ex10_1.htm


    Exhibit
      10-1

    


    SECOND
      AMENDMENT

    TO

    AMENDED
      AND RESTATED CREDIT AGREEMENT

    


    


    THIS
      SECOND AMENDMENT
TO AMENDED AND RESTATED
CREDIT AGREEMENT (this
      “Amendment”), dated as of June 29, 2005, is entered into by and among
      HERCULES INCORPORATED, a Delaware corporation (the “Company”), the
      Guarantors signatory hereto, the Lenders signatory hereto, CREDIT SUISSE, CAYMAN
      ISLANDS BRANCH (formerly known as Credit Suisse First Boston, acting through
      its
      Cayman Islands Branch), as Administrative Agent for the Lenders (in such
      capacity, the “Administrative Agent”) and WACHOVIA BANK, NATIONAL
      ASSOCIATION, as Syndication Agent and Issuing Lender (together with the
      Administrative Agent, the “Agents”).

    


    


    RECITALS

    


    A.           The
      Company, the Guarantors, the Lenders and the Agents are party to that certain
      Amended and Restated Credit Agreement dated as of April 8,
      2004 (as amended by that certain First Amendment to Amended and Restated Credit
      Agreement dated as of August 12, 2004, and as further amended, restated,
      modified or supplemented, the “Existing Credit
      Agreement”).  Unless otherwise defined herein or the context
      otherwise requires, terms used in this Amendment, including its preamble and
      recitals, have the meanings provided in the Existing Credit
      Agreement.

    


    B.           The
      Company has requested certain modifications to the Existing Credit
      Agreement.

    


    C.           Such
      modifications require the consent of the Required Lenders and of all of the
      Lenders with a Revolving Commitment (the “Revolving
      Lenders”).

    


    D.           The
      Required Lenders and the Revolving Lenders have consented to the requested
      modifications on the terms and conditions set forth herein.

    


    


    AGREEMENT

    


    


    NOW,
      THEREFORE, IN
      CONSIDERATION of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:


    
      
        
        

      

      
        
          

        

      

      
        
        

      

    


    I.           AMENDMENTS
      TO EXISTING CREDIT AGREEMENT

    


    Subject
      to the satisfaction of the
      conditions precedent set forth in Section 4 of Article II hereof, from and
      after
      the Second Amendment Effective Date (as defined below), the Existing Credit
      Agreement is hereby amended in the following respects:

    


    1.           Section
      5.2(k)(ii)(B)(I)(2) of the Existing Credit Agreement is hereby amended by
      deleting the reference therein to “$100,000,000” and replacing it with a
      reference to “$150,000,000”.

    


    2.           The
      definition of “Applicable Margin” in Section 7.1 of the Existing Credit
      Agreement is hereby amended by replacing the pricing grid relating to Revolving
      Loans and Revolving Commitments in clause (i) of such definition in its entirety
      with the following:

    


    
      	
               

              Pricing
                Level

            	
               

              Leverage
                Ratio

            	
               

              Applicable
                Margin for Commitment Fees

            	
               

              Revolving
                Loans

            
	 	
              Applicable
                Margin for Eurodollar Loans

            	
              Applicable
                Margin for ABR Loans

            
	
              I

            	
              >
                3.75x

            	
              .375%

            	
              1.50%

            	
              0.50%

            
	
              II

            	
              >
                3.25x and < 3.75x

            	
              .325%

            	
              1.25%

            	
              0.25%

            
	
              III

            	
              <
                3.25x

            	
              .300%

            	
              1.00%

            	
              0.00%

            


    

    


    3.           The
      definition of “Applicable Margin” in Section 7.1 of the Existing Credit
      Agreement is hereby further amended by deleting the “and” before clause (b) in
      the proviso in the last paragraph of such definition and inserting the following
      as a new clause (c) in such proviso:

    


    
      	
            	
              “(c) 
                

            	
              the
                Applicable Margin for Revolving Loans and the Commitment Fee as of
                the
                Second Amendment Effective Date shall be based on Pricing Level II
                of the
                pricing grid set forth in clause (i) above and shall remain at such
                level
                until the first Rate Calculation Date subsequent to the Second Amendment
                Effective Date (as defined in the Second Amendment hereto), and,
                thereafter, the Pricing Level shall be determined by the then current
                Leverage Ratio”

            


    

    


    4.           The
      definition of “Asset Disposition” in Section 7.1 of the Existing Credit
      Agreement is hereby amended by deleting the reference to “$25,000” in clause
      (ii) therein and replacing it with a reference to “$250,000”.

