10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2006

Commission file number: 1-9344

AIRGAS, INC.

(Exact name of registrant as specified in its charter)

Delaware	56-0732648
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
259 North Radnor-Chester Road, Suite 100 Radnor, PA	19087-5283
(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 Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ   Accelerated filer o   Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ

Shares of common stock outstanding at November 3, 2006: 78,006,766 shares

AIRGAS, INC.

FORM 10-Q
September 30, 2006

INDEX

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Earnings for the Three and Six Months Ended September 30, 2006 and 2005 (Unaudited)	3
Consolidated Balance Sheets as of September 30, 2006 (Unaudited) and March 31, 2006	4
Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2006 and 2005 (Unaudited)	5
Notes to Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	54
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	55
Item 1A. Risk Factors	55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 4. Submission of Matters to a Vote of Security Holders	55
Item 6. Exhibit Listing	56
SIGNATURES	57
Twelfth Amended and Restated Credit Agreement
Certification of Peter McCausland, pursuant to Section 302
Certification of Robert M. McLaughlin, pursuant to Section 302
Certification of Peter McCausland, pursuant to Section 906
Certification of Robert M. McLaughlin, pursuant to Section 906

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Net Sales	$	790,747		$	702,182		$	1,563,783		$	1,380,307
Costs and Expenses:
Cost of products sold (excluding depreciation)		386,377			347,857			769,596			682,720
Selling, distribution and administrative expenses		283,924			259,809			559,901			509,658
Depreciation		34,152			30,185			67,314			59,295
Amortization		2,031			1,308			3,803			2,607
Total costs and expenses		706,484			639,159			1,400,614			1,254,280
Operating Income		84,263			63,023			163,169			126,027
Interest expense, net		(14,654	)		(13,253	)		(28,330	)		(27,197	)
Discount on securitization of trade receivables		(3,546	)		(2,247	)		(6,882	)		(4,095	)
Other income, net		551			581			764			1,493
Earnings before income taxes and minority interest		66,614			48,104			128,721			96,228
Income taxes		(26,356	)		(18,043	)		(49,100	)		(36,178	)
Minority interest in earnings of consolidated affiliate		(711	)		(712	)		(1,422	)		(1,234	)
Income from continuing operations		39,547			29,349			78,199			58,816
Income from discontinued operations, net of tax		—			273			—			453
Net Earnings	$	39,547		$	29,622		$	78,199		$	59,269
Net Earnings Per Common Share
Basic
Earnings from continuing operations	$	0.51		$	0.38		$	1.01		$	0.77
Earnings from discontinued operations		—			0.01			—			0.01
Net earnings per share	$	0.51		$	0.39		$	1.01		$	0.78
Diluted
Earnings from continuing operations	$	0.49		$	0.37		$	0.97		$	0.75
Earnings from discontinued operations		—			0.01			—			0.01
Net earnings per share	$	0.49		$	0.38		$	0.97		$	0.76
Weighted average shares outstanding:
Basic		77,811			76,637			77,685			76,446
Diluted		82,629			81,055			82,553			80,679
Comprehensive income	$	38,626		$	31,492		$	78,844		$	60,960

See accompanying notes to consolidated financial statements.

3

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)

	(Unaudited)
	September 30,			March 31,
	2006			2006
ASSETS
Current Assets
Cash	$	31,779		$	34,985
Trade receivables, less allowances for doubtful accounts of $16,154 at September 30, 2006 and $14,782 at March 31, 2006		162,714			132,245
Inventories, net		242,919			229,523
Deferred income tax asset, net		24,290			30,141
Prepaid expenses and other current assets		34,629			31,622
Total current assets		496,331			458,516
Plant and equipment at cost		2,333,081			2,191,673
Less accumulated depreciation		(837,440	)		(792,916	)
Plant and equipment, net		1,495,641			1,398,757
Goodwill		611,546			566,074
Other intangible assets, net		32,406			26,248
Other non-current assets		28,489			24,817
Total assets	$	2,664,413		$	2,474,412
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, trade	$	138,108		$	143,752
Accrued expenses and other current liabilities		197,853			200,001
Current portion of long-term debt		257,096			131,901
Total current liabilities		593,057			475,654
Long-term debt, excluding current portion		597,550			635,726
Deferred income tax liability, net		344,609			327,818
Other non-current liabilities		35,266			30,864
Minority interest in affiliate		57,191			57,191
Commitments and contingencies
Stockholders’ Equity
Preferred stock, no par value, 20,000 shares authorized, no shares issued or outstanding at September 30, 2006 and March 31, 2006		—			—
Common stock, par value $0.01 per share, 200,000 shares authorized, 79,156 and 78,569 shares issued at September 30, 2006 and March 31, 2006, respectively		792			786
Capital in excess of par value		311,213			289,598
Retained earnings		732,473			665,158
Accumulated other comprehensive income		5,396			4,751
Treasury stock, 1,292 common shares at cost at both September 30, 2006 and March 31, 2006		(13,134	)		(13,134	)
Total stockholders’ equity		1,036,740			947,159
Total liabilities and stockholders’ equity	$	2,664,413		$	2,474,412

See accompanying notes to consolidated financial statements.

4

AIRGAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended			Six Months Ended
(In thousands)	September 30, 2006			September 30, 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	78,199		$	59,269
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		67,314			59,295
Amortization		3,803			2,607
Deferred income taxes		22,211			22,163
Gain on sales of plant and equipment		(213	)		(458	)
Minority interest in earnings		1,422			1,234
Stock-based compensation expense		6,532			—
Stock issued for employee stock purchase plan		5,846			5,040
Changes in assets and liabilities, excluding effects of business acquisitions:
Securitization of trade receivables		2,900			19,700
Trade receivables, net		(23,256	)		(15,668	)
Inventories, net		(7,703	)		(14,723	)
Prepaid expenses and other current assets		(4,031	)		4,796
Accounts payable, trade		(13,359	)		(14,081	)
Accrued expenses and other current liabilities		(14,971	)		2,959
Other long-term assets		(1,184	)		4,440
Other long-term liabilities		4,740			1,520
Net cash provided by operating activities		128,250			138,093
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(121,548	)		(105,881	)
Proceeds from sales of plant and equipment		3,487			2,646
Business acquisitions and holdback settlements		(99,166	)		(75,602	)
Other, net		157			319
Net cash used in investing activities		(217,070	)		(178,518	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		525,650			279,324
Repayment of debt		(438,517	)		(284,059	)
Financing costs		(5,103	)		—
Minority interest in earnings		(1,422	)		(1,234	)
Exercise of stock options		6,517			11,210
Tax benefit realized from the exercise of stock options		2,726			—
Minority stockholder note prepayment		—			21,000
Dividends paid to stockholders		(10,884	)		(9,290	)
Cash overdraft		6,647			23,863
Net cash provided by financing activities		85,614			40,814
Change in cash	$	(3,206	)	$	389
Cash — Beginning of period		34,985			32,640
Cash — End of period	$	31,779		$	33,029

See accompanying notes to consolidated financial statements.

5

AIRGAS, INC. AND SUBSIDIARIES
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”), as well as the Company’s consolidated affiliate, National Welders. Intercompany accounts and transactions, including those between the Company and National Welders, are eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. 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 fiscal year ended March 31, 2006.

     The preparation of financial statements requires the use of estimates. The consolidated financial statements reflect, in the opinion of management, reasonable estimates and all adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The interim operating results are not necessarily indicative of the results to be expected for an entire year.

     As described in Note 3, the Company divested its subsidiary, Rutland Tool & Supply Co. (“Rutland Tool”), in December 2005. As a result, Rutland Tool has been reclassified in the Consolidated Statement of Earnings for the three months and six months ended September 30, 2005 as discontinued operations. The Consolidated Statement of Cash Flows for the six months ended September 30, 2005 was not reclassified because the cash flows of Rutland Tool were not significant.

(2) NEW ACCOUNTING PRONOUNCEMENTS

     In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 151, Inventory Costs, as an amendment to the guidance provided on Inventory Pricing in FASB Accounting Research Bulletin 43. SFAS 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This statement requires that if the costs associated with the actual level of spoilage or production defects are greater than the normal range of spoilage or defects, the excess costs should be charged to current period expense. The Company adopted SFAS 151 effective April 1, 2006, as required. Since the Company performs limited manufacturing, the adoption of SFAS 151 did not have a material impact on its results of operations, financial position or liquidity.

     In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets, as an amendment to APB Opinion 29, Accounting for Nonmonetary Transactions. SFAS 153 requires nonmonetary exchanges to be accounted for at fair value, recognizing any gains or losses, if the fair value is determinable within reasonable limits and the transaction has commercial substance. The Company adopted SFAS 153 effective April 1, 2006, as required. The adoption of SFAS 153 did not have a material impact on its results of operations, financial position or liquidity.

     On September 1, 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections, which requires retrospective application to prior periods’ financial statements of voluntary changes in accounting principle, unless it is impractical to do so. The Company adopted SFAS 154 effective April 1, 2006, as required.

6

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(2) NEW ACCOUNTING PRONOUNCEMENTS — (Continued)

     Effective April 1, 2006, the Company adopted SFAS 123 (revised 2004), Share-Based Payment, (“SFAS 123R”), which superseded Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (“APB 25). SFAS 123R requires that grants of employee stock options, including options to purchase shares under employee stock purchase plans, be recognized as compensation expense based on their fair values. The Company adopted SFAS 123R using the “modified prospective” method in which compensation cost is recognized from the date of adoption forward for both new awards and the portion of any previously granted awards that vest after the date of adoption. Prior periods are not restated under the modified prospective method of adoption. Prior to April 1, 2006, the Company accounted for its stock-based compensation using the intrinsic value method outlined in APB 25, which provides that compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeds the exercise price. Accordingly, since the Company does not grant options with exercise prices lower than the market price on the date of grant, no stock-based employee compensation expense was reflected in net earnings prior to the date of adoption. See Note 13 for additional disclosures associated with the adoption of SFAS 123R.

     In November 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards. This FSP provides an elective alternative simplified (“shortcut”) method for calculating the pool of excess tax benefits (the “APIC pool”) available to absorb tax deficiencies recognized subsequent to the adoption of SFAS 123R and reported in the Consolidated Statements of Cash Flows. The shortcut method includes simplified procedures to establish the beginning balance of the APIC pool and to determine the subsequent effect on the APIC pool and Cash Flow Statements of the tax effects of employee stock-based compensation awards that were outstanding upon adoption of SFAS 123R. The Company has elected to adopt the shortcut method provided in the FSP.

(3) ACQUISITIONS AND DIVESTITURE

(a) Acquisitions

     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 date of each respective acquisition.

     During fiscal 2007, the Company purchased four businesses associated with the distribution of packaged gases and related hardgoods products. The largest of the acquisitions included Airtec, Inc., purchased April 1, 2006, and Aeriform Corporation, purchased September 1, 2006. All acquisitions together generated aggregate annual revenues of approximately $80 million and are included in the Distribution segment. The Company acquired the businesses to expand its geographic coverage and strengthen its national network of branch-store locations.

Purchase Price Allocation

     The aggregate cash paid for the fiscal 2007 acquisitions and the settlement of holdback liabilities associated with certain acquisitions was $99 million. The Company negotiated the respective purchase prices of the businesses based on the expected cash flows to be derived from their operations after integration into the Company’s existing distribution network. The purchase price of each acquired business was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the dates of each respective acquisition. The purchase price allocations were based on preliminary estimates of fair value and are subject to revision as the Company finalizes appraisals and other analyses.

7

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(3) ACQUISITIONS AND DIVESTITURE — (Continued)

The Company does not expect the final allocation of the purchase price to differ materially from the amounts included in the accompanying consolidated financial statements. The table below summarizes the allocation of purchase price of all fiscal 2007 acquisitions as well as adjustments related to prior year acquisitions.

(In thousands)
Current assets, net	$	15,820
Property and equipment		44,450
Goodwill		44,967
Other intangible assets		9,333
Current liabilities		(13,892	)
Long-term liabilities		(1,512	)
Total cash consideration	$	99,166

Pro Forma Operating Results

     The following presents unaudited pro forma operating results as if fiscal 2007 and fiscal 2006 acquisitions had occurred on April 1, 2005. The pro forma results were prepared from financial information obtained during the due diligence process associated with the acquisitions. Pro forma adjustments to the historic financial information of businesses acquired were limited to those related to the Company’s stepped-up basis in acquired assets and adjustments to reflect the Company’s borrowing and tax rates. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of April 1, 2005 or of results that may occur in the future.

	Six Months Ended
	September 30,
(In thousands, except per share amounts)	2006		2005
Net sales	$	1,592,413	$	1,455,522
Net earnings		78,400		58,713
Diluted earnings per share	$	0.97	$	0.75

8

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(3) ACQUISITIONS AND DIVESTITURE — (Continued)

(b) Divestiture

     On December 1, 2005, the Company sold its Rutland Tool & Supply Co. (“Rutland Tool”) subsidiary. Rutland Tool distributed metalworking tools, machine tools and MRO supplies from seven locations and had approximately 180 employees. The results of Rutland Tool for the three and six months ended September 30, 2005 have been reclassified in the Consolidated Statement of Earnings as “discontinued operations.” The Consolidated Statement of Cash Flows was not reclassified to reflect discontinued operations because the cash flows of Rutland Tool were not significant.

     The net sales and earnings before income taxes for the three months ended September 30, 2005, which were segregated and reported as discontinued operations, were $12 million and $457 thousand, respectively. For the six months ended September 30, 2005, net sales and earnings before income taxes were $25 million and $759 thousand, respectively.

(4) EARNINGS PER SHARE

     Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of the Company’s common stock outstanding during the period. Outstanding shares consist of issued shares less treasury stock and common stock held by the Employee Benefits Trust (the Trust was terminated during fiscal 2006). Diluted earnings per share is calculated by dividing net earnings by the weighted average common shares outstanding adjusted for the dilutive effect of common stock equivalents related to stock options and the Company’s Employee Stock Purchase Plan. The calculation of diluted earnings per share also assumes the conversion of National Welders’ preferred stock to Airgas common stock.

     The table below presents the computation of basic and diluted earnings per share for the three and six months ended September 30, 2006 and 2005:

	September 30,				September 30,
(In thousands, except per share amounts)	2006		2005		2006		2005
Basic Earnings per Share Computation
Numerator
Income from continuing operations	$	39,547	$	29,349	$	78,199	$	58,816
Income from discontinued operations		—		273		—		453
Net earnings	$	39,547	$	29,622	$	78,199	$	59,269
Denominator
Basic shares outstanding		77,811		76,637		77,685		76,446
Basic earnings per share from continuing operations	$	0.51	$	0.38	$	1.01	$	0.77
Basic earnings per share from discontinued operations		—		0.01		—		0.01
Basic net earnings per share	$	0.51	$	0.39	$	1.01	$	0.78

9

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(4) EARNINGS PER SHARE — (Continued)

	Three Months Ended				Six Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2006		2005		2006		2005
Diluted Earnings per Share Computation
Numerator
Income from continuing operations	$	39,547	$	29,349	$	78,199	$	58,816
Plus: Preferred stock dividends (1)(2)		711		712		1,422		1,424
Plus: Income taxes on earnings of National Welders (3)		262		161		476		324
Income from continuing operations assuming preferred stock conversion		40,520		30,222		80,097		60,564
Income from discontinued operations		—		273		—		453
Net earnings assuming preferred stock conversion	$	40,520	$	30,495	$	80,097	$	61,017
Denominator
Basic shares outstanding		77,811		76,637		77,685		76,446
Incremental shares from assumed conversions:
Stock options and options under the Employee Stock Purchase plan		2,491		2,091		2,541		1,906
Preferred stock of National Welders (1)		2,327		2,327		2,327		2,327
Diluted shares outstanding		82,629		81,055		82,553		80,679
Diluted earnings per share from continuing operations	$	0.49	$	0.37	$	0.97	$	0.75
Diluted earnings per share from discontinued operations		—		0.01		—		0.01
Diluted net earnings per share	$	0.49	$	0.38	$	0.97	$	0.76

(1)	Pursuant to a joint venture agreement between the Company and the holders of the preferred stock of National Welders, until September 2009, the preferred shareholders have the option to exchange their 3.2 million preferred shares of National Welders either for cash at a price of $17.78 per share or to tender them to the joint venture in exchange for approximately 2.3 million shares of Airgas common stock. If Airgas common stock has a market value of $24.45 per share, the stock and cash redemption options are equivalent. Since the average market price of Airgas common stock for each of the periods presented above was in excess of $24.45 per share, the conversion of the preferred stock to Airgas common stock was assumed.
(2)	If the preferred stockholders of National Welders convert their preferred stock to Airgas common stock, the 5% preferred stock dividend, recognized as “Minority interest in earnings of consolidated affiliate,” would no longer be paid to the preferred stockholders, resulting in additional net earnings for Airgas.
(3)	The earnings of National Welders for tax purposes are treated as a deemed dividend to Airgas, net of an 80% dividend exclusion. Upon the assumed conversion of National Welders preferred stock to Airgas common stock, National Welders would become a wholly owned subsidiary of Airgas. As a wholly owned subsidiary, the net earnings of National Welders would not be subject to additional tax at the Airgas level.

10

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(5) TRADE RECEIVABLES SECURITIZATION

     The Company participates in a securitization agreement with two commercial banks to sell up to $250 million of qualifying trade receivables. The agreement will expire in May 2009, but may be renewed subject to renewal provisions contained in the agreement. During the six months ended September 30, 2006, the Company sold, net of its retained interest, $1,273 million of trade receivables and remitted to bank conduits, pursuant to a servicing agreement, $1,270 million in collections on those receivables. The amount of outstanding receivables under the agreement was $247 million at September 30, 2006 and $244 million at March 31, 2006. Effective October 31, 2006, the Company increased the maximum size of the securitization agreement to $270 million of qualifying trade receivables.

     The transaction has been accounted for as a sale under the provisions of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Under the securitization agreement, eligible trade receivables are sold to bank conduits through a bankruptcy-remote special purpose entity, which is consolidated for financial reporting purposes. The difference between the proceeds from the sale and the carrying value of the receivables is recognized as “Discount on securitization of trade receivables” in the accompanying Consolidated Statements of Earnings and varies on a monthly basis depending on the amount of receivables sold and market rates. The Company retains a subordinated interest in the receivables sold, which is recorded at the receivables’ previous carrying value. Subordinated retained interests of approximately $74 million and $63 million are included in “Trade receivables” in the accompanying Consolidated Balance Sheets at September 30, 2006 and March 31, 2006, respectively. The Company’s retained interest is generally collected within 60 days. On a monthly basis, management measures the fair value of the retained interest at management’s best estimate of the undiscounted expected future cash collections on the transferred receivables. Changes in the fair value are recognized as bad debt expense. Actual cash collections may differ from these estimates and would directly affect the fair value of the retained interest. In accordance with a servicing agreement, the Company continues to service, administer and collect the trade receivables on behalf of the bank conduits. The servicing fees charged to the bank conduits approximate the costs of collections.

(6) INVENTORIES, NET

     Inventories, net, consist of:

	September 30,		March 31,
(In thousands)	2006		2006
Hardgoods	$	216,074	$	202,894
Gases		26,845		26,629
	$	242,919	$	229,523

     Net inventories determined by the LIFO inventory method totaled $35 million at September 30, 2006 and $37 million at March 31, 2006. If the FIFO inventory method had been used for these inventories, the carrying value would have been approximately $7 million higher at September 30, 2006 and approximately $6 million higher at March 31, 2006. Substantially all of the inventories are finished goods.

11

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(7) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

     Accrued expenses and other current liabilities include:

	September 30,		March 31,
(In thousands)	2006		2006
Accrued payroll and employee benefits	$	54,718	$	57,555
Business insurance reserves		24,152		20,930
Health insurance reserves		10,593		9,734
Accrued interest expense		14,112		14,910
Taxes other than income taxes		13,613		13,590
Cash overdraft		46,831		40,155
Other accrued expenses and current liabilities		33,834		43,127
	$	197,853	$	200,001

(8) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

     The Company manages its exposure to changes in market interest rates. The Company’s involvement with derivative instruments is limited to highly effective fixed interest rate swap agreements used to manage well-defined interest rate risk exposures. The Company monitors its positions and credit ratings of its counterparties and does not anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

     At September 30, 2006, the Company had six fixed interest rate swap agreements with a notional amount of $150 million. These swaps effectively convert $150 million of variable interest rate debt associated with the Company’s credit facilities to fixed rate debt. At September 30, 2006, these swap agreements required the Company to make fixed interest payments based on a weighted average effective rate of 4.98% and receive variable interest payments from its counterparties based on a weighted average variable rate of 5.37%. The remaining terms of each of these swap agreements are between 21 months to 32 months.

     National Welders was a party to one interest rate swap agreement with a notional principal amount of $27 million. The counter party to the swap agreement is a major financial institution. National Welders is required to make fixed interest payments of 5.36% and receive variable interest payments from its counterparty based on one month LIBOR, which was 5.33% at September 30, 2006. The remaining term of the swap agreement is 32 months.

     During the six months ended September 30, 2006, the Company and National Welders recorded a net decrease in the fair value of the fixed interest rate swap agreements and a corresponding decrease to “Accumulated Other Comprehensive Income” of approximately $1.3 million. Including the effect of the interest rate swap agreements, the debt of National Welders, and the trade receivables securitization, the Company’s ratio of fixed to variable rate debt at September 30, 2006 was 51% fixed to 49% variable. The redemption of $225 million of the 9.125% senior subordinated notes on October 27, 2006 with proceeds from the Company’s revolving credit line changed the Company’s ratio of fixed to variable rate debt to 30% fixed to 70% variable (See subsequent events note 17).

12

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

     The valuations of goodwill and other intangible assets of recent acquisitions are based on preliminary estimates of fair value and are subject to revision as the Company finalizes appraisals and other analyses. Changes in the net carrying amount of goodwill for the six months ended September 30, 2006 were as follows:

			All Other
	Distribution		Operations
(In thousands)	Segment		Segment			Total
Balance at March 31, 2006	$	402,582	$	163,492		$	566,074
Acquisitions		42,125		2,842			44,967
Other adjustments		716		(211	)		505
Balance at September 30, 2006	$	445,423	$	166,123		$	611,546

     Other intangible assets amounted to $32.4 million and $26.2 million, net of accumulated amortization of $47.4 million and $43.8 million at September 30, 2006 and March 31, 2006, respectively. These intangible assets primarily consist of acquired customer lists which are amortized principally over 5 to 11 years and non-compete agreements entered into in connection with business combinations amortized over the term of the agreements. There are no expected residual values related to these intangible assets. Intangible assets also include a trade name with an indefinite useful life valued at $1 million. Estimated remaining fiscal year amortization expense in millions is as follows: remainder of 2007 — $3.6 million; 2008 — $6.3 million; 2009 — $5.1 million; 2010 — $4.4 million; 2011 - - $4.0 million; and $8.0 million thereafter.

(10) INDEBTEDNESS

     Long-term debt consists of:

	September 30,			March 31,
(In thousands)	2006			2006
Revolving credit borrowings	$	288,381		$	112,009
Term loan		100,000			81,250
Money market loans		25,000			25,000
Medium-term notes		—			100,751
Senior subordinated notes		376,419			376,532
Acquisition and other notes		2,702			3,025
National Welders debt		62,144			69,060
Total Long-term debt		854,646			767,627
Less current portion of long-term debt		(257,096	)		(131,901	)
Long-term debt, excluding current portion	$	597,550		$	635,726

13

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(10) INDEBTEDNESS — (Continued)

Debt Refinancing

     Effective July 25, 2006, the Company amended and restated its senior credit facility with a syndicate of lenders. Subject to compliance with certain covenants, the $1.6 billion senior unsecured credit facility (the “Credit Agreement”) permits the Company to borrow up to $966 million under a U.S. dollar revolving credit line, up to C$40 million (U.S. $34 million) under a Canadian dollar revolving credit line and up to $600 million under two or more term loans. Use of the terms loans is restricted to finance the maturity of certain debt and to finance certain contemplated acquisitions. The Company’s ability to draw on the term loans under the Credit Agreement expires on May 31, 2007. The Credit Agreement will mature on July 25, 2011.

     The Company used borrowings under the term loan provision of the Credit Agreement to finance the $100 million maturity of its 7.75% medium-term notes on September 15, 2006. As of September 30, 2006, the Company had approximately $389 million of borrowings under the credit agreement: $269 million under the U.S. dollar revolver, C$23 million (U.S. $20 million) under the Canadian dollar revolver and a $100 million under a term loan. The term loan is repayable in quarterly installments of $3.75 million between March 31, 2007 and September 30, 2010. The quarterly installments then increase to $11.875 million from September 30, 2010 to maturity on July 25, 2011. The Company also had commitments of $34 million under letters of credit with a financial institution. The U.S. dollar borrowings bear interest at LIBOR plus 75 basis points and the Canadian dollar borrowings bear interest at the Canadian Bankers’ Acceptance Rate plus 75 basis points. As of September 30, 2006, the effective interest rate on the U.S. dollar borrowings and Canadian dollar borrowings were 6.14% and 5.19%, respectively.

     As of September 30, 2006, the financial covenants in the credit agreement permitted the Company to incur $612 million of additional debt. At September 30, 2006, approximately $697 million remained unused under the U.S. dollar revolving credit line, approximately C$17 million (U.S. $14 million) remained unused under the Canadian dollar revolving credit line and $500 million remained unused under the term loans. The Credit Agreement also contains customary events of default, including nonpayment and breach of covenants. In the event of default, repayment of borrowings under the Credit Agreement may be accelerated.

     The Company’s domestic subsidiaries, exclusive of a bankruptcy remote special purpose entity (the “domestic guarantors”), guarantee the U.S. and Canadian borrowings. The Canadian borrowings are also guaranteed by the Company’s foreign subsidiaries. The guarantees are full and unconditional and are made on a joint and several basis. The Company has pledged 100% of the stock of its domestic subsidiaries and 65% of the stock of its foreign subsidiaries as surety for its obligations under the Credit Agreement. The Credit Agreement provides for the release of the guarantees and collateral if the Company attains an investment grade credit rating and a similar release on all other debt.

Money Market Loan

     The Company has an agreement with a financial institution that provides access to short term advances not to exceed $25 million for a maximum term of three months. The agreement expires on April 30, 2007, but may be extended subject to renewal provisions contained in the agreement. The amount, term and interest rate of an advance are established through mutual agreement with the financial institution when the Company requests such an advance. At September 30, 2006, the Company had an outstanding advance under the agreement of $25 million for a term of 91 days bearing interest at 5.89%.

14

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(10) INDEBTEDNESS — (Continued)

Senior Subordinated Notes

     At September 30, 2006, the Company had $150 million of senior subordinated notes (the “2004 Notes”) outstanding with a maturity date of July 15, 2014. The 2004 Notes bear interest at a fixed annual rate of 6.25%, payable semi-annually on January 15 and July 15 of each year. The 2004 notes have an optional redemption provision, which permits the Company, at its option, to call the 2004 Notes at scheduled dates and prices. The first scheduled optional redemption date is July 15, 2009 at a price of 103.125% of the principal amount.

     In addition to the 2004 Notes, at September 30, 2006, the Company had $225 million of senior subordinated notes (the “2001 Notes”) outstanding with a maturity date of October 1, 2011. The 2001 Notes bear interest at a fixed annual rate of 9.125%, payable semi-annually on April 1 and October 1 of each year. Under the terms of an optional redemption provision, on October 27, 2006, the Company redeemed the $225 million notes in full at a premium of 104.563% of the principal amount (see Note 17 — Subsequent Event). In conjunction with the redemption of the Notes, the Company recognized a charge on the early extinguishment of debt of approximately $12 million ($8 million after tax) in October 2006. The charge relates to the redemption premium and the write-off of unamortized debt issuance costs. Based on current interest rates under the revolving credit facility, interest savings are estimated to be $500 thousand per month.

     The 2004 Notes contain covenants that could restrict the payment of dividends, the repurchase of common stock, the issuance of preferred stock, and the incurrence of additional indebtedness and liens. The 2004 Notes are fully and unconditionally guaranteed jointly and severally, on a subordinated basis, by each of the wholly owned domestic guarantors under the revolving credit facilities. The stock of the Company’s domestic subsidiaries is also pledged to the note holders on a subordinated basis.

Acquisition and Other Notes

     The Company’s long-term debt also included acquisition and other notes principally consisting of notes issued to sellers of businesses acquired and are repayable in periodic installments. At September 30, 2006, acquisition and other notes totaled approximately $3 million with interest rates ranging from 5% to 8.5%.

15

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(10) INDEBTEDNESS — (Continued)

Debt of the National Welders Joint Venture

     Pursuant to the requirements of FIN 46R, the Company’s Consolidated Balance Sheets at September 30, 2006 and March 31, 2006 include the financial obligations of National Welders. National Welders’ financial obligations are non-recourse to the Company, meaning that the creditors of National Welders do not have a claim on the assets of Airgas, Inc. in settlement of the joint venture’s financial obligations. The debt of National Welders consists of:

	September 30,			March 31,
(In thousands)	2006			2006
Revolving credit borrowings	$	47,875		$	51,393
Term loan A		13,517			15,042
Term loan C		—			1,622
Acquisition and other debt obligations		752			1,003
Total Long-term debt		62,144			69,060
Less current portion of long-term debt		(4,325	)		(5,589	)
Long-term debt, excluding current portion	$	57,819		$	63,471

     The National Welders Credit Agreement (the “NWS Credit Agreement”) provides for a revolving credit line of $74 million, a Term Loan A of $26 million, a Term Loan B of $21 million, and a Term Loan C of $9 million. At September 30, 2006, National Welders had borrowings under its revolving credit line of $48 million and under Term Loan A of $14 million. There were no amounts outstanding under Term loans B or C at September 30, 2006. National Welders also had $752 thousand in acquisition notes and other debt obligations.

     The revolving credit agreement matures in August 2008. Term Loan A is repayable in monthly amounts of $254 thousand with a lump-sum payment of the outstanding balance at maturity in August 2008. The variable interest rate on the revolving credit line and Term Loan A ranges from LIBOR plus 70 to 145 basis points varying with National Welders’ leverage ratio. At September 30, 2006, the effective interest rate for the revolving credit line and Term Loan A was 6.28%. The NWS Credit Agreement also contains certain covenants which, among other things, limit the ability of National Welders to incur and guarantee new indebtedness, and limit its capital expenditures, ownership changes, merger and acquisition activity, and the payment of dividends. National Welders had additional borrowing capacity under the NWS Credit Agreement of approximately $26 million at September 30, 2006.

     As of September 30, 2006, the revolving credit line and Term Loan A are secured by certain current assets, principally trade receivables and inventory, totaling $36 million, non-current assets, principally equipment, totaling $103 million, and Airgas common stock with a market value of $33 million classified as treasury stock and carried at cost of $370 thousand.

16

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(10) INDEBTEDNESS — (Continued)

Aggregate Long-term Debt Maturities

     The aggregate maturities of long-term debt as of September 30, 2006 are as follows:

			National
(In thousands)	Airgas, Inc.		Welders		Total
September 30, 2007	$	252,772	$	4,325	$	257,097
March 31, 2008		15,120		—		15,120
March 31, 2009		15,000		57,819		72,819
March 31, 2010		16,230		—		16,230
March 31, 2011		31,250		—		31,250
March 31, 2012		312,130		—		312,130
Thereafter		150,000		—		150,000
	$	792,502	$	62,144	$	854,646

(11) MINORITY STOCKHOLDER NOTE PREPAYMENT

     In September 2005, National Welders entered into an agreement with its preferred stockholders under which the preferred stockholders prepaid their $21 million note receivable owed to National Welders. National Welders used the proceeds from the prepayment of the preferred stockholders’ note to repay its $21 million Term Loan B, which had been collateralized by the preferred stockholders’ note.

17

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(12) STOCKHOLDERS’ EQUITY

     Changes in stockholders’ equity were as follows:

	Shares of
	Common
	Stock $0.01		Treasury
(In thousands of shares)	Par Value		Stock
Balance—March 31, 2006		78,569		1,292
Common stock issuance (a)		587		—
Balance—September 30, 2006		79,156		1,292

								Accumulated
			Capital in					Other
	Common		Excess of		Retained			Comprehensive			Treasury			Comprehensive
(In thousands)	Stock		Par Value		Earnings			Income (Loss)			Stock			Income
Balance — March 31, 2006	$	786	$	289,598	$	665,158		$	4,751		$	(13,134	)
Net earnings.						78,199									78,199
Common stock issuance (a)		6		12,357
Tax benefit from stock option exercises				2,726
Foreign currency translation adjustment									1,455						1,455
Dividends paid on common stock ($0.14 per share)						(10,884	)
Stock-based compensation (b)				6,532
Net change in fair value of interest rate swap agreements									(1,270	)					(1,270	)
Net tax expense of comprehensive income items									460						460
Balance — September 30, 2006	$	792	$	311,213	$	732,473		$	5,396		$	(13,134	)	$	78,844

(a)	Issuance of common stock for stock option exercises and purchases through the Employee Stock Purchase Plan.
(b)	In accordance with the adoption of SFAS 123R, the Company recognized compensation expense with a corresponding amount recorded to Capital in Excess of Par Value.

18

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(13) STOCK-BASED COMPENSATION

     The Company adopted SFAS 123R effective April 1, 2006 using the modified prospective method. Under the modified prospective method, stock-based compensation recognized since the date of adoption includes: (a) any share-based payments granted subsequent to the date of adoption; and (b) any portion of share-based payments granted prior to the date of adoption that vests subsequent to the date of adoption. Prior periods have not been restated.

     The Company recorded stock-based compensation in the three months ended September 30, 2006 of $3.8 million ($2.6 million after tax), or $0.03 per diluted share, and $6.5 million ($4.6 million after tax), or $0.05 per diluted share, for the six months ended September 30, 2006. The pre-tax compensation expense was included in Selling, Distribution and Administrative expenses in the Consolidated Statement of Earnings. The stock-based compensation expense related to stock options and options to purchase common stock under the Employee Stock Purchase Plan.

Prior Period Pro Forma Earnings

     The following table presents the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123R in the prior year:

	Three Months Ended			Six Months Ended
(In thousands, except per share amounts)	September 30, 2005			September 30, 2005
Net earnings, as reported	$	29,622		$	59,269
Deduct: Total stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects		(2,291	)		(4,429	)
Pro forma net earnings	$	27,331		$	54,840
Earnings per share:
Basic — as reported	$	0.39		$	0.78
Basic — pro forma	$	0.36		$	0.72
Diluted — as reported	$	0.38		$	0.76
Diluted — pro forma	$	0.35		$	0.70

2006 Equity Incentive Plan

     At the August 2006 Annual Meeting of Stockholders, the stockholders approved the 2006 Equity Incentive Plan (the “2006 Equity Plan”). The 2006 Equity Plan replaced both the Company’s 1997 Stock Option Plan for employees and the 1997 Directors’ Stock Option Plan. Outstanding stock options and stock options available for grant under the prior stock option plans were incorporated into the 2006 Equity Plan. Future grants of stock options to employees and directors will only be issued from the 2006 Equity Plan. A total of 981 thousand options were granted during the six months ended September 30, 2006. A total of 11.8 million shares of common stock are reserved for issuance under the 2006 Equity Plan upon the exercise of stock options, stock appreciation rights, restricted shares or restricted units, of which 4.5 million remained available for grant at September 30, 2006.

19

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(13) STOCK-BASED COMPENSATION — (Continued)

Fair Value

     The Company utilizes the Black-Scholes option pricing model to determine the fair value of stock options under SFAS 123R, which is consistent with that used for pro forma disclosures in prior periods. The weighted-average grant date fair value of stock options granted during the six months ended September 30, 2006 and 2005 was $13.74 and $9.45, respectively. In the three and six months ended September 30, 2006, the Company recognized stock-based compensation expense associated with stock options of approximately $3.3 million and $5.2 million, respectively. The following assumptions were used by the Company in valuing the stock option grants issued in the periods presented:

	Six Months Ended
	September 30,
	2006			2005
Expected volatility		36.2	%		35.3	%
Expected dividend yield		0.80	%		0.83	%
Expected term	5.43 years			6.43 years
Risk-free interest rate		5.0	%		3.9	%

     The expected volatility was determined based on anticipated changes in the underlying stock price over the expected term using a weighting of historical and implied volatility. The expected dividend yield was based on the Company’s history and expectation of future dividend payouts. The expected term represents the period of time that the options are expected to be outstanding prior to exercise or forfeiture. The expected term was determined based on historical exercise patterns. The risk-free interest rate was based on U.S. Treasury rates in effect at the time of grant commensurate with the expected term.

Summary of Stock Option Activity

     The following table summarizes the activity of the 2006 Equity Incentive Plan during the six months ended September 30, 2006:

	Number of					Weighted-Average		Aggregate
	Stock Options			Weighted-Average		Remaining Contractual		Intrinsic Value
	(In thousands)			Exercise Price		Term (Years)		(In thousands)
Outstanding at March 31, 2006		6,994		$	16.36
Granted		981		$	36.17
Exercised		(366	)	$	18.71
Forfeited		(103	)	$	26.05
Outstanding at September 30, 2006		7,506		$	18.70		5.67	$	131,130
Exercisable at September 30, 2006		5,193		$	14.71		5.55	$	111,442

     The aggregate intrinsic value represents the difference between the Company’s closing stock price on September 30, 2006 of $36.17 and the weighted-average exercise price multiplied by the number of stock options outstanding as of that date. The total intrinsic value of stock options exercised during the six months ended September 30, 2006 was $6.6 million.

     As of September 30, 2006, $21.6 million of total unrecognized compensation expense related to non-vested stock options is expected to be recognized over a weighted-average vesting period of 2.9 years.

20

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(13) STOCK-BASED COMPENSATION — (Continued)

Employee Stock Purchase Plan

     The Company has an Employee Stock Purchase Plan (the “ESPP”) to encourage and assist employees in acquiring an equity interest in the Company. The ESPP is authorized to issue up to 3.5 million shares of Company common stock, of which 2 million shares were available for issuance at September 30, 2006.

     Under the terms of the ESPP, eligible employees may elect to have up to 15% of their annual gross earnings withheld to purchase common stock at 85% of the market value. Employee purchases are limited in any calendar year to an aggregate market value of $25,000. Market value under the ESPP is defined as either the closing share price on the New York Stock Exchange as of an employee’s enrollment date or the closing price on the first business day of a fiscal quarter when the shares are purchased, whichever is lower. An employee may lock-in a purchase price for up to 12 months. The ESPP effectively resets at the beginning of each fiscal year at which time employees are re-enrolled in the plan and a new 12-month purchase price is established. The ESPP is designed to comply with the requirements of Sections 421 and 423 of the Internal Revenue Code. During the six months ended September 30, 2006 and 2005, the Company granted 385 thousand and 533 thousand options to purchase common stock under the ESPP, respectively.

