Credit Parties (i) to refinance existing Indebtedness of Airgas under the Existing Credit Agreement, (ii) to finance the acquisition of new Subsidiaries, (iii) to finance loans, advances and other investments by the Consolidated Parties to the extent permitted under this Credit Agreement and (iv) for the working capital, capital expenditure and other general corporate purposes of the Consolidated Parties. The Letters of Credit shall be used only for or in connection with appeal bonds, reimbursement obligations arising in connection with surety and reclamation bonds, reinsurance, domestic or international trade transactions and obligations not otherwise aforementioned relating to acquisitions by the Consolidated Parties and other transactions entered into by the applicable account party in the ordinary course of business. 6.16 Environmental Matters. Except as could not reasonably be expected to have a Material Adverse Effect: (a) Each of the facilities and properties owned, leased or operated by any Consolidated Party (the "Properties") and all operations at the Properties are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Properties or the businesses operated by any Consolidated Party (the "Businesses"), and there are no conditions relating to the Businesses or Properties that could give rise to liability under any applicable Environmental Laws. EX-69 (b) None of the Properties contains, or has previously contained, any Materials of Environmental Concern at, on or under the Properties in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws. (c) No Consolidated Party has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Businesses, nor does any Consolidated Party have knowledge or reason to believe that any such notice will be received or is being threatened. (d) Materials of Environmental Concern have not been transported or disposed of from the Properties, or generated, treated, stored or disposed of at, on or under any of the Properties or any other location, in each case by or on behalf of any Consolidated Party in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable Environmental Law. (e) No judicial proceeding or governmental or administrative action is pending or, to the best knowledge of Airgas, threatened, under any Environmental Law to which any Consolidated Party is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to any Consolidated Party, the Properties or the Businesses. (f) There has been no release or, threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations (including, without limitation, disposal) of any Consolidated Party in connection with the Properties or otherwise in connection with the Businesses, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws. SECTION 7 AFFIRMATIVE COVENANTS Airgas hereby covenants and agrees that so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated: 7.1 Information Covenants. Airgas will furnish, or cause to be furnished, to the U.S. Agent and each of the Lenders: (a) Annual Financial Statements. As soon as available, and in any event within 120 days after the close of each fiscal year of the Consolidated Parties, a consolidated and consolidating balance sheet and income statement of the Consolidated Parties, as of the end of such fiscal year, together with related consolidated and consolidating statements of operations and retained earnings and of cash flows for such fiscal year, setting forth in comparative form consolidated and consolidating figures for the preceding fiscal year, all such financial information described above to be in reasonable form and detail and audited by independent certified public accountants of recognized national standing reasonably acceptable to the U.S. Agent and whose opinion shall be to the effect that such financial statements EX-70 have been prepared in accordance with GAAP (except for changes with which such accountants concur) and shall not be limited as to the scope of the audit or qualified as to the status of the Consolidated Parties as a going concern. (b) Quarterly Financial Statements. As soon as available, and in any event within 60 days after the close of each fiscal quarter of the Consolidated Parties (other than the fourth fiscal quarter, in which case 120 days after the end thereof) a consolidated and consolidating balance sheet and income statement of the Consolidated Parties, as of the end of such fiscal quarter, together with related consolidated and consolidating statements of operations and retained earnings and of cash flows for such fiscal quarter in each case setting forth in comparative form consolidated and consolidating figures for the corresponding period of the preceding fiscal year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the U.S. Agent, and accompanied by a certificate of the chief financial officer or other Executive Officer of Airgas to the effect that, to the best of such Person's knowledge and belief, such quarterly financial statements fairly present in all material respects the financial condition of the Consolidated Parties and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments. (c) Officer's Certificate. At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of the chief financial officer or other Executive Officer of Airgas substantially in the form of Schedule 7.1(c), (i) demonstrating compliance with the financial covenants contained in Section 7.10 by calculation thereof as of the end of each such fiscal period and (ii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action the Credit Party proposes to take with respect thereto. (d) Notice of Consolidation-National Welders. Within 15 days of the effective date thereof, written notice to each of the Lenders of the consolidation of National Welders with Airgas in accordance with GAAP. (e) Reports. Promptly upon transmission or receipt thereof, (a) copies of any filings and registrations with, and reports to or from, the Securities and Exchange Commission, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as the Consolidated Parties shall send to their shareholders or to a holder of any Indebtedness owed by the Consolidated Parties in its capacity as such a holder and (b) upon the request of the U.S. Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters. (f) Notices. Within five (5) Business Days after any Executive Officer of any Credit Party obtains knowledge thereof, such Credit Party will give written notice to the U.S. Agent of (a) the occurrence of an event or condition consisting of a Default or Event of Default, specifying the nature and existence thereof and what action the Credit Parties propose to take with respect thereto, and (b) the occurrence of any of the following with respect to the Consolidated Parties (i) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Person which if adversely determined is likely to have a Material Adverse Effect, (ii) the institution of any proceedings against such Person with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or EX-71 regulation, including but not limited to, Environmental Laws, the violation of which would likely have a Material Adverse Effect, or (iii) any notice or determination concerning the imposition of any withdrawal liability by a Multiemployer Plan against such Person or any ERISA Affiliate, the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA or the termination of any Plan. (g) ERISA. Within five (5) Business Days after any Executive Officer of Airgas obtains knowledge thereof, Airgas will give written notice to the U.S. Agent of the occurrence of any of the following events if such event has had or reasonably could be expected to have a Material Adverse Effect: (i) of any event or condition, including, but not limited to, any Reportable Event, that constitutes, or might reasonably lead to, a Termination Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against Airgas or any of its ERISA Affiliates, or of a determination that any Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which any Consolidated Party or any ERISA Affiliate is required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) any change in the funding status of any Plan, together with a description of any such event or condition or a copy of any such notice and a statement by the chief financial officer or other Executive Officer of Airgas briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken by Airgas or any ERISA Affiliate with respect thereto. (h) Other Information. With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of the Consolidated Parties as the U.S. Agent or the Required Lenders may reasonably request. 7.2 Preservation of Existence and Franchises. Except as a result of or in connection with a dissolution, merger or disposition of a Subsidiary permitted by Section 8.4, Airgas will, and will cause each Consolidated Party to, do all things necessary to preserve and keep in full force and effect its existence, rights, franchises and authority. 7.3 Books and Records. Airgas will, and will cause each of its Subsidiaries domiciled in the United States to, keep complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves). Airgas will, and cause each Consolidated Party domiciled in Canada to, keep complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of generally accepted accounting principles applicable in Canada. 7.4 Compliance with Law. Airgas will, and will cause each Consolidated Party to, comply with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would have a Material Adverse Effect. EX-72 7.5 Payment of Taxes and Other Indebtedness. Except as otherwise provided pursuant to the terms of the definition of "Permitted Liens" set forth in Section 1.1, Airgas will, and will cause each Consolidated Party to, pay and discharge (i) all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent, (ii) all lawful claims (including claims for labor, materials and supplies) which, if unpaid, might give rise to a Lien upon any of its properties, and (iii) all of its other Indebtedness as it shall become due. 7.6 Insurance. Airgas will, and will cause each Consolidated Party to, at all times maintain in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal industry practice. 7.7 Maintenance of Property. Airgas will, and will cause each Consolidated Party to, maintain and preserve its properties and equipment material to the conduct of its business in good repair, working order and condition, normal wear and tear and casualty and condemnation excepted, and will make, or cause to be made, in such properties and equipment from time to time all repairs, renewals, replacements, extensions, additions, betterments and improvements thereto as may be needed or proper, to the extent and in the manner customary for companies in similar businesses. 7.8 Use of Proceeds. The Credit Parties will use the proceeds of the Loans and will use the Letters of Credit solely for the purposes set forth in Section 6.15. 7.9 Audits/Inspections. Upon reasonable notice and during normal business hours, Airgas will, and will cause each Consolidated Party to, permit representatives appointed by the U.S. Agent, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect its property, including its books and records, its accounts receivable and inventory, its facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains. 7.10 Financial Covenants. (a) Consolidated Funded Indebtedness Coverage Ratio. Airgas shall cause the Consolidated Funded Indebtedness Coverage Ratio as of each Calculation Date to be no greater than 4.5 to 1.0. (b) Consolidated Fixed Charge Coverage Ratio. Airgas shall cause the Consolidated Fixed Charge Coverage Ratio as of each Calculation Date to be at least 3.00 to 1.00. (c) Consolidated Net Worth. Airgas shall cause Consolidated Net Worth at all times to be no less than the sum of 75% of Consolidated Net Worth as of September 30, 1997 increased on a cumulative basis as of the last day of each fiscal year (commencing with the first of such dates to occur after the Closing Date) by an amount equal to 50% of the Consolidated Net Income EX-73 (excluding Consolidated Net Income for the first and second fiscal quarters of the Borrower for the fiscal year 1998 and without deduction for any losses) for the fiscal year then ended. 