**Exhibit 10.19**

 

 

 

CREDIT AGREEMENT

 

 

dated as of

 

February 12, 2003

 

By and Among

 

 

ALBANY MOLECULAR RESEARCH, INC.,

 

THE LENDERS PARTY HERETO,

 

FLEET NATIONAL BANK,

As Administrative Agent, Advisor,

And Book Manager

 

FLEET SECURITIES, INC.

As Arranger

 

JPMORGAN CHASE BANK,

As Syndication Agent

 

AND

 

CITIZENS BANK OF MASSACHUSETTS

As Documentation Agent

 

 

 

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# **TABLE OF CONTENTS**

 
| ARTICLE I                  |
|---------------------------------|
|                            |
| Definitions                     |
|                            |   |
| SECTION 1.01               | Defined Terms |   |
| SECTION 1.02               | Classification  of Loans and Borrowings |   |
| SECTION 1.03               | Terms  Generally |   |
| SECTION 1.04               | Accounting  Terms; GAAP |   |
|                            |   |
| ARTICLE II                 |
|                            |
| The  Credits                    |
|                            |   |
| SECTION 2.01               | Revolving  Term Loan Commitments |   |
| SECTION 2.02               | Term  Loan Commitment |   |
| SECTION 2.03               | Loans  and Borrowings |   |
| SECTION 2.04               | Requests  for Revolving Loans |   |
| SECTION 2.05               | Intentionally  Omitted |   |
| SECTION 2.06               | Funding  of Loans |   |
| SECTION 2.07               | Interest  Elections for Revolving Loans |   |
| SECTION 2.08               | Termination  and Reduction of Revolving Commitment |   |
| SECTION 2.09               | Repayment  of Loans; Evidence of Debt |   |
| SECTION 2.10               | Prepayment  of Loans |   |
| SECTION 2.11               | Fees |   |
| SECTION 2.12               | Interest;  Late Charges |   |
| SECTION 2.13               | Alternate  Rate of Interest |   |
| SECTION 2.14               | Increased  Costs |   |
| SECTION 2.15               | Break  Funding Payments |   |
| SECTION 2.16               | Taxes |   |
| SECTION 2.17               | Payments  Generally; Pro Rata Treatment; Sharing of Set-Offs |   |
| SECTION 2.18               | Mitigation  Obligations; Replacement of Lenders |   |
| SECTION 2.19               | Letters  of Credit |   |
|                            |   |
| ARTICLE III                |
|                            |
| Representations and  Warranties |
|                            |   |
| SECTION 3.01               | Organization;  Powers |   |
| SECTION 3.02               | Authorization;  Enforceability |   |
| SECTION 3.03               | Governmental  Approvals; No Conflicts |   |
| SECTION 3.04               | Financial  Condition; No Material Adverse Change |   |
| SECTION 3.05               | Properties |   |

 

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| SECTION 3.06     | Litigation  and Environmental Matters                       |   |
|-----------------------|-------------------------------------------------------------|--------|
| SECTION 3.07     | Compliance  with Laws and Agreements                        |   |
| SECTION 3.08     | Investment  and Holding Company Status                      |   |
| SECTION 3.09     | Taxes                                                       |   |
| SECTION 3.10     | ERISA                                                       |   |
| SECTION 3.11     | Disclosure                                                  |   |
| SECTION 3.12     | Subsidiaries                                                |   |
| SECTION 3.13     | Solvency                                                    |   |
| SECTION 3.14     | Fiscal  Year                                                |   |
| SECTION 3.15     | Federal  Regulations                                        |   |
| SECTION 3.16     | Labor  Matters                                              |   |
|                  |                                                        |
| ARTICLE IV       |
|                  |
| Conditions            |
|                  |                                                        |
| SECTION 4.01     | Effective  Date                                             |   |
| SECTION 4.02     | Each  Credit Event                                          |   |
|                  |                                                        |
| ARTICLE V        |
|                  |
| Affirmative Covenants |
|                  |                                                        |
| SECTION 5.01     | Financial  Statements; Ratings Change and Other Information |   |
| SECTION 5.02     | Notices  of Material Events                                 |   |
| SECTION 5.03     | Existence;  Conduct of Business                             |   |
| SECTION 5.04     | Payment  of Obligations                                     |   |
| SECTION 5.05     | Maintenance  of Properties; Insurance                       |   |
| SECTION 5.06     | Books  and Records; Inspection Rights                       |   |
| SECTION 5.07     | Compliance  with Laws                                       |   |
| SECTION 5.08     | Use  of Proceeds                                            |   |
| SECTION 5.09     | Additional  Guarantors                                      |   |
|                  |                                                        |
| ARTICLE VI       |
|                  |
| Negative Covenants    |
|                  |                                                        |
| SECTION 6.01     | Indebtedness                                                |   |
| SECTION 6.02     | Guarantees                                                  |   |
| SECTION 6.03     | Liens                                                       |   |
| SECTION 6.04     | Disposition  of Property                                    |   |
| SECTION 6.05     | Fundamental  Changes                                        |   |
| SECTION 6.06     | Investments,  Loans, Advances, and Acquisitions             |   |
| SECTION 6.07     | Swap  Agreements                                            |   |

 

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| SECTION 6.08 | Restricted  Payments                                        |   |
|-------------------|-------------------------------------------------------------|--------|
| SECTION 6.09 | Transactions  with Affiliates                               |   |
| SECTION 6.10 | Restrictive  Agreements                                     |   |
| SECTION 6.11 | Fiscal  Year                                                |   |
| SECTION 6.12 | Financial  Covenants                                        |   |
| SECTION 6.13 | Sales  and Leasebacks                                       |   |
|              |                                                        |
| ARTICLE VII  |
|              |
|              | Events of Default                                           |   |
|              |
| ARTICLE VIII |
|              |                                                        |
|              | The Administrative Agent                                    |   |
|              |                                                        |
| ARTICLE IX   |
|              |
| Miscellaneous     |
|              |                                                        |
| SECTION 9.01 | Notices                                                     |   |
| SECTION 9.02 | Waivers;  Amendments                                        |   |
| SECTION 9.03 | Expenses;  Indemnity; Damage Waiver                         |   |
| SECTION 9.04 | Successors  and Assigns                                     |   |
| SECTION 9.05 | Prior  Agreements                                           |   |
| SECTION 9.06 | Survival                                                    |   |
| SECTION 9.07 | Counterparts;  Integration; Effectiveness.                  |   |
| SECTION 9.08 | Severability                                                |   |
| SECTION 9.09 | Right  of Setoff                                            |   |
| SECTION 9.10 | Governing  Law; Jurisdiction; Consent to Service of Process |   |
| SECTION 9.11 | Waiver  of Jury Trial                                       |   |
| SECTION 9.12 | Headings                                                    |   |
| SECTION 9.13 | Confidentiality                                             |   |
| SECTION 9.14 | Interest  Rate Limitation                                   |   |
| SECTION 9.15 | Lost  or Damaged Note                                       |   |

 
| EXHIBITS         |                                   |   |
|------------------|----------------------------------------|--------|
|             |                                   |   |
| Exhibit A   | Form of Assignment and Acceptance |   |
| Exhibit B-1 | Form of Borrowing Request         |   |
| Exhibit B-2 | Form of Issuance Request          |   |
| Exhibit C   | Opinion of Counsel for the Borrower    |   |

 

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| SCHEDULES              |                       |   |
|------------------------|----------------------------|--------|
|                   |                       |   |
| Schedule 2.01     | Lenders’ Commitments  |   |
| Schedule 2.02     | Lenders’ Commitments  |   |
| Schedule 3.06     | Disclosed Matters          |   |
| Schedule 3.12     | List of Subsidiaries       |   |
| Schedule 4.01     | Indebtedness to be Retired |   |
| Schedule 6.01 (b) | Indebtedness               |   |
| Schedule 6.02     | Guarantees                 |   |
| Schedule 6.03     | Liens                      |   |
| Schedule 6.06(d)  | Permitted Loans            |   |
| Schedule 6.10     | Restrictive Agreements     |   |
| Schedule 9.05     | Prior Agreements           |   |

 

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CREDIT AGREEMENT dated as of FEBRUARY 12,2003, among ALBANY MOLECULAR RESEARCH, INC. a Delaware corporation having anaddress of 21 Corporate Circle, Albany, New York 12212-5098, the LENDERS partyhereto, and FLEET NATIONAL BANK, as Administrative Agent.

 

The parties hereto agree asfollows:

 

### ARTICLE I

###  

Definitions

 

SECTION 1.01.  Defined Terms.  As used in this Agreement, the followingterms have the meanings specified below:

 

“Adjusted LIBOR Rate”means, with respect to any Eurodollar Borrowing for any Interest Period, aninterest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)equal to (a) the LIBOR Rate for such Interest Period plus (b) theApplicable LIBOR Margin.

 

“Administrative Agent”means Fleet National Bank, in its capacity as administrative agent for theLenders hereunder.

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Administrative Agent.

 

“Affiliate” means,with respect to a specified Person, another Person that directly, or indirectlythrough one or more intermediaries, (i) Controls or is Controlled by or isunder common Control with the Person specified, (ii) owns or holds fivepercent (5%) or more of any class of voting stock of the Borrower or aGuarantor or any Subsidiary thereof, or (iii) five percent (5%) or more ofthe voting stock of which is directly or indirectly beneficially owned or heldby the Borrower or any Guarantor or any Subsidiary thereof; except for purposesof identifying Affiliates of the Borrower or a Subsidiary, a natural Personshall only be deemed to be an Affiliate to the extent that such Person owns inexcess of twenty percent (20%) or more of the voting stock of the Borrower orsuch Subsidiary.

 

“Alternate Base Rate”means a rate per annum equal to the greater of (i) the Prime Rate and (ii) theFederal Funds Effective Rate plus one half of one percent (.50%).

 

“Applicable Percentage”means, with respect to any Lender, the percentage of the total Commitmentsrepresented by such Lender’s Commitments. If the Commitments have terminated or expired, the ApplicablePercentages shall be determined based upon the Commitments most recently ineffect, giving effect to any assignments.

 

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“Applicable LIBOR Margin”means, for each of the Revolving Loan and the Term Loan, respectively, theApplicable Margin set forth below corresponding to the Leverage Ratio mostrecently determined:

 
| **Leverage  Ratio**                 | ** ** | **Revolver Loan Applicable  Margin** | ** ** | **Term Loan Applicable Margin** | ** ** |
|-------------------------------------|------------|--------------------------------------|------------|---------------------------------|------------|
| >=2.00 to  1.00                  |       | 1.50                                 | %          | 1.75                            | %          |
| >=1.50 to  1.00<2.00 to 1.00  |       | 1.25                                 | %          | 1.50                            | %          |
| >=1.00 to  1.00 <1.50 to 1.00 |       | 1.00                                 | %          | 1.25                            | %          |
| <1.00 to  1.00                   |       | 0.75                                 | %          | 1.00                            | %          |

 

Changes in the ApplicableMargin resulting from changes in the Leverage Ratio shall become effective onthe date (the “Adjustment Date”) on which financial statements aredelivered to the Lenders pursuant to Sections 5.01 (a) and (b) hereof(but in any event not later than the 60th day after the end of eachof the first three Fiscal Quarters of the Borrower or the 120th dayafter the end of each Fiscal Year, as the case may be) and shall remain ineffect until the next change to be effected pursuant to this paragraph.  If any financial statements referred to aboveare not delivered within the time periods specified above, then, until suchfinancial statements are delivered, the Leverage Ratio most recently determinedshall govern subject to retroactive adjustment upon the next succeedingdelivery of said financial statements. Each determination of the Leverage Ratio pursuant to this pricing gridshall be made with respect to the period of the prior four consecutive fiscalquarters of the Borrower ending at the end of the period covered by therelevant financial statements.

 

“Application” means an application, in such form as theIssuer may specify from time to time, requesting the Issuer to open a Letter ofCredit.

 

“Approved Fund” hasthe meaning assigned to such term in Section 9.04.

 

“Assessment Rate”means, for any day, the annual assessment rate in effect on such day that ispayable by a member of the Bank Insurance Fund classified as “well-capitalized”and within supervisory subgroup “B” (or a comparable successor riskclassification) within the meaning of 12 C.F.R. Part 327 (or any successorprovision) to the Federal Deposit Insurance Corporation for insurance by suchCorporation of time deposits made in dollars at the offices of such member inthe United States; provided that if, as a result of any change in anylaw, rule or regulation, it is no longer possible to determine theAssessment Rate as aforesaid, then the Assessment Rate shall be such annualrate as shall be determined by the Administrative Agent to be representative ofthe cost of such insurance to the Lenders.

 

“Asset Sale” meansany Disposition of property or series of related Dispositions of property(excluding any such Disposition permitted by Section 6.05 hereof) that yieldsgross proceeds to the Borrower or any of its Subsidiaries (valued at theinitial principal amount thereof in the case of non-cash proceeds consisting ofnotes or other debt securities and valued at fair market value in the case ofother non-cash proceeds) in excess of $20,000,000.00 for any single Dispositionand $40,000,000.00 when aggregated with all prior Dispositions during the termof this Agreement.

 

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“Assignment andAcceptance” means an assignment and acceptance entered into by a Lender andan assignee (with the consent of any party whose consent is required by Section 9.04),and accepted by the Administrative Agent, in the form of Exhibit A or anyother form approved by the Administrative Agent.

 

“Availability Period”means the period from and including the Effective Date to but excluding theearlier of the Revolving Credit Termination Date and the date of termination ofthe Revolving Loan Commitments.

 

“Base Rate” when usedin reference to any Loan or Borrowing, refers to whether such Loan, or theLoans comprising such Borrowing, are bearing interest at a rate determined byreference to the Alternate Base Rate.

 

“Board” means theBoard of Governors of the Federal Reserve System of the United States ofAmerica.

 

“Borrower” meansALBANY MOLECULAR RESEARCH, INC., a Delaware corporation.

 

“Borrowing” meansRevolving Loans of the same Type, made, converted or continued on the same dateand, in the case of Eurodollar Loans, as to which a single Interest Period isin effect.

 

“Borrowing Request”means a request by the Borrower a Revolving Loan in accordance with Section 2.01,as the case may be.

 

“Business Day” meansin respect of any date that is specified to be subject to adjustment inaccordance with the Following Business Day Convention, a day which commercialbanks settle payment in (i) London, if the payment obligation iscalculated by reference to any LIBOR Rate or (ii) New York City, if thepayment obligation is calculated by reference to the Alternate Base Rate.

 

“Capital Expenditures”means, with respect to any Person for any period, the aggregate of allexpenditures by such Person and its Subsidiaries for the acquisition or leasing(pursuant to a capital lease) of fixed or capital assets or additions toequipment (including replacements, capitalized repairs and improvements duringsuch period) that should be capitalized under GAAP on a consolidated balancesheet of such Person and its Subsidiaries.

 

“Capital LeaseObligations” of any Person means the obligations of such Person to pay rentor other amounts under any lease of (or other arrangement conveying the rightto use) real or personal property, or a combination thereof, which obligationsare required to be classified and accounted for as capital leases on a balancesheet of such Person under GAAP, and the amount of such obligations shall bethe capitalized amount thereof determined in accordance with GAAP.

 

“Capital Securities”means, with respect to any Person, (a) any and all shares, interests,participations, rights or other equivalents (however designated, whether votingor non-voting) of or interests in corporate or capital stock, including withoutlimitation, shares of preferred

 

3

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orpreference stock of such Person, (b) all partnership interests (whethergeneral or limited) of such Person, (c) all membership interests orlimited liability interests in such Person, (d) all other equity orownership interests in such Person of any other type and (e) all warrants,rights or options to purchase any of the foregoing.

 

“Cash Equivalents”means:  (a) marketable directobligations issued by, or unconditionally guaranteed by, the United StatesGovernment or issued by any agency thereof and backed by the full faith andcredit of the United States, in each case maturing within one year from thedate of acquisition; (b) certificates of deposit, time deposits,Eurodollar time deposits or overnight bank deposits having maturities of sixmonths or less from the date of acquisition issued by any Lender or by anycommercial bank organized under the laws of the United States or any statethereof having combined capital and surplus of not less than $500,000,000; (c) commercialpaper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carryingan equivalent rating by a nationally recognized rating agency, if both of thetwo named rating agencies cease publishing ratings of commercial paper issuersgenerally, and maturing within six months from the date of acquisition; (d) repurchaseobligations of any Lender or of any commercial bank satisfying the requirementsof clause (b) of this definition, having a term of not more than 30days, with respect to securities issued or fully guaranteed or insured by the UnitedStates government; (e) securities with maturities of one year or less fromthe date of acquisition issued or fully guaranteed by any state, commonwealthor territory of the United States, by any political subdivision or taxingauthority of any such state, commonwealth or territory or by any foreigngovernment, the securities of which state, commonwealth, territory, politicalsubdivision, taxing authority or foreign government (as the case may be) arerated at least A by S&P or A by Moody’s; (f) securities withmaturities of six months or less from the date of acquisition backed by standbyletters of credit issued by any Lender or any commercial bank satisfying therequirements of clause (b) of this definition; or (g) sharesof money market mutual or similar funds which invest exclusively in assetssatisfying the requirements of clauses (a) through (f) ofthis definition.

 

“Change in Law” means(a) the adoption of any law, rule or regulation after the date ofthis Agreement, (b) any change in any law, rule or regulation or inthe interpretation or application thereof by any Governmental Authority afterthe date of this Agreement or (c) compliance by any Lender (or, forpurposes of Section 2.14(b), by any lending office of such Lender or bysuch Lender’s holding company, if any) with any request, guideline or directive(whether or not having the force of law) of any Governmental Authority made orissued after the date of this Agreement.

 

“Class” when used inreference to any Loan or Borrowing, refers to whether such Loan or the Loanscomprising such Borrowing, are Revolving Loans or Term Loans.

 

“CLO” has the meaningassigned to such term in Section 9.04.

 

“Code” means theInternal Revenue Code of 1986, as amended from time to time together with theregulations promulgated thereunder.

 

“Commitments” means,with respect to each Lender, the commitment of such Lender to make RevolvingLoans, and Term Loans hereunder, expressed as an amount representing the

 

4

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maximumaggregate amount of such Lender’s Revolving Credit Loan Exposure, and Term LoanCredit Exposure hereunder, as such commitment may be (a) reduced from timeto time pursuant to Section 2.08 and (b) reduced or increased fromtime to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’sCommitment is set forth on Schedules 2.01 and 2.02, or in the Assignment andAcceptance pursuant to which such Lender shall have assumed its Commitment, asapplicable.  The initial aggregate amountof the Lenders’ Commitments is $65,000,000.00.

 

“Commonly ControlledEntity” means an entity, whether or not incorporated, that is under commoncontrol with the Borrower within the meaning of Section 4001 of ERISA oris part of a group that includes the Borrower and that is treated as a singleemployer under Section 414 of the Code.

 

“Control” means thepossession, directly or indirectly, of the power to direct or cause thedirection of the management or policies of a Person, whether through theability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”have meanings correlative thereto.

 

“Current Assets”means all assets of any business entity which would, in accordance with GAAP,be classified as current assets of an entity conducting a business the same asor similar to that of such business entity.

 

“Current Liabilities”****means all liabilities of any businessentity which would, in accordance with GAAP, be classified as currentliabilities of an entity conducting a business the same as or similar to thatof such business entity.

