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Exhibit 10.1
 
AMENDED AND RESTATED CREDIT AGREEMENT
 
Dated as of April 23, 2010
 
by and among
 
ACETO CORPORATION, ACETO AGRICULTURAL CHEMICALS CORPORATION,
CDC PRODUCTS CORPORATION,
ACCI REALTY CORP., ACETO PHARMA CORP.,
ARSYNCO INC. AND ACETO REALTY LLC
 
and
 
JPMORGAN CHASE BANK, N.A.
 
 
 

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TABLE OF CONTENTS

     
ARTICLE I.  DEFINITIONS AND ACCOUNTING TERMS
5
     
SECTION 1.01 Definitions
5
       
SECTION 1.02 Terms Generally
17
     
ARTICLE II. LOANS
18
     
SECTION 2.01 Revolving Credit Loans
18
       
SECTION 2.02 Revolving Credit Note
19
       
SECTION 2.03 Letters of Credit
19
     
ARTICLE III.  PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT; FEES AND PAYMENTS
21
     
SECTION 3.01 Interest Rate; Continuation and Conversion of  Loans
21
         
SECTION 3.02 Use of Proceeds
23
       
SECTION 3.03 Prepayments
23
       
SECTION 3.04 Fees
23
       
SECTION 3.05 Inability to Determine Interest Rate
24
       
SECTION 3.06 Illegality
24
       
SECTION 3.07 Increased Costs
24
       
SECTION 3.08 Indemnity
26
       
SECTION 3.09 Change of Lending Office
26
       
SECTION 3.10 Taxes
26
       
SECTION 3.11 Payments
27
       
SECTION 3.12 Disbursements of Loans
27
   
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
27
       
SECTION 4.01 Organization, Powers
27
       
SECTION 4.02 Authorization of Borrowing, Enforceable Obligations
28
       
SECTION 4.03 Financial Conditions
28
       
SECTION 4.04 Taxes
29
       
SECTION 4.05 Title to Properties
29
       
SECTION 4.06 Litigation
29

 
 
 
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SECTIN 4.07 Agreements
29
       
SECTION 4.08 Compliance with ERISA
29
       
SECTION 4.09 Federal Reserve Regulations; Use of Proceeds
30
       
SECTION 4.10 Approvals
30
       
SECTION 4.11 Subsidiaries
30
       
SECTION 4.12 Hazardous Materials
30
       
SECTION 4.13 Investment Company Act
30
       
SECTION 4.14 Pledge Agreements
31
       
SECTION 4.15 No Default
31
       
SECTION 4.16 Material Contracts
31
       
SECTION 4.17 Permits and Licenses
31
       
SECTION 4.18 Compliance with Law
31
       
SECTION 4.19 Disclosure
31
     
ARTICLE V.  CONDITIONS OF LENDING
31
     
SECTION 5.01 Conditions to Initial Extension
31
       
SECTION 5.02 Conditions to All Extension of Credit
33
     
ARTICLE VI. AFFIRMATIVE COVENANTS
34
     
SECTION 6.01 Existence, Properties, Insurance
34
       
SECTION 6.02 Payment of Indebtedness and Taxes
35
       
SECTION 6.03 Financial Statements, Reports, etc.
35
       
SECTION 6.04 Books and Records; Access to Premises
36
       
SECTION 6.05 Notice of Adverse Change
37
       
SECTION 6.06 Notice of Default
37
       
SECTION 6.07 Notice of Litigation
37
       
SECTION 6.08 Notice of Default in Other Agreements
37
       
SECTION 6.09 Notice of ERISA Event
37
       
SECTION 6.10 Notice of Environmental Law Violations
38
       
SECTION 6.11 Notice Regarding Material Contracts
38
       
SECTION 6.12 Compliance with Applicable Laws
38
       
SECTION 6.13 Subsidiaries
38
       
SECTION 6.14
39

 
 
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ARTICLE VII.  NEGATIVE COVENANTS
39
     
SECTION 7.01 Liens
39
       
SECTION 7.02 Indebtedness
40
       
SECTION 7.03 Guaranties
42
       
SECTION 7.04 Sale of Assets
42
       
SECTION 7.05 Sale of Receivables
42
       
SECTION 7.06 Loans and Investments
43
       
SECTION 7.07 Nature of Business
43
       
SECTION 7.08 Sale of Leaseback
43
       
SECTION 7.09 Federal Reserve Regulations
43
       
SECTION 7.10 Accounting Policies and Procedures
43
       
SECTION 7.11 Hazardous Materials
43
       
SECTION 7.12 Limitations on Fundamental Changes
43
       
SECTION 7.13 Financial Condition Covenants
44
       
SECTION 7.14 Dividends
44
       
SECTION 7.15 Transactions with Affiliates
45
       
SECTION 7.16 Impairment of Security Interest
45
       
SECTION 7.17 Governmental Regulations
45
     
ARTICLE VIII. EVENTS OF DEFAULT
45
     
SECTION 8.01
45
     
ARTICLE IX. MISCELLANEOUS
48
     
SECTION 9.01 Notices
48
       
SECTION 9.02 Effectiveness; Survival
49
       
SECTION 9.03 Expenses
49
       
SECTION 9.04 Successors and Assigns; Participations
49
       
SECTION 9.05 No Waiver; Cumulative Remedies
50
       
SECTION 9.06 APPLICABLE LAW
50
       
SECTION 9.07 SUBMISSIONS TO JURISDICTION
50
       
SECTION 9.08 Waiver of Special Damages
51
       
SECTION 9.09 Jury Waiver
51
       
SECTION 9.10 Reinstatement; Certain Payments
51
       
SECTION 9.11 Severability
51

 
 
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SECTION 9.12 Right of Setoff
51
       
SECTION 9.13 Confidentiality
52
       
SECTION 9.14 Headings
52
       
SECTION 9.15 Construction
52
       
SECTION 9.16 JOINT AND SEVERAL OBLIGATIONS
52
       
SECTION 9.17 Counterparts
54

 
SCHEDULES

     
Schedule I
-
Subsidiaries
Schedule II
-
Existing Liens
Schedule III
-
Existing Indebtedness
Schedule IV
-
Existing Guarantees
Schedule V
-
Material Contracts
Schedule VI
-
Environmental Matters
Schedule VII
-
Litigation

 
EXHIBITS

     
Exhibit A
-
Form of Amended and Restated Revolving Credit Note
Exhibit B
-
Form of Reaffirmation Agreement
Exhibit C
-
Form of Opinion of Counsel

 
 
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                AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 23,
2010, by and among ACETO CORPORATION, a New York corporation, ACETO AGRICULTURAL
CHEMICALS CORPORATION, a New York corporation, CDC PRODUCTS CORPORATION, a New
York corporation, ACETO PHARMA CORP., a Delaware corporation, ACCI REALTY CORP.,
a New York corporation, ARSYNCO INC., a New Jersey corporation, and ACETO REALTY
LLC, a New York limited liability company, jointly and severally, (each a
“Company” and, collectively, the “Companies”), and JPMORGAN CHASE BANK, N.A., a
national banking association (the “Lender”).
 
A.       The Lender and the Companies (other than Aceto Realty LLC) are parties
to a Credit Agreement dated as of May 10, 2002 (as amended prior to the date
hereof, the “Original Agreement”).
 
B.    The Lender and the Companies desire to amend and restate the Original
Agreement and to join Aceto Realty LLC as a party thereto.
 
NOW  THEREFORE,  the parties hereto agree to amend and restate the Original
Agreement in its entirety as follows:
 
RECITALS
 
The Companies have requested the Lender to extend credit from time to time and
the Lender is willing to extend such credit to the Companies, subject to the
terms and conditions hereinafter set forth.
 
Accordingly, the parties hereto agree as follows:
 
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
 
 
SECTION 1.01.    ­Definitions.  As used herein, the following words and terms
shall have the following meanings:
 
“Aceto” shall mean Aceto Corporation, a New York corporation.
 
“Adjusted Libor Loan” shall mean Loans at such time as they are made and/or
being maintained at a rate of interest based upon Reserve Adjusted Libor.
 
“Adjusted One Month LIBOR Rate” means, with respect to a CB Floating Rate Loan
for any day, the sum of (i) 2.50% per annum plus (ii) the quotient of (a) the
interest rate determined by the Lender by reference to the Page to be the rate
at approximately 11:00 a.m. London time, on such date or, if such date is not a
Business Day, on the immediately preceding Business Day for dollar deposits with
a maturity equal to one (1) month, multiplied by (b) Statutory Reserve Rate
applicable to dollar deposits in the London interbank market with a maturity
equal to one (1) month.
 
 
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“Affiliate” shall mean with respect to a specified Person, another Person which,
directly or indirectly, controls or is controlled by or is under common control
with such specified Person.  For the purpose of this definition, “control” of a
Person shall mean the power, direct or indirect, to direct or cause the
direction of the management or policies of such Person whether through the
ownership of voting securities, by contract or otherwise; provided that, in any
event, any Person who owns directly or indirectly 20% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 20% or more of the partnership or other ownership
interest of any Person (other than as a limited partner of such other Person)
will be deemed to control such corporation or other Person.
 
“Aggregate Letters of Credit Outstanding” shall mean, at a particular time, the
sum of (a) the aggregate maximum stated amount at such time which is available
or available in the future to be drawn under all outstanding Letters of Credit
and (b) the aggregate amount of all payments made by the Lender under any Letter
of Credit that has not been reimbursed by any Company at such time.
 
“Aggregate Outstandings” shall mean, at a particular time, the sum of (a) the
Aggregate Letters of Credit Outstandings at such time and (b) the aggregate
outstanding principal amount of all Revolving Credit Loans at such time.
 
“Agreement” shall mean this Credit Agreement dated as of April 23, 2010, as it
may hereafter be amended, restated, supplemented or otherwise modified from time
to time.
 
 “Amended and Restated Revolving Credit Note” shall have the meaning set forth
in Section 2.02.
 
 “Borrowing Date” shall mean, with respect to any Loan, the date on which such
Loan is disbursed to the Companies.
 
"Business Day" shall mean any day not a Saturday, Sunday or legal holiday, on
which banks in New York City are open for business; provided, however, that when
used in connection with an Adjusted Libor Loan the term "Business Day" shall
exclude any day on which the Bank is not open for dealings in dollar deposits in
the London interbank eurodollar market.
 
“Capital Expenditures” shall mean additions to property and equipment of Aceto
and its Subsidiaries which, in conformity with Generally Accepted Accounting
Principles, are included as “additions to property, plant or equipment” or
similar items which would be reflected in the consolidated statement of cash
flow of Aceto and its Subsidiaries, including without limitation, property and
equipment which are the subject of Capital Leases.
 
“Capital Lease” shall mean any lease the obligations of which are required to be
capitalized on the balance sheet of a Person in accordance with Generally
Accepted Accounting Principles.
 
“Carlstadt Real Property” shall mean the real property of Arsynco, Inc. located
at 13th Street, Carlstadt, New Jersey 07072.
 
 
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“Cash Collateral” shall mean the pledge and deposit by the Companies with the
Lender, as collateral for the Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the Lender.
 
“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall, on any day, not be less than the Adjusted One Month LIBOR Rate.  The CB
Floating Rate is a variable rate and any change in the CB Floating Rate due to
any change in the Prime Rate or the Adjusted One Month LIBOR Rate is effective
from and including the effective date of such change in the Prime Rate or the
Adjusted One Month LIBOR Rate, respectively.
 
“CB Floating Rate Loans” shall mean Loans at such as they are being made and/or
maintained at a rate of interest based on the CB Floating Rate.
 
“Change of Control” shall mean any event which results in (i) any Person, or two
or more Persons acting in concert, acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of securities of Aceto
(or other securities convertible into such securities) representing 30% or more
of the combined voting power of all securities of Aceto entitled to vote in the
election of directors; or (ii) during any period of up to 12 consecutive months,
individuals who at the beginning of such 12-month period were directors of
Aceto, ceasing for any reason to constitute a majority of the Board of Directors
of Aceto; or (iii) any Person, or two or more Persons acting in concert,
acquiring by contract or otherwise, or entering into a contract or arrangement
which upon consummation will results in its or their acquisition of, or control
over, securities of Aceto (or securities convertible into such securities)
representing 30% or more of the combined voting power of all securities of Aceto
entitled to vote in the election of directors.
 
“Chief Financial Officer” shall mean the Chief Financial Officer of Aceto.
 
“Closing Date” shall mean April 23, 2010.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
 
“Commitment” shall mean the Revolving Credit Commitment.
 
“Company” shall have the meaning set forth in the preamble hereto.
 
“Consolidated Debt Service Coverage Ratio” shall mean, for any period, the ratio
of (a) Consolidated Net Income, plus (i) to the extent deducted in determining
Consolidated Net Income, the sum of (A) Consolidated Interest Expense, (B) all
depreciation and amortization expenses or charges, and (C) for any calculation
which includes the fiscal quarter ended December 31, 2009, up to $3,100,000
representing the addback of the after tax effect of non-recurring severance
charges not to exceed $3,802,000 and inventory write downs not to exceed
$860,000 both incurred in the fiscal quarter ended December 31, 2009 minus (ii)
the sum of (A) Unfunded Capital Expenditures (calculated exclusive of those
capital expenditures for capital improvements of up to $2,000,000 in the
aggregate in connection with Aceto’s new headquarters building located at 4 Tri
Harbor Court, Port Washington, New York incurred during the period from the
Closing Date through June 30, 2011) and (B) dividends, distributions, stock
repurchases and redemptions (whether paid or declared) for the applicable
period, to (b) the sum of (i) Consolidated Interest Expense plus (ii) the
scheduled installments of principal on all Indebtedness (including Capital
Leases) having a final maturity of one year or more from the date of incurrence
thereof.  All the foregoing categories shall be determined on a consolidated
basis for Aceto and its Subsidiaries in accordance with Generally Accepted
Accounting Principles applied on a consistent basis and shall be calculated
(without duplication) over the four fiscal quarters then most recently ended
with the exception of the scheduled installments of principal on all
Indebtedness of Aceto and its Subsidiaries with an original maturity of one year
or more, which shall each be calculated based upon the next succeeding four
fiscal quarters.
 
 
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“Consolidated Domestic EBITDA” shall mean for Aceto and its Domestic
Subsidiaries for any period, Consolidated Net Income (or consolidated net loss)
for such period, plus the sum, without duplication, of (a) Consolidated Interest
Expense, (b) depreciation and amortization expenses or charges, and (c) all
income taxes to any government or governmental instrumentality expensed on
Aceto’s or any of its Domestic Subsidiaries’ books (whether paid or accrued), in
each case, determined on a consolidated basis for Aceto and its Domestic
Subsidiaries in accordance with Generally Accepted Accounting Principles applied
on a consistent basis, provided, however, for any calculation which includes the
fiscal quarter ended December 31, 2009, Consolidated Domestic EBITDA shall
include the add back of nonrecurring charges incurred in the fiscal quarter
ended December 31, 2009, not to exceed $4,662,000 in the aggregate representing
severance charges not to exceed $3,802,000 and inventory write downs not to
exceed $860,000 both incurred in the fiscal quarter ended December 31,
2009.  All of the foregoing categories shall be calculated (without duplication)
over the four fiscal quarters then most recently ended.
 
“Consolidated EBITDA” shall mean for Aceto and its Subsidiaries for any period,
Consolidated Net Income (or consolidated net loss) for such period, plus the
sum, without duplication, of (a) Consolidated Interest Expense, (b) depreciation
and amortization expenses or charges, and (c) all income taxes to any government
or governmental instrumentality expensed on Aceto’s or any of its Subsidiaries’
books (whether paid or accrued), in each case, determined on a consolidated
basis for Aceto and its Subsidiaries in accordance with Generally Accepted
Accounting Principles applied on a consistent basis, provided, however, for any
calculation which includes the fiscal quarter ended December 31, 2009,
Consolidated EBIDTA shall include the add back of nonrecurring charges incurred
in the fiscal quarter ended December 31, 2009, not to exceed $4,662,000 in the
aggregate representing severance charges not to exceed $3,802,000 and inventory
write downs not to exceed $860,000 both incurred in the fiscal quarter ended
December 31, 2009.  All of the foregoing categories shall be calculated (without
duplication) over the four fiscal quarters then most recently ended.
 
“Consolidated Total Funded Debt” shall mean the sum of all Indebtedness of Aceto
and its Subsidiaries for borrowed money having an original maturity of one year
or more (including, without limitation, the outstanding Revolving Credit Loans
and the outstanding principal balance of the loans owing by any of Aceto’s
Subsidiaries to Deutsche Bank or any of Aceto’s Subsidiaries to ING Bank), in
each case determined on a consolidated basis for Aceto and its Subsidiaries in
accordance with Generally Accepted Accounting Principles applied on a consistent
basis.
 
“Consolidated Interest Expense” shall mean the consolidated gross interest
expense of Aceto and its Subsidiaries determined in accordance with Generally
Accepted Accounting Principles applied on a consistent basis and calculated over
the four fiscal quarters then most recently ended.
 
 
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“Consolidated Net Income” shall mean, for any period, the net income (or net
loss) of Aceto and its Subsidiaries on a consolidated basis for such period
determined in accordance with Generally Accepted Accounting Principles applied
on a consistent basis.
 
“Default” shall mean any condition or event which upon notice, lapse of time or
both would constitute an Event of Default.
 
“Dollar” and the symbol “$” shall mean lawful money of the United States of
America.
 
“Domestic Subsidiary” shall mean any Subsidiary of Aceto organized under the
laws of any state of the United States of America.
 
“Eligible Investments” shall mean (a) direct obligations of the United States of
America or any governmental agency thereof which are fully guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; or (b) dollar denominated certificates of
time deposit maturing within one year issued by any bank organized and existing
under the laws of the United States or any state thereof and having aggregate
capital and surplus in excess of $1,000,000,000; or (c) money market mutual
funds having assets in excess of $2,500,000,000; or (d) commercial paper rated
not less than P-1 or A-1 or their equivalent by Moody’s Investor Service, Inc.
or Standard & Poor’s Ratings Group, respectively; or (e) tax exempt securities
of a U.S. issuer rated A or better by Standard and Poor’s Ratings Group or
Moody’s Investor Service, Inc.
 