7.11 Maintenance of Designation Rights - National Welders Board of Directors. Airgas shall maintain at all times the right to designate at least 50% of the members of the Board of Directors of National Welders. SECTION 8 NEGATIVE COVENANTS Airgas hereby covenants and agrees that, so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated: 8.1 Indebtedness. Airgas will not permit: (a) the sum (without duplication) of (i) the aggregate outstanding principal balance of all Indebtedness of Subsidiaries of Airgas (other than (A) Indebtedness permitted pursuant to Section 8.1(b), (B) Indebtedness backed or guaranteed by a U.S. Letter of Credit or a Canadian Letter of Credit issued hereunder and (C) Indebtedness of National Welders outstanding during the 180-day period immediately succeeding the first date as of which National Welders is required, if ever, to be consolidated with Airgas in accordance with GAAP), plus (ii) the aggregate outstanding principal balance of all secured Indebtedness of Airgas and its Subsidiaries (other than Indebtedness permitted pursuant to Section 8.1(b) and other than Indebtedness of National Welders outstanding during the 180-day period immediately succeeding the first date as of which National Welders is required, if ever, to be consolidated with Airgas in accordance with GAAP), to exceed at any time 20% of Consolidated Net Worth as of the then most recent Calculation Date; or (b) the aggregate outstanding principal balance of all Indebtedness of the Canadian Subsidiaries of Airgas (other than Indebtedness backed or guaranteed by a U.S. Letter of Credit or a Canadian Letter of Credit issued hereunder) to exceed at any time C$115,000,000. 8.2 Liens. Airgas will not, nor will it permit any Consolidated Party to, contract, create, incur, assume or permit to exist any Lien with respect to any of its Property, whether now owned or after acquired, except for Permitted Liens. 8.3 Nature of Business. Airgas will not, nor will it permit any Consolidated Party to, substantively alter the character or conduct of the business conducted by any such Person as of the Closing Date. EX-74 8.4 Consolidation, Merger, Amalgamation or Sale. Airgas will not, nor will it permit any Consolidated Party to: (a) except in connection with a disposition of assets permitted by the terms of Section 8.4(b), dissolve, liquidate or wind up their affairs, or enter into any transaction of merger, consolidation or amalgamation, provided that (i) Airgas may merge, consolidate or amalgamate with any of its Subsidiaries so long as Airgas is the surviving corporation; (ii) any Canadian Borrower may merge, consolidate or amalgamate with any of its wholly-owned Subsidiaries so long as (A) such Canadian Borrower is the surviving corporation and (B) no Default or Event of Default shall have occurred and be continuing at the time of such merger, consolidation or amalgamation or shall result upon giving effect thereto; (iii) any Subsidiary of any Credit Party may merge, consolidate or amalgamate with any other Subsidiary of such Credit Party; (iv) Airgas or any of its Subsidiaries (other than Canadian Subsidiaries) may merge or consolidate with any other Person that is not a Consolidated Party so long as (A) Airgas or such Subsidiary is the surviving corporation and (B) no Default or Event of Default shall have occurred and be continuing at the time of such merger or consolidation or shall result upon giving effect thereto; (v) a Canadian Borrower may amalgamate with any other Person that is not a Consolidated Party so long as (A) the corporation resulting from such amalgamation is in compliance with all covenants contained in this Credit Agreement and (B) no Default or Event of Default shall have occurred and be continuing at the time of such amalgamation or shall result upon giving effect thereto and (vi) any Subsidiary of any Credit Party of which 85% or more of the capital stock or other equity interests is owned by such Credit Party (directly or indirectly through Subsidiaries) may dissolve, liquidate or wind up its affairs at any time; or (b) sell, lease, transfer or otherwise dispose of any Property (including without limitation pursuant to any sale and leaseback transaction) other than (i) sales or leases in the ordinary course of business, (ii) the sale or disposition of machinery and equipment no longer used or useful in the conduct of such Person's business, (iii) sales, distributions or other dispositions of stock in Subsidiaries of any Credit Party to the extent permitted under Section 8.9 and (iv) other sales of Property (including without limitation stock in Subsidiaries) provided that (A) the aggregate net book value of the Property sold by all Consolidated Parties pursuant to this clause (iv) shall not exceed (1) for all such transactions during any fiscal year, 10% of Consolidated Total Assets as of the end of the fiscal year immediately preceding the then current fiscal year or (2) for all such transactions after the Closing Date, 25% of Total Assets as of the end of the fiscal year immediately preceding the then current fiscal year, (B) the sale price for any Property sold in any such transaction pursuant to this clause (iv) shall not be less than the fair market value of such Property, (C) each such transaction pursuant to this clause (iv) involving Property having a net book value of U.S.$5,000,000 or more shall be on an arms-length basis with a wholly independent third party and (D) no Default of Event of Default shall have occurred and be continuing at the time of any such transaction pursuant to this clause (iv) or shall result upon giving effect thereto. 8.5 Restricted Payments. Airgas will not, nor will it permit any Consolidated Party to, directly or indirectly declare, order, make or set apart any sum for or pay any Restricted Payment, except (i) to make dividends payable solely in the same class of capital stock of such Person, (ii) to make dividends or other distributions payable to a Credit Party (directly or indirectly through Subsidiaries of a Credit Party), (iii) as permitted by Section 8.6, and (iv) other Restricted Payments so long as no Default of Event of Default shall have EX-75 occurred and be continuing at the time of any such Restricted Payment or shall result upon giving effect thereto. 8.6 Prepayments of Indebtedness, Etc. Airgas will not, nor will it permit any Consolidated Party to, (i) if any Default or Event of Default has occurred and is continuing or would be directly or indirectly caused as a result thereof, (A) after the issuance thereof, amend or modify (or permit the amendment or modification of) any of the terms of any Indebtedness if such amendment or modification would add or change any terms in a manner adverse to the issuer of such Indebtedness, or shorten the final maturity or average life to maturity or require any payment to be made sooner than originally scheduled or increase the interest rate applicable thereto or change any subordination provision thereof or (B) make (or give any notice with respect thereto) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any other Indebtedness or (ii) amend, modify or change its articles of incorporation (or corporate charter or other similar organizational document) or bylaws (or other similar document) where such change would have a Material Adverse Effect. 8.7 Fiscal Year. Without prior written notice to the Agents, Airgas will not, nor will it permit any Consolidated Party to, change its fiscal year. 8.8 Limitation on Restrictions on Subsidiary Dividends and Other Distributions, Etc. Airgas will not, nor will it permit any Consolidated Party to, directly or indirectly, create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Person to (i) pay dividends or make any other distribution on any of such Person's capital stock, (ii) pay any Indebtedness owed to any Consolidated Party, (iii) make loans or advances to any Consolidated Party or (iv) transfer any of its Property to any Consolidated Party, except for encumbrances or restrictions existing under or by reason of (A) customary non-assignment provisions in any lease governing a leasehold interest, (B) any agreement or other instrument of a Person existing at the time it becomes a Subsidiary of a Credit Party, provided that such encumbrance or restriction is not applicable to any other Person, or any Property of any other Person, other than such Person becoming a Subsidiary of a Credit Party and was not entered into in contemplation of such Person becoming a Subsidiary of a Credit Party, (C) documents evidencing or relating to Indebtedness of Canadian Subsidiaries of Airgas permitted pursuant to Section 8.1 and (D) this Credit Agreement and the other Credit Documents. 8.9 Issuance and Sale of Subsidiary Stock. Airgas will not, nor will it permit any Consolidated Party to, except to qualify directors where required by applicable law or to satisfy other requirements of applicable law and except as otherwise permitted under the terms of Section 8.4(b), sell, transfer or otherwise dispose of, any shares of capital stock of any of its Subsidiaries or permit any of its Subsidiaries to issue, sell or otherwise dispose of, any shares of capital stock of any of its Subsidiaries; provided, however, that any Subsidiary of a Credit Party 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. EX-76 8.10 No Further Negative Pledges. Except with respect to prohibitions against other encumbrances on specific Property encumbered to secure payment of particular Indebtedness (which Indebtedness relates solely to such specific Property, and improvements and accretions thereto, and is otherwise permitted hereby), Airgas will not, nor will it permit any Consolidated Party to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation. SECTION 9 EVENTS OF DEFAULT 9.1 Events of Default. An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"): (a) Payment. Any Credit Party shall (i) default in the payment when due of any principal of any of the Loans or of any reimbursement obligations arising from drawings under Letters of Credit, or (ii) default, and such defaults shall continue for five (5) or more days, in the payment when due of any interest on the Loans or on any reimbursement obligations arising from drawings under Letters of Credit, or of any Fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith or therewith; or (b) Representations. Any representation, warranty or statement made or deemed to be made by any Credit Party herein, in any of the other Credit Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made; or (c) Covenants. Any Credit Party shall default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a) or (b) of this Section 9.1) contained in this Credit Agreement and such default shall continue unremedied for a period of at least 30 days after the earlier of a Executive Officer of such Credit Party becoming aware of such default or notice thereof by the U.S. Agent; or (d) Other Credit Documents. Any Credit Party shall default in the due performance or observance of any term, covenant or agreement in any of the other Credit Documents (subject to applicable grace or cure periods, if any); or (e) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to any Consolidated Party; or (f) Defaults under Other Indebtedness. With respect to any Indebtedness (other than Indebtedness outstanding under this Credit Agreement) in excess of U.S.