     Compensation expense under SFAS 123 is measured based on the fair value of the employees’ option to purchase shares of common stock at the grant date and is recognized over the future periods in which the related employee service is rendered. The fair value per share of options granted under the ESPP was $8.31 and $5.57 for the six months ended September 30, 2006 and 2005, respectively. In the three and six months ended September 30, 2006, the Company recognized stock-based compensation expense associated with the ESPP of $542 thousand and $1.3 million, respectively. The fair value of the employees’ option to purchase shares of common stock was estimated using the Black-Scholes model. The following assumptions were used by the Company in valuing the employees’ option to purchase shares of common stock under the ESPP:

	Six Months Ended
	September 30,
	2006			2005
Expected volatility		30.8	%		27.1	%
Expected dividend yield		0.73	%		0.90	%
Expected term		2 to 8 months			3 to 12 months
Risk-free interest rate		5.0	%		3.1	%

21

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(13) STOCK-BASED COMPENSATION — (Continued)

The following table summarizes the activity of the ESPP during the six months ended September 30, 2006:

	Number of					Aggregate
	Purchase Options			Weighted Average		Intrinsic Value
	(In thousands)			Exercise Price		(In thousands)
Outstanding at March 31, 2006		138		$	20.14
Granted		385		$	31.06
Exercised		(232	)	$	25.02
Forfeited		—			—
Outstanding at September 30, 2006		291		$	30.75	$	1,577

(14) COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES

Litigation

     The Company is involved in various legal and regulatory proceedings that have arisen in the ordinary course of its business and have not been fully adjudicated. These actions, when ultimately concluded and determined, will not, in the opinion of management, have a material adverse effect upon the Company’s consolidated financial position, results of operations or liquidity.

Supply Agreements

     In September and October 2006, the Company entered into 10-year take-or-pay supply agreements with The BOC Group, Inc. (“BOC”) to purchase helium. The total annual commitment amount for these agreements is approximately $23 million. These new agreements replace the previous two helium supply agreements that were to expire in February 2007 and July 2019.

     The BOC supply agreements contain market pricing subject to certain economic indices and market analysis. The Company believes the minimum product purchases under the agreements are within the Company’s normal product purchases.

22

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(15) SUMMARY BY BUSINESS SEGMENT

     As disclosed in Note (1) Basis of Presentation and Note (3) Acquisitions and Divestiture, the Company sold its subsidiary Rutland Tool in December 2005. The results of Rutland Tool were previously reflected in the Distribution business segment. For the three and six month periods ended September 30, 2005, the operating results of Rutland Tool have been reclassified in the Consolidating Statement of Earnings as discontinued operations. Information related to the Company’s continuing operations by business segment for the three and six months ended September 30, 2006 and 2005 is as follows:

	Three Months Ended									Three Months Ended
	September 30, 2006									September 30, 2005
			All									All
			Other									Other
(In thousands)	Dist.		Ops.		Elim			Combined		Dist.		Ops.		Elim			Combined
Gas and rent	$	342,976	$	124,586	$	(13,505	)	$	454,057	$	300,437	$	113,520	$	(12,979	)	$	400,978
Hardgoods		314,351		23,485		(1,146	)		336,690		284,261		18,565		(1,622	)		301,204
Total net sales		657,327		148,071		(14,651	)		790,747		584,698		132,085		(14,601	)		702,182
Cost of products sold, excluding deprec. expense		329,758		71,270		(14,651	)		386,377		297,171		65,287		(14,601	)		347,857
Selling, distribution and administrative expenses		235,616		48,308		—			283,924		216,593		43,216		—			259,809
Depreciation expense		26,721		7,431		—			34,152		23,519		6,666		—			30,185
Amortization expense		1,569		462		—			2,031		1,150		158		—			1,308
Operating income		63,663		20,600		—			84,263		46,265		16,758		—			63,023

	Six Months Ended									Six Months Ended
	September 30, 2006									September 30, 2005
			All									All
			Other									Other
(In thousands)	Dist.		Ops.		Elim			Combined		Dist.		Ops.		Elim			Combined
Gas and rent	$	674,980	$	241,769	$	(27,991	)	$	888,758	$	600,294	$	206,200	$	(26,596	)	$	779,898
Hardgoods		631,600		46,087		(2,662	)		675,025		565,922		37,376		(2,889	)		600,409
Total net sales		1,306,580		287,856		(30,653	)		1,563,783		1,166,216		243,576		(29,485	)		1,380,307
Cost of products sold, excluding deprec. expense		661,353		138,896		(30,653	)		769,596		594,129		118,076		(29,485	)		682,720
Selling, distribution and administrative expenses		465,499		94,402		—			559,901		428,677		80,981		—			509,658
Depreciation expense		52,546		14,768		—			67,314		46,332		12,963		—			59,295
Amortization expense		2,878		925		—			3,803		2,311		296		—			2,607
Operating income		124,304		38,865		—			163,169		94,767		31,260		—			126,027

23

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(16) SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid for interest and income taxes was as follows:

	Six Months Ended
	September 30,
(In thousands)	2006		2005
Interest paid	$	28,785	$	27,275
Discount on securitization		6,788		3,999
Income taxes (net of refunds)		12,953		6,759

     Cash flows, in excess of a management fee, associated with the Company’s consolidated affiliate, National Welders, are not available for the general use of the Company. Rather these cash flows are used by National Welders for operations, capital expenditures, acquisitions, and to satisfy financial obligations, which are non-recourse to the Company. The following reflects the sources and uses of cash associated with National Welders for each period presented:

	Six Months Ended
	September 30,
(In thousands)	2006			2005
Net cash provided by operating activities	$	15,258		$	8,761
Net cash used in investing activities		(7,458	)		(12,265	)
Net cash provided by (used in) financing activities		(7,334	)		3,553
Change in cash		466			49
Management fee paid to the Company, which is eliminated in consolidation	$	693		$	607

(17) SUBSEQUENT EVENT

Redemption of Senior Subordinated Notes

     On September 27, 2006, the Company announced that it elected to redeem its 9.125% senior subordinated notes due October 1, 2011 (the “Notes”). On October 27, 2006, the Company redeemed the $225 million notes in full at a premium of 104.563% of the principal amount with proceeds from the Company’s revolving credit line. In conjunction with the redemption of the Notes, the Company recognized a charge on the early extinguishment of debt of approximately $12 million ($8 million after tax, or $0.10 per diluted share) in October 2006. The charge relates to the redemption premium and the write-off of unamortized debt issuance costs. Under existing covenant restrictions, liquidity will not be significantly affected by the redemption of the notes. Based on current interest rates under the revolving credit facility, interest savings are estimated to be $500 thousand per month.

24

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(18) SUPPLEMENTARY CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF SUBSIDIARY GUARANTORS

     The obligations of the Company under its senior subordinated notes (“the Notes”) are guaranteed by the Company’s domestic subsidiaries (the “Guarantors”). The guarantees are made fully and unconditionally on a joint and several basis. The Company’s consolidated affiliate, foreign holdings and bankruptcy remote special purpose entity (the “Non-guarantors”) are not guarantors of the Notes. The claims of the creditors of the Non-guarantors have priority over the rights of the Company to receive dividends or distributions from the Non-guarantors.

     Presented below is supplementary condensed consolidating financial information for the Company, the Guarantors and the Non-guarantors as of September 30, 2006 and March 31, 2006 and for the six months ended September 30, 2006 and 2005. As disclosed in Note (3) Acquisitions and Divestiture, the Company sold its subsidiary Rutland Tool in December 2005. Accordingly, the operating results of Rutland Tool, which was a guarantor of the Company’s senior subordinated notes, have been reclassified in the Consolidating Statements of Earnings as discontinued operations for the six months ended September 30, 2005. Intercompany receivables and payables as of March 31, 2006 have been reclassified to conform to the current period presentation.

25

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Balance Sheet
September 30, 2006

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries			Consolidated
ASSETS
Current Assets
Cash	$	—		$	29,927		$	1,852		$	—		$	31,779
Trade receivables, net		—			7,716			154,998			—			162,714
Intercompany receivable/(payable)		—			2,184			(2,184	)		—			—
Inventories, net		—			223,779			19,140			—			242,919
Deferred income tax asset, net		20,557			4,781			(1,048	)		—			24,290
Prepaid expenses and other current assets		8,031			23,431			3,167			—			34,629
Total current assets		28,588			291,818			175,925			—			496,331
Plant and equipment, net		16,753			1,289,216			189,672			—			1,495,641
Goodwill		—			532,424			79,122			—			611,546
Other intangible assets, net		—			29,246			3,160			—			32,406
Investments in subsidiaries		2,051,239			—			—			(2,051,239	)		—
Other non-current assets		13,399			12,168			2,922			—			28,489
Total assets	$	2,109,979		$	2,154,872		$	450,801		$	(2,051,239	)	$	2,664,413
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, trade	$	2,089		$	118,859		$	17,160		$	—		$	138,108
Accrued expenses and other current liabilities		75,167			103,452			19,234			—			197,853
Current portion of long-term debt		251,419			1,353			4,324			—			257,096
Total current liabilities		328,675			223,664			40,718			—			593,057
Long-term debt, excluding current portion		518,400			1,381			77,769			—			597,550
Deferred income tax liability, net		4,107			296,643			43,859			—			344,609
Intercompany (receivable)/payable		217,290			(108,934	)		(108,356	)		—			—
Other non-current liabilities		4,767			22,278			8,221			—			35,266
Minority interest in affiliate		—			—			57,191			—			57,191
Commitments and contingencies
Stockholders’ Equity
Preferred stock, no par value		—			—			—			—			—
Common stock, par value $0.01 per share		792			—			—			—			792
Capital in excess of par value		311,213			898,051			71,956			(970,007	)		311,213
Retained earnings		732,473			820,856			255,578			(1,076,434	)		732,473
Accumulated other comprehensive income		5,396			933			4,235			(5,168	)		5,396
Treasury stock		(13,134	)		—			(370	)		370			(13,134	)
Total stockholders’ equity		1,036,740			1,719,840			331,399			(2,051,239	)		1,036,740
Total liabilities and stockholders’ equity	$	2,109,979		$	2,154,872		$	450,801		$	(2,051,239	)	$	2,664,413

26

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Balance Sheet
March 31, 2006

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries			Consolidated
ASSETS
Current Assets
Cash	$	—		$	30,061		$	4,924		$	—		$	34,985
Trade receivables, net		—			7,149			125,096			—			132,245
Intercompany receivable/(payable)		—			(4,113	)		4,113			—			—
Inventories, net		—			211,319			18,204			—			229,523
Deferred income tax asset, net		21,988			9,239			(1,086	)		—			30,141
Prepaid expenses and other current assets		7,289			20,713			3,620			—			31,622
Total current assets		29,277			274,368			154,871			—			458,516
Plant and equipment, net		18,285			1,194,523			185,949			—			1,398,757
Goodwill		—			488,317			77,757			—			566,074
Other intangible assets, net		—			22,362			3,886			—			26,248
Investments in subsidiaries		1,940,670			—			—			(1,940,670	)		—
Other non-current assets		15,491			6,394			2,932			—			24,817
Total assets	$	2,003,723		$	1,985,964		$	425,395		$	(1,940,670	)	$	2,474,412
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, trade	$	3,057		$	122,078		$	18,617		$	—		$	143,752
Accrued expenses and other current liabilities		112,396			66,241			21,364			—			200,001
Current portion of long-term debt		125,751			561			5,589			—			131,901
Total current liabilities		241,204			188,880			45,570			—			475,654
Long-term debt, excluding current portion		549,382			2,450			83,894			—			635,726
Deferred income tax liability, net		4,372			280,404			43,042			—			327,818
Intercompany (receivable)/payable		257,995			(148,123	)		(109,872	)		—			—
Other non-current liabilities		3,611			25,242			2,011			—			30,864
Minority interest in affiliate		—			—			57,191			—			57,191
Commitments and contingencies
Stockholders’ Equity
Preferred stock, no par value		—			—			—			—			—
Common stock, par value $0.01 per share		786			—			—			—			786
Capital in excess of par value		289,598			894,898			71,955			(966,853	)		289,598
Retained earnings		665,158			741,623			228,662			(970,285	)		665,158
Accumulated other comprehensive income		4,751			590			3,312			(3,902	)		4,751
Treasury stock		(13,134	)		—			(370	)		370			(13,134	)
Total stockholders’ equity		947,159			1,637,111			303,559			(1,940,670	)		947,159
Total liabilities and stockholders’ equity	$	2,003,723		$	1,985,964		$	425,395		$	(1,940,670	)	$	2,474,412

27

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidating Statement of Earnings
Six Months Ended
September 30, 2006

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries			Consolidated
Net Sales	$	—		$	1,433,586		$	130,197		$	—		$	1,563,783
Costs and Expenses
Costs of products sold (excluding depreciation)		—			713,210			56,386			—			769,596
Selling, distribution and administrative expenses		4,911			503,732			51,258			—			559,901
Depreciation		3,267			55,135			8,912			—			67,314
Amortization		—			3,444			359			—			3,803
Operating Income (Loss)		(8,178	)		158,065			13,282			—			163,169
Interest (expense) income, net		(34,244	)		8,195			(2,281	)		—			(28,330	)
(Discount) gain on securitization of trade receivables		—			(39,796	)		32,914			—			(6,882	)
Other income (expense), net		(56	)		(40	)		860			—			764
Earnings (loss) before income taxes and minority interest		(42,478	)		126,424			44,775			—			128,721
Income tax benefit (expense)		14,528			(47,191	)		(16,437	)		—			(49,100	)
Minority interest in earnings of consolidated affiliate		—			—			(1,422	)		—			(1,422	)
Equity in earnings of subsidiaries		106,149			—			—			(106,149	)		—
Net Earnings	$	78,199		$	79,233		$	26,916		$	(106,149	)	$	78,199

28

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidating Statement of Earnings
Six Months Ended
September 30, 2005

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries			Consolidated
Net Sales	$	—		$	1,274,063		$	106,244		$	—		$	1,380,307
Costs and Expenses
Costs of products sold (excluding depreciation)		—			636,991			45,729			—			682,720
Selling, distribution and administrative expenses		12,416			448,452			48,790			—			509,658
Depreciation		3,869			47,693			7,733			—			59,295
Amortization		—			2,563			44			—			2,607
Operating Income (Loss)		(16,285	)		138,364			3,948			—			126,027
Interest (expense) income, net		(35,818	)		10,934			(2,313	)		—			(27,197	)
(Discount) gain on securitization of trade receivables		—			(37,498	)		33,403			—			(4,095	)
Other income (expense), net		9,846			(9,244	)		891			—			1,493
Earnings (loss) before income taxes and minority interest		(42,257	)		102,556			35,929			—			96,228
Income tax benefit (expense)		14,790			(37,838	)		(13,130	)		—			(36,178	)
Minority interest in earnings of consolidated affiliate		—			—			(1,234	)		—			(1,234	)
Equity in earnings of subsidiaries		86,736			—			—			(86,736	)		—
Income from discontinued operations, net of tax		—			453			—			—			453
Net Earnings	$	59,269		$	65,171		$	21,565		$	(86,736	)	$	59,269

29

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Statement of Cash Flows
Six Months Ended
September 30, 2006

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries		Consolidated
Net cash provided by (used in) operating activities	$	(61,716	)	$	175,586		$	14,380		$	—	$	128,250
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(1,878	)		(107,146	)		(12,524	)		—		(121,548	)
Proceeds from sale of plant and equipment		87			2,789			611			—		3,487
Business acquisitions, holdbacks and other settlements of acquisition related liabilities		—			(100,586	)		1,420			—		(99,166	)
Other, net		644			387			(874	)		—		157
Net cash used in investing activities		(1,147	)		(204,556	)		(11,367	)		—		(217,070	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		490,859			2,363			32,428			—		525,650
Repayment of debt		(396,059	)		(2,641	)		(39,817	)		—		(438,517	)
Financing costs		(5,103	)		—			—			—		(5,103	)
Minority interest		—			—			(1,422	)		—		(1,422	)
Exercise of stock options		6,517			—			—			—		6,517
Tax benefit realized from the exercise of stock options		2,726			—			—			—		2,726
Dividends paid to stockholders		(10,884	)		—			—			—		(10,884	)
Cash overdraft		5,644			—			1,003			—		6,647
Inter-company		(30,837	)		29,114			1,723			—		—
Net cash provided by (used in) financing activities		62,863			28,836			(6,085	)		—		85,614
CHANGE IN CASH	$	—		$	(134	)	$	(3,072	)	$	—	$	(3,206	)
Cash — Beginning of year		—			30,061			4,924			—		34,985
Cash — End of year	$	—		$	29,927		$	1,852		$	—	$	31,779

30

AIRGAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Statement of Cash Flows
Six Months Ended
September 30, 2005

							Non-			Elimination
(In thousands)	Parent			Guarantors			Guarantors			Entries		Consolidated
Net cash provided by (used in) operating activities	$	(712	)	$	89,614		$	49,191		$	—	$	138,093
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(1,228	)		(89,189	)		(15,464	)		—		(105,881	)
Proceeds from sale of plant and equipment		—			2,201			445			—		2,646
Business acquisitions, holdbacks and other settlements of acquisition related liabilities		—			(75,258	)		(344	)		—		(75,602	)
Other, net		384			51			(116	)		—		319
Net cash used in investing activities		(844	)		(162,195	)		(15,479	)		—		(178,518	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		241,989			2,069			35,266			—		279,324
Repayment of debt		(230,449	)		(2,662	)		(50,948	)		—		(284,059	)
Minority interest		—			—			(1,234	)		—		(1,234	)
Minority stockholder note prepayment		—			—			21,000			—		21,000
Exercise of stock options		11,210			—			—			—		11,210
Dividends paid to stockholders		(9,290	)		—			—			—		(9,290	)
Cash overdraft		23,465			—			398			—		23,863
Inter-company		(35,369	)		68,563			(33,194	)		—		—
Net cash provided by (used in) financing activities		1,556			67,970			(28,712	)		—		40,814
CHANGE IN CASH	$	—		$	(4,611	)	$	5,000		$	—	$	389
Cash — Beginning of year		—			29,340			3,300			—		32,640
Cash — End of year	$	—		$	24,729		$	8,300		$	—	$	33,029

31

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

     Airgas, Inc. (the “Company”) had net sales for the quarter ended September 30, 2006 (“current quarter”) of $791 million compared to $702 million for the quarter ended September 30, 2005 (“prior year quarter”). Net sales increased by 13% in the current quarter driven by strong same-store sales growth and the impact of current and prior year acquisitions. Sales momentum continued in the current quarter generating same-store sales growth of 11%, with pricing and volume contributing about equally. Acquisitions also added 2% to overall sales growth. Sales growth related to pricing reflected gas price increases implemented in June 2006 and November 2005. Sales volume gains in the quarter reflected broad demand with the strongest sales gains driven by industrial, energy infrastructure (power plants, oil and natural gas), and non-residential construction markets. Strategic product lines, including bulk gases, medical gases and safety products, were solid contributors to the sales gains. Operating margins increased in the current quarter to 10.7% from 9% of sales in the prior year quarter. The significant margin improvement was driven by continued operating profit leverage on sales growth and effective management of costs and pricing. Net earnings per diluted share grew 29% to $0.49 in the current quarter versus $0.38 in the prior year quarter.

     Effective April 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payment, (“SFAS 123R”) using the modified prospective method. The new standard requires the Company to estimate the value of stock options issued to employees, including options to purchase shares under its Employee Stock Purchase Plan, and recognize the estimated cost in earnings over the period in which the options vest. Prior to the adoption of SFAS 123R, the Company used the intrinsic value method outlined in Accounting Principles Board Opinion No. 25 to account for stock-based compensation. For the three months ended September 30, 2006, the Company recognized stock-based compensation expense of $3.8 million ($2.6 million after tax), or $0.03 per diluted share. For the six months ended September 30, 2006, the Company recognized stock-based compensation expense of $6.5 million ($4.6 million after tax), or $0.05 per diluted share. Since the Company adopted SFAS 123R prospectively, no stock-based compensation expense was reflected in earnings prior to April 1, 2006.

     During the six months ended September 30, 2006, the Company completed four acquisitions with combined annual sales of approximately $80 million. The largest of these acquisitions was the September 2006 purchase of the assets and operations of Houston, Texas-based Aeriform Corporation, a distributor of industrial gases and related hardgoods products with 29 locations in Texas, Louisiana, Oklahoma and Kansas.

     In December 2005, the Company divested its subsidiary, Rutland Tool & Supply Co., Inc. (“Rutland Tool”). As a result of the divestiture, the Company classified the operating results of Rutland Tool as “discontinued operations” for the three and six month periods ended September 30, 2005. Rutland Tool generated annual sales of approximately $50 million and an insignificant amount of operating income. The results of Rutland Tool were previously reflected in the Distribution business segment.

     Effective July 25, 2006, the Company amended and restated its senior credit facility with a syndicate of lenders. The $1.6 billion senior unsecured credit facility (the “Credit Agreement”) consists of a US$966 million and C$40 million (US$34 million) revolving credit line and two deferred draw term loans totaling $600 million. The Company intends to use borrowings under the revolving credit line for working capital, acquisitions and general corporate purposes. The Company utilized a $100 million term loan to refinance the Company’s 7.75% medium-term notes in September 2006. The Company intends to use borrowings of up to $500 million from the second term loan to finance certain contemplated acquisitions. If the contemplated acquisitions are not completed, the outstanding commitment for the unused portion of the second term loan will expire no later than May 2007.

32

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     On September 27, 2006, the Company announced that it elected to redeem its 9.125% senior subordinated notes due October 1, 2011 (the “Notes”). On October 27, 2006, the Company redeemed the $225 million notes in full at a premium of 104.563% of the principal amount. In conjunction with the redemption of the Notes, the Company will recognize a charge on the early extinguishment of debt of approximately $12 million ($8 million after tax, or $0.10 per diluted share) in October 2006. The charge relates to the redemption premium and the write-off of unamortized debt issuance costs. Based on current interest rates under the revolving credit facility, interest savings are estimated to be $500 thousand per month.

     Looking forward, the Company expects net earnings to range from $0.37 to $0.39 per diluted share in its fiscal third quarter ending December 31, 2006 and $1.83 to $1.88 per diluted share for the full 2007 fiscal year. The earnings guidance for the third quarter and fiscal 2007 include a $0.10 per diluted share charge related to the early extinguishment of debt, noted above.

33

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2005

STATEMENT OF EARNINGS COMMENTARY

Net Sales

     Net sales increased 13% in the quarter ended September 30, 2006 compared to the quarter ended September 30, 2005 reflecting continued strong same-store sales growth and acquisitions. Same-store sales growth reflected pricing initiatives, volume growth and strategic product sales gains, all benefiting from the continued strength of the industrial economy. On a same-store basis, sales increased 11% versus the prior year quarter. Acquisitions completed during the current and prior fiscal years also contributed to sales growth.

     The Company estimates same-store sales based on a comparison of current period sales to prior period sales, adjusted for acquisitions and divestitures. The pro-forma adjustments consist of adding acquired sales to, or subtracting sales of divested operations from, sales reported in the prior period. These pro-forma adjustments used in calculating the same-store sales metric are not reflected in the table below. The intercompany eliminations represent sales from the All Other Operations segment to the Distribution segment.

	Three Months Ended
	September 30,
(In thousands)	2006			2005			Increase
Net Sales
Distribution	$	657,327		$	584,698		$	72,629		12	%
All Other Operations		148,071			132,085			15,986		12	%
Intercompany eliminations		(14,651	)		(14,601	)		(50	)
	$	790,747		$	702,182		$	88,565		13	%

     The Distribution segment’s principal products include industrial, medical and specialty gases; cylinder and equipment rental; process chemicals; and hardgoods. Industrial, medical and specialty gases and process chemicals are distributed in cylinders and bulk containers. Equipment rental fees are generally charged on cylinders, cryogenic liquid containers, bulk and micro-bulk tanks, tube trailers and welding equipment. Hardgoods consist of welding consumables and equipment, safety products, and maintenance, repair and operating (“MRO”) supplies.

     Distribution segment sales increased 12% during the current quarter compared to the prior year quarter driven by same-store sales growth of $59 million (11%) and incremental sales contributed by acquisitions of $14 million. An increase in hardgoods sales of $24 million (9%) and gas and rent sales of $35 million (12%) drove the Distribution same-store sales growth. Sales gains of the Company’s core gas and welding hardgoods business reflected continued strong demand from industrial, energy infrastructure and non-residential construction sectors. Hardgoods same-store sales growth reflected higher sales of safety and Radnor^® private-label products. Same-store sales of safety products grew 9% in the current quarter, despite strong post-hurricane sales in the prior year quarter. Radnor products continued to generate above-market sales growth of 12%, which was helped by the publication of a new Radnor products catalog.

34

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The Distribution segment’s same-store sales for gas and rent increased 12% reflecting price increases and volume growth. The impact of price increases reflects pricing actions implemented in June 2006 and November 2005. Sales of industrial gases during the current quarter remained strong reflecting continued momentum in the Company’s core industrial markets. Sales of strategic gas products, including bulk and medical gases, were also significant contributors to sales growth in the current quarter. Bulk gas sales volumes were up due to growth in micro-bulk and higher demand in merchant bulk gases. Medical gas sales growth was attributable to continued success in the hospital sector as well as with the Walk-O₂-Bout™ medical cylinder program. Rental revenues benefited from the Company’s rental welder business that generated over 40% same-store sales growth in the current period. Power plant construction projects and the strengthening non-residential construction market contributed to the increase in demand for welding machines, gases and consumables.

     The All Other Operations segment consists of the Company’s Gas Operations Division and its National Welders joint venture. The Gas Operations Division consists of producers and distributors of gas products, principally of carbon dioxide, dry ice, nitrous oxide, specialty gases, and process chemicals, including anhydrous ammonia. National Welders is a producer and distributor of industrial, medical and specialty gases. All Other Operations’ sales increased $16 million (12%) compared to the prior year quarter resulting from same-store sales growth and acquisitions. Same-store sales growth of 10% was driven by continued sales gains at National Welders and sales growth of dry ice and liquid carbon dioxide. Strong dry ice sales reflect success in the food processing market as well as the Company’s nationwide network of Penguin Brand dry ice retail locations. Acquisitions primarily consisted of the March 2006 acquisition of a packaged gas distributor completed by National Welders.

Gross Profits

     Gross profits do not reflect depreciation expense and distribution costs. The Company reflects distribution costs as elements of Selling, Distribution and Administrative Expenses and recognizes depreciation on all its property, plant and equipment on the income statement line item “Depreciation.” Since some companies may report certain or all of these costs as elements of their Cost of Products Sold, the Company’s gross profits discussed below may not be comparable to those of other entities.

     Gross profits increased 14% resulting principally from sales growth and acquisitions. The gross profit margin increased 60 basis points to 51.1% compared to 50.5% in the prior year quarter.

	Three Months Ended
	September 30,
(In thousands)	2006		2005		Increase
Gross Profits
Distribution	$	327,569	$	287,527	$	40,042	14	%
All Other Operations		76,801		66,798		10,003	15	%
	$	404,370	$	354,325	$	50,045	14	%

     The Distribution segment’s gross profits increased $40 million (14%) compared to the prior year quarter. The Distribution segment’s gross profit margin in the current quarter of 49.8% increased 60 basis points versus 49.2% in the prior year quarter. The improvement in the gross profit margin reflects gas price increases as well as a favorable shift in product mix between gas and rent and hardgoods. Gas and rent carry a higher gross profit than hardgoods products. The mix of gas and rent as a percentage of the Distribution segment’s sales was 52.2% as compared to 51.4% in the prior year quarter. The Company intends to continue to raise prices as necessary to offset rising product, operating and delivery costs.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The All Other Operations segment’s gross profits increased $10 million (15%) primarily from strong sales at National Welders and sales volume growth of carbon dioxide products. The gross profit margin increased 130 basis points to 51.9% from 50.6% in the prior year quarter driven by improved pricing and lower product costs associated with the anhydrous ammonia product line, which was acquired in June 2005.

Operating Expenses

     Selling, distribution and administrative expenses (“SD&A”) consist of labor and overhead associated with the purchasing, marketing and distribution of the Company’s products, as well as costs associated with a variety of administrative functions such as legal, treasury, accounting, tax and facility-related expenses. As a percentage of net sales, SD&A expense decreased 110 basis points to 35.9% compared to 37% in the prior year quarter reflecting improved cost leverage on sales growth and effective cost management. SD&A expenses increased $24 million (9%) primarily from variable operating costs associated with the growth in sales volumes and acquisitions. The increase in SD&A expense is primarily attributable to salaries and wages and distribution-related expenses. The increase in salary and wages reflected increased operational headcounts and overtime to fill cylinders, deliver products and operate facilities to meet the increased customer demand. In addition to normal wage inflation, salaries and wages reflected $3.8 million of stock-based compensation expense in the current quarter. There was no stock-based compensation expense in the prior year quarter. The increase in distribution expenses was attributable to higher fuel and vehicle repair and maintenance costs, which were up approximately $4 million versus the prior year quarter. Higher fuel costs were directly related to the rise in diesel fuel prices over the past year and the increase in miles driven to source gas products and meet customer demand. Operating expenses in the prior year quarter include a loss of $2.8 million associated with hurricanes Katrina and Rita. As compared with the prior year quarter, acquisitions added an estimated $5 million of SD&A expense.

     Depreciation expense of $34 million increased $4 million (13%) compared to the prior year quarter. The increase primarily reflects the current and prior year’s capital investments in revenue generating assets to support customer demand, including cylinders, bulk tanks and rental welders, as well as branch expansions and a new fill plant. Amortization expense of approximately $2 million was $723 thousand higher than the prior year quarter driven by the amortization of customer lists and non-compete agreements associated with acquisitions.

Operating Income

     Operating income increased 34% in the current quarter compared to the prior year quarter. Pricing actions, discussed above, and improved cost leverage on sales growth were the primary contributors to a 170 basis point increase in the operating income margin to 10.7% compared to 9% in the prior year quarter.

	Three Months Ended
	September 30,
(In thousands)	2006		2005		Increase
Operating Income
Distribution	$	63,663	$	46,265	$	17,398	38	%
All Other Operations		20,600		16,758		3,842	23	%
	$	84,263	$	63,023	$	21,240	34	%

     Operating income in the Distribution segment increased 38% in the current quarter. The Distribution segment’s operating income margin increased 180 basis points to 9.7% compared to 7.9% in the prior year quarter.

     Operating income in the All Other Operations segment increased 23% primarily benefiting from the strong business momentum of National Welders as well as the improved anhydrous ammonia business. The segment’s operating income margin increased 120 basis points to 13.9% compared to 12.7% in the prior year quarter.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest Expense and Discount on Securitization of Trade Receivables

     Interest expense, net, and the discount on securitization of trade receivables totaled $18 million representing an increase of 17% compared to the prior year quarter. The increase primarily resulted from higher weighted-average interest rates related to the Company’s variable rate debt instruments and higher average debt levels associated with acquisitions.

     The Company participates in a securitization agreement with two commercial banks to sell up to $250 million of qualifying trade receivables. The amount of outstanding receivables under the agreement was $247 million at September 30, 2006 versus $244 million at March 31, 2006. Net proceeds from the sale of trade receivables were used to reduce borrowings under the Company’s revolving credit facilities. The discount on the securitization of trade receivables represents the difference between the carrying value of the receivables and the proceeds from their sale. The amount of the discount varies on a monthly basis depending on the amount of receivables sold and market rates.

     As discussed in “Liquidity and Capital Resources” and in Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” the Company manages its exposure to interest rate risk of certain borrowings through participation in interest rate swap agreements. Including the effect of the interest rate swap agreements and the trade receivables securitization, the Company’s ratio of fixed to variable rate debt at September 30, 2006 was 51% fixed to 49% variable. On October 27, 2006, the Company redeemed its 9.125% senior subordinated notes. The redemption was financed with the revolving credit agreement. Subsequent to redeeming the 9.125% senior subordinated notes, the Company’s ratio of fixed to variable rate debt was 30% fixed to 70% variable. A majority of the Company’s variable rate debt is based on a spread over the London Interbank Offered Rate (“LIBOR”). Based on the Company’s fixed to variable interest rate ratio subsequent to the redemption of the senior subordinated notes, for every 25 basis point increase in LIBOR, the Company estimates that its annual interest expense would increase approximately $2 million.

Income Tax Expense

     The effective income tax rate was 39.6% of pre-tax earnings in current quarter compared to 37.5% in the prior year quarter. The lower tax rate in the prior year quarter resulted from favorable changes in valuation allowances associated with state tax net operating loss carryforwards and the realization of state tax credits.

Income from Continuing Operations

     Income from continuing operations for the quarter ended September 30, 2006 was $40 million, or $0.49 per diluted share, compared to $29 million, or $0.37 per diluted share, in the prior year quarter.

Income from Discontinued Operations

     In December 2005, the Company divested Rutland Tool. Consequently, the prior period operating results of Rutland Tool were classified as discontinued operations. For the three months ended September 30, 2005, income from discontinued operations, net of tax, was $273 thousand.

Net Earnings

     Net earnings for the quarter ended September 30, 2006 were $40 million, or $0.49 per diluted share, compared to $30 million, or $0.38 per diluted share, in the prior year quarter.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS: SIX MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE SIX MONTHS ENDED SEPTEMBER 30, 2005

STATEMENT OF EARNINGS COMMENTARY

Net Sales

     Net sales increased 13% in the six months ended September 30, 2006 (“current period”) compared to the six months ended September 30, 2005 (“prior year period”) reflecting strong same-store sales growth and acquisitions. Sales growth in the current period reflected the continued strength of the industrial production, energy and non-residential construction markets served by the Company. On a same-store basis, sales increased 10% versus the prior year period with pricing and volume contributing about equally.

	Six Months Ended
	September 30,
(In thousands)	2006			2005			Increase
Net Sales
Distribution	$	1,306,580		$	1,166,216		$	140,364		12	%
All Other Operations		287,856			243,576			44,280		18	%
Intercompany eliminations		(30,653	)		(29,485	)		(1,168	)
	$	1,563,783		$	1,380,307		$	183,476		13	%

     Distribution segment sales increased $140 million (12%) during the current period driven by same-store sales growth of $113 million (10%) and incremental sales contributed by current and prior year acquisitions of $27 million. An increase in higher hardgoods sales of $54 million (10%) and gas and rent sales of $59 million (10%) drove the Distribution same-store sales growth. Broad demand from industrial, energy infrastructure and non-residential construction sectors helped the Company’s core gas and welding hardgoods business. Hardgoods same-store sales growth reflected continued volume and pricing gains. The Company’s successful Radnor private label brand of products generated sales growth of 13% in the current period. Same-store sales of safety products also increased 11% reflecting the success of the telemarketing operations (telesales) and effective cross-selling of safety products to new and existing customers.

     The Distribution segment’s same-store sales for gas and rent increased 10% reflecting price increases and volume growth. The impact of price increases reflects pricing actions implemented in June 2006 and November 2005. Sales of industrial gases during the current period remained strong reflecting demand from the Company’s core industrial markets. Sales of strategic gas products increased 9% in the current period driven by bulk and medical gas sales gains. Bulk gas sales volumes were up related to growth in micro-bulk and the signing of new bulk customer contracts. Medical gas sales growth was attributable to higher demand from the hospital sector as well as success of the Walk-O₂-Bout™ medical cylinder program. Rental revenues benefited from the Company’s rental welder business that generated over 40% same-store sales growth in the current period. The rebuilding effort in the Gulf Coast area, power plant construction projects and the strengthening non-residential construction market contributed to the increase in demand for welding machines, gases and consumables.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     All Other Operations’ sales increased $44 million (18%) compared to the prior year period resulting from same-store sales growth and acquisitions. Same-store sales growth of 10% was driven by continued sales gains of National Welders and growth in carbon dioxide products. Sales of dry ice and liquid carbon dioxide were strong contributors to sales growth in the current period reflecting success in the food processing and industrial carbon dioxide markets and the Company’s nationwide network of Penguin dry ice retail locations. Acquisitions primarily consisted of the June 2005 acquisition of the anhydrous ammonia business, as well as a March 2006 acquisition of a packaged gas distributor by National Welders.

Gross Profits

     Gross profits do not reflect depreciation expense and distribution costs. The Company reflects distribution costs as elements of Selling, Distribution and Administrative Expenses and recognizes depreciation on all its property, plant and equipment on the income statement line item “Depreciation.” Since some companies may report certain or all of these costs as elements of their Cost of Products Sold, the Company’s gross profits discussed below may not be comparable to those of other entities.

     Gross profits increased 14% principally from sales growth and acquisitions. The gross profit margin in the current period was 50.8% compared to 50.5% in the prior year period.

	Six Months Ended
	September 30,
(In thousands)	2006		2005		Increase
Gross Profits
Distribution	$	645,227	$	572,087	$	73,140	13	%
All Other Operations		148,960		125,500		23,460	19	%
	$	794,187	$	697,587	$	96,600	14	%

     The Distribution segment’s gross profits increased $73 million (13%) compared to the prior year period. The Distribution segment’s gross profit margin was 49.4% versus 49.1% in the prior year period. The increase in the gross profit margin reflected the impact of price increases as well as a favorable shift in product mix between gas and rent and hardgoods. Gas and rent carry a higher gross profit than hardgoods products. The mix of gas and rent as a percentage of the Distribution segment’s sales was 51.7% as compared to 51.5% in the prior year period.

     The All Other Operations segment’s gross profits increased $23 million (19%) primarily from strong sales momentum of National Welders and acquisitions. The segment’s gross profit margin increased 20 basis points to 51.7% versus 51.5% in the prior year period. Improvement in pricing and lower product costs associated with the anhydrous ammonia product line contributed to the higher gross profit margin in the current period.

Operating Expenses

     As a percentage of net sales, SD&A expense decreased 110 basis points to 35.8% compared to 36.9% in the prior year period reflecting improved cost leverage and effective cost management. SD&A expenses increased $50 million (10%) primarily from higher variable expenses associated with the growth in sales volumes and the operating costs of acquired businesses. The increase in SD&A expense was primarily attributable to salaries and wages and distribution-related expenses. The increase in salaries and wages reflected increased operational headcounts and overtime to fill cylinders, deliver products and operate facilities to meet increased customer demand. In addition to normal wage inflation, salaries and wages reflected $6.5 million of stock-based compensation expense in the current period. There was no stock-based compensation expense in the prior year period. The increase in distribution expenses was attributable to higher fuel and vehicle repair and maintenance costs, which were up approximately $6 million versus the prior year period. Higher fuel costs were directly related to the rise in diesel fuel prices over the past year and the increase in miles driven to source gas products and meet customer demand. Operating expenses in the prior year period include a loss of $2.8 million associated with hurricanes Katrina and Rita. Acquisitions contributed estimated

39

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

incremental SD&A expenses of $13 million in the current period.

     Depreciation expense of $67 million increased $8 million (14%) compared to the prior year period. Acquired businesses contributed depreciation expense of approximately $1 million. The remainder of the increase primarily reflects the current and prior year’s capital investments in revenue generating assets to support customer demand, primarily cylinders, bulk tanks and rental welders, as well as the addition of a new fill plant and branch stores. Amortization expense of $3.8 million was $1.2 million higher than the prior year period driven by the amortization of customer lists and non-compete agreements associated with acquisitions.

Operating Income

     Operating income increased 29% in the current period driven by higher sales levels. Improved cost leverage on sales growth was the primary contributor to a 130 basis point increase in the operating income margin to 10.4% compared to 9.1% in the prior year period.

	Six Months Ended
	September 30,
(In thousands)	2006		2005		Increase
Operating Income
Distribution	$	124,304	$	94,767	$	29,537	31	%
All Other Operations		38,865		31,260		7,605	24	%
	$	163,169	$	126,027	$	37,142	29	%

     Operating income in the Distribution segment increased 31% in the current period. The Distribution segment’s operating income margin increased 140 basis points to 9.5% compared to 8.1% in the prior year period. The significant margin improvement was driven by continued operating profit leverage on sales growth, the completion of the BOC integration, and effective management of costs and pricing.

     Operating income in the All Other Operations segment increased 24% compared to the prior year period. The segment’s operating income margin of 13.5% was 70 basis points higher than 12.8% in the prior year period. The increases in operating income and operating margin were driven by the strong business momentum of National Welders and the improved anhydrous ammonia business.