 

“Current Ratio” meansfor the Borrower on a consolidated basis with all Subsidiaries, the ratio of (i) CurrentAssets to (ii) Current Liabilities plus Revolving Loansoutstanding.

 

“Default” means anyevent or condition which constitutes an Event of Default or which upon notice,lapse of time or both would, unless cured or waived, become an Event ofDefault.

 

“Disclosed Matters”means the actions, suits and proceedings and the environmental mattersdisclosed in Schedule 3.06.

 

“Disbursement” isdefined in Section 2.19 (e) hereof.

 

“Disbursement Date” isdefined in Section 2.19 (e) hereof.

 

“Disposition” means, with respect to any property, anysale, lease, sale and leaseback, assignment, conveyance, transfer or otherdisposition thereof.  The terms “Dispose”and “Disposed of” shall have correlative meanings.

 

“dollars” or “$”refers to lawful money of the United States of America.

 

5

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“Domestic Subsidiary”means any Subsidiary of the Borrower organized under the laws of anyjurisdiction within the United States.

 

“EBIT” shall mean, for any period, Net Income for such period,plus the sum of the amounts for such period included in determining such NetIncome of (i) Interest Expense and (ii) Income Tax Expense,calculated in accordance with GAAP.

 

“EBIT to Interest Ratio”means for the Borrower on a consolidated basis with all Subsidiaries, the ratioof (i) EBIT to Interest Expense.

 

“EBITDA**”** means, forany period, EBIT for such period, plus the sum (without duplication) of theamounts for such period included in determining EBIT of (i) depreciationexpense, and (ii) amortization expense, calculated in accordance withGAAP.

 

“Effective Date”means the date on which the conditions specified in Section 4.01 aresatisfied (or waived in accordance with Section 9.02).

 

“Environmental Laws”means all laws, rules, regulations, codes, ordinances, orders, decrees,judgments, injunctions, notices or binding agreements issued, promulgated orentered into by any Governmental Authority, relating in any way to theenvironment, preservation or reclamation of natural resources, the management,release or threatened release of any Hazardous Material or to health and safetymatters.

 

“Environmental Liability”means any liability, contingent or otherwise (including any liability fordamages, costs of environmental remediation, fines, penalties or indemnities),of the Borrower or any Subsidiary, including the Guarantors, directly orindirectly resulting from or based upon (a) violation of any EnvironmentalLaw, (b) the generation, use, handling, transportation, storage, treatmentor disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,(d) the release or threatened release of any Hazardous Materials into theenvironment or (e) any contract, agreement or other consensual arrangementpursuant to which liability is assumed or imposed with respect to any of theforegoing.

 

“Equity Interests”means shares of capital stock, partnership interests, membership interests in alimited liability company, beneficial interests in a trust or other equityownership interests in a Person, and any warrants, options or other rightsentitling the holder thereof to purchase or acquire any such equity interest.

 

“ERISA” means theEmployee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”means any trade or business (whether or not incorporated) that, together withthe Borrower, is treated as a single employer under Section 414(b) or(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412of the Code, is treated as a single employer under Section 414 of theCode.

 

6

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“ERISA Event” means (a) any“reportable event”, as defined in Section 4043 of ERISA or the regulationsissued thereunder with respect to a Plan (other than an event for which the 30-daynotice period is waived); (b) the existence with respect to any Plan of an“accumulated funding deficiency” (as defined in Section 412 of the Code orSection 302 of ERISA), whether or not waived; (c) the filing pursuantto Section 412(d) of the Code or Section 303(d) of ERISA ofan application for a waiver of the minimum funding standard with respect to anyPlan; (d) the incurrence by the Borrower or any Commonly Controlled Entityof any liability under Title IV of ERISA with respect to the terminationof any Plan; (e) the receipt by the Borrower or any ERISA Affiliate fromthe PBGC or a plan administrator of any notice relating to an intention toterminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) theincurrence by the Borrower or any Commonly Controlled Entity of any liabilitywith respect to the withdrawal or partial withdrawal from any Plan orMultiemployer Plan; or (g) the receipt by the Borrower or any CommonlyControlled Entity of any notice, or the receipt by any Multiemployer Plan fromthe Borrower or any Commonly Controlled Entity of any notice, concerning theimposition of Withdrawal Liability or a determination that a Multiemployer Planis, or is expected to be, insolvent or in reorganization, within the meaning ofTitle IV of ERISA.

 

“Eurodollar” whenused in reference to any Loan or Borrowing, refers to whether such Loan, or theLoans comprising such Borrowing, are bearing interest at a rate determined byreference to the Adjusted LIBOR Rate.

 

“Event of Default”has the meaning assigned to such term in Article VII.

 

“Excluded Taxes”means, with respect to the Administrative Agent, any Lender or any otherrecipient of any payment to be made by or on account of any obligation of theBorrower hereunder, (a) income or franchise taxes imposed on (or measuredby) its net income by the United States of America, or by the jurisdictionunder the laws of which such recipient is organized or in which its principaloffice is located or, in the case of any Lender, in which its applicablelending office is located, (b) any branch profits taxes imposed by theUnited States of America or any similar tax imposed by any other jurisdictionin which the Borrower is located and (c) in the case of a Foreign Lender(other than an assignee pursuant to a request by the Borrower under Section 2.18(b)),any withholding tax that is imposed on amounts payable to such Foreign Lenderat the time such Foreign Lender becomes a party to this Agreement (ordesignates a new lending office) or is attributable to such Foreign Lender’sfailure to comply with Section 2.16(e), except to the extent that suchForeign Lender (or its assignor, if any) was entitled, at the time ofdesignation of a new lending office (or assignment), to receive additionalamounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a).

 

“Federal Funds EffectiveRate” means, for any day, the weighted average (rounded upwards, ifnecessary, to the next 1/100 of 1%) of the rates on overnight Federal fundstransactions with members of the Federal Reserve System arranged by Federalfunds brokers, as published on the next succeeding Business Day by the FederalReserve Bank of New York, or, if such rate is not so published for any daythat is a Business Day, the average (rounded upwards, if necessary, to the next1/100 of 1%) of the quotations for such day for such transactions received bythe Administrative Agent from three Federal funds brokers of recognizedstanding selected by it.

 

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“Financial Officer”means the chief financial officer, principal accounting officer, treasurer orcontroller of the Borrower.

 

“Fiscal Quarter”means a quarter ending on the last day of March, June, September orDecember.

 

“Fiscal Year” meansany period of twelve consecutive calendar months ending on December 31;references to a Fiscal Year with a number corresponding to any calendar year(e.g. the “2003 Fiscal Year”) refer to the Fiscal Year ending on December 31of such calendar year.

 

“Following Business DayConvention” means that an adjustment will be made if that date wouldotherwise fall on a day that is not a Business Day so that the date will be thefirst following day that is a Business Day.

 

“Foreign Lender”means any Lender that is organized under the laws of a jurisdiction other thanthat in which the Borrower is located. For purposes of this definition, the United States of America, eachState thereof and the District of Columbia shall be deemed to constitute asingle jurisdiction.

 

“Funded Debt” means,as to any Person, the sum, without duplication, of (a) the aggregateamount of Indebtedness of the Borrower and its Subsidiaries, on a consolidatedbasis, that would be reflected on a consolidated balance sheet of the Borrowerand its Subsidiaries prepared as of the date of determination in accordancewith GAAP, plus (b) the aggregate amount of the cash advancespursuant to any Synthetic Lease Obligations ; plus (c) theaggregate amount of Indebtedness of the Borrower and its Subsidiaries relatingto the maximum drawing amount of all letters of credit outstanding and bankersacceptances plus, (d) Indebtedness of the type referred to inclauses (a) – (c) hereof of another Person guaranteed by the Borroweror any of its Subsidiaries..

 

“GAAP” means thosegenerally accepted accounting principles and practices which are recognized assuch by the American Institute of Certified Public Accountants acting throughits Accounting Principles Board or by the Financial Accounting Standard Boardor through other appropriate boards or committees thereof and which areconsistently applied so as to properly reflect the financial condition, and theresults of operations and changes in financial position, of the Borrower andits Subsidiaries, except that any change in any accounting principle or practiceapproved by the Borrower’s independent certified public accountants, disclosedin the Borrower’s financial statements and required or permitted to be made bythe Accounting Principles Board or Financial Accounting Standard Board (orother appropriate board or committee of said Boards) in order to continue as agenerally accepted accounting principle or practice or consistent with existinggenerally accepted accounting principles may be so made and shall be recognizedby the Lenders and the Administrative Agent.

 

“Governmental Authority”means the government of the United States of America, any other nation or anypolitical subdivision thereof, whether state or local, and any agency,authority, instrumentality, regulatory body, court, central bank or otherentity exercising executive,

 

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legislative,judicial, taxing, regulatory or administrative powers or functions of orpertaining to government.

 

“Guarantee” of or byany Person (the “guarantor”) means any obligation, contingent orotherwise, of the guarantor guaranteeing or having the economic effect ofguaranteeing any Indebtedness or other obligation of any other Person (the “primaryobligor”) in any manner, whether directly or indirectly, and including anyobligation of the guarantor, direct or indirect, (a) to purchase or pay(or advance or supply funds for the purchase or payment of) such Indebtednessor other obligation or to purchase (or to advance or supply funds for thepurchase of) any security for the payment thereof, (b) to purchase orlease property, securities or services for the purpose of assuring the owner ofsuch Indebtedness or other obligation of the payment thereof, (c) tomaintain working capital, equity capital or any other financial statementcondition or liquidity of the primary obligor so as to enable the primaryobligor to pay such Indebtedness or other obligation or (d) as an accountparty in respect of any letter of credit or letter of guaranty issued tosupport such Indebtedness or obligation; provided, that the termguarantee shall not include endorsements for collection or deposit in theordinary course of business.

 

“Guarantors” meansOrganichem Corporation (to be effective upon completion of the Transactions)AMRI Bothell Research Center, Inc., AMR Technology, Inc., and anyother Subsidiary and any other Person who shall guaranty to the Lenders thepayment and performance of the Obligations including, but not limited to, anyadditional Guarantors as described in Section 5.09 hereof, excluding,however, in all instances Albany Molecular Research Export Corp..

 

“Guaranty” means that certain written guarantydelivered by the Guarantors to the Lenders under the terms of this CreditAgreement whereby the Guarantors unconditionally, absolutely and irrevocablyguaranty to the Lenders the payment and performance of the Credit Agreement, aswell as all other present and future indebtedness of any name, nature or kinddue or to become due the Lenders by the Borrower.

 

“Hazardous Materials”  means all explosive or radioactive substancesor wastes and all hazardous or toxic substances, wastes or other pollutants,including petroleum or petroleum distillates, asbestos or asbestos containingmaterials, polychlorinated biphenyls, radon gas, infectious or medical wastesand all other substances or wastes of any nature regulated pursuant to anyEnvironmental Law.

 

“Income Tax Expense” shall mean, for any period, all provisionsfor taxes based upon Net Income (including, without limitation, any additionsto such taxes, any penalties and interest with respect thereto), calculated inaccordance with GAAP.

 

“Indebtedness” of anyPerson means, without duplication, (a) all obligations of such Person forborrowed money or with respect to deposits or advances of any kind, (b) allobligations of such Person evidenced by bonds, debentures, notes or similarinstruments, (c) all obligations of such Person upon which interestcharges are customarily paid, (d) all obligations of such Person underconditional sale or other title retention agreements relating to propertyacquired by such Person, (e) all obligations of such Person in respect ofthe deferred purchase price of property or services

 

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(excludingcurrent accounts payable incurred in the ordinary course of business), (f) allIndebtedness of others secured by (or for which the holder of such Indebtednesshas an existing right, contingent or otherwise, to be secured by) any Lien onproperty owned or acquired by such Person, whether or not the Indebtednesssecured thereby has been assumed, (g) all guarantees by such Person ofIndebtedness of others, (h) all Capital Lease Obligations of such Person, (i) allnet liabilities of such Person under any Swap Agreements, (j) all SyntheticLease Obligations of such Person, (k) all obligations, contingent orotherwise, of such Person as an account party in respect of letters of creditand letters of guaranty and (l) all obligations, contingent or otherwise, ofsuch Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of anyother entity (including any partnership in which such Person is a generalpartner) to the extent such Person is liable therefor as a result of such Person’sownership interest in or other relationship with such entity, except to theextent the terms of such Indebtedness provide that such Person is not liabletherefor.

 

“Indemnified Taxes”means Taxes other than Excluded Taxes.

 

“Index Debt” meanssenior, unsecured, long-term indebtedness for borrowed money of the Borrowerthat is not guaranteed by any other Person or subject to any other creditenhancement.

 

“Information Memorandum”means the Confidential Information Memorandum dated January, 2003, relating tothe Borrower and the Transactions.

 

“Insolvent” or “Insolvency”means, with respect to any Multiemployer Plan, the condition that such Plan isinsolvent within the meaning of Section 4245 of ERISA.

 

“Interest ElectionRequest” means a request by the Borrower to obtain, convert or continue aBorrowing in accordance with Section 2.07.

 

“Interest Expense” means, for any period, total cash interestexpense (including that attributable to Capital Lease Obligations) of theBorrower and its Subsidiaries for such period with respect to all outstandingIndebtedness of the Borrower and its Subsidiaries (including all commissions,discounts and other fees and charges owed with respect to letters of credit andbankers’ acceptance financing and net costs under Swap Agreements in respect ofinterest rates to the extent such net costs are allocable to such period inaccordance with GAAP).

 

“Interest Payment Date”means (a) with respect to any Base Rate Loan, the last day of each fiscalquarter of the Borrower, and (b) with respect to any Eurodollar Loan, theearlier to occur of (i) the last day of the Interest Period applicable tosuch Loan, except that in the case of a Eurodollar Revolving Borrowing with anInterest Period of more than three months’ duration, each day prior to the lastday of such Interest Period that occurs at intervals of three months’ durationafter the first day of such Interest Period and (ii) the last day of eachfiscal quarter of the Borrower.

 

“Interest Period”means with respect to any Eurodollar Loan, the period commencing on the date ofsuch Loan and ending on the numerically corresponding day in the calendar monththat

 

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isone, two, three, six months or one year thereafter, as the Borrower mayelect; provided, that (i) if any Interest Period would end on a dayother than a Business Day, such Interest Period shall be extended to the nextsucceeding Business Day unless, in the case of a Eurodollar Loan only, suchnext succeeding Business Day would fall in the next calendar month, in whichcase such Interest Period shall end on the next preceding Business Day and (ii) anyInterest Period pertaining to a Eurodollar Loan that commences on the lastBusiness Day of a calendar month (or on a day for which there is no numericallycorresponding day in the last calendar month of such Interest Period) shall endon the last Business Day of the last calendar month of such InterestPeriod.  For purposes hereof, the date ofa Loan initially shall be the date on which such Loan is made and, in the caseof a Revolving Loan, thereafter shall be the effective date of the most recentconversion or continuation of such Loan.

 

“Issuance Request”means a Letter of Credit request and certificate duly executed by a ResponsibleOfficer of the Borrower, substantially in the form of Exhibit B-2hereto.

 

“Issuer” means FleetNational Bank, in its capacity as issuer of any Letter of Credit.

 

“L/C Commitment”means, with respect to the Issuer, the Issuer’s obligation to issue Letters ofCredit pursuant to Section 2.01 (b) hereof and, with respect to eachRevolving Lender, the obligation of each such Lender to participate in suchLetters of Credit pursuant to Section 2.19 (d) hereof.

 

“L/C Commitment Amount”means, on any date, a maximum amount of $15,000,000, as such maximum amount maybe changed from time to time pursuant to the terms hereof.

 

“L/C Participants”means, collectively, all the Revolving Lenders other than the Issuer.

 

“Lenders” means thePersons listed on Schedule 2.01 and 2.02 and any other Person that shallhave become a party hereto pursuant to an Assignment and Acceptance, other thanany such Person that ceases to be a party hereto pursuant to an Assignment andAcceptance.

 

“Letter of CreditOutstandings” means, at any time, an amount equal to the sum of (a) theaggregate then undrawn and unexpired amount of the then outstanding Letters ofCredit and (b) the aggregate amount of drawings under Letters of Creditthat have not then been reimbursed pursuant to Section 2.19 hereof.

 

“Letters of Credit”is defined in Section 2.01 (b).

 

“Leverage Ratio’means for the Borrower on a consolidated basis with all Subsidiaries, (a) thesum of (i) Funded Debt plus, without duplication, (ii) contingentobligations for Funded Debt divided by (b) EBITDA.

 

“LIBOR Rate” meansthe rate per annum as determined on the basis of the offered rates for depositsin U.S. Dollars for the applicable Interest Period which appears on the Teleratepage 3750

 

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asof 11:00 a.m. London time on the day which is two (2) London BankingDays prior to the first day of the Interest Period in question; provided,however, if the rate described above does not appear on the Telerate System onany applicable interest determination date, the LIBOR Rate shall be the rate(rounded upward if necessary, to the nearest one-hundred thousandth of apercentage point) determined on the basis of the offered rates for deposits inU.S. Dollars for the applicable Interest Period which are offered by four majorbanks in the London Interbank Market at approximately 11:00 a.m. Londontime on the day which is two (2) London Banking Days prior to the firstday of the Interest Period in question as selected by the Lender.  The principal London office of each of thefour major London banks will be requested to provide a quotation of its U.S.dollar deposit offered rate.  If at leasttwo such quotations are provided, the rate for that date will be the arithmeticmean of the quotations.  If fewer thantwo quotations are provided as requested, then the LIBOR Rate will bedetermined on the basis of the rates quoted for loans in U.S. Dollars toleading European banks for the applicable Interest Period as offered by majorbanks in New York City at approximately 11:00 a.m. New York City time onthe day which is two (2) London Banking Days prior to the first day of theInterest Period in question.  In theevent the Lender is unable to obtain any such quotation as provided above, itwill be deemed that LIBOR pursuant to a Eurodollar Loan cannot bedetermined.  Notwithstanding anything tothe contrary set forth herein, in the event the Board of Governors of theUnited States Federal Reserve System shall impose a Reserve Percentage withrespect to LIBOR deposits of the Lender, then for any period during which saidReserve Percentage shall apply, the LIBOR Rate shall equal the rate asdetermined above divided by an amount equal to one (1) minus said ReservePercentage.

 

“Lien” means, withrespect to any asset, (a) any mortgage, deed of trust, lien, pledge,hypothecation, encumbrance, charge or security interest in, on or of suchasset, (b) the interest of a vendor or a lessor under any conditional saleagreement, capital lease or title retention agreement (or any financing leasehaving substantially the same economic effect as any of the foregoing) relatingto such asset and (c) in the case of securities, any purchase option, callor similar right of a third party with respect to such securities.

 

“Loan(s)” means theloan(s) made by the Lenders to the Borrower pursuant to this Agreement.

 

“London Banking Day”means any date on which commercial banks are open for business in London,England.

 

“Material Adverse Effect” means with respect to any event oroccurrence of whatever nature (including any adverse determination in anylitigation, arbitration or governmental investigation or proceeding):

 

(a)           a material adverse effect on the business, condition(financial or otherwise), assets, or operation of the Borrower and itsSubsidiaries, individually (with respect to the Borrower) or taken as a whole(with respect to any Subsidiary); or

 

(b)           a material adverse effect on the validity orenforceability of this Agreement or any other Loan document, or the rights orremedies available to the Administrative Agent or any Lender under any suchLoan document.