“Environmental Law” shall mean any law, ordinance, rule, regulation, or policy
having the force of law of any Governmental Authority relating to pollution or
protection of the environment or to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.) the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, et seq.) and the rules and regulations promulgated
pursuant thereto.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
 
“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with any Company or any Affiliate of any Company would be deemed
to be a member of the same “controlled group” within the meaning of Section
414(b), (c), (m) or (o) of the Code.
 
 “Event of Default” shall have the meaning set forth in Article VIII.
 
“Executive Officer” shall mean any of the President, the Chief Executive
Officer, Chief Financial Officer or the Secretary of Aceto or any of its
Subsidiaries, as applicable, and their respective successors, if any, designated
by the board of directors thereof.
 
 
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“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal fund brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Lender from three
Federal fund brokers of recognized standing selected by the Lender.
 
“First-Tier Foreign Subsidiary” shall mean, with respect to Aceto or any
Domestic Subsidiary, a Foreign Subsidiary that is directly owned by Aceto and/or
such Domestic Subsidiary.
 
“Fixed Rate Loans” shall mean, collectively, Adjusted Libor Loans and Quoted
Rate Loans.
 
“Foreign Subsidiary” shall mean any Subsidiary of any Company which is not a
Domestic Subsidiary.
 
“Generally Accepted Accounting Principles” shall mean those generally accepted
accounting principles in the United States of America, as in effect from time to
time.
 
“Governmental Authority” shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
 
“Hazardous Materials” shall mean any explosives, radioactive materials, or other
materials, wastes, substances, or chemicals regulated as toxic hazardous or as a
pollutant, contaminant or waste under any applicable Environmental Law.
 
“IDA Transaction” shall mean the conveyance by Aceto Realty LLC of its fee
interest in the real property and improvements located at 4 Tri Harbor Court,
Port Washington, New York to the Nassau County Industrial Development Agency
(the “Agency”) subject to a lease-back of such property pursuant to the terms of
a lease (“Lease”) for a period of ten (10) years and a right of Aceto Realty LLC
to repurchase such real property and improvements for $1.00 (i) upon expiration
of the Lease from the Agency, or (ii) at any time Aceto Realty LLC determines to
do so provided in connection therewith it reimburses the Agency for any benefits
that it received from the Lease and the payment in lieu of taxes agreement
executed in connection with the Lease, which reimbursement obligations are
secured by a so-called “Pilot Mortgage” granted by Aceto Realty LLC in favor of
the Agency (the “Pilot Mortgage”).  The IDA Transaction shall include a sublease
by Aceto Realty LLC of its rights under the Lease to Aceto.
 
 “Indebtedness” shall mean, without duplication, as to any Person or Persons (a)
indebtedness for borrowed money; (b) indebtedness for the deferred purchase
price of property or services; (c) indebtedness evidenced by bonds, debentures,
notes or other similar instruments; (d) obligations and liabilities secured by a
Lien upon property owned by such Person, whether or not owing by such Person and
even though such Person has not assumed or become liable for the payment
thereof; (e) obligations and liabilities directly or indirectly guaranteed by
such Person; (f) obligations or liabilities created or arising under any
conditional sales contract or other title retention agreement with respect to
property used and/or acquired by such Person; (g) obligations of such Person as
lessee under Capital Leases; (h) net liabilities of such Person under Rate
Management Transaction Agreements and foreign currency exchange agreements, as
calculated on a basis satisfactory to the Lender and in accordance with accepted
practice; (i) all obligations of such Person in respect of bankers’ acceptance;
and (j) all obligations, contingent or otherwise of such Person as an account
party or applicant in respect of letters of credit.
 
 
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“Interest Payment Date” shall mean (a) as to any CB Floating Rate Loan, the
first day of each calendar month during the term hereof; (b) as to any Fixed
Rate Loan, the last day of the Interest Period for such Fixed Rate Loan and, in
the case of any Fixed Rate Loan with an Interest Period of more than three
months duration, each day prior to the last day of such Interest Period that
occurs at intervals of 3 months duration after the first day of such period; and
(c) as to any Loan, the date such Loan is paid in full or in part.
 
“Interest Period” shall mean with respect to any Fixed Rate Loan:
 
 (a)           initially, the period commencing on the date such Fixed Rate Loan
is made and ending one, two, three or six months thereafter, as selected by the
Companies in its Notice of Borrowing or in its notice of conversion from another
Type of loan to a Fixed Rate Loan provided, in each case, in accordance with the
terms of Articles II and III hereof; and
 
 (b)           thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Fixed Rate Loan and ending one,
two, three or six months thereafter, as selected by the Companies by irrevocable
written notice to the Lender not later than 11:00 a.m. New York, New York time
(I) three Business Days, with respect to Adjusted Libor Loans or (II) one
Business Day with respect to a Quoted Rate Loan, prior to the last day of the
then current Interest Period with respect to such Fixed Rate Loan; provided,
however, that all of the foregoing provisions relating to Interest Periods are
subject to the following:
 
(i)           if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
 
(ii)          if the Companies shall fail to give notice as provided in clause
(b) above, the Companies shall be deemed to have requested conversion of the
affected Fixed Rate Loan to a CB Floating Rate Loan on the last day of the then
current Interest Period with respect thereto;
 
(iii)         any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
 
(iv)         no more than three (3) Interest Periods may exist at any one time;
and
 
 
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(v)          the Companies shall select Interest Periods so as not to require a
payment or prepayment of any Fixed Rate Loan during an Interest Period for such
Fixed Rate Loan.
 
“Lender” shall have the meaning set forth in the preamble hereto.
 
“Letter of Credit” shall mean standby and commercial letter of credit issued by
the Issuing Lender for the account of a Company pursuant to the terms of this
Agreement.
 
“Leverage Purpose Transaction” shall mean any transaction that (a) causes the
ratio of consolidated liabilities to consolidated assets to exceed 75% or (b)
causes the ratio of the consolidated liabilities to consolidated assets to
exceed 50% and increases the consolidated liabilities by 100% or more, in each
case determined in accordance with Generally Accepted Accounting Principles,
applied on a consistent basis with respect to Aceto and its consolidated
Subsidiaries.
 
“LIBOR Rate” means, with respect to any Adjusted Libor Loan for any Interest
Period, the rate determined by the Lender by reference to Reuters Screen LIBOR1,
formerly known as Page 3750 of the Moneyline Telerate Service (the “Service”),
or any successor to or substitute page of the Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Lender from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market
(the “Page”), at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, for dollar deposits with a maturity
comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the "LIBOR Rate" with respect to
such Adjusted Libor Loan for such Interest Period shall be the rate at which
dollar deposits in the approximate amount of principal outstanding on such date
and for a maturity comparable to such Interest Period are offered by the Lender
to place U.S. dollar deposits with first class banks in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
 
 “Lien” shall mean any lien (statutory or otherwise), security interest,
mortgage, deed of trust, pledge, charge, conditional sale, title retention
agreement, Capital Lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
 
“Loans” shall mean the Revolving Credit Loans.
 
“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Reaffirmation Agreement, the Security Documents, any Rate Management Transaction
Agreement entered into with the Lender and each other agreement executed in
connection with the transactions contemplated hereby or thereby, as each of the
same may hereafter be amended, restated, supplemented or otherwise modified from
time to time.
 
“Material Adverse Effect” shall mean a material adverse effect upon (a) the
business, operations, property, prospects or condition (financial or otherwise)
of Aceto and its Subsidiaries taken as a whole, or (b) the validity or
enforceability of (i) this Agreement or any of the other Loan Documents or (ii)
the rights or remedies of the Lenders hereunder or thereunder.
 
 
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“Material Contract” shall mean each contract, instrument or agreement (a) to
which Aceto or any of its Subsidiaries is a party which is material to the
business, operations or condition (financial or otherwise), prospects, or
properties of any Company or of Aceto and its Subsidiaries taken as a whole, or
(b) which is not a contract, instrument or agreement to purchase inventory in
the ordinary course of business and which requires the payment during the term
thereof in excess of $2,500,000.
 
“Note” shall mean the Amended and Restated Revolving Credit Note.
 
“Notice of Borrowing” shall mean the Lender’s form of notice of borrowing or
other form of notice of borrowing acceptable to the Lender.
 
“Obligations” shall mean all obligations, liabilities and indebtedness of each
Company to the Lender, whether now existing or hereafter created, absolute or
contingent, direct or indirect, due or not, whether created directly or acquired
by assignment or otherwise, arising under or relating to this Agreement, the
Note or any other Loan Document including, without limitation, all obligations,
liabilities and indebtedness of any Company with respect to the principal of and
interest on the Loans, reimbursement of Letters of Credit, and obligations
arising under Rate Management Transaction Agreements with the Lender (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code, and
interest that but for the filing of a petition in bankruptcy with respect to any
Company, would accrue on such obligations, whether or not a claim is allowed
against such Company for such interest in the related bankruptcy proceeding),
and all fees, costs, expenses and indemnity obligations of the Companies
hereunder, under any other Loan Document or under any Rate Management
Transaction Agreement.  The Obligations shall be joint and several obligations
of the Companies.
 
           “Page” shall have the meaning set forth in the definition of LIBOR
Rate.
 
“Payment Office” shall mean the Lender’s office located at 395 North Service
Road, Melville, New York 11747 or such other office as the Lender may designate
from time to time.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
 
 
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“Permitted Acquisitions” shall mean any acquisition (whether by merger or
otherwise) by Aceto or any Subsidiary of Aceto of more than 50% of the
outstanding capital stock, membership interests, partnership interests or other
similar ownership interests of a Person which is engaged in a line of business
similar to the business of Aceto or such Subsidiary (or reasonable extensions
thereof) or the purchase of all or substantially all of the assets owned by such
Person; provided (a) the Lender shall have received, within ten (10) Business
Days of the closing of such Permitted Acquisition, (i) with respect to a Person
which constitutes a Material Domestic Subsidiary, to the extent not previously
received, a duly executed Guaranty, and (ii) with respect to a Person which
constitutes a First-Tier Foreign Subsidiary, to the extent not previously
received, a duly executed Pledge Agreement by the parent of such First-Tier
Foreign Subsidiary, to the extent such documents are required to be delivered
pursuant to Section 6.13 hereof; (b) the Lender shall have received evidence
reasonably satisfactory to it that the shares or other interests in the Person,
or the assets of the Person, which is the subject of the Permitted Acquisition
are, or will be promptly following the closing of such Permitted Acquisition,
free and clear of all Liens, except Permitted Liens, including, without
limitation, with respect to the acquisition of shares or other equity interests,
free of any restrictions on transfer other than restrictions applicable to the
sale of securities under federal and state securities laws and regulations
generally or, with respect to the acquisition of any Foreign Subsidiary,
restrictions applicable to the sale of securities under applicable laws or
regulations of the applicable foreign jurisdiction;  (c) the Lender shall have
received not less than five (5) Business Days preceding the closing of such
Permitted Acquisition, the documentation governing the proposed acquisition,
including, without limitation, the purchase agreement with respect thereto,
together with such other additional documentation or information with respect to
the proposed acquisition as the Lender may reasonably require; (d) no Default or
Event of Default shall have occurred and be continuing immediately prior to or
would occur after giving effect to the acquisition on a pro forma basis; (e) the
Lender shall have received projections and pro forma financial statements
showing that, after giving effect to such acquisition, (i) no Default or Event
of Default shall have occurred and (ii) such acquisition will not be a Leveraged
Purpose Transaction; (e) the acquisition has either (i) been approved by the
Board of Directors or other governing body of the Person which is the subject of
the acquisition or (ii) been recommended for approval by the Board of Directors
or other governing body of such Person to the shareholders or other members of
such Person and subsequently approved by the shareholders or such members if
shareholder or such member approval is required under applicable law or the
by-laws, certificate of incorporation or other governing instruments of such
Person; (f) prior to the closing of any such acquisition, the Companies shall
have delivered evidence to the Lender that, on a pro forma basis, the Companies
will be in compliance with the financial condition covenants of Section 7.13
hereof upon completion of such acquisition; (g) the aggregate purchase price for
such purchase when aggregated with the purchase price of all other Permitted
Acquisitions in the same fiscal year in which such Permitted Acquisition shall
occur does not exceed $7,500,000, and (h) with respect to each purchase, the
purchase price of which exceeds $7,500,000, the Lender shall have provided its
prior written consent to the consummation thereof.
 
“Permitted Liens” shall mean the Liens specified in clauses (a) through (i) of
Section 7.01.
 
“Person” shall mean any natural person, corporation, limited liability company,
limited liability partnership, business trust, joint venture, association,
company, partnership or Governmental Authority.
 
“Plan” shall mean any multi-employer or single-employer plan defined in Section
4001 of ERISA, which covers, or at any time during the five calendar years
preceding the date of this Agreement covered, employees of Aceto, or any
Subsidiary of Aceto or an ERISA Affiliate on account of such employees’
employment by Aceto, or any Subsidiary of Aceto or an ERISA Affiliate.
 
“Pledge Agreements” shall mean, collectively, the Pledge Agreement dated May 10,
2002 by and between Aceto and the Bank and each pledge agreement executed by any
Domestic Subsidiary of Aceto who may be required to execute the same pursuant to
Section 6.13, as each of the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
 
 
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 “Prime Rate” shall mean the rate per annum publicly announced by the Lender
from time to time as its prime rate in effect at its principal office in New
York City, each change in the Prime Rate shall be effective on the date such
change is announced to become effective.
 
“Quoted Rate” shall mean a rate of interest per annum quoted to the Companies by
the Lender, in its discretion, on the requested Borrowing Date for the requested
Quoted Rate Loan.  Such quote rate shall be the fixed rate which would be
applicable to a Quoted Rate Loan made by the Lender on the requested date for
the proposed Quoted Rate Loan.  Notwithstanding any other provision of this
Agreement, (i) the rate so quoted by the Lender shall be determined in the sole
discretion of the Lender by reference to such factors and consideration as the
Lender shall deem relevant and (ii) the Lender shall not be required to quote
any rate at all for any reason whatsoever for any proposed Quoted Rate Loan or
upon the termination of any Interest Period relating to any existing Quoted Rate
Loan.
 
“Quoted Rate Loans” shall mean loans at such time as they are made and/or
maintained at a rate of interest based upon the Quoted Rate.
 
“Rate Management Transaction Agreement” means any agreement between a Company
and the Bank with respect to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, derivative transaction or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
 
“Reaffirmation” Agreement shall mean the Reaffirmation Agreement, substantially
in the form attached hereto as Exhibit B to be executed and delivered on the
Closing Date by Aceto.
 
 “Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
 
“Reportable Event” shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan as to which the 30 day notice requirement has not been
waived by the PBGC.
 
"Reserve Adjusted LIBOR" means, with respect to any Adjusted LIBOR Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBOR Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Revolving Credit Commitment” shall mean the Lender’s obligation to make
Revolving Credit Loans to the Companies in an aggregate amount not to exceed
$25,000,000, as such amount may be adjusted in accordance with the terms of this
Agreement.
 
 
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“Revolving Credit Commitment Period” shall mean the period from and including
the Closing Date to, but not including, the Revolving Credit Commitment
Termination Date or such earlier date as the Revolving Credit Commitment shall
terminate as provided herein.
 
“Revolving Credit Commitment Termination Date” shall mean December 31, 2012.
 
“Revolving Credit Loans” shall have the meaning set forth in Section 2.01(a).
 
 “Security Documents” shall mean the Pledge Agreements and each other collateral
security document delivered to the Lender hereunder.
 
“Solvent” shall mean with respect to any Person as of the date of determination
thereof that (a) the amount of the “present fair saleable value” of the assets
of such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise,” as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required on its debts as such debts become absolute and matured,
(c) such Person will not have as of such date, an unreasonably small amount of
capital with which to conduct its business, and (d) such Person will be able to
pay its debts as they mature.
 
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Bank is subject for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board).  Such reserve percentages shall include those imposed pursuant to such
Regulation D.  Adjusted Libor Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to the Bank under such Regulation D or any comparable regulation.  The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
 
“Subsidiaries” shall mean with respect to any Person any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled, directly
or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
 
“Taxes” shall have the meaning set forth in Section 3.10.
 
“Type” shall mean as to any Loan its status as a CB Floating Rate Loan, a
Adjusted Libor Loan or a Quoted Rate Loan.
 
“Unfunded Capital Expenditures” shall mean Capital Expenditures which are not
financed with the proceeds from any Indebtedness.
 
 
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“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the present value of the accrued benefits under the Plan as of the close of its
most recent plan year exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
 
SECTION 1.02.   Terms Generally.    The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and the neuter.  Except as otherwise
herein specifically provided, each accounting term used herein shall have the
meaning given to it under Generally Accepted Accounting Principles.  The term
“including” shall not be limited or exclusive, unless specifically indicated to
the contrary.  The word “will” shall be construed to have the same meaning in
effect as the word “shall”.  The words “herein”, “hereof” and “hereunder” and
other words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto, all of which are by this reference incorporated
into this Agreement.

 
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ARTICLE II.
LOANS
 
SECTION 2.01.  ­Revolving Credit Loans.
 
(a)  Subject to the terms and conditions, and relying upon the representations
and warranties, set forth herein, the Lender severally agrees to make loans
(individually a “Revolving Credit Loan” and, collectively, the “Revolving Credit
Loans”) to  the Companies from time to time during the Revolving Credit
Commitment Period up to but not exceeding at any one time outstanding the amount
of its Revolving Credit Commitment; provided, however, that no Revolving Credit
Loan shall be made if, after giving effect to such Revolving Credit Loan, the
Aggregate Outstandings would exceed the Revolving Credit Commitment in effect at
such time.  During the Revolving Credit Commitment Period, the Companies may
from time to time borrow, repay and reborrow hereunder on or after the date
hereof and prior to the Revolving Credit Commitment Termination Date, subject to
the terms, provisions and limitations set forth herein.  The Revolving Credit
Loans may be (i) Adjusted Libor Loans, (ii) CB Floating Rate Loans, (iii) Quoted
Rate Loans or (iv) a combination thereof.
 