Interest Expense and Discount on Securitization of Trade Receivables

     Interest expense, net, and the discount on securitization of trade receivables totaled $35 million representing an increase of 13% compared to the prior year period. The increase primarily resulted from higher weighted-average interest rates related to the Company’s variable rate debt instruments and higher average debt levels associated with acquisitions.

Income Tax Expense

     The effective income tax rate was 38.1% of pre-tax earnings in the current period compared to 37.6% in the prior year period. The effective income tax rate in the current period reflects a $1.8 million, or $0.02 per diluted share, one-time tax benefit associated with a recent change in state income tax law in Texas. The one-time benefit reflects the reduction of deferred tax liabilities previously established for timing differences under the prior state tax law. The tax rate in the prior year period reflects favorable changes in valuation allowances associated with state tax net operating loss carryforwards and the realization of state tax credits. The Company expects the overall effective tax rate for fiscal 2007, including the one-time tax benefit above, to range from 38% to 39% of pre-tax earnings.

40

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Income from Continuing Operations

     Income from continuing operations for the current period ended September 30, 2006 was $78 million, or $0.97 per diluted share, compared to $59 million, or $0.75 per diluted share, in the prior year period.

Income from Discontinued Operations

     In December 2005, the Company divested Rutland Tool. Consequently, the prior period operating results of Rutland Tool were classified as discontinued operations. For the six months ended September 30, 2005, income from discontinued operations, net of tax, was $453 thousand.

Net Earnings

     Net earnings for the six months ended September 30, 2006 were $78 million, or $0.97 per diluted share, compared to $59 million, or $0.76 per diluted share, in the prior year period.

41

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

     Net cash provided by operating activities was $128 million for the six months ended September 30, 2006 compared to $138 million in the comparable prior year period. Net earnings adjusted for non-cash items provided cash of $185 million versus $149 million in the prior year period. Working capital resulted in a use of cash of $63 million in the current period versus $37 million in the prior year period. The use of cash for working capital in the current period principally reflects lower accounts payable associated with the timing of payments to vendors, lower accrued expenses and higher trade receivables from sales growth. The trade receivables securitization provided cash of $3 million versus $20 million in the prior year period. Cash flows of National Welders, in excess of a management fee paid by National Welders to the Company, are not available to the Company. Cash provided by operating activities in the current period included $15 million of cash provided by National Welders versus $9 million in the prior year period. Cash flows provided by operating activities were principally used to fund investing activities.

     Net cash used in investing activities totaled $217 million during the current period and primarily consisted of cash used for capital expenditures and acquisitions. Capital expenditures were $122 million in the current period (including $9 million at National Welders) and primarily relate to spending for cylinders, bulk tanks, rental welding machines and new fill plants. These capital expenditures reflect investments to support the Company’s sales growth initiatives. Cash of $99 million was also used for acquisitions and holdback settlements.

     Financing activities provided net cash of $86 million primarily from net borrowings under the Company’s credit agreement. The additional borrowing was principally used to fund acquisitions. Other sources of cash effectively offset the uses of cash within financing activities.

Dividends

     On May 23, 2006, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.07 per share, which was paid on June 30, 2006 to stockholders of record as of June 15, 2006. On August 9, 2006, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.07 per share, which was paid on September 29, 2006 to stockholders of record as of September 15, 2006. Future dividend declarations and associated amounts paid will depend upon the Company’s earnings, financial condition, loan covenants, capital requirements and other factors deemed relevant by management and the Company’s Board of Directors.

Stock Repurchase Plan

     Due to certain contemplated acquisitions, in July 2006, the Company suspended the three-year share repurchase plan that it initiated in November 2005. No shares of Company common stock were repurchased during the six months ended September 30, 2006. The Company continues to focus on using its cash flow for investing in growth opportunities, including future acquisitions, paying down debt and growing its dividend.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Instruments

Debt Refinancing

     Effective July 25, 2006, the Company amended and restated its senior credit facility with a syndicate of lenders. Subject to compliance with certain covenants, the $1.6 billion senior unsecured credit facility (the “Credit Agreement”) permits the Company to borrow up to $966 million under a U.S. dollar revolving credit line, up to C$40 million (U.S. $34 million) under a Canadian dollar revolving credit line and up to $600 million under two or more term loans. Use of the terms loans is restricted to finance the maturity of certain debt and to finance certain contemplated acquisitions. The Company’s ability to draw on the term loans under the Credit Agreement expires on May 31, 2007. The Credit Agreement will mature on July 25, 2011.

     The Company used borrowings under the term loan provision of the Credit Agreement to finance the $100 million maturity of its 7.75% medium-term notes on September 15, 2006. As of September 30, 2006, the Company had approximately $389 million of borrowings under the credit agreement: $269 million under the U.S. dollar revolver, C$23 million (U.S. $20 million) under the Canadian dollar revolver and a $100 million under a term loan. The term loan is repayable in quarterly installments of $3.75 million between March 31, 2007 and September 30, 2010. The quarterly installments then increase to $11.875 million from September 30, 2010 to maturity on July 25, 2011. The Company also had commitments of $34 million under letters of credit with a financial institution. The U.S. dollar borrowings bear interest at LIBOR plus 75 basis points and the Canadian dollar borrowings bear interest at the Canadian Bankers’ Acceptance Rate plus 75 basis points. As of September 30, 2006, the effective interest rate on the U.S. dollar borrowings and Canadian dollar borrowings were 6.14% and 5.19%, respectively.

     As of September 30, 2006, the financial covenants in the credit agreement permitted the Company to incur $612 million of additional debt. At September 30, 2006, approximately $697 million remained unused under the U.S. dollar revolving credit line, approximately C$17 million (U.S. $14 million) remained unused under the Canadian dollar revolving credit line and $500 million remained unused under the term loans. The Credit Agreement also contains customary events of default, including nonpayment and breach of covenants. In the event of default, repayment of borrowings under the Credit Agreement may be accelerated.

     The Company’s domestic subsidiaries, exclusive of a bankruptcy remote special purpose entity (the “domestic guarantors”), guarantee the U.S. and Canadian borrowings. The Canadian borrowings are also guaranteed by the Company’s foreign subsidiaries. The guarantees are full and unconditional and are made on a joint and several basis. The Company has pledged 100% of the stock of its domestic subsidiaries and 65% of the stock of its foreign subsidiaries as surety for its obligations under the Credit Agreement. The Credit Agreement provides for the release of the guarantees and collateral if the Company attains an investment grade credit rating and a similar release on all other debt.

Money Market Loan

     The Company has an agreement with a financial institution that provides access to short term advances not to exceed $25 million for a maximum term of three months. The agreement expires on April 30, 2007, but may be extended subject to renewal provisions contained in the agreement. The amount, term and interest rate of an advance are established through mutual agreement with the financial institution when the Company requests such an advance. At September 30, 2006, the Company had an outstanding advance under the agreement of $25 million for a term of 91 days bearing interest at 5.89%.

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AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Senior Subordinated Notes

     At September 30, 2006, the Company had $150 million of senior subordinated notes (the “2004 Notes”) outstanding with a maturity date of July 15, 2014. The 2004 Notes bear interest at a fixed annual rate of 6.25%, payable semi-annually on January 15 and July 15 of each year. The 2004 notes have an optional redemption provision, which permits the Company, at its option, to call the 2004 Notes at scheduled dates and prices. The first scheduled optional redemption date is July 15, 2009 at a price of 103.125% of the principal amount.

     In addition to the 2004 Notes, at September 30, 2006, the Company had $225 million of senior subordinated notes (the “2001 Notes”) outstanding with a maturity date of October 1, 2011. The 2001 Notes bear interest at a fixed annual rate of 9.125%, payable semi-annually on April 1 and October 1 of each year. Under the terms of an optional redemption provision, on October 27, 2006, the Company redeemed the $225 million notes in full at a premium of 104.563% of the principal amount with proceeds from the Company’s revolving credit line. In conjunction with the redemption of the Notes, the Company will recognize a charge on the early extinguishment of debt of approximately $12 million ($8 million after tax) in October 2006. The charge relates to the redemption premium and the write-off of unamortized debt issuance costs. Based on current interest rates under the revolving credit facility, interest savings are estimated to be $500 thousand per month.

     The 2004 Notes contain covenants that could restrict the payment of dividends, the repurchase of common stock, the issuance of preferred stock, and the incurrence of additional indebtedness and liens. The 2004 Notes are fully and unconditionally guaranteed jointly and severally, on a subordinated basis, by each of the wholly owned domestic guarantors under the revolving credit facilities. The stock of the Company’s domestic subsidiaries is also pledged to the note holders on a subordinated basis.

Acquisition and Other Notes

     The Company’s long-term debt also included acquisition and other notes principally consisting of notes issued to sellers of businesses acquired and are repayable in periodic installments. At September 30, 2006, acquisition and other notes totaled approximately $3 million with interest rates ranging from 5% to 8.5%.

Financial Instruments of the National Welders Joint Venture

     Pursuant to the requirements of FASB’s Financial Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, (“FIN 46R”), the Company’s Consolidated Balance Sheets at September 30, 2006 and March 31, 2006 include the financial obligations of National Welders. National Welders’ financial obligations are non-recourse to the Company, meaning that the creditors of National Welders do not have a claim on the assets of Airgas, Inc.

     The National Welders Credit Agreement (the “NWS Credit Agreement”) provides for a revolving credit line of $74 million, a Term Loan A of $26 million, a Term Loan B of $21 million, and a Term Loan C of $9 million. At September 30, 2006, National Welders had borrowings under its revolving credit line of $48 million and under Term Loan A of $14 million. There were no amounts outstanding under Term loans B or C at September 30, 2006. National Welders also had $752 thousand in acquisition notes and other debt obligations.

     The revolving credit agreement matures in August 2008. Term Loan A is repayable in monthly amounts of $254 thousand with a lump-sum payment of the outstanding balance at maturity in August 2008. The variable interest rate on the revolving credit line and Term Loan A ranges from LIBOR plus 70 to 145 basis points varying with National Welders’ leverage ratio. At September 30, 2006, the effective interest rate for the revolving credit line and Term Loan A was 6.28%. The NWS Credit Agreement also contains certain covenants which, among other things, limit the ability of National Welders to incur and guarantee new indebtedness, and limit its capital expenditures, ownership

44

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

changes, merger and acquisition activity, and the payment of dividends. National Welders had additional borrowing capacity under the NWS Credit Agreement of approximately $26 million at September 30, 2006.

     As of September 30, 2006, the revolving credit line and Term Loan A are secured by certain current assets, principally trade receivables and inventory, totaling $36 million, non-current assets, principally equipment, totaling $103 million, and Airgas common stock with a market value of $33 million classified as treasury stock and carried at cost of $370 thousand.

Trade Receivables Securitization

     The Company participates in a securitization agreement with two commercial banks to sell up to $250 million of qualifying trade receivables. The agreement expires in May 2009, but may be renewed subject to provisions contained in the agreement. During the six months ended September 30, 2006, the Company sold, net of its retained interest, $1,273 million of trade receivables and remitted to bank conduits, pursuant to a servicing agreement, $1,270 million in collections on those receivables. The net proceeds were used to reduce borrowings under the Company’s revolving credit facilities. The amount of outstanding receivables under the agreement was $247 million at September 30, 2006 and $244 million at March 31, 2006, respectively. Effective October 31, 2006, the Company increased the maximum size of the securitization agreement to $270 million of qualifying trade receivables.

Interest Rate Swap Agreements

     The Company manages its exposure to changes in market interest rates. At September 30, 2006, the Company was party to six interest rate swap agreements. The swap agreements are with major financial institutions and aggregate $150 million in notional principal amount. At September 30, 2006, these swap agreements required the Company to make fixed interest payments based on a weighted average effective rate of 4.98% and receive variable interest payments from its counterparties based on a weighted average variable rate of 5.37%. The remaining terms of each of these swap agreements are between 21 months to 32 months. The Company monitors its positions and the credit ratings of its counterparties and does not anticipate non-performance by the counterparties.

     National Welders was a party to one interest rate swap agreement with a major financial institution with a notional principal amount of $27 million. National Welders is required to make fixed interest payments of 5.36% and receive variable interest payments from its counterparty based on one month LIBOR, which was 5.33% at September 30, 2006. The remaining term of the swap agreement is 32 months.

     Including the effect of the interest rate swap agreements, the debt of National Welders, and the trade receivables securitization, the Company’s ratio of fixed to variable rate debt at September 30, 2006 was 51% fixed to 49% variable. The redemption of 9.125% senior subordinated notes on October 27, 2006 changed the Company’s ratio of fixed to variable rate debt to 30% fixed to 70% variable. A majority of the Company’s variable rate debt is based on a spread over LIBOR. Based on the Company’s fixed to variable interest rate ratio subsequent to the redemption of the 2001 Notes, for every 25 basis point increase in LIBOR, the Company estimates that its annual interest expense would increase approximately $2 million.

45

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Contractual Obligations and Off-Balance Sheet Arrangements

     The following table presents the Company obligations and off-balance sheet arrangements as of September 30, 2006.

(In thousands)				Payments Due by Period
Contractual and Off-Balance Sheet					Remainder of			1 to 3 Years			3 to 5 Years			More than 5
Obligations	Total				fiscal 2007 (a)			(a)			(a)			Years (a)
Obligations reflected on the September 30, 2006 Balance Sheet:
Long-term debt (1)	$	854,646			$	27,477		$	90,971		$	47,219		$	688,979
Off-balance sheet obligations as of September 30, 2006:
Estimated interest payments on long-term debt (2)		252,957				25,779			98,090			89,058			40,030
Estimated payments (receipts) on interest rate swap agreements (3)		(1,269	)			(293	)		(878	)		(98	)		—
Operating leases (4)		161,455				27,913			79,892			41,532			12,118
Trade receivables securitization (5)		247,100				—			—			247,100			—
Estimated discount on securitization (6)		35,780				6,709			26,835			2,236			—
Letters of credit (7)		34,426				34,426			—			—			—
Purchase obligations:
Liquid bulk gas supply agreements (8)		782,393				42,358			150,639			144,270			445,126
Liquid carbon dioxide supply agreements (9)		154,002				6,630			18,416			15,456			113,500
Ammonia supply agreements (10)		4,978				4,978			—			—			—
Other purchase commitments (11)		8,247				7,830			278			139			—
Total	$	2,534,715			$	183,807		$	464,243		$	586,912		$	1,299,753

(a)

The remainder of Fiscal 2007 column relates to obligations due during the period October 1, 2006 through March 31, 2007. The 1 to 3 years column relates to obligations due in fiscal years ended March 31, 2008 and 2009. The 3 to 5 years column relates to obligations due in fiscal years ended March 31, 2010 and 2011. The more than 5 years column relates to obligations due in fiscal years ended March 31, 2012 and beyond.

(1)

Aggregate long-term debt instrument maturities are reflected as of September 30, 2006, as adjusted to reflect the October 27, 2006 early extinguishment of $225 million of senior subordinated notes originally due October 1, 2011. Maturities were adjusted to provide more meaningful information about the Company’s obligations and commitments to make future payments under its debt instruments. The senior subordinated notes were redeemed by borrowing under the revolving credit facility which matures in July 2011. Long-term debt includes capital lease obligations, which were not material and, therefore, did not warrant separate disclosure. See Note 10 to the Consolidated Financial Statements for more information regarding long-term debt instruments.

46

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(2)	The future interest payments on the Company’s long-term debt obligations were estimated based on the maturities reflected in the contractual obligation table as described in (1) above and interest rates as of September 30, 2006. The estimated interest payments may differ materially from those presented above based on actual amounts of long-term debt outstanding and actual interest rates in future periods.
(3)	Payments or receipts under interest rate swap agreements result from changes in market interest rates compared to contractual payments to be exchanged between the parties to the agreements. The estimated receipts in future periods were determined based on interest rates as of September 30, 2006. Actual receipts or payments may differ materially from those presented above based on actual interest rates in future periods.
(4)	The Company’s operating leases at September 30, 2006 includes approximately $123 million in fleet vehicles under long-term operating leases. The Company guaranteed a residual value of $15 million related to its leased vehicles.
(5)	The Company participates in a securitization agreement with two commercial banks to sell up to $250 million of qualifying trade receivables. Effective October 31, 2006, the Company increased the maximum size of the securitization agreement to $270 million of qualifying trade receivables. The agreement expires in May 2009, but may be renewed subject to provisions contained in the agreement. Under the securitization agreement, on a monthly basis, eligible trade receivables are sold to two commercial banks through a bankruptcy-remote special purpose entity. Proceeds received from the sale of receivables were used by the Company to reduce its borrowings on its revolving credit facilities. The securitization agreement is a form of off-balance sheet financing. Also see Note 5 to the Consolidated Financial Statements.
(6)	The discount on the securitization of trade receivables represents the difference between the carrying value of the receivables and the proceeds from their sale. The amount of the discount varies on a monthly basis depending on the amount of receivables sold and market interest rates. The estimated discount in future periods is based on receivables sold and interest rates as of September 30, 2006. The actual discount recognized in future periods may differ materially from those presented above based on actual amounts of receivables sold and market rates.
(7)	Letters of credit are guarantees of payment to third parties. The Company’s letters of credit principally back obligations associated with the Company’s self-insured retention on workers’ compensation, automobile and general liability claims. These claims are supported by an arrangement with a financial institution.
(8)	The Company has a 15-year take-or-pay supply agreement, expiring September 1, 2017, under which Air Products and Chemicals, Inc. will supply at least 35% of the Company’s bulk liquid nitrogen, oxygen and argon requirements, exclusive of the volumes produced by the Company and those purchased under The BOC Group, Inc. (“BOC”) supply agreements noted below. Additionally, the Company purchases helium under the terms of the supply agreement. Based on the volume of fiscal 2006 purchases, the Air Products supply agreement represents approximately $47 million in annual liquid bulk gas purchases. The purchase commitments for future periods contained in the table above reflect estimates based on fiscal 2006 purchases.
	In July 2004, the Company entered into a 15-year take-or-pay supply agreement with BOC to purchase oxygen, nitrogen and argon. The agreement was entered into in conjunction with the July 2004 acquisition of BOC’s U.S. packaged gas business. The agreement will expire in July 2019. The 2004 BOC agreement represents approximately $3 million in annual bulk gas purchases. Prior to the acquisition, the Company purchased oxygen, nitrogen and argon under an agreement with BOC which expires in May 2007. Minimum purchases through May 2007 under the pre-acquisition supply agreement are approximately $2.4 million.
	In September and October 2006, the Company entered into 10-year take-or-pay supply agreements with BOC to purchase helium. The total annual commitment amount for these agreements is approximately $23

47

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	million. These new agreements replace the previous two helium supply agreements that were to expire in February 2007 and July 2019.
	Both the Air Products and BOC supply agreements contain market pricing subject to certain economic indices and market analysis. The Company believes the minimum product purchases under the agreements are within the Company’s normal product purchases. Actual purchases in future periods under the supply agreements could differ materially from those presented in the table due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions.
(9)	The Company is a party to long-term take-or-pay supply agreements for the purchase of liquid carbon dioxide. The aggregate obligations under the supply agreements represent approximately 20% of the Company’s annual carbon dioxide requirements. The purchase commitments for future periods contained in the table above reflect estimates based on fiscal 2006 purchases. The Company believes the minimum product purchases under the agreements are within the Company’s normal product purchases. Actual purchases in future periods under the carbon dioxide supply agreements could differ materially from those presented in the table due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions. Certain of the liquid carbon dioxide supply agreements contain market pricing subject to certain economic indices.
(10)	The Company purchases ammonia from a variety of sources. With one of those sources, the Company has minimum purchase commitments under supply agreements, which is perpetual pending a 180-day written notification of termination from either party.
(11)	Other purchase commitments primarily include property, plant and equipment expenditures.

48

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OTHER

New Accounting Pronouncements

     In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments — an amendment of FASB Statements No. 133 and 140. SFAS 155 addresses the application of SFAS 133 to beneficial interests in securitized financial assets. SFAS 155 is effective for fiscal years beginning after September 15, 2006. The Company is currently evaluating the requirements of SFAS 155 and has not yet determined the impact on its consolidated financial statements.

     In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets — an amendment of FASB Statement No. 140. SFAS 156 requires that an entity recognize a servicing asset or liability each time it undertakes an obligation to service a financial asset by entering into a service contract under certain situations. SFAS 156 is effective for fiscal years beginning after September 15, 2006. The Company is currently evaluating the requirements of SFAS 156 and has not yet determined the impact on its consolidated financial statements.

     In June 2006, the FASB issued EITF No. 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement. EITF 06-3 requires companies to disclose the presentation of any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer (e.g. sales and use tax) as either gross or net in the accounting principles included in the notes to the financial statements. EITF 06-3 is effective for interim and annual reporting periods beginning after December 15, 2006. The Company will disclose its policy when the EITF is adopted.

     In July 2006, the FASB issued FASB Interpretation (“FIN”) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. The interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the requirements of FIN 48 and has not yet determined the impact on its consolidated financial statements.

     In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when quantifying Misstatements in Current Year Financial Statements (“SAB 108”). The new Staff Accounting Bulletin addresses the methods to be used when assessing the materiality of identified, unadjusted errors or differences between Generally Accepted Accounting Principles (“GAAP”) and company policies on the financial statements. Prior to SAB 108, either a balance sheet approach or an income statement approach was used to make such assessments. Although either approach could result in a different conclusion about materiality, both approaches were acceptable under generally accepted accounting principles. Under SAB 108, both the balance sheet and the income statement approach must now be used to evaluate the materiality of identified errors. SAB 108 is effective for fiscal years ending after November 15, 2006.

     Historically, the Company used the income statement or “rollover” approach when assessing the materiality of differences between GAAP and Company policies. The Company is currently re-evaluating its materiality assessment using the guidance of SAB 108. The SAB 108 approach may change the previous conclusions about the materiality of certain of these differences. In such cases, SAB 108 permits the Company to change its policies to those specified by GAAP and to record the impact of such changes as a cumulative effect adjustment to beginning retained earnings. The Company is evaluating the impact of SAB 108.

49

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This standard defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure about fair value measurements. This pronouncement applies to the fair value requirements as applicable in other accounting standards that require or permit fair value measurements. Accordingly, this statement does not require any new fair value measurement. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating the requirements of SFAS No. 157 and has not yet determined the impact on the consolidated financial statements.

50

AIRGAS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

     This report contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding: the Company’s intention to use up to $500 million in term loan borrowings to finance certain contemplated acquisitions; the Company’s intent to use borrowings under the revolving credit line for working capital, acquisitions and general corporate purposes; interest savings of $500 thousand per month resulting from the redemption of its 9.125% senior subordinated notes; the Company’s expectation that net earnings in the fiscal 2007 third quarter will range from $0.37 to $0.39 per diluted share; the Company’s expectation that net earnings in fiscal 2007 will range from $1.83 to $1.88 per diluted share; the Company’s intention to continue to raise prices as necessary to offset rising product, operating and delivery costs; the Company’s ability to manage its exposure to interest rate risk through the use of interest rate swap agreements; the performance of counterparties under interest rate swap agreements; based on the fixed to variable interest rate ratio subsequent to the redemption of the 9.125% senior subordinated notes, the Company’s estimate that for every 25 basis point increase in LIBOR, annual interest expense will increase approximately $2 million; the Company’s expectation that its overall effective tax rate for fiscal 2007, including the one-time tax benefit, will range from 38% to 39% of pre-tax earnings; the Company’s focus on using its cash flow for growth opportunities, including future acquisitions, paying down debt and growing its dividend; the future payment of dividends; the estimate of future interest payments on the Company’s long-term debt obligations; the estimate of future payments or receipts under interest rate swap agreements; the estimate of future purchase commitments; and the Company’s belief that the minimum product purchases under supply agreements are well within the Company’s normal product purchases.

     These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in any forward-looking statement include, but are not limited to: the inability to close certain contemplated acquisitions and the resulting expiration of the $500 million term loan; fluctuations in interest rates; higher or lower overall tax rates in fiscal 2007 than that estimated by the Company; an increase in debt in future periods and the impact on the Company’s ability to grow its dividend; a lack of available financing necessary to invest in growth opportunities and future acquisitions; a decline in demand from markets served by the Company; adverse customer response to the Company’s strategic product sales initiatives; underlying market conditions; customers’ acceptance of price increases; adverse changes in customer buying patterns; an economic downturn (including adverse changes in the specific markets for the Company’s products); the Company’s inability to meet its earnings estimates; a rise in product costs and/or operating expenses at a rate faster than the Company’s ability to increase prices; higher than estimated interest expense resulting from increases in LIBOR; potential disruption to the Company’s business from integration problems associated with acquisitions; the inability of management to control expenses; a lack of available cash flow necessary to pay future dividends; the inability to pay dividends as a result of loan covenant restrictions; the inability to manage interest rate exposure; unanticipated non-performance by counterparties related to interest rate swap agreements; the effects of competition from independent distributors and vertically integrated gas producers on products, pricing and sales growth; changes in product prices from gas producers and name-brand manufacturers and suppliers of hardgoods; changes in customer demand resulting in the inability to meet minimum product purchases under supply agreements; and the effects of, and changes in, the economy, monetary and fiscal policies, laws and regulations, inflation and monetary fluctuations, 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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

     The Company manages its exposure to changes in market interest rates. The interest rate exposure arises primarily from the interest payment terms of the Company’s borrowing agreements. Interest rate swap agreements are used to adjust the interest rate risk exposures that are inherent in its portfolio of funding sources. The Company has not, and will not establish any interest rate risk positions for purposes other than managing the risk associated with its portfolio of funding sources. The Company maintains the ratio of fixed to variable rate debt within parameters established by management under policies approved by the Board of Directors. Including the effect of interest rate swap agreements on the Company’s debt and off-balance sheet financing arrangements, the Company’s ratio of fixed to variable rate debt was 51% fixed and 49% variable at September 30, 2006. The redemption of $225 million 9.125% senior subordinated notes on October 27, 2006 changed the Company’s ratio of fixed to variable rate debt to 30% fixed to 70% variable. The ratio includes the effect of the fixed to variable rate debt of National Welders. Counterparties to interest rate swap agreements are major financial institutions. The Company has established counterparty credit guidelines and only enters into transactions with financial institutions with long-term credit ratings of ‘A’ or better. In addition, the Company monitors its position and the credit ratings of its counterparties, thereby minimizing the risk of non-performance by the counterparties.

     The table below summarizes the Company’s market risks associated with debt obligations, interest rate swaps and the trade receivables securitization. To provide a more meaningful assessment of those risks, the $225 million fixed rate senior subordinated notes redeemed October 27, 2006 are reflected as borrowings under the variable rate revolving credit facilities used to fund the redemption. For debt obligations and the trade receivables securitization, the table presents cash flows related to payments of principal, interest and the discount on the securitization program by fiscal year of maturity. For interest rate swaps, the table presents the notional amounts underlying the agreements by year of maturity. The notional amounts are used to calculate contractual payments to be exchanged and are not actually paid or received. Fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the period.

	Fiscal Year of Maturity
(In millions)	2007 (a)			2008			2009			2010			2011			2012			Thereafter			Total		Fair Value
Fixed Rate Debt:
Acquisition and other notes	$	—		$	1		$	—		$	2		$	—		$	—		$	—		$	3	$	3
Interest expense	$	0.1		$	0.1		$	0.1		$	0.1		$	—		$	—		$	—		$	0.4
Average interest rate		5.55	%		5.82	%		5.67	%		8.50	%
Senior subordinated Notes due 2014	$	—		$	—		$	—		$	—		$	—		$	—		$	150		$	150	$	141
Interest expense	$	5		$	9		$	9		$	9		$	9		$	9		$	19		$	69
Interest rate		6.25	%		6.25	%		6.25	%		6.25	%		6.25	%		6.25	%		6.25	%
National Welders:
Acquisition and other notes	$	0.8		$	—		$	—		$	—		$	—		$	—		$	—		$	0.8	$	0.8
Interest expense	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Interest rate		7.00	%

52

	Fiscal Year of Maturity
(In millions)	2007 (a)			2008			2009			2010			2011			2012			Thereafter		Total		Fair Value
Variable Rate Debt:
Revolving credit facilities	$	—		$	—		$	—		$	—		$	—		$	514		$	—	$	514	$	514
Interest expense	$	16		$	31		$	31		$	31		$	31		$	11		$	—	$	151
Interest rate (b)		6.07	%		6.07	%		6.07	%		6.07	%		6.07	%		6.07	%
Term loan	$	—		$	15		$	15		$	15		$	31		$	24		$	—	$	100	$	100
Interest expense	$	3		$	6		$	5		$	4		$	3		$	1		$	—	$	22
Interest rate (b)		6.14	%		6.14	%		6.14	%		6.14	%		6.14	%		6.14	%
Money Market Loan	$	25		$	—		$	—		$	—		$	—		$	—		$	—	$	25	$	25
Interest expense	$	0.4		$	—		$	—		$	—		$	—		$	—		$	—	$	0.4
Interest rate (b)		5.89	%
National Welders:
Revolving credit facility	$	—		$	—		$	48		$	—		$	—		$	—		$	—	$	48	$	48
Interest expense	$	1.6		$	3.0		$	1.2		$	—		$	—		$	—		$	—	$	5.8
Interest rate (b)		6.28	%		6.28	%		6.28	%
Term loan A	$	2		$	3		$	9		$	—		$	—		$	—		$	—	$	14	$	14
Interest expense	$	0.4		$	0.8		$	0.2		$	—		$	—		$	—		$	—	$	1.4
Interest rate (b)		6.28	%		6.28	%		6.28	%

	Fiscal Year of Maturity
(In millions)	2007 (a)			2008			2009			2010			2011		2012		Thereafter		Total			Fair Value
Interest Rate Swaps:
6 Swaps (Receive Variable)/Pay Fixed
Notional amounts	$	—		$	—		$	100		$	50		$	—	$	—	$	—	$	150		$	(0.5	)
Swap payments/(receipts)	$	(0.3	)	$	(0.6	)	$	(0.3	)	$	(0.1	)	$	—	$	—	$	—	$	(1.3	)
Variable receive rate = 5.37%
Weighted average pay rate = 4.98%
National Welders:
1 Swap (Receive Variable)/Pay Fixed
Notional amount	$	—		$	—		$	—		$	27		$	—	$	—	$	—	$	27		$	—
Variable receive rate = 5.33%	$	—		$	—		$	—		$	—		$	—	$	—	$	—
Weighted average pay rate = 5.36%
Other Off-Balance Sheet LIBOR-based agreement:
Trade receivables securitization (c)	$	—		$	—		$	—		$	247		$	—	$	—	$	—	$	247		$	247
Discount on securitization	$	7		$	14		$	14		$	2		$	—	$	—	$	—	$	37

53

(a)	Fiscal 2007 financial instrument maturities and interest expense relate to the period October 1, 2006 through March 31, 2007.
(b)	The variable rate of U.S. revolving credit facilities and term loan is based on the average LIBOR rate of outstanding contracts as of September 30, 2006. The variable rate of the Canadian dollar portion of the revolving credit facilities is the rate on Canadian Bankers’ acceptances as of September 30, 2006.
(c)	The trade receivables securitization agreement expires in May 2009, but may be renewed subject to renewal provisions contained in the agreement.

Limitations of the tabular presentation

     As the table incorporates only those interest rate risk exposures that exist as of September 30, 2006, it does not consider those exposures or positions that could arise after that date. In addition, actual cash flows of financial instruments in future periods may differ materially from prospective cash flows presented in the table due to future fluctuations in variable interest rates, debt levels and the Company’s credit rating.

Foreign Currency Rate Risk

     Canadian subsidiaries of the Company are funded in part with local currency debt. The Company does not otherwise hedge its exposure to translation gains and losses relating to foreign currency net asset exposures. The Company considers its exposure to foreign currency exchange fluctuations to be immaterial to its consolidated financial position and results of operations.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

     The Company carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of September 30, 2006. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported in the periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in Internal Control

     There were no changes in internal control over financial reporting that occurred during the quarter ended September 30, 2006 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

54

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is involved in various legal and regulatory proceedings that have arisen in the ordinary course of its business and have not been fully adjudicated. These actions, when ultimately concluded will not, in the opinion of management, have a material adverse effect upon the Company’s consolidated financial position, results of operations or liquidity.

Item 1A. Risk Factors

     There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended March 31, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)	Not applicable
(b)	Not applicable
(c)	Purchase of Equity Securities by the Issuer and Affiliated Purchasers

As a result of certain acquisitions under consideration, the Company suspended its three-year share repurchase plan initiated in November 2005. Accordingly, no shares of the Company’s common stock were repurchased during the six months ended September 30, 2006.

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of the stockholders of the Company was held on August 9, 2006, where the following actions were taken:

(a) The stockholders voted to elect James W. Hovey, Paula A. Sneed and David M. Stout to the Board of Directors. The votes cast for each Director were as follows:

	No. of Shares
	For		Withheld/Against
James W. Hovey		71,325,927		1,386,175
Paula A. Sneed		68,160,503		4,551,599
David M. Stout		67,633,408		5,078,694

(b) The stockholders voted to approve the 2006 Equity Incentive Plan. The votes cast in regard to the action were as follows:

No. of Shares
For	Withheld/Against		Abstain		Broker Non-Votes
41,649,506		24,210,132		338,357		6,514,107

(c) The stockholders voted to approve the Amended and Restated 2003 Employee Stock Purchase Plan. The votes cast in regard to the action were as follows:

No. of Shares
For	Withheld/Against		Abstain		Broker Non-Votes
64,994,509		1,114,470		89,016		6,514,107

55

(d) The stockholders voted to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2007. The votes cast in regard to the action were as follows:

No. of Shares
For	Withheld/Against		Abstain
72,071,789		476,570		163,743

Item 6. Exhibit Listing

     The following exhibits are being filed or furnished as part of this Quarterly Report on Form 10-Q:

Exhibit No.	Description
4	Twelfth Amended and Restated Credit Agreement, dated as of July 25, 2006, among Airgas, Inc., Airgas Canada, Inc., Red-D-Arc Limited, Bank of America, N.A., as U.S. Agent and The Bank of Nova Scotia, as Canadian Agent.
31.1	Certification of Peter McCausland as Chairman and Chief Executive Officer of Airgas, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Robert M. McLaughlin as Senior Vice President and Chief Financial Officer of Airgas, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Peter McCausland as Chairman and Chief Executive Officer of Airgas, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Robert M. McLaughlin as Senior Vice President and Chief Financial Officer of Airgas, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

56

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant and Co-Registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AIRGAS, INC. (Registrant)		AIRGAS EAST, INC. AIRGAS GREAT LAKES, INC. AIRGAS MID AMERICA, INC. AIRGAS NORTH CENTRAL, INC.
BY:	/s/ Robert M. McLaughlin	AIRGAS SOUTH, INC.
	Robert M. McLaughlin  Senior Vice President & Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)	AIRGAS GULF STATES, INC. AIRGAS MID SOUTH, INC. AIRGAS INTERMOUNTAIN, INC. AIRGAS NORPAC, INC. AIRGAS NORTHERN CALIFORNIA NEVADA, INC.
		AIRGAS SOUTHWEST, INC. AIRGAS WEST, INC. AIRGAS SAFETY, INC. AIRGAS CARBONIC, INC. AIRGAS SPECIALTY GASES, INC. NITROUS OXIDE CORP. RED-D-ARC, INC. AIRGAS DATA, LLC
		(Co-Registrant)
		BY:	/s/ Robert M. McLaughlin
			Robert M. McLaughlin  Vice President
		ATNL, INC.
		(Co-Registrant)
		BY:	/s/ Melanie Andrews
			Melanie Andrews  President

DATED: November 9, 2006

57

EX-4

EXHIBIT 4

Note: Pursuant to a request submitted to the Securities and Exchange Commission
for confidential treatment, a portion of section 1.1 of the Twelfth Amended and
Restated Credit Agreement was omitted. The omitted information is marked with
bolded brackets and double asterisks [**]. The omitted information has been
filed separately with the Securities and Exchange Commission.