 

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“Material Indebtedness”means Indebtedness (other than the Loans), of any one or more of the Borrowerand its Subsidiaries individually or in an aggregate principal amount exceeding$1,500,000.00.  For purposes ofdetermining Material Indebtedness, the “principal amount” of the obligations ofthe Borrower or any Subsidiary in respect of any Swap Agreement at any timeshall be the maximum aggregate amount (giving effect to any netting agreements)that the Borrower or such Subsidiary would be required to pay if such SwapAgreement were terminated at such time.

 

“Moody’s” means Moody’sInvestors Service, Inc.

 

“Multiemployer Plan”means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds”means (a) in connection with any Asset Sale or any Recovery Event, theproceeds thereof in the form of cash and Cash Equivalents (including any suchproceeds received by way of deferred payment of principal pursuant to a note orinstallment receivable or purchase price adjustment receivable or otherwise,but only as and when received) of such Asset Sale or Recovery Event, net ofattorneys’ fees, accountants’ fees, investment banking fees, amounts requiredto be applied to the repayment of Indebtedness secured by a Lien expresslypermitted hereunder on any asset that is the subject of such Asset Sale orRecovery Event) and other customary fees and expenses actually incurred inconnection therewith and net of taxes paid or reasonably estimated to bepayable as a result thereof (after taking into account any available taxcredits or deductions and any tax sharing arrangements) and (b) inconnection with any issuance or sale of equity securities or debt securities orinstruments or the incurrence of loans, the cash proceeds received from suchissuance or incurrence, net of attorneys’ fees, investment banking fees,accountants’ fees, underwriting discounts and commissions and other customaryfees and expenses actually incurred in connection therewith.

 

**“**Net Income” shall mean, for any period, the net income(or loss), without deduction for minority interests, for such period taken as asingle accounting period and calculated in accordance with GAAP.

 

“Obligations” meansall of the obligations of the Borrower and the Subsidiaries, including theGuarantors, under this Agreement and the other loan documents, whether forprincipal, interest, fees, costs, expenses, taxes, or otherwise and any and allother obligations of the Borrower and its Subsidiaries, including theGuarantors, to the Lenders of any nature whatsoever, direct or indirect,absolute or conditional, whether now existing or hereafter arising.

 

“Obligors” means,collectively, the Borrower and the Guarantors.

 

“Operating Cash FlowCoverage Ratio” means for the Borrower on a consolidated basis with allSubsidiaries the ratio of (i) EBITDA less (ii) cash taxes paidless (iii) the lesser of (x) actual Capital Expenditures or (y)maintenance Capital Expenditures in the assumed amount of $10,000,000.00 to(i) current maturities of long term debt plus (ii) InterestExpense.

 

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“Operating Lease Payments”means those payments made by the Borrower, its Subsidiaries, including theGuarantors, for any Fiscal Year, including real estate rents, and any otherlease payments which are not treated for financial statement purposes asCapital Leases and are expensed in the Borrower’s and its Subsidiaries,including the Guarantors’ consolidated financial statements.

 

“Organic Document”means, relative to any Obligor, as applicable, its certificate ofincorporation, by-laws, certificate of partnership, partnership agreement, certificateof formation, limited liability agreement and all shareholder agreements,voting trusts and similar arrangements applicable to any of such Obligor’spartnership interests, limited liability company interests or authorized sharesof Capital Securities.

 

“Other Taxes” meansany and all present or future stamp or documentary taxes or any other excise orproperty taxes, charges or similar levies arising from any payment madehereunder or from the execution, delivery or enforcement of, or otherwise withrespect to, this Agreement.

 

“PBGC” means thePension Benefit Guaranty Corporation referred to and defined in ERISA and anysuccessor entity performing similar functions.

 

“Participant” has themeaning set forth in Section 9.04.

 

“Permitted Acquisitions”means an acquisition (whether pursuant to an acquisition of Capital Securities,assets or otherwise) by the Borrower or any Domestic Subsidiary of the Borrowerfrom any Person in which each of the following conditions are satisfied:

 

(a)           immediately before and after giving effect to suchacquisition no Default or Event of Default shall have occurred and becontinuing or would result therefrom ;

 

(b)           in the case of an acquisition of assets, after givingeffect to such acquisition, such assets shall be owned by the Borrower or aGuarantor free and clear of all Liens (other than Liens permitted under Section 6.03);

 

(c)           such acquisition is on friendly terms and not consideredhostile from the standpoint of the acquiree;

 

(d)           for acquisitions the aggregate purchase price for whichexceeds $20,000,000.00, the Borrower shall have delivered to the AdministrativeAgent (i) a compliance certificate as described in Section 5.01 (c) hereoffor the period of four full Fiscal Quarters immediately preceding suchacquisition (or, if such proposed acquisition is contemplated to be consummatedprior to December 31, 2003, for the period from the Closing Date throughthe end of the Borrower’s last full Fiscal Quarter immediately preceding suchacquisition) giving proforma effect to the consummation of suchacquisition and any borrowing of Loans necessary in connection therewith andevidencing compliance with the covenants set forth in Section 6.12 hereof,(ii) the most recent annual and interim financial statements for the Personor business being acquired and (iii) new detailed projections for theBorrower and its

 

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Subsidiaries through theStated Maturity Date for the Term Loans giving proforma effectto such acquisition, based on assumptions reasonably satisfactory to theAdministrative Agent and demonstrating pro forma compliance with all covenantscontained in this Agreement, including those contained in Section 6.12hereof, in each case, prepared in good faith and in a manner and using suchmethodology which is consistent with the most recent financial statementsdelivered pursuant to Section 5.01 (b) and in form and substancereasonably satisfactory to the Administrative Agent;

 

(e)                                  the Borrower shall have delivered to theAdministrative Agent, at least 20 days prior to the consummation of theproposed acquisition (unless the Administrative Agent shall otherwise consentin writing to a shorter period), such information regarding the acquisition asthe Administrative Agent may reasonably request in order to evaluate theacquisition;

 

(f)                                    the Borrower shall have delivered to theAdministrative Agent, at least 20 days prior to the consummation of theproposed acquisition (unless the Administrative Agent shall otherwise consentin writing to a shorter period), the Permitted Acquisition Documentationrelating to such acquisition, and such documentation shall be reasonablysatisfactory in form and substance to the Administrative Agent and shall beaccompanied by lien searches, payoff letters and other customary requirementsas the Administrative Agent may reasonably impose, in each case reasonablysatisfactory to the Administrative Agent;

 

(g)                                 the maximum purchase price for suchacquisition (including any Indebtedness to be assumed in connection therewith)must not exceed $75,000,000.00 and when added to the purchase price withrespect to any prior acquisitions allowed pursuant hereto does not exceed$150,000,000.00 in the aggregate;

 

(h)                                 the business being acquired as a result ofsuch acquisition must be in the same or related line of business to that of theBorrower or otherwise related to the drug development and discovery business ;and

 

(i)                                     concurrently with the consummation ofsuch acquisition, the Borrower (and, if applicable, the acquired Person) shallhave complied with the requirements of Section 5.09 hereof.

 

Permitted Acquisition Agreement” means each stock purchase agreement, assetpurchase agreement or other similar agreement entered into by the Borrower orany of its Subsidiaries in connection with any Permitted Acquisition.

 

“Permitted Acquisition Documentation” means, collectively, each PermittedAcquisition Agreement and all schedules, exhibits and annexes thereto and allside letters and agreements affecting the terms thereof or entered into inconnection therewith.

 

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“PermittedEncumbrances” means:

 

(a)                                  mortgages, liens, pledges and securityinterests in favor of the Lenders hereunder;

 

(b)                                 other encumbrances consisting of zoningrestrictions, easements, restrictions on the use of real property, or minorirregularities in title thereto, which do not arise in connection with theborrowing of, or in the obligation for the payment of money, and which, in theaggregate, do not materially impair the use or enjoyment of such property orassets;

 

(c)                                  involuntary liens including mechanic’s andmaterialmen’s liens and liens arising out of judgments and/or awards, inrespect of which the Borrower and/or the Guarantors shall in good faith beprosecuting an appeal or proceedings for review and in respect of which theBorrower and/or the Guarantors shall have secured a subsisting stay ofexecution pending such appeal or proceeding for review, provided the Borrowerand/or the Guarantors shall have set aside on their books adequate reserveswith respect to such judgment and/or award;

 

(d)                                 liens for taxes, assessments, governmentalcharges or levies that are not yet due or are being contested in compliancewith Section 5.04;

 

(e)                                  deposits, liens, or pledges to secure thepayment of worker’s compensation, unemployment insurance, old age pensions orsocial security obligations, or the performance of bids, tenders, leases,contracts, corporate or statutory obligations, surety, stay or appeal bonds orother similar obligations arising in the ordinary course of business;

 

(f)                                    statutory landlord liens under leases towhich Borrower and/or the Guarantors are a party;

 

(g)                                 liens securing Indebtedness described in Section 6.01(d) or6.01(g) hereof; and

 

(h)                                 any other lien or encumbrance approved inwriting by the Required Lenders.

 

“PermittedInvestments” means:

 

(a)                                  direct obligations of, or obligations theprincipal of and interest on which are unconditionally guaranteed by, theUnited States of America (or by any agency thereof to the extent suchobligations are backed by the full faith and credit of the United States ofAmerica), in each case maturing within two years from the date of acquisitionthereof;

 

(b)                                 bonds, debentures, notes, participationcertificates or other evidences of indebtedness issued or fully guaranteed byFarmers Home Administration, Federal National Mortgage Association, FederalHome Loan Bank System, Federal Home Loan Mortgage Association or any agency orinstrumentality of the United States of America or any other corporationwholly-owned by the United States of America;

 

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(c)                                  direct and general obligations, to thepayment of the principal of and interest on which the full faith and credit ofthe issuer thereof is pledged, of any of the following: any state of the UnitedStates of America, or any political subdivision of such state; provided, that (i) asto such obligations of a political subdivision, all of the taxable realproperty within such political subdivision shall be subject to taxation therebyto pay such obligations and the interest thereon, without limitation as to rateor amount, or the revenues of such political subdivision shall be pledged topay such obligations and the interest thereon and (ii) at the time of thepurchase of such obligations, such obligations of any such state or politicalsubdivision are rated in either of the two highest ratings categories of bothS&P and Moody’s;

 

(d)                                 investments in commercial paper maturingwithin 270 days from the date of acquisition thereof and having, at such dateof acquisition, the highest credit rating obtainable from S & P orfrom Moody’s;

 

(e)                                  investments in certificates of deposit,banker’s acceptances and time deposits maturing within 180 days from the dateof acquisition thereof issued or guaranteed by or placed with, and money marketdeposit accounts issued or offered by, any domestic office of any commercialbank organized under the laws of the United States of America or any Statethereof which has a combined capital and surplus and undivided profits of notless than $500,000,000;

 

(f)                                    fully collateralized repurchase agreementswith a term of not more than 30 days for securities described in clause (a) aboveand entered into with a financial institution satisfying the criteria describedin clause (c) above;

 

(g)                                 direct obligations of the Federal ReserveSystem; and

 

(h)                                 investments which at the time of investmentare considered “Investment Grade” in accordance with the rating systemsemployed by either Moody’s or S & P.

 

“Person”means any natural person, corporation, limited liability company, trust, jointventure, association, company, partnership, Governmental Authority or otherentity.

 

“Plan”means any employee pension benefit plan (other than a Multiemployer Plan)subject to the provisions of Title IV of ERISA or Section 412 of theCode or Section 302 of ERISA, and in respect of which the Borrower or anyCommonly Controlled Entity is (or, if such plan were terminated, would under Section 4069of ERISA be deemed to be) an “employer” as defined in Section 3(5) ofERISA.

 

“PrimeRate” means the variable per annum rate of interest so designated from timeto time by Fleet National Bank as its prime rate.  The Prime Rate is a reference and does notnecessarily represent the lowest or best rate being charged to anycustomer.  Changes in the rate of interesthereunder resulting from changes in the Prime Rate shall take place immediatelywithout notice or demand of any kind.

 

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“RecoveryEvent” means any settlement of or payment in respect of any property orcasualty insurance claim or any condemnation proceeding relating to any assetof the Borrower or any of its Subsidiaries.

 

“Register”has the meaning set forth in Section 9.04.

 

“Regulation U”means Regulation U of the Board as in effect from time to time.

 

“Requirement of Law” means as to any Person, its Organic Documents and any law, treaty, rule orregulation or determination of an arbitrator or a court or other GovernmentalAuthority, in each case applicable to or binding upon such Person or any of itsproperty or to which such Person or any of its property is subject.

 

“ReimbursementObligation” means the obligation of the Borrower to reimburse the Issuerpursuant to Section 2.19 hereof for amounts drawn under Letters of Credit.

 

“ReinvestmentNotice” means a written notice executed by the Borrower stating that noDefault or Event of Default has occurred and is continuing and that theBorrower (directly or indirectly through a Subsidiary) intends and expects touse all or a specified portion of the Net Cash Proceeds of an Asset Sale orRecovery Event to acquire assets useful in its business.

 

“RelatedParties” means, with respect to any specified Person, such Person’sAffiliates and the respective directors, officers, employees, agents andadvisors of such Person and such Person’s Affiliates.

 

“Reorganization”means, with respect to any Multiemployer Plan, the condition that such plan isin reorganization within the meaning of Section 4241 of ERISA.

 

“ReportableEvent” means any of the events set forth in Section 4043(b) ofERISA, other than those events as to which the thirty day notice period iswaived under subsections .27, .28, .29, .30, .31, .32, .34, or .35 of PBGC Reg.§ 4043.

 

“RequiredLenders” means, at any time, Lenders having Revolving Loan Credit Exposure,Term Loan Credit Exposure and unused Commitments representing at leastsixty-six and two-thirds (66 2/3%) percent of the sum of the total RevolvingLoan Credit Exposure, Term Loan Credit Exposure and unused Commitments at suchtime.

 

“ReservePercentage” means the maximum aggregate reserve requirement (including allbasic, supplemental, marginal and other reserves) which is imposed on memberbanks of the Federal Reserve System against “Euro-currency Liabilities” asdefined in Regulation D

 

“RestrictedPayment” means any dividend or other distribution (whether in cash,securities or other property) with respect to any shares of any class ofcapital stock of the Borrower or any Subsidiary, including the Guarantors, orany payment (whether in cash, securities or other property), including anysinking fund or similar deposit, on account of the purchase, redemption,

 

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retirement, acquisition, cancellation ortermination of any such shares of capital stock of the Borrower or any option,warrant or other right to acquire any such shares of capital stock of theBorrower.

 

“RevolvingExtensions of Credit” means as to any Lender at any time, an amount equalto the sum of (a) the aggregate principal amount of all Revolving Loansheld by such Lender then outstanding plus (b) such Lender’spercentage of the Letter of Credit Outstandings then outstanding.

 

“RevolvingLoan Commitment” means, with respect to each Lender, the commitment of suchLender to make Revolving Loans including the issuance of, or participation in,Letters of Credit, expressed as an amount representing the maximum aggregateamount of such Lender’s Revolving Credit Exposure hereunder, as such commitmentmay be reduced from time to time pursuant to Section 2.09 and (b) reducedor increased from time to time pursuant to assignments by or to such Lenderpursuant to Section 9.04.  Theinitial amount of each Lender’s Revolving Loan Commitment is set forth on Schedule 2.01,or in the Assignment and Acceptance pursuant to which such Lender shall haveassumed its Revolving Loan Commitment, as applicable.  The initial aggregate amount of the Lenders’Revolving Loan Commitment is $35,000,000.00

 

“RevolvingLoan Credit Exposure” means, with respect to any Lender at any time, thesum of the outstanding principal amount of such Lender’s Revolving Loans atsuch time.

 

“RevolvingCredit Termination Date” means the date three (3) years following theEffective Date or such earlier date on which the Lender demands payment of andaccelerates the Revolving Loan as provided herein. On the Revolving CreditTermination Date, all Revolving Loans shall mature and all unpaid principal,accrued and unpaid interest and all other charges due hereunder and under anyother loan document shall be due and payable in full.

 

“RevolvingLoan” means a Loan made pursuant to Section 2.01(a).

 

“SingleEmployer Plan” means any Plan that is covered by Title IV of ERISA, butthat is not a Multiemployer Plan.

 

“Solvent”means, when used with respect to any Person, means that, as of any date ofdetermination, (a) the amount of the “present fair saleable value” of theassets of such Person will, as of such date, exceed the amount of all “liabilitiesof such Person, contingent or otherwise”, as of such date, as such quoted termsare determined in accordance with applicable federal and state laws governingdeterminations of the insolvency of debtors, (b) the present fair saleablevalue of the assets of such Person will, as of such date, be greater than theamount that will be required to pay the liability of such Person on its debtsas 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 conductits business, and (d) such Person will be able to pay its debts as theymature.  For purposes of this definition,(i) “debt” means liability on a “claim”, and (ii) “claim” means any(x) right to payment, whether or not such a right is reduced to judgment,liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,undisputed, legal, equitable, secured or unsecured or (y) right to an 

 

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equitable remedy for breach of performance ifsuch breach gives rise to a right to payment, whether or not such right to anequitable remedy is reduced to judgment, fixed, contingent, matured orunmatured, disputed, undisputed, secured or unsecured.

 

“S &P” means Standard & Poor’s.

 

“StatedAmount” means on any date with respect to a particular Letter of Credit,the total amount then available to be drawn under such Letter of Credit.

 

“StatedMaturity Date” means with reference to the Term Loans, the Term LoanMaturity Date and with reference to the Revolving Loans, the Revolving CreditTermination Date.

 

“subsidiary”means, with respect to any Person (the “parent”) at any date, anycorporation, limited liability company, partnership, association or otherentity the accounts of which would be consolidated with those of the parent inthe parent’s consolidated financial statements if such financial statementswere prepared in accordance with GAAP as of such date, as well as any othercorporation, limited liability company, partnership, association or otherentity (a) of which securities or other ownership interests representingmore than 50% of the equity or more than 50% of the ordinary voting power or,in the case of a partnership, more than 50% of the general partnershipinterests are, as of such date, owned, controlled or held, or (b) that is,as of such date, otherwise Controlled, by the parent or one or moresubsidiaries of the parent or by the parent and one or more subsidiaries of theparent.

 

“Subsidiary”means any subsidiary of the Borrower, including the Guarantors.

 

“SwapAgreement” means any agreement with respect to any swap, forward, future orderivative transaction or option or similar agreement involving, or settled byreference to, one or more rates, currencies, commodities, equity or debtinstruments or securities, or economic, financial or pricing indices ormeasures of economic, financial or pricing risk or value or any similartransaction or any combination of these transactions; provided that nophantom stock or similar plan providing for payments only on account ofservices provided by current or former directors, officers, employees orconsultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

 

“Synthetic Lease Obligations” means as to any Person, the obligations of such Person to pay rent or otheramounts under any lease (including leases that may be terminated by the lesseeat any time) of any property (whether real, personal or mixed) (i) that isnot a capital lease in accordance with GAAP and (ii) in respect of whichthe lessee retains or obtains ownership of the property so leased for federalincome tax purposes, other than any such lease under which such Person is thelessor.

 

“TargetAcquisition” means the acquisition of the outstanding common stock ofOrganichem Corporation not already owned by the Borrower

 

“Taxes”means any and all present or future taxes, levies, imposts, duties, deductions,charges or withholdings imposed by any Governmental Authority.