(b)  The Companies shall give the Lender irrevocable written notice (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m. (New
York, New York time), three Business Days prior to the date of each proposed
Adjusted Libor Loan under this Section 2.01 or prior to 11:00 a.m. (New York,
New York time) on the date of each proposed CB Floating Rate Loan or Quoted Rate
Loan under this Section 2.01.  Such notice shall be irrevocable and shall
specify (i) the amount and Type of the proposed borrowing, (ii) the proposed use
of the loan proceeds, (iii) the initial Interest Period if a Fixed Rate Loan,
and (iv) the proposed Borrowing Date.  Except for borrowings which utilize the
full remaining amount of the Revolving Credit Commitment, each borrowing of a CB
Floating Rate Loan shall be in an amount not less than $250,000 or, if greater,
whole multiples of $100,000 in excess thereof.  Each borrowing of Fixed Rate
Loan shall be an amount not less than $500,000 or whole multiples of $100,000 in
excess thereof.  Funding of all Loans shall be made in accordance with Section
3.12 of this Agreement.
 
(c)  The Companies shall have the right, upon not less than three Business Days’
prior written notice to the Lender to terminate the Revolving Credit Commitment
or from time to time to permanently reduce the amount of the Revolving Credit
Commitment; provided, however, that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the Aggregate
Outstandings would exceed the Revolving Credit Commitment as then reduced;
provided, further, that any such termination or reduction requiring prepayment
of any Fixed Rate Loan shall be made only on the last day of the Interest Period
with respect thereto or on the date of payment in full of all amounts owing
pursuant to Section 3.08 as a result of such termination or reduction.  Any such
reduction shall be in the amount of $250,000 or whole multiples of $100,000 in
excess thereof, and shall reduce permanently the amount of the Revolving Credit
Commitment then in effect.
 
 
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(d)  The agreement of the Lender to make Revolving Credit Loans pursuant to this
Section 2.01 shall automatically terminate on the Revolving Credit Commitment
Termination Date.  Upon such termination, the Companies shall immediately repay
in full the principal amount of the Revolving Credit Loans then outstanding,
together with all accrued interest thereon and all other amounts due and payable
hereunder.
 
SECTION 2.02.   Revolving Credit Note.   The Revolving Credit Loans made by the
Lender shall be evidenced by a promissory note of the Companies (the “Amended
and Restated Revolving Credit Note”), substantially in the form attached hereto
as Exhibit A, appropriately completed, duly executed and delivered on behalf of
the Companies and payable to the order of the Lender in a principal amount equal
to the Revolving Credit Commitment of the Lender.  The Amended and Restated
Revolving Credit Note shall (a) be dated the Closing Date, (b) be stated to
mature on the Revolving Credit Commitment Termination Date, and (c) bear
interest from the date thereof until paid in full on the unpaid principal amount
thereof from time to time outstanding as provided in Section 3.01.  The Lender
is authorized to record the date, Type and amount of each Revolving Credit Loan
and the date and amount of each payment or prepayment of principal of each
Revolving Credit Loan in the Lender’s records or on the grid schedule annexed to
the Amended and Restated Revolving Credit Note; provided, however, that the
failure of the Lender to set forth each such Revolving Credit Loan, payment and
other information shall not in any manner affect the obligation of the Companies
to repay each Revolving Credit Loan made by the Lender in accordance with the
terms of its Amended and Restated Revolving Credit Note and this Agreement.  The
Amended and Restated Revolving Credit Note, the grid schedule and the books and
records of the Lender shall constitute presumptive evidence of the information
so recorded absent manifest error.
 
SECTION 2.03.   ­Letters of Credit.
 
(a)  Generally.   Subject to the terms and conditions set forth in this
Agreement, upon the written request of the Companies in accordance herewith, the
Lender shall issue Letters of Credit at any time during the Revolving Credit
Commitment Period.  Notwithstanding the foregoing, (i) at no time shall the sum
of the Aggregate Letters of Credit Outstanding with respect to standby Letters
of Credit exceed $1 million and (ii) no Letter of Credit shall be issued if,
after giving effect to the same, the Aggregate Outstandings would exceed the
Revolving Credit Commitment.  Furthermore, notwithstanding anything contained
herein to the contrary, the Lender shall be under no obligation to issue a
Letter of Credit if any order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms, to enjoin, restrict or
restrain the Lender in any respect relating to the issuance of such Letter of
Credit or a similar letter of credit, or any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Lender shall prohibit or
direct the Lender in any respect relating to the issuance of such Letter of
Credit or a similar letter of credit, or shall impose upon the Lender with
respect to any Letter of Credit, any restrictions, any reserve or capital
requirement or any loss, cost or expense not reimbursed by the Companies to the
Lender. Each request for issuance of a Letter of Credit shall be in writing and
shall be received by the Lender by no later than 12:00 p.m. (New York, New York
time), on the day which is at least two Business Days prior to the proposed date
of issuance.  Such issuance shall occur by no later than 3:00 p.m. on the
proposed date of issuance (assuming proper prior notice as aforesaid).  Subject
to the terms and conditions contained herein, the expiry date, and the amount
and beneficiary of the Letters of Credit will be as designated by the
Companies.  Each Letter of Credit issued by the Lender hereunder shall identify:
(i) the dates of issuance and expiry of such Letter of Credit, (ii) the amount
of such Letter of Credit (which shall be a sum certain), (iii) the beneficiary
of such Letter of Credit, and (iv) the drafts and other documents necessary to
be presented to the Lender upon drawing thereunder.    No Letter of Credit
issued hereunder shall expire more than 365 days from the date of issuance or
creation thereof, and in no event shall any Letter of Credit mature after the
Business Day which is immediately prior to the Revolving Credit Commitment
Termination Date.  The Companies agree to execute and deliver to the Lender such
further documents and instruments in connection with any Letter of Credit issued
hereunder (including without limitation, applications therefor) as the Lender in
accordance with its customary practices may request.
 
 
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(b)  Drawings Under Letters of Credit.   The Companies hereby absolutely and
unconditionally promise to pay to the Lender on the date of each drawing under a
Letter of Credit, in immediately available funds from its accounts, the amount
of such drawing under such Letter of Credit.
 
(c)  Letter of Credit Obligations Absolute.  (i) The obligation of the Companies
to reimburse the Lender as provided hereunder in respect of drawings under
Letters of Credit shall rank pari passu with the obligation of the Companies to
repay the Revolving Credit Loans hereunder, and shall be absolute and
unconditional under any and all circumstances.  Without limiting the generality
of the foregoing, the obligation of the Companies to reimburse the Lender in
respect of drawings under Letters of Credit shall not be subject to any defense
based on the non-application or misapplication by the beneficiary of the
proceeds of any such drawing or the legality, validity, regularity or
enforceability of the Letters of Credit or any related document, even though
such document shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Companies, the beneficiary of any Letter of Credit
or any financial institution or other party to which any Letter of Credit may be
transferred.  The Lender may accept or pay any draft presented to it under any
Letter of Credit regardless of when drawn or made and whether or not negotiated,
if such draft, accompanying certificate or documents and any transmittal advice
are presented or negotiated on or before the expiry date of such Letter of
Credit or any renewal or extension thereof then in effect, and is in substantial
compliance with the terms and conditions of such Letter of Credit.  Furthermore,
neither the Lender nor any of its correspondents shall be responsible, as to any
document presented under a Letter of Credit which appears to be regular on its
face, and appears on its face to be in substantial compliance with the terms of
the Letter of Credit, for the validity or sufficiency of any signature or
endorsement, for delay in giving any notice or failure of any instrument to bear
adequate reference to the Letter of Credit, or for failure of any Person to note
the amount of any draft on the reverse of the Letter of Credit.
 
(ii)           Any action, inaction or omission on the part of the Lender or any
of its correspondents under or in connection with any Letter of Credit or the
related instruments, documents or property, if in good faith and in conformity
with such laws, regulations or customs as are applicable, shall be binding upon
the Companies and shall not place the Lender or any of its correspondents under
any liability to the Companies in the absence of (x) gross negligence or willful
misconduct by the Lender or its correspondents or (y) the failure by the Lender
to pay under a Letter of Credit after presentation of a draft and documents
strictly complying with such Letter of Credit unless the Lender is prohibited
from making such payment pursuant to a court order.  The Lender’s rights,
powers, privileges and immunities specified in or arising under this Agreement
are in addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.  All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided therein
or hereunder, be governed by the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No. 500,
and any subsequent revisions thereof.
 
 
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ARTICLE III.
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
 
SECTION 3.01.  ­Interest Rate; Continuation and Conversion of Loans.
 
(a)  Each CB Floating Rate Loan shall bear interest for the period from the date
thereof on the unpaid principal amount thereof at a fluctuating rate per annum
equal to the CB Floating Rate.
 
(b)  Each Adjusted Libor Loan shall bear interest for the Interest Period
applicable thereto on the unpaid principal amount thereof at a rate per annum
equal to the Reserve Adjusted Libor determined for each Interest Period thereof
in accordance with the terms hereof plus a margin of two percent (2%) per annum.
 
(c)  Each Quoted Rate Loan shall bear interest for the Interest Period
applicable thereto on the unpaid principal amount thereof at a rate per annum
equal to the Quoted Rate determined for each Interest Period thereof in
accordance with the terms hereof.
 
(d)      Upon the occurrence and during the continuance of an Event of Default
the outstanding principal amount of the Loans (excluding any defaulted payment
of principal accruing interest in accordance with clause (e) below), shall, at
the option of the Lender, bear interest payable on demand at a rate of interest
3% per annum in excess of the interest rate otherwise then in effect or, if no
rate is in effect, 3% per annum in excess of the CB Floating Rate.
 
(e)      If any of the Companies shall default in the payment of the principal
of or interest on any portion of any Loan or any other amount becoming due
hereunder, whether with respect to reimbursement of drawings under Letters of
Credit, interest, fees, expenses or otherwise, the Companies shall pay interest
on such defaulted amount accruing from the date of such default (without
reference to any period of grace) up to and including the date of actual payment
(after as well as before judgment) at a rate of 3% per annum in excess of the
rate otherwise in effect or, if no rate is in effect, 3% per annum in excess of
the CB Floating Rate.
 
 
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(f)  The Companies may elect from time to time to convert outstanding Loans from
Fixed Rate Loans to CB Floating Rate Loans or a Fixed Rate Loan of another type
by giving the Lender at least three Business Day’s prior irrevocable written
notice of such election, provided that any such conversion of Fixed Rate Loans
shall only be made on the last day of an Interest Period with respect thereto or
upon the date of payment in full of any amounts owing pursuant to Section 3.08
as a result of such conversion.  The Companies may elect from time to time to
convert outstanding Loans from CB Floating Rate Loans to any Type of Fixed Rate
Loan by giving the Lender irrevocable written notice of such election not later
than 11:00 a.m. (New York, New York time), (i) three Business Days prior to the
date of the proposed conversion., with respect to an Adjusted Libor Loan and
(ii) on the date of the proposed conversion, with respect to a Quoted Rate
Loan   All or any part of outstanding CB Floating Rate Loans may be converted as
provided herein, provided that each conversion shall be in the principal amount
of $500,000 or whole multiples of $100,000 in excess thereof, and further
provided that no Default or Event of Default shall have occurred and be
continuing.  Any conversion to or from any type of Fixed Rate Loans hereunder
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all Fixed Rate Loans
having the same Interest Period shall not be less than $500,000.
 
(g)  Any Fixed Rate Loan in a minimum principal amount of $500,000 may be
continued as such upon the expiration of an Interest Period with respect thereto
by compliance by the Companies with the notice provisions contained in the
definition of Interest Period; provided, that no Fixed Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a CB Floating Rate Loan on
the last day of the Interest Period in effect when the Lender is notified, or
otherwise has actual knowledge, of such Default or Event of Default.
 
(h)  If the Companies shall fail to select the duration of any Interest Period
for any Fixed Rate Loan in accordance with the definition of “Interest Period”
set forth in Section 1.01, the Companies shall be deemed to have selected an
Interest Period of one month.
 
(i)       No Loan may be funded as a Fixed Rate Loan, or converted to or
continued as a Fixed Rate Loan, with an Interest Period that extends beyond the
Revolving Credit Commitment Termination Date.
 
(j)      Anything in this Agreement or in any Note to the contrary
notwithstanding, the obligation of the Companies to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be paid to the Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting the rates of interest that may be charged or collected by the
Lender.  In each such event payments of interest required to be paid to the
Lender shall be calculated at the highest rate permitted by applicable law until
such time as the rates of interest required hereunder may lawfully be charged
and collected by the Lender.  If the provisions of this Agreement or any Note
would at any time otherwise require payment by the Companies to the Lender of
any amount of interest in excess of the maximum amount then permitted by
applicable law, the interest payments to the Lender shall be reduced to the
extent necessary so that the Lender shall not receive interest in excess of such
maximum amount.
 
 
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(k)      Interest on each Loan shall be payable in arrears on each Interest
Payment Date and shall be calculated on the basis year of 360 days and shall be
payable for the actual days elapsed.  Any rate of interest on the Loans or other
Obligations which is computed on the basis of the Prime Rate shall change when
and as the Prime Rate changes in accordance with the definition thereof.  Each
determination by the Lender of an interest rate or fee hereunder shall, absent
manifest error, be conclusive and binding for all purposes.
 
SECTION 3.02.  ­Use of Proceeds.   The proceeds of the Revolving Credit Loans
shall be used, subject to the terms and conditions of this Agreement, solely (i)
for general corporate purposes, (ii) to finance the purchase by Aceto
Agricultural Chemicals Corp. on or prior to December 31, 2011, of the rights to
market United States Environmental Protection Agency approved products for an
aggregate consideration not to exceed $13,000,000 and to support the start up
working capital requirements related to such acquired products; and (iii) to
fund Permitted Acquisitions, provided that Revolving Credit Loans for the
purpose of funding a Permitted Acquisition shall be subject to the prior written
consent of the Lender, in its sole discretion.  Commercial Letters of Credit
issued by the Lender hereunder shall be for the account of the Companies and
shall be issued to provide the primary payment mechanism in connection with the
purchase of any materials, goods or services by any Company in the ordinary
course of business.  Standby Letters of Credit shall be issued by the Lender to
support the Companies’ obligations to third parties in the ordinary course of
business.
 
SECTION 3.03. ­  Prepayments.
 
(a)  The Companies may at any time and from time to time  prepay the then
outstanding Loans, in whole or in part, without premium or penalty, except as
provided in Section 3.08 with respect to any prepayment or payment of a Fixed
Rate Loan on a date other than the last day of the Interest Period with respect
thereto, upon written notice to the Lender (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. (New York, New York time), three
Business Days before the date of prepayment with respect to prepayments of Fixed
Rate Loans, or 11:00 a.m. (New York, New York time) one Business Day before the
date of prepayment with respect to CB Floating Rate Loans.  Each notice shall be
irrevocable and shall specify the date and amount of prepayment and whether such
prepayment is of Adjusted Libor Loans, CB Floating Rate Loans or Quoted Rate
Loans, or a combination thereof, and if a combination thereof, the amount of
prepayment allocable to each.  If such notice is given, the Companies shall make
such prepayment, and the amount specified in such notice shall be due and
payable, on the date specified therein.  Each partial prepayment of a Fixed Rate
Loan pursuant to this Section 3.03 shall be in a principal amount of $500,000 or
whole multiples of $100,000 in excess thereof.  Each partial prepayment of a CB
Floating Rate Loan pursuant to this Section 3.03 shall be in a principal amount
of $250,000 or whole multiples of $100,000 in excess thereof.
 
(b)  Each prepayment of principal of a Loan pursuant to this Section 3.03 shall
be accompanied by accrued interest to the date prepaid on the amount
prepaid.  Unless otherwise directed by the Companies pursuant to Section
3.03(a), partial prepayments of any Loan shall be applied first to outstanding
CB Floating Rate Loans and then to Fixed Rate Loans in such order as the Lender
shall determine in its sole and absolute discretion.
 
SECTION 3.04.  ­Fees.
 
(a)  Each of the Companies agrees to pay to the Lender a commitment fee on the
average daily unused portion of the Revolving Credit Commitment from the date of
this Agreement until the Revolving Credit Commitment Termination Date at a rate
per annum equal to .15%, based on a year of 360 days, payable in arrears on the
last day of March, June, September, and December of each year commencing June
30, 2010, on the Revolving Credit Commitment Termination Date and on each date
the Revolving Credit Commitment is permanently reduced in whole or in part.
 
 
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(b)  The Companies shall pay to the Lender, on demand, all customary fees
charged by the Lender with respect to the processing and administration of
letters of credit, (including, without limitation, amendments, renewals or
extensions of letters of credit).  In addition, the Companies shall pay to the
Lender, a letter credit fee which shall accrue at a rate per annum equal to a
percentage per annum to be agreed upon by Aceto and the Lender of the aggregate
undrawn amount of all outstanding standby Letters of Credit during the
applicable period.  Such letter of credit fee shall be payable in arrears on the
last day of each March, June, September and December of each year commencing
June 30, 2010, and on the Revolving Credit Commitment Termination Date.  Such
letter of credit fee shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed.
 
(c)  The Companies agree to pay to the Lender a non-refundable facility fee of
$50,000 which shall be paid in full on the Closing Date.
 