    


    5.           The
      definition of “Consolidated EBITDA” in Section 7.1 of the Existing Credit
      Agreement is hereby amended by deleting the “and” immediately before clause
      (iii)(e) and replacing it with a “,” and inserting the following as a new clause
      (iii)(f):

    


    “(f)
      cash restructuring charges taken
      by the Company in the fiscal year ended December 31, 2005 not to exceed
      $20,000,000 in the aggregate”

    


    6.           The
      definition of “Indebtedness” in Section 7.1 of the Existing Credit Agreement is
      hereby amended by adding the following proviso at the end of clause (vii) of
      such definition:


    
      
        
        

      

      
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          2
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    “;
provided
      that the component
      of such amount represented by contingent obligations only (i.e., rather than
      actual liabilities on the balance sheet) shall be reduced Dollar for Dollar
      by
      the amount of unrestricted cash on the consolidated balance sheet of the Company
      and its Subsidiaries,”

    


    


    II.           MISCELLANEOUS

    


    1.           Representations
      and Warranties.  Each of the Credit Parties represents and
      warrants to the Lenders and the Administrative Agent as follows:

    


    
      	
            	
              (i) 
                

            	
              It
                has taken all necessary action to authorize the execution, delivery
                and
                performance of this Amendment.

            


    

    


    
      	
              (ii) 
                

            	
              This
                Amendment has been duly executed and delivered by such Credit Party
                and
                constitutes such Credit Party’s legal, valid and binding obligation,
                enforceable in accordance with its terms, except as such enforceability
                may be limited (x) by general principles of equity and conflicts
                of laws
                (whether enforcement is sought by proceedings in equity or at law)
                or (y)
                by bankruptcy, reorganization, insolvency, moratorium or other laws
                of
                general application relating to or affecting the enforcement, of
                creditors' rights.

            


    

    


    
      	
              (iii) 
                

            	
              No
                consent, approval, authorization or order of, or filing, registration
                or
                qualification with, any court or governmental authority or third
                party is
                required in connection with the execution, delivery or performance
                by such
                Credit Party of this Amendment (except for those which have been
                obtained
                on or prior to the Second Amendment Effective
                Date).

            


    

    


    
      	
              (iv) 
                

            	
              The
                execution and delivery of this Amendment does not diminish or reduce
                its
                obligations under the Credit Documents (including, without limitation,
                in
                the case of each Guarantor, such Guarantor’s guaranty pursuant to
                Section 3A of the Existing Credit Agreement) in any manner, except as
                specifically set forth herein.

            


    

    


    
      	
            	
              (v) 
                

            	
              Such
                Credit Party has no claims, counterclaims, offsets, or defenses to
                the
                Credit Documents and the performance of its obligations thereunder,
                or if
                such Credit Party has any such claims, counterclaims, offsets, or
                defenses
                to the Credit Documents or any transaction related to the Credit
                Documents, the same are hereby waived, relinquished and released
                in
                consideration of the Required Lenders’ and the Term B Loan Lenders’
                execution and delivery of this
                Amendment.

            


    

    


    
      	
              (vi) 
                

            	
              The
                representations and warranties of the Credit Parties set forth in
                Section
                1 of the Existing Credit Agreement are true and correct in all material
                respects as of the date hereof (except those that expressly relate
                to an
                earlier date, in which case such representations and warranties are
                true
                and correct in all material respects as of such earlier date) and
                all of
                the provisions of the Credit Documents, except as amended hereby,
                are in
                full force and effect.