$10,000,000 in the aggregate for the Consolidated Parties taken as a whole any of the following shall occur (unless, with respect to any Indebtedness in favor of the seller of a company acquired by EX-77 any Consolidated Party, such occurrence is in connection with a bona fide dispute as to the right of the applicable Person to offset such Indebtedness against indemnification obligations of the holder of such Indebtedness to such Person and such Person shall have made adequate provision (as determined by the Required Lenders in their reasonable discretion) for such Indebtedness on its books of account): (A) any Consolidated Party shall (1) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (2) the occurrence and continuance of a default in the observance or performance relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause (determined without regard to whether any notice or lapse of time is required), any such Indebtedness to become due prior to its stated maturity; or (B) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; or (g) Judgments. One or more judgments or decrees shall be entered against any Consolidated Party involving a liability of U.S.$10,000,000 or more in the aggregate (to the extent not paid or fully covered by insurance provided by a carrier who has acknowledged coverage) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 30 days from the entry thereof; or (h) ERISA. Any of the following events or conditions, if such event or condition reasonably could be expected to involve possible taxes, penalties, and other liabilities in an aggregate amount in excess of U.S.$10,000,000: (1) any "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of any Consolidated Party or any ERISA Affiliate in favor of the PBGC or a Plan; (2) a Termination Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of the U.S. Agent, likely to result in the termination of such Plan forpurposes of Title IV of ERISA; (3) a Termination Event shall occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable opinion of the U.S. Agent, likely to result in (i) the termination of such Plan for purposes of Title IV of ERISA, or (ii) any Consolidated Party or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or (4) any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which may subject any Consolidated Party or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any Consolidated Party or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability; or (i) Ownership. (i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of any Credit Party(or other securities convertible into such Voting Stock) representing 50% or more of the combined voting power of all Voting Stock of such Credit Party; 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 EX-78 acquisition by such Person and/or its Affiliates of Voting Stock of such Credit Party which gives such Person and/or its Affiliates an aggregate ownership of more than 50% of the Voting Stock of such Credit Party; 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. (ii) Airgas shall fail to own, directly or indirectly, all of the Voting Stock of each of the Canadian Borrowers. 9.2 Acceleration; Remedies. Upon the occurrence of an Event of Default, and at any time thereafter unless and until such Event of Default has been waived by the Required Lenders or cured to the satisfaction of the Required Lenders (pursuant to the voting procedures in Section 11.6), the U.S. Agent shall, upon the request and direction of the Required Lenders, by written notice to the Credit Parties take any of the following actions: (i) Termination of Commitments. Declare the Commitments terminated whereupon the Commitments shall be immediately terminated. (ii) Acceleration. Declare the unpaid principal of and any accrued interest in respect of all Loans, any reimbursement obligations arising from drawings under Letters of Credit and any and all other indebtedness or obligations of any and every kind owing by any Credit Party to an Agent and/or any of the Lenders hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Credit Parties. (iii) Cash Collateral. Direct the Credit Parties to pay (and each Credit Party agrees that upon receipt of such notice, or upon the occurrence of an Event of Default under Section 9.1(e), it will immediately pay) to the U.S. Agent (A) additional cash, to be held by the U.S. Agent, for the benefit of the U.S. Lenders, in a cash collateral account as additional security for the U.S. LOC Obligations in respect of subsequent drawings under all then outstanding U.S. Letters of Credit in an amount equal to the maximum aggregate amount which may be drawn under all U.S. Letters of Credits then outstanding and (B) additional cash, to be held by the Canadian Agent, for the benefit of the Canadian Lenders, in a cash collateral account as additional security for the Canadian LOC Obligations in respect of subsequent drawings under all then outstanding Canadian Letters of Credit in an amount equal to the maximum aggregate amount which may be drawn under all Canadian Letters of Credits then outstanding. (iv) Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents and all rights of set-off. Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(e) shall occur, then the Commitments shall automatically terminate and all Loans, all reimbursement obligations arising from drawings under Letters of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and other indebtedness or obligations owing to an Agent and/or any of the Lenders hereunder automatically shall immediately become due and payable without the giving of any notice or other action by the U.S. Agent or the Lenders. EX-79 SECTION 10 AGENCY PROVISIONS 10.1 Appointment. Each Lender hereby designates and appoints NationsBank, N.A. as the U.S. Agent to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the U.S. Agent as the agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Each Canadian Lender hereby designates and appoints Canadian Imperial Bank of Commerce as the Canadian Agent to act as specified herein and the other Credit Documents, and each such Canadian Lender hereby authorizes the Canadian Agent as the agent for such Canadian Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Agents shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Credit Documents, or shall otherwise exist against the Agents. The provisions of this Section are solely for the benefit of the Agents and the Lenders, and the Credit Parties shall have no rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the U.S. Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for the Credit Parties or any of their respective Affiliates. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the Canadian Agent shall act solely as agent of the Canadian Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for the Credit Parties or any of their respective Affiliates. 10.2 Delegation of Duties. Each of the Agents may execute any of its duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Neither of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 10.3 Exculpatory Provisions. Each of the Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Credit Party contained herein or in any of the other Credit Documents or in any certificate, report, document, financial statement or other written or oral statement referred to or provided for in, or received by an Agent under or in connection herewith or EX-80 in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of any Credit Party to perform its obligations hereunder or thereunder. Neither of the Agents shall be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Credit Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by any Credit Party in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by such Agent to the Lenders or by or on behalf of the Credit Parties to such Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or the use of the Letters of Credit or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of any Credit Party or any of its respective Affiliates. Neither of the Agents is a trustee for any Lenders or owes any fiduciary duty to any Lenders. 10.4 Reliance on Communications. Each of the Agents 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 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, independent accountants and other experts selected by the U.S. Agent with reasonable care). Each of the Agents may deem and treat each Lender as the owner of its interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with such Agent in accordance with Section 11.3(b) hereof. Each of the Agents shall be fully justified in failing or refusing to take any action under this Credit Agreement or under any of the other Credit Documents unless it shall first receive such advice or concurrence as it deems appropriate from, in the case of the U.S. Agent, the Required Lenders, or, in the case of the Canadian Agent, the Required Canadian Lenders, or it shall first be indemnified to its satisfaction by, in the case of the U.S. Agent, the Lenders, or, in the case of the Canadian Agent, the Canadian Lenders, against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of, in the case of the U.S. Agent, the Required Lenders, or, in the case of the Canadian Agent, the Required Canadian Lenders (or, in the case of the U.S. Agent or the Canadian Agent, all the Lenders to the extent specifically provided in Section 10.6) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns). 10.5 Notice of Default. Neither of the Agents shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender or a Credit Party referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that either Agent receives such a notice, such Agent shall give prompt notice thereof to, in the case of the U.S. Agent, all of the Lenders, or, in the case of the Canadian Agent, the EX-81 Canadian Lenders. The U.S. Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders. 10.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly acknowledges that neither of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by an Agent or any affiliate thereof hereinafter taken, including any review of the affairs of the Credit Parties or any of their respective Affiliates, shall be deemed to constitute any representation or warranty by such Agent to any Lender. Each Lender represents to each of the Agents that it has, independently and without reliance upon the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Credit Parties or their respective Affiliates and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance upon the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Credit Parties and their respective Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders (or any of them) by such Agent hereunder, neither of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of the Credit Parties or any of their respective Affiliates which may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 10.7 Indemnification. The Lenders agree to indemnify the U.S. Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably (according to (i) the sum of the Dollar Amount of (A) the Revolving U.S. Commitments, (B) the 364-Day Revolving Commitments, (C) the Revolving Canadian Commitments, and (D) the outstanding principal amount of any 364-Day Revolving Loans which have been converted to term loans pursuant to Section 2.5(f) (and Participation Interests therein) or (ii) if the Commitments have been terminated, the sum of the Dollar Amount of (A) the outstanding Loans, (B) the outstanding Participation Interests (including the Participation Interests of the U.S. Issuing Lender in any U.S. Letters of Credit, the Participation Interests of the U.S. Swingline Lender in any U.S. Swingline Loans and the Participation Interests of the Canadian Issuing Lender in any Canadian Letters of Credit), (C) the Canadian LOC Obligations and (D) the BA Outstandings), 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 final payment of all of the obligations of the Credit Parties hereunder and under the other Credit Documents) be imposed on, incurred by or asserted against the U.S. Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit 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 U.S. EX-82 Agent under or in connection with any of the foregoing; provided that no Lender 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 gross negligence or willful misconduct of the U.S. Agent. If any indemnity furnished to the U.S. Agent for any purpose shall, in the opinion of the U.S. Agent, be insufficient or become impaired, the U.S. Agent may call for additional indemnity from the Lenders and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The Canadian Lenders agree to indemnify the Canadian Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to their respective Commitments (or if the Commitments have expired or been terminated, in accordance with the respective principal amounts of outstanding Loans and Participation Interests of the Lenders), 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 final payment of all of the obligations of the Credit Parties hereunder and under the other Credit Documents) be imposed on, incurred by or asserted against the Canadian Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit 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 Canadian Agent under or in connection with any of the foregoing; provided that no Lender 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 gross negligence or willful misconduct of the Canadian Agent. If any indemnity furnished to the Canadian Agent for any purpose shall, in the opinion of the Canadian Agent, be insufficient or become impaired, the Canadian Agent may call for additional indemnity from the Canadian Lenders and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the repayment of the Loans, LOC Obligations, BA outstandings and other obligations under the Credit Documents and the termination of the Commitments hereunder. Nothing set forth in this Section 10.7 shall effect any obligation arising under the Credit Documents of either of the Agents to any of the Credit Parties. 10.8 Agents in their Individual Capacity. Each of the Agents and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Consolidated Parties or their respective Affiliates as though such Agent were not an Agent hereunder. With respect to the Loans made by and all obligations of the Credit Parties hereunder and under the other Credit Documents, each Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include the U.S. Agent and the Canadian Agent in their individual capacities. 10.9 Successor Agents. Either of the Agents may, at any time, resign upon 45 days' written notice to the Lenders and Airgas, and be removed with or without cause by the Required Lenders upon 30 days' written notice to the Agents and Airgas. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor U.S. Agent or successor Canadian Agent, as applicable, acceptable to Airgas. If no successor U.S. Agent or successor Canadian Agent, as applicable, shall have been so appointed (and accepted such appointment) within 30 days after the notice of resignation or notice of removal, as EX-83 appropriate, then the retiring U.S. Agent or Canadian Agent, as applicable, shall select a successor U.S. Agent or successor Canadian Agent, as applicable, acceptable to Airgas, provided such successor is a Lender hereunder or, in the case of a successor U.S. Agent, 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 U.S.$1,000,000,000, or, in the case of a successor Canadian Agent, a commercial bank organized under the laws of Canada or of any Province thereof and has a combined capital and surplus of at least C$1,000,000,000. Upon the acceptance of any appointment as U.S. Agent or Canadian Agent, as applicable, hereunder by a successor, such successor U.S. Agent or successor Canadian Agent, as applicable, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring U.S. Agent or Canadian Agent, as applicable, and the retiring U.S. Agent or Canadian Agent, as applicable, shall be discharged from its duties and obligations as U.S. Agent or Canadian Agent, as applicable, under this Credit Agreement and the other Credit Documents and the provisions of this Section 10.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Credit Agreement. SECTION 11 MISCELLANEOUS 11.1 Notices. Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (i) when delivered, (ii) when transmitted via telecopy (or other facsimile device) to the number set out below, (iii) the day following the day on which the same has been delivered prepaid to a reputable national overnight air courier service, or (iv) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid save in the event of disruption of postal services, in which case notices or other communications shall not be mailed, in each case to the respective parties at the address, in the case of the Credit Parties, the U.S. Agent and the Canadian Agent, set forth below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such other address as such party may specify by written notice to the other parties hereto: if to the Credit Parties: Airgas, Inc. Radnor Court, Suite 100 259 Radnor-Chester Road Radnor, PA 19087 Attn: Chief Financial Officer Telecopy: (610) 225-3271 with a copy to: McCausland, Keen & Buckman Radnor Court, Suite 160 259 Radnor-Chester Road Radnor, PA 19087 Attn: Melvin J. Buckman, Esq. Telecopy: (610) 341-1099 EX-84 if to the U.S. Agent: NationsBank, N.A. NationsBank Corporate Center, 8th Floor Charlotte, NC 28255 Attn: M. Gregory Seaton Telecopy: (704) 386-3271 with a copy to: NationsBank, N.A. Independence Center, 15th Floor NC1-001-15-04 101 N. Tryon Street Charlotte, North Carolina 28255 Attn: Lori McIntosh Telecopy: (704) 386-9923 if to the Canadian Agent: Canadian Imperial Bank of Commerce 7th Floor Commerce Court West Toronto, Ontario M5L 1A2 Attn: Executive Director, Cross-Border North American Banking Group Telecopy: (416) 980-8384 with a copy to Canadian Imperial Bank of Commerce Loan Underwriting and Distribution 7th Floor Commerce Court West Toronto, Ontario M5L 1A2 Attn: David Evelyn Telecopy: (416) 980-5151 11.2 Right of Set-Off. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of a Credit Party against obligations and liabilities of such Person to such Lender hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether such Lender shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Any Person purchasing EX-85 a participation in the Loans and Commitments hereunder pursuant to Section 4.13 or Section 11.3(c) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder. 11.3 Benefit of Agreement. (a) Generally. This Credit Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that a Credit Party may not assign or transfer any of its interests without prior written consent of all the Lenders; provided further that the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth in this Section 11.3, provided however that nothing herein shall prevent or prohibit any Lender from (i) pledging its Loans hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank, or (ii) granting assignments or selling participations in such Lender's Loans and/or Commitments hereunder to its parent company and/or to any Affiliate or Subsidiary of such Lender. (b) Assignments. Each Lender may assign all or a portion of its rights and obligations hereunder, pursuant to an assignment agreement substantially in the form of Schedule 11.3(b), to (i) any Lender, any Subsidiary of a Lender or any Affiliate of a Lender under direct or indirect common control with such Lender, or (ii) any other commercial bank, financial institution or "accredited investor" (as defined in Regulation D of the Securities and Exchange Commission) reasonably acceptable to the U.S. Agent, Airgas and, in the case of any assignment by a Canadian Lender, the Canadian Agent (provided that it shall not be unreasonable for Airgas to withhold its approval for any assignment to any competitor of Airgas (which term "competitor" shall not include a Person solely by reason of the fact that such Person is making loans to, accepting deposits from or otherwise generally engaging in banking business with any competitor of Airgas); provided that (i)(A) in the case of any assignment by a U.S. Lender of all or any portion of such U.S. Lender's Revolving U.S. Commitment or 364-Day Revolving Commitment, (other than any assignment to an existing Lender), such assignment shall be in a minimum aggregate amount of U.S.$5,000,000 of such Commitments and in integral multiples of U.S.$1,000,000 above such amount (or, if less, the remaining amount of the Commitment being assigned by such U.S. Lender) or (B) in the case of any assignment by a Canadian Lender of all or any portion of such Canadian Lender's Revolving Canadian Commitment (other than any assignment to an existing Lender), such assignment shall be in a minimum aggregate amount of C$1,500,000 of such Commitment and in integral multiples of C$100,000 above such amount (or, if less, the remaining amount of the Commitment being assigned by such Canadian Lender) and (ii) each such assignment shall be of a constant, not varying, percentage of all such Lender's rights and obligations under this Credit Agreement. Any assignment of all or any portion of a U.S. Lender's Revolving U.S. Commitment or 364-Day Revolving Commitment hereunder shall be effective upon delivery to the U.S. Agent of written notice of the assignment together with a transfer fee of U.S.$3,500 payable to the U.S. Agent for its own account from and after the effective date specified in the applicable assignment agreement. Any assignment of all or any portion of a Canadian Lender's Revolving Canadian Commitment hereunder shall be effective upon (i) delivery to the U.S. Agent and Canadian Agent of written notice of the assignment and (ii) payment of a transfer fee of C$3,500 payable to the Canadian Agent for its own account from and after the effective date specified in the applicable assignment agreement. In addition, the assigning Lender will give prompt notice to Airgas of any such assignment. Upon the effectiveness of any such assignment (and after notice to, and (to the extent required pursuant to the terms hereof), with the consent of, Airgas as provided herein), the assignee shall become a "Lender" for all purposes of EX-86 this Credit Agreement and the other Credit Documents and, to the extent of such assignment, the assigning Lender shall be relieved of its obligations hereunder to the extent of the Loans and Commitment components being assigned. Along such lines each Credit Party agrees that upon notice of any such assignment and surrender of the appropriate Note or Notes, it will promptly provide to the assigning Lender and to the assignee separate promissory notes in the amount of their respective interests substantially in the form of the original Note (but with notation thereon that it is given in substitution for and replacement of the original Note or any replacement notes thereof). By executing and delivering an assignment agreement in accordance with this Section 11.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim; (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of any Credit Party or any of its respective Affiliates or the performance or observance by any Credit Party of any of its obligations under this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (iv) such assignee confirms that it has received a copy of this Credit Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement; (v) such assignee will independently and without reliance upon the Agents, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement and the other Credit Documents; (vi) such assignee appoints and authorizes the Agents to take such action on its behalf and to exercise such powers under this Credit Agreement or any other Credit Document as are delegated to the Agents by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Credit Agreement and the other Credit Documents are required to be performed by it as a Lender. (c) Participations. Each Lender may sell, transfer, grant or assign participations in all or any part of such Lender's interests and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Credit Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Credit Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or Fees in respect of any Loans in which the participant is participating, (B) postpone the date fixed for any payment of principal (including extension of the Termination Date or the date of any mandatory prepayment), interest or Fees in which the participant is participating or (C) alter the obligations of the Guarantor, and (iii) sub-participations by the participant (except to an affiliate, parent company or affiliate of a parent company of the participant) shall be prohibited. In the case of any such participation, the participant shall not have any rights under this Credit Agreement or the other Credit EX-87 Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by the Credit Parties hereunder shall be determined as if such Lender had not sold such participation, provided, however, that such participant shall be entitled to receive additional amounts under Sections 4.6, 4.9, 4.10 and 4.11 to the same extent as if it were a Lender provided that it shall not be entitled to receive any more than the selling Lender would have received had it not sold the participation. 