                          TWELFTH AMENDED AND RESTATED
                                CREDIT AGREEMENT

                            Dated as of July 25, 2006

                                      among

                                  AIRGAS, INC.,
                    AIRGAS CANADA INC. and RED-D-ARC LIMITED,
                                  as Borrowers

                      CERTAIN SUBSIDIARIES OF AIRGAS, INC.
                         FROM TIME TO TIME PARTY HERETO,
                                  as Guarantors

                               THE SEVERAL LENDERS
                         FROM TIME TO TIME PARTY HERETO,

                             BANK OF AMERICA, N.A.,
                                  as U.S. Agent

                                       and

                            THE BANK OF NOVA SCOTIA,
                                as Canadian Agent

                           JPMORGAN CHASE BANK, N.A.,
                              as Syndication Agent,

                              THE BANK OF NEW YORK,
                            THE BANK OF NOVA SCOTIA,
                     BANK OF TOKYO-MITSUBISHI TRUST COMPANY
                                       and
                         PNC BANK, NATIONAL ASSOCIATION,

                           as Co-Documentation Agents,

                                       and

                         BANC OF AMERICA SECURITIES LLC
                                       and
                          J.P. MORGAN SECURITIES INC.,
                  as Joint Lead Arrangers and Co-Book Managers,



                                TABLE OF CONTENTS

                                                                          
ARTICLE I DEFINITIONS.....................................................     1
   1.1   Definitions......................................................     1
   1.2   Computation of Time Periods......................................    26
   1.3   Accounting Terms.................................................    27
ARTICLE II U.S. DOLLAR CREDIT FACILITIES..................................    27
   2.1   U.S. Revolving Loans.............................................    27
   2.2   Competitive U.S. Loan Subfacility................................    29
   2.3   U.S. Letter of Credit Subfacility................................    31
   2.4   U.S. Swingline Loan Subfacility..................................    35
   2.5   U.S. Term Loan...................................................    37
ARTICLE III CANADIAN DOLLAR CREDIT FACILITIES.............................    38
   3.1   Canadian Revolving Loans.........................................    39
   3.2   Canadian Swingline Loan Subfacility..............................    40
   3.3   Canadian Letter of Credit Subfacility............................    41
   3.4   Bankers' Acceptances.............................................    45
   3.5   Removal of a Canadian Borrower...................................    47
   3.6   Reset Mechanism..................................................    47
   3.7   Certain Waivers..................................................    47
ARTICLE IV OTHER PROVISIONS RELATING TO CREDIT FACILITIES.................    47
   4.1   Default Rate.....................................................    47
   4.2   Extension and Conversion.........................................    48
   4.3   Prepayments......................................................    49
   4.4   Termination and Reduction of Commitments; Increase of
         Commitments......................................................    50
   4.5   Fees.............................................................    53
   4.6   Capital Adequacy.................................................    55
   4.7   Inability To Determine Interest Rate.............................    56
   4.8   Illegality.......................................................    56
   4.9   Requirements of Law..............................................    57
   4.10  Taxes............................................................    57
   4.11  Indemnity........................................................    59
   4.12  Payments Generally; Agents' Clawback.............................    59
   4.13  Sharing of Payments..............................................    61
   4.14  Computations; Allocation of Payments Post-Acceleration...........    61
ARTICLE V CONDITIONS......................................................    63
   5.1   Closing Conditions...............................................    63
   5.2   Conditions to all Extensions of Credit...........................    64
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................    65
   6.1   Financial Condition..............................................    65
   6.2   No Change........................................................    66
   6.3   Organization; Existence; Compliance with Law.....................    66
   6.4   Power; Authorization; Enforceable Obligations....................    66
   6.5   No Legal Bar.....................................................    67
   6.6   No Material Litigation...........................................    67
   6.7   No Default.......................................................    67
   6.8   Ownership of Property; Liens.....................................    67
   6.9   Intellectual Property............................................    67
   6.10  No Burdensome Restrictions.......................................    68
   6.11  Taxes............................................................    68
   6.12  ERISA............................................................    68
   6.13  Governmental Regulations, Etc....................................    69




                                        i



                                                                          
   6.14  Subsidiaries.....................................................    69
   6.15  Purpose of Loans and Letters of Credit...........................    69
   6.16  Environmental Matters............................................    70
   6.17  Solvency.........................................................    70
   6.18  Perfection of Security Interests in the Collateral...............    71
   6.19  Perfection Information...........................................    71
ARTICLE VII AFFIRMATIVE COVENANTS.........................................    71
   7.1   Information Covenants............................................    71
   7.2   Preservation of Existence and Franchises.........................    73
   7.3   Books and Records................................................    73
   7.4   Compliance with Law..............................................    73
   7.5   Payment of Taxes and Other Indebtedness..........................    73
   7.6   Insurance........................................................    74
   7.7   Maintenance of Property..........................................    74
   7.8   Use of Proceeds..................................................    74
   7.9   Audits/Inspections...............................................    74
   7.10  Financial Covenants..............................................    74
   7.11  Maintenance of Designation Rights - National Welders Board of
         Directors........................................................    74
   7.12  Additional Guarantors............................................    74
   7.13  Pledged Assets...................................................    75
   7.14  Receivables Financing Further Assurances.........................    76
ARTICLE VIII NEGATIVE COVENANTS...........................................    76
   8.1   Indebtedness.....................................................    76
   8.2   Liens............................................................    77
   8.3   Nature of Business...............................................    77
   8.4   Consolidation, Merger, Amalgamation or Sale......................    77
   8.5   Investments......................................................    78
   8.6   Restricted Payments..............................................    79
   8.7   Payments of Indebtedness, Etc....................................    80
   8.8   Fiscal Year; Organizational Documents............................    80
   8.9   Limitation on Restricted Actions.................................    80
   8.10  Issuance and Sale of Subsidiary Stock............................    81
   8.11  No Further Negative Pledges......................................    81
   8.12  Transactions with Affiliates.....................................    81
ARTICLE IX EVENTS OF DEFAULT..............................................    81
   9.1   Events of Default................................................    81
   9.2   Acceleration; Remedies...........................................    84
ARTICLE X AGENCY PROVISIONS...............................................    85
   10.1  Appointment and Authority........................................    85
   10.2  Rights as a Lender...............................................    85
   10.3  Exculpatory Provisions...........................................    86
   10.4  Reliance by the Agents...........................................    86
   10.5  Delegation of Duties.............................................    87
   10.6  Resignation of Agents............................................    87
   10.7  Non-Reliance on Agents and Other Lenders.........................    88
   10.8  No Other Duties; Etc.............................................    88
   10.9  U.S. Agent May File Proofs of Claim..............................    88
   10.10 Collateral and Guaranty Matters..................................    89
ARTICLE XI MISCELLANEOUS..................................................    89
   11.1  Notices and Other Communications; Facsimile Copies...............    89
   11.2  Right of Set-Off.................................................    91
   11.3  Benefit of Agreement.............................................    91




                                       ii



                                                                          
   11.4  No Waiver; Remedies Cumulative...................................    94
   11.5  Payment of Expenses, Etc.........................................    94
   11.6  Amendments, Waivers and Consents.................................    95
   11.7  Counterparts.....................................................    97
   11.8  Headings.........................................................    97
   11.9  Survival.........................................................    97
   11.10 Governing Law; Submission to Jurisdiction; Venue.................    97
   11.11 Severability.....................................................    99
   11.12 Entirety.........................................................    99
   11.13 Binding Effect; Termination......................................    99
   11.14 Confidentiality..................................................    99
   11.15 Conflict.........................................................   100
   11.16 USA PATRIOT Act Notice...........................................   100
   11.17 Replacement of Lenders...........................................   100
   11.18 Designation as Senior Debt.......................................   101
   11.19 No Advisory or Fiduciary Responsibility..........................   101
ARTICLE XII GUARANTY......................................................   102
   12.1  The Guaranty.....................................................   102
   12.2  Obligations Unconditional........................................   102
   12.3  Reinstatement....................................................   104
   12.4  Certain Additional Waivers.......................................   104
   12.5  Remedies.........................................................   104
   12.6  Rights of Contribution...........................................   104
   12.7  Guarantee of Payment; Continuing Guarantee.......................   104
   12.8  Collateral and Guarantor Release Date; Subsequent
         Collateralization Date...........................................   104




                                       iii



                             SCHEDULES AND EXHIBITS

Schedules

Schedule 1.1A     Excluded Asset Dispositions
Schedule 1.1B     Existing Canadian Letters of Credit
Schedule 1.1C     Existing U.S. Letters of Credit
Schedule 1.1D     National Welder Liens
Schedule 1.1E     Liens
Schedule 2.1(a)   Lenders and Commitments
Schedule 5.1(d)   Legal Opinions
Schedule 6.14     Subsidiaries
Schedule 6.19     Perfection Information
Schedule 8.1      Indebtedness
Schedule 8.5      Investments
Schedule 11.1     Certain Notices

Exhibits

Exhibit 2.1(b)(i)   Form of Notice of U.S. Borrowing
Exhibit 3.1(b)(i)   Form of Notice of Canadian Borrowing
Exhibit 4.2         Form of Notice of Extension/Conversion
Exhibit 4.4         Form of New Commitment Agreement
Exhibit 7.1(c)      Form of Officer's Compliance Certificate
Exhibit 7.12        Form of Joinder Agreement
Exhibit 11.3        Form of Assignment and Assumption


                                       iv


                  TWELFTH AMENDED AND RESTATED CREDIT AGREEMENT

     THIS TWELFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 25,
2006 (the "Credit Agreement"), is by and among AIRGAS, INC., a Delaware
corporation ("Airgas" and also a "Borrower"), AIRGAS CANADA INC., a Canada
corporation, and RED-D-ARC LIMITED, an Ontario corporation, (each a "Canadian
Borrower" and together with Airgas, the "Borrowers"), the Guarantors from time
to time party hereto, the several lenders identified on the signature pages
hereto as Lenders and such other lenders as may from time to time become a party
hereto as Lenders (the "Lenders"), BANK OF AMERICA, N.A., as administrative
agent for the Lenders (in such capacity, the "U.S. Agent") and THE BANK OF NOVA
SCOTIA, as Canadian administrative agent for the Lenders (in such capacity, the
"Canadian Agent").

                                   WITNESSETH

     WHEREAS, Airgas, the Canadian Borrowers and the Guarantors are parties to a
Eleventh Amended and Restated Credit Agreement dated as of January 14, 2005 (as
amended, supplemented or otherwise modified from time to time until (but not
including) the date of this Credit Agreement, the "Existing Credit Agreement")
with the banks, financial institutions and other institutional lenders party
thereto, Bank of America, N.A., as United States administrative agent for such
lenders, and Canadian Imperial Bank of Commerce, as Canadian administrative
agent for such lenders.

     WHEREAS, the parties to this Credit Agreement desire to amend the Existing
Credit Agreement as set forth herein and to restate the Existing Credit
Agreement in its entirety to read as follows.

     WHEREAS, the Credit Parties have requested that the (i) U.S. Revolving
Lenders agree to extend credit to Airgas in an aggregate principal amount of up
to $966,000,000, (ii) U.S. Term Lenders agree to extend credit to Airgas in an
aggregate principal amount of up to $600,000,000 and (iii) Canadian Lenders
agree to extend credit to the Canadian Borrowers in an aggregate principal
amount of up to C$40,000,000, each for the purposes set forth in this Credit
Agreement. The Lenders have indicated their willingness to agree to extend
credit to Airgas and the Canadian Borrowers from time to time in such amount on
the terms and conditions of this Credit Agreement

     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:

                                    ARTICLE I

                                   DEFINITIONS

     1.1 DEFINITIONS.

     As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:

     "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.


                                       1



     "Acquisition", by any Consolidated Party, means the acquisition (whether or
not involving a merger or consolidation) by such Consolidated Party, of (i) to
the extent not constituting a Consolidated Capital Expenditure, all or a
majority of the Capital Stock or all or substantially all of the Property or a
line of business or division of another Person or (ii) all of the remaining
Capital Stock of National Welders not then owned by Airgas and/or its Restricted
Subsidiaries.

     "Additional Commitment" means, with respect to any Person which executes a
New Commitment Agreement in accordance with Section 4.4(b), the commitment of
such Lender in an aggregate principal amount up to the amount specified in such
New Commitment Agreement (i) to (A) make U.S. Revolving Loans in accordance with
the provisions of Section 2.1(a), (B) purchase participation interests in U.S.
Letters of Credit in accordance with the provisions of Section 2.3(c), and (C)
purchase participation interests in the U.S. Swingline Loans in accordance with
the provisions of Section 2.4(b)(iii), and/or (ii) to make U.S. Term Loans in
accordance with the provisions of Section 2.5(a) and/or (iii) to (A) make
Canadian Revolving 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) accept Bankers' Acceptances in
accordance with the provisions of Section 3.4(a).

     "Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the U.S. Agent or the Canadian Agent, as applicable.

     "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
ten percent (10%) 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.


                                       2



     "Applicable Percentage" means, for purposes of calculating the applicable
rate for any day for any U.S. Base Rate Loan, any Eurodollar Loan or any
Canadian Base Rate Loan, the Acceptance Fee, the U.S. Revolving Commitment
Unused Fee, the U.S. Term Commitment Unused Fee, the Canadian Unused Fee, the
issuance fee for standby U.S. Letters of Credit, the drawing fee for trade U.S.
Letters of Credit, the issuance fee for standby Canadian Letters of Credit, the
drawing fee for trade Canadian Letters of Credit, the appropriate applicable
percentage, corresponding to the higher of the long term credit ratings of
Airgas by S&P and Moody's in effect as of such date:

                             Applicable Percentages

                           U.S. Revolving Loans
                           and U.S. Term Loans



                                                                                                                      U.S. Revolving
                             U.S. Revolving Loans                                                                        Commitment
                             and U.S. Term Loans                                 Issuance Fees      Drawing Fees for     Unused Fee,
                             --------------------                              for standby U.S.       trade U.S.         U.S. Term
                                            U.S.                                  Letters of      Letters of Credit     Commitment
              Long term                     Base     Canadian                     Credit and          and trade       Unused Fee and
Pricing        credit         Eurodollar    Rate    Base Rate     Bankers'     standby Canadian    Canadian Letters      Canadian
 Level         rating            Loans     Loans      Loans     Acceptances   Letters of Credit       of Credit         Unused Fee
- -------   ----------------    ----------   -----    ---------   -----------   -----------------   -----------------   --------------
                                                                                              
   I         > or = BBB/         0.500%     0.00%      0.00%       0.500%           0.500%             0.2500%            0.100%
             > or = Baa2
   II         BBB-/Baa3          0.625%     0.00%      0.00%       0.625%           0.625%             0.3125%            0.125%
  III          BB+/Ba1           0.750%     0.00%      0.00%       0.750%           0.750%             0.3750%            0.175%
   IV          BB/Ba2            1.250%    0.250%     0.250%       1.250%           1.250%             0.6250%            0.275%
   V        < or = BB- or        1.750%    0.750%     0.750%       1.750%           1.750%             0.8750%            0.375%
             unrated by
          S&P / < or = Ba3
             or unrated
             by Moody's


     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 (or if Airgas is unrated by
either S&P or Moody's), the Applicable Percentage for such day shall be the
appropriate applicable percentage corresponding to the Pricing Level which is
one Pricing Level lower (with Pricing Level I begin the highest and Pricing
Level V being the lowest) than the Pricing Level corresponding to the higher of
the long term credit ratings of Airgas by S&P and Moody's in effect as of such
date.

     "Application Period" means, in respect of any Asset Disposition, the period
of 360 days (or such shorter period as provided for reinvestment of the proceeds
thereof under any Junior Financing Documentation) following the consummation of
such Asset Disposition.

     "Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

     "Asset Disposition" means any disposition (including pursuant to an Asset
Exchange or a Sale and Leaseback Transaction and including any Involuntary
Disposition) of any or all of the Property (including without limitation the
Capital Stock of a Subsidiary) of any Consolidated Party whether by sale, lease,
licensing, transfer or otherwise; provided, however, that (i) the term "Asset
Disposition" shall be deemed to include any "Asset Sale" (or any comparable
term) under, and as defined in, any Junior Financing Documentation, and (ii) an
issuance of Capital Stock shall not constitute an Asset Disposition.


                                       3



     "Asset Disposition Prepayment Event" means, without duplication, (i) with
respect to any Asset Disposition (other than an Excluded Asset Disposition)
occurring on any date, if any, on which the Applicable Percentage is based on
"Pricing Level IV" or "Pricing Level V", the failure of the Credit Parties to
apply (or cause to be applied) the Net Cash Proceeds of such Asset Disposition
to Eligible Reinvestments during the Application Period for such Asset
Disposition and (ii) as long as the U.S. Term Loan is outstanding, the date five
(5) Business Days prior to the date on which a failure of the Credit Parties to
have applied the Net Cash Proceeds from any "Asset Sale" (or any comparable
term) under, and as defined in, any Junior Financing Documentation in such a
manner as to not create an obligation of Airgas to offer to purchase any
Subordinated Debt with any such Net Cash Proceeds.

     "Asset Exchange" means, in connection with any Asset Disposition by a
Consolidated Party, any substantially contemporaneous exchange of Property of
such Consolidated Party for Property (that would otherwise constitute an
Eligible Reinvestment) of the other party to such Asset Disposition.

     "Attributed Principal Amount" means, on any day, with respect to any
Securitization Transaction, the aggregate amount (with respect to such
transaction, the "Invested Amount") paid to, or borrowed by, such Person as of
such date under the Securitization Transaction, minus the aggregate amount
received by the applicable purchaser of the related Securitization Assets
(including, with respect to the Permitted Receivables Financing, the Receivables
Financier) and applied to the reduction of the Invested Amount under such
Securitization Transaction.

     "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 Canadian Revolving Commitment for acceptance by a Canadian Lender, (b)
denominated in Canadian Dollars and (c) issued and payable only in Canada.

     "Bank of America" means Bank of America, N.A. and its successors.

     "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code or the Bankruptcy and Insolvency Act of Canada, in any case, 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


                                       4



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.

     "BNS" means The Bank of Nova Scotia and its successors.

     "Borrowers" means a collective reference to each of Airgas and the Canadian
Borrowers.

     "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.

     "Canadian Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.

     "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 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 BNS, 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 BNS 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 BNS 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 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
Canadian Revolving Committed Amount pursuant to Section 4.4(b) 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 Canadian Revolving 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 Canadian Revolving 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 Credit Parties" means a collective reference to the Canadian
Borrowers and the Canadian Subsidiary Guarantors, and "Canadian Credit Party"
means any one of them.


                                       5



     "Canadian Dollars" means and "C$" means dollars in lawful currency of
Canada.

     "Canadian Guarantors" means collectively, Airgas, the U.S. Subsidiary
Guarantors and the Canadian Subsidiary Guarantors, and "Canadian Guarantor"
means any one of them.

     "Canadian Issuing Lender" means BNS.

     "Canadian Lenders" means (i) those Lenders that have Canadian Revolving
Commitments and are identified as 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(b), together with their successors
and assigns.

     "Canadian Letter of Credit" means (i) any standby or trade 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. For all
purposes of this Agreement, if on any date of determination a Canadian Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by
reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be "outstanding" in the amount so remaining available to be drawn.

     "Canadian Obligations" means without duplication, (i) all of the
obligations of the Canadian Borrowers and the Canadian Guarantors, in their
capacity as such, to the Canadian Lenders, the Agents and the Collateral Agent,
whenever arising, under this Credit Agreement or any of the other Credit
Documents (including, but not limited to, any interest owed with respect to such
obligations which has accrued after the occurrence of a Bankruptcy Event with
respect to any Canadian Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code) and (ii) all liabilities and
obligations, whenever arising, owing from the Canadian Borrowers to any Canadian
Lender, or any affiliate of a Canadian Lender, arising under any Hedging
Agreement.

     "Canadian Revolving 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 Canadian Revolving Committed Amount, (i) to make Canadian
Revolving Loans in accordance with the provisions of Section 3.1(a), (ii) to
purchase participation


                                       6



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).

     "Canadian Revolving Committed Amount" shall have the meaning assigned to
such term in Section 3.1(a).

     "Canadian Revolving Loans" shall have the meaning assigned to such term in
Section 3.1(a).

     "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 Subsidiary Guarantors" means each of the Persons identified as a
"Canadian Subsidiary Guarantor" on the signature pages hereto and each Person
which may hereafter guaranty the Canadian Obligations by its execution of a
Joinder Agreement pursuant to Section 7.12, together with their successors and
permitted assigns, and "Canadian Subsidiary Guarantor" means any one of them.

     "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 BNS.

     "Canadian Swingline Loan" means a loan made pursuant to and defined in
Section 3.2(a).

     "Canadian Unused Fee" shall have the meaning assigned to such term in
Section 4.5(a)(ii).

     "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.

     "Capital Stock" means (a) in the case of a corporation, capital stock, (b)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

     "Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States, the government of the Canada or any
agency or instrumentality thereof (to the extent that the full faith and credit
of the United States or Canada is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S. Dollar or
Canadian Dollar denominated time deposits and certificates of deposit of (1) any
Lender, (2) any United States or Canadian commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 (or C$800,000,000, as the
case may be) or (3) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or


                                       7



 better by Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 (or C$800,000,000, as the case may
be) for direct obligations issued by or fully guaranteed by the United States or
Canada in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (d).

     "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 BNS 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
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.

     "Closing Date" means July 25, 2006.

     "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.

     "Collateral" means a collective reference to all personal Property with
respect to which Liens in favor of the Collateral Agent are purported to be
granted pursuant to and in accordance with the terms of the Collateral
Documents.

     "Collateral Agent" means Bank of America, in its capacity as collateral
agent under the Collateral Documents, together with any successors or assigns.

     "Collateral and Guarantor Release Date" means the first date, if any, that
occurs after the Closing Date or after a Collateralization Date (a) on which the
Applicable Percentage is based on "Pricing Level I" or "Pricing Level II" and
(b) that the Guaranty Obligations of all of the Guarantors of Airgas'
obligations under the Medium Term Note Indenture (and the Medium Term Notes) and
all Junior Financing Documentation have been released (or will be released
contemporaneously upon the release of the Guarantors hereunder) (it being
understood that a Collateral and Guarantor Release Date may occur more than once
during the term of this Credit Agreement). For purposes of clarification, the
occurrence of a Collateral and Guarantor Release Date shall not result in the
release of Airgas from its obligations under Article XII.

     "Collateral Documents" means a collective reference to the Pledge Agreement
and any other pledge or similar agreement executed and delivered in accordance
with Section 7.13.

     "Collateralization Date" means the first date, if any, following a
Collateral and Guarantor Release Date, on which either (a) the Applicable
Percentage is based on "Pricing Level III", "Pricing Level IV" or "Pricing Level
V" or (b) any Subsidiary of Airgas guarantees Airgas' obligations under the
Medium Term Note Indenture (or the Medium Term Notes) or any Junior Financing
Documentation (it being understood that a Collateralization Date may occur more
than once during the term of this Credit Agreement).

     "Commitment" means (i) with respect to each U.S. Revolving Lender, the U.S.
Revolving Commitment of such Lender, (ii) with respect to each U.S. Term Lender,
the U.S. Term Loan Commitment


                                       8



of such Lender, (iii) with respect to each Canadian Lender, the Canadian
Revolving Commitment of such Lender, (iv) with respect to the U.S. Swingline
Lender, the U.S. Swingline Commitment, (v) with respect to the Canadian
Swingline Lender, the Canadian Swingline Commitment, (v) with respect to the
U.S. Issuing Lenders, 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. Revolving 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. Revolving Lender in accordance with the provisions of Section 2.2, the
fixed rate of interest offered by the U.S. Revolving Lender making the
Competitive U.S. Bid.

     "Competitive U.S. Loan" means a loan made by a U.S. Revolving Lender in its
discretion pursuant to the provisions of Section 2.2.

     "Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties on a consolidated basis during such
period, as determined in accordance with GAAP; provided, however, that
Consolidated Capital Expenditures shall not include (i) capital expenditures
constituting Eligible Reinvestments made with the proceeds of any Asset
Disposition or (ii) Acquisitions.

     "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, (C) depreciation and amortization expense, (D) one-time
cash expenses incurred in connection with the refinancing of the Existing Credit
Agreement, (E) non-cash, non-recurring charges, (F) any losses realized upon the
disposition of Property other than the disposition of Inventory in the ordinary
course of business, (G) other non-cash expenses (excluding any non-cash expense
to the extent that it represents an accrual of or reserve for cash expenses in
any future period) and (H) one-time charges resulting from the permanent closure
of facilities, the termination of employees and other costs directly associated
with the Project OT Acquisition to the extent such charges were incurred not
later than March 31, 2008 and not exceeding $20,000,000 in the aggregate, minus
(iii) an amount which, in the determination of Consolidated Net Income for such
period, has been included for (A) non-cash gains during such period and (B) any
gains realized upon the disposition of Property other than the disposition of
Inventory in the ordinary course of business, all as determined in accordance
with GAAP.

     "Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (i) Consolidated EBITDA for the period of the four
fiscal quarters most recently ended on or prior to such date to (ii)
Consolidated Interest Expense for such period.

     "Consolidated Interest Expense" means, for any period, the sum of (i)
interest expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and Synthetic Leases) of the
Consolidated Parties on a consolidated basis and (ii) the implied interest
component and all other fees and expenses under the Permitted Receivables
Financing.

     "Consolidated Leverage Ratio" means, as of any date of determination, the
ratio of (i) Funded Indebtedness of the Consolidated Parties on a consolidated
basis as of such date to (ii) Consolidated EBITDA for the period of the four
fiscal quarters most recently ended on or prior to such date.

     "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) to the extent not
included in the amount determined pursuant to clause (i) above and to the extent
paid in cash to a


                                       9



Consolidated Party, equity earnings of unconsolidated Affiliates for such period
minus (iii) to the extent included in the amount determined pursuant to clause
(i) above and to the extent not paid in cash to a Consolidated Party, equity
earnings of Affiliates that are not consolidated (on the consolidation basis)
with Airgas for such period, all as determined in accordance with GAAP.

     "Consolidated Parties" means a collective reference to each of Airgas and
its Restricted Subsidiaries.

     "Consolidated Senior Leverage Ratio" means, as of any date of
determination, the ratio of (i) the sum of (A) total Funded Indebtedness (other
than Funded Indebtedness of the types described in clauses (viii), (ix) and (x)
of the definition thereof) of the Consolidated Parties on a consolidated basis
as of such date less (B) the outstanding principal amount of Subordinated Debt
of the Consolidated Parties on a consolidated basis as of such date to (ii)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended on or prior to such date.

     "Credit Documents" means a collective reference to this Credit Agreement,
the Collateral Documents, the Intercreditor Agreement, the U.S. LOC Documents,
the Canadian LOC Documents, Bankers' Acceptances, each Joinder Agreement, the
U.S. Agent's Fee Letter and the Canadian Agent's Fee Letter.

     "Credit Parties" means a collective reference to each of Airgas, the
Canadian Borrowers and the Guarantors.

     "Credit Party Obligations" means without duplication, (i) all of the
obligations of the Borrowers and the Guarantors to the Lenders, the Agents and
the Collateral Agent, whenever arising, under this Credit Agreement or any of
the other Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from the
Borrowers to any Lender, or any affiliate of a Lender, arising under any Hedging
Agreement.

     "Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

     "Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans, participations in LOC Obligations or participations in
U.S. Swingline Loans or Canadian Swingline Loans required to be funded by it
hereunder or create Bankers' Acceptances as required by it hereunder, in each
case, within one Business Day of the date required hereunder, (b) has otherwise
failed to pay over to the applicable Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless such payment is the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

     "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
not a Schedule I 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


                                       10



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.

     "Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the Termination Date. Notwithstanding the preceding sentence,
(i) any Capital Stock that would constitute Disqualified Stock solely because
the holders of the Capital Stock have the right to require Airgas to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock
provide that Airgas may not repurchase or redeem any such Capital Stock pursuant
to such provisions unless such repurchase or redemption complies with Section
8.6 of this Credit Agreement and (ii) the preferred stock issued under the
National Welders Joint Venture shall be deemed not to be "Disqualified Stock".

     "Domestic Subsidiary" means any direct or indirect Subsidiary of Airgas
(other than a direct or indirect Subsidiary of a Foreign Subsidiary) which is
incorporated or organized under the laws of any State of the United States or
the District of Columbia.

     "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the U.S. Agent (and in the case of any assignment by a Canadian
Lender, the Canadian Agent), (ii) in the case of any assignment of a U.S.
Revolving Commitment, each U.S. Issuing Lender and the U.S. Swingline Lender,
(iii) in the case of any assignment of a Canadian Revolving Commitment, the
Canadian Issuing Lender and the Canadian Swingline Lender, and (iv) unless an
Event of Default has occurred and is continuing, Airgas (each such approval in
clauses (i) through (iv) not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, "Eligible Assignee" shall not include Airgas
or any of Airgas' Affiliates or Subsidiaries.

     "Eligible Reinvestment" means (i) any acquisition (whether or not
constituting a capital expenditure, but not constituting an Acquisition) of
assets or any business (or any substantial part thereof) used or useful in the
same or a similar or ancillary line of business as Airgas and its Restricted
Subsidiaries were engaged in on the Closing Date (or any reasonable extensions
or expansions thereof) and (ii) any Permitted Acquisition. The term "Eligible
Reinvestment" shall not include any item which is not a permitted application of
proceeds of an "Asset Sale" (or any comparable term) under, and as defined in,
any Junior Financing Documentation.

     "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.


                                       11



     "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 Base Rate" means, for any Interest Period with respect to a
Eurodollar Loan, the rate per annum equal to the British Bankers Association
LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially
available source providing quotations of BBA LIBOR as designated by the U.S.
Agent from time to time) at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period, for U.S. Dollar deposits
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period. If such rate is not available at such time for any
reason, then the "Eurodollar Rate" for such Interest Period shall be the rate
per annum determined by the U.S. Agent to be the rate at which deposits in U.S.
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

     "Eurodollar Loan" means any Loan bearing interest at a rate determined by
reference to the Eurodollar Rate.

     "Eurodollar Rate" means, for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the U.S. Agent to be equal
to the quotient obtained by dividing (a) the Eurodollar Base Rate for such
Eurodollar Loan for such Interest Period by (b) one minus the Eurodollar Reserve
Percentage for such Eurodollar Loan for such Interest Period.

     "Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"). The Eurodollar Rate for each outstanding Eurodollar
Loan shall be adjusted automatically 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.

     "Excluded Asset Disposition" means, with respect to any Consolidated Party,
any Asset Disposition consisting of (i) the sale, lease, license, transfer or
other disposition of inventory in the ordinary course of such Consolidated
Party's business, (ii) the sale, lease, license, transfer or other disposition
of obsolete machinery and equipment or machinery and equipment no longer used or
useful in the conduct of such Consolidated Party's business, (iii) any sale,
lease, license, transfer or other disposition of Property by such Consolidated
Party to any U.S. Credit Party, (iv) any sale, lease, license, transfer or other
disposition of Property by a Canadian Subsidiary to any Canadian Credit Party,
(v) any portion of an Asset Disposition by such Consolidated Party constituting
a Permitted Investment, (vi) if such Consolidated Party is not a Credit Party,
any sale, lease, license, transfer or other disposition of Property by such
Consolidated Party to any Consolidated Party that is not a Credit Party, (viii)
the sale or disposition of Cash Equivalents for fair market value, (ix) the
disposition of cash in connection with a transaction permitted under the Credit
Agreement, (x) any sale of Securitization Assets by such Consolidated Party to
the Receivables Subsidiary in connection with the Permitted Receivables
Financing, (xi) to the extent constituting an Asset Disposition, the creation of
any Permitted Lien, (xii) any Asset Disposition required or advisable by law,
regulation or Governmental Authority as part of a


                                       12



Permitted Acquisition and (xiii) the sale of the assets identified on Schedule
1.1A; provided, however, that the term "Excluded Asset Disposition" shall not
include (A) any Asset Disposition to the extent that any portion of the proceeds
of such Asset Disposition would be required under any Junior Financing
Documentation to be applied to permanently retire Indebtedness of the
Consolidated Parties and (B) any transfer of assets to any Person identified on
Schedule 1.1A by a Consolidated Party not identified on Schedule 1.1A to the
extent such transfer of assets was made in contemplation of an Asset Disposition
permitted by clause (xiii) above.

     "Executive Officer" means, in respect of any Person, the chief executive
officer, chief operating officer, treasurer or chief financial officer of such
Person.

     "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 Credit Agreement" shall have the meaning assigned to such term in
the recitals hereof.

     "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.

     "Federal Funds Rate" means, for any day, the rate per annum 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 as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the U.S. Agent.

     "Foreign Subsidiary" means any direct or indirect Subsidiary of Airgas
which is not is incorporated or organized under the laws of any State of the
United States or the District of Columbia.

     "Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

     "Funded Indebtedness" means, with respect to any Person, 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 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 implied principal component 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 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


                                       13



any Consolidated Party that would otherwise be included in such calculation),
(viii) the principal portion of all obligations of such Person under Synthetic
Leases, (ix) all Disqualified Stock of such Person, and (x) the outstanding
Attributed Principal Amount under any Securitization Transaction, and (xi) all
Funded Indebtedness of others secured by (or for which the holder of such Funded
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. The Funded Indebtedness of any Person (a) 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 and (b) shall not include any Indebtedness
of a Consolidated Party owing to another Consolidated Party.

     "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.

     "Guarantors" means collectively, the U.S. Subsidiary Guarantors and the
Canadian Guarantors, and "Guarantor" means any one of them.

     "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.

     "Hedging Agreements" means any interest rate protection agreement,
commodities purchase agreement or foreign currency exchange agreement.

     "Immaterial Foreign Subsidiary" means, at any time, any Foreign Subsidiary
that does not (a) have total revenues for the most recently ended fiscal year in
excess of $5,000,000 and (b) together with the other Foreign Subsidiaries for
which the Credit Parties have not (i) delivered pledge or similar agreements
that are governed by the laws of the jurisdictions of organization of such
Foreign Subsidiaries and (ii) provided legal opinions of foreign counsel with
respect to such Foreign Subsidiaries in connection with the execution of Joinder
Agreements by such Foreign Subsidiaries and the pledge of the Capital Stock of
such Foreign Subsidiaries pursuant to the Collateral Documents, have aggregate
total revenues for the most recently ended fiscal year in excess of $15,000,000.

     "Indebtedness" of any Person means, without duplication, (i) all Funded
Indebtedness of such Person, (ii) all Guaranty Obligations of such Person, (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


                                       14



business) and (iv) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements. The Indebtedness of any Person (a)
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 (b) shall not include any Indebtedness
of a Consolidated Party owing to another Consolidated Party.

     "Intercreditor Agreement" means that certain Intercreditor Agreement dated
as of the Closing Date among the Agents and the Lenders.

     "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 Canadian
Revolving Loan, the first Business Day of each calendar month, the date of
repayment of principal of such Loan and the Termination Date and (iii) 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.

     "Investment" in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
assets (other than equipment, inventory and supplies in the ordinary course of
business and other than any acquisition of assets constituting a Consolidated
Capital Expenditure), Capital Stock, bonds, notes, debentures, partnership,
joint ventures or other ownership interests or other securities of such other
Person, (b) any deposit with, or advance, loan or other extension of credit to,
such Person (other than deposits made in connection with the purchase of
equipment, inventory and supplies in the ordinary course of business) or (c) any
other capital contribution to or investment in such Person, including, without
limitation, any Guaranty Obligations (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such Person
and any portion of an Asset Disposition (other than an Excluded Asset
Disposition) to such Person for consideration less than the fair market value of
the Property disposed in such transaction, but excluding any Restricted Payment
to such Person. Investments which are capital contributions or purchases of
Capital Stock which have a right to participate in the profits of the issuer
thereof shall be valued at the amount actually contributed or paid to purchase
such


                                       15



Capital Stock as of the date of such contribution or payment. Investments which
are loans, advances, extensions of credit or Guaranty Obligations shall be
valued at the principal amount of such loan, advance or extension of credit
outstanding as of the date of determination or, as applicable, the principal
amount of the loan or advance outstanding as of the date of determination
actually guaranteed by such Guaranty Obligation.

     "Involuntary Disposition" means any loss of, damage to or destruction of,
or any condemnation or other taking for public use of, any Property of any
Consolidated Party.

     "ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).

     "Joinder Agreement" means a Joinder Agreement substantially in the form of
Exhibit 7.12 hereto, executed and delivered by a Person required to become a
Guarantor in accordance with the provisions of Section 7.12.

     "Junior Financing Documentation" means (i) the Subordinated Note
Indentures, (ii) the Subordinated Notes and (iii) any other documentation
governing any Subordinated Debt.

     "Lenders" means each Canadian Lender, each U.S. Revolving Lender and each
U.S. Term Lender and, as the context requires, the U.S. Issuing Lenders, the
Canadian Issuing Lender, the U.S. Swingline Lender and the Canadian Swingline
Lender, 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 U.S. Revolving Loans and the U.S. Term Loans,
the Competitive U.S. Loans, the Canadian Revolving Loans, the BA Outstandings,
the U.S. Swingline Loans and/or the Canadian Swingline Loans, individually or
collectively, as appropriate.

     "LOC Obligations" means the U.S. LOC Obligations and the Canadian LOC
Obligations.

     "Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets or liabilities
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.

     "Maximum Increase Amount" means, as of any date of determination, an amount
equal to the lesser of (a) the aggregate principal repayments made by Airgas on
the U.S. Term Loan prior to such date and (b) $200,000,000.


                                       16



     "Medium Term Notes" means any one of the notes issued by Airgas in favor of
the Medium Term Noteholders pursuant to the Medium Term Note Indenture, as such
Medium Term Notes may be amended, modified, restated or supplemented and in
effect from time to time in accordance with the terms hereof.

     "Medium Term Note Indenture" means a collective reference to that certain
Indenture dated as of August 1, 1996, among Airgas and The Bank of New York as
Trustee, as such Medium Term Note Indenture may be amended, modified, restated
or supplemented and in effect from time to time in accordance with the terms
hereof.

     "Medium Term Noteholder" means any one of the holders from time to time of
the Medium Term Notes.

     "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.

     "Net Cash Proceeds" means the aggregate cash or Cash Equivalents proceeds
received by any Consolidated Party in respect of any Asset Disposition, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions), (b) taxes paid or payable as a
result thereof or in connection therewith or attributable thereto and (c) the
amount necessary to retire any Indebtedness secured by a Permitted Lien (ranking
senior to any Lien of the U.S. Agent) on the related Property; it being
understood that "Net Cash Proceeds" shall include, without limitation, any cash
or Cash Equivalents received upon the sale or other disposition of any non-cash
consideration received by any such Consolidated Party in any Asset Disposition.
In addition, the "Net Cash Proceeds" of any Asset Disposition shall include any
other amounts which constitute "Net Proceeds" (or any comparable term) of such
transaction under, and as defined in, any Junior Financing Documentation.

     "New Commitment Agreement" shall have the meaning assigned to such term in
Section 4.4(b).

     "Non-Excluded Taxes" shall have the meaning assigned to such term in
Section 4.10.

     "Notice of Borrowing" means (a) in the case of U.S. Revolving Loans or the
U.S. Term Loan, a written notice of borrowing in substantially the form of
Exhibit 2.1(b)(i), as required by Section 2.1(b)(i) or Section 2.5(b), as
applicable, or (b) in the case of Canadian Revolving Loans, a written notice of
borrowing in substantially the form of Exhibit 3.1(b)(i).


                                       17



     "Notice of Extension/Conversion" means the written notice of extension or
conversion in substantially the form of Exhibit 4.2, as required by Section 4.2.

     "Operating Accounts" shall have the meaning assigned to such term in
Section 3.2(a).

     "Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.

     "Participant" shall have the meaning assigned to such term in Section
11.3(d).

     "PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereof.

     "Permitted Acquisition" means an Acquisition by Airgas or any Subsidiary of
Airgas permitted pursuant to the terms of Section 8.5(i).

     "Permitted Investments" means, at any time, Investments by the Consolidated
Parties permitted to exist at such time pursuant to the terms of Section 8.5.

     "Permitted Liens" means:

          (i) Liens arising under the Collateral Documents;

          (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;


                                       18



          (vi) easements, rights-of-way, restrictions (including zoning
     restrictions), minor defects or irregularities in title and other similar
     charges or encumbrances not, in any material respect, impairing the use of
     the encumbered Property for its intended purposes;

          (vii) Liens existing as of the Closing Date and set forth on Schedule
     1.1E;

          (viii) Liens on Property of any Person securing purchase money
     Indebtedness, Capital Leases and Synthetic Leases of such Person, provided
     that (a) any such Lien attaches to such Property (and only such Property)
     concurrently with or within 90 days after the incurrence of the
     Indebtedness secured thereby; (b) the Indebtedness secured thereby shall
     not exceed the purchase price of the asset(s) financed and (c) the
     aggregate principal amount of all Indebtedness secured thereby does not
     exceed $25,000,000;

          (ix) Liens on Property of any Person securing Indebtedness (other than
     purchase money Indebtedness and obligations under Capital Leases or
     Synthetic Leases) assumed or acquired by the Consolidated Parties in
     connection with a Permitted Acquisition, provided that (a) no such Lien
     shall at any time be extended to or cover any Property other than the
     Property subject thereto on the date the related Permitted Acquisition is
     consummated, (b) the Indebtedness secured by such Lien was not created in
     anticipation of the related Permitted Acquisition and (c) the aggregate
     principal amount of all Indebtedness secured thereby does not exceed
     $50,000,000;

          (x) leases or subleases granted to others not interfering in any
     material respect with the business of any Consolidated Party;

          (xi) any interest of title of a lessor under, and Liens arising from
     Uniform Commercial Code financing statements (or equivalent filings,
     registrations or agreements in foreign jurisdictions) relating to, leases
     permitted by this Credit Agreement;

          (xii) normal and customary rights of setoff upon deposits of cash in
     favor of banks or other depository institutions;

          (xiii) during the 180-day period immediately succeeding the first date
     as of which National Welders becomes a Restricted Subsidiary, if ever, the
     National Welders Liens;

          (xiv) Liens in favor of the Receivables Subsidiary or Receivables
     Financier created or deemed to exist in connection with the Permitted
     Receivables Financing (including any related filings of any financing
     statements), but only to the extent that any such Lien relates to the
     Securitization ASSETS actually sold, contributed, financed or otherwise
     conveyed or pledged pursuant to such transaction; and

          (xv) other Liens not described above, provided that such Liens do not
     secure obligations in excess of $25,000,000 at any one time outstanding.

     "Permitted Receivables Financing" means (a) that certain Securitization
Transaction pursuant to the Receivables Purchase Agreement dated as of December
19, 2002 among the Receivables Subsidiary, Airgas, the Amended and Restated
Receivables Financiers party thereto and PNC Bank, National Association, as
administrator, as such agreement has been amended, modified, extended, replaced,
restated or substituted from time to time prior to the Closing Date or as such
agreement may hereafter be amended, modified, extended, replaced, restated or
substituted in accordance with the terms of this Credit Agreement; provided that
(i) such Securitization Transaction shall not involve any recourse to any
Consolidated Party for any reason other than (A) repurchases of non-eligible
receivables and (B) indemnifications for losses other than credit losses related
to the receivables sold in such financing and (ii) the documentation for such


                                       19



Securitization Transaction shall not be amended or modified, in any way that is
adverse to Airgas or the Lenders in any material respect, without the prior
approval of the U.S. Agent and (b) any other Securitization Transaction on
substantially similar terms as the transaction described in the forgoing clause
(a).