            


    


    
      
        
        

      

      
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          3
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              (vii) 
                

            	
              Subsequent
                to the execution and delivery of this Amendment and after giving
                effect
                hereto, no unwaived event has occurred and is continuing on the date
                hereof which constitutes a Default or an Event of
                Default.

            


    

    


    2.           Liens.  Each
      Credit Party affirms the liens and security interests created and granted by
      it
      in the Credit Documents (including, but not limited to, the Security Agreement
      and the Mortgages) and agrees that this Amendment shall in no manner adversely
      affect or impair such liens and security interests.

    


    3.           Effect
      of Amendment.  Except as expressly modified and amended in this
      Amendment, all of the terms, provisions and conditions of the Credit Documents
      shall remain unchanged and in full force and effect.  The Credit
      Documents and any and all other documents heretofore, now or hereafter executed
      and delivered pursuant to the terms of or otherwise in connection with the
      Credit Documents are hereby amended so that any reference to the Existing Credit
      Agreement shall mean a reference to the Existing Credit Agreement as amended
      hereby.

    


    4.           Conditions
      Precedent.   This Amendment shall become effective as of the
      date first above written (the “Second Amendment Effective Date”) when,
      and only when, each of the following conditions shall have been satisfied (it
      being understood that the satisfaction of one or more of the following
      conditions may occur concurrently with the effectiveness of this
      Amendment):

    


    (a)           Execution
      of Counterparts of Amendment.  The Administrative Agent shall have
      received counterparts of this Amendment, which collectively shall have been
      duly
      executed on behalf of the Company, each of the Guarantors, the Required Lenders
      and each of the Revolving Lenders.

    


    (b)           Officer’s
      Certificate.  The Administrative Agent shall have received a
      certificate executed by a Responsible Officer of the Company as of the Second
      Amendment Effective Date, in form and substance satisfactory to the
      Administrative Agent, stating that (i) each Credit Party is in compliance with
      all existing material financial obligations, (ii) all governmental, shareholder
      and third party consents and approvals, if any, with respect to the Credit
      Documents and the transactions contemplated thereby have been obtained, (iii)
      no
      action, suit, investigation or proceeding is pending or threatened in any court
      or before any arbitrator or governmental instrumentality that purports to affect
      any Credit Party or any transaction contemplated by the Credit Documents, if
      such action, suit, investigation or proceeding would reasonably be expected
      to
      have a Material Adverse Effect, and (iv) (A) no Default or Event of Default
      exists and (B) all representations and warranties contained herein and in the
      other Credit Documents are true and correct in all material respects (except
      those that expressly relate to an earlier date, in which case such
      representations and warranties are true and correct in all material respects
      as
      of such earlier date).


    
      
        
        

      

      
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          4
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    (c)           Fees
      and Expenses.  The payment by the Company to the Agents (or their
      Affiliates) of all fees and expenses relating to this Amendment and the Existing
      Credit Agreement which are due and payable on the Second Amendment Effective
      Date, including, without limitation, payment by the Company (i) on the date
      hereof, of all out-of-pocket costs and expenses of the Agents in connection
      with
      the preparation, execution and delivery of this Amendment, including without
      limitation the fees and expenses of Moore & Van Allen PLLC, special counsel
      to the Agents, and (ii) of the other respective fees set forth in the engagement
      letter executed by and among the Company and the Agents in connection with
      this
      Amendment.

     

    5.           Construction.  This
      Amendment is a Credit Document executed pursuant to the Existing Credit
      Agreement and shall (unless otherwise expressly indicated therein) be construed,
      administered and applied in accordance with the terms and provisions of the
      Existing Credit Agreement as amended hereby.

    


    6.           Counterparts.  This
      Amendment may be executed in any number of counterparts and by the parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed to be an original and all of which taken together shall
      constitute one and the same instrument.

    


    7.           GOVERNING
      LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
      HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH
      THE LAWS OF THE STATE OF NEW YORK.