11.4 No Waiver; Remedies Cumulative. No failure or delay on the part of an Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between an Agent or any Lender and the Credit Parties shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Agents or any Lender would otherwise have. No notice to or demand on the Credit Parties in any case shall entitle the Credit Parties to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the U.S. Agent or the Lenders to any other or further action in any circumstances without notice or demand. 11.5 Payment of Expenses, Etc. The Credit Parties agree to: (i) pay all reasonable out-of-pocket costs and expenses (A) of the U.S. Agent in connection with the negotiation, preparation, execution and delivery and administration of this Credit Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and expenses of Moore & Van Allen, PLLC, special counsel to the Agents as well as Canadian counsel to the Agents) and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by the Credit Parties under this Credit Agreement and (B) of the U.S. Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel for the U.S. Agent and each of the Lenders); (ii) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify each Agent, each Lender, its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of (A) any investigation, litigation or other proceeding (whether or not any Agent or Lender is a party thereto) occurring subsequent to and as the result of the occurrence of a Default or Event of Default and related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding or (B) the presence or Release of any Materials of Environmental Concern at, under or from any Property owned, operated or EX-88 leased by any Consolidated Party, or the failure by any Consolidated Party to comply with any Environmental Law (but excluding, in the case of either of clause (A) or (B) above, any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified). 11.6 Amendments, Waivers and Consents. Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing entered into by, or approved in writing by, the Required Lenders and the Credit Parties, provided that no such amendment, change, waiver, discharge or termination shall, without the consent of each Lender: (i) extend the final maturity of any Loan or of any reimbursement obligations arising from drawings under Letters of Credit, or any portion thereof; (ii) reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) on any Loan or of any reimbursement obligations arising from drawings under Letters of Credit or fees hereunder; (iii) reduce the principal amount on any Loan or of any reimbursement obligations arising from drawings under Letters of Credit or the amount of any accrued interest or Fees, or increase the Commitments of the Lenders over the amount thereof in effect (it being understood and agreed that a waiver of any Default or Event of Default or of a mandatory reduction in the total commitments shall not constitute a change in the terms of any Commitment of any Lender); (iv) amend, modify or waive any provision of this Section 11.6 or Section 4.6, 4.10, 4.11, 4.12, 4.13, 9.1(a), 11.2, 11.3, 11.5 or 11.9; (v) reduce any percentage specified in, or otherwise modify, the definition of "Required Lenders"; (vi) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under (or in respect of) the Credit Documents to which it is a party or (vi) alter the obligations of the Guarantor. No provision of Section 2 may be amended without the consent of the Required U.S. Lenders (provided further that (a) no provision of Section 2.3 may be amended without the consent of the U.S. Issuing Lender and (b) no provision of Section 2.4 may be amended without the consent of the U.S. Swingline Lender). No provision of Section 3 may be amended without the consent of the Required Canadian Lenders (provided further (a) that no provision of Section 3.2 may be amended without the consent of the Canadian Swingline Lender and (b) no provision of Section 3.3 may be amended without the consent of the Canadian Issuing Lender). No provision of Section 10 may be amended without the consent of the Agents. EX-89 11.7 Counterparts. This Credit Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart. 11.8 Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement. 11.9 Survival. All indemnities set forth herein, including, without limitation, in Section 2.3(i), 4.9, 4.11, 10.7 or 11.5 shall survive the execution and delivery of this Credit Agreement, the making of the Loans, the issuance of the Letters of Credit, the repayment of the Loans, LOC Obligations and other obligations under the Credit Documents and the termination of the Commitments hereunder, and all representations and warranties made by the Credit Parties herein shall survive delivery of the Notes and the making of the Loans hereunder. 11.10 Governing Law; Submission to Jurisdiction; Venue. (a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document may be brought in the courts of the State of North Carolina in Mecklenburg County, or of the United States for the Western District of North Carolina, and, by execution and delivery of this Credit Agreement, each Credit Party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each Credit Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address set out for notices pursuant to Section 11.1, such service to become effective three (3) days after such mailing. Nothing herein shall affect the right of the U.S. Agent to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against a Credit Party in any other jurisdiction. (b) Each Credit Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Credit Agreement or any other Credit Document brought in the courts referred to in subsection (a) hereof and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) With respect to the guaranty obligations of Airgas arising under Section 3.5: (i) (A) Without limiting the generality of subsections (a) and (b) of this Section 11.10, Airgas agrees that any controversy or claim with respect to it arising out of or relating to this Credit Agreement or the other Credit Documents may, at the option of the Canadian Agent and the Canadian EX-90 Lenders, be settled immediately by submitting the same to binding arbitration in the City of Charlotte, North Carolina (or such other place as the parties may agree) in accordance with the Commercial Arbitration Rules then obtaining of the American Arbitration Association. Upon the request and submission of any controversy or claim for arbitration hereunder, the Canadian Agent shall give Airgas not less than 45 days written notice of the request for arbitration, the nature of the controversy or claim, and the time and place set for arbitration. Airgas agrees that such notice is reasonable to enable it sufficient time to prepare and present its case before the arbitration panel. Judgment on the award rendered by the arbitration panel may be entered in any court in which any action could have been brought or maintained pursuant to subparagraph (ii) below, including without limitation any court of the State of North Carolina or any Federal court sitting in the State of North Carolina. The expenses of arbitration shall be paid by Airgas. (B) The provisions of subparagraph (A) above are intended to comply with the requirements of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention"). To the extent that any provisions of such subparagraph (A) are not consistent with or fail to conform to the requirements set out in the Convention, such subparagraph (A) shall be deemed amended to conform to the requirements of the Convention. (C) Airgas hereby specifically consents and submits to the jurisdiction of the courts of the State of North Carolina and courts of the United States located in the State of North Carolina for purposes of entry of a judgment or arbitration award entered by the arbitration panel. (ii) The guarantee of Airgas under Section 3.5 is an international transaction in which payment of Canadian Dollars in Toronto, Ontario, Canada, is of the essence, and Canadian Dollars shall be the currency of account in all events in respect of the guaranty obligations of Airgas under Section 3.5. The payment obligation of Airgas shall not be discharged by an amount paid in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to dollars and transfer to Toronto, Ontario, Canada, under normal banking procedures does not yield the amount of dollars in Toronto, Ontario, Canada due hereunder. In the event that any payment by Airgas, whether pursuant to a judgment or otherwise, upon conversion and transfer does not result in payment of such amount of dollars in Toronto, Ontario, Canada, the Canadian Agent and the Canadian Lenders shall have a separate cause of action against Airgas for the additional amount necessary to yield the amount due and owing to the Canadian Agent and the Canadian Lenders. (d) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. 11.11 Severability. If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. EX-91 11.12 Entirety. This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein. 11.13 Binding Effect; Termination of Existing Credit Agreement and $125,000,000 Credit Facility; Termination of This Credit Agreement. (a) This Credit Agreement shall become effective at such time on or after the Closing Date and satisfaction of the conditions precedent set forth in Section 5.1 when it shall have been executed by the Credit Parties and the Agents, and the U.S. Agent shall have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Credit Parties, the Agents and each Lender and their respective successors and assigns. Airgas and the Lenders party to the Existing Credit Agreement each hereby agrees that, at such time as this Credit Agreement shall have become effective pursuant to the terms of the immediately preceding sentence, (i) the Existing Credit Agreement and the Commitments thereunder and as defined therein automatically shall be terminated and (ii) all of the promissory notes executed by Airgas in connection with the Existing Credit Agreement (A) automatically shall be canceled and (B) shall be returned promptly to Airgas. Airgas, NationsBank and the Lenders party to that certain Credit Agreement dated as of June 30, 1997 among Airgas, NationsBank and the lenders party thereto (the "$125,000,000 Credit Facility"), each hereby agrees that, at such time as this Credit Agreement shall have become effective pursuant to the terms of the immediately preceding sentence, (i) the $125,000,000 Credit Facility and the Commitments thereunder and as defined therein automatically shall be terminated and (ii) all of the promissory notes executed by Airgas in connection with the $125,000,000 Credit Facility (A) automatically shall be canceled and (B) shall be returned promptly to Airgas. (b) The term of this Credit Agreement shall be until no Loans, LOC Obligations or any other amounts payable hereunder or under any of the other Credit Documents shall remain outstanding and until all of the Commitments hereunder shall have expired or been terminated. 