     "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.

     "Pledge Agreement" means the Amended and Restated Pledge Agreement dated as
of the Closing Date among the Collateral Agent and the U.S. Credit Parties, as
amended, modified, restated or supplemented from time to time.

     "Pro Forma Basis" means, for purposes of calculating (utilizing the
principles set forth in the second paragraph of Section 1.3) compliance with
each of the financial covenants set forth in Section 7.10 in respect of a
proposed transaction, that such transaction shall be deemed to have occurred as
of the first day of the four fiscal-quarter period ending as of the most recent
fiscal quarter end preceding the date of such transaction with respect to which
the U.S. Agent has received the Required Financial Information. As used herein,
"transaction" shall mean (i) any incurrence or assumption of Indebtedness as
referred to in Section 8.1(a)(iv), (ii) any Asset Disposition as referred to in
Section 8.4(b), (iii) any Acquisition as referred to in Section 8.5(i) and (iv)
any Restricted Payment as referred to in Section 8.6(iii). In connection with
any calculation of the financial covenants set forth in Section 7.10 upon giving
effect to a transaction on a Pro Forma Basis:

          (A) for purposes of any such calculation in respect of any incurrence
     or assumption of Indebtedness as referred to in Section 8.1(a)(iv), any
     Indebtedness which is retired in connection with such incurrence or
     assumption shall be excluded and deemed to have been retired as of the
     first day of the applicable period;

          (B) for purposes of any such calculation in respect of any Asset
     Disposition as referred to in Section 8.4(b), (1) income statement items
     (whether positive or negative) attributable to the Property disposed of
     shall be excluded and (2) any Indebtedness which is retired in connection
     with such transaction shall be excluded and deemed to have been retired as
     of the first day of the applicable period;

          (C) for purposes of any such calculation in respect of any Acquisition
     as referred to in Section 8.5(i), (1) any Indebtedness incurred by any
     Consolidated Party in connection with such transaction (x) shall be deemed
     to have been incurred as of the first day of the applicable period and (y)
     if such Indebtedness has a floating or formula rate, shall have an implied
     rate of interest for the applicable period for purposes of this definition
     determined by utilizing the rate which is or would be in effect with
     respect to such Indebtedness as at the relevant date of determination, (2)
     income statement items (whether positive or negative) attributable to the
     Person or Property acquired shall be included beginning as of the first day
     of the applicable period and (3) pro forma adjustments may be included to
     the extent that such adjustments meet the requirements of Regulation S-X
     under the Securities Act of 1933, as amended, and all other accounting
     rules and regulations of the SEC promulgated thereunder; and

          (D) for purposes of any such calculation in respect of any Restricted
     Payment as referred to in Section 8.6(iii), (1) any Indebtedness incurred
     by any Consolidated Party in


                                       20



     connection with such transaction (x) shall be deemed to have been incurred
     as of the first day of the applicable period and (y) if such Indebtedness
     has a floating or formula rate, shall have an implied rate of interest for
     the applicable period for purposes of this definition determined by
     utilizing the rate which is or would be in effect with respect to such
     Indebtedness as at the relevant date of determination.

     "Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of Airgas delivered to the U.S. Agent in connection with (i) any
incurrence, assumption or retirement of Indebtedness as referred to in Section
8.1(a)(iv), (ii) any Asset Disposition as referred to in Section 8.4(b), (iii)
any Acquisition as referred to in Section 8.5(i) or (iv) any Restricted Payment
as referred to in Section 8.6(iii), as applicable, and containing reasonably
detailed calculations, upon giving effect to the applicable transaction on a Pro
Forma Basis, of the Consolidated Leverage Ratio and the Consolidated Interest
Coverage Ratio as of the most recent fiscal quarter end preceding the date of
the applicable transaction with respect to which the U.S. Agent shall have
received the Required Financial Information.

     "Project OT Acquisition" means the acquisition, through a purchase of
stock, assets or otherwise, by Airgas of the type of [**] assets or business
located in the United States or Canada as generally identified by Airgas to the
Lenders in the Confidential Offering Memorandum dated April, 2006.

[**] - Confidential treatment requested.

     "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.

     "Receivables Financier" means any of the "Conduit Purchasers" or "Related
Committed Purchasers" as such terms are defined in the documents governing a
Permitted Receivables Financing.

     "Receivables Subsidiary" means (i) Radnor Funding Corp., a Delaware
corporation, and (ii) any other Subsidiary or Affiliate of Airgas to which any
Consolidated Party sells, contributes or otherwise conveys any Securitization
Assets in connection with a Permitted Receivables Financing.

     "Redemption Obligation" means the contingent liability of any Consolidated
Party with respect to cash redemption obligations relating to any Capital Stock
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, U, or X" means Regulation D, 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.

     "Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.

     "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).


                                       21



     "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. Section 2615.

     "Required Canadian Lenders" means, at any time, Lenders holding in the
aggregate more than 50% of (a) the unfunded Commitments denominated in Canadian
Dollars and the outstanding Loans denominated in Canadian Dollars, Canadian LOC
Obligations and participations therein or (b) if the Commitments denominated in
Canadian Dollars have been terminated, the outstanding Loans denominated in
Canadian Dollars, Canadian LOC Obligations and participations therein. The
unfunded Commitments of, and the outstanding Canadian Obligations held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Canadian Lenders.

     "Required Financial Information" means, with respect to the last day of any
fiscal quarter of Airgas, (i) the financial statements of the Consolidated
Parties required to be delivered pursuant to Section 7.1(a) or (b) for the
fiscal period or quarter ending as of such date, and (ii) the certificate of an
Executive Officer of Airgas required by Section 7.1(c) to be delivered with the
financial statements described in clause (i) above.

     "Required Lenders" means, at any time, Lenders holding in the aggregate
more than 50% of (a) the unfunded Commitments and the outstanding Loans (other
than Competitive U.S. Loans at any time prior to the termination of the U.S.
Revolving Commitments), LOC Obligations and participations therein or (b) if the
Commitments have been terminated, the outstanding Loans, LOC Obligations and
participations therein. The unfunded Commitments of, and the outstanding Credit
Party Obligations held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

     "Required U.S. Lenders" means, at any time, Lenders holding in the
aggregate more than 50% of (a) the unfunded Commitments denominated in U.S.
Dollars and the outstanding Loans denominated in U.S. Dollars (other than
Competitive U.S. Loans at any time prior to the termination of the U.S.
Revolving Commitments), U.S. LOC Obligations and participations therein or (b)
if the Commitments denominated in U.S. Dollars have been terminated, the
outstanding Loans denominated in U.S. Dollars, U.S. LOC Obligations and
participations therein. The unfunded Commitments of, and the outstanding Credit
Party Obligations held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required U.S. Lenders.

     "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. With respect to any Restricted Payment that is
permitted by this Credit Agreement to be made (i) after demonstrating compliance
with the financial covenants set forth in Section 7.10 on a Pro Forma Basis and
(ii) so long as no Default or Event of Default exists at the time of such
Restricted Payment or would result upon giving effect thereto, then solely for
purposes of Section 8.6(iii), the amount of such Restricted Payment shall be
deemed reduced (to an


                                       22



amount not less than zero) by an amount equal to the net cash proceeds received
by Airgas from any issuances of Capital Stock occurring after the Closing Date.

     "Restricted Subsidiary" means (i) any wholly-owned Subsidiary of Airgas
(other than the Receivables Subsidiary) and (ii) any other Subsidiary of Airgas
that, at the option of Airgas, executes a Joinder Agreement in accordance with
Section 7.12.

     "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.

     "Sale and Leaseback Transaction" means any arrangement pursuant to which
any Consolidated Party, directly or indirectly, becomes liable as lessee,
guarantor or other surety with respect to any lease, whether an Operating Lease
or a Capital Lease, of any Property (a) which such Consolidated Party has sold
or transferred (or is to sell or transfer) to a Person which is not a
Consolidated Party or (b) which such Consolidated Party intends to use for
substantially the same purpose as any other Property which has been sold or
transferred (or is to be sold or transferred) by such Consolidated Party to
another Person which is not a Consolidated Party in connection with such lease.

     "Securitization Assets" means any accounts or trade receivable, notes
receivable, rights to future lease payments or residuals or capital, or any
other asset or a portion or interest therein that is or could be securitized,
together with certain related property relating thereto and the right to
collections thereon, which are subject to a Securitization Transaction.

     "Securitization Transaction" means any transaction or series of
transactions pursuant to which a Person may sell, convey or otherwise transfer
to (i) a Subsidiary or Affiliate, or (ii) any other Person, or may grant a
security interest in, any Securitization Assets (or any portion or interest
therein) of such Person, including, without limitation, any sale, lease, whole
loan sale, secured loan or other transfer.

     "Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

     "Subordinated Debt" means (i) any Indebtedness evidenced and governed by
the Subordinated Note Indentures and the Subordinated Notes, including any
guarantees thereof by any Credit Party, and (ii) any other Indebtedness of
Airgas, including any guarantees thereof by any Credit Party that is
contractually subordinated to the Credit Party Obligations.

     "Subordinated Note" means any one of (i) the 9.125% notes due 2011 or (ii)
the 6.25% notes due 2014, issued by Airgas in favor of the Subordinated
Noteholders pursuant to the respective Subordinated Note Indenture, as such
Subordinated Notes may be amended, modified, exchanged as contemplated by the
Subordinated Note Indentures, restated or supplemented and in effect from time
to time in accordance with the terms hereof.

     "Subordinated Note Indentures" means (i) the Indenture, dated as of July
30, 2001, and (ii) the Indenture, dated as of March 8, 2004, by and among
Airgas, the guarantors named therein and The Bank of New York, as trustee, as
each Subordinated Note Indenture may be amended, modified, restated or
supplemented and in effect from time to time in accordance with the terms
hereof.

     "Subordinated Noteholder" means any one of the holders from time to time of
the Subordinated Notes.


                                       23



     "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. For purposes of clarification only, the parties hereto
hereby acknowledge and agree that, notwithstanding the fact that National
Welders may be required, in accordance with GAAP, to be consolidated (on the
consolidation basis) with Airgas, the term "Subsidiary" as used in this
Agreement shall not include National Welders unless and until such time as
National Welders would constitute a "Subsidiary" within the meaning of the
immediately preceding sentence.

     "Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease under GAAP.

     "Termination Date" means July [__], 2011.

     "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.

     "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
March 30, 2005, between the U.S. Agent and Airgas, as amended, modified,
supplemented or replaced from time to time.

     "U.S. Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.

     "U.S. Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the U.S. Base Rate.

     "U.S. Credit Parties" shall mean a collective reference to Airgas and the
U.S. Subsidiary Guarantors, and "U.S. Credit Party" shall mean any one of them.

     "U.S. Dollars" and "$" means dollars in lawful currency of the United
States.


                                       24



     "U.S. Issuing Lender" means, with respect to a particular U.S. Letter of
Credit, (i) The Bank of New York, in its capacity as issuer of such U.S. Letter
of Credit or (ii) such other U.S. Revolving Lender selected by Airgas and
consented to by such U.S. Revolving Lender (upon notice to the U.S. Agent) from
time to time to issue such U.S. Letter of Credit.

     "U.S. Letter of Credit" means (i) any standby or trade 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. For all purposes of this
Credit Agreement, if on any date of determination a U.S. Letter of Credit has
expired by its terms but any amount may still be drawn thereunder by reason of
the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to
be "outstanding" in the amount so remaining available to be drawn

     "U.S. Revolving Commitment" means, with respect to each U.S. Revolving
Lender, the commitment of such U.S. Revolving Lender in an aggregate principal
amount at any time outstanding of up to such U.S. Revolving Lender's U.S.
Revolving Commitment Percentage of the U.S. Revolving Committed Amount, (i) to
make U.S. Revolving 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), (iii) to purchase participation interests
in the U.S. Swingline Loans in accordance with the provisions of Section
2.4(b)(iii).

     "U.S. Revolving Commitment Percentage" means, for any U.S. Revolving
Lender, the percentage identified as its U.S. Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
increase in the U.S. Revolving Committed Amount pursuant to Section 4.4(b) or
any assignment made in accordance with the provisions of Section 11.3.

     "U.S. Revolving Commitment Unused Fee" shall have the meaning assigned to
such term in Section 4.5(a)(i)(A).

     "U.S. Revolving Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).

     "U.S. Revolving Lenders" means (i) those Lenders that have U.S. Revolving
Commitments and are identified as Lenders on the signature pages attached hereto
and (ii) any Person which becomes a U.S.


                                       25



Revolving Lender by executing a New Commitment Agreement pursuant to Section
4.4(b), together with their successors and assigns.

     "U.S. Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).

     "U.S. Subsidiary Guarantors" means each of the Persons identified as a
"U.S. Subsidiary Guarantor" on the signature pages hereto and each Person which
may hereafter guaranty the Credit Party Obligations by its execution of a
Joinder Agreement pursuant to Section 7.12, together with their successors and
permitted assigns, and "U.S. Subsidiary Guarantor" means any one of them.

     "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 Bank of America.

     "U.S. Swingline Loan" means a loan made pursuant to and defined in Section
2.4(a).

     "U.S. Term Commitment Unused Fee" shall have the meaning assigned to such
term in Section 4.5(a)(i)(B).

     "U.S. Term Lenders" means (i) those Lenders that have U.S. Term Loan
Commitments and are identified as Lenders on the signature pages attached hereto
and (ii) any Person which becomes a U.S. Term Lender by executing a New
Commitment Agreement pursuant to Section 4.4(b), together with their successors
and assigns.

     "U.S. Term Loan" shall have the meaning assigned to such term in Section
2.5(a).

     "U.S. Term Loan Commitment" means, with respect to each U.S. Term Lender,
the commitment of such U.S. Term Lender to make U.S. Term Loans in accordance
with Section 2.5(a) in an aggregate principal amount equal to the amount
specified on Schedule 2.1(a) or in the New Commitment Agreement executed by such
U.S. Term Lender.

     "U.S. Term Loan Committed Amount" shall have the meaning assigned to such
term in Section 2.5(a).

     "U.S. Term Loan Percentage" means, for any U.S. Term Lender, the percentage
obtained by dividing (i) the principal amount of the U.S. Term Loan Commitment
of such U.S. Term Lender by (ii) the U.S. Term Loan Committed Amount, as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3 or as the result of an increase in the
amount of the U.S. Term Loan Committed Amount pursuant to Section 4.4(b).

     "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
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.


                                       26



     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; provided, however, that calculations of the implied principal component
of all obligations under any Synthetic Lease or the implied interest component
of any rent paid under any Synthetic Lease shall be made by Airgas in accordance
with accepted financial practice and consistent with the terms of such Synthetic
Lease. 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 of March 31,
2006); 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 shall 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, the parties hereto acknowledge and agree that,
for purposes of all calculations made under the financial covenants set forth in
Section 7.10 (including without limitation for purposes of the definition of
"Pro Forma Basis" set forth in Section 1.1), (i) after consummation of any Asset
Disposition (A) income statement items (whether positive or negative) and
capital expenditures attributable to the Property disposed of shall be excluded
to the extent relating to any period occurring prior to the date of such
transaction and (B) Indebtedness which is retired shall be excluded and deemed
to have been retired as of the first day of the applicable period and (ii) after
consummation of any Acquisition (A) income statement items (whether positive or
negative) and capital expenditures attributable to the Person or Property
acquired shall, to the extent not otherwise included in such income statement
items for the Consolidated Parties in accordance with GAAP or in accordance with
any defined terms set forth in Section 1.1, be included to the extent relating
to any period applicable in such calculations, (B) to the extent not retired in
connection with such Acquisition, Indebtedness of the Person or Property
acquired shall be deemed to have been incurred as of the first day of the
applicable period and (C) pro forma adjustments may be included to the extent
that such adjustments meet the requirements of Regulation S-X under the
Securities Act of 1933, as amended, and all other accounting rules and
regulations of the SEC promulgated thereunder.

                                   ARTICLE II

                          U.S. DOLLAR CREDIT FACILITIES

     2.1 U.S. REVOLVING LOANS.

     (a) U.S. Revolving Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein, each
U.S. Revolving Lender severally agrees to make available to Airgas such U.S.
Revolving Lender's U.S. Revolving Commitment Percentage of revolving credit
loans requested by Airgas in U.S. Dollars ("U.S. Revolving Loans") from time to
time from the Closing Date until the Termination Date, or such earlier date as
the U.S. Revolving Commitments shall have been terminated as provided herein for
the purposes hereinafter set forth; provided, however, that the aggregate
principal amount of outstanding U.S. Revolving Loans shall not exceed NINE
HUNDRED


                                       27



SIXTY-THREE MILLION NINE HUNDRED THOUSAND U.S. DOLLARS ($963,900,000) (as such
aggregate maximum amount may be increased or reduced from time to time as
provided in Section 4.4, the "U.S. Revolving Committed Amount"); provided,
further, (i) with regard to each U.S. Revolving Lender individually, such U.S.
Revolving Lender's outstanding U.S. Revolving Loans shall not exceed such U.S.
Revolving Lender's U.S. Revolving Commitment Percentage of the U.S. Revolving
Committed Amount and (ii) with regard to the U.S. Revolving Lenders
collectively, the aggregate principal amount of outstanding U.S. Revolving 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 U.S. Revolving Committed Amount.
U.S. 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. U.S. Revolving Loans hereunder
may be repaid and reborrowed in accordance with the provisions hereof.

     (b) U.S. Revolving Loan Borrowings.

          (i) Notice of Borrowing. Airgas (by its duly authorized officers or
     representatives) shall request a U.S. 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 irrevocable and shall specify (A) that a U.S. 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 U.S. 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 U.S.
     Revolving 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. Revolving 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 U.S. Revolving Loan shall be in a minimum aggregate principal amount
     of $5,000,000 and integral multiples of $1,000,000 in excess thereof (or
     the remaining amount of the U.S. Revolving Committed Amount, if less).

          (iii) Advances. Each U.S. Revolving Lender will make its U.S.
     Revolving Commitment Percentage of each U.S. Revolving Loan borrowing
     available to the U.S. Agent for the account of Airgas 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 in like funds as received by the U.S. Agent by (A) crediting the
     account of Airgas on the books of the U.S. Agent with the amount of such
     funds or (B) wire transfer of such funds, in each case in accordance with
     instructions provided to (and reasonably acceptable to) the U.S. Agent by
     Airgas.


                                       28



     (c) Repayment. Airgas promises to pay the principal amount of all U.S.
Revolving Loans in full on the Termination Date.

     (d) Interest. Subject to the provisions of Section 4.1,

          (i) U.S. Base Rate Loans. During such periods as U.S. 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 plus the Applicable Percentage; and

          (ii) Eurodollar Loans. During such periods as U.S. 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.

Airgas promises to pay interest on U.S. Revolving Loans in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).

     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.
Revolving 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 FIFTY MILLION U.S. DOLLARS ($50,000,000) and (ii) the sum of the
aggregate principal amount of outstanding U.S. Revolving 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 U.S. Revolving
Committed Amount. Each Competitive U.S. Loan shall be not less than $1,000,000
in the aggregate and integral multiples of $500,000 in excess thereof (or the
remaining portion of the U.S. Revolving 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. Revolving Lenders for a Competitive U.S. Loan. To be
effective, such request must be received by each of the U.S. Revolving Lenders
by such time as determined by each such U.S. Revolving Lender in accordance with
such U.S. Revolving 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. Revolving 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. Revolving Lender in
accordance with such U.S. Revolving 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 of (but not more than) the amount requested by Airgas), (iii)
the applicable Competitive U.S. Bid Rate, and (iv) the applicable Interest
Period.


                                       29



     (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. Revolving Lender in accordance with such U.S. Revolving 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. Revolving Lender and the U.S.
Agent telephone notice (immediately confirmed in writing) of (i) the U.S.
Revolving Lender or U.S. Revolving 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. Revolving Lender's
Competitive U.S. Bid, such U.S. Revolving Lender shall, before such time as
determined by such U.S. Revolving Lender in accordance with such U.S. Revolving
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. 3750353729
maintained at the offices of Bank of America; provided, however, that if on the
date of such Competitive U.S. Loan Airgas is to repay all or any part of an
outstanding U.S. Revolving 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) Repayment of Competitive U.S. Loans. Airgas promises to repay to each
U.S. Revolving 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 4.11.

     (g) Interest. Airgas promises to pay interest to each U.S. Revolving Lender
on the unpaid principal amount of each Competitive U.S. Loan of such U.S.
Revolving Lender from 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).

     (h) 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, (i) the sum
of the aggregate principal amount of outstanding U.S. Revolving 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 U.S.


                                       30



Revolving Committed Amount or (ii) the sum of the aggregate principal amount of
outstanding Competitive U.S. Loans would exceed $50,000,000.

     (i) Change in Procedures for Requesting Competitive U.S. Loans. Airgas and
the U.S. Revolving 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. Revolving Lenders, all further requests by Airgas for Competitive U.S.
Loans shall be made by Airgas to the U.S. Revolving 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. Revolving 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, and in reliance upon the agreements of the Credit
Parties and U.S. Revolving Lenders set forth herein, the U.S. Revolving 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 SIXTY-FIVE MILLION U.S. DOLLARS ($65,000,000) (the "U.S.
LOC Committed Amount") and (ii) the sum of the aggregate principal amount of
outstanding U.S. Revolving 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 U.S. Revolving Committed Amount. No U.S. Letter
of Credit shall (x) except in the case where the U.S. Issuing Lender in respect
of a U.S. Letter of Credit has been replaced by a successor U.S. Issuing Lender,
have an original expiry date more than one year from the date of issuance
(provided that such U.S. Letter of Credit may contain customary "evergreen"
provisions pursuant to which the expiry date is automatically extended by a
specific time period unless the U.S. Issuing Lender gives notice of non-renewal
to the beneficiary of such U.S. Letter of Credit at least a specified time
period prior to the expiry date then in effect), or (y) as originally issued or
as extended, have an expiry date extending beyond the Termination Date. The U.S.
Issuing Lender shall be under no obligation to issue any U.S. Letter of Credit
if the issuance of such U.S. Letter of Credit would violate any applicable
Requirement of Law or any policy of the U.S. Issuing Lender. Each U.S. Letter of
Credit shall comply with the related U.S. LOC Documents. The issuance 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 with a copy to the U.S. Agent 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. Revolving 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. Revolving 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 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. Revolving Commitment Percentages of the U.S. Revolving 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.
Revolving Lender's participation in any U.S. Letter of Credit, to the extent
that the U.S. Issuing


                                       31



Lender has not been reimbursed as required hereunder or under any such U.S.
Letter of Credit, each such U.S. Revolving 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.
Revolving 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 and the U.S. Agent.
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. Revolving Lenders make a U.S.
Revolving 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 U.S. Revolving 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. Revolving 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. Agent will
promptly notify the other U.S. Revolving Lenders of the amount of any
unreimbursed drawing under any U.S. Letter of Credit and each U.S. Revolving
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. Revolving 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. Revolving
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. Revolving Lender does
not pay such amount to the U.S. Issuing Lender in full upon such request, such
U.S. Revolving 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. Revolving 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. Revolving 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. Revolving
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
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. Revolving Lender to the U.S. Issuing Lender, such U.S.
Revolving Lender shall, automatically and without any further action on the part
of the U.S. Issuing Lender or such U.S. Revolving 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 U.S. Revolving Loans. On any day on which Airgas shall
have requested, or shall be deemed to have requested, a U.S. Revolving Loan
advance to reimburse a drawing under a U.S.


                                       32


Letter of Credit, the U.S. Agent shall give notice to the U.S. Revolving Lenders
that a U.S. Revolving 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 U.S. Revolving 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. Revolving Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective U.S. Revolving
Commitment Percentages of the U.S. Revolving 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 U.S. Revolving Lender
hereby irrevocably agrees to make its pro rata share of each such U.S. Revolving
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 U.S. Revolving 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 U.S. Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which U.S.
Revolving 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 U.S. Revolving 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. Revolving 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 U.S. Revolving Lender to share in such U.S. LOC Obligations ratably
(based upon the respective U.S. Revolving Commitment Percentages of the U.S.
Revolving 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.
Revolving Lender shall be required to pay to the U.S. Issuing Lender, to the
extent not paid to the U.S. Issuing Lender 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 U.S. Revolving Loan advance, the Federal Funds Rate, and
thereafter at a rate equal to the U.S. Base Rate.

     (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) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
U.S. Issuing Lender and Airgas when a U.S. Letter of Credit is issued (including
any such agreement applicable to an Existing U.S. Letter of Credit), (i) the
rules of the ISP shall apply to each standby U.S. Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce at the time of
issuance shall apply to each trade U.S. Letter of Credit.

     (i) Indemnification; Nature of U.S. Issuing Lender's Duties.


                                       33



          (i) Airgas agrees to indemnify and hold harmless the U.S. Issuing
     Lender, each other U.S. Revolving 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 any Indemnitee 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 such 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 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.
Revolving 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. Revolving Lender to recover from
the U.S. Issuing Lender any amounts made available by such U.S. Revolving 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.


                                       34



     (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.

     (l) Role of U.S. Agent. Airgas and each U.S. Issuing Lender agree to
provide the U.S. Agent with a copy of any notice or report otherwise required to
be furnished by such Person to any other Person pursuant to Sections 2.3(a),
2.3(b) or 2.3(d). Furthermore, all payments required to be made by any U.S.
Revolving Lender to a U.S. Issuing Lender pursuant to Section 2.3 shall be made
to the U.S. Agent, for the account of such U.S. Issuing Lender, and the U.S.
Agent shall distribute such payments to such U.S. Issuing Lender.

     2.4 U.S. SWINGLINE LOAN SUBFACILITY.

     (a) U.S. Swingline Commitment. Subject to the terms and conditions set
forth herein, the U.S. Swingline Lender agrees, in reliance upon the agreements
of the other U.S. Revolving Lenders set forth in this Section 2.4, 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 THIRTY MILLION U.S.
DOLLARS ($30,000,000) (the "U.S. Swingline Committed Amount"), and (ii) the
aggregate principal amount of outstanding U.S. Revolving 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 U.S. Revolving 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.

          (ii) Minimum Amounts. Each U.S. Swingline Loan advance shall be in a
     minimum principal amount of $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. Airgas promises to pay the
     principal amount of all U.S. Swingline Loans 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. Revolving
     Lenders, demand repayment of its U.S. Swingline Loans by way of a U.S.
     Revolving


                                       35



     Loan advance, in which case Airgas shall be deemed to have requested a U.S.
     Revolving 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 (if not made prior thereto) 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.
     Revolving Lender hereby irrevocably agrees to make its pro rata share of
     each such U.S. Revolving 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 U.S.
     Revolving 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 U.S. Revolving Loan to be made by the time otherwise required
     hereunder, (V) whether the date of such borrowing is a date on which U.S.
     Revolving 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 U.S. Revolving
     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. Revolving 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 U.S.
     Revolving Lender to share in such U.S. Swingline Loans ratably based upon
     its U.S. Revolving Commitment Percentage of the U.S. Revolving Committed
     Amount (determined before giving effect to any termination of the
     Commitments pursuant to Section 9.2), 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. Revolving 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 plus the Applicable Percentage; and

               (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. Airgas promises to pay interest on U.S.
     Swingline Loans in arrears on each applicable Interest Payment Date (or at
     such other times as may be specified herein).


                                       36



     2.5 U.S. TERM LOAN.

          (a) U.S. Term Commitment. Subject to the terms and conditions hereof
     and in reliance upon the representations and warranties set forth herein,
     each U.S. Term Lender severally agrees to make available to Airgas in one
     or more drawings during the period from the Closing Date until the
     Termination Date term loans in U.S. Dollars (the "U.S. Term Loans");
     provided, however, (i) with regard to the U.S. Term Lenders collectively,
     the aggregate principal amount of all U.S. Term Loans shall not exceed SIX
     HUNDRED MILLION U.S. DOLLARS ($600,000,000) (as such aggregate maximum
     amount may be increased or reduced from time to time as provided in Section
     4.4, the "U.S. Term Loan Committed Amount") and (ii) with regard to each
     U.S. Term Lender individually, such U.S. Term Lender's outstanding U.S.
     Term Loans shall not exceed such U.S. Term Lender's U.S. Term Loan
     Commitment Percentage of the U.S. Term Committed Amount. U.S. Term Loans
     may consist of U.S. Base Rate Loans or Eurodollar Loans, or a combination
     thereof, as Airgas may request; provided, however, that no more than five
     (5) Eurodollar Loans which are U.S. Term 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). Amounts
     repaid on the U.S. Term Loans may not be reborrowed.

          (b) Borrowing Procedures. Airgas shall submit an appropriate Notice of
     Borrowing 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, or on the third Business Day prior to the Business
     Day of the requested borrowing in the case of Eurodollar Loans. Such Notice
     of Borrowing shall be irrevocable and shall specify (i) that the funding of
     a U.S. Term Loan is requested and (ii) whether the funding of the U.S. Term
     Loan 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 deliver such Notice of
     Borrowing to the U.S. Agent by 11:00 A.M. (Charlotte, North Carolina time)
     on the third Business Day prior to the Business Day of the requested
     borrowing, then the full amount of the requested U.S. Term Loan shall be
     disbursed on the Business Day of the requested borrowing as a U.S. Base
     Rate Loan. Each U.S. Term Lender shall make its U.S. Term Loan Percentage
     of each U.S. Term Loan available to the U.S. Agent for the account of
     Airgas by 1:00 P.M. (Charlotte, North Carolina time) on the Business Day of
     the requested borrowing in U.S. Dollars and in funds immediately available
     to the U.S. Agent.

          (c) Minimum Amounts. Each Eurodollar Loan or U.S. Base Rate Loan that
     is part of a U.S. Term Loan shall be in an aggregate principal amount that
     is not less than $5,000,000 and integral multiples of $1,000,000 (or the
     then remaining principal balance of the U.S. Term Loan Committed Amount, if
     less).

          (d) Repayment of U.S. Term Loans. Airgas promises to pay the
     outstanding principal amount of the U.S. Term Loans in consecutive
     installments commencing on the earlier of (i) March 31, 2007 if, prior to
     such date, any portion of the U.S. Term Loan Commitments is funded to
     finance the Project OT Acquisition or (ii) otherwise, June 30, 2007 (such
     date hereinafter referred to as the "Amortization Commencement Date") as
     follows (as such installments may hereafter be adjusted as a result of
     prepayments made pursuant to Section 4.3 or as the result of an increase in
     the amount of the U.S. Term Loan Committed Amount pursuant to Section
     4.4(b)), unless accelerated sooner pursuant to Section 9.2:


                                       37





                                    PRINCIPAL AMORTIZATION
                                      PAYMENT DUE ON THE
         PAYMENT DATES            CORRESPONDING PAYMENT DATE
         -------------            --------------------------
                               
Amortization Commencement Date               3.75%
  and the last day of each of
  the three subsequent fiscal
           quarters

  the last day of each of the                3.75%
four subsequent fiscal quarters

  the last day of each of the                3.75%
four subsequent fiscal quarters

  the last day of each of the                3.75%
two subsequent fiscal quarters

  the last day of each of the               11.875%
    three subsequent fiscal
           quarters

either: (i) if the most recent          Unpaid Balance
scheduled amortization payment
  date occurred on March 31,
  2011, June 30, 2011 or (ii)
otherwise, the Termination Date


          (e) Interest. Subject to the provisions of Section 4.1,

               (i) U.S. Base Rate Loans. During such periods as the U.S. Term
          Loan 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 plus the Applicable Percentage; and

               (ii) Eurodollar Loans. During such periods as the U.S. Term Loan
          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.

          Airgas promises to pay interest on the U.S. Term Loan in arrears on
     each applicable Interest Payment Date (or at such other times as may be
     specified herein).

                                   ARTICLE III

                        CANADIAN DOLLAR CREDIT FACILITIES


                                       38



     3.1 CANADIAN REVOLVING LOANS.

     (a) Canadian Revolving 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 ("Canadian Revolving Loans") from time to time
from the Closing Date until the Termination Date, or such earlier date as the
Canadian 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 Canadian Revolving Loans shall not
exceed FORTY MILLION CANADIAN DOLLARS (C$40,000,000) (as such aggregate maximum
amount may be increased or reduced from time to time as provided in Section 4.4,
the "Canadian Revolving Committed Amount"); provided, further, (i) with regard
to each Canadian Lender individually, outstanding Canadian Revolving 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 Canadian Revolving Committed Amount and (ii) with regard to the Canadian
Lenders collectively, 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 the BA
Outstandings shall not exceed the Canadian Revolving Committed Amount. Canadian
Revolving Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.

     (b) Canadian Revolving Loan Borrowings.

          (i) Notice of Borrowing. Each Canadian Borrower (by its duly
     authorized officers or representatives) shall request a Canadian Revolving
     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 the requested borrowing. Each such request for borrowing shall
     be irrevocable and shall specify (A) that a Canadian Revolving 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 Canadian Revolving 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 Canadian
     Revolving Committed Amount, if less).

          (iii) Advances. Each Canadian Lender will make its Canadian Commitment
     Percentage of each Canadian Revolving Loan borrowing available to the
     Canadian Agent for the account of the particular Canadian Borrower 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 in like funds as
     received by the Canadian Agent by (A) crediting the account of such
     Canadian Borrower on the books of the Canadian Agent with the amount of
     such funds or (B) wire transfer of such funds, in each case in accordance
     with instructions provided to (and reasonably acceptable to) the Canadian
     Agent by such Canadian Borrower

     (c) Repayment. Each Canadian Borrower promises to pay the principal amount
of all Canadian Revolving Loans made to such Canadian Borrower in full on the
Termination Date.


                                       39



     (d) Interest. Subject to the provisions of Section 4.1, Canadian Revolving
Loans shall bear interest at a per annum rate equal to the Canadian Base Rate
plus the Applicable Percentage. Each Canadian Borrower promises to pay interest
on Canadian Revolving Loans made to such Canadian Borrower monthly in arrears on
each applicable Interest Payment Date (or at such other times as may be
specified herein).

     3.2 CANADIAN SWINGLINE LOAN SUBFACILITY.

     (a) Canadian Swingline Commitment. Subject to the terms and conditions set
forth herein, the Canadian Swingline Lender agrees, in reliance upon the
agreements of the other Canadian Lenders set forth in this Section 3.2, 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
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 Canadian Revolving Loans plus
the aggregate principal amount of outstanding Canadian Swingline Loans plus
Canadian LOC Obligations outstanding plus the BA Outstandings shall not exceed
the Canadian Revolving Committed Amount. Unless the Canadian Borrowers have made
prior arrangements with the Canadian Swingline Lender (including without
limitation by requesting a Canadian Revolving 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
Canadian Revolving 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 Canadian Revolving Loan advance, in which case the
Canadian Borrower shall be deemed to have requested a Canadian Revolving Loan
advance in the amount of such Canadian Swingline Loans; provided, however, that
such a demand (if not made prior thereto) 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 Canadian Revolving 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 Canadian Revolving 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 Canadian Revolving Loan to be made by the time otherwise
required hereunder, (V) whether the date of such borrowing is a date


                                       40



on which Canadian Revolving 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 plus the Applicable Percentage; 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).

     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, and in reliance upon the
agreements of the Credit Parties and Canadian Lenders set forth herein, 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 FORTY
MILLION CANADIAN DOLLARS (C$40,000,000) (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 Canadian Revolving Committed Amount.
No Canadian Letter of Credit shall (x) have an original expiry date more than
one year from the date of issuance (provided that such Canadian Letter of Credit
may contain customary "evergreen" provisions pursuant to which the expiry date
is automatically extended by a specific time period unless the Canadian Issuing
Lender gives notice of non-renewal to the beneficiary of such Canadian Letter of
Credit at least a specified time period prior to the expiry date then in
effect), or (y) as originally issued or as extended, have an expiry date
extending beyond the Termination Date. The Canadian Issuing Lender shall be
under no obligation to issue any Canadian Letter of Credit if the issuance of
such Canadian Letter of Credit would violate any applicable Requirement of Law
or any policy of the Canadian Issuing Lender. Each Canadian Letter of Credit
shall comply with the related Canadian LOC Documents. The issuance 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 with a
copy to the Canadian Agent 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


                                       41



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 and the Canadian Agent. Unless the applicable Canadian Borrower shall
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 Canadian Revolving 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 Canadian Revolving 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 Canadian Revolving 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 the Applicable Percentage 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 Agent 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


                                       42



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 Canadian Revolving Loans. On any day on which a Canadian
Borrower shall have requested, or shall be deemed to have requested, a Canadian
Revolving Loan advance to reimburse a drawing under a Canadian Letter of Credit,
the Canadian Agent shall give notice to the Canadian Lenders that a Canadian
Revolving Loan advance has been requested or deemed requested by such Canadian
Borrower to be made in connection with a drawing under a Canadian Letter of
Credit, in which case a Canadian Revolving 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
Canadian Revolving 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 Canadian Revolving 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 Canadian Revolving Loan is not made by the time otherwise
required hereunder, (v) whether the date of such borrowing is a date on which
Canadian Revolving 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 Canadian Revolving
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
Canadian Issuing Lender by the applicable Canadian Borrower 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) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
Canadian Issuing Lender and the applicable Canadian Borrower when a Canadian
Letter of Credit is issued (including any such agreement applicable to an
Existing Canadian Letter of Credit), (i) the rules of the ISP shall apply to
each standby Canadian Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance shall apply to each
trade Canadian Letter of Credit.

     (h) Indemnification; Nature of Canadian Issuing Lender's Duties.


                                       43



          (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 Canadian Borrower; provided that the Canadian
     Borrowers shall not be required to indemnify any Indemnitee 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
     such 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.


                                       44



     (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.

     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 Canadian Revolving
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 Canadian Revolving 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 Bankers' 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. Each 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. Each Bankers' Acceptance shall be dated the date such Bankers'
Acceptance is issued.

     (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 Canadian Revolving 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


                                       45



notwithstanding the fact that the applicable Canadian Lender may be the holder
of a Bankers' Acceptance previously issued 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) To facilitate acceptance of drafts, each Canadian Borrower hereby
appoints each Canadian Lender as its attorney to sign and endorse on its behalf
(in accordance with a request under section 3.4(a) above), in handwriting or by
facsimile or mechanical signature as and when deemed necessary by such Canadian
Lender, blank drafts in the form requested by such Canadian Lender. In this
respect, it is each Canadian Lender's responsibility to maintain an adequate
supply of such blank forms of draft for acceptance under this Credit Agreement.
All such drafts signed and/or endorsed by a Canadian Lender on behalf of a
Canadian Borrower pursuant to such a request shall be deemed to have been
presented by such Canadian Borrower for acceptance and shall bind such Canadian
Borrower as fully and effectually as if signed in the handwriting of and duly
issued by the proper signing officers of such Canadian Borrower. Notwithstanding
that any person whose signature appears on any Bankers' Acceptance may no longer
be an authorized signatory for any Canadian Lender or Canadian Borrower at the
date of issuance of a Bankers' Acceptance, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained in force
at the time of such issuance and any such Bankers' Acceptance so signed shall be
binding on the applicable Canadian Borrower. Each Canadian Lender shall maintain
a record with respect to Bankers' Acceptances (A) accepted and purchased by it
hereunder, and (B) cancelled at their respective maturities. On request by or on
behalf of a Canadian Borrower, a Canadian Lender shall cancel all forms of
Bankers' Acceptance which have been pre-signed or pre-endorsed on behalf of such
Canadian Borrower and which are held by such Canadian Lender and are not
required to be issued in accordance with such Canadian Borrower's request(s).
Each Canadian Borrower hereby confirms that each Canadian Lender shall be
entitled to rely upon instructions provided by Airgas regarding the completion
of drafts 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.