 

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“TermLoan” means the Loans referred to in Section 2.02.

 

“TermLoan Commitment” means, with respect to each Lender, the commitment of suchLender to make the Term Loans, expressed as an amount representing the maximumaggregate amount of such Lender’s Term Loan Credit Exposure hereunder, as suchcommitment may be reduced or increased from time to time pursuant toassignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Term LoanCommitment is set forth on Schedule 2.02, or in the Assignment and Acceptancepursuant to which such Lender shall have assumed its Term Loan Commitment, asapplicable.  The initial aggregate amountof the Lenders’ Term Loan Commitment is $30,000,000.00.

 

“TermLoan Credit Exposure” means, with respect to any Lender at any time, thesum of the outstanding principal amount of such Lender’s Term Loan at suchtime.

 

“TermLoan Maturity Date” means the date which is five (5) years from theEffective Date.

 

“TotalLiabilities” means, for any corporation, all items of Indebtedness,Obligations and/or liabilities of such corporation, which would, in accordancewith GAAP, be classified as liabilities of a corporation conducting a businessthe same as or similar to that of such corporation, excluding, however, (i) deferredpension costs created by Financial Accounting Standards Board Statement No. 87,and (ii) any liability created by the application of Financial AccountingStandards Board Statement No. 133.

 

“Transactions”means the execution, delivery and performance by the Borrower of thisAgreement, the borrowing of Loans and the use of the proceeds thereof.

 

“Type”,when used in reference to any Loan or Borrowing, refers to whether the rate ofinterest on such Loan, or on the Loans comprising such Borrowing, is determinedby reference to the Adjusted LIBOR Rate or Alternate Base Rate.

 

“WithdrawalLiability” means liability to a Multiemployer Plan as a result of acomplete or partial withdrawal from such Multiemployer Plan, as such terms aredefined in Part I of Subtitle E of Title IV of ERISA.

 

“WhollyOwned Subsidiary” means as to any Person, any other Person all of theCapital Securities of which (other than directors’ qualifying shares requiredby law) is owned by such Person directly and/or through other Wholly OwnedSubsidiaries.

 

“WhollyOwned Subsidiary Guarantor” means any Guarantor that is a Wholly OwnedSubsidiary of the Borrower.

 

SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this Agreement,Loans may be classified and referred to by Class (e.g., a “RevolvingLoan” or “Term

 

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Loan”) or by Type (e.g., a “EurodollarLoan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan” ora “Eurodollar Term Loan”).  Borrowingsalso may be classified and referred to by Class (e.g., a “RevolvingBorrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class andType (e.g., a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03.  TermsGenerally.  The definitions of termsherein shall apply equally to the singular and plural forms of the termsdefined.  Whenever the context mayrequire, any pronoun shall include the corresponding masculine, feminine andneuter forms.  The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.  The word “will” shall beconstrued to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) anydefinition of or reference to any agreement, instrument or other documentherein shall be construed as referring to such agreement, instrument or otherdocument as from time to time amended, supplemented or otherwise modified(subject to any restrictions on such amendments, supplements or modificationsset forth herein), (b) any reference herein to any Person shall beconstrued to include such Person’s successors and assigns, (c) the words “herein”,“hereof” and “hereunder”, and words of similar import, shall be construed torefer to this Agreement in its entirety and not to any particular provision hereof,(d) all references herein to Articles, Sections, Exhibits and Schedulesshall be construed to refer to Articles and Sections of, and Exhibits andSchedules to, this Agreement and (e) the words “asset” and “property”shall be construed to have the same meaning and effect and to refer to any andall tangible and intangible assets and properties, including cash, securities,accounts and contract rights.

 

SECTION 1.04.  AccountingTerms; GAAP.  Except as otherwiseexpressly provided herein, all terms of an accounting or financial nature shallbe construed in accordance with GAAP, as in effect from time to time; providedthat, if the Borrower notifies the Administrative Agent that the Borrowerrequests an amendment to any provision hereof to eliminate the effect of anychange occurring after the date hereof in GAAP or in the application thereof onthe operation of such provision (or if the Administrative Agent notifies theBorrower that the Required Lenders request an amendment to any provision hereoffor such purpose), regardless of whether any such notice is given before orafter such change in GAAP or in the application thereof, then such provisionshall be interpreted on the basis of GAAP as in effect and applied immediatelybefore such change shall have become effective until such notice shall have beenwithdrawn or such provision amended in accordance herewith.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.  RevolvingLoan Commitments.

 

a.Revolving Loans                                         Subject to the terms and conditions set forthherein, each Lender agrees to make Revolving Loans to the Borrower from time totime during the Availability Period in an aggregate principal amount that willnot result in such Lender’s Revolving Loan Credit Exposure exceeding suchLender’s Revolving Loan Commitment as set forth in Schedule 2.01.

 

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Within the foregoing limits and subject tothe terms and conditions set forth herein, the Borrower may borrow, prepay andreborrow Revolving Loans.

 

AllRevolving Loan Borrowings shall be repaid in full on the Revolving CreditTermination Date.

 

b.Letters of Credit.  The Issueragrees that it will, from time to time on any Business Day occurring during theRevolving Commitment Period,

 

(i)                                     issue one or more direct pay letters ofcredit, standby letters of credit and/or bankers’ acceptances (relative to theIssuer, its “Letters of Credit”) for the account of the Borrower or anyGuarantor in the Stated Amount requested by the Borrower on such day, in suchform as may be approved from time to time by the Issuer; or

 

(ii)                                  extend the Stated Expiry Date of an existingLetter of Credit previously issued hereunder;

 

provided, however, that the Issuer shall haveno obligation to issue any Letter of Credit if, after giving effect to suchissuance, (i) the Letter of Credit Outstandings would exceed the L/CCommitment Amount or (ii) the aggregate outstanding Revolving Extensionsof Credit of all Lenders would exceed the Revolving Loan CommitmentAmount.  Furthermore, the Issuer shall notat any time be obligated to issue any Letter of Credit hereunder if suchissuance would conflict with, or cause the Issuer or any L/C Participant toexceed any limits imposed by, any applicable Requirement of Law.  Each Letter of Credit shall be denominated inDollars.

 

SECTION 2.02.  TermLoan Commitment.

 

Subjectto the terms and conditions set forth herein, each Lender agrees in anaggregate principal amount that will not result in such Lender’s Term LoanExposure exceeding such Lender’s Term Loan Commitment to make Term Loans to theBorrower under and pursuant to which the Borrower may,  borrow up to the principal sum of such Lender’sTerm Loan Commitment as set forth in Schedule 2.02.

 

Fromand after the Effective Date through and including March 31, 2003, theTerm Loan shall be comprised of a Eurodollar Term Loan with an Interest Periodof two months’ duration and from and after April 1, 2003, the Term Loanshall be comprised of a Eurodollar Term Loan with an Interest Period of threemonths’ duration.  The Term Loan shall befully funded on the date of execution and delivery of this Agreement.  The Borrower shall pay interest at theapplicable interest rate on the outstanding principal balance due under theTerm Loan on each Interest Payment Date. In addition to accrued interest the Borrower shall pay to Lenderprincipal installments on each June 30th, September 30th, December 31stand March 31st commencing June 30th, 2003 untilthe Term Loan Maturity Date in the amounts set forth below for the payment datein question, or such earlier date in the event Lender accelerates the Borrower’sobligations hereunder, when the balance of

 

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principal remaining unpaid plus accrued andunpaid interest and all other charges due or to become due hereunder and underall other loan documents shall be due and payable in full:

 
| **Payment Dates (inclusive)**                          | ** ** | **Principal Payment Due**                   | ** **   |
|--------------------------------------------------------|------------|---------------------------------------------|--------------|
| June 30th, 2003 through  March 31st, 2004    |       | $                                           | 1,071,428.75 |   |
| June 30th, 2004 through  March 31st, 2005    |       | $                                           | 1,071,428.75 |   |
| June 30th, 2005 through  March 31st, 2006    |       | $                                           | 1,071,428.75 |   |
| June 30th, 2006 through  March 31st, 2007    |       | $                                           | 1,071,428.75 |   |
| June 30th, 2007 through  December 31st, 2007 |       | $                                           | 1,071,428.75 |   |
| February 12, 2008                                 |       | Outstanding  principal balance of Term Loan |         |

 

SECTION 2.03.  Loansand Borrowings.

 

(a)                                  Each Revolving Loan shall be made as part ofa Borrowing consisting of Revolving Loans made by the Lenders ratably inaccordance with their respective Revolving Loan Commitments.

 

(b)                                 The failure of any Lender to make any Loan,whether a Revolving Loan, or Term Loan, required to be made by it shall notrelieve any other Lender of its obligations hereunder; provided that theCommitments of the Lenders are several and no Lender shall be responsible forany other Lender’s failure to make Loans as required.

 

(c)                                  Subject to Section 2.13, each Loan shallbe comprised entirely of Base Rate Loans or Eurodollar Loans as the Borrowermay request in accordance herewith.  EachLender at its option, in accordance with the request of the Borrower to make aEurodollar Loan pursuant to Section 2.03 (c) hereof, may make anysuch Eurodollar Loan by causing any domestic or foreign branch or Affiliate ofsuch Lender to make such Loan; provided that any exercise of such optionshall not affect the obligation of the Borrower to repay such Loan inaccordance with the terms of this Agreement.

 

(d)                                 At the commencement of each Interest Periodfor any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregateamount that is an integral multiple of $100,000.00 and not less than$1,000,000.00.  At the time that eachBase Rate Revolving Borrowing is made, such Borrowing shall be in an aggregateamount that is an integral multiple of $50,000.00 and not less than $500,000.00;provided that a Base Rate Revolving Borrowing may be in an aggregateamount that is equal to the entire unused balance of the total Revolving LoanCommitments.  Borrowings of more than oneType and Class may be outstanding at the same time; provided thatthere shall not at any time be more than a total of ten (10) EurodollarRevolving Borrowings outstanding.

 

(e)                                  Notwithstanding any other provision of thisAgreement, the Borrower shall not be entitled to request, or to elect tocontinue, any Borrowing if the Interest Period requested with respect theretowould end after the Revolving Credit Termination Date.

 

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SECTION 2.04.  Requestsfor Revolving Loans.

 

Torequest a Revolving Borrowing, the Borrower shall notify the AdministrativeAgent of such request by telephone (a) in the case of a Eurodollar Loan,not later than 11:00 a.m., New York City time, three Business Daysbefore the date of the proposed Loan or (b) in the case of a Base RateLoan, not later than 11:00 a.m., New York City time, one Business Daybefore the date of the proposed Loan. Each such telephonic Borrowing Request shall be irrevocable and shall beconfirmed promptly by hand delivery or telecopy to the Administrative Agent ofa written Borrowing Request in a form approved by the Administrative Agent andsigned by the Borrower.  Each suchtelephonic and written Borrowing Request shall specify the followinginformation in compliance with Section 2.03 and shall be in the formattached hereto as Exhibit B-1:

 

(i)                                     the aggregate amount of the requested Loan;

 

(ii)                                  the date of such Loan, which shall be aBusiness Day;

 

(iii)                               whether such Loan is to be a Base Rate Loanor a Eurodollar Loan;

 

(iv)                              in the case of a Eurodollar RevolvingBorrowing, the initial Interest Period to be applicable thereto, which shall bea period contemplated by the definition of the term “Interest Period”; and

 

(v)                                 the location and number of the Borrower’saccount to which funds are to be disbursed, which shall comply with therequirements of Section 2.07.

 

Ifno election as to the Type of Revolving Borrowing is specified, then therequested Borrowing shall be a Eurodollar Revolving Borrowing consisting of anInterest Period of one month’s duration. If no Interest Period is specified with respect to any requestedEurodollar Revolving Borrowing, then the Borrower shall be deemed to haveselected an Interest Period of one month’s duration.  Promptly following receipt of a BorrowingRequest in accordance with this Section, the Administrative Agent shall adviseeach Lender of the details thereof and of the amount of such Lender’s Loan tobe made as part of the requested Borrowing.

 

SECTION 2.05. INTENTIONALLY OMITTED.

 

SECTION 2.06.  Fundingof Loans.

 

(a)                                  Each Lender shall make each Loan to be madeby it hereunder, whether a Revolving Loan, or Term Loan, on the proposed datethereof by wire transfer of immediately available funds by 12:00 noon, New YorkCity time, to the account of the Administrative Agent most recently designatedby it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loansavailable to the Borrower by promptly crediting the amounts so received, inlike funds, to an account of the Borrower maintained with the AdministrativeAgent in New York City and designated by the Borrower in the applicableBorrowing Request.

 

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(b)                                 Unless the Administrative Agent shall havereceived notice from a Lender prior to the proposed date of any Loan that suchLender will not make available to the Administrative Agent such Lender’s shareof such Loan, the Administrative Agent may assume that such Lender has madesuch share available on such date in accordance with paragraph (a) of thisSection and may, in reliance upon such assumption, make available to theBorrower a corresponding amount.  In suchevent, if a Lender has not in fact made its share of the applicable Loanavailable to the Administrative Agent, then the applicable Lender agrees to payto the Administrative Agent forthwith on demand such corresponding amount withinterest thereon, for each day from and including the date such amount is madeavailable to the Borrower to but excluding the date of payment to theAdministrative Agent at, the greater of the Federal Funds Effective Rate and arate determined by the Administrative Agent in accordance with banking industryrules on interbank compensation.  Acertificate of the Administrative Agent submitted to any Lender with respect toany amounts owing under this subsection (b) shall be conclusive inthe absence of manifest error.  If suchLender pays such amount to the Administrative Agent, then such amount shallconstitute such Lender’s Loan included in such Borrowing.  If such Lender’s share of such Loan is notmade available to the Administrative Agent by such Lender within three (3) BusinessDays of such date such amount is made available to the Borrower, theAdministrative Agent shall also be entitled to seek recovery of such amountwith interest thereon at the rate applicable to such Loan, on demand, from theBorrower.

 

SECTION 2.07.  InterestElections for Revolving Loans.

 

(a)                                  Each Revolving Loan initially shall be of theType specified in the applicable Borrowing Request and, in the case of aEurodollar Loan, shall,  have an initialInterest Period as specified in such Borrowing Request.  Thereafter, in the case of a Revolving LoanBorrowing, the Borrower may elect to convert such Revolving Loan Borrowing to adifferent Type or to continue such Revolving Loan Borrowing and, in the case ofa Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all asprovided in this Section.  The Borrowermay elect different options with respect to different portions of the affectedrevolving Borrowing, in which case each such portion shall be allocated ratablyamong the Lenders holding the Loans comprising such Revolving Loan Borrowing,and the Loans comprising each such portion shall be considered a separateRevolving Loan Borrowing.

 

(b)                                 To make an election pursuant to this Section,the Borrower shall notify the Administrative Agent of such election bytelephone by the time that a Borrowing Request would be required under Section 2.04if the Borrower were requesting a Loan of the Type resulting from such electionto be made on the effective date of such election.  Each such telephonic Interest ElectionRequest shall be irrevocable and shall be confirmed promptly by hand deliveryor telecopy to the Administrative Agent of a written Interest Election Requestin a form approved by the Administrative Agent and signed by the Borrower.

 

(c)                                  Each telephonic and written Interest ElectionRequest for a Loan shall specify the following information in compliance with Section 2.03:

 

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(i)                                     the Loan to which such Interest ElectionRequest applies and, if different options are being elected with respect todifferent portions thereof, the portions thereof to be allocated to eachresulting Borrowing (in which case the information to be specified pursuant toclauses (iii) and (iv) below shall be specified for each resultingBorrowing);

 

(ii)                                  the effective date of the election madepursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)                               whether the resulting Loan is to be a BaseRate Loan or a Eurodollar Loan; and

 

(iv)                              if the resulting loan is a Revolving LoanBorrowing which is also a Eurodollar Revolving Loan Borrowing, the InterestPeriod to be applicable thereto after giving effect to such election, whichshall be a period contemplated by the definition of the term “Interest Period”.

 

Ifany such Interest Election Request requests a Eurodollar Borrowing of aRevolving Loan but does not specify an Interest Period, the Borrower shall bedeemed to have selected an Interest Period of one month’s duration.

 

(d)                                 Promptly following receipt of an InterestElection Request, the Administrative Agent shall advise each Lender of thedetails thereof and of such Lender’s portion of each resulting BorrowingRequest.

 

(e)                                  If the Borrower fails to deliver a timelyInterest Election Request with respect to a Eurodollar Revolving Borrowingprior to the end of the Interest Period applicable thereto, then, unless suchBorrowing is repaid as provided herein, at the end of such Interest Period suchBorrowing shall be converted to a Base Rate Borrowing.  Notwithstanding any contrary provisionhereof, if an Event of Default has occurred and is continuing and the AdministrativeAgent, at the request of the Required Lenders, so notifies the Borrower, then,so long as an Event of Default is continuing (i) no outstanding RevolvingBorrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unlessrepaid, each Eurodollar Revolving Borrowing shall be converted to a Base RateBorrowing at the end of the Interest Period applicable thereto.

 

SECTION 2.08.  Terminationand Reduction of Revolving Loan Commitment.

 

(a)                                  Unless previously terminated, the RevolvingLoan Commitment shall terminate on the Revolving Credit Termination Date.

 

(b)                                 The Borrower may at any time terminate, orfrom time to time reduce, the Revolving Loan Commitment; provided that (i) eachreduction of the Revolving Loan Commitment shall be in an amount that is anintegral multiple of $1,000,000.00 and not less than $1,000,000.00 and (ii) theBorrower shall not terminate or reduce the Revolving Loan Commitment if, aftergiving

 

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effect to any concurrent prepayment of theLoans in accordance with Section 2.10, the sum of the Revolving LoanCredit Exposures would exceed the total Revolving and Loan Commitment.

 

(c)                                  The Borrower shall notify the AdministrativeAgent of any election to terminate or reduce the Revolving Loan Commitmentunder paragraph (b) of this Section at least three Business Daysprior to the effective date of such termination or reduction, specifying suchelection and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shalladvise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shallbe irrevocable; provided that a notice of termination of the RevolvingLoan Commitment delivered by the Borrower may state that such notice is conditionedupon the effectiveness of other credit facilities, in which case such noticemay be revoked by the Borrower (by notice to the Administrative Agent on orprior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the RevolvingLoan Commitment shall be permanent.  Eachreduction of the Revolving Loan Commitment shall be made ratably among theLenders in accordance with their respective Revolving Loan Commitment.

 

SECTION 2.09.  Repayment ofLoans; Evidence of Debt.

 

(a)                                  The Borrower hereby unconditionally promisesto pay to the Administrative Agent for the account of each Lender the thenunpaid principal amount of each Loan as required herein, on the RevolvingCredit Termination Date.

 

(b)                                 Each Lender shall maintain in accordance withits usual practice an account or accounts evidencing the indebtedness of theBorrower to such Lender resulting from each Loan made by such Lender, includingthe amounts of principal and interest payable and paid to such Lender from timeto time hereunder.

 

(c)                                  The Administrative Agent shall maintainaccounts in which it shall record (i) the amount of each Loan madehereunder, the Class and Type thereof and the Interest Period applicablethereto, (ii) the amount of any principal or interest due and payable orto become due and payable from the Borrower to each Lender hereunder and (iii) theamount of any sum received by the Administrative Agent hereunder for theaccount of the Lenders and each Lender’s share thereof.