SECTION 3.05.  ­Inability to Determine Interest Rate.  In the event that the
Lender shall have determined (which determination shall be conclusive and
binding upon the Companies) that, by reason of circumstances affecting the
London interbank market, adequate and reasonable means do not exist for
ascertaining the Reserve Adjusted Libor applicable pursuant to Section 3.01(b)
for any requested Interest Period with respect to (a) the making of a Adjusted
Libor Loan, (b) an Adjusted Libor Loan that will result from the requested
conversion of a CB Floating Rate Loan or a Quoted Rate Loan into an Adjusted
Libor Loan, or (c) the continuation of an Adjusted Libor Loan beyond the
expiration of the then current Interest Period with respect thereto, the Lender
shall forthwith give notice by telephone of such determination, promptly
confirmed in writing, to the Companies of such determination.  Until the Lender
notifies each of the Companies that the circumstances giving rise to the
suspension described herein no longer exist, each of the Companies shall not
have the right to request or continue an Adjusted Libor Loan or to convert a CB
Floating Rate Loan or a Quoted Rate Loan to a Adjusted Libor Loan.
 
SECTION 3.06.  ­Illegality.  Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for the Lender to
make or maintain Fixed Rate Loans as contemplated by this Agreement, the Lender
shall forthwith give notice by telephone of such circumstances, promptly
confirmed in writing, and (a) the commitment of the Lender to make and to allow
conversion to or continuations of Fixed Rate Loans shall forthwith be cancelled
for the duration of such illegality and (b) the Loans then outstanding as Fixed
Rate Loans, if any, shall be converted automatically to CB Floating Rate Loans
on the next succeeding last day of each Interest Period applicable to such Fixed
Rate Loans or within such  earlier period as may be required by law.  The
Companies shall pay to the Lender, upon demand, any additional amounts required
to be paid pursuant to Section 3.08 hereof.
 
SECTION 3.07.  ­Increased Costs.  (a)  In the event that any introduction of or
change in, on or after the date hereof, any applicable law, regulation, treaty,
order, directive or in the interpretation or application thereof (including,
without limitation, any request, guideline or policy, whether or not having the
force of law, of or from any central bank or other governmental authority,
agency or instrumentality and including, without limitation, Regulation D), by
any authority charged with the administration or interpretation thereof shall
occur, which:
 
 
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(i)    shall subject the Lender to any tax of any kind whatsoever with respect
to this Agreement, any Note, any Loan, or any Letter of Credit or change the
basis of taxation of payments to the Lender of principal, interest, fees or any
other amount payable hereunder (other than any tax that is measured with respect
to the overall net income of the Lender or lending office of the Lender and that
is imposed by the United States of America, or any political subdivision or
taxing authority thereof or therein, or by any jurisdiction in which the
Lender’s lending office is located, or by any jurisdiction in which the Lender
is organized, has its principal office or is managed and controlled); or
 
(ii)   shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement (whether or not having the force of law)
against assets held by, or deposits or other liabilities in or for the account
of, advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of the Lender; or
 
(iii)   shall impose on the Lender any other condition, or change therein;
 
and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing or maintaining or participating in advances or extensions of
credit hereunder or to reduce any amount receivable hereunder, in each case by
an amount which the Lender deems material, then, in any such case, the Companies
shall pay the Lender, upon demand, such additional amount or amounts as the
Lender shall have determined will compensate the Lender for such increased costs
or reduction.
 
(b)           If the Lender shall have determined that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender (or any
lending office of the Lender) or the Lender’s holding company, with any request
or directive regarding capital adequacy (whether or not having the force of the
law) of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the Lender’s capital or on the
capital of the Lender’s holding company as a consequence of its obligations
hereunder to a level below that which the Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Lender’s
policies and the policies of the Lender’s holding company with respect to
capital adequacy) by an amount deemed by the Lender to be material, then from
time to time, the Companies shall pay to the Lender, the additional amount or
amounts as the Lender shall have determined will compensate the Lender or the
Lender’s holding company for such reduction.  The Lender’s determination of such
amounts shall be conclusive and binding on the Companies absent manifest error.
 
 
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(c)           A certificate of the Lender setting forth the amount or amounts
payable pursuant to Sections 3.07(a) and 3.07(b) above shall be conclusive
absent manifest error.  The Companies shall pay the Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
 
(d)            In the event the Lender shall be entitled to compensation
pursuant to Section 3.07(a) or Section 3.07(b), it shall promptly notify the
Companies of the event by reason of which it has become so entitled; provided,
however, no failure on the part of the Lender to demand compensation under
clause (a) or clause (b) above on one occasion shall constitute a waiver of its
right to demand compensation on any other occasion.
 
SECTION 3.08.   ­Indemnity.   The Companies agree to indemnify the Lender and to
hold the Lender harmless from any loss, cost or expense which the Lender may
sustain or incur, including, without limitation, interest or fees payable by the
Lender to lenders of funds obtained by it in order to maintain Fixed Rate Loans
hereunder, as a consequence of (a) default by the Companies in payment of the
principal amount of or interest on any Fixed Rate Loan, (b) default by the
Companies to accept or make a borrowing of a Fixed Rate Loan or a conversion
into or continuation of a Fixed Rate Loan after the Companies have requested
such borrowing, conversion or continuation, (c) default by the Companies in
making any prepayment of any Fixed Rate Loan after the Companies give a notice
in accordance with Section 3.03 of this Agreement and/or (d) the making of any
payment or prepayment (whether mandatory or optional) of a Fixed Rate Loan or
the making of any conversion of a Fixed Rate Loan to a CB Floating Rate Loan on
a day which is not the last day of the applicable Interest Period with respect
thereto.  A certificate of the Lender setting forth such amounts shall be
conclusive absent manifest error.  The Companies shall pay the Lender the amount
shown as due on any certificate within ten days after receipt thereof.
 
SECTION 3.09.   ­Change of Lending Office.  The Lender agrees to use reasonable
efforts to designate an alternate lending office with respect to its Adjusted
Libor Loans affected by the events or circumstances described in Section 3.05,
Section 3.06 or Section 3.07 to avoid or minimize the Companies’ liability
thereunder; provided, however, that such efforts shall not cause the imposition
on the Lender of any additional cost or legal, regulatory or administrative
burdens deemed by the Lender, in its sole discretion, to be material.
 
 
SECTION 3.10.   ­Taxes.    Except as set forth in clause (c) below or as
required by law, all payments made by the Companies under this Agreement shall
be made free and clear of, and without reduction for or on account of, any
present or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income and franchise taxes imposed on
the Lender by (i) the United States of America or any political subdivision or
taxing authority thereof or therein, (ii) the jurisdiction under the laws of
which the Lender is organized or in which it has its principal office or is
managed and controlled or any political subdivision or taxing authority thereof
or therein, or (iii) any jurisdiction in which the Lender’s lending office is
located or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes being called “Taxes”).  If any Taxes are required to be
withheld from any amounts payable to the Lender hereunder, or under the Note,
the amount so payable to the Lender shall be increased to the extent necessary
to yield to the Lender (after payment of all Taxes and free and clear of all
liability in respect of such Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Note.  Whenever any Taxes are payable by the Companies, as promptly as possible
thereafter, the Companies shall send to the Lender, as the case may be, a
certified copy of an original official receipt showing payment thereof.  If the
Companies fail to pay Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other required documentary
evidence, the Companies shall indemnify the Lender for any incremental taxes,
interest or penalties that may become payable by the Lender as a result of any
such failure together with any expenses payable by the Lender in connection
therewith.
 
 
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SECTION 3.11.    ­Payments.   All payments (including prepayments) to be made by
the Companies on account of principal, interest, fees and reimbursement
obligations shall be made without set-off or counterclaim and shall be made to
the Lender, at the Payment Office of the Lender in Dollars in immediately
available funds.  To effectuate any payment of any Obligations, the Companies
hereby authorize the Lender to initiate debit entries to any deposit account of
any Company maintained with the Lender and to debit the same to such
account.  This authorization to initiate debit entries shall remain in full
force and effect until the Lender has received written notification of its
termination in such time and in such manner as to afford the Lender a reasonable
opportunity to act on it.  Each Company acknowledges (i) that such debit entries
may cause an overdraft of any such account which may result in the Lender’s
refusal to honor items drawn on any such account until adequate deposits are
made to any such account; (ii) that the Lender is under no duty or obligation to
initiate any debit entry for any purpose; and (iii) that if a debit is not made
because any such account does not have a sufficient available balance, or
otherwise, the payment may be late or past due.  Except as otherwise provided in
the definition of “Interest Period”, if any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
 
SECTION 3.12.   ­Disbursement of Loans.   The Lender shall make each Loan to be
made by it hereunder available to the Companies at the Payment Office by
crediting the account of the Companies with such amount and in like funds;
provided, however, that if the proceeds of any Loan or any portion thereof are
to be used to prepay outstanding Loans, then the Lender shall apply such
proceeds for such purpose to extent necessary and credit the balance, if any, to
the Companies’ account.
 
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
 
In order to induce the Lender to enter into this Agreement and to extend the
credit herein provided for, the Companies, jointly and severally, represent and
warrant to the Lender that:
 
SECTION 4.01.   ­Organization, Powers.   Each Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation or formation, (b) has the power and authority to own its
properties and to carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification except those jurisdictions in which the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect, and (d) has
the power to execute, deliver and perform each of the Loan Documents to which it
is a party, including, without limitation, with respect to each Company, the
power to obtain extensions of credit hereunder and to execute and deliver the
Note.
 
 
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SECTION 4.02.   ­Authorization of Borrowing, Enforceable Obligations.     The
execution, delivery and performance by the Companies of this Agreement, and the
other Loan Documents to which it is a party, the borrowings and the other
extensions of credit to the Companies hereunder, and the execution, delivery and
performance by each of its Subsidiaries of the Loan Documents to which such
Subsidiary is a party, (a) have been duly authorized by all requisite corporate,
limited partnership or limited liability action, (b) will not violate or require
any consent (other than consents as have been made or obtained and which are in
full force and effect) under (i) any provision of law applicable to any Company
or any Subsidiary of any Company, any rule or regulation of any Governmental
Authority, or the Certificate of Incorporation or By-laws of any Company or the
Certificate of Incorporation, By-Laws, or other organizational documents, as
applicable, of any Subsidiary of any Company or (ii) any order of any court or
other Governmental Authority binding on any Company or any Subsidiary of any
Company or any indenture, agreement or other instrument to which any Company or
any Subsidiary of any Company is a party, or by which any Company or any
Subsidiary of any Company or any of its property is bound, and (c) will not be
in conflict with, result in a breach of or constitute (with due notice and/or
lapse of time) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any Lien, of any nature
whatsoever upon any of the property or assets of any Company or any Subsidiary
of any Company other than as contemplated by this Agreement or the other Loan
Documents.  This Agreement and each other Loan Document to which any Company or
any of its Subsidiaries is a party constitutes a legal, valid and binding
obligation of such Company and each such Subsidiary of such Company, as the case
may be, enforceable against such Company and each such Subsidiary of such
Company, as the case may be, in accordance with its terms.
 
SECTION 4.03.  ­Financial Condition.
 
(a)   The Companies have heretofore furnished to the Lender the audited
consolidated balance sheet of Aceto and its Subsidiaries and the related
consolidated statement of income, retained earnings and cash flow of Aceto and
its Subsidiaries, audited by BDO Seidman LLP, independent certified public
accountants, for the fiscal year ended June 30, 2009.  Such financial statements
were prepared in conformity with Generally Accepted Accounting Principles,
applied on a consistent basis, and fairly present the consolidated financial
condition and consolidated results of operations of Aceto and its Subsidiaries
as of the date of such financial statements and for the periods to which they
relate and since June 30, 2009, no Material Adverse Effect has occurred.  The
Companies shall deliver to the Lender, a certificate of the Chief Financial
Officer to that effect on the Closing Date.  Other than obligations and
liabilities arising in the ordinary course of business since June 30, 2009,
there are no material obligations or liabilities contingent or otherwise, of
Aceto or any of its Subsidiaries which are not reflected or disclosed on such
audited statements other than obligations of Aceto and any of its Subsidiaries
incurred in the ordinary course of business (which shall be deemed to exclude
acquisitions by Aceto or any Subsidiary of Aceto of the business or assets
(including, without limitation stock) of any Person).
 
 
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(b)   Each of Aceto and its Domestic Subsidiaries on a consolidated basis, Aceto
and its  Subsidiaries on a consolidated basis, and Aceto, individually, is
Solvent and immediately after giving effect to each Loan and each other
extension of credit contemplated by this Agreement and the execution of each
Loan Document, will be Solvent.
 
SECTION 4.04.  ­Taxes.   All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of Aceto or any
of its Subsidiaries have been discharged or reserved against in accordance with
Generally Accepted Accounting Principles.  Aceto and each of its Subsidiaries
has filed or caused to be filed all federal, state and local tax returns which
are required to be filed, and has paid or has caused to be paid all taxes as
shown on said returns or on any assessment received by them, to the extent that
such taxes have become due, except taxes which are being contested in good faith
and which are reserved against in accordance with Generally Accepted Accounting
Principles.
 
SECTION 4.05.  ­Title to Properties.   Aceto and each of its Subsidiaries has
good title to their respective properties and assets, except for such properties
and assets as have been disposed of since the date of such financial statements
as no longer used or useful in the conduct of their respective businesses or as
have been disposed of in the ordinary course of business, and all such
properties and assets are free and clear of all Liens other than Permitted
Liens.
 
SECTION 4.06. ­  Litigation.    (a)  Except as set forth on Schedule VII, there
are no actions, suits or proceedings (whether or not purportedly on behalf of
Aceto or any of its Subsidiaries) pending or, except as set forth on Schedule
VII, to the knowledge of the Companies, threatened against or affecting Aceto or
any of its Subsidiaries at law or in equity or before or by any Governmental
Authority, which involve any of the transactions contemplated herein or which,
if adversely determined against Aceto or such Subsidiary, could reasonably be
expected to result in a Material Adverse Effect; and (b) neither Aceto nor any
of its Subsidiaries is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any Governmental Authority which could
reasonably be expected to result in a Material Adverse Effect.
 
SECTION 4.07.  ­Agreements.   Neither Aceto nor any of its Subsidiaries is a
party to any agreement or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
regulation which could reasonably be expected to have a Material Adverse
Effect.  Neither Aceto nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect.
 
SECTION 4.08.  ­Compliance with ERISA.   Each Plan is in compliance with ERISA;
no Plan is insolvent or in reorganization, no Plan or Plans have an Unfunded
Current Liability, and no Plan has an accumulated or waived funding deficiency;
neither Aceto, its Subsidiaries nor any ERISA Affiliate has incurred any
liability to or on account of a Plan pursuant to Section 515, 4062, 4063, 4064,
4201 or 4204 of ERISA or expects to incur any liability under any of the
foregoing sections on account of the prior termination of participation in or
contributions to any such Plan; no proceedings have been instituted to terminate
any Plan; no condition exists which could reasonably be expected to present a
risk to any Company, or any ERISA Affiliate of incurring a liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
lien imposed under the Code or ERISA on the assets of any Company, or any ERISA
Affiliates exists or is likely to arise on account of any Plan and each Company,
as applicable, may terminate contributions to any other employee benefit plans
maintained by it without incurring any material liability to any Person
interested therein.
 
 
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SECTION 4.09.   ­Federal Reserve Regulations; Use of Proceeds.  (a)  Neither
Aceto nor any of its Subsidiaries is engaged principally in, nor has as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying any “margin stock” (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United States, as
amended from time to time).
 
(b)          No part of the proceeds of any Loan and no other extension of
credit hereunder will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) to purchase or to carry margin
stock or to extend credit to others for the purpose of purchasing or carrying
margin stock, or to refund indebtedness originally incurred for such purposes,
or (ii) for any purpose which violates or is inconsistent with the provisions of
Regulation T,U, or X of the Board of Governors of the Federal Reserve System.
 
(c)          The proceeds of each Loan, and each other extension of credit
hereunder shall be used solely for the purposes permitted under Section 3.02.
 
SECTION 4.10.     ­Approvals.   No registration with or consent or approval of,
or other action by, any Governmental Authority or any other Person is required
in connection with the execution, delivery and performance of this Agreement by
Aceto or any of its Subsidiaries, or with the execution and delivery of other
Loan Documents to which it is a party or, with respect to any Company, the
borrowings and each other extension of credit hereunder.
 
SECTION 4.11.  ­Subsidiaries.  Attached hereto as Schedule I is a correct and
complete list of each of Aceto’s Subsidiaries as of the Closing Date showing as
to each Subsidiary, its name, the jurisdiction of its incorporation, its
shareholders or other owners of an interest in each Subsidiary and the number of
outstanding shares or other ownership interest owned by each shareholder or
other owner of an interest.
 
SECTION 4.12.  ­Hazardous Materials.  Except as set forth on Schedule VI hereto,
Aceto and each of its Subsidiaries in compliance in all material respects with
all applicable Environmental Laws and neither Aceto nor any of its Subsidiaries
has used Hazardous Materials on, from, or affecting any property now owned or
occupied or previously owned or occupied by any of Aceto or any of its
Subsidiaries in any manner which violates any applicable Environmental Law.  To
the knowledge of the Companies, no prior owner of any such property or any
tenant, subtenant, prior tenant or prior subtenant have used Hazardous Materials
on, from, or affecting such property in any manner which violates any applicable
Environmental Law.
 
SECTION 4.13.      ­Investment Company Act.   Neither Aceto nor any of its
Subsidiaries is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.
 
 
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SECTION 4.14.     ­Pledge Agreements.  Each Pledge Agreement executed by Aceto
and each Domestic Subsidiary of the Companies, as applicable, shall, pursuant to
its terms, constitute a valid and continuing lien on and security interest in
the collateral referred to in such Pledge Agreement in favor of the Lender,
which shall be prior to all other Liens, claims and rights of all other Persons
in such collateral.
 
SECTION 4.15.  ­No Default.  No Default or Event of Default has occurred and is
continuing.
 