     (c) Transition.

     The parties hereto acknowledge that as at the Closing Date, certain
Bankers' Acceptances ("Old BAs") are outstanding which were issued prior to such
date and mature after such date, and agree that the following provisions shall
be applicable to Old BAs:

     (i) Any Old BA accepted by a Canadian Lender (as defined in the Existing
Credit Agreement) that is not a party to this Credit Agreement (an "Old Lender")
shall be deemed for purposes of this Credit Agreement to have been issued under
this Credit Agreement; without limiting the generality of the foregoing, the
Face Amount of any such Old BA shall, so long as it remains outstanding, be
included in the BA Outstandings hereunder.

     (ii) Any amount paid by a Canadian Lender hereunder to indemnify an Old
Lender as acceptor of any Old BA by reason of the failure of the applicable
Canadian Borrower to comply with Section 3.4(b)(iv) above shall be subject to
the same terms as are applicable to a Canadian Base Rate


                                       46



Loan made by such Canadian Lender, but be payable on demand, and the obligation
of the applicable Canadian Borrower to pay any such amount shall be a Canadian
Obligation.

     (iii) If and to the extent that the Applicable Percentage of a Canadian
Lender hereunder differs from the Applicable Percentage of such Canadian Lender
(in its capacity as a Canadian Lender under the Existing Credit Agreement), the
liability and entitlement of such Canadian Lender in respect of any Old BA shall
be determined by its Applicable Percentage hereunder rather than by its
Applicable Percentage under the Existing Credit Agreement, and the Canadian
Lenders shall make such payments to one another as shall be necessary to give
effect to each such change in Applicable Percentage, including without
limitation the calculation of the Acceptance Fee to which such Canadian Lender
is entitled for the period from (but excluding) the Closing Date to (and
including) the maturity of the Old BA in respect of which an Acceptance Fee was
paid upon issuance.

     3.5 REMOVAL OF A CANADIAN BORROWER.

     Airgas may at any time request that any Canadian Borrower hereunder cease
to be a Canadian Borrower by delivering to the Canadian Agent (which shall
promptly deliver counterparts thereof to each Canadian Lender) a written notice
to such effect. Such Canadian Borrower shall cease to be a Canadian Borrower
hereunder on the later to occur of (i) the date the Canadian Agent receives such
request, and (ii) the date on which (A) such Canadian Borrower has paid all of
the Canadian Obligations owing by such Canadian Borrower, and (B) no Canadian
Letter of Credit issued at the request of such Canadian Borrower remains
outstanding.

     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
Canadian Revolving 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 Canadian Revolving 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.

     3.7 CERTAIN WAIVERS.

     Each Canadian Borrower waives presentment for payment and any other defense
to the payment of any amounts due to any Canadian Lender in respect of any
Bankers' Acceptance accepted and purchased by such Canadian Lender pursuant to
this Credit Agreement which might exist solely by reason of the Banker's
Acceptance being held, at the maturity thereof, by such Canadian Lender in its
own right and each Canadian Borrower agrees not to claim any days of grace in
any action brought for payment of the amount payable by such Canadian Borrower
under a Banker's Acceptance.

                                   ARTICLE IV

                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

     4.1 DEFAULT RATE.

     (a) Payment Defaults. Upon the occurrence, and during the continuance, of
an Event of Default of the type described in Section 9.1(a), the principal of
and, to the extent permitted by law, interest on the


                                       47



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 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 plus the Applicable Percentage).

     (b) Non-Payment Defaults. Except as provided in subsection (a) above,
during the continuance of any Event of Default for a period of more than 30 days
from the date Airgas receives notice thereof from the U.S. Agent, 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, at the
discretion of the Required Lenders, bear interest, payable on demand, at a per
annum rate 2% greater than 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 plus the Applicable Percentage).

     4.2 EXTENSION AND CONVERSION.

     (a) Airgas. Airgas shall have the option, on any Business Day, to extend
existing U.S. Revolving Loans or U.S. Term 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) 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 Section 2.1(b)(ii), (iii) 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), (iv) 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
(v) 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. 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 affected Lender notice as promptly as practicable of any
such proposed extension or conversion affecting any Loan.

     (b) Canadian Borrowers. 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 Exhibit 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 such
continuation or conversion shall be in such minimum amounts as provided in
Sections 3.1(b)(ii) and 3.4(b)(i), 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 or conversion


                                       48



must be requested by such Canadian Borrower no later than 10:00 a.m., Toronto,
Ontario time, on (A) the date of a requested conversion of a Bankers' Acceptance
to a Canadian Base Rate Loan or (B) the third Business Day 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 Canadian Revolving
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 Canadian Revolving 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 U.S. Revolving Loans and the U.S. Term Loan, in a
minimum principal amount of $5,000,000 and integral multiples of $1,000,000 in
excess thereof, (B) in the case of Canadian Revolving 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 $100,000 and integral multiples thereof; and (v) any prepayment of the
U.S. Term Loan shall be applied ratably to the remaining principal amortization
payments thereof. Subject to the foregoing terms, amounts prepaid under this
Section 4.3(a) shall be applied as the applicable Borrower may elect.

     (b) Mandatory Prepayments.

          (i) U.S. Revolving Committed Amount. If at any time the sum of the
     aggregate principal amount of outstanding U.S. Revolving 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 U.S. Revolving Committed
     Amount, Airgas shall prepay immediately the outstanding principal balance
     on the U.S. Revolving Loans, Competitive U.S. Loans and/or U.S. Swingline
     Loans (and after all U.S. Revolving 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. Issuing Lenders and the U.S. Revolving Lenders, in a
     cash collateral account) in an amount sufficient to eliminate such excess.

          (ii) Canadian Revolving Committed Amount. If at any time 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 plus the BA Outstandings outstanding shall exceed
     the Canadian Revolving Committed Amount, the Canadian Borrowers shall
     prepay immediately the outstanding principal balance on the Canadian
     Revolving Loans or Canadian Swingline Loans (and, after all Canadian
     Revolving Loans and Canadian Swingline Loans have been repaid, pay to the
     Canadian Agent additional cash in respect of Canadian LOC Obligations and
     BA Outstandings, to be held by the Canadian Agent, for the benefit of the
     Canadian Issuing Lender and the Canadian Lenders, in a cash collateral
     account) in an amount sufficient to eliminate such excess.

          (iii) Asset Dispositions. Immediately upon the occurrence of any Asset
     Disposition Prepayment Event, Airgas shall prepay (or shall cause the
     applicable Canadian Borrower to prepay) the Loans in an aggregate amount
     equal to 100% of the Net Cash Proceeds of the related Asset


                                       49



     Disposition not applied (or caused to be applied) by the Credit Parties
     during the related Application Period to make Eligible Reinvestments as
     contemplated by the terms of Section 8.4(b)(v) (such prepayment to be
     applied as set forth in clause (iv) below).

          (iv) Application of Certain Mandatory Prepayments. All amounts
     required to be paid pursuant to Section 4.3(b)(iii) shall be applied first
     to the U.S. Term Loan (ratably to the remaining principal amortization
     payments thereof), second to reduce the undrawn commitments, if any, under
     the U.S. Term Loan as provided in Section 4.4(a)(ii)(B), and third (with
     respect to any Net Cash Proceeds in excess of any prepayment pursuant to
     clause "first" and any reduction of undrawn commitments pursuant to clause
     "second") pro rata to (1) the Credit Party Obligations consisting of U.S.
     Swingline Loans, U.S. Revolving Loans, Competitive U.S. Loans and U.S. LOC
     Obligations (first, ratably to U.S. Swingline Loans, U.S. Revolving Loans
     and Competitive U.S. Loans and, second, after all such Loans have been
     repaid, 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 Lenders,
     in a cash collateral account) and (2) to the Canadian Obligations
     consisting of Canadian Swingline Loans, Canadian Revolving Loans, BA
     Outstandings and Canadian LOC Obligations (first to the Canadian Swingline
     Loans, second to the Canadian Revolving Loans, third to the BA Outstandings
     in direct order of maturities and, fourth, after all Canadian Revolving
     Loans, Canadian Swingline Loans and BA Outstandings have been repaid, to
     the Canadian Agent additional cash in respect of Canadian LOC Obligations,
     to be held by the Canadian Agent, for the benefit of the Lenders, in a cash
     collateral account).

          Within the parameters of the applications set forth above, prepayments
     of U.S. Revolving Loans and the U.S. Term Loan shall be applied first to
     U.S. Base Rate Loans and then to Eurodollar Loans in direct order of
     Interest Period maturities. All prepayments under this Section 4.3(b) shall
     be subject to Section 4.11 and be accompanied by interest on the principal
     amount prepaid through the date of prepayment.

          (v) Prepayment Account. If Airgas is required to make a mandatory
     prepayment of Eurodollar Loans under this Section 4.3(b), Airgas shall have
     the right, in lieu of making such prepayment in full, to deposit an amount
     equal to such mandatory prepayment with the U.S. Agent in a cash collateral
     account maintained (pursuant to documentation reasonably satisfactory to
     U.S. Agent) by and in the sole dominion and control of U.S. Agent. Any
     amounts so deposited shall be held by the U.S. Agent as collateral for the
     prepayment of such Eurodollar Loans and shall be applied to the prepayment
     of the applicable Eurodollar Loans at the end of the current Interest
     Periods applicable thereto. At the request of Airgas, amounts so deposited
     shall be invested by the U.S. Agent in Cash Equivalents maturing prior to
     the date or dates on which it is anticipated that such amounts will be
     applied to prepay such Eurodollar Loans; any interest earned on such Cash
     Equivalents will be for the account of Airgas and Airgas will deposit with
     the U.S. Agent the amount of any loss on any such Cash Equivalents to the
     extent necessary in order that the amount of the prepayment to be made with
     the deposited amounts may not be reduced.

     4.4 TERMINATION AND REDUCTION OF COMMITMENTS; INCREASE OF COMMITMENTS.

     (a)  (i) Voluntary Reductions; Terminations.

               (A) Airgas may from time to time permanently reduce or terminate
          the U.S. Revolving Committed Amount in whole or in part (in minimum
          aggregate amounts of $5,000,000 or in integral multiples of $1,000,000
          in excess thereof (or, if less, the full remaining amount of the U.S.
          Revolving Committed Amount)) upon five Business Days' prior written
          notice to the U.S. Agent; provided, however, no such termination or
          reduction


                                       50



          shall be made which would cause the aggregate principal amount of
          outstanding U.S. Revolving 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 U.S. Revolving Committed Amount unless,
          concurrently with such termination or reduction, the respective Credit
          Party Obligations are repaid to the extent necessary to eliminate such
          excess. The U.S. Revolving Commitments, the U.S. Swingline Commitment
          and the U.S. LOC Commitments shall automatically terminate on the
          Termination Date;

               (B) Airgas may from time to time permanently reduce or terminate
          the U.S. Term Loan Committed Amount in whole or in part (in minimum
          aggregate amounts of $5,000,000 or in integral multiples of $1,000,000
          in excess thereof (or, if less, the full remaining amount of the U.S.
          Term Loan Committed Amount)) upon five Business Days' prior written
          notice to the U.S. Agent. Any unfunded U.S. Term Loan Commitments
          shall automatically terminate on the Termination Date; and

               (C) Airgas or the Canadian Borrowers may from time to time
          permanently reduce or terminate the Canadian Revolving 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 Canadian Revolving
          Committed Amount)) upon five Business Days' prior written notice to
          the U.S. Agent and the Canadian Agent; provided, however, no such
          termination or reduction shall be made which would cause 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 the BA Outstandings to
          exceed the Canadian Revolving Committed Amount unless, concurrently
          with such termination or reduction, the respective Credit Party
          Obligations are repaid to the extent necessary to eliminate such
          excess. The Canadian Revolving Commitments, the Canadian Swingline
          Commitment and the Canadian LOC Commitment shall automatically
          terminate on the Termination Date;

     Each Agent shall promptly notify each affected Lender of receipt by such
     Agent of any notice pursuant to this Section 4.4(a)(i).

          (ii) Mandatory Reductions of U.S. Term Loan Committed Amounts.

               (A) The U.S Term Loan Committed Amount shall be automatically and
          permanently reduced (A) on September 28, 2006 by an amount equal to
          (x) $100,000,000 minus (y) the amount of the U.S. Term Loans
          previously borrowed and applied in order to repay the Medium Term
          Notes and (B) on the date that is ten months after the Closing Date by
          an amount equal to (x) $500,000,000 minus (y) the amount of the U.S.
          Term Loans previously borrowed and applied in order to finance the
          Project OT Acquisition.

               (B) The U.S Term Loan Committed Amount shall be automatically and
          permanently reduced by an amount equal to the difference (to the
          extent positive) between (1) the amount of Net Cash Proceeds from any
          Asset Disposition required to be applied to reduce the Credit Party
          Obligations pursuant to Section 4.3(b)(iii) and (2) the amount of such
          Net Cash Proceeds applied to prepay outstanding U.S. Term Loans.

The applicable Borrowers shall pay to the applicable Agent for the account of
the applicable Lenders in accordance with the terms of Section 4.5(a), on the
date of each termination or reduction of the U.S. Revolving Committed Amount,
the Canadian Revolving Committed Amount or the U.S. Term Loan Committed Amount,
the U.S. Revolving Commitment Unused Fee, the U.S. Term Commitment Unused Fee


                                       51



or the Canadian Unused Fee, as applicable, accrued through the date of such
termination or reduction on the amount of the U.S. Revolving Committed Amount,
the Canadian Revolving Committed Amount or the U.S. Term Loan Committed Amount
so terminated or reduced.

     (b) Increase in Commitments. Following the Closing Date, Airgas shall have
the right, upon at least fifteen (15) Business Days' prior written notice to the
U.S. Agent (and, in the case of an increase in the Canadian Revolving Committed
Amount, the Canadian Agent), to increase the U.S. Revolving Committed Amount,
the Canadian Revolving Commitment and/or the U.S. Term Loan Committed Amount by
an aggregate amount for all such increases not to exceed the Maximum Increase
Amount, in one or more increases, at any time and from time to time; 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 Article VI 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 an integral multiple of $1,000,000 and
     shall in no event be less than $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 (and, in the
     case of an increase in the Canadian Revolving Committed Amount, the
     Canadian 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 (and, in the case of an increase in the Canadian Revolving
     Committed Amount, the Canadian Agent) from one or more lenders that would
     qualify as an Eligible Assignee (assuming such transaction were treated as
     an assignment pursuant to Section 11.3(b)) (it being understood that no
     Lender shall be obligated to increase any of its Commitments pursuant to
     this Section without its consent) and (B) each such lender shall have
     executed an agreement in the form of Exhibit 4.4 hereto (each such
     agreement a "New Commitment Agreement"), accepted in writing therein by the
     U.S. Agent (and, in the case of an increase in the Canadian Revolving
     Committed Amount, the Canadian 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;

          (v) the U.S. Agent (and, in the case of an increase in the Canadian
     Revolving Committed Amount, the Canadian Agent) shall have received all
     documents (including board of directors' resolutions and opinions of
     counsel) it may reasonably request relating to the corporate or other
     necessary authority for and the validity of such increase in the U.S.
     Revolving Committed Amount, the Canadian Revolving Committed Amount and/or
     the U.S. Term Loan Committed Amount, and any other matters relevant
     thereto, all in form and substance reasonably satisfactory to the U.S.
     Agent (and, in the case of an increase in the Canadian Revolving Committed
     Amount, the Canadian Agent);

          (vi) if the reallocation, if any, of outstanding Loans among the
     Lenders in connection with such increase results in the prepayment of
     Eurodollar Loans on a day which is not the last day of an Interest Period
     with respect thereto, Airgas shall have paid to each affected Lender such
     amounts, if any, as may be required pursuant to Section 4.11; and

          (vii) the aggregate amount of all increases to the Canadian Revolving
     Commitment effected by this Section 4.4(b) shall not exceed C$30,000,000.


                                       52



     (c) (i) Upon the effectiveness of the increase in the U.S. Revolving
Committed Amount, the Canadian Revolving Commitment and/or the U.S. Term Loan
Committed Amount, as applicable, pursuant to subsection (b), (A) the U.S.
Revolving Commitment Percentage, the Canadian Commitment Percentage and/or the
U.S. Term Loan Percentage, as applicable, of each Lender shall be automatically
adjusted to give effect to such increase, provided that the amount of each
Lender's U.S. Revolving Commitment, Canadian Revolving Commitment and/or U.S.
Term Loan Commitment, as applicable, (other than a Lender whose U.S. Revolving
Commitment, Canadian Revolving Commitment and/or U.S. Term Loan Commitment, as
applicable, shall have been increased in connection with such increase) shall
remain unchanged and (B) Airgas, the U.S. Agent (and, in the case of an increase
in the Canadian Revolving Committed Amount, the Canadian Agent) and the Lenders
will use all commercially reasonable efforts to assign and assume outstanding
Loans of the affected category to conform the respective amounts thereof held by
each Lender to the U.S. Revolving Commitment Percentage or the Canadian
Commitment Percentage, as applicable, as so adjusted, it being understood that
the parties hereto shall use commercially reasonable efforts to avoid prepayment
or assignment of any affected Loan that is a Eurodollar Loan on a day other than
the last day of the Interest Period applicable thereto and (ii) in the case of
an increase in the U.S. Term Loan Committed Amount, beginning with the date of
the next principal amortization payment occurring after the date of such
increase, the amount of each principal amortization payment on the U.S. Term
Loans shall be increased by the minimum amount that, when allocated ratably
(based on outstandings) among all of the Lenders holding U.S. Term Loans
immediately after giving effect to such increase in the U.S. Term Loan Committed
Amount, would provide (assuming all other things to be equal) for each of the
Lenders holding U.S. Term Loans immediately prior to giving effect to such
increase in the U.S. Term Loan Committed Amount to receive in connection with
such principal amortization payment an amount at least equal to the amount that
such Lender would have received had such increase in the U.S. Term Loan
Committed Amount (and the corresponding adjustment to such principal
amortization payment pursuant to this Section 4.4(c)) not taken place.

     4.5 FEES.

     (a) Unused Fees.

          (i) U.S. Unused Fees.

               (A) U.S. Revolving Commitment Unused Fee. In consideration of the
          U.S. Revolving Commitments of the U.S. Revolving Lenders hereunder,
          Airgas agrees to pay to the U.S. Agent for the account of the U.S.
          Revolving Lenders a fee (the "U.S. Revolving Commitment Unused Fee")
          on the actual daily amount by which (a) the U.S. Revolving Committed
          Amount exceeds (b) the sum of (i) the outstanding aggregate principal
          amount of all U.S. Revolving 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,
          computed at a per annum rate for each day during the applicable period
          at a rate equal to the Applicable Percentage in effect from time to
          time. The U.S. Revolving Commitment Unused 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 U.S. Revolving Committed Amount is reduced as
          provided in Section 4.4 and the Termination Date) for the immediately
          preceding quarter (or portion thereof), beginning with the first of
          such dates to occur after the Closing Date.

               (B) U.S. Term Commitment Unused Fee. In consideration of the U.S.
          Term Loan Commitments of the U.S. Term Lenders hereunder, Airgas
          agrees to pay to the U.S. Agent for the account of the U.S. Term
          Lenders holding unfunded U.S. Term Loan Commitments a fee (the "U.S.
          Term Commitment Unused Fee") on the then applicable U.S.


                                       53



          Term Loan Committed Amount, computed at a per annum rate for each day
          during the applicable period at a rate equal to the Applicable
          Percentage in effect from time to time. The U.S. Term Commitment
          Unused 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 U.S. Term Loan
          Committed Amount is reduced as provided in Section 4.4 and the
          Termination Date) for the immediately preceding quarter (or portion
          thereof), beginning with the first of such dates to occur after the
          Closing Date.

          (ii) Canadian Unused Fee. In consideration of the Canadian Revolving
     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 "Canadian Unused Fee") on the actual daily amount by which (a) the
     Canadian Revolving Committed Amount exceeds (b) the sum of (i) the
     outstanding aggregate principal amount of all Canadian Revolving Loans plus
     (ii) the outstanding aggregate principal amount of all Canadian LOC
     Obligations plus (iii) the aggregate BA Outstandings, computed at a per
     annum rate for each day during the applicable period at a rate equal to the
     Applicable Percentage in effect from time to time. The Canadian Unused 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 Canadian Revolving Committed Amount is
     reduced as provided in Section 4.4 and the Termination Date) for the
     immediately preceding quarter (or portion thereof), beginning with the
     first of such dates to occur after the Closing Date.

     (b) U.S. Letter of Credit Fees.

          (i) Issuance Fee for Standby U.S. Letters of Credit. 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. Revolving
     Lender a fee on such U.S. Revolving Lender's U.S. Revolving 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. Such 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) Drawing Fee for Trade U.S. Letters of Credit. 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. Revolving Lender a fee
     equal to the Applicable Percentage on such U.S. Revolving Lender's U.S.
     Revolving Commitment Percentage of the daily maximum amount available to be
     drawn under any such trade U.S. Letter of Credit. Such fee will be payable
     on the date of any drawing thereunder or on the cancellation of expiration
     of such trade U.S. Letter of Credit.

          (iii) U.S. Issuing Lender Fronting Fees. In addition to the fees
     payable pursuant to clauses (i) and (ii) above, Airgas promises to pay to
     the applicable U.S. Issuing Lender for its own account without sharing by
     the other Lenders (A) an issuance fee in an amount agreed between Airgas
     and such U.S. Issuing Lender 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 in an amount agreed between Airgas and
     such U.S. Issuing Lender 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 such U.S. Issuing Lender and (D) the customary charges from
     time to time of such 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.


                                       54



     (c) Canadian Letter of Credit Fees.

          (i) Issuance Fee for Standby Canadian Letters of Credit. 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 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. Such 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) Drawing Fee for Trade Canadian Letters of Credit. 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 equal to the Applicable
     Percentage on such Lender's Canadian Commitment Percentage of the daily
     maximum amount available to be drawn under any such trade Canadian Letter
     of Credit. Such fee will be payable on the date of any drawing thereunder
     or on the cancellation of expiration of such trade Canadian Letter of
     Credit.

          (iii) Canadian Issuing Lender Fronting Fees. In addition to the fees
     payable pursuant to clauses (i) and (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 in an amount agreed
     between Airgas and the Canadian Issuing Lender 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 in an
     amount agreed between Airgas and the Canadian Issuing Lender 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 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.

     (d) Agent Fees.

          (i) U.S. Agent Fees. Airgas agrees to pay to the U.S. Agent, for its
     own account, the fees referred to in the U.S. Agent's Fee Letter.

          (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.

     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 Borrowers, the Borrowers shall be obligated to pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction. Upon making a request for such additional amount hereunder, such
Lender will furnish to the Borrowers a statement certifying the amount of such
reduction and describing the event giving rise to


                                       55



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 Rate for such
Interest Period, the U.S. Agent shall give telecopy or telephonic notice thereof
to Airgas and the affected 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.

     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 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.


                                       56



     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 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 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 Canadian
Revolving Loan, issuing or participating in any 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 Borrowers from such Lender,
through an Agent, in accordance herewith, the Borrowers 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 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 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 Canadian Revolving Loan, of issuing or participating in any Letter of
Credit or of accepting any Bankers' Acceptance by a material amount, then such
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 Borrowers 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 Borrowers, together with
interest thereon at the U.S. Base Rate or Canadian Base Rate, as applicable.
This covenant shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.

     4.10 TAXES.

     (a) Except as provided below in this subsection, all payments made by the
Credit Parties under this Credit Agreement shall be made free and clear of, and
without deduction or withholding for or on


                                       57



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. 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, (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, 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 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 Borrowers 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 4.10 that were erroneously billed to the
Credit Parties, together with interest thereon at the U.S. Base Rate or Canadian
Base Rate, as applicable. 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 or a state thereof shall deliver to Airgas and the U.S. Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Lender becomes a Lender under this Credit Agreement (and from time
to time thereafter upon the request of Airgas or the U.S. Agent, but only if
such Lender is legally entitled to do so), whichever of the following is
applicable:

     (i)  duly completed copies of Internal Revenue Service Form W-8BEN claiming
          eligibility for benefits of an income tax treaty to which the United
          States is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Lender claiming the benefits of the exemption for
          portfolio interest under section 881(c) of the Code, (x) a certificate
          to the effect that such Lender is not (A) a "bank" within the meaning
          of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of
          Airgas within the meaning of section 881(c)(3)(B) of the Code, or (C)
          a "controlled foreign corporation" described in section 881(c)(3)(C)
          of the Code and (y) duly completed copies of Internal Revenue Service
          Form W-8BEN, or


                                       58



     (iv) any other form prescribed by applicable law as a basis for claiming an
          exemption from withholding tax with respects to payments under this
          Credit Agreement duly completed together with such supplementary
          documentation as may be prescribed by applicable law.

     4.11 INDEMNITY.

     Airgas promises to indemnify each Lender and to hold each Lender harmless
from any loss or expense which such Lender may sustain or incur (other than
through such 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 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 Lender) which would have accrued to such 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 PAYMENTS GENERALLY; AGENTS' CLAWBACK.

     (a) General. All payments to be made by a Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, (i) all payments in respect of
Canadian Revolving Loans, Canadian Swingline Loans, Canadian Letters of Credit,
Bankers' Acceptances, interest on Canadian Revolving Loans, the Acceptance Fee
on Bankers' Acceptances or the Canadian Unused Fee shall be made to the Canadian
Agent, for the account of the respective Lenders to which such payment is owed,
at the Canadian Agent's office specified in Schedule 11.1 in Canadian Dollars
and in immediately available funds not later than 2:00 P.M. (Toronto, Ontario
time) on the date specified herein and (ii) all other payments hereunder (other
than payments in respect of Competitive U.S. Loans) shall be made to the U.S.
Agent, for the account of the respective Lenders to which such payment is owed,
at the U.S. Agent's office specified in Schedule 11.1 in U.S. Dollars and in
immediately available funds not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date specified herein. All payments received by the applicable
Agent after such times shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. 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).
The applicable Agent will promptly distribute to each Lender its pro rata share
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender. Subject to the definition of "Interest
Period", if any payment to be made by a Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be. All payments of principal and interest in respect of
Competitive U.S. Loans shall be in accordance with the terms of Section 2.2.


                                       59



     (b) (i) Funding by Lenders; Presumption by Agents. Unless the U.S. Agent or
     the Canadian Agent, as appropriate, shall have received notice from a
     Lender prior to the proposed date of any extension of credit that such
     Lender will not make available to such Agent such Lender's share of such
     extension of credit, such Agent may assume that such Lender has made such
     share available on such date in accordance with the terms of this Credit
     Agreement and may, in reliance upon such assumption, make available to the
     applicable Borrower a corresponding amount. In such event, if a Lender has
     not in fact made its share of the applicable extension of credit available
     to the appropriate Agent, then the applicable Lender and the applicable
     Borrower severally agree to pay to such Agent forthwith on demand such
     corresponding amount in immediately available funds with interest thereon,
     for each day from and including the date such amount is made available to
     such Borrower to but excluding the date of payment to such Agent, at (A) in
     the case of a payment to be made by such Lender in connection with any
     extension of credit in U.S. Dollars, the Federal Funds Rate (or, if
     greater, a rate determined by the U.S. Agent in accordance with banking
     industry rules on interbank compensation) or, in the case of a payment to
     be made by such Lender in connection with any extension of credit in
     Canadian Dollars, the interbank rate (as defined in the Canadian Payment
     Association Rules), and (B) in the case of a payment to be made by a
     Borrower in connection with any extension of credit in U.S. Dollars, the
     U.S. Base Rate or in the case of a payment to be made by a Borrower in
     connection with any extension of credit in Canadian Dollars, the Canadian
     Base Rate. If such Borrower and such Lender shall pay such interest to the
     appropriate Agent for the same or an overlapping period, such Agent shall
     promptly remit to such Borrower the amount of such interest paid by such
     Borrower for such period. If such Lender pays its share of the applicable
     extension of credit to the appropriate Agent, then the amount so paid shall
     constitute such Lender's Loan included in such extension of credit. Any
     payment by a Borrower shall be without prejudice to any claim such Borrower
     may have against a Lender that shall have failed to make such payment to
     the appropriate Agent.

          (ii) Payments by Borrowers; Presumptions by Agents. Unless the
     appropriate Agent shall have received notice from the applicable Borrower
     prior to the date on which any payment is due to such Agent for the account
     of the Lenders hereunder that such Borrower will not make such payment,
     such Agent may assume that such Borrower has made such payment on such date
     in accordance herewith and may, in reliance upon such assumption,
     distribute to the appropriate Lenders the amount due. In such event, if
     such Borrower has not in fact made such payment, then each of the
     applicable Lenders severally agrees to repay to the appropriate Agent
     forthwith on demand the amount so distributed to such Lender, in
     immediately available funds with interest thereon, for each day from and
     including the date such amount is distributed to it to but excluding the
     date of payment to such Agent, at (A) in the case of any extension of
     credit in U.S. Dollars, the Federal Funds Rate (or, if greater, a rate
     determined by the U.S. Agent in accordance with banking industry rules on
     interbank compensation), or (B) in the case of any extension of credit in
     Canadian Dollars, the interbank rate (as defined in the Canadian Payment
     Association Rules).

     A notice of an Agent to any Lender or a Borrower with respect to any amount
owing under this subsection (b) shall be conclusive, absent manifest error.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the applicable Agent funds for any extension of credit to be made by such
Lender as provided in this Credit Agreement, and such funds are not made
available to the applicable Borrower by such Agent because the conditions to the
applicable extension of credit set forth in Section 5.2 are not satisfied or
waived in accordance with the terms hereof, such Agent shall return such funds
(in like funds as received from such Lender) to such Lender, without interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Loans, to fund participations in other extensions of credit
and to make payments pursuant to


                                       60



Section 11.5(b) are several and not joint. The failure of any Lender to make any
Loan, to fund any such participation or to make any payment under Section
11.5(b) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, to purchase
its participation or to make its payment under Section 11.5(b).

     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any extension of credit hereunder in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any such extension of credit in any
particular place or manner.

     4.13 SHARING OF PAYMENTS.

     If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
the Loans made by it, or the participations in LOC Obligations or in U.S.
Swingline Loans or Canadian Swingline Loans held by it resulting in such
Lender's receiving payment of a proportion of the aggregate amount of such Loans
or participations and accrued interest thereon greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Agents of such fact, and (b) purchase (for cash at face
value) participations in the Loans and subparticipations in LOC Obligations,
U.S. Swingline Loans or Canadian Swingline Loans of the other Lenders, or make
such other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans and other
amounts owing them, provided that:

          (i) if any such participations or subparticipations are purchased and
     all or any portion of the payment giving rise thereto is recovered, such
     participations or subparticipations shall be rescinded and the purchase
     price restored to the extent of such recovery, without interest; and

          (ii) the provisions of this Section 4.13 shall not be construed to
     apply to (x) any payment made by a Borrower pursuant to and in accordance
     with the express terms of this Credit Agreement or (y) any payment obtained
     by a Lender as consideration for any assignment of or sale of any of its
     interests hereunder in accordance with Section 11.3, other than to a
     Borrower or any Subsidiary thereof (as to which the provisions of this
     Section 4.13 shall apply).

     Each Credit Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Credit Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Credit
Party in the amount of such participation.

     4.14 COMPUTATIONS; ALLOCATION OF PAYMENTS POST-ACCELERATION.

     (a) Computation of Interest and Fees. All computations of interest for U.S.
Base Rate Loans when the U.S. Base Rate is determined by Bank of America's
"prime rate" and all computations of interest for Canadian Base Rate Loans shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. Except as expressly provided otherwise herein, all other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 4.12(a), bear interest for one day. Each
determination by the applicable Agent of an interest rate or fee hereunder shall
be conclusive and binding for all purposes, absent manifest error.


                                       61



     (b) Allocation of Payments After Acceleration. After acceleration of the
Credit Party Obligations pursuant to Section 9.2, all amounts collected or
received by any Agent or any Lender (i) from the Credit Parties in connection
with or on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or (ii) in respect of the
Collateral pledged by the Credit Parties in support of the Credit Party
Obligations, whether received from a Borrower, a Guarantor or otherwise shall be
immediately forwarded to the U.S. Agent and shall be thereafter be paid over or
delivered as follows:

          FIRST, to the payment of all reasonable out-of-pocket costs and
     expenses (including without limitation reasonable attorneys' fees) of the
     Agents and the Collateral Agent in connection with enforcing the rights of
     the Lenders under the Credit Documents and any protective advances made by
     the Collateral Agent with respect to the Collateral under or pursuant to
     the terms of the Collateral Documents;

          SECOND, to the payment of any fees owed to the Agents;

          THIRD, to the payment of all reasonable out-of-pocket costs and
     expenses (including without limitation, reasonable attorneys' fees) of each
     of the Lenders in connection with enforcing its rights under the Credit
     Documents or otherwise with respect to the Credit Party Obligations owing
     to such Lender ratably among them in proportion to the amounts described in
     this clause THIRD payable to them;

          FOURTH, to the payment of all of the Credit Party Obligations
     consisting of accrued fees and interest ratably among the Lenders in
     proportion to the respective amounts described in this clause FOURTH held
     by them;

          FIFTH, to the payment of the outstanding principal amount of the
     Credit Party Obligations (including the payment or cash collateralization
     of the outstanding LOC Obligations) ratably among the Lenders in proportion
     to the respective amounts described in this clause FIFTH held by them;

          SIXTH, to all other Credit Party Obligations and other obligations
     which shall have become due and payable under the Credit Documents or
     otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above
     ratably among the Lenders in proportion to the respective amounts described
     in this clause SIXTH held by them; and

          SEVENTH, to the payment of the surplus, if any, to whoever may be
     lawfully entitled to receive such surplus.

          In carrying out the foregoing:

               (i) to the extent that any amounts available for distribution
          pursuant to clause "FIFTH" above are attributable to the issued but
          undrawn amount of outstanding U.S. Letters of Credit and Canadian
          Letters of Credit, such amounts shall be held by the U.S. Agent and
          the Canadian Agent, respectively, in a cash collateral account and
          applied (A) first, to reimburse the applicable U.S. Issuing Lender or
          Canadian Issuing Lender from time to time for any drawings under such
          Letters of Credit and (B) then, following the expiration or
          cancellation of all Letters of Credit, to all other obligations of the
          types described in clauses "FIFTH", "SIXTH" and "SEVENTH" above in the
          manner provided in this Section 4.14(b);


                                       62



               (ii) all amounts collected or received by any Agent or any Lender
          from the Canadian Credit Parties shall be applied exclusively to the
          Canadian Obligations; and

               (iii) with respect to any amounts collected or received by any
          Agent or any Lender from the U.S. Credit Parties or in respect of the
          Collateral pledged by the U.S Credit Parties, clauses "THIRD",
          "FOURTH" and "FIFTH" above shall include only that portion, if any, of
          the Canadian Obligations that is outstanding and unsecured after
          taking into account any amounts collected or received by any Agent or
          any Lender from the Canadian Credit Parties or in respect of the
          Collateral, if any, pledged by the Canadian Credit Parties.

                                    ARTICLE V

                                   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 Agreement, the Pledge Agreement and the Intercreditor Agreement
     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 Agents shall have received a legal opinion of Cravath, Swaine
     & Moore LLP, U.S. counsel for the Credit Parties, dated as of the Closing
     Date in form and substance reasonably satisfactory to the Agents.

          (d) (i) The Agents shall have received a legal opinion of Cassels
          Brock & Blackwell, Canadian counsel for the Credit Parties, dated as
          of the Closing Date in form and substance reasonably satisfactory to
          the Agents.

               (ii) The Agents shall have received a legal opinion of special
          local counsel for each Credit Party set forth on Schedule 5.1(d) in
          form and substance reasonably satisfactory to the Agents.

          (e) 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;

          (f) The U.S. Agent shall have received a certificate or certificates
     executed by an Executive Officer of Airgas, in form and substance
     satisfactory to the U.S. Agent, stating that (A) each Credit Party is in
     compliance with all existing material financial obligations, (B) all
     governmental, shareholder and third party consents and approvals, if any,
     with respect to the Credit Documents and the transactions contemplated
     thereby have been obtained, (C) no action, suit, investigation or
     proceeding is pending or, to the best of his knowledge, threatened in any
     court or before any arbitrator or governmental instrumentality that
     purports to affect any Credit Party or any


                                       63



     transaction contemplated by the Credit Documents that could have a Material
     Adverse Effect and (D) immediately after giving effect to the initial
     extensions of credit under this Credit Agreement, (1) no Default or Event
     of Default exists, (2) all representations and warranties contained herein
     are, subject to the limitations set forth herein, true and correct in all
     material respects unless the failure to be so true and correct would not be
     reasonably expected to have a Material Adverse Effect, (3) the Credit
     Parties are in compliance with each of the financial covenants set forth in
     Section 7.10 as of the first date provided for the measurement of each of
     such financial covenants in accordance with the terms thereof and (4)
     assuming full utilization of the credit facilities hereunder (other than
     any increase contemplated by but not yet effected pursuant to Section
     4.4(b)) on the Closing Date, the Indebtedness of the Credit Parties
     hereunder constitutes "Senior Debt" as defined in the Subordinated Note
     Indentures (including an analysis supporting such statement); and

          (g) Perfection and Priority of Liens. Receipt by the U.S. Agent of the
     following:

          (i)  searches of Uniform Commercial Code and PPSA filings in the
               jurisdiction of formation of each Borrower and each U.S. Credit
               Party;

          (ii) UCC and PPSA financing statements for each appropriate
               jurisdiction as is necessary, in the U.S. Agent's sole
               discretion, to perfect the Collateral Agent's security interest
               in the Collateral;

          (iii) all certificates evidencing any certificated Capital Stock
               pledged to the Collateral Agent pursuant to the Pledge Agreement,
               together with duly executed in blank, undated stock powers
               attached thereto (unless, with respect to the pledged Capital
               Stock of any Foreign Subsidiary, such stock powers are deemed
               unnecessary by the U.S. Agent in its reasonable discretion under
               the law of the jurisdiction of incorporation of such Person); and

          (iv) all intercompany notes issued by any Subsidiary of Airgas in
               favor of a U.S. Credit Party, together with allonges or
               assignments as may be necessary or appropriate to perfect the
               Collateral Agent's security interest in the Collateral.

     5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.

     The obligations of each Lender to make any Loan or create any Bankers'
Acceptance, of any 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 Borrower 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 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 Article VI 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;


                                       64



          (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;

          (v) The incurrence by the applicable Borrower of the Indebtedness
     evidenced by such Loan, Bankers' Acceptance or Letter of Credit shall be
     permitted by the Subordinated Note Indentures and shall constitute "Senior
     Debt" (as defined in the Subordinated Note Indentures).

