Exhibit 10.1


    

      Exhibit
        10.1

      


      Execution
        Copy

      


      THIRD
        AMENDMENT 

      TO

      AMENDED
        AND RESTATED CREDIT AGREEMENT

      


      


      THIS
        THIRD AMENDMENT TO
        AMENDED
        AND RESTATED CREDIT
        AGREEMENT (this
        “Amendment”),
        dated
        as of March 2, 2006, 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, that
        certain Second Amendment to Amended and Restated Credit Agreement dated as
        of
        June 29, 2005 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 (i) all of the Lenders with a Term B
        Loan
        Commitment (the “Term
        B
        Lenders”)
        and
        (ii) the Required Lenders.

      


      D. The
        Term B
        Lenders and the Required 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 Third Amendment Effective Date (as
        defined
        below), the Existing Credit Agreement is hereby amended in the following
        respects:

      


      1. Section
        2.6(b)(iii) of the Existing Credit Agreement is hereby deleted in its entirety
        and replaced with the following: 

      


      “(iii) Asset
        Dispositions.
        The Net
        Cash Proceeds from any Asset Disposition or Involuntary Disposition (including
        insurance and condemnation proceeds) received at any time by any Credit Party
        or
        any Subsidiary of a Credit Party may, within 270 days from the date of receipt,
        be applied (or caused to be applied) by the Company and its Consolidated
        Subsidiaries to make Eligible Reinvestments; provided,
        however,
        that
        the Net Cash Proceeds from the FiberVisions Transaction shall be promptly
        applied after receipt of such proceeds to permanently repurchase, repay,
        legally
        defease or otherwise redeem outstanding Indebtedness of the 


      
        
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      Company
        (including without limitation, the High Yield Notes) and/or relating to the
        Preferred Securities. If and whenever any such Net Cash Proceeds (i) other
        than
        Net Cash Proceeds from the FiberVisions Transaction and (ii) in excess of
        $15,000,000 in the aggregate from the Closing Date are not reinvested in
        Eligible

      Reinvestments
        prior to the expiration of such 270-day period, the Company shall, on the
        first
        Business Day thereafter, apply such excess unreinvested amount to prepay
        the
        Loans as set forth in clause (vi) below.”

      


      2. Section
        2.14(a) of the Existing Credit Agreement is hereby amended by deleting the
        reference to “ONE
        HUNDRED MILLION DOLLARS ($100,000,000)”
and
        replacing it with a reference to “ONE
        HUNDRED TWENTY MILLION DOLLARS ($120,000,000)”. 

      


      3. Section
        5.2(b)(iii) of the Existing Credit Agreement is hereby deleted in its entirety
        and replaced with the following:  

      


      “(iii) Sale
        of Assets.
        It will
        not, and will not permit any of its Subsidiaries to, sell, lease or otherwise
        dispose of any of its assets, in a transaction or a series of related
        transactions unless (A) such transaction is not an Asset Disposition, (B)
        such
        transaction is the FiberVisions Transaction or (C) the aggregate value of
        the
        assets sold, leased or disposed of in such transaction, when added to the
        aggregate value of all assets sold, leased or disposed of in all transactions
        permitted by this clause (C) at any time after the Closing Date, does not
        exceed
        $75,000,000; provided, however, that at least 85% of the consideration received
        by the Company and/or its Subsidiaries in connection with each such transaction
        shall be in cash or Cash Equivalents.”

      


      4. Section
        5.2(f)(iii) of the Existing Credit Agreement is hereby amended by inserting
        the
        word “price,” immediately following the word “anticipated” therein.

      


      5. Section
        5.2(k)(ii)(B)(II) of the Existing Credit Agreement is hereby amended by (i)
        deleting the reference to “$40,000,000” therein and replacing it with a
        reference to “$75,000,000” and (ii) deleting the proviso in its
        entirety.

      


      6. Section
        5.2(k)(ii) of the Existing Credit Agreement is hereby amended by adding the
        following as new clauses (C) and (D) respectively:

      


      “(C)
        the
        Company may use the Net Cash Proceeds of the FiberVisions Transaction to
        repurchase, repay, legally defease or otherwise redeem any
        Indebtedness for
        borrowed money (including, without limitation, the High Yield Notes) or relating
        to Preferred Securities; provided,
        however,
        that
        for the avoidance of doubt, amounts used to repurchase, repay, legally defease
        or otherwise redeem such Indebtedness pursuant to this clause (C) shall be
        in
        addition to, and shall not count towards, the baskets set forth in clauses
        (B)(I) and (II); and 

      


      (D)
        the
        Company and its Subsidiaries may make voluntary or optional payments or
        prepayments on, or otherwise repurchase, repay, legally defease or otherwise
        redeem, Indebtedness of FiberVisions
        Delaware Corporation (formerly known as FiberVisions, L.L.C.)
        and its
        Subsidiaries in an aggregate amount not to exceed $9,000,000.”