SECTION 4.16.  ­Material Contracts.  All Material Contracts in effect on the
date hereof are disclosed on Schedule V hereto.  Each such Material Contract is
in full force and effect and is binding upon and enforceable against Aceto and
each of its Subsidiaries, in each case, to the extent they are a party thereto,
and, to the Companies’ knowledge, all other parties thereto in accordance with
its terms, and there exists no default under any Material Contract by Aceto or
any Subsidiary of Aceto or by any other party thereto which has not been fully
cured or waived.
 
SECTION 4.17. ­     Permits and Licenses.   Aceto and each of its
Subsidiaries  has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except those the failure of which to have could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
SECTION 4.18. ­  Compliance with Law.     Aceto and each of its Subsidiaries are
in compliance, with all laws, rules, regulations, orders and decrees which are
applicable to Aceto or any of its Subsidiaries, or to any of their respective
properties.
 
SECTION 4.19.   ­Disclosure.  Neither this Agreement, any other Loan Document,
nor any other document, certificate or written statement furnished to the Lender
by or on behalf of Aceto or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which they were made.
 
ARTICLE V.
CONDITIONS OF LENDING
 
SECTION 5.01.  Conditions to Initial Extension of Credit.  The obligation of the
Lender to make its initial Loan hereunder, and the obligation of the Lender to
issue the initial Letter of Credit, are subject to the following conditions
precedent:
 
(a)   Note.    On or prior to the Closing Date, the Lender shall have received
the Amended and Restated Revolving Credit Note duly executed by the Companies.
 
(b)   Reaffirmation Agreement.    On or prior to the Closing Date, the Lender
shall have received the Reaffirmation Agreement duly executed by the Companies.
 
(c)   Opinion of Counsel.     On or prior to the Closing Date, the Lender shall
have received a written opinion of counsel for the Companies dated the Closing
Date and addressed to the Lender, substantially in the form of Exhibit C
attached hereto and an opinion in form and substance satisfactory to the Lender
of foreign counsel with respect to the security interests created pursuant to
Pledge Agreement.
 
 
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(d)   Supporting Documents.    On or prior to the Closing Date, the Lender shall
have received (i) a certificate of good standing for the Companies from the
secretary of state of the states of their organizational jurisdiction dated as
of a recent date; (ii) certified copies of the charter documents of the
Companies, (iii) a certificate of an authorized officer of each Company dated
the Closing Date and certifying:  (x) that the charter documents of such Person
have not been amended since the date of their certification (or if there has
been any such amendment, attaching a certified copy thereof); (y) that attached
thereto is a true and complete copy of resolutions adopted by the Board of
Directors of each of the Companies and by the board of directors or other
governing body or Persons of each Domestic Subsidiary authorizing the execution,
delivery and performance of each Loan Document to which it is a party,
the  borrowings and other extensions of credit hereunder; and (z) the incumbency
and specimen signature of each officer of each Company and of each officer or
other authorized Person of each Domestic Subsidiary executing each Loan Document
to which any Company or any Domestic Subsidiary of any Company is a party and
any certificates or instruments furnished pursuant hereto or thereto, and a
certification by another officer of each Company and each Domestic Subsidiary as
to the incumbency and signature of the Secretary or Assistant Secretary of such
Company and each such Domestic Subsidiary; and (iv) such other documents as the
Lender may reasonably request.
 
(e)    Insurance.    On or prior to the Closing Date, the Lender shall have
received a certificate or certificates of insurance from an independent
insurance broker or brokers confirming the insurance required to be maintained
pursuant to Section 6.01 hereof.
 
(f)       Financial Statements.   Prior to the Closing Date, the Lender shall
have received (i) the Companies’ unaudited consolidated financial statements for
the six months ended December 31, 2009 and (ii) three year projections
incorporating the impact of the acquisition of products contemplated pursuant to
Section 3.02(ii) hereof and demonstrating continued compliance with the
financial covenants set forth in Section 7.13 hereof, and the Lender shall have
been satisfied in its sole discretion with the form and substance of such
statements and projections.
 
(g)   Assets Free from Liens.    Prior to the Closing Date, the Lender shall
have received UCC-1 financing statement, tax and judgment lien searches
evidencing that each Company’s accounts receivable, inventory, equipment and all
other assets of each Company are free and clear of all Liens except Permitted
Liens.
 
(h)      Fees and Expenses.   On or prior to the Closing Date, the Lender shall
have received the fees payable on the Closing Date pursuant to Section 3.04(c)
and reimbursement of expenses in accordance with Section 9.03(b).
 
(i)    No Litigation.    There shall exist no action, suit, investigation,
litigation or proceeding affecting any Company pending or, to the knowledge of
any Company, threatened before any court, governmental agency or arbiter that
could reasonably be expected to be adversely determined against such Company
and, if so adversely determined, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
 
 
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(j)       Consents and Approvals.    All governmental and third party consents
and approvals necessary in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lender) and shall
remain in effect, and no law or regulation shall be applicable in the reasonable
judgment of the Lender that imposes materially adverse conditions upon the
transactions contemplated hereby.
 
      (k)        No Material Adverse Changes.  There shall not have occurred any
material adverse change in the business, operations, properties, prospects or
condition (financial or otherwise) of Aceto or Aceto and its Subsidiaries taken
as a whole, since December 31, 2009.
 
       (l)         Deutsche Bank and ING Bank Documentation.  The Lender and its
counsel shall have received a copy of the documents executed in connection with
the indebtedness owing by the Foreign Subsidiaries to Deutsche Bank and ING
Bank, all of which shall be satisfactory in form and substance to the Lender and
its counsel.
 
      (m)        Material Contracts.  The Lender shall have received a copy of
each Material Contract and shall be satisfied with the form and substance of
each thereof.
 
      (n)         Officer’s Certificate.  On the Closing Date, the Lender shall
have received a certificate dated the Closing Date, executed by an Executive
Officer confirming compliance with the conditions set forth in clauses (a), (b)
and (c) of Section 5.02.
 
      (o)          Other Information, Documentation.  The Lender shall have
received such other and further information and documentation as it may
reasonably require, including, but not limited to, any information or
documentation relating to compliance by each Company and each of its
Subsidiaries with the requirements of all Environmental Laws.
 
      (p)          Completion of Proceedings.  All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by the Loan Documents, shall be
reasonably satisfactory in form and substance to the Lender, and its counsel.
 
SECTION 5.02.    ­Conditions to All Extensions of Credit.  The obligation of the
Lender to make each Loan hereunder and the obligation of the Lender to issue,
amend, renew or extend any Letter of Credit, including, without limitation, the
initial Loan and initial Letter of Credit, are subject to the conditions
precedent set forth in Section 5.01 and the following conditions precedent:
 
      (a)           Representations and Warranties.  The representations and
warranties by the Companies pursuant to this Agreement and the other Loan
Documents to which each is a party shall be true and correct in all material
respects on and as of the Borrowing Date or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, with the same
effect as though such representations and warranties had been made on and as of
such date unless such representation is as of a specific date, in which case, as
of such date.
 
 
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    (b)    No Default.  No Default or Event of Default shall have occurred and
be continuing on the Borrowing Date or on the date of issuance, amendment,
renewal or extension of a Letter of Credit or will result after giving effect to
the Loan requested or the requested issuance, amendment, renewal or extension of
a Letter of Credit.
 
    (c)    Availability.  After giving effect to any requested Revolving Credit
Loan or Letter of Credit, the Aggregate Outstandings shall not exceed the
Revolving Credit Commitment then in effect.
 
    (d)    Notice of Borrowing.  The Lender shall have received a Notice of
Borrowing duly executed by an Executive Officer with respect to the requested
Loan.
 
    (e)    Additional Documentation.  With respect to the issuance, amendment,
renewal or extension of any Letter of Credit, the Lender shall have received the
documents and instruments requested by the Lender in accordance with the last
sentence of Section 2.05(a).
 
Each borrowing hereunder and each issuance, amendment, renewal or extension of a
Letter of Credit shall constitute a representation and warranty of the Companies
that the statements contained in clauses (a), (b), and (c) of Section 5.02 are
true and correct on and as of the Borrowing Date or as of the date of issuance,
amendment, renewal or extension of a Letter of Credit, as applicable, as though
such representation and warranty had been made on and as of such date.
 
ARTICLE VI.
AFFIRMATIVE COVENANTS
 
The Companies, jointly and severally, covenant and agree with the Lender that so
long as the Commitment remains in effect, or any of the principal of or interest
on the Note or any other Obligations hereunder shall be unpaid they will, and
will cause each of Aceto’s Subsidiaries to:
 
SECTION 6.01. ­   Existence, Properties, Insurance.  Do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate,
partnership or limited liability company existence, as applicable, rights and
franchises and comply in all material respects with all laws applicable to it;
at all times maintain, preserve and protect all franchises and trade names and
preserve all of its property, in each case, used or useful in and material to
the conduct of its business and keep the same in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted in the ordinary course at all times; and at all times
maintain insurance covering its assets and its businesses with financially sound
and reputable insurance companies or associations in such amounts and against
such risks (including, without limitation, hazard, business interruption, public
liability and product liability) as are usually carried by companies engaged in
the same or similar business.  The Companies shall provide to the Lender
promptly upon receipt thereof evidence of the annual renewal of each such
policy.
 
 
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SECTION 6.02.   ­Payment of Indebtedness and Taxes.  Pay all indebtedness and
obligations, now existing or hereafter arising, as and when due and payable in
accordance with customary trade practices, and (b) pay and discharge or cause to
be paid and discharged promptly all taxes, assessments and government charges or
levies imposed upon it or upon its income and profits, or upon any of its
property, real, personal or mixed, or upon any part thereof, before the same
shall become in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might become a lien or charge upon such
properties or any part thereof; provided, however, that neither Aceto nor any
Subsidiary of Aceto shall be required to pay and discharge or cause to be paid
and discharged any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings,
and Aceto or such Subsidiary, as the case may be, shall have set aside on its
books adequate reserves determined in accordance with Generally Accepted
Accounting Principles with respect to any such tax, assessment, charge, levy or
claim so contested; further, provided that, subject to the foregoing proviso,
Aceto and each of its Subsidiaries will pay or cause to be paid all such taxes,
assessments, charges, levies or claims upon the commencement of proceedings to
foreclose any lien which has attached as security therefor.
 
SECTION 6.03.   ­Financial Statements, Reports, etc.   Furnish to the Lender:
 
(a)   as soon as available, but in any event within 90 days after the end of
each fiscal year of Aceto, a copy of the audited consolidated balance sheet of
Aceto and its Subsidiaries as of the end of such year and the related audited
consolidated statements of income, shareholders equity and cash flow for such
year, setting forth in each case in comparative form the respective figures as
of the end of and for the previous fiscal year, and accompanied by a report
thereon of BDO Seidman LLP or other independent certified public accountants of
recognized standing selected by Aceto and satisfactory to the Lender (the
“Auditor”), which report shall be unqualified, and which statements shall be
prepared in accordance with Generally Accepted Accounting Principles, applied on
a consistent basis, and accompanied by a certificate to that effect executed by
the Chief Financial Officer.
 
(b)   as soon as available, but in any event not later than 45 days after the
end of each quarterly period of each fiscal year of Aceto, a copy of the
unaudited interim consolidated balance sheet of Aceto and its Subsidiaries as of
the end of each such quarter and the related unaudited interim consolidated and
consolidating statements of income, shareholders equity and cash flow for such
quarter and the portion of the fiscal year through such date and setting forth
in each case in comparative form the respective figures for the corresponding
date and period in the previous fiscal year, in each case prepared by the Chief
Financial Officer in accordance with Generally Accepted Accounting Principles,
applied on a consistent basis, and accompanied by a certificate to that effect
executed by the Chief Financial Officer;
 
 
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        (c)   an annual debt compliance memorandum in the form previously
provided to the Lender signed by the Auditor with each delivery required by
clause (a);
 
(d)   a certificate prepared and signed by the Chief Financial Officer with each
delivery required by (a) and (b), as to whether or not, as of the close of such
preceding period and at all times during such preceding period, each Company was
in compliance with all the provisions in this Agreement and the other Loan
Documents, showing computation of financial covenants and quantitative negative
covenants, and if the Chief Financial Officer shall have obtained knowledge of
any default in such compliance or notice of such default, it shall disclose in
such certificate such default or defaults or notice thereof and the nature
thereof, whether or not the same shall constitute a Default or an Event of
Default hereunder;
 
(e)   at all times indicated in clause (a) above a copy of the management
letter, if any, prepared by the Auditor;
 
(f)   if applicable, promptly after filing thereof, copies of all regular and
periodic financial information, proxy materials and other information and
reports which Aceto or any of its Subsidiaries shall file with the Securities
and Exchange Commission;
 
(g)   within forty-five (45) days after the end of each fiscal year a schedule
of Material Contracts in effect as of the last day of such fiscal year;
 
(h)   within forty-five (45) days after the end of each fiscal quarter, (i) a
calculation of Consolidated EBITDA and consolidated revenue of the Immaterial
Subsidiaries (as that term is defined in Section 6.13) for such fiscal quarter
ended and (ii) a report identifying (x) the cost of the remediation incurred
with respect to the Carstadt Real Property during such fiscal quarter ended, (y)
the total of such costs incurred to date, and (z) the outstanding Indebtedness,
if any, identified in Section 7.02(m);
 
(i)   promptly after submission to any government or regulatory agency, all
documents and information furnished to such government or regulatory agency
other than such documents and information prepared in the normal course of
business and which could not reasonably be expected to result in any materially
adverse action to be taken by such agency; and
 
(j)   promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of Aceto or
any of its Subsidiaries as the Lender may reasonably request.
 
SECTION 6.04. ­   Books and Records; Access to Premises.  Keep adequate records
and proper books of record and account in which complete entries will be made in
a manner to enable the preparation of financial statements in accordance with
Generally Accepted Accounting Principles, and which shall reflect all financial
transactions of each Company and each of its Subsidiaries.  At any time, and
from time to time permit the Lender or any agents or representatives thereof, to
examine and make copies of and abstracts from the books and records of such
information which the Lender deems is necessary or desirable (including, without
limitation, the financial records of Aceto and each of its Subsidiaries) and to
visit the properties of Aceto or any of its Subsidiaries and to discuss the
affairs, finances and accounts of Aceto or any of its Subsidiaries with any of
their respective Executive Officers or Aceto’s independent accountants.
 
 
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SECTION 6.05. ­   Notice of Adverse Change.  Promptly notify the Lender in
writing of (a) any change in the business or the operations of Aceto or any of
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, and (b) any information which indicates that any financial statements
which are the subject of any representation contained in this Agreement, or
which are furnished to the Lender pursuant to this Agreement, fail, in any
material respect, to present fairly, as of the date thereof and for the period
covered thereby, the financial condition and results of operations purported to
be presented therein, disclosing the nature thereof.
 
SECTION 6.06. ­   Notice of Default.    Promptly notify the Lender of any
Default or Event of Default which shall have occurred, which notice shall
include a written statement as to such occurrence, specifying the nature thereof
and the action (if any) which is proposed to be taken with respect thereto.
 
SECTION 6.07.     Notice of Litigation.  Promptly notify the Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against Aceto or
any Subsidiary of Aceto on the basis of the allegations and information set
forth in the complaint or other notice of such action, suit or proceeding, or in
the amendments thereof, if any, could reasonably be expected to have a Material
Adverse Effect.
 
SECTION 6.08.   ­Notice of Default in Other Agreements.  Promptly notify the
Lender of any default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which Aceto or any Subsidiary of Aceto is a party which default
could reasonably be expected to have a Material Adverse Effect.
 
SECTION 6.09. ­   Notice of ERISA Event.  Promptly deliver to the Lender a
certificate of the Chief Financial Officer setting forth details as to such
occurrence and such action, if any, which a Company, or an ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by such Company, such ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator, with respect thereto: that a
Reportable Event has occurred with respect to a Plan, that an accumulated
funding deficiency has been incurred or an application may be or has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code with respect to a Plan,
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA, that one or more Plans have an Unfunded
Current Liability giving rise to a Lien under ERISA, that proceedings may be or
have been instituted to terminate a Plan, that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan,
or that such Company, or any ERISA Affiliate will or may incur any liability
(including any contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or
4204 of ERISA.  The Companies will deliver to the Lender a complete copy of the
annual report (Form 5500) of each Plan required to be filed with the Internal
Revenue Service.  In addition to any certificates or notices delivered to the
Lender pursuant to the first sentence hereof, copies of annual reports and any
other notices received by any Company required to be delivered to the Lender
hereunder shall be delivered to the Lender no later than ten days after the
later of the date such report or notice has been filed with the Internal Revenue
Service or the PBGC, given to Plan participants or received by any Company.
 
 
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SECTION 6.10.   ­Notice of Environmental Law Violations.  Promptly notify the
Lender of the receipt of any notice of an action, suit, and proceeding before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending against Aceto or any Subsidiary of
Aceto relating to any alleged violation of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect.
 
SECTION 6.11.   ­Notice Regarding Material Contracts.  Promptly notify the
Lender of (a) any termination (prior to the end of its stated term), material
amendment, material supplement or other material modification of any Material
Contract and (b) the occurrence of a default by Aceto or any of its
Subsidiaries, or by any party to any Material Contract of which the Companies
are aware.
 
SECTION 6.12.   ­Compliance with Applicable Laws.  Comply with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority, the breach of which could reasonably be expected to have a Material
Adverse Effect.
 