          (vi) In the case of a borrowing of U.S. Term Loans on or prior to the
     date that is ten months after the Closing Date, such proceeds shall only be
     used for the purposes of U.S. Term Loans funded on or prior to such date as
     set forth in Section 6.15 and Section 7.8;

          (vii) 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 U.S. Revolving Loans, Competitive U.S. Loans, U.S. Swingline
     Loans and U.S. Letters of Credit, the sum of the aggregate principal amount
     of outstanding U.S. Revolving 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 U.S. Revolving 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
     Canadian Revolving Loans, Canadian Swingline Loans, Canadian Letters of
     Credit and Bankers' Acceptances, 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 exceed the Canadian Revolving
     Committed Amount, (E) 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 (F) 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;
     and

The delivery of each Notice of Borrowing, 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 Borrowers
of the correctness of the matters specified in subsections (ii), (iii), (iv),
(v), (vi) and (vii) above.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

     Each Credit Party hereby represents to the Agents and each Lender that:

     6.1 FINANCIAL CONDITION.


                                       65



     (a) The audited consolidated balance sheet of the Consolidated Parties, and
the related consolidated statements of earnings and statements of cash flows, as
of March 31, 2006 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, 2006 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,
2006 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 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 2006, 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, 2006, 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 duly organized, validly existing and is in
good standing under the laws of the jurisdiction of its 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 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


                                       66



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 (other than those arising pursuant to the
Collateral Documents) 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.

     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 $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.

     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.


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     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 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),


                                       68



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 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
T, U or X.

     (b) No Consolidated Party is subject to regulation under the Investment
Company Act of 1940, as amended. In addition, no Consolidated Party is 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
company.

     (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 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 organization 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 Permitted Acquisitions


                                       69



and Permitted Investments and (iii) for the working capital, capital
expenditures and other general corporate purposes of the Consolidated Parties;
provided, however, prior to the date that is ten months after the Closing Date,
the proceeds of the U.S. Term Loans shall only be used for the following
purposes: (A) $100 million of the U.S. Term Loan may only be funded to repay the
Medium Term Notes and (B) $500 million of the U.S. Term Loan may only be funded
to finance the Project OT Acquisition. 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.

     (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 the Credit Parties, 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.

     6.17 SOLVENCY.

     The Credit Parties, on a consolidated basis, (a) are able to pay their
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (ii) do not intend to, and do not
believe that they will, incur debts or liabilities beyond their ability to pay
as such debts and liabilities mature in their ordinary course, (iii) are not
engaged in a business or a transaction, and are not


                                       70



about to engage in a business or a transaction, for which their Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which they are engaged or are to engage,
(iv) own Property, the fair value of which is greater than the total amount of
their liabilities, including, without limitation, contingent liabilities, and
(v) own assets, the present fair salable value of which is not less than the
amount that will be required to pay the probable liability on their debts as
they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

     6.18 PERFECTION OF SECURITY INTERESTS IN THE COLLATERAL.

     During such time as the Collateral Documents are in effect, the Collateral
Documents create valid security interests in, and Liens on, the Collateral
purported to be covered thereby, which security interests and Liens are
currently perfected security interests and Liens, prior to all other Liens.

     6.19 PERFECTION INFORMATION.

     Set forth on Schedule 6.19 is the chief executive office, jurisdiction of
organization, tax payer identification number and organizational identification
number of each U.S. Credit Party as of the Closing Date. Except as set forth on
Schedule 6.19, no U.S. Credit Party has during the five years preceding the
Closing Date (i) changed its legal name, (ii) changed its state of formation, or
(iii) been party to a merger, consolidation or other change in structure where
such Person was not the surviving Person.

                                   ARTICLE VII

                              AFFIRMATIVE COVENANTS

     Each Credit Party 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.

     The Credit Parties will furnish, or cause to be furnished, to each of the
Agents and each of the Lenders:

     (a) Annual Financial Statements. As soon as available, and in any event
within 105 days after the close of each fiscal year of the Consolidated Parties,
a consolidated balance sheet and income statement of the Consolidated Parties,
as of the end of such fiscal year, together with related consolidated statements
of operations and retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated 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 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 105 days after the
end thereof) a consolidated balance sheet and income statement of the
Consolidated Parties, as of the end of such fiscal quarter, together with
related consolidated statements of operations and retained earnings and of cash
flows for such fiscal quarter in each case setting forth in comparative form


                                       71



consolidated 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 an
Executive Officer of Airgas substantially in the form of Exhibit 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, (ii) including
a description of adjustments to Consolidated EBITDA (of the type described in
clause (H) of the definition thereof) and (iii) 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) Reports. Promptly upon transmission or receipt thereof, (i) 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 (ii) 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.

     (e) 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 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.

     (f) 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,


                                       72


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.

     (g) 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.

     Documents required to be delivered pursuant to Section 7.1(a), (b) or (d)
may be delivered electronically and shall be deemed to have been delivered on
the date (i) on which Airgas posts such documents on the Securities and Exchange
Commission website or Airgas' website at the website address listed on Schedule
11.1; or (ii) on which such documents are posted on Airgas' behalf on an
Internet or intranet website, if any, to which each Lender and each Agent have
access (whether a commercial, third-party website or whether sponsored by the
U.S. Agent); provided that: (i) if such Person does not have access to such
websites, Airgas shall deliver paper copies of such documents to the U.S. Agent
or any Lender that requests Airgas to deliver such paper copies until a written
request to cease delivering paper copies is given by the U.S. Agent or such
Lender and (ii) Airgas shall notify the U.S. Agent (by telecopier or electronic
mail) of the posting of any such documents and, if requested by the U.S. Agent,
provide to the U.S. Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance Airgas shall be required to provide paper copies of the compliance
certificates required by Section 7.1(c) to the U.S. Agent. Except for such
compliance certificates, the U.S. Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Airgas with any such
request for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

     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(a), each Credit Party 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.

     Each Credit Party 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). Each
Credit Party 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.

     Each Credit Party 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.

     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, each Credit Party 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


                                       73



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.

     Each Credit Party 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 practices.

     7.7 MAINTENANCE OF PROPERTY.

     Each Credit Party 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, each Credit Party
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. The U.S. Agent shall make available to the Lenders upon
request any information it obtains from any such visitations or inspections.

     7.10 FINANCIAL COVENANTS.

     (a) Consolidated Leverage Ratio. The Credit Parties shall cause the
Consolidated Leverage Ratio as of the last day of each fiscal quarter of Airgas
to be no greater than 4.0 to 1.0.

     (b) Consolidated Interest Coverage Ratio. The Credit Parties shall cause
the Consolidated Interest Coverage Ratio as of the last day of each fiscal
quarter of Airgas to be at least 3.5 to 1.0.

     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.

     7.12 ADDITIONAL GUARANTORS.

     (a) At all times other than during a period following a Collateral and
Guarantor Release Date that has not been followed by a Collateralization Date,
as soon as practicable and in any event within 30


                                       74




days after (i) any Person becomes a direct or indirect Restricted Subsidiary of
Airgas or (ii) any direct or indirect Subsidiary of Airgas guarantees Airgas'
obligations under any Junior Financing Documentation, the Credit Parties shall
(a) provide the U.S. Agent with written notice thereof, (b) cause such Person to
execute a Joinder Agreement, (c) deliver such other documentation as the U.S.
Agent may reasonably request in connection with the foregoing, including,
without limitation, favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of such Joinder Agreement) and other items of the types required
to be delivered pursuant to Section 5.1(b), all in form, content and scope
reasonably satisfactory to the U.S. Agent and (d) otherwise comply with Section
7.13 in respect of such Person.

     (b) Upon the occurrence of a Collateralization Date, Airgas shall (i) cause
each of its Restricted Subsidiaries to execute a Joinder Agreement, (ii) deliver
such other documentation as the U.S. Agent may reasonably request in connection
with the foregoing, including, without limitation, favorable opinions of counsel
to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of such Joinder Agreement) and other items of
the types delivered pursuant to Section 5.1(b) on the Closing Date, all in form,
content and scope reasonably satisfactory to the U.S. Agent and (iii) otherwise
comply with Section 7.13 in respect of such Restricted Subsidiaries.

Notwithstanding anything in this Section 7.12 to the contrary, the Credit
Parties shall not be required to provide legal opinions of foreign counsel with
respect to Immaterial Foreign Subsidiaries in connection with the execution of
any Joinder Agreement.

     7.13 PLEDGED ASSETS.

     (a) Generally. At all times other than during a period following a
Collateral and Guarantor Release Date that has not been followed by a
Collateralization Date, the Credit Parties will cause (i) 100% of the issued and
outstanding Capital Stock of the direct Domestic Subsidiaries of any U.S. Credit
Party to be subject at all times to a first priority, perfected Lien in favor of
the Collateral Agent securing the Credit Party Obligations pursuant to the terms
and conditions of the Pledge Agreement or such other security documents as the
U.S. Agent shall reasonably request, (ii) 65% of the issued and outstanding
Capital Stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of any direct
Foreign Subsidiary of any U.S. Credit Party (or such greater percentage that,
due to a change in an applicable Requirement of Law after the date hereof, (1)
could not reasonably be expected to cause the undistributed earnings of as
determined for United States federal income tax purposes to be treated as a
deemed dividend to such Subsidiary's United States parent and (2) could not
reasonably be expected to cause any material adverse tax consequences) to be
subject at all times to a first priority, perfected Lien in favor of the
Collateral Agent securing the Credit Party Obligations pursuant to the terms and
conditions of the Pledge Agreement or such other security documents as the U.S.
Agent shall reasonably request, and (iii) all intercompany notes issued by any
Subsidiary in favor of a U.S. Credit Party to be subject at all times to first
priority, perfected Liens in favor of the Collateral Agent to secure the Credit
Party Obligations pursuant to the terms and conditions of the Collateral
Documents. In connection with the foregoing, the Credit Parties shall cause to
be delivered to the Collateral Agent (A) all certificates evidencing any
certificated Capital Stock pledged to the Collateral Agent pursuant to the
Collateral Documents, together with duly executed in blank, undated stock powers
attached thereto (unless, with respect to the pledged Capital Stock of any
Foreign Subsidiary, such stock powers are deemed unnecessary by the U.S. Agent
in its reasonable discretion under the law of the jurisdiction of incorporation
of such Person), (B) all intercompany notes issued by any Subsidiary in favor of
a U.S. Credit Party, together with allonges or assignments as may be necessary
or appropriate to perfect the Collateral Agent's security interest in the
Collateral, (C) searches under the Uniform Commercial Code (or equivalent local
legislation) to the extent a filing of a financing statement pursuant to the
Uniform Commercial Code (or equivalent local legislation) would be necessary to
perfect a security interest in


                                       75



such Capital Stock, appropriate financing statements in Form UCC-1 (or the local
equivalent) necessary to perfect the Collateral Agent's security interest in
such Capital Stock, and (D) certified resolutions and other organizational and
authorizing documents of, and favorable opinions (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Collateral Agent's
Liens thereunder) of counsel to, each Person required to execute or otherwise
become a party to the Collateral Documents. If a U.S. Credit Party shall create
or acquire any Subsidiary the Capital Stock of which is required to be pledged
to the Collateral Agent as Collateral hereunder or acquire any intercompany
notes issued by a Subsidiary in favor of a U.S. Credit Party, the Credit Parties
shall promptly notify the U.S. Agent of the same. Each Credit Party shall, and
shall cause each of its Subsidiaries to, take such action (including but not
limited to the actions set forth in this Section 7.13(a)) at its own expense as
requested by the U.S. Agent to ensure that the Collateral Agent has a first
priority perfected Lien on such Capital Stock or intercompany notes to secure
the Credit Party Obligations as required by this Section 7.13. Notwithstanding
anything in this Section 7.13(a) to the contrary, the Credit Parties shall not
be required to (i) execute and deliver a pledge or security agreement that is
governed by the law of the jurisdiction of organization of any Immaterial
Foreign Subsidiary or (ii) provide legal opinions of foreign counsel with
respect to any Immaterial Foreign Subsidiary in connection with the pledge of
the Capital Stock of such Immaterial Foreign Subsidiary pursuant to the
Collateral Documents.

     (b) Collateral and Guarantor Release Date. Immediately upon the occurrence
of a Collateral and Guarantor Release Date, the Liens in favor of the Collateral
Agent in the Collateral shall automatically be released. The Collateral Agent
shall (to the extent applicable) deliver to the Credit Parties, upon the Credit
Parties' request and at the Credit Parties' expense, such documentation as is
reasonably necessary to evidence the release of the Collateral Agent's Lien, if
any, in such assets or Capital Stock, including, without limitation,
terminations of financing statements under the Uniform Commercial Code (or
equivalent local legislation), if any, and the return of stock certificates, if
any.

     7.14 RECEIVABLES FINANCING FURTHER ASSURANCES.

     Following the consummation of any sale of Securitization Assets by any
Receivables Subsidiary to the applicable Receivables Financier, each of the
applicable Credit Parties in its capacity as an owner of the Capital Stock of
such Receivables Subsidiary will take such action to cause, to the extent it is
legally able to do so in its capacity as an owner of Capital Stock, such
Receivables Subsidiary to dividend, distribute, lend (on a basis subordinated to
the Credit Party Obligations) or otherwise transfer to the Credit Parties any
Property (including cash) of such Receivables Subsidiary not required to be
pledged to the applicable Receivables Financier or required to be held by such
Receivables Subsidiary by the terms of the applicable Permitted Receivables
Financing.

                                  ARTICLE VIII

                               NEGATIVE COVENANTS

     Each Credit Party 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.

     (a) The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness except:

          (i) Indebtedness arising under this Credit Agreement and the other
     Credit Documents;


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          (ii) Indebtedness set forth in Schedule 8.1 (and renewals,
     refinancings and extensions thereof on terms and conditions no less
     favorable to such Person than such existing Indebtedness);

          (iii) Permitted Receivables Financings; and

          (iv) other Indebtedness so long as after giving effect to the
     incurrence thereof on a Pro Forma Basis, the Credit Parties would be in
     compliance with the financial covenants set forth in Section 7.10.

     (b) In addition to the limitations on Indebtedness set forth in Section
8.1(a), at all times following a Collateral and Guarantor Release Date that has
not been followed by a Collateralization Date, the Credit Parties will not
permit the aggregate principal amount of all Indebtedness of all Subsidiaries of
Airgas to exceed an amount equal to five percent (5%) of the consolidated total
assets of the Consolidated Parties, as determined in accordance with GAAP;
provided, however, during the 180 day period immediately following the first
date as of which National Welders becomes a Restricted Subsidiary, if ever,
Indebtedness of National Welders shall be excluded from the forgoing
calculation.

     8.2 LIENS.

     The Credit Parties will not 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.

     The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by any such Person as
of the Closing Date, except for reasonable extensions thereof and businesses
ancillary thereto.

     8.4 CONSOLIDATION, MERGER, AMALGAMATION OR SALE.

     (a) Except in connection with a disposition of assets permitted by the
terms of Section 8.4(b), the Credit Parties will not permit any Consolidated
Party to dissolve, liquidate or wind up their affairs, or merge, consolidate or
amalgamate; provided that, notwithstanding the foregoing provisions of this
Section 8.4(a) but subject to the terms of Sections 7.12 and 7.13, (i) Airgas
may merge, consolidate or amalgamate with any of its Subsidiaries so long as (A)
Airgas 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, (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 Credit Party (other than a Borrower) may merge,
consolidate or amalgamate with any other Credit Party (other than a Borrower),
so long as (A) to the extent a U.S. Subsidiary Guarantor is a party to such
transaction, a U.S. Subsidiary Guarantor is the surviving Person 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, (iv) any Subsidiary of Airgas which is not a Credit Party may merge,
consolidate or amalgamate with any other Subsidiary of Airgas, so long as (A) to
the extent a Credit Party is a party to such transaction, such Credit Party is
the surviving Person 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, (v) Airgas or any of its Subsidiaries
(other than Canadian Subsidiaries) may merge or consolidate with any other
Person that is not a Consolidated Party in connection with a Permitted
Acquisition so long as


                                       77



Airgas or such Subsidiary is the surviving Person, (vi) a Canadian Borrower may
amalgamate with any other Person that is not a Consolidated Party in connection
with a Permitted Acquisition so long as the corporation resulting from such
amalgamation is in compliance with all covenants contained in this Credit
Agreement and (vii) 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; provided, however, a Consolidated Party that is not
identified on Schedule 1.1A may not merge, consolidate or amalgamate with any
Person identified on Schedule 1.1A in connection with or in contemplation of an
Asset Disposition of the Capital Stock of or all or substantially all of the
assets of the surviving entity permitted by clause (xii) of the definition of
"Excluded Asset Disposition"; or

     (b) The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition other than an Excluded Asset Disposition unless (i) except
with respect to an Involuntary Disposition, the consideration paid in connection
therewith (A) shall, except to the extent constituting an Asset Exchange, be at
least 75% cash or Cash Equivalents and (B) shall be in an amount not less than
the fair market value of the Property disposed of, (ii) the aggregate net book
value of the Property disposed of by all Consolidated Parties shall not exceed
(A) $50,000,000 for all such transactions other than Involuntary Dispositions
during any fiscal year, and (B) $100,000,000 for all such transactions other
than Involuntary Dispositions after the Closing Date, (iii) the consideration
received for any Property disposed of in any such transaction other than an
Involuntary Disposition shall not be less than the fair market value of such
Property, (iv) each such transaction other than an Involuntary Disposition
involving Property having a net book value of $5,000,000 or more shall be on an
arms-length basis with a wholly independent third party, and (v) if the net book
value of the Property subject to such Asset Disposition exceeds $15,000,000, no
later than five (5) Business Days prior to such Asset Disposition, Airgas shall
have delivered to the U.S. Agent (A) a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
Airgas would be in compliance with the financial covenants set forth in Section
7.10 and (B) a certificate of an Executive Officer of Airgas specifying the
anticipated date of such Asset Disposition, briefly describing the assets to be
sold or otherwise disposed of and setting forth the net book value of such
assets, the aggregate consideration and the Net Cash Proceeds to be received for
such assets in connection with such Asset Disposition. Notwithstanding anything
to the contrary contained in this Credit Agreement, no Credit Party shall permit
any Consolidated Party to engage in or be a party to any Securitization
Transaction other than a Permitted Receivables Financing.

     8.5 INVESTMENTS.

     The Credit Parties will not permit any Consolidated Party to make any
Investments, except for:

          (a) Investments consisting of cash and Cash Equivalents;

          (b) Investments consisting of accounts receivable created, acquired or
     made by any Consolidated Party in the ordinary course of business and
     payable or dischargeable in accordance with customary trade terms;

          (c) Investments consisting of Capital Stock, obligations, securities
     or other property received by any Consolidated Party in settlement of
     accounts receivable (created in the ordinary course of business) from
     bankrupt obligors;

          (d) Investments existing as of the Closing Date and set forth in
     Schedule 8.5;

          (e) Investments consisting of advances or loans to directors,
     officers, employees, agents, customers or suppliers that do not exceed
     $5,000,000 in the aggregate at any one time outstanding;


                                       78


          (f) Investments in any U.S. Credit Party;

          (g) Investments by any Foreign Subsidiary in any Canadian Credit
     Party;

          (h) any Eligible Reinvestment of the proceeds of any Asset Disposition
     as contemplated by Section 8.4(b)(v);

          (i) Acquisitions by Airgas or any Subsidiary of Airgas, provided that
     (A) the Property acquired (or the Property of the Person acquired) in such
     Acquisition is used or useful in the same or a similar or ancillary line of
     business as Airgas and its Subsidiaries were engaged in on the Closing Date
     (or any reasonable extensions or expansions thereof), (B) in the case of an
     Acquisition of the Capital Stock of another Person, the board of directors
     (or other comparable governing body) of such other Person shall have duly
     approved such Acquisition, (C) Airgas shall have delivered to the U.S.
     Agent, if the aggregate purchase price of such Acquisition exceeds
     $50,000,000, a Pro Forma Compliance Certificate demonstrating that, upon
     giving effect to such Acquisition on a Pro Forma Basis, Airgas would be in
     compliance with the financial covenants set forth in Section 7.10, and (D)
     the representations and warranties made by the Credit Parties in each
     Credit Document shall be true and correct in all material respects at and
     as if made as of the date of such Acquisition (after giving effect thereto)
     except to the extent such representations and warranties expressly relate
     to an earlier date;

          (j) Investments (other than Acquisitions) consisting of non-cash
     consideration received by a Consolidated Party in connection with any Asset
     Disposition permitted by Section 8.4(b);

          (k) Investments by any Credit Party in a Receivables Subsidiary made
     as part of a Permitted Receivables Financing;

          (l) to the extent not constituting an Acquisition, additional
     Investments in the Capital Stock of National Welders; and

          (m) other Investments not constituting Restricted Payments and not
     listed above in an aggregate amount not to exceed $10,000,000.

     8.6 RESTRICTED PAYMENTS.

     The Credit Parties will not permit any Consolidated Party to directly or
indirectly declare, order, make or set apart any sum for or pay any Restricted
Payment, except:

     (i) any Consolidated Party may directly or indirectly declare or make
dividends payable solely in the same class of Capital Stock of such Person;

     (ii) each Subsidiary may directly or indirectly declare, order, make or set
apart any sum for or pay Restricted Payments to the U.S. Credit Parties and any
other Person that owns Capital Stock in such Subsidiary, ratably according to
their respective holdings of the type of Capital Stock in respect of which such
Restricted Payment is being made; and

     (iii) any Consolidated Party may directly or indirectly declare, order,
make or set apart any sum for or pay other Restricted Payments so long as (a) no
Default or Event of Default shall have occurred and be continuing at the time of
any such Restricted Payment or shall result upon giving effect thereto and (b)
after giving effect to the declaration, order, making or setting apart any sum
for such Restricted Payment on a Pro Forma Basis, the Credit Parties would be in
compliance with the financial covenants set forth in Section 7.10.


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     8.7 PAYMENTS OF INDEBTEDNESS, ETC.

     The Credit Parties will not permit any Consolidated Party to (a) if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, (i) 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 (ii) except for the exchange of
the Subordinated Notes for notes with substantially identical terms registered
pursuant to the registration rights agreement set forth in the Subordinated Note
Indentures, 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, (b) after the issuance
thereof, amend or modify any of the terms of the Indebtedness arising under any
Junior Financing Documentation if such amendment or modification would add or
change any terms in a manner adverse to the Consolidated Parties, or shorten the
final maturity or average life to maturity thereof or require any payment to be
made sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, (c) make payments
(including payment of accrued interest and premium, if any, payable in
connection with a redemption of the Subordinated Notes permitted under this
Section 8.7) in respect of any Subordinated Debt in violation of the
subordination provisions of any Junior Financing Documentation or (d) make (or
give any notice with respect thereto) any voluntary or optional payment or
prepayment, redemption, acquisition for value or defeasance 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 Subordinated Debt (i) except for the exchange of
the Subordinated Notes for notes with substantially identical terms registered
pursuant to the registration rights agreement set forth in the Subordinated Note
Indenture, (ii) unless (A) no Default or Event of Default has occurred and is
continuing or would be directly or indirectly caused as a result thereof and (B)
after giving effect thereto on a Pro Forma Basis, the Credit Parties would be in
compliance with the financial covenants set forth in Section 7.10 or (iii)
except for refinancings thereof with other Subordinated Debt so long as (A) such
new Subordinated Debt is at least as subordinated in right of payment and
otherwise to the Credit Party Obligations as the Subordinated Debt being
refinanced (as determined by the U.S. Agent), (B) the principal amount of the
new Subordinated Debt is not greater than the principal amount of Subordinated
Debt being refinanced, (C) the final maturity and average life to maturity of
the new Subordinated Debt is not less than the Subordinated Debt being
refinanced and (D) the material terms of the new Subordinated Debt are at least
as favorable to the Consolidated Parties and the Lenders as the Subordinated
Debt being refinanced.

     8.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.

     The Credit Parties will not permit any Consolidated Party to (i) 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 be materially adverse to the Lenders or (ii) change its fiscal
year.

     8.9 LIMITATION ON RESTRICTED ACTIONS.

     The Credit Parties will not permit any Consolidated Party to directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) make
Restricted Payments, (b) pay any Indebtedness or other obligation owed to any
Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its Property to any Credit Party, or (e) act as a Credit Party,
except (in respect of any of the matters referred to in clauses (a)-(d) above)
for such encumbrances or restrictions existing under or by reason of (i) this
Credit Agreement


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and the other Credit Documents, (ii) any Junior Financing Documentation,
provided that the encumbrances and restrictions relating to any Consolidated
Party in such document or instrument are no more restrictive than the
corresponding encumbrances and restrictions contained in the Subordinated Note
Indentures and the Subordinated Notes, in each case as in effect as of the
Closing Date, (iii) applicable law, (iv) the Medium Term Indenture, as in effect
as of the Closing Date, (v) any Permitted Lien or any document or instrument
governing any Permitted Lien, provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien, (vi)
customary restrictions and conditions contained in any agreement relating to the
sale of any Property permitted under Section 8.4(b) pending the consummation of
such sale or (vii) customary restrictions and conditions contained in leases and
other contracts restricting the assignment thereof.

     8.10 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.

     8.11 NO FURTHER NEGATIVE PLEDGES.

     The Credit Parties will not permit any Consolidated Party to enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the existence of any Lien upon any of its Property in favor of the U.S. Agent or
the Collateral Agent (in each case, for the benefit of the Lenders) for the
purpose of securing the Credit Party Obligations, whether now owned or hereafter
acquired, or requiring the grant of any security for any obligation if such
Property is given as security for the Credit Party Obligations, except (a) in
connection with any Permitted Lien or any document or instrument governing any
Permitted Lien, provided that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien, (b) pursuant to
customary restrictions and conditions contained in any agreement relating to the
sale of any Property permitted under Section 8.4(b), pending the consummation of
such sale, (c) the Medium Term Indenture, as in effect as of the Closing Date,
and (d) customary restrictions and conditions contained in leases and other
contracts restricting the assignment thereof.

     8.12 TRANSACTIONS WITH AFFILIATES.

     The Credit Parties will not permit any Consolidated Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
intercompany transactions expressly permitted by Section 8.1, Section 8.4,
Section 8.5 or Section 8.6, (b) normal compensation and reimbursement of
expenses of officers and directors and (c) except as otherwise specifically
limited in this Credit Agreement, other transactions on terms and conditions
substantially as favorable to such Consolidated Party as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.

                                   ARTICLE IX

                                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"):


                                       81



          (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.

          (i) default in the due performance or observance by it of any term,
covenant or agreement contained in Sections 7.2, 7.8 or 7.10 or Article VIII of
this Credit Agreement (other than those referred to in subsections (a) or (b) of
this Section 9.1) contained in this Credit Agreement; or

               (ii) default in the due performance or observance by it of any
          term, covenant or agreement (other than those referred to in
          subsections (a), (b) or (c)(i) of this Section 9.1) contained in this
          Credit Agreement or any other Credit Document 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. Except as a result of or in connection
     with a dissolution, merger or disposition of a Subsidiary not prohibited by
     Section 8.4 or as otherwise permitted by any Credit Document, any Credit
     Document shall fail to be in full force and effect or to give the Agents,
     the Collateral Agent and/or the Lenders the Liens, rights, powers and
     privileges purported to be created thereby, or any Credit Party shall so
     state in writing; or

          (e) Guaranties. Except as the result of or in connection with a
     dissolution, merger, amalgamation or disposition of a Subsidiary not
     prohibited by Section 8.4, in connection with a Collateral and Guarantor
     Release Date or as otherwise permitted by any Credit Document, the guaranty
     given by any Guarantor hereunder or any provision thereof shall cease to be
     in full force and effect, or any Guarantor hereunder or any Person acting
     by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
     obligations under such guaranty, or any Guarantor shall default in the due
     performance or observance of any term, covenant or agreement on its part to
     be performed or observed pursuant to any guaranty hereunder; or

          (f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
     any Consolidated Party; or

          (g) Defaults under Other Indebtedness. With respect to any
     Indebtedness (other than Indebtedness outstanding under this Credit
     Agreement) in excess of $25,000,000 in the aggregate for the Consolidated
     Parties taken as a whole any of the following shall


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     occur (unless, with respect to any Indebtedness in favor of the seller of a
     company acquired by 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)
     (1) any Consolidated Party shall 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

          (h) Judgments. One or more judgments or decrees shall be entered
     against any Consolidated Party involving a liability of $25,000,000 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

          (i) 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
     $25,000,000: (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 for purposes 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

          (j) 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
          Borrower (or other securities convertible into such Voting Stock)
          representing 50% or more of the combined voting power of all Voting
          Stock of such Borrower;


                                       83



          provided, however, such occurrence shall not constitute an Event of
          Default hereunder until a period of 30 days has elapsed from the date
          of the acquisition by such Person and/or its Affiliates of Voting
          Stock of such Borrower which gives such Person and/or its Affiliates
          an aggregate ownership of more than 50% of the Voting Stock of such
          Borrower; 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) A "Change of Control" (or any comparable term) under, and as
          defined in, any Junior Financing Documentation shall have occurred.

               (iii) Airgas shall fail to own, directly or indirectly, all of
          the Voting Stock of each of the Canadian Borrowers which Airgas owned
          as of the Closing Date other than with respect to any Canadian
          Borrower as of the Closing Date which ceases to be a Canadian Borrower
          pursuant to Section 3.5.

          (k) Subordinated Debt Documentation. (i) There shall occur and be
     continuing any "Event of Default" (or any comparable term) under, and as
     defined in, any Junior Financing Documentation, (ii) any of the Credit
     Party Obligations for any reason shall cease to be "Designated Senior Debt"
     (or any comparable term) under, and as defined in, any Junior Financing
     Documentation, (iii) any Indebtedness other the Credit Party Obligations
     shall constitute "Designated Senior Debt" (or any comparable term) under,
     and as defined in, any Junior Financing Documentation or (iv) the
     subordination provisions of any Junior Financing Documentation shall, in
     whole or in part, terminate, cease to be effective or cease to be legally
     valid, binding and enforceable against any holder of the applicable
     Subordinated Debt.

     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, or cured to the
satisfaction of, the requisite 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,
     the Collateral 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(f), 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. Revolving 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)


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     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(f) 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.

                                    ARTICLE X

                                AGENCY PROVISIONS

     10.1 APPOINTMENT AND AUTHORITY.

     Each of the Lenders hereby irrevocably appoints Bank of America to act on
its behalf as the U.S. Agent hereunder and under the other Credit Documents and
authorizes the U.S. Agent to take such actions on its behalf and to exercise
such powers as are delegated to the U.S. Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto. Each
of the Lenders hereby irrevocably appoints BNS to act on its behalf as the
Canadian Agent hereunder and under the other Credit Documents and authorizes the
Canadian Agent to take such actions on its behalf and to exercise such powers as
are delegated to the Canadian Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. Each of the
Lenders hereby irrevocably appoints Bank of America to act on its behalf as the
Collateral Agent hereunder and under the other Credit Documents and authorizes
the Collateral Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Collateral Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto. The
Lenders and the Agents agree that the Collateral Agent shall be entitled to all
of the benefits and privileges of this Article X to the same extent as the U.S.
Agent. The provisions of this Article X are solely for the benefit of the
Agents, the Collateral Agent and the Lenders, and neither Airgas nor any other
Credit Party shall have rights as a third party beneficiary of any of such
provisions.

     10.2 RIGHTS AS A LENDER.

     Any Person serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
any Person serving as an Agent hereunder in its individual capacity. Any such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with any Credit Party or any Subsidiary or other Affiliate
thereof as if such Person were not an Agent hereunder and without any duty to
account therefor to the Lenders.


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     10.3 EXCULPATORY PROVISIONS.

     The Agents shall not have any duties or obligations except those expressly
set forth herein and in the other Credit Documents. Without limiting the
generality of the foregoing, neither Agent:

          (a) shall be subject to any fiduciary or other implied duties,
     regardless of whether a Default or Event of Default has occurred and is
     continuing;

          (b) shall have any duty to take any discretionary action or exercise
     any discretionary powers, except discretionary rights and powers expressly
     contemplated hereby or by the other Credit Documents that such Agent is
     required to exercise as directed in writing by the Required Lenders (or
     such other number or percentage of the Lenders as shall be expressly
     provided for herein or in the other Credit Documents), provided that
     neither Agent shall be required to take any action that, in its opinion or
     the opinion of its counsel, may expose such Agent to liability or that is
     contrary to any Credit Document or applicable law; and

          (c) shall, except as expressly set forth herein and in the other
     Credit Documents, have any duty to disclose, and shall be liable for the
     failure to disclose, any information relating to any Credit Party or any of
     its Affiliates that is communicated to or obtained by the Person serving as
     an Agent or any of its Affiliates in any capacity.

     Neither Agent shall be liable for any action taken or not taken by it (i)
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary, or as such Agent shall
believe in good faith shall be necessary, under the circumstances as provided in
Sections 11.6 and 9.2) or (ii) in the absence of its own gross negligence or
willful misconduct. No Agent shall be deemed to have knowledge of any Default or
Event of Default unless and until notice describing such Default or Event of
Default is given to such Agent by Airgas or a Lender.

     Neither Agent shall be responsible for nor have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Credit Agreement or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this Credit
Agreement, any other Credit Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to such Agent.

     10.4 RELIANCE BY THE AGENTS.

     Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. Each Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, the issuance of a Letter
of Credit or the making of any other extension of credit hereunder, that by its
terms must be fulfilled to the satisfaction of a Lender, the applicable Agent
may presume that such condition is satisfactory to such Lender unless such Agent
shall have received notice to the contrary from such Lender prior to the making
of such Loan, the issuance of such Letter of Credit or the making of such other
extension of credit. Each Agent may consult with legal counsel (who may be
counsel for the Credit Parties), independent accountants and other experts
selected


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by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

     10.5 DELEGATION OF DUTIES.

     Each Agent may perform any and all of its duties and exercise its rights
and powers hereunder or under any other Credit Document by or through any one or
more sub-agents appointed by such Agent. Each Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article X shall apply to any such sub-agent and to the Related Parties of the
applicable Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as an Agent.

     10.6 RESIGNATION OF AGENTS.

     Any Agent (which term shall, for purposes of this Section 10.6, include the
Collateral Agent) may at any time give notice of its resignation to the Lenders
and Airgas. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with Airgas, to appoint a successor,
which, in the case of a successor U.S. Agent or Collateral Agent, shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States or, in the case of a successor Canadian Agent,
shall be a bank with an office in Canada, or an Affiliate of any such bank with
an office in Canada. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may
on behalf of the Lenders, appoint a successor Agent meeting the qualifications
set forth above; provided that if such Agent shall notify Airgas and the Lenders
that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Credit Documents (except that in the case of any collateral
security held by such Agent on behalf of the Lenders under any of the Credit
Documents, the retiring Agent shall continue to hold such collateral security
until such time as a successor Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through such
Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Agent as provided for above in this
Section. Upon the acceptance of a successor's appointment as an Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Credit Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by Airgas to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between Airgas and such successor. After a retiring Agent's
resignation hereunder and under the other Credit Documents, the provisions of
this Article X and Section 11.5 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring
Agent was acting as an Agent.

     Any resignation by Bank of America as U.S. Agent pursuant to this Section
shall also constitute its resignation as U.S. Swingline Lender, Collateral Agent
(and, if applicable, as a U.S. Issuing Lender). Upon the acceptance of a
successor's appointment as U.S. Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of such retiring U.S. Swingline Lender, Collateral Agent (and, if
applicable, retiring U.S. Issuing Lender), (b) such retiring U.S. Swingline
Lender, Collateral Agent (and, if applicable, retiring U.S. Issuing Lender)
shall be discharged from all of their respective duties and obligations
hereunder or under the other Credit Documents, and (c) if Bank of America is
also a retiring U.S. Issuing Lender, the successor U.S. Issuing Lender shall
issue letters of credit in substitution for the U.S. Letters of Credit, if any,
outstanding at the


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time of such succession or make other arrangement satisfactory to the retiring
U.S. Issuing Lender to effectively assume the obligations of the retiring U.S.
Issuing Lender with respect to such U.S. Letters of Credit.

     Any resignation by BNS as Canadian Agent pursuant to this Section shall
also constitute its resignation as Canadian Issuing Lender and Canadian
Swingline Lender. Upon the acceptance of a successor's appointment as Canadian
Agent hereunder, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of such retiring Canadian Issuing
Lender and Canadian Swingline Lender, (b) the retiring Canadian Issuing Lender
and Canadian Swingline Lender shall be discharged from all of their respective
duties and obligations hereunder or under the other Credit Documents, and (c)
the successor Canadian Issuing Lender shall issue letters of credit in
substitution for the Canadian Letters of Credit, if any, outstanding at the time
of such succession or make other arrangement satisfactory to the retiring
Canadian Issuing Lender to effectively assume the obligations of the retiring
Canadian Issuing Lender with respect to such Canadian Letters of Credit.

     10.7 NON-RELIANCE ON AGENTS AND OTHER LENDERS.

     Each Lender acknowledges that it has, independently and without reliance
upon any Agent or any other Lender or any of their Related Parties and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Credit Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Credit
Agreement, any other Credit Document or any related agreement or any document
furnished hereunder or thereunder.

     10.8 NO OTHER DUTIES; ETC.

     Anything herein to the contrary notwithstanding, none of the bookrunners,
arrangers, syndication agents, documentation agents or co-agents shall have any
powers, duties or responsibilities under this Credit Agreement or any of the
other Credit Documents, except in its capacity, as applicable, as an Agent or a
Lender hereunder.

     10.9 U.S. AGENT MAY FILE PROOFS OF CLAIM.

     In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Credit Party, the U.S. Agent (irrespective
of whether the principal of any Loan, LOC Obligation or other extension of
credit hereunder shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the U.S. Agent shall have
made any demand on any Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

          (a) to file and prove a claim for the whole amount of the principal
     and interest owing and unpaid in respect of the Loans, LOC Obligations and
     all other Obligations (other than obligations under Hedging Agreements to
     which the U.S. Agent is not a party) that are owing and unpaid and to file
     such other documents as may be necessary or advisable in order to have the
     claims of the Lenders and the Agents (including any claim for the
     reasonable compensation, expenses, disbursements and advances of the
     Lenders and the Agents and their respective agents and counsel and all
     other amounts due the Lenders and the Agents under Sections 4.5 and 11.5)
     allowed in such judicial proceeding; and


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          (b) to collect and receive any monies or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the U.S. Agent and, in the event that the
U.S. Agent shall consent to the making of such payments directly to the Lenders,
to pay to the U.S. Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the U.S. Agent and its agents and
counsel, and any other amounts due the U.S. Agent under Sections 4.5 and 11.5.

     Nothing contained herein shall be deemed to authorize the U.S. Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Credit
Party Obligations or the rights of any Lender or to authorize the U.S. Agent to
vote in respect of the claim of any Lender in any such proceeding.

     10.10 COLLATERAL AND GUARANTY MATTERS.

     The Lenders irrevocably authorize the U.S. Agent and/or the Collateral
Agent, as applicable, at its option and in its discretion,

          (a) to release any Lien on any Collateral granted to or held by the
     Collateral Agent under any Credit Document (i) upon termination of the
     Commitments and payment in full of all Credit Party Obligations (other than
     contingent indemnification obligations) and the expiration or termination
     of all Letters of Credit, (ii) that is transferred or to be transferred as
     part of or in connection with any Asset Disposition permitted hereunder or
     under any other Credit Document or any Involuntary Disposition, (iii) upon
     the occurrence of a Collateral and Guarantor Release Date or (iv) as
     approved in accordance with Section 11.6; and

          (b) to release any Guarantor from its obligations under Article XII if
     such Person ceases to be a Subsidiary as a result of a transaction
     permitted hereunder or on the occurrence of a Collateral and Guarantor
     Release Date.

Upon request by the U.S. Agent at any time, the Required Lenders will confirm in
writing the U.S. Agent's and/or the Collateral Agent's, as applicable, authority
to release its interest in particular types or items of Property, or to release
any Guarantor from its obligations under Article XII, pursuant to this Section
10.10.