11.14 Confidentiality. The Agents and the Lenders agree to keep confidential (and to cause their respective Affiliates, officers, directors, employees, agents and representatives to keep confidential) all information, materials and documents furnished to the Agents or any such Lender by or on behalf the Credit Parties (whether before or after the Closing Date) which relates to the Consolidated Parties (the "Information"). Notwithstanding the foregoing, the Agents and each Lender shall be permitted to disclose Information (i) to its Subsidiaries, its Affiliates under direct or indirect common control with it, its officers, its directors, its employees, its agents and its representatives who need to know such Information in connection with its participation in any of the transactions evidenced by this Credit Agreement or any other Credit Documents or the administration of this Credit Agreement or any other Credit Documents; (ii) to the extent required by applicable laws and regulations or by any subpoena or similar legal process, or requested by any Governmental Authority; (iii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Credit Agreement or any agreement entered into pursuant to clause (iv) below, (B) becomes available to such Agent or such Lender on a non-confidential basis from a source other than the Credit Parties or (C) was available to the Agents or such Lender on a non- EX-92 confidential basis prior to its disclosure to such Agent or such Lender by the Credit Parties; (iv) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first specifically agrees in a writing reasonable to Airgas furnished to and for the benefit of the Credit Parties to be bound by the terms of this Section 11.14; or (v) to the extent that the Credit Parties shall have consented in writing to such disclosure. Nothing set forth in this Section 11.14 shall obligate the Agents or any Lender to return any materials furnished by the Credit Party. 11.15 Conflict. To the extent that there is a conflict or inconsistency between any provision hereof, on the one hand, and any provision of any Credit Document, on the other hand, this Credit Agreement shall control. [The remainder of this page has been left blank intentionally.] EX-93 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written. CREDIT PARTIES: AIRGAS, INC. By____________________________ Thomas C. Deas, Jr. Vice President/Finance AIRGAS CANADA INC., By____________________________ Jeffrey P. Cornwell Vice President/Finance RED-D-ARC LIMITED By____________________________ Jeffrey P. Cornwell Vice President/Finance AIRGAS ONTARIO INC. By____________________________ Jeffrey P. Cornwell Vice President/Finance [Signatures continued] EX-94 U.S. LENDERS: NATIONSBANK, N.A., individually in its capacity as a Lender and in its capacity as U.S. Agent By_____________________________ Title__________________________ THE BANK OF NEW YORK By_____________________________ Title__________________________ FIRST UNION NATIONAL BANK By_____________________________ Title__________________________ CORESTATES BANK, N.A. By_____________________________ Title__________________________ BANK OF AMERICA NT&SA By_____________________________ Title__________________________ THE FIRST NATIONAL BANK OF CHICAGO By_____________________________ Title__________________________ EX-95 CIBC INC. By_____________________________ Title__________________________ PNC BANK NATIONAL ASSOCIATION By_____________________________ Title__________________________ FLEET BANK N.A. By_____________________________ Title__________________________ THE SANWA BANK, LIMITED NEW YORK BRANCH By_____________________________ Title__________________________ SOCIETE GENERALE By_____________________________ Title__________________________ THE BANK OF NOVA SCOTIA By_____________________________ Title__________________________ BANK AUSTRIA AKTIENGESELLSCHAFT By_____________________________ Title__________________________ EX-96 BANK OF TOKYO-MITSUBISHI TRUST COMPANY By_____________________________ Title__________________________ THE FUJI BANK, LIMITED By_____________________________ Title__________________________ MELLON BANK, N.A. By_____________________________ Title__________________________ SUNTRUST BANK, ATLANTA By_____________________________ Title__________________________ By_____________________________ Title__________________________ THE SUMITOMO BANK, LIMITED By_____________________________ Title__________________________ WACHOVIA BANK, N.A. By_____________________________ Title__________________________ EX-97 CANADIAN LENDERS: CANADIAN IMPERIAL BANK OF COMMERCE, individually in its capacity as a Lender and in its capacity as Canadian Agent By_____________________________ Title__________________________ BANK OF AMERICA CANADA By_____________________________ Title__________________________ FIRST CHICAGO NBD BANK, CANADA By_____________________________ Title__________________________ THE BANK OF NOVA SCOTIA By_____________________________ Title__________________________ MELLON BANK CANADA By_____________________________ Title__________________________ EX-98 Schedule 1.1A APPLICABLE PERCENTAGES Pricing Pricing Pricing Pricing Pricing Pricing Level I Level II Level III Level IV Level V Level VI If the If the If the If the If the If the Borrower's Borrower's Borrower's Borrower's Borrower's Borrower's long term long term long term long term long term long term credit rating credit rating credit rating credit rating credit credit is at least is at least is at least is at least rating is ratings A- by S&P or BBB+ by S&P BBB by S&P, BBB- by S&P at least BB+ in Levels A3 by Moody's or Baa1 by or Baa2 by or Baa3 by by S&P,orBa1 I-V do Moody's Moody's Moody's by Moody's not apply _____________ ___________ ___________ ___________ ___________ _________ Applicable Percentage for Eurodollar Loans: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% Applicable Percentage for Bankers'Acceptances: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% Applicable Percentage for Unused Revolving U.S. Commitment Fee: 0.085% 0.100% 0.125% 0.150% 0.200% 0.250% Applicable Percentage for Unused 364-Day Revolving Commitment Fee: 0.085% 0.100% 0.125% 0.150% 0.200% 0.250% Applicable Percentage for Unused Revolving Canadian Commitment Fee: 0.085% 0.100% 0.125% 0.150% 0.200% 0.250% Applicable Percentage for Standby U.S. Letter of Credit Fee: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% Applicable Percentage for Trade U.S. Letter of Credit Fee: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% Applicable Percentage for Standby Canadian Letter of Credit Fee: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% Applicable Percentage for Trade Canadian Letter of Credit Fee: 0.250% 0.300% 0.375% 0.450% 0.625% 0.875% EX-99 Schedule 1.1B EXISTING CANADIAN LETTERS OF CREDIT EX-100 Schedule 1.1C EXISTING U.S. LETTERS OF CREDIT EX-101 Schedule 1.1D NATIONAL WELDERS LIENS EX-102 Schedule 1.1E LIENS EX-103 Schedule 2.1(a) SCHEDULE OF LENDERS AND COMMITMENTS EX-104 Schedule 2.1(b)(i) FORM OF NOTICE OF U.S. BORROWING TO: NationsBank, N.A., as U.S. Agent 100 North Tryon Street Charlotte, North Carolina 28255 RE: Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 among Airgas, Inc. ("Airgas"), Airgas Canada Inc., Red-D-Arc Limited and Airgas Ontario Inc. (each a "Canadian Borrower"), NationsBank, N.A., as U.S. Agent, Canadian Imperial Bank of Commerce, as Canadian Agent and the Lenders party thereto (as amended or modified from time to time, the "Credit Agreement"). DATE: _____________, 199__ ______________________________________________________________________________ 1. This Notice of Borrowing is made pursuant to the terms of the Credit Agreement. All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement. 2. Please be advised that Airgas is requesting: (a) ______ a U.S. Revolving Loan in the amount of $__________ be funded on ____________, 199__ to accrue interest at the interest rate set forth in paragraph 4 below. Subsequent to the funding of the requested U.S. Revolving Loan, the aggregate amount of outstanding U.S. Revolving Loans will be $___________; or (b) ______ a 364-Day Revolving Loan in the amount of $___________ be funded on ___________ 199__ to accrue interest at the interest rate set forth in paragraph 5 below. Subsequent to the funding of the requested 364-Day Revolving Loan, the aggregate amount of outstanding 364-Day Revolving Loans will be $___________. 3. The interest rate option applicable to the requested U.S. Revolving Loan set forth in paragraph 2(a) above shall be: a. ________ the U.S. Base Rate; or b. ________ the Eurodollar Rate plus the Applicable Percentage for Eurodollar Loans for an Interest Period of: ________ one month ________ two months ________ three months ________ six months 4. The interest rate option applicable to the requested 364-Day Revolving Loan by Airgas as set forth in paragraph 2(b) above shall be: a. ________ the U.S. Base Rate; or EX-105 b. ________ the Eurodollar Rate plus the Applicable Percentage for Eurodollar Loans for an Interest Period of: ________ one month ________ two months ________ three months ________ six months 5. The representations and warranties made in the Credit Agreement are true and correct in all material respects at and as if made on the date hereof. 6. As of the date hereof, no Default or Event of Default has occurred and is continuing or would be caused by the requested Revolving Loan . 7. No Material Adverse Effect has occurred since the Closing Date. 8. Immediately after giving effect to the making of the requested Loan, (A) in the case of Revolving U.S. Loans, the sum of the aggregate principal amount of outstanding Revolving U.S. Loans plus the aggregate principal amount of outstanding Competitive U.S. Loans plus the aggregate principal amount of outstanding U.S. Swingline Loans plus U.S. LOC Obligations outstanding shall not exceed the Revolving U.S. Committed Amount and (B) in the case of 364-Day Revolving Loans, the sum of the aggregate principal amount of outstanding 364-Day Revolving Loans shall not exceed the 364-Day Revolving Committed Amount. By: Title: EX-106 Schedule 2.1(e) FORM OF U.S. REVOLVING NOTE U.S.$_________________ December 5, 1997 FOR VALUE RECEIVED, AIRGAS, INC., a Delaware corporation ("Airgas"), hereby promises to pay to the order of __________________________, its successors and assigns (the "Lender"), at the office of NationsBank, N.A., as U.S. Agent (the "U.S. Agent"), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places as the holder hereof may designate), at the times set forth in the Ninth Amended and Restated Credit Agreement dated as of the date hereof among Airgas, the Canadian Borrowers, the Lenders, the U.S. Agent and the Canadian Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in U.S. Dollars and in immediately available funds, the principal amount of ________________________U.S. DOLLARS (U.S.$____________) or, if less than such principal amount, the aggregate unpaid principal amount of all Revolving U.S. Loans made by the Lender to Airgas pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.1(d) of the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 4.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of Airgas to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by Airgas. In the event this Note is not paid when due at any stated or accelerated maturity, Airgas agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees. IN WITNESS WHEREOF, Airgas has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written. AIRGAS, INC. By____________________________ Thomas C. Deas Vice President/Finance EX-107 Schedule 2.2(i) FORM OF U.S. COMPETITIVE NOTE U.S.$625,000,00 December 5, 1997 FOR VALUE RECEIVED, AIRGAS, INC., a Delaware corporation ("Airgas"), hereby promises to pay to the order of __________________________, its successors and permitted assigns (the "Lender") at such place or places as the holder hereof may designate from time to time, at the times set forth in the Ninth Amended and Restated Credit Agreement dated as of the date hereof among Airgas, the Canadian Borrowers, the Lenders, the U.S. Agent and the Canadian Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in U.S. Dollars and in immediately available funds, the principal amount of SIX HUNDRED TWENTY-FIVE MILLION U.S. DOLLARS (U.S.