SECTION 6.13.   Subsidiaries.  Give the Lender written notice of the creation,
establishment or acquisition, in any manner, of any Subsidiary of Aceto not
existing on the Closing Date not less than ten (10) days prior to such creation,
establishment or acquisition.  Aceto or any Domestic Subsidiary, as appropriate,
(a) shall execute the Lender’s form of pledge agreement, with respect to not
more than 65% of the capital stock or equivalent interests of each Subsidiary
which is or becomes First-Tier Foreign Subsidiary (together with certificates
and powers with respect to such interests duly endorsed in blank, or such other
documentation as requested by the Lender in order to grant and perfect a
security interest in such interests); (b) shall cause each Subsidiary of Aceto
which is a Domestic Subsidiary to execute a joinder agreement in form and
substance satisfactory to the Lender pursuant to which such Domestic Subsidiary
agrees to be bound by all of the obligations of a Company hereunder and under
each Loan Document to which any Company is a party as if such Domestic
Subsidiary was originally a party hereto and thereto; (c) deliver an opinion of
counsel, simultaneously with the delivery of such pledge agreement executed
pursuant to clause (a) above, that such Pledge Agreement is valid and
enforceable in the jurisdiction of formation of such Foreign Subsidiary,
provided that if such opinion cannot be provided, such Company or such Domestic
Subsidiary, as appropriate, shall execute any additional documents that may be
required in order to perfect the lien granted by such pledge agreement in such
jurisdiction and to enable such counsel to deliver an acceptable opinion with
respect thereto; in the case of both (a) and (b), within ten (10) Business Days
after the creation, establishment or acquisition of such Subsidiary and in
connection therewith shall deliver or cause to be delivered such proof of
corporate action, incumbency of officers and other documents (including opinions
of counsel) as are consistent with those delivered as to each Company pursuant
to Section 5.01 hereof on the Closing Date, or as the Lender may request, each
in form and substance satisfactory to the Lender.  The foregoing requirements of
this Section 6.13 shall not apply with respect to (i) Aceto Pharmaceutical
Shanghai Ltd., unless such pledge may be obtained pursuant to applicable law and
is requested by the Lender upon not less than 30 days prior notice to Aceto, and
(ii) each of Aceto Japan, Inc., Aceto Agriculture Chemical Corp. Ltd. and Aceto
Agriculture Chemicals Corp. MX. S. DE. RI. DE .CV. and each other Foreign
Subsidiary formed after the date hereof until the date on which such entity (an
“Immaterial Subsidiary”) has (i) gross sales, determined in accordance with
GAAP, consistently applied, of US $1,000,000 or more in any consecutive 12 month
period, or (ii) a net worth of US $2,000,000 or more, determined in accordance
with GAAP consistently applied, except all loans and advances from its
Affiliates shall be deemed equity for purposes of determining such net
worth.  Notwithstanding the foregoing, in the event that (i) the consolidated
revenue of all the Immaterial Subsidiaries exceeds 10% of the consolidated
revenues of Aceto and its Subsidiaries for any fiscal quarter or (ii)
Consolidated EBITDA (calculated solely with respect to the Immaterial
Subsidiaries) exceeds 10% of Consolidated EBITDA of Aceto and its Subsidiaries
for any fiscal quarter, the requirements of this Section 6.13 shall again apply
to such Immaterial Subsidiaries.
 
 
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SECTION 6.14.   ­Environmental Laws.  Comply in all material respects with the
requirements of all Environmental Laws, provide to the Lender all documentation
in connection with such compliance that the Lender may reasonably request, and
defend, indemnify, and hold harmless the Lender and its respective employees,
agents, officers, and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or otherwise, arising out
of, or in any way related to, (a) the presence, disposal, or release of any
Hazardous Materials on any property at any time owned or occupied by Aceto or
any Subsidiary of Aceto; (b) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Materials; (c) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Materials, and/or (d) any violation
of applicable Environmental Laws, including, without limitation, reasonable
attorney and consultant fees, investigation and laboratory fees, court costs,
and litigation expenses.
 
ARTICLE VII.
NEGATIVE COVENANTS
 
The Companies, jointly and severally, covenant and agree with the Lender that so
long as the Commitment remains in effect or any of the principal of or interest
on the Note or any other Obligations hereunder shall be unpaid, it will not, and
will not cause or permit any Subsidiary of Aceto, directly or indirectly, to:
 
SECTION 7.01.   ­Liens.      Incur, create, assume or suffer to exist any Lien
on any of their respective assets now or hereafter owned, other than:
 
(a)    Liens existing on the date hereof as set forth on Schedule II attached
hereto including any renewals or extensions thereof; provided that no such Lien
is extended to cover any additional property and that the amount of Indebtedness
secured thereby is not increased;
 
 
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(b)    Liens for taxes, assessments or other governmental charges or levies not
yet delinquent or which are being contested in good faith by appropriate
proceedings, provided, however, that adequate reserves with respect thereto are
maintained on the books of the Companies or its Subsidiaries in accordance with
Generally Accepted Accounting Principles;
 
(c)    Carriers’, warehousemens’, mechanics’, suppliers’ or other like Liens
arising in the ordinary course of business and, to the extent the aggregate of
such Liens secure obligations in excess of $300,000 in the aggregate, such Liens
are  not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings in a manner which will not jeopardize
or diminish the interest of the Lender in any of the collateral subject to the
Security Documents;
 
(d)    Liens incurred or deposits to secure the performance of tenders, bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety, performance and appeal bonds, and other obligations of similar nature
incurred in the ordinary course of business;
 
(e)    Easements, rights of way, restrictions and other similar charges or
encumbrances which in the aggregate do not interfere in any material respect
with the occupation, use and enjoyment by Aceto or any of its Subsidiaries of
the property or assets encumbered thereby in the normal course of their
respective business or materially impair the value of the property subject
thereto;
 
(f)        Deposits under workmen’s compensation, unemployment insurance and
social security laws;
 
(g)       Liens granted to the Lender under this Agreement or any other Loan
Document;
 
(h)       Purchase money liens for fixed assets including obligations with
respect to Capital Leases; provided in each case (i) no Default or Event of
Default shall have occurred and be continuing or shall occur after giving effect
to such lien, (ii) such purchase money lien does not exceed 100% of the purchase
price of, and encumbers only, the property acquired, and (iii) such purchase
money Lien does not secure any Indebtedness other than in respect of the
purchase price of the asset acquired;
 
(i)        Liens on the real property acquired with the proceeds of the mortgage
indebtedness permitted pursuant to Section 7.02(i);
 
(j)        Liens granted to the seller in connection with a Permitted
Acquisition; provided such Liens (i) encumber solely the assets acquired from
such seller and (ii) secure solely indebtedness permitted pursuant to Section
7.02(l); and
 
(k)      The Pilot Mortgage.
 
SECTION 7.02.   Indebtedness.  Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
 
(a)    Indebtedness incurred prior to the date hereof as described in Schedule
III attached hereto, including any renewals or extensions thereof; provided such
renewal or extension does not result in an increase in the aggregate principal
amount of such Indebtedness;
 
 
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(b)   Indebtedness to the Lender under this Agreement, the Note or any other
Loan Document;
 
(c)   Indebtedness for trade payables incurred in the ordinary course of
business; provided such payables shall be paid or discharged when due;
 
(d)   Indebtedness consisting of guarantees permitted pursuant to Section 7.03;
 
(e)   Indebtedness secured by purchase money liens as permitted under Section
7.01(h); provided such Indebtedness incurred in any fiscal year of Aceto shall
not exceed $500,000, and, further, provided no Default or Event of Default shall
have occurred and be continuing or would occur after giving effect to the
incurrence of such Indebtedness;
 
(f)            Unsecured Indebtedness of Foreign Subsidiaries to (i) Deutsche
Bank, in an amount not to exceed 14,000,000 Euros, in the aggregate, at any
time, and (ii) ING Bank, in an amount not to exceed 500,000 Euros, in the
aggregate, at any time;
 
(g)          Indebtedness assumed in connection with any Permitted
Acquisition,  provided that such Indebtedness shall not exceed $5,000,000, in
the aggregate, with respect to all Permitted Acquisitions; and
 
(h)          Indebtedness arising under Capital Leases; provided that the
aggregate amount of such Indebtedness incurred in any fiscal year of Aceto shall
not exceed $500,000; and
 
(i)           Commercial mortgage indebtedness, having terms reasonably
acceptable to the Lender, in an amount not to exceed $4,000,000 in connection
with the purchase of the land and improvements located at 4 Tri Harbor Court,
Port Washington, New York;
 
(j)   Indebtedness owing from one Company to another Company;
 
(k)          Indebtedness consisting of loans and advances permitted pursuant to
Sections 7.06(d) and 7.06(g);
 
(l)   Indebtedness constituting all or a portion of the purchase price owing to
the seller in connection with a Permitted Acquisition; provided such
Indebtedness shall not exceed $2,000,000 in the aggregate at any one time
outstanding;
 
(m)         Unsecured Indebtedness, not to exceed $6,000,000 in the aggregate
(exclusive of the portion thereof for which Arsynco is entitled to reimbursement
from BASF Corporation pursuant to the terms of the Settlement Agreement dated
July 19, 2009 by and between Arsynco and BASF Corporation), with respect to
performance bonds or surety bonds required under the “ISRA Remediation Approval”
under Industrial Site Recovery Act Case No. E93024 and the U.S. Environmental
Protection Agency approval of a Risk Based Clean Up/Disposal of Polychlorinated
Biphenyl Remediation Waste.  Both approvals are in reference to Asrynco Inc.’s
property at 511 13th Street, Carstadt, New Jersey also being known and
designated as Block 91, Lot 1 on the Tax Map of the borough of Carstadt, New
Jersey; and
 
 
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(n)   Other Indebtedness, which when aggregated with the aggregate obligations
under those guarantees permitted pursuant to Section 7.03(e), shall not exceed
$3,000,000 at any one time outstanding.
 
SECTION 7.03.   ­Guaranties.    Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any other Person, whether by agreement to maintain working
capital or equity capital or otherwise maintain the net worth or solvency of any
Person or by agreement to purchase the Indebtedness of any other Person, or
agreement for the furnishing of funds, directly or indirectly, through the
purchase of goods, supplies or services for the purpose of discharging the
Indebtedness of any other Person or otherwise, or enter into or be a party to
any contract for the purchase of merchandise, materials, supplies or other
property if such contract provides that payment for such merchandise, materials,
supplies or other property shall be made regardless of whether delivery of such
merchandise, supplies or other property is ever made or tendered except:
 
(a)   guaranties executed prior to the date hereof as described on Schedule IV
attached hereto but not including any renewals or extension thereof;
 
(b)   endorsements of negotiable instruments for collection or deposit in the
ordinary course of business;
 
(c)   guaranties of any Indebtedness under this Agreement or any other Loan
Document;
 
(d)   guaranties by any Company of any Indebtedness permitted pursuant to
clauses (c), (e), (f), (g), (h), (i), (j)and (l) of Section 7.02 hereof of any
other Company;
 
(e)   other guaranties, which when aggregated with the aggregate amount of
indebtedness outstanding pursuant to Section 7.02(n), shall not exceed
$3,000,000 at any one time outstanding.
 
(f)   guaranties of the obligations of Aceto Realty LLC under the Lease and
Pilot Mortgage.
 
SECTION 7.04.  ­Sale of Assets.  Sell, assign, lease, transfer or otherwise
dispose of any of their now owned or hereafter acquired respective properties
and assets, whether or not pursuant to an order of a federal agency or
commission, except for (a) the sale of inventory disposed of in the ordinary
course of business, (b) so long as no Event of Default shall have occurred and
is continuing or would occur as a result thereof, the sale or other disposition
of properties or assets no longer used or useful in the conduct of their
respective businesses, (c) the sale of certain real property and improvements of
Aceto Realty LLC pursuant to the IDA Transaction and (d) the sale (including any
option for purchase) or lease of Arsynco Inc.’s real property and improvements
located at Carlstadt, New Jersey.
 
SECTION 7.05.  Sales of Receivables.  Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to Aceto or any
of its Subsidiaries, with or without recourse, except for collection in the
ordinary course of business.
 
 
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SECTION 7.06.  ­Loans and Investments.  Make or commit to make any advance,
loan, extension of credit, or capital contribution to, or purchase or hold
beneficially any stock or other securities, or evidence of Indebtedness of,
purchase or acquire all or a substantial part of the assets of, make or permit
to exist any interest whatsoever in, any other Person except for (a) the
ownership of stock of any Subsidiaries existing as of the Closing Date or
acquired after the date hereof, provided the Companies has complied with its
obligations under Section 6.13 with respect to such Subsidiary, (b) Eligible
Investments, (c) Permitted Acquisitions, (d) investments, loans or advances made
on or after the Closing Date by the Companies in Foreign Subsidiaries in an
aggregate amount not to exceed $5,000,000, during the term of this Agreement,
(e) repurchases of stock as permitted pursuant to Section 7.14(ii), (f) loans
and advances to customers, suppliers and/or vendors of any Company provided the
aggregate principal amount of all such loans and advances shall not exceed
$2,000,000, and (g) loans and advances by Foreign Subsidiaries to other Foreign
Subsidiaries.
 
SECTION 7.07.  ­Nature of Business.   Change or alter, in any material respect,
the nature of its business from the nature of the business engaged in by it on
the date hereof.
 
SECTION 7.08. ­  Sale and Leaseback.  Except as contemplated by the IDA
Transaction, enter into any arrangement, directly or indirectly, with any Person
whereby it shall sell or transfer any property, whether real or personal, used
or useful in its business, whether now owned or hereafter acquired, of it or any
of its Subsidiaries, if the aggregate sales price of all such assets sold or
transferred during the term of this Agreement exceeds $100,000, and at the time
of such sale or disposition it intends to lease or otherwise acquire the right
to use or possess (except by purchase) such property or like property for a
substantially similar purpose.
 
SECTION 7.09.  Federal Reserve Regulations.  Permit any Loan or the proceeds of
any Loan to be used for any purpose which violates or is inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
 
SECTION 7.10.  ­Accounting Policies and Procedures.  Except as required by
applicable law, rule or regulation, permit any change in the accounting policies
and procedures of Aceto or any of its Subsidiaries, including a change in fiscal
year, provided, however, any Foreign Subsidiary may change its fiscal year to
reflect a fiscal year ending on June 30th of each year, and provided, further
that any policy or procedure required to be changed by the Financial Accounting
Standards Board (or other board or committee thereof) in order to comply with
Generally Accepted Accounting Principles may be so changed.
 
SECTION 7.11.  ­Hazardous Materials.  Cause or permit any of its properties or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance with all applicable federal, state and local laws or regulations, or
cause or permit, a release of Hazardous Materials onto such property or asset or
onto any other property in violation of any such local laws or regulations.
 
SECTION 7.12.  Limitations on Fundamental Changes.   Merge or consolidate with,
or sell, assign, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether now or
hereafter acquired) to, any Person, acquire all of the stock or all or
substantially all of the assets or the business of any Person (except pursuant
to a Permitted Acquisition) or liquidate, wind up or dissolve or suffer any
liquidation or dissolution.
 
 
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SECTION 7.13.  ­Financial Condition Covenants.
 
(a)      Consolidated Domestic EBITDA.  Permit Consolidated Domestic EBITDA to
be less than the amount set forth below opposite the applicable fiscal quarter
ending:
 
Period                                                                                                      
Domestic EBITDA
 
Fiscal Quarter Ending
12/31/09                                                             $1,500,000
Fiscal Quarter Ending
3/31/10                                                               $2,500,000
Fiscal Quarter Ending
6/30/10                                                               $4,000,000
Fiscal Quarter ending
9/30/10                                                               $4,300,000
Fiscal Quarter Ending
12/31/10                                                             $4,300,000
Fiscal Quarter Ending
3/31/11                                                               $5,100,000
Fiscal Quarter Ending
6/30/11                                                               $6,300,000
Fiscal Quarter Ending
9/30/11                                                               $6,300,000
Fiscal Quarter Ending
12/31/11                                                             $6,600,000
Fiscal Quarter Ending
3/31/12                                                               $6,600,000
Fiscal Quarter Ending
6/30/12                                                               $6,600,000
Fiscal Quarter Ending
9/30/12                                                               $7,000,000
Fiscal Quarter Ending
12/31/12                                                             $7,000,000
 
(b)  Consolidated Total Funded Debt to Consolidated EBITDA.  Permit the ratio of
Consolidated Total Funded Debt to Consolidated EBITDA to be greater than, at the
end of any fiscal quarter 2.25:1.00.
 
(c)  Consolidated Debt Service Coverage Ratio.   Permit Consolidated Debt
Service Coverage Ratio to be less than 1.50:1.00, at the end of any fiscal
quarter.
 
SECTION 7.14.  ­Dividends.   Declare any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of stock of Aceto or any of its Subsidiaries or any warrant to
purchase any class of stock of Aceto or any of its Subsidiaries, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash, securities or property or in
obligations of Aceto or any of its Subsidiaries or in any combination thereof,
or permit any Affiliate to make any payment on account of, or purchase or
otherwise acquire, any shares of any class of the stock of Aceto or any of its
Subsidiaries or any warrant to purchase any class of stock of Aceto or any of
its Subsidiaries from any Person, provided (a) if no Default or Event of Default
shall have occurred and is then continuing or could occur as a result thereof,
Aceto may (i) make dividends and distributions to its shareholders in any fiscal
year not to exceed an amount equal to $7,500,000 in the aggregate and (ii) make
buy-backs, redemptions and repurchases of its common stock not in excess of
$10,,000,000, in the aggregate, during the term of this Agreement, (b) any
wholly-owned Domestic Subsidiary of Aceto may make dividends or distributions to
its shareholders or members, and (c) any Subsidiary of Aceto which is a Foreign
Subsidiary and which at least 70% of the outstanding capital stock or membership
interest is owed by Aceto and/or its Subsidiaries may make dividends or
distributions to its shareholders or members.
 
 
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SECTION 7.15.  ­Transactions with Affiliates.  Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate (other than Aceto or any of
Aceto’s Subsidiaries), except in the ordinary course of and pursuant to the
reasonable requirements of Aceto or any of its Subsidiaries’ business and upon
fair and reasonable terms no less favorable to Aceto or such Subsidiary than
they would obtain in a comparable arms-length transaction with a Person not an
Affiliate (other than Aceto or any of Aceto’s Subsidiaries).
 