                                   ARTICLE XI

                                 MISCELLANEOUS.

     11.1 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

     (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

          (i) if to Airgas or any other Credit Party, the U.S. Agent, the
     Canadian Agent, the Collateral Agent, a U.S. Issuing Lender, the Canadian
     Issuing Lender, the U.S. Swingline Lender


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     or the Canadian Swingline Lender, to the address, telecopier number,
     electronic mail address or telephone number specified for such Person on
     Schedule 11.1; and

          (ii) if to any other Lender, to the address, telecopier number,
     electronic mail address or telephone number specified in its Administrative
     Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

     (b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the U.S. Agent, provided that the foregoing shall not apply to
notices to any Lender pursuant to Article II, Article III or Article IV if such
Lender has notified the U.S. Agent that it is incapable of receiving notices
under such Section by electronic communication. Each Agent or Airgas may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

     Unless the U.S. Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

     (c) Change of Address, Etc. Each of Airgas, the Agents, the Collateral
Agent, a U.S. Issuing Lender, the Canadian Issuing Lender, the U.S. Swingline
Lender and the Canadian Swingline Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to
Airgas and the U.S. Agent and, in the case of any U.S. Revolving Lender, the
U.S. Issuing Lenders and the U.S. Swingline Lender and, in the case of any
Canadian Lender, the Canadian Issuing Lender and the Canadian Swingline Lender.
In addition, each Lender agrees to notify the Agents from time to time to ensure
that the Agents have on record (i) an effective address, contact name, telephone
number, telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.

     (d) Reliance. The Agents, the Collateral Agent and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Notices of
Borrowing) purportedly given by or on behalf of any Credit Party even if (i)
such notices were not made in a manner specified herein, were incomplete or were
not preceded or followed by any other form of notice specified herein, or (ii)
the terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Credit Parties shall indemnify each Agent, the Collateral Agent,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of a Credit Party. All telephonic
notices to and other telephonic communications with the


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an Agent may be recorded by such Agent, and each of the parties hereto hereby
consents to such recording.

     11.2 RIGHT OF SET-OFF.

     If an Event of Default shall have occurred and be continuing, each Lender
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender or any such Affiliate to or
for the credit or the account of Airgas or any other Credit Party against any
and all of the obligations of Airgas or such Credit Party now or hereafter
existing under this Credit Agreement or any other Credit Document to such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Credit Agreement or any other Credit Document and although such
obligations of Airgas or such Credit Party may be contingent or unmatured or are
owed to a branch or office of such Lender different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each
Lender and its Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender or its Affiliates
may have. Each Lender agrees to notify Airgas and the U.S. Agent promptly after
any such setoff and application, provided that the failure to give such notice
shall not affect the validity of such setoff and application.

     11.3 BENEFIT OF AGREEMENT.

     (a) Successors and Assigns Generally. The provisions of this Credit
Agreement and the other Credit Documents shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns permitted hereby, except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder or thereunder without the
prior written consent of each Agent and each affected Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection (b)
of this Section, (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Credit Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Agents and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Credit
Agreement.

     (b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement and the other Credit Documents (including all or a portion
of its Commitment and the Loans (including for purposes of this subsection (b),
participations in LOC Obligations and in U.S. Swingline Loans or Canadian
Swingline Loans) at the time owing to it); provided that (i) except in the case
of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
outstanding Loans thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the U.S. Agent and, if
applicable, the Canadian Agent, or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than (x)
$5,000,000 in the case of an assignment of U.S. Revolving Loans, (y) C$1,500,000
in the case of an assignment of Canadian Revolving Loans and BA Outstandings and
(z)


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$1,000,000 in the case of an assignment of U.S. Term Loans unless each of the
U.S. Agent, the Canadian Agent (in the case of assignments of Canadian Revolving
Commitments) and, so long as no Event of Default has occurred and is continuing,
Airgas otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
hereunder, assigned, except that this clause (ii) shall not apply to rights in
respect of Competitive U.S. Loans, U.S. Swingline Loans, Canadian Swingline
Loans or the U.S Term Loan; (iii) any assignment of a U.S. Revolving Commitment
must be approved by the U.S. Agent, the U.S. Issuing Lenders and the U.S.
Swingline Lender (such approvals not to be unreasonably withheld) unless the
Person that is the proposed assignee is itself a U.S. Revolving Lender (whether
or not the proposed assignee would otherwise qualify as an Eligible Assignee);
(iv) any assignment of a Canadian Revolving Commitment must be approved by the
Canadian Agent, the Canadian Issuing Lender and the Canadian Swingline Lender
unless the Person that is the proposed assignee is itself a Canadian Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); (v) in the case of assignments of Canadian Revolving Commitments, the
parties to each assignment shall execute and deliver to the Canadian Agent and
the U.S. Agent an Assignment and Assumption, together with (in cases other than
an assignment to an Affiliate of the assigning Lender) a processing and
recordation fee of C$2,500 to the Canadian Agent, and the Eligible Assignee, if
it shall not be a Canadian Lender, shall deliver to the U.S. Agent and the
Canadian Agent an Administrative Questionnaire and (vi) in all other cases, the
parties to each assignment shall execute and deliver to the U.S. Agent an
Assignment and Assumption, together with (in cases other than an assignment to
an Affiliate of the assigning Lender) a processing and recordation fee of
$2,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
the U.S. Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof by the applicable Agents pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Credit
Agreement and the Intercreditor Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Credit Agreement and the Intercreditor Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Credit Agreement and the Intercreditor Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 4.6, 4.9,
4.10, 4.11 and 11.5 with respect to facts and circumstances occurring prior to
the effective date of such assignment). Any assignment or transfer by a Lender
of rights or obligations under this Credit Agreement that does not comply with
this subsection shall be treated for purposes of this Credit Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

     (c) Register. Each Agent, acting solely for this purpose as an agent of the
applicable Borrowers, shall maintain at its office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and LOC Obligations owing to, each applicable Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive absent manifest error, and the Borrowers, the Agents and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Credit Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the U.S. Issuing Lenders and the Canadian Issuing
Lender, in each case, at any reasonable time and from time to time upon
reasonable prior notice. In addition, at any time that a request for a consent
for a material or substantive change to the Credit Documents is pending, any
Lender wishing to consult with other Lenders in connection therewith may request
and receive from the U.S. Agent a copy of the Register.


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     (d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Agents, sell participations to any Person (other
than a natural person or a Borrower or any of the Borrowers' Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Credit Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in LOC Obligations, U.S. Swingline Loans and/or Canadian
Swingline Loans) owing to it); provided that (i) such Lender's obligations under
this Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Credit Agreement
and to approve any amendment, modification or waiver of any provision of this
Credit Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in clauses (i) through (viii)
of Section 11.6(a) that affects such Participant. Subject to subsection (e) of
this Section, Airgas agrees that each Participant shall be entitled to the
benefits of Sections 4.6, 4.9, 4.10, 4.11 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.2 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.13 as though it were a
Lender.

     (e) Limitation on Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 4.10 or 4.11 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with Airgas' prior written consent. A Participant that is
not incorporated under the laws of the United States or a state thereof shall
not be entitled to the benefits of Section 4.10 unless Airgas is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers, to comply with Section 4.11(b) as though it were a
Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Credit Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

     (g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

     (h) Resignation as by Bank of America as a U.S. Issuing Lender or U.S.
Swingline Lender after Assignment. Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its U.S.
Revolving Commitment pursuant to subsection (b) above, Bank of America may, (i)
if Bank of America is a U.S. Issuing Lender, upon thirty days' notice to Airgas
and the Lenders, resign as a U.S. Issuing Lender and/or (ii) upon thirty days'
notice to Airgas, resign as U.S. Swingline Lender. In the event of any such
resignation as U.S. Issuing Lender or U.S. Swingline Lender, Airgas shall be
entitled to appoint from among the Lenders a successor U.S. Issuing Lender or
U.S. Swingline Lender hereunder; provided, however, that no failure by Airgas to
appoint any such successor shall affect the resignation of Bank of America as a
U.S. Issuing Lender or U.S. Swingline Lender, as the


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case may be. If Bank of America resigns as a U.S. Issuing Lender, it shall
retain all the rights and obligations of a U.S. Issuing Lender hereunder with
respect to all U.S. Letters of Credit outstanding as of the effective date of
its resignation as a U.S. Issuing Lender and all U.S. LOC Obligations with
respect thereto (including the right to require the U.S. Revolving Lenders to
make U.S. Base Rate Loans or fund risk participations in unreimbursed drawings
under U.S. Letters of Credit pursuant to Section 2.3(c)). If Bank of America
resigns as U.S. Swingline Lender, it shall retain all the rights of the U.S.
Swingline Lender provided for hereunder with respect to U.S. Swingline Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the U.S. Revolving Lenders to make U.S. Base Rate
Loans or fund risk participations in outstanding U.S. Swingline Loans pursuant
to Section 2.4(b).

     11.4 NO WAIVER; REMEDIES CUMULATIVE.

     No failure or delay on the part of an Agent, the Collateral 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, the Collateral 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, the Collateral Agent 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 Agents, the Collateral Agent or the Lenders to any other or further action
in any circumstances without notice or demand.

     11.5 PAYMENT OF EXPENSES, ETC.

     (a) The Credit Parties agree to: (i) pay all reasonable out-of-pocket costs
and expenses (A) of the U.S. Agent and the Collateral 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 and
the Collateral Agent 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, the
Collateral 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, the Collateral Agent and each
of the Lenders); (ii) pay and hold each Agent, the Collateral Agent and 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, the Collateral
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 leased by any Consolidated Party, or the
failure by any Consolidated Party to comply with any Environmental Law


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(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).

     (b) Reimbursement by Lenders. To the extent that the Credit Parties for any
reason fail to indefeasibly pay any amount required under Section 11.5(a) to be
paid by them to the Agents (or any sub-agent thereof), the Collateral Agent or
any Related Party of any of the foregoing, each Lender severally agrees to pay
to the applicable Agent (or any such sub-agent), the Collateral Agent or such
Related Party, as the case may be, such Lender's pro rata share (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against such Agent (or any such sub-agent) or
the Collateral Agent in its capacity as such, or against any Related Party of
any of the foregoing acting for such Agent (or any such sub-agent) or the
Collateral Agent in connection with such capacity; and provided further that
only the Canadian Lenders shall have any obligation to make any payment to the
Canadian Agent pursuant to this Section 11.5(b). The obligations of the Lenders
under this Section 11.5(b) are subject to the provisions of Section 4.12(d).

     (c) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, no party hereto shall assert, and each party hereto hereby
waives, any claim against any other party hereto or any other Person to be
indemnified under Section 11.5(a), on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Credit
Agreement, any other Credit Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan, Letter of
Credit or other extension of credit hereunder or the use of the proceeds
thereof. No Person to be indemnified under Section 11.5(a) shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Credit Agreement
or the other Credit Documents or the transactions contemplated hereby or
thereby.

     (d) Payments. All amounts due under this Section shall be payable not later
than thirty Business Days after demand therefor.

     (e) Survival. The agreements in this Section shall survive the resignation
of the Agents, the replacement of any Lender, the termination of the Commitments
of all the Lenders and the repayment, satisfaction or discharge of all the other
Credit Party Obligations.

     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 further that:

          (a) no such amendment, change, waiver, discharge or termination shall:

               (i) extend the final maturity of any Loan or of any reimbursement
          obligations arising from drawings under Letters of Credit, or any
          portion thereof without the written consent of each Lender whose
          Loans, reimbursement obligations or portions thereof that are being so
          extended;

               (ii) postpone any date fixed by this Credit Agreement for the
          payment of principal of any Loan (excluding mandatory prepayments) or
          reduce the rate or extend the


                                       95



          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 without the written consent of
          each Lender entitled to receive such payment;

               (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
          Commitment of any Lender over the amount thereof in effect without the
          written consent of each Lender entitled to receive such payment or
          each Lender whose Commitment is being increased (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(a)
          or Section 4.13 or 4.14(b) without the written consent of each Lender
          directly affected thereby;

               (v) reduce any percentage specified in, or otherwise modify, the
          definition of "Required Lenders", "Required U.S. Lenders" and
          "Required Canadian Lenders" without the written consent of each Lender
          directly affected thereby;

               (vi) consent to the assignment or transfer by any Borrower of any
          of its rights and obligations under (or in respect of) the Credit
          Documents to which it is a party without the written consent of each
          Lender; or

               (vii) except as the result of or in connection with a
          dissolution, merger, amalgamation or disposition of a Restricted
          Subsidiary (other than a Borrower whose Credit Party Obligations have
          not been assumed by another Borrower) not prohibited by Section 8.4,
          on the occurrence of a Collateral and Guarantor Release Date or as
          otherwise permitted by any Credit Document, release the Borrowers or
          substantially all of the other Credit Parties from its or their
          obligations under the Credit Documents without the written consent of
          each Lender that has Credit Party Obligations owing by the Person to
          be released; and

               (viii) to the extent the Credit Party Obligations are secured by
          the Collateral, release all or substantially all of the Collateral,
          except on the occurrence of a Collateral and Guarantor Release Date or
          as the result of or in connection with an Asset Disposition not
          prohibited by Section 8.4(b) or as otherwise permitted by any Credit
          Document without the written consent of each Lender whose Credit Party
          Obligations are secured by the Collateral to be released;

          (b) no provision of Article II may be amended without the consent of
     the Required U.S. Lenders (provided further that (i) no provision of
     Section 2.3 may be amended without the consent of the U.S. Issuing Lender
     and (ii) no provision of Section 2.4 may be amended without the consent of
     the U.S. Swingline Lender);

          (c) no provision of Article III may be amended without the consent of
     the Required Canadian Lenders (provided further (i) that no provision of
     Section 3.2 may be amended without the consent of the Canadian Swingline
     Lender and (ii) no provision of Section 3.3 may be amended without the
     consent of the Canadian Issuing Lender); and

          (d) no provision of Article X may be amended without the consent of
     the Agents and the Collateral Agent.


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     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 articles, 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 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
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 NEW YORK.
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 New York in
New York County, or of the United States for the Southern District of New York,
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 the Canadian Guarantors
arising under Article XII:

          (i) (A) Without limiting the generality of subsections (a) and (b) of
     this Section 11.10, each Canadian Guarantor 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 Lenders, be


                                       97



     settled immediately by submitting the same to binding arbitration in the
     City of New York, New York (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 the Canadian Guarantors 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. Each Canadian Guarantor 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 New York or
     any Federal court sitting in the State of New York. The expenses of
     arbitration shall be paid by the Canadian Guarantors.

          (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) Each Canadian Guarantor hereby specifically consents and submits
     to the jurisdiction of the courts of the State of New York and courts of
     the United States located in the State of New York for purposes of entry of
     a judgment or arbitration award entered by the arbitration panel.

          (ii) The guarantee of the Canadian Guarantors under Article XII 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
     the Canadian Guarantors under Article XII. The payment obligation of the
     Canadian Guarantors 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 the Canadian Guarantors, 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 the Canadian Guarantors for the additional amount necessary to
     yield the amount due and owing to the Canadian Agent and the Canadian
     Lenders.

     (d) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN


                                       98



INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     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.

     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.

     (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, if any, executed by Airgas in connection with the Existing
Credit Agreement automatically shall be canceled.

     (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.

     Each of the Agents and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates' respective partners,
directors, officers, employees, agents, advisors and representatives and to any
direct or indirect contractual counterparty (or such contractual counterparty's
professional advisor) under any Hedging Agreement relating to Loans outstanding
under this Credit Agreement (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any action or proceeding
relating to this Credit Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Credit Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to a Credit Party and its obligations, (g)


                                       99



with the written consent of Airgas or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to any Agent, any Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrowers.

     For purposes of this Section, "Information" means all information received
from a Credit Party or any Subsidiary relating to the Credit Parties or any
Subsidiary or any of their respective businesses, other than any such
information that is available to an Agent or any Lender on a nonconfidential
basis prior to disclosure by such Credit Party or any Subsidiary. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

     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; provided, however, the
Intercreditor Agreement contains additional provisions with respect to the
allocation of certain recoveries from the Credit Parties that are binding only
among the Lenders.

     11.16 USA PATRIOT ACT NOTICE.

     Each Lender that is subject to the Act (as hereinafter defined) and each
Agent that is subject to the Act (for itself and not on behalf of any Lender)
hereby notifies the Borrowers that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "Act"), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of the
Borrowers and other information that will allow such Lender or such Agent, as
applicable, to identify the Borrowers in accordance with the Act.

     11.17 REPLACEMENT OF LENDERS.

     If (i) any Lender requests compensation under Sections 4.6 or 4.9, (ii) any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.10,
(iii) any Lender is a Defaulting Lender or (iv) if any Lender refuses to consent
to an amendment, modification and/or waiver of this Credit Agreement, then
Airgas may, at its sole expense and effort, upon notice to such Lender and the
Agents, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 11.3), all of its interests, rights and obligations under
this Credit Agreement and the related Credit Documents to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment), provided that:

     (a) Airgas shall have paid to the U.S. Agent or the Canadian Agent, as
applicable, the assignment fee specified in Section 11.3(b);

     (b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Credit Documents
(including any amounts under Sections 4.6, 4.9, 4.10 and 4.11) from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the applicable Borrower (in the case of all other amounts);

     (c) in the case of any such assignment resulting from a claim for
compensation under Section 4.6 or 4.9 or payments required to be made pursuant
to Section 4.10, such assignment will result in a reduction in such compensation
or payments thereafter;


                                       100



     (d) such assignment does not conflict with applicable laws; and

     (e) in the case of any replacement of Lenders under the circumstances
described in clause (iv) above, the applicable amendment, modification and/or
waiver of this Credit Agreement that Airgas has requested shall become effective
upon giving effect to such assignment (and any related assignments required to
be effected in connection therewith in accordance with this Section 11.17).

     A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Airgas to require such assignment and delegation cease
to apply.

     11.18 DESIGNATION AS SENIOR DEBT.

     All Credit Party Obligations are hereby designated by the Credit Parties as
"Designated Senior Debt" for purposes of and as defined in each of the
Subordinated Note Indentures.

     11.19 NO ADVISORY OR FIDUCIARY RESPONSIBILITY.

     In connection with all aspects of each transaction contemplated hereby, the
Credit Parties each acknowledge and agree that: (i) the credit facilities
provided for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Credit Document) are an arm's-length
commercial transaction between the Credit Parties and their respective
Affiliates, on the one hand, and the Agents, Banc of America Securities LLC
("BAS") and J.P. Morgan Securities Inc. ("JPMS, together with BAS, the
"Arrangers"), on the other hand, and each of the Credit Parties is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated hereby and by the other Credit
Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the
Agents and the Arrangers each is and has been acting solely as a principal and
is not the financial advisor, agent or fiduciary, for the Credit Parties or any
of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) neither the Agents nor the Arrangers have assumed or will
assume an advisory, agency or fiduciary responsibility in favor of any Credit
Party with respect to any of the transactions contemplated hereby or the process
leading thereto, including with respect to any amendment, waiver or other
modification hereof or of any other Credit Document (irrespective of whether the
Agents or the Arrangers have advised or is currently advising any of the Credit
Parties or any of their respective Affiliates on other matters) and neither the
Agents nor the Arrangers have any obligation to any of the Credit Parties or any
of their respective Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other
Credit Documents; (iv) the Agents and the Arrangers and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Credit Parties and their respective
Affiliates, and neither the Agents nor the Arrangers have any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Agents and the Arrangers have not provided and will
not provide any legal, accounting, regulatory or tax advice with respect to any
of the transactions contemplated hereby (including any amendment, waiver or
other modification hereof or of any other Credit Document) and each Credit Party
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate. Each Credit Party hereby waives and releases,
to the fullest extent permitted by law, any claims that it may have against the
Agents and the Arrangers with respect to any breach or alleged breach of agency
or fiduciary duty.


                                       101



                                   ARTICLE XII

                                    GUARANTY

     12.1 THE GUARANTY.

     (a) U.S. Subsidiary Guarantors. Each of the U.S. Subsidiary Guarantors
hereby jointly and severally guarantees to each Lender, each Affiliate of a
Lender that enters into a Hedging Agreement with a Borrower, the Agents and the
Collateral Agent as hereinafter provided, as primary obligor and not as surety,
the prompt payment of the Credit Party 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 U.S. Subsidiary Guarantors hereby further agree that if any of the Credit
Party 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 U.S. Subsidiary Guarantors will, jointly and severally,
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 Credit Party
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.

     (b) Canadian Guarantors. Each of the Canadian Guarantors hereby jointly and
severally guarantees to each Canadian Lender, each Affiliate of a Canadian
Lender that enters into a Hedging Agreement with a Canadian Borrower, the Agents
and the Collateral Agent as hereinafter provided, as primary obligor and not as
surety, the prompt payment of the Canadian 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 Canadian Guarantors hereby further agree that if any of the
Canadian 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 Canadian Guarantors will, jointly and
severally, 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 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.

     Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor under this Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under Section 548 of the Bankruptcy Code
of the United States, if applicable, or any comparable provisions of any other
applicable Bankruptcy Code.

     12.2 OBLIGATIONS UNCONDITIONAL.

     The obligations of the U.S. Subsidiary Guarantors under Section 12.1 with
respect to the Credit Party Obligations and the obligations of the Canadian
Guarantors under Section 12.1 with respect to the Canadian Obligations are, in
each case, joint and several, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of the Credit
Documents, Hedging Agreements between any Lender or Affiliate of a Lender and
the applicable Borrower, 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 Credit Party Obligations or the Canadian
Obligations, as the case may be, 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 12.2 that the respective
obligations of the U.S. Subsidiary Guarantors and the Canadian


                                       102



Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the applicable
Borrower or any other applicable Guarantor of the Canadian Obligations for
amounts paid under this Article XII until such time as the Lenders (and any
Affiliates of Lenders entering into Hedging Agreements with the applicable
Borrower) have been paid in full in respect of all Credit Party Obligations or
all Canadian Obligations, as the case may be, 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 or Hedging
Agreements between the applicable Borrower and any Lender, or any Affiliate of a
Lender. 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 any Guarantor hereunder
which shall remain absolute and unconditional as described above:

          (a) at any time or from time to time, without notice to any Guarantor,
     the time for any performance of or compliance with any of the Credit Party
     Obligations or Canadian Obligations, as the case may be, shall be extended,
     or such performance or compliance shall be waived;

          (b) any of the acts mentioned in any of the provisions of any of the
     Credit Documents, any Hedging Agreement between the applicable Borrower and
     any Lender, or any Affiliate of a Lender, or any other agreement or
     instrument referred to in the Credit Documents or such Hedging Agreements
     shall be done or omitted;

          (c) the maturity of any of the Credit Party Obligations or Canadian
     Obligations, as the case may be, shall be accelerated, or any of the Credit
     Party Obligations or Canadian Obligations, as the case may be, shall be
     modified, supplemented or amended in any respect, or any right under any of
     the Credit Documents, any Hedging Agreement between the applicable Borrower
     and any Lender, or any Affiliate of a Lender, or any other agreement or
     instrument referred to in the Credit Documents or such Hedging Agreements
     shall be waived or any other guarantee of any of the Credit Party
     Obligations or Canadian Obligations, as the case may be, or any applicable
     security therefor shall be released, impaired or exchanged in whole or in
     part or otherwise dealt with;

          (d) any Lien granted to, or in favor of, any Agent, the Collateral
     Agent or any Lender or Lenders as security for any of the Credit Party
     Obligations or the Canadian Obligations, as the case may be, shall fail to
     attach or be perfected; or

          (e) any of the Credit Party Obligations or Canadian Obligations, as
     the case may be, shall be determined to be void or voidable (including,
     without limitation, for the benefit of any creditor of any applicable
     Guarantor) or shall be subordinated to the claims of any Person (including,
     without limitation, any creditor of applicable Guarantor).

     With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agents, the Collateral Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Credit Documents, any Hedging Agreement between the applicable
Borrower and any Lender, or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging Agreements, or
against any other Person under any other guarantee of, or security for, any of
the Credit Party Obligations or Canadian Obligations, as the case may be. The
rights of the Agents, the Collateral Agent and the Lenders and the Affiliates of
any of the Lenders contained herein shall be in addition to and independent of
all other rights which they may at any time have or hold in respect of any of
the Credit Party Obligations or Canadian Obligations.


                                       103



     12.3 REINSTATEMENT.

     The obligations of the Guarantors under this Article XII 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 Credit Party Obligations or the
Canadian Obligations, as the case may be, is rescinded or must be otherwise
restored by any holder of any of the Credit Party Obligations or the Canadian
Obligations, as the case may be, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agents, the Collateral Agent and each Lender on demand for
all reasonable costs and expenses (including, without limitation, fees and
expenses of counsel) incurred by such Agent, the Collateral Agent or such 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.

     12.4 CERTAIN ADDITIONAL WAIVERS.

     Without limiting the generality of the provisions of this Article XII, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sections
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that it shall have no right of recourse to security for the Credit Party
Obligations or the Canadian Obligations, as the case may be, except through the
exercise of the rights of subrogation pursuant to Section 12.2.

     12.5 REMEDIES.

     The Guarantors agree that, to the fullest extent permitted by law, as
between the applicable Guarantors, on the one hand, and the Agents, the
Collateral Agent and the Lenders, on the other hand, the Credit Party
Obligations or the Canadian Obligations, as the case may be, 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 12.1 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations and/or the Canadian Obligations, as the case may be,
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the applicable Guarantors for purposes of Section 12.1. The
Guarantors acknowledge and agree that to the extent their obligations hereunder
become secured in accordance with the terms of the Collateral Documents, the
Lenders may exercise their remedies thereunder in accordance with the terms
thereof.

     12.6 RIGHTS OF CONTRIBUTION.

     The Guarantors agree among themselves that, in connection with payments
made hereunder, each Guarantor shall have contribution rights against the other
Guarantors as permitted under applicable law. Such contribution rights shall be
subordinate and subject in right of payment to the obligations of such
Guarantors under the Credit Documents and no Guarantor shall exercise such
rights of contribution until all Credit Party Obligations have been paid in full
and the Commitments have terminated.

     12.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.

     The guarantee in this Article XII is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.

     12.8 COLLATERAL AND GUARANTOR RELEASE DATE; SUBSEQUENT COLLATERALIZATION
DATE.


                                       104



     (a) Upon the occurrence of any Collateral and Guarantor Release Date (and
until the occurrence of any Collateralization Date thereafter), each Guarantor
(other than Airgas) shall be fully released and discharged from its obligations
under, and, as applicable, the security interests under, this Credit Agreement
and the other Credit Documents to which such Person is a party. Promptly upon
the request of Airgas, the U.S. Agent and the Collateral Agent (on behalf of the
Lenders) shall, at Airgas' expense, execute such documents and take such other
action reasonably requested by Airgas to evidence such release and discharge
from all such obligations and security interests.

     (b) Immediately upon the occurrence of a Collateralization Date, the
guarantees of each U.S. Subsidiary Guarantor and Canadian Subsidiary Guarantor
under this Article XII shall automatically and without any further action be
reinstated, and the Credit Parties will comply with Sections 7.12 and 7.13.

         [The remainder of this page has been left blank intentionally.]


                                       105


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.

BORROWERS:                              AIRGAS, INC.


                                        By /s/ Joseph C. Sullivan
                                           -------------------------------------
                                        Name: Joseph C. Sullivan
                                        Title: Vice President


                                        AIRGAS CANADA INC.


                                        By /s/ Robert M. McLaughlin
                                           -------------------------------------
                                        Name: Robert M. McLaughlin
                                        Title: Vice President


                                        RED-D-ARC LIMITED


                                        By /s/ Robert M. McLaughlin
                                           -------------------------------------
                                        Name: Robert M. McLaughlin
                                        Title: Vice President



U.S. SUBSIDIARY GUARANTORS:             AIRGAS-EAST, INC.
                                        AIRGAS-GREAT LAKES, INC.
                                        AIRGAS-MID AMERICA, INC.
                                        AIRGAS-NORTH CENTRAL, INC.
                                        AIRGAS-SOUTH, INC.
                                        AIRGAS-GULF STATES, INC.
                                        AIRGAS-INTERMOUNTAIN, INC.
                                        AIRGAS-MID SOUTH, INC.
                                        AIRGAS-NORPAC, INC.
                                        AIRGAS-NORTHERN CALIFORNIA &
                                        NEVADA, INC.
                                        AIRGAS-SOUTHWEST, INC.
                                        AIRGAS-WEST, INC.
                                        AIRGAS-SAFETY, INC.
                                        AIRGAS CARBONIC, INC.
                                        AIRGAS SPECIALTY GASES, INC.
                                        NITROUS OXIDE CORP.
                                        RED-D-ARC, INC.
                                        AIRGAS DATA, LLC
                                        AIRGAS GASPRO, INC.
                                        MISSOURI RIVER HOLDINGS, INC.
                                        AIRGAS INVESTMENTS, INC.
                                        AIRGAS SPECIALTY PRODUCTS, INC.


                                        By: /s/ Robert M. McLaughlin
                                            ------------------------------------
                                        Name: Robert M. McLaughlin
                                        Title: Vice President


                                        ATNL, INC.


                                        By: /s/ Melanie Andrews
                                            ------------------------------------
                                        Name: Melanie Andrews
                                        Title: President & Treasurer

CANADIAN SUBSIDIARY
GUARANTORS:                             AIRGAS, S.A. DE C.V.
                                        RED-D-ARC, S.A. DE C.V.
                                        AIRGAS WEST, S.A. DE C.V.


                                        By: /s/ Joseph C. Sullivan
                                            ------------------------------------
                                        Name: Joseph C. Sullivan
                                        Title: Vice President



[Signatures continued]

U.S. AGENT:                             BANK OF AMERICA, N.A.,


                                        By: /s/ Colleen M. Briscoe
                                            ------------------------------------
                                        Name: Colleen M. Briscoe
                                        Title: Vice President



CANADIAN AGENT:                         THE BANK OF NOVA SCOTIA


                                        By: /s/ James Rhee
                                            ------------------------------------
                                        Name: James Rhee
                                        Title: Director


                                        By: /s/ Chad Graves
                                            ------------------------------------
                                        Name: Chad Graves
                                        Title: Associate



LENDERS:                                BANK OF AMERICA, N.A.


                                        By: /s/ Colleen M. Briscoe
                                            ------------------------------------
                                        Name: Colleen M. Briscoe
                                        Title: Vice President


                                        BANK OF AMERICA, N.A. (CANADA BRANCH)


                                        By: /s/ Medina Sales De Andrade
                                            ------------------------------------
                                        Name: Medina Sales De Andrade
                                        Title: Assistant Vice President



                                        THE BANK OF TOYKO-MITSUBISHI UFJ, LTD.
                                        NY BRANCH


                                        By: /s/ Lillian Kim
                                            ------------------------------------
                                        Name: Lillian Kim
                                        Title: Authorized Signatory



                                        BARCLAYS BANK PLC


                                        By: /s/ Nicholas Bell
                                            ------------------------------------
                                        Name: Nicholas Bell
                                        Title: Director



                                        CITIZENS BANK


                                        By: /s/ Devon L. Starks
                                            ------------------------------------
                                        Name: Devon L. Starks
                                        Title: Senior Vice President



                                        LASALLE BANK NATIONAL ASSOCIATION


                                        By: /s/ Nick Lotz
                                            ------------------------------------
                                        Name: Nick Lotz
                                        Title: Assistant Vice President



                                        JPMORGAN CHASE BANK, N.A.


                                        By: /s/ Lee P. Brennan
                                            ------------------------------------
                                        Name: Lee P. Brennan
                                        Title: Vice President


                                        JPMORGAN CHASE BANK, N.A., TORONTO


                                        By: /s/ Michael N. Tam
                                            ------------------------------------
                                        Name: Michael N. Tam
                                        Title: Senior Vice President



                                        WACHOVIA BANK, NATIONAL ASSOCIATION


                                        By: /s/ Anne Sheahan
                                            ------------------------------------
                                        Name: Anne Sheahan
                                        Title: Vice President



                                        PNC BANK, NATIONAL ASSOCIATION


                                        By: /s/ Frank A. Pugliese
                                            ------------------------------------
                                        Name: Frank A. Pugliese
                                        Title: Senior Vice President



                                        THE BANK OF NOVA SCOTIA
                                        (AS CANADIAN LENDER)


                                        By: /s/ James Rhee
                                            ------------------------------------
                                        Name: James Rhee
                                        Title: Director


                                        By: /s/ Chad Graves
                                            ------------------------------------
                                        Name: Chad Graves
                                        Title: Associate


                                        THE BANK OF NOVA SCOTIA (AS US LENDER)


                                        By: /s/ Todd Meller
                                            ------------------------------------
                                        Name: Todd Meller
                                        Title: Managing Director



                                        MELLON BANK, N.A.


                                        By: /s/ William M. Feathers
                                            ------------------------------------
                                        Name: William M. Feathers
                                        Title: Vice President



                                         NATIONAL CITY BANK


                                        By: /s/ Eleana Orlando
                                            ------------------------------------
                                        Name: Eleana Orlando
                                        Title: Corporate Banking Officer



                                        BANK OF HAWAII


                                        By: /s/ Luke Yeh
                                            ------------------------------------
                                        Name: Luke Yeh
                                        Title: Senior Vice President



                                        CALYON, NEW YORK BRANCH


                                        By: /s/ Michael Madnick
                                            ------------------------------------
                                        Name: Michael Madnick
                                        Title: Managing Director


                                        By: /s/ Yuri Muzichenko
                                            ------------------------------------
                                        Name: Yuri Muzichenko
                                        Title: Director



                                        GOLDMAN SACHS CREDIT PARTNERS L.P.


                                        By: /s/ Walt Jackson
                                            ------------------------------------
                                        Name: Walt Jackson
                                        Title: Managing Director



                                        MIZUHO CORPORATE BANK, LTD.


                                        By: /s/ Raymond Ventura
                                            ------------------------------------
                                        Name: Raymond Ventura
                                        Title: Deputy General Manager



                                        SUMITOMO MITSUI BANKING CORPORATION


                                        By: /s/ Shigeru Tsuru
                                            ------------------------------------
                                        Name: Shigeru Tsuru
                                        Title: Joint General Manager


                                        SUNTRUST BANK


                                        By: /s/ William C. Washburn, Jr.
                                            ------------------------------------
                                        Name: William C. Washburn, Jr.
                                        Title: Vice President



                                        BAYERISCHE LANDESBANK,
                                        NEW YORK BRANCH


                                        By: /s/ Norman McClave
                                            ------------------------------------
                                        Name: Norman McClave
                                        Title: First Vice President


                                        By: /s/ Stuart Schulman
                                            ------------------------------------
                                        Name: Stuart Schulman
                                        Title: Senior Vice President



                                        COMMERZBANK AG, NEW YORK AND
                                        GRAND CAYMAN BRANCHES


                                        By: /s/ Subash R. Viswanathan
                                            ------------------------------------
                                        Name: Subash R. Viswanathan
                                        Title: Senior Vice President


                                        By: /s/ Barbara Peters
                                            ------------------------------------
                                        Name: Barbara Peters
                                        Title: Assistant Treasurer



                                        FIFTH THIRD BANK


                                        By: /s/ Christine L. Wagner
                                            ------------------------------------
                                        Name: Christine L. Wagner
                                        Title: Vice President



                                        FORTIS CAPITAL CORP.


                                        By: /s/ Douglas Riahi
                                            ------------------------------------
                                        Name: Douglas Riahi
                                        Title: Managing Director


                                        By: /s/ Steven Silverstein
                                            ------------------------------------
                                        Name: Steven Silverstein
                                        Title: Vice President



                                        HSBC BANK USA, NATIONAL ASSOCIATION


                                        By: /s/ Susan A. Waters
                                            ------------------------------------
                                        Name: Susan A. Waters
                                        Title: Vice President



                                        WELLS FARGO BANK, NATIONAL ASSOCIATION


                                        By: /s/ James R. Bednaric
                                            ------------------------------------
                                        Name: James R. Bednaric
                                        Title: Senior Vice President



                                        REGIONS BANK


                                        By: /s/ Elaine B. Passman
                                            ------------------------------------
                                        Name: Elaine B. Passman
                                        Title: Vice President



                                        SOVEREIGN BANK


                                        By: /s/ Kimberly Tavares
                                            ------------------------------------
                                        Name: Kimberly Tavares
                                        Title: Vice President



                                        U.S. BANK, NATIONAL ASSOCIATION


                                        By: /s/ Michael P. Dickman
                                            ------------------------------------
                                        Name: Michael P. Dickman
                                        Title: Vice President



                                        BANK OF CHINA
                                        NEW YORK BRANCH


                                        By: /s/ William W. Smith
                                            ------------------------------------
                                        Name: William W. Smith
                                        Title: Deputy General Manager



                                        COMERICA BANK


                                        By: /s/ Richard C. Hampson
                                            ------------------------------------
                                        Name: Richard C. Hampson
                                        Title: Vice President



                                        NORTH FORK BANK


                                        By: /s/ Philip Davi
                                            ------------------------------------
                                        Name: Philip Davi
                                        Title: Senior Vice President



                                        PEOPLE'S BANK


                                        By: /s/ George F. Paik
                                            ------------------------------------
                                        Name: George F. Paik
                                        Title: Vice President



                                        CHANG HWA COMMERCIAL BANK, LTD.,
                                        NEW YORK BRANCH


                                        By: /s/ Jim C.Y.Chen
                                            ------------------------------------
                                        Name: Jim C.Y. Chen
                                        Title: VP & General Manager



                                        CHIAO TUNG BANK CO., LTD.
                                        NEW YORK AGENCY


                                        By: /s/ Chun-Kai Hu
                                            ------------------------------------
                                        Name: Chun-Kai Hu
                                        Title: VP & Deputy General Manager



                                        ESUN COMMERCIAL BANK., LTD.
                                        LOS ANGELES BRANCH


                                        By: /s/ Benjamin Lin
                                            ------------------------------------
                                        Name: Benjamin Lin
                                        Title: EVP & General Manager



                                        HUA NAN COMMERCIAL BANK, LTD
                                        NEW YORK AGENCY


                                        By: /s/ Te-Chin Wang
                                            ------------------------------------
                                        Name: Te-Chin Wang
                                        Title: Assistant General Manager



                                        BRANCH BANKING AND TRUST COMPANY


                                        By: /s/ Troy R. Weaver
                                            ------------------------------------
                                        Name: Troy R. Weaver
                                        Title: Senior Vice President



                                        BANK LEUMI USA


                                        By: /s/ Joung Hee Hong
                                            ------------------------------------
                                        Name: Joung Hee Hong
                                        Title: Vice President


                                        THE BANK OF NEW YORK


                                        By: /s/ Roger Grossman
                                            ------------------------------------
                                        Name: Roger Grossman
                                        Title: Vice President

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Peter McCausland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Airgas, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

/s/ Peter McCausland  

Peter McCausland 

Chairman and Chief Executive Officer
(Principal Executive Officer) 

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Robert M. McLaughlin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Airgas, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

/s/ Robert M. McLaughlin  

Robert M. McLaughlin 

Senior Vice President and
Chief Financial Officer
(Principal Financial Officer) 

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Airgas, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, Peter McCausland, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Peter McCausland Peter McCausland
Chairman and Chief Executive Officer
(Principal Executive Officer)
November 9, 2006

The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350 as an exhibit to the Report and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Airgas, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, Robert M. McLaughlin, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Robert M. McLaughlin Robert M. McLaughlin
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
November 9, 2006

The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350 as an exhibit to the Report and is not being filed as part of the Report or as a separate disclosure document.