$625,000,000) or, if less than such principal amount, the aggregate unpaid principal amount of all Competitive U.S. Loans made by the Lender to Airgas pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.2 of the Credit Agreement and in the respective Competitive U.S. Bid applicable to each Competitive U.S. Loan borrowing evidenced hereby. Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 4.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of Airgas to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by Airgas. In the event this Note is not paid when due at any stated or accelerated maturity, Airgas agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees. IN WITNESS WHEREOF, Airgas has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written. AIRGAS, INC. By____________________________ Thomas C. Deas Vice President/Finance EX-108 Schedule 2.4(d) FORM OF U.S. SWINGLINE NOTE U.S.$__________ December 5, 1997 FOR VALUE RECEIVED, AIRGAS, INC., a Delaware corporation ("Airgas"), hereby promises to pay to the order of NATIONSBANK, N.A., its successors and assigns (the "U.S. Swingline Lender"), at the office of NationsBank, N.A., as U.S. Agent (the "U.S. Agent"), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places as the holder hereof may designate), at the times set forth in the Ninth Amended and Restated Credit Agreement dated as of the date hereof among Airgas, the Canadian Borrowers, the Lenders, the U.S. Agent and the Canadian Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in U.S. Dollars and in immediately available funds, the principal amount of FIFTEEN MILLION U.S. DOLLARS (U.S.$15,000,000) or, if less than such principal amount, the aggregate unpaid principal amount of all U.S. Swingline Loans made by the U.S. Swingline Lender to Airgas pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.4(c) of the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 4.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of Airgas to the U.S. Swingline Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by Airgas. In the event this Note is not paid when due at any stated or accelerated maturity, Airgas agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees. IN WITNESS WHEREOF, Airgas has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written. AIRGAS, INC. By____________________________ Thomas C. Deas Vice President/Finance EX-109 Schedule 2.5(e) FORM OF 364-DAY REVOLVING NOTE U.S.$_________________ December 5, 1997 FOR VALUE RECEIVED, AIRGAS, INC., a Delaware corporation ("Airgas"), hereby promises to pay to the order of __________________________, its successors and assigns (the "Lender"), at the office of NationsBank, N.A., as U.S. Agent (the "U.S. Agent"), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places as the holder hereof may designate), at the times set forth in the Ninth Amended and Restated Credit Agreement dated as of the date hereof among Airgas, the Canadian Borrowers, the Lenders, the U.S. Agent and the Canadian Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in U.S. Dollars and in immediately available funds, the principal amount of ________________________U.S. DOLLARS (U.S.$____________) or, if less than such principal amount, the aggregate unpaid principal amount of all 364-Day Revolving Loans made by the Lender to Airgas pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.5(d) of the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 4.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of Airgas to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by Airgas. In the event this Note is not paid when due at any stated or accelerated maturity, Airgas agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees. IN WITNESS WHEREOF, Airgas has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written. AIRGAS, INC. By____________________________ Thomas C. Deas Vice President/Finance EX-110 Schedule 3.1(b)(i) FORM OF NOTICE OF CANADIAN BORROWING TO: Canadian Imperial Bank of Commerce, as Canadian Agent _________________ ___________________ RE: Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 among Airgas, Inc. ("Airgas"), Airgas Canada Inc., Red-D-Arc Limited and Airgas Ontario Inc. (each a "Canadian Borrower"), NationsBank, N.A., as U.S. Agent, Canadian Imperial Bank of Commerce, as Canadian Agent and the Lenders party thereto (as amended or modified from time to time, the "Credit Agreement"). DATE: _____________, 199__ ______________________________________________________________________________ 1. This Notice of Borrowing is made pursuant to the terms of the Credit Agreement. All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement. 2. Please be advised that [the Canadian Borrower] is requesting: (a)_____ a Canadian Revolving Loan in the amount of $___________ be funded on ____________ 199__ to accrue interest at the Canadian Base Rate. Subsequent to the funding of the requested Canadian Revolving Loan, the aggregate amount of outstanding Canadian Revolving Loans will be $___________; or (b)_____ the Canadian Lenders to create Bankers' Acceptances in the aggregate amount of $___________ on ____________, 199__ for the following period: ________ 30 days ________ 60 days ________ 90 days ________ 120 days ________ 180 days ________ [ ] days 3. The representations and warranties made in the Credit Agreement are true and correct in all material respects at and as if made on the date hereof. 4. As of the date hereof, no Default or Event of Default has occurred and is continuing or would be caused by the requested Revolving Loan or Bankers' Acceptances. 5. No Material Adverse Effect has occurred since the Closing Date. EX-111 6. Immediately after giving effect to the making of the requested Loan or of the creation of the requested Bankers' Acceptance, as the case may be, the sum of the aggregate principal amount of outstanding Revolving Canadian Loans plus the aggregate principal amount of outstanding Canadian Swingline Loans plus Canadian LOC Obligations outstanding plus BA Outstandings shall not exceed the Revolving Canadian Committed Amount. By: Name: Title: Schedule 3.1(e) EX-112 FORM OF CANADIAN REVOLVING NOTE C$_________________ December 5, 1997 FOR VALUE RECEIVED, [CANADIAN BORROWER], a __________ corporation (the "Canadian Borrower"), hereby promises to pay to the order of __________________________, its successors and assigns (the "Lender"), at the office of Canadian Imperial Bank of Commerce., as Canadian Agent (the "Canadian Agent"), at __________________ (or at such other place or places as the holder hereof may designate), at the times set forth in the Ninth Amended and Restated Credit Agreement dated as of the date hereof among Airgas, Inc., the Canadian Borrowers, the Lenders, the U.S. Agent and the Canadian Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in immediately available funds, the principal amount of ________________________CANADIAN DOLLARS (C$____________) or, if less than such principal amount, the aggregate unpaid principal amount of all Revolving Canadian Loans made by the Lender to the Canadian Borrower pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rate set forth in Section 3.1(d) of the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 4.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Canadian Borrower to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Canadian Borrower. In the event this Note is not paid when due at any stated or accelerated maturity, the Canadian Borrower agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees. IN WITNESS WHEREOF, the Canadian Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written. [CANADIAN BORROWER] By____________________________ Jeffrey P. Cornwell Vice President/Finance EX-113 Schedule 4.2 FORM OF NOTICE OF EXTENSION/CONVERSION NationsBank, N.A., as Agent for the Lenders 101 N. Tryon Street Independence Center, 15th Floor NC1-001-15-04 Charlotte, North Carolina 28255 Attention: Agency Services Ladies and Gentlemen: The undersigned, [Airgas, Inc.] (the "Borrower"), refers to the Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 (as amended, modified, extended or restated from time to time, the "Credit Agreement"), among the Airgas, Inc., the Canadian Borrowers, the Lenders, NationsBank, N.A., as U.S. Agent and Canadian Imperial Bank of Commerce as Canadian Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Borrower hereby gives notice pursuant to Section 4.2 of the Credit Agreement that it requests an extension or conversion of a [___________ Loan] outstanding under the Credit Agreement, and in connection therewith sets forth below the terms on which such extension or conversion is requested to be made: (A)Date of Extension or Conversion (which is the last day of the the applicable Interest Period)_______________________ (B)Principal Amount of Extension or Conversion _______________________ (C)Interest rate basis _______________________ (D)Interest Period and the last day thereof _______________________ In accordance with the requirements of Section 5.2, the Borrower hereby reaffirms the representations and warranties set forth in the Credit Agreement as provided in subsection (a)(ii) of such Section, and confirms that the matters referenced in subsections (ii), (iii), (iv) and (v) of such Section, are true and correct. Very truly yours, [BORROWER] By:____________________________ Title:_________________________ EX-114 Schedule 4.4 FORM OF NEW COMMITMENT AGREEMENT Reference is made to the Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 (as amended, modified, extended or restated from time to time, the "Credit Agreement") among by and among Airgas, Inc., a Delaware corporation ("Airgas"), the other Credit Parties party thereto, the Lenders party thereto, NationsBank, N.A., as U.S. Agent and Canadian Imperial Bank of Commerce as Canadian Agent. All of the defined terms in the Credit Agreement are incorporated herein by reference. 1. Effective as of the Effective Date set forth below, the undersigned Lender hereby confirms its Additional Commitment, in an aggregate principal amount of up to the amount set forth below, the commitment of such Lender in an aggregate principal amount up to the amount specified below to [(i) make Revolving U.S. Loans in accordance with the provisions of Section 2.1(a), (ii) make 364-Day Revolving Loans in accordance with the provisions of Section 2.5(a), as applicable, (iii) purchase participation interests in U.S. Letters of Credit in accordance with the provisions of Section 2.3(c) and (iv) to purchase participation interests in the U.S. Swingline Loans in accordance with the provisions of Section 2.4(b)(iii)]* [to (i) make Revolving Canadian Loans in accordance with the provisions of Section 3.1(a), (ii) purchase participation interests in Canadian Letters of Credit in accordance with the provisions of Section 3.3(c) and (iii) issue Bankers' Acceptances in accordance with the provisions of Section 3.4].** If the undersigned Lender is already a Lender under the Credit Agreement, such Lender acknowledges and agrees that such Additional Commitment is in addition to any existing Commitment of such Lender under the Credit Agreement. If the undersigned Lender is not already a Lender under the Credit Agreement, such Lender hereby acknowledges, agrees and confirms that, by its execution of this New Commitment Agreement, such Lender will, as of the Effective Date, be a party to the Credit Agreement and be bound by the provisions of the Credit Agreement and, to the extent of its Commitment, have the rights and obligations of a Lender thereunder. 