 

(d)                                 The entries made in the accounts maintainedpursuant to paragraph (b) or (c) of this Section shallbe primafacie evidence of the existence and amounts of theobligations recorded therein; provided that the failure of any Lender orthe Administrative Agent to maintain such accounts or any error therein shallnot in any manner affect the obligation of the Borrower to repay the Loans inaccordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by itbe evidenced by a promissory note.  Insuch event, the Borrower shall prepare, execute and deliver to such Lender apromissory note payable to the order of such Lender (or, if requested by suchLender, to such Lender and its registered assigns) and in a form approved bythe Administrative Agent.  Thereafter,the Loans evidenced by such promissory note and interest thereon shall at alltimes (including after assignment pursuant to Section 9.04) be representedby one or more promissory notes in such form payable to

 

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the order of the payee named therein (or, ifsuch promissory note is a registered note, to such payee and its registeredassigns).

 

SECTION 2.10.  Prepaymentof Loans.

 

(a)                                  Optional Repayments.                          (i) The Borrower shall have the right atany time and from time to time to prepay any Borrowing, Revolving Loan, or TermLoan in whole or in part, subject to prior notice and application of payment inaccordance with paragraph (b) of this Section without penalty orprepayment fee except as set forth in Section 2.15 hereof.

 

(ii)                                  The Borrower shall notify the Administrative Agentby telephone (confirmed by telecopy) of any prepayment hereunder (i) inthe case of prepayment of a Eurodollar Loan, not later than 11:00 a.m.,New York City time, three Business Days before the date of prepayment, or (ii)  inthe case of prepayment of a Base Rate Loan, not later than 11:00 a.m., NewYork City time, one Business Day before the date of prepayment.  Each such notice shall be irrevocable andshall specify the prepayment date and the principal amount of each Loan orportion thereof to be prepaid; provided that, if a notice of prepaymentis given in connection with a conditional notice of termination of theCommitments as contemplated by Section 2.08, then such notice ofprepayment may be revoked if such notice of termination is revoked inaccordance with Section 2.08. Promptly following receipt of any such notice relating to a Loan, theAdministrative Agent shall advise the Lenders of the contents thereof.   Eachpartial prepayment of any Loan shall be in an amount that would be permitted inthe case of an advance of a Revolving Borrowing of the same Type as provided inSection 2.03.  Prepayments shall beaccompanied by accrued interest to the extent required by Section 2.12.  Provided there is no Event of Default, eachPrepayment applied to the Term Loan shall be in the inverse order of maturity.

 

(b)                                 Mandatory Repayments. Prior to the Stated Maturity Date for each Loan, the Borrower shall makepayments and prepayments of the Loans as set forth in this Section 2.10(b).

 

(i)                                     Mandatory Prepayment of Revolving Loans, etc.  Ifon any date (after giving effect to any other payments on such date) theaggregate outstanding amount of all Revolving Extensions of Credit of allLenders exceeds the Revolving Loan Commitment as then in effect, the Borrowershall make a mandatory prepayment on such date of Revolving Loans.

 

(ii)                                  Issuance of Capital Securities orIndebtedness.  If any Capital Securities or Indebtednessshall be issued or incurred by the Borrower or any of its Subsidiaries(excluding any Indebtedness incurred in accordance with Section 6.01hereof), an amount equal to 100% of the Net Cash Proceeds thereof shall beapplied on the date of such issuance or incurrence toward the prepayment of theTerm Loans as set forth in subsection (c) of this Section 2.10;.

 

(iii)                               Asset Sales; Recovery Events.  Ifon any date the Borrower or any of its Subsidiaries shall receive Net CashProceeds from any Asset Sale or Recovery Event then, unless a ReinvestmentNotice shall be delivered in respect thereof, such Net Cash Proceeds shall beapplied on such date toward the prepayment of the Term Loans as set forth insubsection (c) of this Section 2.10; provided, however,that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceedsof

 

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Asset Sales and Recovery Events that may beexcluded from the foregoing requirement pursuant to a Reinvestment Notice shallnot exceed $20,000,000.00 in any Fiscal Year of the Borrower and (ii) oneach Reinvestment Prepayment Date, an amount equal to the ReinvestmentPrepayment Amount with respect to the relevant Reinvestment Event shall beapplied toward the prepayment of the Term Loans and the reduction of theRevolving Loan Commitment Amount as set forth in subsection (c) ofthis Section 2.10.

 

(iv)                              Acceleration. Immediately upon any acceleration of the Stated Maturity Date of anyLoans pursuant to Article VII hereof, the Borrower shall repay all theLoans, unless, pursuant to Article VII hereof, only a portion of all theLoans is so accelerated (in which case the portion so accelerated shall be sorepaid).

 

Each prepayment of anyLoans made pursuant to this Section shall be without premium or penalty,except as may be required by Section 2.15 hereof.

 

(c)                                  Application of Prepayments and CommitmentReductions.  Amounts permitted or required to be appliedto the prepayment of the Loans or the reduction of the Revolving LoanCommitment Amount pursuant to this Section 2.10, and all other amountsprepaid pursuant to this Section 2.10, shall be applied as follows:

 

(i)                                     Subject to clause (b), the applicationof each repayment or prepayment of the principal of the Loans shall be applied,to the extent of such repayment or prepayment, first, to Base Rate Loansand, second, to Eurodollar Loans.

 

(ii)                                  Amounts to be applied pursuant to subsection (b) ofthis Section 2.10 shall be applied to the prepayment of the Term Loans(with the amount of such prepayment being applied to reduce, in inverse order,the remaining scheduled quarterly amortization payments in respect thereof) andthen to the prepayment of the Revolving Loans.

 

(iii)                               Except as provided above, all prepaymentsreceived shall be applied first to the payment of all fees, expenses and otheramounts due to the Lenders (excluding principal and interest), then to accruedinterest, and the balance on account of outstanding principal; provided,however, that after a Default or demand for payments, payments will be appliedto the obligations of Borrower to the Lenders as the Lenders determine in theirsole discretion.

 

(iv)                              All prepayments of the Term Loan shall bedeemed to have been applied first to any portion thereof which is notsubject to a Swap Agreement.

 

SECTION 2.11.  Fees.

 

(a)                                  The Borrower agrees to pay to theAdministrative Agent for the account of each Lender a facility fee, which shallaccrue at the percentage rate set forth below for the period in questioncorresponding to the Leverage Ratio most recently determined on the dailyamount of the unused Revolving Loan Commitment of such Lender during the periodfrom and including the Effective Date to but excluding the date on which suchRevolving Loan Commitment terminates:

 

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| **Leverage Ratio**                 | ** ** | **Unused Fee (As a percentage of unused  Revolving Loan Commitment)** | ** ** |
|------------------------------------|------------|-----------------------------------------------------------------------|------------|
| >=2.00 to 1.00                  |       | 0.250                                                                 | %          |
| >=1.50 to 1.00<2.00 to 1.00  |       | 0.200                                                                 | %          |
| >=1.00 to 1.00 <1.50 to 1.00 |       | 0.150                                                                 | %          |
| <1.00 to 1.00                   |       | 0.125                                                                 | %          |

 

provided that,if such Lender continues to have any Revolving Loan Credit Exposure after itsRevolving Loan Commitment terminates, then such facility fee shall continue toaccrue on the daily amount of such Lender’s Revolving Loan Credit Exposure fromand including the date on which its Revolving Loan Commitment terminates to butexcluding the date on which such Lender ceases to have any Revolving LoanCredit Exposure.  Accrued facility feesshall be payable in arrears on the last day of March, June, September and December ofeach year and on the date on which the Revolving Loan Commitment terminate,commencing on the first such date to occur after the date hereof; providedthat any facility fees accruing after the date on which the Revolving LoanCommitment terminates shall be payable on demand.  All facility fees shall be computed on thebasis of a year of 360 days and shall be payable for the actual number of dayselapsed (including the first day but excluding the last day).

 

(b)                                 The Borrower agrees to pay to the Issuer forthe account of each Lender a letter of credit fee payable annually on theissuance of each Letter of Credit and on each anniversary date thereof in anamount set forth below computed on the Stated Amount of each such Letter ofCredit:

 
| **Leverage Ratio**                 | ** ** | **L/C Fee** | ** ** |
|------------------------------------|------------|-------------|------------|
| >=2.00 to 1.00                  |       | 1.50        | %          |
| >=1.50 to 1.00<2.00 to 1.00  |       | 1.25        | %          |
| >=1.00 to 1.00 <1.50 to 1.00 |       | 1.00        | %          |
| <1.00 to 1.00                   |       | 0.75        | %          |

 

(c)                                  The Borrower agrees to pay to theAdministrative Agent, for its own account, fees payable in the amounts and atthe times separately agreed upon between the Borrower and the AdministrativeAgent.

 

(d)                                 All fees payable hereunder shall be paid onthe dates due, in immediately available funds, to the Administrative Agent fordistribution, in the case of facility fees and participation fees and issuancefees, to the Lenders.  Fees paid shallnot be refundable under any circumstances.

 

SECTION 2.12.  Interest;Late Charges.

 

(a)                                  The Loans comprising each Base Rate Loanshall bear interest at the Alternate Base Rate.

 

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(b)                                 The Loans comprising each Eurodollar Loanshall bear interest at the Adjusted LIBOR Rate for the Interest Period ineffect for such Loan.

 

(c)                                  Notwithstanding the foregoing, if anyprincipal of or interest on any Loan or any fee or other amount payable by theBorrower hereunder is not paid when due, whether at stated maturity, uponacceleration or otherwise, such overdue amount shall bear interest, after aswell as before judgment, at a rate per annum equal to (i) in the case ofoverdue principal of any Loan, 2% plus the rate otherwise applicable to suchLoan as provided in the paragraphs (a) and (b) of this Section or(ii) in the case of any other amount, 2% plus the rate applicable to BaseRate Loans as provided in paragraph (a) of this Section.

 

(d)                                 Accrued interest on each Loan shall bepayable in arrears on each Interest Payment Date for such Loan and, in the caseof Revolving Loans, upon termination of the Commitments; provided that (i) interestaccrued pursuant to paragraph (c) of this Section shall be payable ondemand, (ii) in the event of any repayment or prepayment of any Loan(other than a prepayment of an Base Rate Revolving Loan prior to the end of theAvailability Period), accrued interest on the principal amount repaid orprepaid shall be payable on the date of such repayment or prepayment and (iii) inthe event of any conversion of any Eurodollar Revolving Loan prior to the endof the current Interest Period therefor, accrued interest on such Loan shall bepayable on the effective date of such conversion.

 

(e)                                  All interest accruing on Eurodollar Loansshall be computed on the basis of a year of 360 days, and in each case shall bepayable for the actual number of days elapsed (including the first day butexcluding the last day).  All interestaccruing on Base Rate Loans shall be computed on the basis of a year of 365days, and in each case shall be payable for the actual number of days elapsed(including the first day but excluding the last day).  The applicable Alternate Base Rate orAdjusted LIBOR Rate shall be determined by the Administrative Agent, and suchdetermination shall be conclusive absent manifest error.

 

(f)                                    If the entire amount of any requiredprincipal and/or interest is not paid within ten (10) days after the sameis due, the Borrower shall pay to the Lenders a late fee equal to five percent(5.00%) of the required payment.

 

SECTION 2.13.  AlternateRate of Interest.

 

Ifprior to the commencement of any Interest Period for a Eurodollar Borrowing theAdministrative Agent determines (which determination shall be conclusive absentmanifest error) that adequate and reasonable means do not exist forascertaining the Adjusted LIBOR Rate for such Interest Period then theAdministrative Agent shall give notice thereof to the Borrower and the Lendersby telephone or telecopy as promptly as practicable thereafter and, until theAdministrative Agent notifies the Borrower and the Lenders that thecircumstances giving rise to such notice no longer exist, (i) any InterestElection Request that requests the conversion of any Revolving Borrowing to, orcontinuation of any Revolving Borrowing as, a Eurodollar Borrowing shall beineffective, (ii) if any Borrowing Request requests a Eurodollar Loan,such Loan shall be made as an Base Rate Loan. Each determination by the Administrative Agent hereunder shall beconclusive absent manifest error.

 

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SECTION 2.14.  IncreasedCosts.

 

(a)                                  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable anyreserve, special deposit or similar requirement against assets of, depositswith or for the account of, or credit extended by, any Lender (except any suchreserve requirement reflected in the Adjusted LIBOR Rate); or

 

(ii)                                  impose on any Lender or the London interbankmarket any other condition affecting this Agreement or Eurodollar Loans;

 

andthe result of any of the foregoing shall be to increase the cost to such Lenderof making or maintaining any Eurodollar Loan (or of maintaining its obligationto make any such Loan) or to reduce the amount of any sum received orreceivable by such Lender hereunder (whether of principal, interest orotherwise), then the Borrower will pay to such Lender such additional amount oramounts as will compensate such Lender for such additional costs incurred orreduction suffered.

 

(b)                                 If any Lender determines that any Change inLaw regarding capital requirements has or would have the effect of reducing therate of return on such Lender’s capital or on the capital of such Lender’sholding company, if any, as a consequence of this Agreement or the Loans madeby such Lender to a level below that which such Lender or such Lender’s holdingcompany could have achieved but for such Change in Law (taking intoconsideration such Lender’s policies and the policies of such Lender’s holdingcompany with respect to capital adequacy), then from time to time the Borrowerwill pay to such Lender such additional amount or amounts as will compensate suchLender or such Lender’s holding company for any such reduction suffered.

 

(c)                                  A certificate of a Lender setting forth theamount or amounts necessary to compensate such Lender or its holding company asspecified in paragraph (a) or (b) of this Section shall bedelivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amountshown as due on any such certificate within ten (10) days after receiptthereof.

 

(d)                                 Failure or delay on the part of any Lender todemand compensation pursuant to this Section shall not constitute a waiverof such Lender’s right to demand such compensation; provided that theBorrower shall not be required to compensate a Lender pursuant to this Section forany increased costs or reductions incurred more than 180 days prior to the datethat such Lender notifies the Borrower of the Change in Law giving rise to suchincreased costs or reductions and of such Lender’s intention to claimcompensation therefor; providedfurther that, if the Change inLaw giving rise to such increased costs or reductions is retroactive, then the180-day period referred to above shall be extended to include the period ofretroactive effect thereof.

 

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SECTION 2.15.  BreakFunding Payments.

 

In the event of (a) thepayment of any principal of any Eurodollar Loan other than on the last day ofan Interest Period applicable thereto (including as a result of an Event ofDefault), (b) the conversion of any Eurodollar Loan other than on the lastday of the Interest Period applicable thereto, (c) the failure to borrow,convert, continue or prepay any Revolving Loan on the date specified in anynotice delivered pursuant hereto (regardless of whether such notice may be revokedunder Section 2.10(b) and is revoked in accordance therewith), or (d) theassignment of any Eurodollar Loan other than on the last day of the InterestPeriod applicable thereto as a result of a request by the Borrower pursuant to Section 2.18,then, in any such event, the Borrower shall compensate each Lender for theloss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss,cost or expense to any Lender shall be deemed to include an amount determinedby such Lender to be the excess, if any, of (i) the amount of interestwhich would have accrued on the principal amount of such Loan had such eventnot occurred, at the Adjusted LIBOR Rate that would have been applicable tosuch Loan, for the period from the date of such event to the last day of thethen current Interest Period therefor (or, in the case of a failure to borrow,convert or continue, for the period that would have been the Interest Periodfor such Loan), over (ii) the amount of interest which would accrue onsuch principal amount for such period at the interest rate which such Lenderwould bid were it to bid, at the commencement of such period, for dollardeposits of a comparable amount and period from other banks in the eurodollarmarket.  A certificate of any Lendersetting forth any amount or amounts that such Lender is entitled to receivepursuant to this Section shall be delivered to the Borrower and shall beconclusive absent manifest error.  TheBorrower shall pay such Lender the amount shown as due on any such certificatewithin ten (10) days after receipt thereof.

 

SECTION 2.16.  Taxes.

 

(a)                                  Any and all payments by or on account of anyobligation of the Borrower hereunder shall be made free and clear of andwithout deduction for any Indemnified Taxes or Other Taxes; providedthat if the Borrower shall be required to deduct any Indemnified Taxes or OtherTaxes from such payments, then (i) the sum payable shall be increased asnecessary so that after making all required deductions (including deductionsapplicable to additional sums payable under this Section) the AdministrativeAgent or Lender (as the case may be) receives an amount equal to the sum itwould have received had no such deductions been made, (ii) the Borrowershall make such deductions and (iii) the Borrower shall pay the fullamount deducted to the relevant Governmental Authority in accordance withapplicable law.

 

(b)                                 In addition, the Borrower shall pay any OtherTaxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                  The Borrower shall indemnify theAdministrative Agent and each Lender, within ten (10) days after writtendemand therefor, for the full amount of any Indemnified Taxes or Other Taxespaid by the Administrative Agent or such Lender, as the case may be, on or withrespect to any payment by or on account of any obligation of the Borrowerhereunder (including Indemnified Taxes or Other Taxes imposed or asserted on orattributable to amounts payable under this Section)

 

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and any penalties, interest and reasonable expenses arising therefromor with respect thereto, whether or not such Indemnified Taxes or Other Taxeswere correctly or legally imposed or asserted by the relevant GovernmentalAuthority.  A certificate as to theamount of such payment or liability delivered to the Borrower by a Lender or bythe Administrative Agent on its own behalf or on behalf of a Lender, shall beconclusive absent manifest error.

 

(d)                                 Assoon as practicable after any payment of Indemnified Taxes or Other Taxes bythe Borrower to a Governmental Authority, the Borrower shall deliver to theAdministrative Agent the original or a certified copy of a receipt issued bysuch Governmental Authority evidencing such payment, a copy of the return reportingsuch payment or other evidence of such payment reasonably satisfactory to theAdministrative Agent.

 

(e)                                  AnyForeign Lender that is entitled to an exemption from or reduction ofwithholding tax under the law of the jurisdiction in which the Borrower islocated, or any treaty to which such jurisdiction is a party, with respect topayments under this Agreement shall deliver to the Borrower (with a copy to theAdministrative Agent), at the time or times prescribed by applicable law, suchproperly completed and executed documentation prescribed by applicable law orreasonably requested by the Borrower as will permit such payments to be madewithout withholding or at a reduced rate.

 

SECTION 2.17.  Payments Generally; Pro Rata Treatment;Sharing of Set-offs.

 

(a)                                  TheBorrower shall make each payment required to be made by it hereunder (whetherof principal, interest, fees, or of amounts payable under Section 2.14,2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on thedate when due, in immediately available funds, without set-off orcounterclaim.  Any amounts received aftersuch time on any date may, in the discretion of the Administrative Agent, bedeemed to have been received on the next succeeding Business Day for purposesof calculating interest thereon.  Allsuch payments shall be made to the Administrative Agent at its offices at OneKiernan Plaza, Albany, New York, except that payments pursuant to Sections2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute anysuch payments received by it for the account of any other Person to theappropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on aday that is not a Business Day, the date for payment shall be extended to thenext succeeding Business Day, and, in the case of any payment accruinginterest, interest thereon shall be payable for the period of suchextension.  All payments hereunder shallbe made in dollars.

 

(b)                                 Ifat any time insufficient funds are received by and available to theAdministrative Agent to pay fully all amounts of principal, interest and feesthen due hereunder, such funds shall be applied (i) first, towards paymentof interest and fees then due hereunder, ratably among the parties entitledthereto in accordance with the amounts of interest and fees then due to suchparties, and (ii) second, towards payment of principal then due hereunder,ratably among the parties entitled thereto in accordance with the amounts ofprincipal then due to such parties.