SECTION 7.16.  Impairment of Security Interest.  Take or omit to take any action
which could reasonably be expected to have the result of impairing the security
interest in any property subject to a security interest in favor of the Lender
or grant to any person any interest whatsoever in any property which is subject
to a security interest in favor of the Lender.
 
SECTION 7.17.  Governmental Regulation.  (1)  Be or become subject at any time
to any law, regulation, or list of any government agency (including, without
limitation, the U.S. Office of Foreign Asset Control list) that prohibits or
limits Lender from making any advance or extension of credit to the Companies or
from otherwise conducting business with the Companies, or (2) fail to provide
documentary and other evidence of the Companies' identity as may be requested by
Lender at any time to enable Lender to verify Company's identity or to comply
with any applicable law or regulation, including, without limitation, Section
326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.
 
ARTICLE VIII.
EVENTS OF DEFAULT
 
SECTION 8.01.  ­Events of Default.  In the case of the happening of any of the
following events (each an “Event of Default”):
 
(a)   failure to pay the principal of, or interest on, any Loan, any
reimbursement obligations with respect to a drawing under any Letter of Credit,
or any fee or other amount due under this Agreement, as and when due and
payable;
 
(b)   default shall be made in the due observance or performance of (i) any
covenant, condition or agreement of Aceto or any of its Subsidiaries to be
performed pursuant to Article VII of this Agreement or (ii) any other covenant,
condition or agreement of Aceto or any of its Subsidiaries to be performed
pursuant to this Agreement or any other Loan Document (other than those
specified in clause (a) of this Section 8.01) and such default, if capable of
cure, shall continue unremedied for a period of twenty (20) days from the date
of such default.
 
(c)   any representation or warranty made or deemed made in this Agreement or
any other Loan Document shall prove to be false or misleading in any material
respect when made or given or when deemed made or given;
 
 
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(d)   any report, certificate, financial statement or other instrument furnished
in connection with this Agreement or any other Loan Document or the borrowings
hereunder, shall prove to be false or misleading in any material respect when
made or given or when deemed made or given;
 
(e)   default in the performance or compliance in respect of any agreement or
condition relating to any Indebtedness of Aceto or any of its Subsidiaries in
excess of $1,000,000 individually or in the aggregate (other than the Note) if
the effect of such default is to accelerate the maturity of such Indebtedness or
to permit the holder or obligee thereof (or a trustee on behalf of such holder
or obligee) to cause such Indebtedness to become due prior to the stated
maturity thereof, or, any such Indebtedness shall not be paid when due;
 
(f)           Aceto or any of its Subsidiaries shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency or similar law,
(ii) consent to the institution of, or fail to controvert in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the employment of a receiver, trustee, custodian,
sequestrator or similar official for any Company or any of its Subsidiaries or
for a substantial part of its property; (iv) file an answer admitting the
material allegations of a petition filed against it in such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) take corporate action
for the purpose of effecting any of the foregoing; or(vii) become unable or
admit in writing its inability or fail generally to pay its debts as they become
due;
 
(g)   an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Aceto or any of its Subsidiaries or of a substantial part of their
respective property, under Title 11 of the United States Code or any other
federal or state bankruptcy insolvency or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for Aceto or any
of its Subsidiaries or for a substantial part of their property, or (iii) the
winding-up or liquidation of Aceto or any of its Subsidiaries and such
proceeding or petition shall continue undismissed for 30 days or an order or
decree approving or ordering any of the foregoing shall continue unstayed and in
effect for 30 days;
 
(h)   one or more orders, judgments or decrees for the payment of money in
excess of $1,000,000 in the aggregate (not fully covered, but subject to
customary deductibles, by insurance the coverage of which is not in dispute)
shall be rendered against Aceto or any of its Subsidiaries and the same shall
not have been paid in accordance with such judgment, order or decree or
settlement and either (i) an enforcement proceeding shall have been commenced by
any creditor upon such judgment, order or decree, or (ii) there shall have been
a period of forty-five (45) consecutive days with respect to Aceto or any
Domestic Subsidiary or ninety (90) consecutive days with respect to any Foreign
Subsidiary during which a stay of enforcement of such judgment, order or decree,
by reason of pending appeal or otherwise, was not in effect;
 
 
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(i)  any Plan shall fail to maintain the minimum funding standard required for
any Plan year or part thereof or a waiver of such standard or extension of any
amortization period is applied for or granted under Section 412 of the Code, any
Plan is terminated by Aceto or any ERISA Affiliate or the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
Reportable Event shall have occurred with respect to a Plan or Aceto, any of its
Subsidiaries or any ERISA Affiliate shall have incurred a liability to or on
account of a Plan under Section 515, 4062, 4063, 4201 or 4204 of ERISA, and
there shall result from any such event or events the imposition of a lien upon
the assets of Aceto or any of its Subsidiaries or the granting of a security
interest on such assets, or a liability to the PBGC or a Plan or a trustee
appointed under ERISA or a penalty under Section 4971 of the Code;
 
(j)  any material provision of any Loan Document shall for any reason cease to
be in full force and effect in accordance with its terms or Aceto or any of its
Subsidiaries shall so assert in writing;
 
(k)  a Change of Control shall have occurred;
 
(l)       any material or adverse change in the financial condition of Aceto or
Aceto and its Subsidiaries, taken as a whole, shall have occurred;
 
(m)     any of the Liens purported to be granted pursuant to any Security
Document shall fail or cease for any reason to be legal, valid and enforceable
liens on the collateral purported to be covered thereby or shall fail or cease
to have the priority purported to be created thereby;
 
(n)  The cost of the remediation with respect to the Carlstadt Real Property
(exclusive of those costs paid by BASF Corporation) exceeds $6,000,000 in the
aggregate, or
 
(o)  the occurrence or existence of any default or other similar condition or
event (however described) with respect to any Rate Management Transaction
Agreement;
 
then, at any time thereafter during the continuance of any such event, the
Lender may, in its sole discretion, by written or telephonic notice to the
Companies, take either or both of the following actions, at the same or
different times, (a) terminate the Commitment and (b) declare (i) the Note, both
as to principal and interest, (ii) an amount equal to the maximum amount that
may be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any Letter of Credit shall have presented or be entitled to
present the drafts and other documents required to draw under such Letter of
Credit), and (iii) all other Obligations, to be forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Note to the
contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(f) or (g) shall have occurred, the Commitment shall automatically
terminate and interest, principal and amounts referred to in the preceding
clauses (i), (ii), and (iii) shall be immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, anything contained herein or in the Note to the contrary
notwithstanding.  With respect to all Letters of Credit that shall not have
matured or presentment for honor shall not have occurred, the Companies shall
provide the Lender with Cash Collateral in an amount equal to the aggregate
undrawn amount of the Letters of Credit.  Such Cash Collateral shall be applied
by the Lender to reimburse it for drawings under Letters of Credit for which the
it has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Companies at such time
or, if the maturity of the Loans has been accelerated, be applied to satisfy
other Obligations.
 
 
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ARTICLE IX.
MISCELLANEOUS
 
SECTION 9.01.    ­Notices.               All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including telecopy), and unless otherwise expressly provided herein, shall be
conclusively deemed to have been received by a party hereto and to be effective
on the day on which delivered by hand to such party or one Business Day after
being sent by overnight mail to the address set forth below, or, in the case of
telecopy notice, when acknowledged as received, or if sent by registered or
certified mail, three (3) Business Days after the day on which mailed in the
United States, addressed to such party at such address:
 
(a)           if to the Lender, at
 
JPMorgan Chase Bank, N.A.
395 North Service Road
Melville, New York 11747
Attention:                      Relationship Manager for Aceto Corporation
Telecopy:                      (631 ) 755-5110
 
With a copy to:
 
Farrell Fritz, P.C.
1320 RXR Plaza
Uniondale, New York 11556
Attention:   Stephen F. Melore, Esq.
Telecopy:  (516) 336-2207
 
(b)           if to the Companies, at
 
c/o Aceto Corporation
One Hollow Lane
Lake Success, New York 11042
Attention:    Mr. Douglas Roth
       Vice President and Chief Financial Officer
Telecopy:   (516) 627-6419
 
With a copy to”
 
Fischer & Burstein, P.C.
98 Cutter Mill Road, Suite 294N
Great Neck, New York 11021
Attention:   Stanley H. Fischer, Esq.
Telecopy:  (516) 829-5973
 
- and -
 
 
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(c)           as to each such party at such other address as such party shall
have designated to the other in a written notice complying as to delivery with
the provisions of this Section 9.01.
 
SECTION 9.02.  ­Effectiveness; Survival.  This Agreement shall become effective
on the date on which all parties hereto shall have signed a counterpart copy
hereof and shall have delivered the same to the Lender.  All representations and
warranties made herein and in the other Loan Documents and in the certificates
delivered pursuant hereto or thereto shall survive the making by the Lender of
the Loans and the issuance of the Letters of Credit, in each case, as herein
contemplated and the execution and delivery to the Lender of the Note evidencing
the Loans and shall continue in full force and effect so long as the Obligations
hereunder are outstanding and unpaid and the Commitments are in effect.  The
obligations of the Companies pursuant to Section 3.07, Section 3.08, Section
3.10 and Section 9.03 shall survive termination of this Agreement and payment of
the Obligations.
 
SECTION 9.03.  ­Expenses.  The Companies, jointly and severally, agree (a) to
indemnify, defend and hold harmless the Lender and its officers, directors,
employees, and affiliates (each, an “indemnified person”) from and against any
and all losses, claims, damages, liabilities or judgments to which any such
indemnified person may be subject and arising out of or in connection with the
Loan Documents, the financings contemplated hereby, the use of any proceeds of
such financings or any related transaction or any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
of such indemnified persons is a party thereto, and to reimburse each of such
indemnified persons upon demand for any reasonable, legal or other expenses
incurred in connection with the investigation or defending any of the foregoing;
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities, judgments or related expenses to
the extent arising from the willful misconduct or gross negligence of such
indemnified person, (b) to pay or reimburse the Lender for all its out-of-pocket
costs and expenses incurred in connection with the preparation and execution of
and any amendment, supplement or modification to this Agreement, the Note any
other Loan Documents, and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including without limitation, the reasonable fees and disbursements of
Farrell Fritz, P.C., counsel to the Lender, and the reasonable fees and
disbursements of counsel retained by the Lender in connection with the pledge of
shares of a Foreign Subsidiary pursuant to Section 6.13, and (c) to pay or
reimburse the Lender for all their costs and expenses incurred in connection
with the enforcement and preservation of any rights under this Agreement, the
Note, the other Loan Documents, and any other documents prepared in connection
herewith or therewith, including, without limitation, the reasonable fees and
disbursements of counsel (including, without limitation, in-house counsel) to
the Lender, including all such out-of-pocket expenses incurred during any
work-out, restructuring or negotiations in respect of the Obligations.
 
SECTION 9.04.  Successors and Assigns; Participations.
 
(a)  This Agreement shall be binding upon and inure to the benefit of the
Companies, the Lender, all future holders of the Note and their respective
successors and assigns, except that no Company may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Lender.
 
 
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(b)  The Lender reserves the right to sell participations in or to sell and
assign its rights, duties or obligations with respect to the Loans or the
Commitments to such banks, lending institutions or other parties as it may
choose and without the consent of the Companies.  The Lender may furnish any
information concerning Aceto or any of its Subsidiaries in its possession from
time to time to any assignee or participant (or proposed assignee or
participant).  The Lender may at any time pledge or assign or grant a security
interest in all or any part of its rights under this Agreement and its Note to a
Federal Reserve Bank, provided that no such assignment shall release the
transferor Lender from its Commitment or its obligations hereunder or substitute
any such pledgee or assignee for the Lender as a party to this Agreement.
 
SECTION 9.05.  ­No Waiver; Cumulative Remedies.  Neither any failure nor any
delay on the part of the Lender in exercising any right, power or privilege
hereunder or under any Note or any other Loan Document shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege.  The rights, remedies,
powers and privileges herein provided or provided in the other Loan Documents
are cumulative and not exclusive of any rights, remedies powers and privileges
provided by law.
 
SECTION 9.06.  ­APPLICABLE LAW. THIS AGREEMENT AND THE NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
 
SECTION 9.07. ­  SUBMISSION TO JURISDICTION.  EACH OF THE COMPANIES HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE
STATE OF NEW YORK, COUNTY OF NEW YORK, COUNTY OF QUEENS OR COUNTY OF NASSAU IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE COMPANIES HEREBY WAIVES AND AGREES NOT TO ASSERT BY
WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL
OR STATE COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER
HEREOF THEREOF MAY NOT BE LITIGATED IN OR BY SUCH FEDERAL OR STATE COURTS.  TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE COMPANIES AGREES NOT TO
ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING UNLESS SUCH
COUNTERCLAIM CONSTITUTES A COMPULSORY OR MANDATORY COUNTERCLAIM UNDER APPLICABLE
RULES OF CIVIL PROCEDURE.  EACH OF THE COMPANIES AGREES THAT SERVICE OF PROCESS
MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES
SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
 
 
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SECTION 9.08.  Waiver of Special Damages.  EACH COMPANY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR
RECOVER FROM THE LENDER IN ANY LEGAL ACTION OR PROCEEDING ANY  SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
 
SECTION 9.09.  Jury Waiver.   EACH COMPANY AND THE LENDER HEREBY VOLUNTARILY,
KNOWLINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN THE COMPANIES AND THE LENDER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS
NOTE.
 
SECTION 9.10.  Reinstatement; Certain Payments.  If claim is ever made upon the
Lender for repayment or recovery of any amount or amounts received by the Lender
in payment or on account of any of the Obligations under this Agreement, the
Lender shall give prompt notice of such claim to each Company, and if the Lender
repays all or part of said amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over the Lender or any
of its property, or (ii) any settlement or compromise of any such claim effected
by the Lender with any such claimant, then and in such event each Company agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon such Company notwithstanding the cancellation of the Note or other
instrument evidencing the Obligations under this Agreement or the termination of
this Agreement, and each Company shall be and remain jointly and severally
liable to the Lender hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by the Lender.
 
SECTION 9.11.  ­Severability.  In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
 
SECTION 9.12.  ­Right of Setoff.  If an Event of Default shall have occurred and
be continuing, the Lender and each of its Affiliates are each hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender or any Affiliate of the Lender to or for the credit or the account
of any Company against any and all of the Obligations of, irrespective of
whether or not the Lender shall have made any demand under this Agreement or any
Note and although such obligations may be unmatured.  The rights of the Lender
and each Affiliate of the Lender under this Section 9.09 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which they may have.
 
 
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SECTION 9.13.  Confidentiality.  The Lender agrees that it will not disclose
without the prior consent of the Companies (other than to affiliates of the
Lender and its directors, employees, auditors, counsel or other professional
advisors and their respective counsel who are advised of the need to maintain
the confidentiality thereof) any Confidential Information (as defined below)
with respect to Aceto or any of its Subsidiaries which is furnished by such
Company; provided that the Lender may disclose any such information (a) that is
or has become generally available to the public; (b) as may be required or
appropriate (i) in any report, statement or testimony submitted to any
municipal, state or federal or other governmental regulatory body having or
claiming to have jurisdiction over the Lender or to the Federal Reserve Board or
the Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors or (ii) in connection with
any request or requirement of any such regulatory body; (c) as may be required
or appropriate in response to any summons or subpoena or in connection with any
litigation; (d) to comply with any law, order, regulation or ruling applicable
to the Lender; and (e) to any prospective Transferee in connection with any
contemplated transfer of any of the Notes or any interest therein by the Lender;
provided that such prospective Transferee agrees to be bound by this Section
9.13 to the same extent as the Lender.  As used herein “Confidential
Information” shall mean information with respect to Aceto and any of its
Subsidiaries which is not generally available to the public other than such
information which after the date hereof becomes generally available to the
public through no fault or action by the Lender or becomes available to the
Lender on a nonconfidential basis from a source other than any Company which to
the Lender’s knowledge is not prohibited from disclosing such information by any
contractual, legal or fiduciary obligation owed to any Company.  In the event of
disclosure pursuant to the preceding clauses (b), (c) and (d) (other than in
connection with bank executions and reporting to bank regulatory authorities)
the Lender shall to the extent permitted by applicable law, make commercially
reasonable efforts to notify such Company of the disclosure in advance thereof.
 
SECTION 9.14.  ­Headings.  Section headings used herein are for convenience of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
 
SECTION 9.15. ­  Construction.  This Agreement is the result of negotiations
between, and has been reviewed by, each of the Companies, the Lender and their
respective counsel.  Accordingly, this Agreement shall be deemed to be the
product of each party hereto, and no ambiguity shall be construed in favor of or
against the Companies or the Lender.
 
SECTION 9.16. ­  JOINT AND SEVERAL OBLIGATIONS.  (A)    BENEFITS.  THE LOANS
WILL DIRECTLY OR INDIRECTLY BENEFIT EACH COMPANY HEREUNDER SEVERALLY, AND ALL OF
THEM JOINTLY, REGARDLESS OF THE FACT NO COMPANY RECEIVES ALL OR PART OF THE
PROCEEDS OF ANY OF THE LOANS.
 
(B)       ACCEPTANCE OF JOINT AND SEVERAL LIABILITY.  EACH OF THE COMPANIES IS
ACCEPTING JOINT AND SEVERAL LIABILITY HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS IN CONSIDERATION OF THE FINANCIAL ACCOMMODATIONS TO BE PROVIDED BY THE
LENDERS UNDER THIS AGREEMENT, FOR THE MUTUAL BENEFIT, DIRECTLY AND INDIRECTLY,
OF EACH OF THE COMPANIES AND IN CONSIDERATION OF THE UNDERTAKINGS OF EACH OTHER
COMPANY TO ACCEPT JOINT AND SEVERAL LIABILITY FOR THE OBLIGATIONS.
 
 
52

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(C)           PAYMENT AND PERFORMANCE.  EACH OF THE COMPANIES, JOINTLY AND
SEVERALLY, HEREBY IRREVOCABLY AND UNCONDITIONALLY ACCEPTS, NOT AS A SURETY BUT
AS A CO-DEBTOR, JOINT AND SEVERAL LIABILITY WITH THE OTHER COMPANIES, WITH
RESPECT TO THE PAYMENT AND PERFORMANCE OF ALL OF THE OBLIGATIONS, IT BEING THE
INTENTION OF THE PARTIES HERETO THAT ALL THE OBLIGATIONS SHALL BE THE JOINT AND
SEVERAL OBLIGATIONS OF EACH OF THE COMPANIES WITHOUT PREFERENCE OR DISTINCTION
AMONG THEM.
 
(D)           FAILURE TO PERFORM.  IF AND TO THE EXTENT THAT ANY OF THE
COMPANIES SHALL FAIL TO MAKE ANY PAYMENT WITH RESPECT TO ANY OF THE OBLIGATIONS
AS AND WHEN DUE OR TO PERFORM ANY OF THE OBLIGATIONS IN ACCORDANCE WITH THE
TERMS THEREOF, THEN IN EACH SUCH EVENT THE OTHER COMPANIES WILL MAKE SUCH
PAYMENT WITH RESPECT TO, OR PERFORM, SUCH OBLIGATION.
 
(E)          WAIVER OF NOTICE; ASSENT TO ACTIONS; ETC.  THE OBLIGATIONS OF EACH
OF THE COMPANIES UNDER THE PROVISIONS OF THIS SECTION 10.15 CONSTITUTE FULL
RECOURSE OBLIGATIONS OF EACH OF THE COMPANIES ENFORCEABLE AGAINST EACH SUCH
COMPANY, IRRESPECTIVE OF THE VALIDITY, REGULARITY OR ENFORCEABILITY OF THIS
AGREEMENT AS AGAINST ANY PARTICULAR COMPANY.  EACH AND EVERY REPRESENTATION,
WARRANTY, COVENANT AND AGREEMENT MADE BY THE COMPANIES, OR ANY OF THEM,
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS SHALL BE JOINT AND SEVERAL, WHETHER
OR NOT SO EXPRESSED, AND SUCH OBLIGATIONS OF ANY COMPANY SHALL NOT BE SUBJECT TO
ANY COUNTERCLAIM, SETOFF, OR RECOUPMENT BASED UPON ANY CLAIM ANY COMPANY MAY
HAVE AGAINST ANY OTHER COMPANY OR THE LENDER, AND SHALL REMAIN IN FULL FORCE AND
EFFECT WITHOUT REGARD TO, AND SHALL NOT BE RELEASED, DISCHARGED OR IN ANY WAY
AFFECTED BY, ANY CIRCUMSTANCES OR CONDITION AFFECTING ANY OTHER COMPANY,
INCLUDING WITHOUT LIMITATION (A) ANY WAIVER, CONSENT, EXTENSION, RENEWAL,
INDULGENCE OR OTHER ACTION OR INACTION UNDER OR IN RESPECT OF THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY AGREEMENT OR OTHER DOCUMENT RELATED THERETO WITH
RESPECT TO ANY OTHER COMPANY, OR ANY EXERCISE OR NONEXERCISE OF ANY RIGHT,
REMEDY, POWER OR PRIVILEGE UNDER OR IN RESPECT OF ANY SUCH AGREEMENT OR
INSTRUMENT WITH RESPECT TO ANY OTHER COMPANY, OR THE FAILURE TO GIVE NOTICE OF
ANY OF THE FOREGOING TO ANY OTHER COMPANY, (B) ANY INVALIDITY OR
UNENFORCEABILITY, IN WHOLE OR IN PART, OF ANY SUCH AGREEMENT OR INSTRUMENT WITH
RESPECT TO ANY OTHER COMPANY; (C) ANY FAILURE ON THE PART OF ANY OTHER COMPANY
FOR ANY REASON TO PERFORM OR COMPLY WITH ANY TERM OF ANY SUCH AGREEMENT OR
INSTRUMENT; (D) ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION, ARRANGEMENT,
READJUSTMENT, COMPOSITION, LIQUIDATION OR SIMILAR PROCEEDING WITH RESPECT TO ANY
OTHER COMPANY OR ITS PROPERTIES OR CREDITORS; OR (E) ANY OTHER OCCURRENCE
WHATSOEVER, WHETHER SIMILAR OR DISSIMILAR TO THE FOREGOING, WITH RESPECT TO ANY
OTHER COMPANY.  EACH COMPANY HEREBY WAIVES ANY REQUIREMENT OF DILIGENCE OR
PROMPTNESS ON THE PART OF THE LENDERS IN THE ENFORCEMENT OF THEIR RIGHTS
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT WITH RESPECT TO THE OBLIGATIONS OF
ITSELF OR OF ANY OTHER COMPANY.  WITHOUT LIMITING THE FOREGOING ANY FAILURE TO
MAKE ANY DEMAND UPON, TO PURSUE OR EXHAUST ANY RIGHTS OR REMEDIES AGAINST A
COMPANY, OR ANY DELAY WITH RESPECT THERETO, SHALL NOT AFFECT THE OBLIGATIONS OF
ANY OTHER COMPANY HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.
 
 
53

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SECTION 9.17.  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same instrument.
 
[The Next Page is the Signature Page]
 
 
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IN WITNESS WHEREOF, the Companies and the Lender have caused this Agreement to
be duly executed by their duly authorized officers, as of the day and year first
above written.
 
ACETO CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
ACETO AGRICULTURAL
CHEMICALS CORPORATION
 
By:__________________________
Name: Douglas Roth
Title: Secretary
 
CDC PRODUCTS CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACCI REALTY CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO PHARMA CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ARSYNCO INC.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO REALTY LLC
 
By:__________________________
Name:           Vincent Miata
Title:           President
JPMORGAN CHASE BANK, N.A.
 
 
By:__________________________
Name:
Title:

 
 
55

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SCHEDULE I
 
 Subsidiaries
 
 
Name of Entity
State of
Incorporation    

or Formation
Owners of Shares or Interests
Names and Percentages
of Shares Owned

                                       

 
56

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SCHEDULE II
 
 Existing Liens
 
None
 
 
57

--------------------------------------------------------------------------------

 

SCHEDULE III
 
Existing Indebtedness
 
 
58

--------------------------------------------------------------------------------

 

SCHEDULE IV
 
Existing Guarantees
 
 
59

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SCHEDULE V
 
Material Contracts
 
 
60

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SCHEDULE VI
 
Environmental Matters
 
 
61

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SCHEDULE VII
 
Litigation
 
 
62

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--------------------------------------------------------------------------------

EXHIBIT A
 
 
 

--------------------------------------------------------------------------------

 
 
AMENDED AND RESTATED REVOLVING CREDIT NOTE
 

 $­­­25,000,000   Uniondale, New York    April 23, 2010

 
FOR VALUE RECEIVED, ACETO CORPORATION, a New York corporation, ACETO
AGRICULTURAL CHEMICALS CORPORATION, a New York corporation, CDC PRODUCTS
CORPORATION, a New York corporation, ACETO PHARMA CORP., a  Delaware
corporation, ACCI REALTY CORP., a New York corporation, ARSYNCO INC., a New
Jersey corporation, and ACETO REALTY LLC, a New York limited liability company
(each a “Company” and, collectively, the “Companies”), jointly and severally,
promise to pay to the order of JPMORGAN CHASE BANK, N.A. (the “Lender”), on or
before the Revolving Credit Commitment Termination Date, the principal amount of
the Revolving Credit Commitment or, if less, the unpaid principal amount of all
Revolving Credit Loans made by the Lender to the Companies under the Credit
Agreement referred to below.
 
The Companies, jointly and severally, also promise to pay interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined, and to make principal repayments on this
Note at the times which shall be determined, in accordance with the provisions
of the Credit Agreement referred to below.
 
This Note is the “Amended and Restated Revolving Credit Note” referred to in the
Amended and Restated Credit Agreement dated as of April 23, 2010, by and among
the Companies and the Lender (as the same may be amended, modified or
supplemented from time to time, the “Credit Agreement”) and is issued pursuant
to and entitled to the benefits of the Credit Agreement to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Revolving Credit Loans evidenced hereby were made and are to be
repaid.  Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
 
Each of the Lender and any subsequent holder of this Note agrees, by its
acceptance hereof, that before transferring this Note it shall record the date,
Type and amount of each Revolving Credit Loan and the date and amount of each
payment or prepayment of principal of each Revolving Credit Loan previously made
hereunder on the grid schedule annexed to this Note; provided, however, that the
failure of the Lender or holder to set forth such Revolving Credit Loans,
payments and other information on the attached grid schedule shall not in any
manner affect the obligation of the Companies to repay the Revolving Credit
Loans made by the Lender in accordance with the terms of this Note.
 
This Note is subject to prepayments pursuant to Section 3.03 of the Credit
Agreement.
 
Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note together with all accrued but unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.
 
 
 

--------------------------------------------------------------------------------

 
 
All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in immediately available funds at
the office of JPMorgan Chase Bank, N.A., located at 395 North Service Road,
Melville, New York 11747 or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
 
This Note is an amendment and restatement of, and it is being issued in
replacement of and in substitution for, the Revolving Credit Note dated May 10,
2002 (the "Original Note"), issued by the Companies to the order of the Lender;
provided, however, that all principal unpaid and all interest accrued and unpaid
under the Original Note shall be deemed to be evidenced by this Note and payable
hereunder from and after the date thereof.  The execution and delivery of this
Note shall not be construed (i) to have constituted repayment of any principal
or interest on the Original Note or (ii) to release, cancel, terminate or
otherwise impair all or any part of the lien or security interest granted to the
Lender as collateral security for the Original Note, all of which liens and
security interests shall secure this Note.
 
No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligation of the Companies, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.
 
The Companies and endorsers of this Note waive presentment, diligence, demand,
protest, and notice of any kind in connection with this Note.
 
THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
 
[The Next Page is the Signature Page]
 
 
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IN WITNESS WHEREOF, the each of the Companies has caused this Note to be
executed and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
 
ACETO CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
ACETO AGRICULTURAL
CHEMICALS CORPORATION
 
By:__________________________
Name: Douglas Roth
Title: Secretary
 
CDC PRODUCTS CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACCI REALTY CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO PHARMA CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ARSYNCO INC.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO REALTY LLC
 
By:__________________________
Name: Vincent Miata
Title: President
JPMORGAN CHASE BANK, N.A.
 
 
By:__________________________
Name:
Title:

 
3

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SCHEDULE
 
 Date
 Principal  Type    Applicable  Amount of  Notation  of  Amount of of  Interest
 Interest  Principal  Made  Loan  Loan             Loan     Rate  Period  Paid
 By

 
 
4

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--------------------------------------------------------------------------------

EXHIBIT B
 
REAFFIRMATION AGREEMENT
 
Reference is made to the AMENDED AND RESTATED CREDIT AGREEMENT dated the date
hereof by and among ACETO CORPORATION, a New York corporation, ACETO
AGRICULTURAL CHEMICALS CORPORATION, a New York corporation, CDC PRODUCTS
CORPORATION, a New York corporation, ACETO PHARMA CORP., a Delaware corporation,
ACCI REALTY CORP., a New York corporation, ARSYNCO INC., a New Jersey
corporation, and ACETO REALTY LLC, a New York limited liability company, jointly
and severally, (each a “Company” and, collectively, the “Companies”), and
JPMORGAN CHASE BANK, N.A., a national banking association (the “Lender”) (the
“Amended and Restated Credit Agreement”) and the Pledge Agreement identified on
Annex A attached hereto (the “Pledge Agreement”).
 
Each of the undersigned (a) acknowledges and agrees that the term “Credit
Agreement” as used in the Pledge Agreement shall mean and be deemed to refer to
the Amended and Restated Credit Agreement, as the same may be further amended,
modified, supplemented, extended or renewed from time to time, and (b) confirms
to the Lender that the Pledge Agreement to which it is a party is in full force
and effect and will remain in full force and effect after giving effect to the
Credit Agreement.
 
Each of the undersigned represents and warrants to the Lender that (a) its
execution, delivery and performance of this Reaffirmation Agreement does not and
will not violate any provision of applicable law or regulation or that any
agreement or instrument to which it is a party and (b) this Reaffirmation
Agreement constitutes its legal and valid and binding obligation enforceable
against it in accordance with its terms.
 
This Reaffirmation Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute an agreement.
 
[The Next Page is the Signature Page]
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned have executed this Reaffirmation Agreement
as of April 23, 2010.
 
ACETO CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
ACETO AGRICULTURAL
CHEMICALS CORPORATION
 
By:__________________________
Name: Douglas Roth
Title: Secretary
 
CDC PRODUCTS CORPORATION
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACCI REALTY CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO PHARMA CORP.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ARSYNCO INC.
 
By:__________________________
Name: Vincent Miata
Title: President
 
ACETO REALTY LLC
 
By:__________________________
Name: Vincent Miata
Title: President
JPMORGAN CHASE BANK, N.A.
 
 
By:__________________________
Name:
Title:

 
2

--------------------------------------------------------------------------------

 
 
SCHEDULE “A”
 
 
 
Description
of Stock
 
 
 
Authorized
Shares
 
 
Outstanding
Shares
% and Number
of Outstanding
Shares Owned
by Pledgor
% and Number
of  Outstanding
Shares Pledged
by Pledgor

Common Stock of
______________________
 
______________________
 
 
___
 
___

100%
 

65%
 

 
3

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--------------------------------------------------------------------------------

EXHIBIT C
 
[LETTERHEAD OF COUNSEL TO THE COMPANY]
 
April 23, 2010
 
JPMorgan Chase Bank, N.A.
395 North Service Road,
Melville, New York 11747
 
Ladies and Gentlemen:
 
We have acted as counsel to Aceto Corporation (the “Company”), a New York
corporation, Aceto Agricultural Chemicals Corporation, a New York corporation,
CDC Products Corporation, a New York corporation, Aceto Pharma Corp., a Delaware
corporation, ACCI Realty Corp., a New York corporation, Arsynco Inc., a New
Jersey corporation, and Aceto Realty LLC, a New York limited liability company
(each, a “Company”; and, collectively, the “Companies”), in connection with the
Amended and Restated Credit Agreement (the “Agreement”) dated the date hereof
between the Companies and JPMorgan Chase Bank, N.A., pursuant to which the
Lender has agreed to extend credit to the Companies in an aggregate principal
amount not to exceed $25,000,000.  Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Agreement.
 
In acting as such counsel, we have examined:
 
 
(a)
a counterpart of the Agreement executed by each Company;

 
 
(b)
the Amended and Restated Revolving Credit Note executed by each Company in favor
of the Lender; and

 
 
(c)
a counterpart of the Reaffirmation Agreement executed by each Company.

 
The documents referred to in items (a) through (c) above are hereinafter
referred to collectively as the “Loan Documents”.
 
We have assumed the authenticity of all documents submitted to us as originals,
the conformity to the originals of all documents submitted to us as certified,
conformed or photo static copies and the authenticity of the originals of such
copies.  We have also examined originals, or copies certified to our
satisfaction, of such corporate records, certificates of public officials,
certificates of corporate officers of each Company and such other instruments
and documents as we have deemed necessary as a basis for the opinions
hereinafter set forth.  As to questions of fact, we have, to the extent that
such facts were not independently established by us, relied upon such
certificates.
 
 
 

--------------------------------------------------------------------------------

 
 
Based upon the foregoing and subject to the qualifications set forth herein, we
are of the opinion that,
 
1.           Each Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of their incorporation and in good
standing in each jurisdiction wherein the conduct of its business or any
ownership of its properties requires it to be qualified to do business except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect, and each has the corporate power and authority to own
its assets and to transact the business in which it is now engaged and to
execute and perform each of the Loan Documents to which it is a party.
 
2.           Each Company has the requisite corporate power and authority to
execute, deliver and perform the Loan Documents to which it is a party, each of
which has been duly authorized by all necessary and proper corporate action.
 
3.           The Loan Documents constitute the legal, valid and binding
obligation of each Company (to the extent they are a party thereto) enforceable
against each Company, as the case may be, in accordance with their respective
terms subject as to enforcement by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors’ rights
generally, and by equitable principles of general application.
 
4.           Neither the execution and delivery by the Companies of the Loan
Documents to which they are a party nor the performance by the Companies of
their respective obligations under the Loan Documents, will (a) violate any law,
rule or regulation or, to our knowledge, any order or decree of any court or
governmental instrumentality binding upon any Company, (b) contravene the
Certificate of Incorporation or By-Laws of any Company or, result in a breach of
or constitute a default (with due notice or lapse of time or both) under any
agreements to which any Company is bound of which we are aware, or, to our
knowledge, result in the creation or imposition of any lien, charge, or
encumbrance upon any of the property or assets of any Company other than the
liens granted pursuant to the Loan Documents, or (c) require the consent,
license, approval or authorization of any governmental or public body or
authority.
 
5.           No Company is an “investment company” or a company “controlled” by
an “investment company” within the meaning of the Investment Company Act of
1940.
 
6.           No consent or authorization of, filing with or other act by or in
respect of any governmental authority is required to be obtained by any Company
for the valid execution, delivery and performance of the Loan Documents to which
they are a party.
 
7.           Assuming the proceeds of the Loans are used for the purposes set
forth in Section 3.02 of the Agreement, the making of the loans contemplated
therein and the application of the proceeds thereof will not violate the
provisions of Regulation U or X of the Board of Governors of the Federal Reserve
System.
 
 
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 8.           To the best of our knowledge there are no actions, suits or
proceedings, pending or threatened against the Company or any Guarantor, before
any court, governmental agency or arbitrator which challenges the validity or
enforceability of any Loan Document or which, if adversely determined, would
impair the ability of any Company to perform its obligations under the Loan
Documents to which it is a party.
 
                                        Very truly yours,
 

3