2. This New Commitment Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. Amount of Additional Commitment _____________________ Effective Date of Additional Commitment ________________, 19__ *To be used if the New Commitment being provided is a Commitment in U.S. Dollars **To be used if the New Commitment being provided is a Commitment in Canadian Dollars The terms set forth above are hereby agreed to: [Lender] By:___________________________ Title: EX-115 CONSENTED TO (as required by the Credit Agreement): NATIONSBANK, N.A., as U.S. Agent [BORROWER] By:____________________________ By:____________________________ Title: Title: EX-116 Schedule 5.1(c) FORM OF LEGAL OPINION MCCAUSLAND, KEEN & BUCKMAN EX-117 Schedule 5.1(d) FORM OF LEGAL OPINION BLANEY, MCMURTRY, STAPELLS, FRIEDMAN EX-118 Schedule 5.1(e) FORM OF LEGAL OPINION MOORE & VAN ALLEN, PLLC December 5, 1997 To the Lenders party to the Credit Agreement referred to below, NationsBank, N.A., as U.S. Agent thereunder Canadian Imperial Bank of Commerce, as Canadian Agent thereunder Ladies and Gentlemen: We have acted as special counsel to the U.S. Agent, the Canadian Agent and the Lenders party to that certain Credit Agreement of even date herewith among Airgas, Inc. ("Airgas"), Airgas Canada Inc., Red-D-Arc Limited and Airgas Ontario Inc. (each a "Canadian Borrower" and, together with Airgas, the "Credit Parties"), the Lenders party thereto, NationsBank, N.A., as U.S. Agent, and Canadian Imperial Bank of Commerce, as Canadian Agent thereunder (the "Credit Agreement"). This opinion is delivered to you pursuant to Section 5.1(e) of the Credit Agreement. Terms defined in the Credit Agreement are incorporated herein by reference. In connection with this opinion, we have examined the originals, or certified, conformed or reproduction copies, of all records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinions hereinafter expressed. In stating our opinion, we have assumed the genuineness of all signatures on original or certified copies, the authenticity of documents submitted to us as originals and the conformity to original or certified copies of all copies submitted to us as certified or reproduction copies. We have also assumed, for purposes of the opinions expressed herein, (i) that the parties to the Credit Documents have the corporate power and authority to enter into and perform the Credit Documents and that the Credit Documents have been duly authorized, executed and delivered by each such party and (ii) the delivery of the consideration for the Credit Documents. The opinions expressed herein are subject to the following further assumptions, limitations, qualifications and exceptions: (a) Certain rights, remedies and waivers contained in the Credit Documents may be rendered ineffective, or may be limited, by applicable laws or judicial decisions governing such provisions, but such laws and judicial decisions do not, in our opinion, make the Credit Documents inadequate for the practical realization of the benefits and security which the Credit Documents purport to provide. (b) We express no opinion as to perfection of any lien on or security interest in (or the priority of any lien on or security interest in) any collateral securing any of the obligations of the Credit Parties under the Credit Documents. Based upon the foregoing, and subject to the limitations set forth herein, we are of the opinion that the Credit Documents constitute the legal, valid and binding obligation of each Credit Party, enforceable in accordance with their respective terms except to the extent that enforcement may be EX-119 limited by applicable bankruptcy, fraudulent conveyance, insolvency, reorganization or other similar laws affecting creditors' rights generally and by equity principles (regardless of whether enforcement is sought in equity or at law). Without limiting the generality of the foregoing, we express no opinion as to the applicability to the obligations of any Credit Party under the Credit Documents of Section 548 of the Bankruptcy Code or North Carolina General Statutes Section 39-15 relating to fraudulent transfers and obligations. This opinion is limited to the federal law of the United States of America and the law of the State of North Carolina in effect on the date hereof. This opinion is rendered solely for your benefit in connection with the transaction described above and may not be used or relied upon by any other person and may not be disclosed, quoted, filed with a governmental agency or otherwise referred to without our prior written consent except to your bank examiners, auditors, and counsel and to prospective transferees of your interests under the Credit Documents and their professional advisers, or as required by law or pursuant to legal process. Very truly yours, MOORE & VAN ALLEN, PLLC EX-120 Schedule 6.6 LITIGATION EX-121 Schedule 6.14 SUBSIDIARIES EX-122 Schedule 7.1(c) FORM OF OFFICER'S COMPLIANCE CERTIFICATE For the fiscal quarter ended _________________, 19___. I, ______________________, [Title] of Airgas, Inc. ("Airgas") hereby certify that, to the best of my knowledge and belief, with respect to that certain Ninth Amended and Restated Credit Agreement dated as of December 5, 1997 (as amended, modified, extended or restated from time to time, the "Credit Agreement"; all of the defined terms in the Credit Agreement are incorporated herein by reference) among Airgas, the Canadian Borrowers, the Lenders party thereto, NationsBank, N.A., as U.S. Agent and Canadian Imperial Bank of Commerce as Canadian Agent: a. The company-prepared financial statements which accompany this certificate are true and correct in all material respects and have been prepared in accordance with GAAP applied on a consistent basis, subject to changes resulting from normal year-end audit adjustments. b. Since ___________ (the date of the last similar certification, or, if none, the Closing Date) no Default or Event of Default has occurred under the Credit Agreement; and Delivered herewith are detailed calculations demonstrating compliance by the Consolidated Parties with the financial covenants contained in Section 7.10 of the Credit Agreement as of the end of the fiscal period referred to above. This ______ day of ___________, 19__. AIRGAS, INC. Name:___________________________ Title:__________________________ EX-123 Attachment to Officer's Certificate Computation of Financial Covenants EX-124 Schedule 10.3(b) FORM OF ASSIGNMENT AND ACCEPTANCE THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, 199_ is entered into between ________________ ("Assignor") and ____________________ ("Assignee"). Reference is made to the Ninth Amended and Restated Credit Agreement dated as of December 5, 1997, as amended and modified from time to time thereafter (the "Credit Agreement") among Airgas, Inc., the Canadian Borrowers, the Lenders party thereto, NationsBank, N.A., as U.S. Agent and Canadian Imperial Bank of Commerce as Canadian Agent. Terms defined in the Credit Agreement are used herein with the same meanings. 1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, effective as of the Effective Date set forth below, the interests set forth below (the "Assigned Interest") in the Assignor's rights and obligations under the Credit Agreement, including, without limitation, the interests set forth below in the Commitments and outstanding Loans of the Assignor on the effective date of the assignment designated below (the "Effective Date"), together with unpaid Fees accrued on the assigned Commitments to the Effective Date and unpaid interest accrued on the assigned Loans to the Effective Date. Each of the Assignor and the Assignee hereby makes and agrees to be bound by all the representations, warranties and agreements set forth in Section 11.3(b) of the Credit Agreement, a copy of which has been received by the Assignee. From and after the Effective Date (i) the Assignee, if it is not already a Lender under the Credit Agreement, shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests purchased and assumed by the Assignee under this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the interests sold and assigned by the Assignor under this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 2. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of North Carolina. 3. Terms of Assignment (a) Date of Assignment: (b) Legal Name of Assignor: (c) Legal Name of Assignee: (d) Effective Date of Assignment: (e) U.S. Commitment Percentage Assigned (expressed as a percentage set forth to at least 8 decimals) % (f) U.S. Commitment Percentage of Assignee after giving effect to this Assignment and Acceptance as of the Effective Date (set forth to at least 8 decimals) % EX-125 (g) U.S. Commitment Percentage of Assignor after giving effect to this Assignment and Acceptance as of the Effective Date (set forth to at least 8 decimals) % (h) Revolving U.S. Committed Amount as of Effective Date U.S.$_____________ (i) U.S. Dollar Amount of Assignor's U.S. Commitment Percentage as of the Effective Date (the amount set forth in (h) multiplied by the percentage set forth in (g)) U.S.$_____________ (j) U.S. Dollar Amount of Assignee's U.S. Commitment Percentage as of the Effective Date (the amount set forth in (h) multiplied by the percentage set forth in (f)) U.S.$_____________ (k) Canadian Commitment Percentage Assigned (expressed as a percentage set forth to at least 8 decimals) % (l) Canadian Commitment Percentage of Assignee after giving effect to this Assignment and Acceptance as of the Effective Date (set forth to at least 8 decimals) % (m) Canadian Commitment Percentage of Assignor after giving effect to this Assignment and Acceptance as of the Effective Date (set forth to at least 8 decimals) % (n) Revolving Canadian Committed Amount as of Effective Date C$_____________ (o) Canadian Dollar Amount of Assignor's Canadian Commitment Percentage as of the Effective Date (the amount set forth in (n) multiplied by the percentage set forth in (m)) C$_____________ (p) Canadian Dollar Amount of Assignee's Canadian Commitment Percentage as of the Effective Date (the amount set forth in (n) multiplied by the percentage set forth in (l)) C$_____________ 4.This Assignment and Acceptance shall be effective only upon consent of U.S. Agent [Airgas] [and the Canadian Agent], if applicable, delivery to the [U.S./Canadian] of this Assignment and Acceptance together with the transfer fee payable pursuant to Section 11.3(b) in connection herewith. 5.This Assignment and Acceptance may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Assignment and Acceptance to produce or account for more than one such counterpart. EX-126 The terms set forth above are hereby agreed to: ____________________, as Assignor By:_____________________________________ Title:__________________________________ _____________________, as Assignee By:_____________________________________ Title:__________________________________ CONSENTED TO: NATIONSBANK, N.A., as U.S. Agent By:____________________________________ Title:_________________________________ AIRGAS, INC. By:____________________________________ Title:_________________________________ EX-11 3 EXHIBIT 11 EX-127 EXHIBIT 11 AIRGAS, INC. EARNINGS PER SHARE CALCULATIONS Three Months Ended Nine Months Ended December 31, December 31, 1997 1996 1997 1996 ____ ____ ____ ____ Adjustment of Weighted Average Shares Outstanding: Shares of common stock outstanding - weighted 69,580,000 67,350,000 68,240,000 65,400,000 Net common stock equivalents 1,920,000 2,850,000 2,260,000 2,800,000 __________ __________ __________ __________ Adjusted shares outstanding 71,500,000 70,200,000 70,500,000 68,200,000 ========== ========== ========== ========== Net earnings $11,826,000 $10,960,000 45,727,000 33,420,000 ========== ========== ========== ========== Diluted earnings per share $ .17 $ .16 $ .65 $ .49 ========== ========= ========== ========= Earnings per share amounts were determined using the treasury stock method. This method assumes the exercise of all dilutive outstanding options and warrants and the use of the aggregate proceeds therefrom to acquire the Company's outstanding common stock. Net earnings were divided by the weighted average number of shares outstanding adjusted for the assumed exercise of the options and warrants outstanding and repurchase of common stock to calculate per share amounts. EX-27 4 ART. 5 FDS FOR 2ND QUARTER 10-Q
5 1000 9-MOS MAR-31-1998 DEC-31-1997 0 0 172,077 5,780 158,689 367,407 683,915 217,117 1,597,188 194,926 808,808 713 0 0 417,287 1,597,188 1,059,578 1,059,578 565,086 565,086 0 0 39,234 77,381 31,654 45,727 0 0 0 45,727 .65 .65
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