 

(c)                                  Ifany Lender shall, by exercising any right of set-off or counterclaim orotherwise, obtain payment in respect of any principal of or interest on any ofits Revolving Loans

 

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resulting in such Lender receiving payment of a greater proportion ofthe aggregate amount of its Revolving Loans and accrued interest thereon thanthe proportion received by any other Lender, then the Lender receiving such greaterproportion shall purchase (for cash at face value) participations in theRevolving Loans of other Lenders to the extent necessary so that the benefit ofall such payments shall be shared by the Lenders ratably in accordance with theaggregate amount of principal of and accrued interest on their respectiveRevolving Loans; provided that (i) if any such participations arepurchased and all or any portion of the payment giving rise thereto isrecovered,  such participations shall berescinded and the purchase price restored to the extent of such recovery,without interest, and (ii) the provisions of this paragraph shall not beconstrued to apply to any payment made by the Borrower pursuant to and inaccordance with the express terms of this Agreement or any payment obtained bya Lender as consideration for the assignment of or sale of a participation inany of its Loans to any assignee or participant, other than to the Borrower orany Subsidiary or Affiliate thereof (as to which the provisions of this paragraphshall apply).  The Borrower consents tothe foregoing and agrees, to the extent it may effectively do so underapplicable law, that any Lender acquiring a participation pursuant to theforegoing arrangements may exercise against the Borrower rights of set-off andcounterclaim with respect to such participation as fully as if such Lender werea direct creditor of the Borrower in the amount of such participation.

 

(d)                                 Unlessthe Administrative Agent shall have received notice from the Borrower prior tothe date on which any payment is due to the Administrative Agent for theaccount of the Lenders hereunder that the Borrower will not make such payment,the Administrative Agent may assume that the Borrower has made such payment onsuch date in accordance herewith and may, in reliance upon such assumption,distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, theneach of the Lenders severally agrees to repay to the Administrative Agentforthwith on demand the amount so distributed to such Lender with interestthereon, for each day from and including the date such amount is distributed toit to but excluding the date of payment to the Administrative Agent, at thegreater of the Federal Funds Effective Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules oninterbank compensation.

 

(e)                                  Ifany Lender shall fail to make any payment required to be made by it pursuant toSection 2.06(b) or 2.17(d), then the Administrative Agent may, in itsdiscretion (notwithstanding any contrary provision hereof), apply any amountsthereafter received by the Administrative Agent for the account of such Lenderto satisfy such Lender’s obligations under such Sections until all such unsatisfiedobligations are fully paid.

 

SECTION 2.18.  Mitigation Obligations; Replacement ofLenders.

 

(a)                                  Ifany Lender requests compensation under Section 2.14, or if theBorrower is required to pay any additional amount to any Lender or anyGovernmental Authority for the account of any Lender pursuant to Section 2.16,then such Lender shall use reasonable efforts to designate a different lendingoffice for funding or booking its Loans hereunder or to assign its rights andobligations hereunder to another of its offices, branches or affiliates, if, inthe judgment of such Lender, such designation or assignment (i) wouldeliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, asthe case may be, in the future and (ii) would not subject such Lender toany

 

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unreimbursed cost or expense and would not otherwise be disadvantageousto such Lender.  The Borrower herebyagrees to pay all reasonable costs and expenses incurred by any Lender inconnection with any such designation or assignment.

 

(b)                                 Ifany Lender requests compensation under Section 2.14, or if the Borrower isrequired to pay any additional amount to any Lender or any GovernmentalAuthority for the account of any Lender pursuant to Section 2.16, or ifany Lender defaults in its obligation to fund Loans hereunder, then theBorrower may, at its sole expense and effort, upon notice to such Lender andthe Administrative Agent, require such Lender to assign and delegate, withoutrecourse (in accordance with and subject to the restrictions contained in Section 9.04),all its interests, rights and obligations under this Agreement to an assigneethat shall assume such obligations (which assignee may be another Lender, if aLender accepts such assignment); provided that (i) the Borrowershall have received the prior written consent of the Administrative Agent,which consent shall not unreasonably be withheld, (ii) such Lender shallhave received payment of an amount equal to the outstanding principal of itsLoans, accrued interest thereon, accrued fees and all other amounts payable toit hereunder, from the assignee (to the extent of such outstanding principaland accrued interest and fees) or the Borrower (in the case of all otheramounts) and (iii) in the case of any such assignment resulting from aclaim for compensation under Section 2.14 or payments required to be madepursuant to Section 2.16, such assignment will result in a reduction insuch compensation or payments.  A Lendershall not be required to make any such assignment and delegation if, priorthereto, as a result of a waiver by such Lender or otherwise, the circumstancesentitling the Borrower to require such assignment and delegation cease toapply.

 

SECTION 2.19.  Lettersof Credit.  Letters of Credit issuedhereunder shall be issued in accordance with, and subject to the terms andprovisions of, this Section 2.19.

 

(a).                               Stated Expiry Date.  EachLetter of Credit shall by its terms be stated to expire on a date (its “StatedExpiry Date”) no later than the earlier to occur of (x) unless otherwiseagreed to by the Issuer in its sole discretion, the first anniversary of itsdate of issuance (provided that (i) any Letter of Credit with aone-year term may provide for the renewal thereof for additional one-yearperiods) and (y) the date that is five Business Days prior to the RevolvingCredit Termination Date.

 

(b).                              Procedure for Issuance of Letter of Credit.  TheBorrower may from time to time request that the Issuer issue a Letter of Creditby delivering to the Issuer at its address for notices specified herein anApplication therefor, completed to the satisfaction of the Issuer, and suchother certificates, documents and other papers and information as the Issuermay request.  Upon receipt of anyApplication, the Issuer will process such Application and the certificates,documents and other papers and information delivered to it in connectiontherewith in accordance with its customary procedures and shall promptly issuethe Letter of Credit requested thereby (but in no event shall the Issuer berequired to issue any Letter of Credit earlier than three Business Days afterits receipt of the Application therefor and all such other certificates,documents and other papers and information relating thereto) by issuing theoriginal of such Letter of Credit to the beneficiary thereof or as otherwisemay be agreed to by the Issuer and the Borrower.  The Issuer shall furnish a copy of suchLetter of Credit to the Borrower promptly following the issuance thereof.  The Issuer shall promptly

 

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furnishto the Administrative Agent, which shall in turn promptly furnish to theLenders, notice of the issuance of each Letter of Credit (including the amountthereof).

 

(c).                               Letter of Credit Fees and Other Charges.  Inaddition to any fee payable under Section 2.11 hereof, the Borrower shallpay or reimburse the Issuer for such normal and customary costs and expenses asare incurred or charged by the Issuer in issuing, negotiating, effectingpayment under, amending or otherwise administering any Letter of Credit whichcosts and expenses shall be shared with the Lenders on a pro-rata basis.

 

(d).                              L/C Participations.  (i) TheIssuer irrevocably agrees to grant and hereby grants to each L/C Participant,and, to induce the Issuer to issue Letters of Credit hereunder, each L/CParticipant irrevocably agrees to accept and purchase and hereby accepts andpurchases from the Issuer, on the terms and conditions hereinafter stated, forsuch L/C Participant’s own account and risk an undivided interest equal to suchL/C Participant’s percentage in the Issuer’s obligations and rights under eachLetter of Credit issued hereunder and the amount of each draft paid by theIssuer thereunder.  Each L/C Participantunconditionally and irrevocably agrees with the Issuer that, if a draft is paidunder any Letter of Credit for which the Issuer is not reimbursed in full bythe Borrower in accordance with the terms of this Agreement, such L/C Participantshall pay to the Issuer upon demand at the Issuer’s address for noticesspecified herein an amount equal to such L/C Participant’s percentage of theamount of such draft, or any part thereof, that is not so reimbursed.

 

(ii)                                  If any amount required to be paid by any L/CParticipant to the Issuer pursuant to clause (i) in respect of anyunreimbursed portion of any payment made by the Issuer under any Letter ofCredit is paid to the Issuer within three Business Days after the date suchpayment is due, such L/C Participant shall pay to the Issuer on demand anamount equal to the product of (x) such amount, times (y) the dailyaverage Federal Funds Effective Rate during the period from and including thedate such payment is required to the date on which such payment is immediatelyavailable to the Issuer, times (z) a fraction the numerator of which isthe number of days that elapse during such period and the denominator of whichis 360.  If any such amount required tobe paid by any L/C Participant pursuant to clause (i) is not madeavailable to the Issuer by such L/C Participant within three Business Daysafter the date such payment is due, the Issuer shall be entitled to recoverfrom such L/C Participant, on demand, such amount with interest thereon calculatedfrom such due date at the rate per annum applicable to Revolving Loans.  A certificate of the Issuer submitted to anyL/C Participant with respect to any amounts owing under this Section shallbe conclusive in the absence of manifest error.

 

(iii)                               Whenever, at any time after the Issuer hasmade payment under any Letter of Credit and has received from any L/CParticipant its prorata share of such payment in accordance withclause (i), the Issuer receives any payment related to such Letter ofCredit (whether directly from the Borrower or otherwise, including proceeds ofcollateral applied thereto by the Issuer), or any payment of interest onaccount thereof, the Issuer will distribute to such L/C Participant its prorata share thereof; provided, however, that in the eventthat any such payment received by the Issuer shall be required to be returnedby the Issuer, such L/C Participant shall return to the Issuer the portionthereof previously distributed by the Issuer to it.

 

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(e).                               Letter of Credit Payments.  Ifany draft shall be presented for payment under any Letter of Credit, the Issuershall promptly notify the Borrower of the date (the “Disbursement Date”)such payment (each such payment, a “Disbursement”) shall be made and theamount thereof.  The responsibility ofthe Issuer to the Borrower in connection with any draft presented for paymentunder any Letter of Credit shall, in addition to any payment obligation expresslyprovided for in such Letter of Credit, be limited to determining that thedocuments (including each draft) delivered under such Letter of Credit inconnection with such presentment are substantially in conformity with suchLetter of Credit.

 

(f).                                 Reimbursement Obligation of the Borrower.  TheBorrower agrees to reimburse the Issuer on each date on which the Issuernotifies the Borrower of the date and amount of a draft presented under anyLetter of Credit and paid by the Issuer for the amount of (a) such draftso paid and (b) any taxes, fees, charges or other costs or expensesincurred by the Issuer in connection with such payment.  Each such payment shall be made to the Issuerat its address for notices specified herein in Dollars and in immediatelyavailable funds.  Interest shall be payableon any and all amounts due by the Borrower under this Section from theDisbursement Date until payment in full at the rate applicable thereto setforth in Section 2.12 hereof. Without limiting in any way the foregoing and notwithstanding anything tothe contrary contained herein or in any Application, the Borrower herebyacknowledges and agrees that it shall be obligated to reimburse the Issuer uponeach Disbursement of a Letter of Credit, and it shall be deemed to be theobligor for purposes of each Letter of Credit issued hereunder (whether theaccount party on such Letter of Credit is the Borrower or any Subsidiary of theBorrower).

 

(g).                              Obligations Absolute, etc.  (i) TheBorrower’s obligations under this Section 2.19 shall be absolute and unconditionalunder any and all circumstances and irrespective of any setoff, counterclaim ordefense to payment that the Borrower may have or have had against the Issuer,any beneficiary of a Letter of Credit or any other Person, including anydefense based upon the failure of any Disbursement to conform to the terms ofthe applicable Letter of Credit (if, in the Issuer’s good faith opinion, suchDisbursement is determined to be appropriate) or any non-application ormisapplication by the beneficiary of the proceeds of such Letter of Credit; provided,however, that after paying in full its Reimbursement Obligationhereunder, nothing herein shall adversely affect the right of the Borrower tocommence any proceeding against the Issuer for any wrongful Disbursement madeby the Issuer under a Letter of Credit as a result of acts or omissionsconstituting gross negligence or willful misconduct on the part of the Issuer.

 

(ii)                                  The Borrower, each other Obligor and, to theextent set forth in Section 2.19 (d) hereof, each L/C Participant,shall assume all risks of the acts, omissions or misuse of any Letter of Creditby the beneficiary thereof.  The Issuershall not (except to the extent of its own gross negligence or wilful misconduct)be responsible or liable for, and the Borrower’s Reimbursement Obligationsshall not be affected by, any of the following:

 

(x)                                   the form, validity, sufficiency, accuracy,genuineness or legal effect of any Letter of Credit or any document submittedby any party in connection with the application for and issuance of a Letter ofCredit, even if it should in fact prove to be in any or all respects invalid,insufficient, inaccurate, fraudulent or forged;

 

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(y)                                 the form, validity, sufficiency, accuracy,genuineness or legal effect of any instrument transferring or assigning orpurporting to transfer or assign a Letter of Credit or the rights or benefitsthereunder or the proceeds thereof in whole or in part, which may prove to beinvalid or ineffective for any reason;

 

(z)                                   failure of the beneficiary to comply fully withconditions required in order to demand payment under a Letter of Credit;

 

(aa)                            any dispute between or among any Obligor and anybeneficiary of any Letter of Credit or any other party to which such Letter ofCredit may be transferred or any claims whatsoever of any Obligor against anybeneficiary of such Letter of Credit or any such transferee;

 

(bb)                          errors, omissions, interruptions or delays intransmission, dispatch or delivery of any message or advice, howevertransmitted, in connection with any Letter of Credit, except for errors oromissions found by a final and nonappealable decision of a court of competentjurisdiction to have resulted from the gross negligence or willful misconductof the Issuer; or

 

(cc)                            any loss or delay in the transmission orotherwise of any document or draft required in order to make a Disbursementunder a Letter of Credit.

 

Noneof the foregoing shall affect, impair or prevent the vesting of any of the rightsor powers granted to the Issuer or any L/C Participant hereunder.  In furtherance and not in limitation orderogation of any of the foregoing, the Borrower agrees that any action takenor omitted by the Issuer under or in connection with any Letter of Credit orthe related drafts or documents, if done in the absence of gross negligence orwillful misconduct and in accordance with the standards of care specified inthe Uniform Commercial Code of the State of New York, shall be binding on theBorrower and shall not result in any liability of the Issuer to the Borrower.

 

(h).                              Deemed Disbursements.  Uponthe occurrence and during the continuation of an Event of Default under clause (i) ofArticle VII hereof:

 

(i)                                     the aggregate Stated Amount of all Letters ofCredit shall, without demand upon or notice to the Borrower or any otherPerson, be deemed to have been paid or disbursed by the Issuers of such Lettersof Credit (notwithstanding that such amount may not in fact have been paid ordisbursed); and

 

(ii)                                  the Borrower shall be immediately obligatedto reimburse the Issuer for the amount deemed to have been so paid or disbursedby such Issuer.

 

Amountspayable by the Borrower pursuant to this Section shall be deposited inimmediately available funds with the Administrative Agent and held ascollateral security for the Reimbursement Obligations. When all Events ofDefault giving rise to the deemed disbursements under this

 

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Section havebeen cured or waived the Administrative Agent shall return to the Borrower allamounts then on deposit with the Administrative Agent pursuant to this Section whichhave not been applied to the satisfaction of the Reimbursement Obligations.

 

(i).                                  Applications.  Tothe extent that any provision of any Application related to any Letter ofCredit is inconsistent with the provisions of this Section 2.19, theprovisions of this Section 2.19 shall apply.

 

ARTICLE III

 

Representations and Warranties

 

The Borrower and the Subsidiaries, including the Guarantors, representand warrant to the Lenders that:

 

SECTION 3.01.  Organization; Powers.  Each of the Borrower, and the Subsidiaries isduly organized, validly existing and in good standing under the laws of thejurisdiction of its organization, has all requisite power and authority tocarry on its business as now conducted and, except where the failure to do so,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect, is qualified to do business in, and is in goodstanding in, every jurisdiction where such qualification is required.

 

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within the Borrower’sand the Guarantors’ corporate powers and have been duly authorized by allnecessary corporate and, if required, stockholder action.  This Agreement has been duly executed anddelivered by the Borrower and constitutes a legal, valid and binding obligationof the Borrower and/or Guarantor, enforceable in accordance with its terms,subject to applicable bankruptcy, insolvency, reorganization, moratorium orother laws affecting creditors’ rights generally and subject to generalprinciples of equity, regardless of whether considered in a proceeding inequity or at law.

 

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do not require anyconsent or approval of, registration or filing with, or any other action by,any Governmental Authority, except such as have been obtained or made and arein full force and effect, (b) will not violate any applicable law orregulation or the Organic Documents of the Borrower, or any of its Subsidiariesor any order of any Governmental Authority, (c) will not violate or resultin a default under any indenture, agreement or other instrument binding uponthe Borrower, or any of its Subsidiaries or its assets, or give rise to a rightthereunder to require any payment to be made by the Borrower, each Guarantor orany of its Subsidiaries, and (d) will not result in the creation or impositionof any Lien on any asset of the Borrower, or any of its Subsidiaries.

 

SECTION 3.04.  Financial Condition; No Material AdverseChange.

 

(a)                                  TheBorrower has heretofore furnished to the Lenders its consolidated balance sheetand statements of income, stockholders equity and cash flows (i) as of andfor the fiscal year

 

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ended December 31, 2001, with an unqualified audit opinion issuedby PricewaterhouseCoopers LLP, independent public accountants, and (ii) asof and for the fiscal quarter and the portion of the fiscal year ended September 30,  2002, certified by its chief financialofficer, treasurer or controller.  Suchfinancial statements present fairly, in all material respects, the financialposition and results of operations and cash flows of the Borrower and itsconsolidated Subsidiaries as of such dates and for such periods in accordancewith GAAP, subject to year-end audit adjustments and the absence of footnotesin the case of the statements referred to in clause (ii) above.

 

(b)                                 SinceSeptember 30, 2002, there has been no material adverse change in thebusiness, assets, operations, prospects or condition, financial or otherwise,of the Borrower and its Subsidiaries, taken as a whole.

 

SECTION 3.05.  Properties.

 

(a)                                  Each of the Borrower and the Subsidiaries has goodtitle to, or valid leasehold interests in, all its real and personal propertymaterial to its business, except for minor defects in title that do notinterfere with its ability to conduct its business as currently conducted or toutilize such properties for their intended purposes.

 

(b)                                 Eachof the Borrower and the Subsidiaries owns, or is licensed to use, alltrademarks, tradenames, copyrights, patents and other intellectual propertymaterial to its business, and the use thereof by the Borrower and theSubsidiaries does not infringe upon the rights of any other Person, except forany such infringements that, individually or in the aggregate, could notreasonably be expected to result in a Material Adverse Effect or infringementswhich are being challenged by the Borrower and which are disclosed in thefinancial statements of the Borrower.

 

SECTION 3.06.  Litigation and Environmental Matters.

 

(a)                                  There are no actions, suits or proceedings by orbefore any arbitrator or Governmental Authority pending against or, to theknowledge of the Borrower, threatened against or affecting the Borrower or anyof the Subsidiaries (i) as to which there is a reasonable possibility ofan adverse determination and that, if adversely determined, could reasonably beexpected, individually or in the aggregate, to result in a Material AdverseEffect (other than the Disclosed Matters) and pending patent challengesmaintained against the Borrower’s patents as disclosed in the financialstatements of the Borrower or (ii) that involve this Agreement or theTransactions.

 

(b)                                 Exceptfor the Disclosed Matters and except with respect to any other matters that,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect, neither the Borrower nor any of the Subsidiaries (i) tothe best of the knowledge and belief of the officer executing this Agreement onbehalf of the Borrower, has failed to comply with any Environmental Law or toobtain, maintain or comply with any permit, license or other approval requiredunder any Environmental Law, (ii) has become subject to any EnvironmentalLiability, (iii) has received notice of any claim with respect to anyEnvironmental Liability or (iv) knows of any basis for any EnvironmentalLiability.

 

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(c)                                  Sincethe date of this Agreement, there has been no change in the status of theDisclosed Matters that, individually or in the aggregate, has resulted in, ormaterially increased the likelihood of, a Material Adverse Effect.

 

SECTION 3.07.  Compliance with Laws and Agreements.  To the best of the knowledge and belief ofthe officer executing this Agreement on behalf of the Borrower, each of theBorrower and the Subsidiaries is in material compliance with all laws,regulations and orders of any Governmental Authority applicable to it or itsproperty and all indentures, agreements and other instruments binding upon itor its property, except where the failure to do so, individually or in theaggregate, could not reasonably be expected to result in a Material AdverseEffect.  No Event of Default Default hasoccurred and is continuing.

 

SECTION 3.08.  Investment and Holding Company Status.  Neither the Borrower nor any of theSubsidiaries is (a) an “investment company” as defined in, or subject toregulation under, the Investment Company Act of 1940 or (b) a “holdingcompany” as defined in, or subject to regulation under, the Public UtilityHolding Company Act of 1935.

 

SECTION 3.09.  Taxes. Each of the Borrower and the Subsidiaries has timely filed or caused tobe filed all Tax returns and reports required to have been filed and has paidor caused to be paid all Taxes required to have been paid by it, except (a) Taxesthat are being contested in good faith by appropriate proceedings and for whichthe Borrower or such Subsidiary, as applicable, has set aside on its booksadequate reserves or (b) to the extent that the failure to do so could notreasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10.  ERISA. Neither an ERISA Event hasoccurred during the five-year period prior to the date on which thisrepresentation is made or deemed made with respect to any Plan, and each Plan hascomplied in all material respects with the applicable provisions of ERISA andthe Code.  No termination of a SingleEmployer Plan has occurred, and no Lien in favor of the PBGC or a Plan hasarisen, during such five-year period. The present value of all accrued benefits under each Single EmployerPlan (based on those assumptions used to fund such Plans) did not, as of thelast annual valuation date prior to the date on which this representation ismade or deemed made, exceed the value of the assets of such Plan allocable tosuch accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had acomplete or partial withdrawal from any Multiemployer Plan that has resulted orcould reasonably be expected to result in a material liability under ERISA, andneither the Borrower nor any Commonly Controlled Entity would become subject toany material liability under ERISA if the Borrower or any such CommonlyControlled Entity were to withdraw completely from all Multiemployer Plans asof the valuation date most closely preceding the date on which thisrepresentation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

 

SECTION 3.11.  Disclosure.  To the best of the Borrower’s knowledge andbelief, the Borrower has disclosed to the Lenders all agreements, instrumentsand corporate or other restrictions to which it or any of its Subsidiaries issubject, and all other matters known to it, that, individually or in theaggregate, could reasonably be expected to result in a Material AdverseEffect.  Neither the InformationMemorandum nor any of the other reports, financial statements, certificates orother

 

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information furnished by or on behalf of the Borrower to theAdministrative Agent or any Lender in connection with the negotiation of thisAgreement or delivered hereunder (as modified or supplemented by otherinformation so furnished) contains any material misstatement of fact or omitsto state any material fact necessary to make the statements therein, in thelight of the circumstances under which they were made, not misleading; providedthat, with respect to projected financial information, the Borrower representsonly that such information was prepared in good faith based upon assumptionsbelieved to be reasonable at the time.

 

SECTION 3.12.  Subsidiaries.  Set forth in Schedule 3.12 is a completeand accurate list of all of the Subsidiaries of the Borrower and theGuarantors.  All of the outstandingcapital stock of all classes of the Subsidiaries has been validly issued, isfully paid and non-assessable, and is owned by the Borrower and/or one or moreof the Guarantors, free and clear of all mortgages, deeds of trust, pledges,liens, security interests and other charges or encumbrances.

 

SECTION 3.13.  Solvency.  The Borrower and each Subsidiary is Solventand has not: (i) filed a petition seeking relief under any provision ofany bankruptcy, reorganization, arrangement or dissolution law of anyjurisdiction; (ii) made an assignment for the benefit of creditors; (iii) hada receiver, custodian, liquidator or trustee of their assets appointed by courtorder or otherwise; or (iv) failed to pay or admitted in writing theirinability to pay debts generally as they become due.

 

SECTION 3.14.  Fiscal Year.  The Borrower’s and each Subsidiary’s FiscalYear currently end as of December 31st.

 

SECTION 3.15  FederalRegulations.  No part of the proceeds of any Loans will beused for “buying” or “carrying” any “margin stock” within the respectivemeanings of each of the quoted terms under Regulation U as now and from time totime hereafter in effect or for any purpose that violates the provisions of theRegulations of the Board.  If requestedby any Lender or the Administrative Agent, the Borrower will furnish to theAdministrative Agent and each Lender a statement to the foregoing effect inconformity with the requirements of FR Form G-3 or FR Form U-1, asapplicable, referred to in Regulation U.

 

SECTION 3.16  Labor Matters.  Except as, in the aggregate, would notreasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labordisputes against the Borrower or any of its Subsidiaries pending or, to theknowledge of the Borrower, threatened; (b) hours worked by and paymentmade to employees of the Borrower and its Subsidiaries while employed by theBorrower and its Subsidiaries have not been in violation of the Fair LaborStandards Act or any other applicable Requirement of Law dealing with suchmatters; and (c) all payments due from the Borrower or any of itsSubsidiaries on account of employee health and welfare insurance have been paidor accrued as a liability on the books of the Borrower or the relevantSubsidiary in accordance with ERISA.

 

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ARTICLE IV

 

Conditions

 

SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loanshereunder shall not become effective until the date on which each of thefollowing conditions is satisfied (or waived in accordance with Section 9.02):

 

(a)                                  TheAdministrative Agent shall have received from each party hereto either (i) acounterpart of this Agreement signed on behalf of such party or (ii) writtenevidence satisfactory to the Administrative Agent (which may include telecopytransmission of a signed signature page of this Agreement) that such partyhas signed a counterpart of this Agreement.

 

(b)                                 TheAdministrative Agent shall have received from such Guarantor either (i) theexecuted Guaranty or (ii) written evidence satisfactory to theAdministrative Agent that each Guarantor has signed the Guaranty.

 

(c)                                  TheAdministrative Agent shall have received a favorable opinion (addressed to theAdministrative Agent and the Lenders and dated the Effective Date) of Segel,Goldman, Mazzotta & Siegel, P.C., counsel for the Borrower and theGuarantors covering legal issues set forth in Exhibit C and covering suchother matters relating to the Borrower and its Subsidiaries, this Agreement orthe Transactions as the Required Lenders shall reasonably request.  The Borrower hereby requests such counsel todeliver such opinion.

 

(d)                                 TheAdministrative Agent shall have received such documents and certificates as theAdministrative Agent or its counsel may reasonably request relating to theorganization, existence and good standing of the Borrower and its Subsidiaries,the authorization of the Transactions and any other legal matters relating tothe Borrower, its Subsidiaries, this Agreement or the Transactions, all in formand substance satisfactory to the Administrative Agent and its counsel.

 

(e)                                  The Administrative Agentshall have received all fees and other amounts due and payable on or prior tothe Effective Date, including, (i) a fee in the amount of $30,000.00 fordistribution to the Lenders on a pro-rata basis and (ii) to the extentinvoiced, reimbursement or payment of all out-of-pocket expenses required to bereimbursed or paid by the Borrower hereunder.

 

(f)                                    The following transactions shall have beenconsummated, in each case on terms and conditions reasonably satisfactory tothe Lenders:

 

(i)                                                 the Target Acquisition shall be consummatedon the Closing Date and the aggregate purchase price for such shall not exceed$30,000,000 ; and

 

(ii)                                              the Administrative Agent shall have receivedsatisfactory evidence that, on the Closing Date, (x) all Indebtednessidentified on Schedule 4.01 hereof shall be paid in full and allcommitments thereunder shall be terminated and (y) all Liens securingpayment of said Indebtedness shall be released, in form and substance 

 

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satisfactoryto the Administrative Agent, and receipt of all Uniform Commercial Code Form UCC-3termination statements, terminations of security interests in intellectualproperty or other instruments as may be suitable or appropriate in connectionwith the release of any such Liens.

 

(g)                                 The Lenders shall have received projectionsfor the next succeeding five (5) year period as prepared by the Borrowerand in form and substance satisfactory to the Lenders.

 

SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loanon the occasion of any Borrowing is subject to the satisfaction of thefollowing conditions:

 

(a)                                  Therepresentations and warranties of the Borrower and the Guarantors set forth inthis Agreement, including the material adverse change and litigationrepresentations, shall be true and correct on and as of the date of suchBorrowing.

 

(b)                                 Atthe time of and immediately after giving effect to such Borrowing, no Defaultshall have occurred and be continuing.

 

Each Borrowing shall be deemed to constitute a representation andwarranty by the Borrower and the Guarantors on the date thereof as to thematters specified in paragraphs (a) and (b) of this Section.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principalof and interest on each Loan and all fees payable hereunder shall have beenpaid in full, the Borrower and each of its Subsidiaries, including theGuarantors, covenant and agree with the Lenders that:

 

SECTION 5.01.  Financial Statements; Ratings Change andOther Information.  The Borrower willfurnish to the Administrative Agent and each Lender:

 

(a)                                  within120 days after the end of each fiscal year of the Borrower, its auditedconsolidated balance sheet and related statements of operations, stockholders’equity and cash flows as of the end of and for such year, setting forth in eachcase in comparative form the figures for the previous fiscal year, all reportedon by PricewaterhouseCoopers LLP or other independent public accountants ofrecognized national standing (without a “going concern” or like qualificationor exception and without any qualification or exception as to the scope of suchaudit) to the effect that such consolidated financial statements present fairlyin all material respects the financial condition and results of operations ofthe Borrower and its consolidated Subsidiaries on a consolidated basis inaccordance with GAAP consistently applied together with a copy of anymanagement letter issued in connection therewith;

 

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(b)                                 within60 days after the end of each of the first three fiscal quarters of eachfiscal year of the Borrower, its consolidated balance sheet and relatedstatements of operations, stockholders’ equity and cash flows as of the end ofand for such fiscal quarter and the then elapsed portion of the fiscal year,setting forth in each case in comparative form the figures for thecorresponding period or periods of (or, in the case of the balance sheet, as ofthe end of) the previous fiscal year, all certified by one of its FinancialOfficers as presenting fairly in all material respects the financial conditionand results of operations of the Borrower and its consolidated Subsidiaries ona consolidated basis in accordance with GAAP consistently applied, subject tonormal year-end audit adjustments and the absence of footnotes.  Notwithstanding anything to the contrarycontained herein, for the period during which the Borrower is required to file Form 10-Qwith the U.S. Securities and Exchange Commission, the submission of said Form 10-Qin the time period provided in this subsection (b) shall be deemed tosatisfy the requirements of this subsection (b);

 

(c)                                  concurrentlywith any delivery of financial statements under clause (a) or (b) above,a certificate of a Financial Officer of the Borrower (i) verifying to thebest of his knowledge as to whether a material Default has occurred and, if amaterial Default has occurred, specifying the details thereof and any actiontaken or proposed to be taken with respect thereto, (ii) setting forthreasonably detailed calculations demonstrating compliance with Section 6.12and (iii) stating whether any change in GAAP or in the application thereofhas occurred since the date of the audited financial statements referred to in Section 3.04and, if any such change has occurred, specifying the effect of such change onthe financial statements accompanying such certificate;

 

(d)                                 withinsixty (60) days of the end of each Fiscal Year, a one-year projection of theBorrower and the Guarantors, such projection to include an income statement andbalance sheet; and

 

(e)                                  promptlyfollowing any request therefor, such other information regarding theoperations, business affairs and financial condition of the Borrower or anySubsidiary, or compliance with the terms of this Agreement, as theAdministrative Agent or any Lender may reasonably request.

 

SECTION 5.02.  Notices of Material Events.  The Borrower will furnish to theAdministrative Agent and each Lender prompt written notice of the following:

 

(a)                                  theoccurrence and continuance of any material Default;

 

(b)                                 thefiling or commencement of any action, suit or proceeding by or before anyarbitrator or Governmental Authority against or affecting the Borrower or anyERISA Affiliate thereof that, if adversely determined, could reasonably beexpected to result in a Material Adverse Effect;

 

(c)                                  theoccurrence of any ERISA Event that, alone or together with any other ERISAEvents that have occurred, could reasonably be expected to result in liabilityof the Borrower and its Subsidiaries in an aggregate amount exceeding $25,000.00;and

 

(d)                                 anyother development that results in, or could reasonably be expected to resultin, a Material Adverse Effect.

 

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Each notice delivered under this Section shall be accompanied by astatement of a Financial Officer or other executive officer of the Borrowersetting forth the details of the event or development requiring such notice andany action taken or proposed to be taken with respect thereto.

 

SECTION 5.03.  Existence; Conduct of Business.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, do or cause to be done all thingsnecessary to preserve, renew and keep in full force and effect its legalexistence and the rights, licenses, permits, privileges and franchises materialto the conduct of its business; provided that the foregoing shall notprohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.05.

 

SECTION 5.04.  Payment of Obligations.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, pay its obligations, including Taxliabilities, that, if not paid, could result in a Material Adverse Effectbefore the same shall become delinquent or in default, except where (a) thevalidity or amount thereof is being contested in good faith by appropriateproceedings, (b) the Borrower, the Guarantors, or such Subsidiary has setaside on its books adequate reserves with respect thereto in accordance withGAAP and (c) the failure to make payment pending such contest could notreasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.05.  Maintenance of Properties; Insurance.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, (a) keep and maintain all propertymaterial to the conduct of its business in good working order and condition,ordinary wear and tear excepted, and (b) maintain, with financially soundand reputable insurance companies, insurance in such amounts and against suchrisks as are customarily maintained by companies engaged in the same or similarbusinesses operating in the same or similar locations, including, but notlimited to, fire insurance.

 

SECTION 5.06.  Books and Records; Inspection Rights.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, keep proper books of record and accountin which full, true and correct entries are made of all dealings andtransactions in relation to its business and activities.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, permit any representatives designatedby the Administrative Agent or any Lender, upon reasonable prior notice andduring business hours, to visit and inspect its properties, to examine and makeextracts from its books and records, and to discuss its affairs, finances andcondition with its officers and independent accountants, all at such reasonabletimes and as often as reasonably requested.

 

SECTION 5.07.  Compliance with Laws.  The Borrower and the Guarantors will, andwill cause each of its Subsidiaries to, comply with all laws, rules,regulations and orders of any Governmental Authority applicable to it or itsproperty, except where the failure to do so, individually or in the aggregate,could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.08.  Use of Proceeds.  The proceeds of the Loans will be used onlyfor the following corporate purposes:

 

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(a)                                  tofund the Target Acquisition;

 

(b)                                 torefinance the Borrower’s existing senior credit facility and the existingseller’s note held by Amersham (as described on Schedule 6.01 (b) hereto);

 

(c)                                  tosupport issuances of commercial letters of credit, direct pay letters of creditand bankers’ acceptances, all in the ordinary course of the Borrower’sbusiness; and

 

(d)                                 generalworking capital purposes, including Permitted Acquisitions.

 

No part of the proceeds of any Loan will be used, whether directly orindirectly, for any purpose that entails a violation of any of the Regulationsof the Board, including Regulations G, U and X.

 

SECTION 5.09.  Additional Guarantors.  The Borrower will give the AdministrativeAgent prompt written notice of the formation of any new Subsidiary.  Such notice shall be accompanied by aGuaranty in form acceptable to the Administrative Agent and a resolution of theBoard of Directors of such Subsidiary authorizing such Subsidiary to executeand deliver to the Administrative Agent its unconditional written guarantee ofthe Loans and all related obligations of the Borrower to the Lenders andfurther authorizing such Subsidiary to be bound by and comply with all of theterms and provisions of the Credit Agreement to the same extent as theGuarantors.

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal ofand interest on each Loan and all fees payable hereunder have been paid infull, the Borrower and each of its Subsidiaries, including the Guarantors,covenant and agree with the Lenders that:

 

SECTION 6.01  Indebtedness. The Borrower will not create,issue, incur, assume, become liable in respect of or suffer to exist anyIndebtedness, except:

 

(a)                                  Indebtedness in respect of the Obligations;

 

(b)                                 Indebtedness existing as of the EffectiveDate which is identified in Schedule 6.01, and refinancing of suchIndebtedness;

 

(c)                                  unsecured Indebtedness (i) incurred inthe ordinary course of business of the Borrower and its Subsidiaries (includingopen accounts extended by suppliers on normal trade terms in connection withpurchases of goods and services which are not overdue for a period of more than90 days or, if overdue for more than 90 days, as to which a dispute exists andadequate reserves in conformity with GAAP have been established on the books ofthe Borrower or such Subsidiary) and (ii) in respect of performance,surety or appeal bonds provided in the ordinary course of business, butexcluding (in each case), Indebtedness incurred through the borrowing of moneyor Guarantee Obligations in respect thereof;

 

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(d)                                 Indebtedness (i) evidencing the deferredpurchase price of newly acquired property or incurred to finance theacquisition of equipment of the Borrower and its Subsidiaries (pursuant to purchasemoney mortgages or otherwise, whether owed to the seller or a third party) usedin the ordinary course of business of the Borrower and its Subsidiaries (provided,that such Indebtedness is incurred within 60 days of the acquisition of suchproperty), (ii) in respect of Capital Lease Obligations and (iii) underSynthetic Leases; provided, that the aggregate amount of allIndebtedness outstanding pursuant to this clause and clause (f) belowshall not at any time exceed $20,000,000.00;

 

(e)                                  Indebtedness of any Wholly Owned SubsidiaryGuarantor owing to the Borrower or any other Subsidiary, which Indebtednessshall be evidenced by one or more promissory notes in form and substancereasonably satisfactory to the Administrative Agent, duly executed, and shallnot be forgiven or otherwise discharged for any consideration other thanpayment in full or in part in cash (provided, that only the amountrepaid in part shall be discharged);

 

(f)                                    other Indebtedness of the Borrower and itsSubsidiaries provided, that the aggregate amount of all Indebtednessoutstanding pursuant to this clause and clause (d) above shall not at anytime exceed $20,000,000.00; and

 

(g)                                 industrial development revenue bonds issuedon behalf of the Borrower or a Subsidiary and held by the Borrower or aSubsidiary;

 

provided, however, that no Indebtednessotherwise permitted by clauses (d), (e), (f) or (g) shall beassumed or otherwise incurred if an Event of Default has occurred and is thencontinuing or would result therefrom.