    


    8.           Binding
      Effect.  This Amendment, the Existing Credit Agreement as amended
      hereby and the other Credit Documents embody the entire agreement between the
      parties and supersede all prior agreements and understandings, if any, relating
      to the subject matter hereof. These Credit Documents represent the final
      agreement between the parties and may not be contradicted by evidence of prior,
      contemporaneous or subsequent oral agreements of the parties. Except as
      expressly modified and amended in this Amendment, all the terms, provisions
      and
      conditions of the Credit Documents shall remain unchanged and shall continue
      in
      full force and effect.

    


    9.           Severability.   If
      any provision of this Amendment is determined to be illegal, invalid or
      unenforceable, such provision shall be fully severable and the remaining
      provisions shall remain in full force and effect and shall be construed without
      giving effect to the illegal, invalid or unenforceable provisions.

    


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      of Page Intentionally Left Blank]

    



    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      each of the parties hereto has caused a counterpart of this Amendment to be
      duly
      executed and delivered as of the date first above written.

    


    COMPANY:                                                                           HERCULES
      INCORPORATED

    


    By:
      /s/
      Allen A. Spizzo

    Name:
      Allen A. Spizzo

    Title:
      Chief Financial Officer

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    GUARANTORS:                                                  AQUALON
      COMPANY,

    a
      Delaware general
      partnership

    EAST
      BAY REALTY SERVICES,
      INC.,

    a
      Delaware corporation

    HERCULES
      COUNTRY CLUB,
      INC.,

    a
      Delaware corporation

    HERCULES
      CREDIT,
      INC.,

    a
      Delaware corporation

    HERCULES
      EURO HOLDINGS,
      LLC,

    a
      Delaware limited liability
      company

    HERCULES
      FINANCE
      COMPANY,

    a
      Delaware general
      partnership

    HERCULES
      FLAVOR,
      INC.,

     a
      Delaware
      corporation

    HERCULES
      HYDROCARBON HOLDINGS,
      INC.,

    a
      Delaware corporation

    HERCULES
      INTERNATIONAL LIMITED,
      LLC,

    a
      Delaware limited liability
      company

    HERCULES
      PAPER HOLDINGS,
      INC.,

    a
      Delaware corporation

    HERCULES
      SHARED SERVICES
      CORPORATION,

    a
      Delaware corporation

    WSP,
      INC.,

    a
      Delaware corporation

    ATHENS
      HOLDINGS,
      INC.,

    a
      Delaware corporation

    COVINGTON
      HOLDINGS,
      INC.,

    a
      Delaware corporation

    FIBERVISIONS
      INCORPORATED,

    a
      Delaware corporation

    FIBERVISIONS,
      L.P.,

    a
      Delaware limited
      partnership

    FIBERVISIONS
      PRODUCTS,
      INC.,

    a
      Georgia corporation

    FIBERVISIONS,
      L.L.C.,

    a
      Delaware limited liability
      company

    


    


    By:
      /s/ Allen A. Spizzo

    Name:
      Allen A. Spizzo

    Title:
      Authorized
      Representative

    for
      each of the foregoing
      Guarantors

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
              
                ADMINISTRATIVE
                  AGENT

              

            	
               

            


    

    
      	
              AND
                LENDER:

            	
              CREDIT
                SUISSE, CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse
                First Boston, acting through its Cayman Islands Branch), in its capacity
                as Administrative Agent, Collateral Agent and
                Lender

            


    

    


    By:
      /s/ James
      Moran                                                                

    Name:
      James Moran

    Title:
      Managing Director

    


    By:  /s/
      Denise
      Alvarez                                                                

    Name:
      Denise Alvarez

    Title:
      Associate

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    LENDERS:                                                                          
      WACHOVIA BANK, NATIONAL ASSOCIATION

    


    By:  /s/
      C. Jeffrey
      Seaton                                                                

    Name
      C.
      Jeffrey Seaton

    Title:
      Managing Director

    


    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ____________________________________

    [Name
      of Institution or
      Fund]

    


    By:                                                                

    Name:

    Title: