EIGHTEENTH AMENDMENT to SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 4.38
This EIGHTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of October 30, 2006, by and among THERMADYNE INDUSTRIES, INC., a
Delaware corporation (“Industries”), THERMAL DYNAMICS CORPORATION, a Delaware corporation
(“Dynamics”), TWECO PRODUCTS, INC., a Delaware corporation (“Tweco”), XXXXXX EQUIPMENT
COMPANY, a Delaware corporation (“Xxxxxx”), C & G SYSTEMS, INC., an Illinois corporation
(“C & G”), STOODY COMPANY, a Delaware corporation (“Stoody”), THERMAL ARC, INC., a
Delaware corporation (“Thermal Arc”), PROTIP CORPORATION, a Missouri corporation
(“ProTip”), THERMADYNE INTERNATIONAL CORP., a Delaware corporation
(“International”, and collectively with ProTip, Thermal Arc, Stoody, C & G, Xxxxxx, Tweco,
Dynamics and Industries, the “Borrowers”), the other persons designated as Credit Parties
on the signature pages hereof, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
(“Agent”) and the Persons signatory thereto from time to time as Lenders. Unless otherwise
specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them
in Annex A to the Credit Agreement and the Intercreditor Agreement (each as hereinafter
defined).
RECITALS
WHEREAS, the Borrowers, the Credit Parties, Agent and Lenders have entered into that certain
Second Amended and Restated Credit Agreement dated as of November 22, 2004 (as further amended,
supplemented, restated or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Borrowers and the other Credit Parties have requested that Agent and Lenders
amend certain provisions of the Credit Agreement; and
WHEREAS, the Agent and Lenders have agreed to amend the Credit Agreement as set forth herein.
NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable
consideration, the parties hereto agree as follows:
1. Amendment to Annex A. Annex A of the Credit Agreement is hereby amended
by amending and restating the following definitions to read in their entirety as
follows:
““EBITDA” means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for such period
determined in accordance with GAAP, minus (b) the sum of (i) income tax credits, (ii)
interest income, (iii) gain from extraordinary items and dispositions of discontinued
operations for such period, (iv) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all inventory sold
in conjunction with the disposition of fixed assets and all securities), and (v) any
other non-cash gains that have been added in determining consolidated net income, in each case to
the extent included in the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items and dispositions of discontinued
operations and from impairments for such period (which for the avoidance of doubt, such losses
shall in no case include operating losses from discontinued operations), (iv) depreciation and
amortization for such period, (v) amortized debt discount for such period, (vi) the amount of any
deduction to consolidated net income as the result of any grant to any members of the management of
such Person of any Stock, (vii) any non-recurring employee severance expenses (a) not to exceed
$2,000,000 in the aggregate, accrued during the Fiscal Year ended December 31, 2005 and (b) not to
exceed $ 1,000,000 in the aggregate, accrued during the Fiscal Year ended December 31, 2006, in
each case to the extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication, (viii) amounts incurred, not to
exceed $1,400,000 in the aggregate, prior to June 30, 2006, in connection with modifications of the
91/4% Senior Subordinated Notes due 2014 and the Fourteenth Amendment to this Agreement
and Amendment No. 14 and Consent to the Second Lien Credit Agreement, (ix) amounts incurred, not to
exceed $1,100,000 in the aggregate, during the Fiscal Quarter ended June 30, 2006, for audit and
contractor fees relating to completion of 2005 Form 10-K and Form 10-Q for the Fiscal Quarter ended
March 31, 2006, any restatements with respect to prior periods and audited financial statements
related to any of the foregoing, (x) amounts incurred, not to exceed $400,000 in the aggregate,
during the Fiscal Quarter ended September 30, 2006, for audit and contractor fees relating to
completion of 2005 Form 10-K and Form 10-Q for the Fiscal Quarter ended March 31, 2006, any
restatements with respect to prior periods and audited financial statements related to any of the
foregoing or in connection with the transition from Ernst & Young LLP to other independent public
accountants of recognized national standing, (xi) the accrual, net of any payment in cash, related
to the net periodic post retirement benefits, (xii) consent fees, not to exceed $700,000 in the
aggregate, paid on or subsequent to July 1, 2006, in connection with modifications of the
91/4% Senior Subordinated Notes due 2014, (xiii) amounts incurred, not to exceed
$400,000 in the aggregate, on or subsequent to July 1, 2006, in connection with the Sixteenth
Amendment and Limited Waiver to this Agreement and Amendment No. 16 and Consent to the Second Lien
Credit Agreement and (xiv) any non-cash loss resulting from a revaluation of any interest rate swap
(provided, however, that if the Second Lien Credit Agreement is not amended by June 30, 2007 to add
a corresponding add-back to “EBITDA” as defined therein, EBITDA shall be calculated without giving
effect to this clause (xiv) for purposes of calculating the Financial Covenants for all periods
ending September 30, 2007 and thereafter), plus or minus as applicable (d) the impact of any net
change in the Borrowers’ LIFO inventory reserve. For purposes of this definition, the following
items shall be excluded in determining consolidated net income of a Person: (1) the income (or
deficit) of any other Person accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into, such Person or any of such Person’s Subsidiaries; (2) the income (or deficit) of
any other Person (other than a Subsidiary) in which such Person has an ownership interest, except
to the extent any such income has actually been received by
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such Person in the form of cash dividends or distributions; (3) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the time permitted by the terms of any
contractual obligation or requirement of law applicable to such Subsidiary; (4) any
restoration to income of any contingency reserve, except to the extent that provision for
such reserve was made out of income accrued during such period; (5) any write-up of any
asset; (6) any net gain from the collection of the proceeds of life insurance policies; (7)
any net gain arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of such Person; (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such successor
prior to such consolidation, merger or transfer of assets; and (9) any deferred credit
representing the excess of equity in any Subsidiary of such Person at the date of
acquisition of such Subsidiary over the cost to such Person of the investment in such
Subsidiary.”
““Fixed Charge Coverage Ratio” means, with respect to any Person for any fiscal
period, the ratio of EBITDA to Fixed Charges (calculated without giving effect to any
non-cash loss or gain resulting from a revaluation of any interest rate swap).”
2. Amendment to Annex G. Clause (a)(iv) (Maximum Leverage Ratio) is hereby amended by
replacing the phrase “5.75 for the Fiscal Quarter ending September 30, 2006*” with the phrase “5.95
for the Fiscal Quarter ending September 30, 2006*”.
3. Representations and Warranties of Credit Parties. The Credit Parties represent
and warrant that:
(a) the execution, delivery and performance by the Credit Parties of this Amendment have
been duly authorized by all necessary corporate action required on its part and this
Amendment is a legal, valid and binding obligation of the Credit Parties enforceable against
the Credit Parties in accordance with its terms except as the enforcement thereof may be
subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and (ii) general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity or at law);
and
(b) after giving effect to this Amendment, each of the representations and warranties
contained in the Credit Agreement is true and correct in all material respects on and as of
the date hereof as if made on the date hereof, except to the extent that such representations
and warranties expressly relate to an earlier date.
4. Conditions To Effectiveness. This Amendment shall be effective upon the
following (all in form and substance satisfactory to Agent):
(a) execution and delivery of this Amendment by the Lenders and the Credit Parties;
(b) the Agent shall have received payment of a $50,000 amendment fee; and
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(c) payment in full of all fees, costs and expenses, including the reasonable fees,
costs and expenses of counsel or other advisors for advice, assistance, or other
representation in connection with this Amendment, as provided in Section 11.3(a) of
the Credit Agreement.
5. Reference To And Effect Upon The Credit Agreement.
(a) The Credit Agreement and the other Loan Documents shall remain in full force and
effect, as amended hereby, and are hereby ratified and confirmed.
(b) The waiver and amendments set forth herein is effective solely for the purposes set
forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a
consent to any amendment, waiver or modification of any other term or condition of the Credit
Agreement or any other Loan Document, (ii) operate as a waiver or otherwise prejudice any
right, power or remedy that the Agent or the Lenders may now have or may have in the future
under or in connection with the Credit Agreement or any other Loan Document or (iii)
constitute a waiver of any provision of the Credit Agreement or any Loan Document, except as
specifically set forth herein. Upon the effectiveness of this Waiver, each reference in the
Credit Agreement to “this Agreement”, “herein”,
“hereof” and words of like import and each
reference in the Credit Agreement and the Loan Documents to the Credit Agreement shall mean
the Credit Agreement as amended hereby. This Waiver shall be construed in connection with and
as part of the Credit Agreement.
6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
7. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment for any other
purposes.
8. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.
9. Reaffirmation of Guaranties. The Credit Parties signatory hereto hereby reaffirm
their Guaranties of the Obligations, taking into account the provisions of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment
as of the date first written above.
| LENDER: | ||||
| GENERAL ELECTRIC CAPITAL CORPORATION, | ||||
| as Agent and Lender | ||||
| By: | /s/ [ILLEGIBLE] | |||
| Duly Authorized Signatory | ||||
| CREDIT PARTIES: | ||||
| THERMADYNE INDUSTRIES, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMAL DYNAMICS CORPORATION | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| TWECO PRODUCTS, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & X. X. | |||
| XXXXXX EQUIPMENT COMPANY | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
S-1
| C & G SYSTEMS, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & X. X. | |||
| XXXXXX COMPANY | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMAL ARC, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMADYNE INTERNATIONAL CORP. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| PROTIP CORPORATION | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMADYNE HOLDINGS CORPORATION | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| MECO HOLDING COMPANY | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| C&G SYSTEMS HOLDING, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMADYNE AUSTRALIA PTY LTD. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| DUXTECH PTY LTD. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| CIGWELD PTY LTD. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| QUETALA PTY. LTD. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| QUETACK PTY. LTD. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMADYNE WELDING PRODUCTS CANADA LIMITED | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
| THERMADYNE INDUSTRIES LIMITED | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |||
| Name: | XXXXXXXX X. XXXXXXXX | |||
| Title: | V. P. SECTY & G. C. | |||