      


      7. The
        definition of “Applicable Margin” in Section 7.1 of the Existing Credit
        Agreement is hereby amended in clause (ii) therein by (i) deleting the reference
        to “1.75%”
        and
        replacing it with a reference to “1.50%” and (ii) deleting the reference to
“0.75%”
        and replacing it with a reference to “0.50%”.

       

      8. 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)(f) and replacing it with a “,” and inserting the following as a new clause
        (iii)(g):

      


      “(g)
        cash
        restructuring charges taken by the Company in the fiscal year ended December
        31,
        2006 not to exceed $35,000,000 in the aggregate”


      
        
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      9. The
        definition of “Permitted Liens” in Section 7.1 of the Existing Credit Agreement
        is hereby amended in clause (vii) therein by deleting the phrase “indebtedness
        for borrowed money” and replacing it with “Indebtedness.”

      


      10. Section
        7.1 of the Existing Credit Agreement is hereby amended by adding the following
        definition in the appropriate alphabetical order:

      


      “FiberVisions
        Transaction”
shall
        mean collectively, the transaction involving (i) the sale of the Company’s 51%
        interest in FiberVisions Delaware Corporation (formerly known as FiberVisions,
        L.L.C.) to SPG for approximately $125,000,000 in cash and certain other earn-out
        payments to be determined, and (ii) the granting by WSP, Inc. to SPG of an
        option to buy, no later than January 31, 2007, an additional 14% interest
        in
        FiberVisions Delaware Corporation (formerly known as FiberVisions,
        L.L.C.) for
        approximately $7,400,000.

      


      “SPG”
shall
        mean SPG/FV Investor LLC, an affiliate of SPG Partners, LLC, a New York-based
        private equity firm.

      


      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 Third 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 Lenders’ execution and delivery of this
        Amendment.


      
        
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      (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.
        

      


      (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. Release
        of Liens; Release of Guarantors; Reaffirmations.
        Upon
        consummation of the FiberVisions Transaction, all security interests, mortgages,
        liens, pledges and other encumbrances granted to the Administrative Agent,
        on
        behalf of the Lenders, encumbering the assets of FiberVisions
        Incorporated,
        FiberVisions,

      L.P.,
        FiberVisions Products, Inc., FiberVisions Delaware Corporation (formerly
        known
        as FiberVisions, L.L.C.), Athens Holdings, Inc. and Covington Holdings,
        Inc.
        shall
        automatically be deemed to be terminated and released. The Administrative
        Agent
        will promptly deliver to the Company, at the Company’s expense, (x) UCC releases
        in the form of Exhibit A attached hereto, which releases the Company will
        be
        authorized to file on behalf of the Administrative Agent with the Secretary
        of
        State of the applicable jurisdiction of incorporation upon the consummation
        of
        the FiberVisions Transaction and (y) upon the Company’s request, such other
        releases or termination statements, discharges of security interest or any
        other
        discharge or release documents as are reasonably necessary to give effect
        to the
        foregoing. The Company agrees to give the Administrative Agent prompt written
        notice of the closing of the FiberVisions Transaction and in the event such
        sale
        does not occur on or before April 30, 2006, the Company shall promptly return
        such UCC releases to the Administrative Agent. Furthermore, upon consummation
        of
        the FiberVisions Transaction, each of FiberVisions
        Incorporated,
        FiberVisions,
        L.P., FiberVisions Products, Inc., FiberVisions Delaware Corporation (formerly
        known as FiberVisions, L.L.C.), Athens Holdings, Inc. and Covington Holdings,
        Inc.
        shall
        automatically be deemed released as Guarantors.
        Except
        as set forth in this Article II, Section 2, 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
        “Third
        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 Term B Lenders and the Required Lenders. 

      


      (b) Officer’s
        Certificate.
        The
        Administrative Agent shall have received a certificate executed by a Responsible
        Officer of the Company as of the Third 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 


      
        
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      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).

      


      (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 Third Amendment Effective Date, including, without limitation,
        payment by the Company 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.

       

      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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      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/
        S.
        C. Shears

      Name: S.
        C.
        Shears

      Title: Vice
        President and Treasurer

      


      


      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
        DELAWARE CORPORATION, (formerly
        known as FiberVisions, L.L.C.),

      a
        Delaware corporation

      


       

      By: /s/
        S.
        C. Shears      

      Name: S.
        C.
        Shears

      Title: Vice
        President and Treasurer

      for
        each
        of the foregoing Guarantors 

       


      
        
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      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/
        Dana F. Klein  

      Name: Dana
        F.
        Klein

      Title: Managing
        Director

      


      



      
        
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      LENDERS:                  WACHOVIA
        BANK, NATIONAL ASSOCIATION

      


      By: /s/
        C.
        Jeffrey Seaton  

      Name C.
        Jeffrey Seaton

      Title: Managing
        Director