 

SECTION 6.02.  Guarantees.  The Borrower and the Guarantors will not, andwill not permit any Subsidiary to guaranty, endorse, become a surety for, orotherwise in any way become or be responsible for obligations of any otherPerson, whether by agreement to purchase the indebtedness of any person, or anagreement for the furnishing of funds, directly or indirectly, through purchaseof goods, supplies, or services, or for the purpose of discharging theindebtedness of any other Person, or otherwise enter into or be a party to anycontract for the purchase of merchandise, materials, supplies or otherproperty; if such contract provides that payment for such merchandise,materials, supplies or other properties shall be made regardless of whetherdelivery of such merchandise, supplies or other property is ever made ortendered, except for:

 

(a)                                  Guaranteesin favor of the Lenders;

 

(b)                                 ExistingGuarantees given to Persons other than the Lenders and set forth in Schedule 6.02and extensions, renewals and replacements of any related Indebtedness that doesnot increase the amount of the Guarantee;

 

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(c)                                  Theendorsement of negotiable instruments for deposit in the normal course ofbusiness;

 

(d)                                 Guaranteesby the Borrower or the Guarantors on behalf of each other or any Subsidiary ofIndebtedness incurred by them in the normal course of business; and

 

(e)                                  Guaranteessecuring aggregate Indebtedness not to exceed $20,000,000.00 provided thatwritten notice thereof has been provided to the Lenders.

 

SECTION 6.03.  Liens. The Borrower and the Guarantors will not, and will not permit anySubsidiary to, create, incur, assume or permit to exist any Lien on anyproperty or asset now owned or hereafter acquired by it, or assign or sell any incomeor revenues (including accounts receivable) or rights in respect of anythereof, except:

 

(a)                                  PermittedEncumbrances;

 

(b)                                 anyLien on any property or asset of the Borrower or any Subsidiary existing on thedate hereof and set forth in Schedule 6.03; provided that (i) suchLien shall not apply to any other property or asset of the Borrower or anySubsidiary and (ii) such Lien shall secure only those obligations which itsecures on the date hereof and extensions, renewals and replacements thereofthat do not increase the outstanding principal amount thereof;

 

(c)                                  anyLien existing on any property or asset prior to the acquisition thereof by theBorrower or any Subsidiary or existing on any property or asset of any Personthat becomes a Subsidiary after the date hereof prior to the time such Personbecomes a Subsidiary; provided that (i) such Lien is not created incontemplation of or in connection with such acquisition or such Person becominga Subsidiary , as the case may be, (ii) such Lien shall not apply to anyother property or assets of the Borrower or any Subsidiary and (iii) suchLien shall secure only those obligations which it secures on the date of suchacquisition or the date such Person becomes a Subsidiary, as the case may beand extensions, renewals and replacements thereof that do not increase theoutstanding principal amount thereof; and

 

(d)                                 Lienson fixed or capital assets acquired, constructed or improved by the Borrower orany Subsidiary; provided that (i) such security interests secureIndebtedness permitted by clause (d) of Section 6.01, (ii) suchsecurity interests and the Indebtedness secured thereby are incurred prior toor within 90 days after such acquisition or the completion of suchconstruction or improvement, (iii) the Indebtedness secured thereby doesnot exceed 100% of the cost of acquiring, constructing or improving such fixedor capital assets and (iv) such security interests shall not apply to anyother property or assets of the Borrower or any Subsidiary.

 

SECTION 6.04  Disposition of Property.  TheBorrower will not, and will not permit any of its Subsidiaries to, dispose ofany of its property, whether now owned or hereafter acquired, or, in the caseof any Subsidiary, issue or sell any shares of such Subsidiary’s CapitalSecurities to any Person, except:

 

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(a)                                  the Disposition of obsolete, worn out orsurplus property in the ordinary course of business;

 

(b)                                 the sale of inventory in the ordinary courseof business;

 

(c)                                  the sale or issuance of any Subsidiary’sCapital Securities to the Borrower or any Wholly Owned Subsidiary Guarantor;and

 

(d)                                 the Disposition of other property having a fair market value not to exceed$20,000,000.00 in the aggregate for any Fiscal Year and $40,000,000.00 in theaggregate when combined with prior Dispositions during the term of thisAgreement not previously consented to by operation of this subsection (d).

 

SECTION 6.05.  Fundamental Changes.

 

(a)                                  TheBorrower will not, and will not permit any Subsidiary to, merge into orconsolidate with any other Person, or permit any other Person to merge into orconsolidate with it, or sell, transfer, lease or otherwise dispose of (in onetransaction or in a series of transactions) all or any substantial part of itsassets, or all or substantially all of the stock of any of its Subsidiaries (ineach case, whether now owned or hereafter acquired), or liquidate or dissolve,except that, if at the time thereof and immediately after giving effect theretono Event of Default shall have occurred and be continuing (i) anySubsidiary may merge into the Borrower in a transaction in which the Borroweris the surviving corporation, (ii) any Subsidiary may merge into anySubsidiary in a transaction in which the surviving entity is a Subsidiary, (iii) anySubsidiary may sell, transfer, lease or otherwise dispose of its assets to theBorrower or to another Subsidiary and (iv) any Subsidiary may liquidate ordissolve or dispose of all or substantially all of its assets upon writtennotice to the Lenders if the Borrower determines in good faith that suchliquidation or dissolution is in the best interests of the Borrower and is notmaterially disadvantageous to the Lenders; provided that any such mergerinvolving a Person that is not a wholly owned Subsidiary immediately prior tosuch merger shall not be permitted unless also permitted by Section 6.06.

 

(b)                                 TheBorrower will not, and will not permit any of its Subsidiaries to, engage toany material extent in any business other than businesses of the type conductedby the Borrower and its Subsidiaries on the date of execution of this Agreementand businesses reasonably related thereto.

 

(c)                                  TheBorrower will not, and will not permit the Guarantors, to alter their capitalstructure except to : (i) acquire and hold treasury stock; (ii) decreasetheir authorized capital stock, provided that such decrease does not result inthe reduction of the capital stock issued by the Borrower and the Guarantors;and (iii) at any time increase the capital stock issued by the Borrowerand the Guarantors.

 

SECTION 6.06.  Investments, Loans, Advances, andAcquisitions.  The Borrower will not,and will not permit any of its Subsidiaries to, purchase, hold or acquire(including pursuant to any merger with any Person that was not a wholly ownedSubsidiary prior to such merger) any

 

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capital stock, evidences of Indebtedness or other securities (includingany option, warrant or other right to acquire any of the foregoing) of, make orpermit to exist any loans or advances to, or make or permit to exist anyinvestment or any other interest in, any other Person, or purchase or otherwiseacquire (in one transaction or a series of transactions) any assets of anyother Person constituting a business unit, except:

 

(a)                                  PermittedInvestments;

 

(b)                                 investmentsby the Borrower existing on the date hereof in the capital stock of itsSubsidiaries;

 

(c)                                  loansor advances between the Borrower and the Guarantors occurring in normal courseof business;

 

(d)                                 loansother than those described in this paragraph, provided that such loans do notexceed the amounts set forth in Schedule 6.06(d) in the aggregate asof the fiscal years set forth in such schedule;

 

(e)                                  investmentsconstituting Permitted Acquisitions; and

 

(f)                                    theacquisition of stock in Organichem Corporation comprising the TargetAcquisition.

 

SECTION 6.07.   Swap Agreements.   The Borrower will not, and will not permitany of its Subsidiaries to, enter into any Swap Agreement, except (a) SwapAgreements entered into to hedge or mitigate risks to which the Borrower or anySubsidiary has actual exposure, (b) Swap Agreements entered into in orderto effectively cap, collar or exchange interest rates (from fixed to floatingrates or otherwise) with respect to any interest-bearing liability orinvestment of the Borrower or any Subsidiary and (c) Swap Agreementsrelated to any Equity Interest but only to the extent that the payments forwhich the Borrower or its Subsidiaries may be obligated under such SwapAgreements (including upon any early termination thereof) are limited toamounts permitted to be paid under Section 6.08.

 

SECTION 6.08.  Restricted Payments.  The Borrower will not, and will not permitany of its Subsidiaries to, declare or make, or agree to pay or make, directlyor indirectly, any Restricted Payment, except (a) the Borrower may declareand pay dividends with respect to its capital stock payable solely (i) inadditional shares of its common stock or (ii) in cash in an amount not toexceed $20,000,000.00 during each fiscal year, (b) Subsidiaries maydeclare and pay dividends ratably with respect to their capital stock, (c) theBorrower may make Restricted Payments pursuant to and in accordance with stock optionplans or other benefit plans for management or employees of the Borrower andits Subsidiaries, and (d) treasury stock purchases not to exceed$30,000,000.00 during each fiscal year thereafter throughout the term of thisAgreement.

 

SECTION 6.09.  Transactions with Affiliates.  The Borrower will not, and will not permitany of its Subsidiaries to, sell, lease or otherwise transfer any property orassets to, or

 

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purchase, lease or otherwise acquire any property or assets from, orotherwise engage in any other transactions with, any of its Affiliates, except (a) inthe ordinary course of business at prices and on terms and conditions not lessfavorable to the Borrower or such Subsidiary than could be obtained on an arm’s-lengthbasis from unrelated third parties, (b) transactions between or among theBorrower and its Subsidiaries not involving any other Affiliate and (c) any Restricted Payment permitted by Section 6.08.

 

SECTION 6.10.  Restrictive Agreements.  The Borrower will not, and will not permitany of its Subsidiaries to, directly or indirectly, enter into, incur or permitto exist any agreement or other arrangement that prohibits, restricts orimposes any condition upon (a) the ability of the Borrower or anySubsidiary to create, incur or permit to exist any Lien upon any of itsproperty or assets, or (b) the ability of any Subsidiary to pay dividendsor other distributions with respect to any shares of its capital stock or tomake or repay loans or advances to the Borrower or any other Subsidiary or toGuarantee Indebtedness of the Borrower or any other Subsidiary; providedthat (i) the foregoing shall not apply to restrictions and conditionsimposed by law or by this Agreement, (ii) the foregoing shall not apply torestrictions and conditions existing on the date hereof identified on Schedule 6.10(but shall apply to any extension or renewal of, or any amendment ormodification expanding the scope of, any such restriction or condition), (iii) theforegoing shall not apply to customary restrictions and conditions contained inagreements relating to the sale of a Subsidiary pending such sale, providedsuch restrictions and conditions apply only to the Subsidiary that is to besold and such sale is permitted hereunder, (iv) clause (a) of theforegoing shall not apply to restrictions or conditions imposed by anyagreement relating to secured Indebtedness permitted by this Agreement if suchrestrictions or conditions apply only to the property or assets securing suchIndebtedness and (v) clause (a) of the foregoing shall not apply tocustomary provisions in leases and other contracts restricting the assignmentthereof.

 

SECTION 6.11.  Fiscal Year.  The Borrower will and the Subsidiaries willnot change their Fiscal Year, except upon a prior written notice to theAdministrative Agent.

 

SECTION 6.12.  Financial Covenants.  The Borrower and the Subsidiaries will not:

 

(a)                                  Permitthe Leverage Ratio to exceed 3.0 to 1.0 as of the close of each Fiscal Quarterof the Borrower based upon the most recent four Fiscal Quarters.

 

(b)                                 Permitthe Operating Cash Flow Coverage Ratio to be less than 1.50 to 1.00 as of theclose of each Fiscal Quarter of the Borrower based upon the most recent fourFiscal Quarters.

 

(c)                                  Permitthe EBIT to Interest Ratio to be less than 3.50 to 1.00 as of the close of eachFiscal Quarter of the Borrower based upon the most recent four Fiscal Quarters.

 

(d)                                 Permitthe Current Ratio to be less than 2.00 to 1.00 at any time.

 

SECTION 6.13  Salesand Leasebacks.  The Borrower will not, and will not permitany of its Subsidiaries to, enter into any arrangement with any Personproviding for the leasing by the

 

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Borroweror any Subsidiary of real or personal property that has been or is to be soldor transferred by the Borrower or such Subsidiary to such Person or to anyother Person to whom funds have been or are to be advanced by such Person onthe security of such property or rental obligations of the Borrower or suchSubsidiary.

 

ARTICLE VII

 

Events of Default

 

If any of the following events (“Events of Default”) shalloccur:

 

(a)           the Borrower orGuarantors shall fail to pay any principal of any Loan or ReimbursementObligation when and as the same shall become due and payable, whether at thedue date thereof or at a date fixed for prepayment thereof;

 

(b)           the Borrower or anyGuarantor shall fail to pay any interest on any Loan or any ReimbursementObligation or any fee or any other amount (other than an amount referred to inclause (a) of this Article) payable under this Agreement, when and as thesame shall become due and payable;

 

(c)           any representationor warranty made or deemed made by or on behalf of the Borrower or Guarantorsin or in connection with this Agreement or any amendment or modification hereofor waiver hereunder, or in any report, certificate, financial statement orother document furnished pursuant to or in connection with this Agreement or anyamendment or modification hereof or waiver hereunder, shall prove to have beenmaterially incorrect when made or deemed made;

 

(d)           the Borrower or anyGuarantors shall fail to observe or perform any covenant, condition oragreement contained in Section 5.03 (with respect to the Borrower’sexistence only) or 5.08 or in Article VI;

 

(e)           the Borrower or anyGuarantor shall fail to observe or perform any covenant, condition or agreementcontained in this Agreement (other than those specified in clause (a), (b) or(d) of this Article), and such failure shall continue unremedied for aperiod of 30 days after notice thereof from the Administrative Agent tothe Borrower (which notice will be given at the request of any Lender) provided,however, that if such default is not capable of being cured within suchthirty (30) day period and the Borrower or such Guarantor is diligentlypursuing a cure, such period to cure shall be extended upon written request foran additional period not to exceed thirty (30) days;

 

(f)            the occurrence ofany event of default under any credit facility now or hereinafter outstandingfrom a Lender to the Borrower or a Guarantor;

 

(g)           any event orcondition occurs that results in any Material Indebtedness becoming due priorto its scheduled maturity or that requires the prepayment, repurchase,redemption or defeasance of a Material Indebtedness in its entirety, prior toits scheduled maturity; provided that

 

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this clause (g) shall not apply to secured Indebtedness thatbecomes due as a result of the voluntary sale or transfer of the property orassets securing such Indebtedness;

 

(h)           an involuntaryproceeding shall be commenced or an involuntary petition shall be filed seeking(i) liquidation, reorganization or other relief in respect of theBorrower, a Guarantor or its debts, or of a substantial part of its assets,under any Federal, state or foreign bankruptcy, insolvency, receivership orsimilar law now or hereafter in effect or (ii) the appointment of areceiver, trustee, custodian, sequestrator, conservator or similar official forthe Borrower, or a Guarantor or for a substantial part of its assets, and, inany such case, such proceeding or petition shall continue undismissed for 60 daysor an order or decree approving or ordering any of the foregoing shall beentered;

 

(i)            the Borrower, orany Guarantor shall (i) voluntarily commence any proceeding or file anypetition seeking liquidation, reorganization or other relief under any Federal,state or foreign bankruptcy, insolvency, receivership or similar law now orhereafter in effect, (ii) consent to the institution of, or fail tocontest in a timely and appropriate manner, any proceeding or petitiondescribed in clause (h) of this Article, (iii) apply for or consentto the appointment of a receiver, trustee, custodian, sequestrator, conservatoror similar official for the Borrower, a Guarantor or for a substantial part ofits assets, (iv) file an answer admitting the material allegations of apetition filed against it in any such proceeding, (v) make a generalassignment for the benefit of creditors or (vi) take any action for thepurpose of effecting any of the foregoing;

 

(j)            the Borroweror aGuarantor shall become unable, admit in writing its inability or fail generallyto pay its debts as they become due;

 

(k)           one or morejudgments for the payment of money in an aggregate amount in excess of$5,000,000.00 shall be rendered against the Borrower or a Guarantor, or anycombination thereof and the same shall remain undischarged for a period of60 consecutive days during which execution shall not be effectivelystayed, or any action shall be legally taken by a judgment creditor to attachor levy upon any assets of the Borrower to enforce any such judgment; or

 

(l)            any Person shall engage in any “prohibitedtransaction” (as defined in Section 406 of ERISA or Section 4975 ofthe Code) involving any Plan after a final determination and exhaustion ofappeals, (ii) any “accumulated funding deficiency” (as defined in Section 302of ERISA), whether or not waived, shall exist with respect to any Plan or anyLien in favor of the PBGC or a Lien shall arise on the assets of the Borroweror any Guarantor, (iii) a Reportable Event shall occur with respect to, orproceedings shall commence to have a trustee appointed, or a trustee shall beappointed, to administer or to terminate, any Single Employer Plan, whichReportable Event results in the “distressed termination” of such Plan forpurposes of Title IV of ERISA, (iv) any Single Employer Plan shallterminate in a “distressed termination” for purposes of Title IV of ERISA, (v) any other event or condition shall occur or exist with respect to a Plan; andin each case in clauses (i) through (iv) above, suchevent or condition, together with all other such events or conditions, if any,could, reasonably be expected to have a Material Adverse Effect;

 

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(m)          any person or groupof persons (within the meaning of Section 13 or 14 of the SecuritiesExchange Act of 1934, as amended) shall have acquired, either directly orindirectly, beneficial ownership (within the meaning of Rule 13d-3promulgated by the Securities and Exchange Commission under said Act) of inexcess of 50% of the outstanding shares of voting stock of the Borrower or,during any period of twelve (12) consecutive calendar months, individuals whowere directors of the Borrower on the first day of such period shall cease toconstitute a majority of the board of directors of the Borrower;

 

 then, and in every such event(other than an event with respect to the Borrower described in clause (h) or(i) of this Article), and at any time thereafter during the continuance ofsuch event, the Administrative Agent may, and at the request of the RequiredLenders shall, by notice to the Borrower, take either or both of the followingactions, at the same or different times:  (i) terminate theCommitments, and thereupon the Commitments shall terminate immediately, and (ii) declarethe Loans then outstanding to be due and payable in whole (or in part, in whichcase any principal not so declared to be due and payable may thereafter bedeclared to be due and payable), and thereupon the principal of the Loans sodeclared to be due and payable, together with accrued interest thereon and allfees and other obligations of the Borrower accrued hereunder (including all amounts of Letter of CreditOutstandings, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder), shallbecome due and payable immediately, without presentment, demand, protest orother notice of any kind, all of which are hereby waived by the Borrower; andin case of any event with respect to the Borrower described in clause (h) or(i) of this Article, the Commitments shall automatically terminate and theprincipal of the Loans then outstanding, together with accrued interest thereonand all fees and other obligations of the Borrower accrued hereunder (including all amounts of Letter of CreditOutstandings, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder), shallautomatically become due and payable, without presentment, demand, protest orother notice of any kind, all of which are hereby waived by the Borrower.

 

ARTICLE VIII

 

The Administrative Agent

 

Each of the Lenders hereby irrevocably appoints the AdministrativeAgent as its agent and authorizes the Administrative Agent to take such actionson its behalf and to exercise such powers as are delegated to theAdministrative Agent by the terms hereof, together with such actions and powersas are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder shall have thesame rights and powers in its capacity as a Lender as any other Lender and mayexercise the same as though it were not the Administrative Agent, and such bankand its Affiliates may accept deposits from, lend money to and generally engagein any kind of business with the Borrower or any Subsidiary or other Affiliatethereof as if it were not the Administrative Agent hereunder.

 

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The Administrative Agent shall not have any duties or obligationsexcept those expressly set forth herein. Without limiting the generality of the foregoing, (a) theAdministrative Agent shall not be subject to any fiduciary or other impliedduties, regardless of whether a Default has occurred and is continuing, (b) theAdministrative Agent shall not have any duty to take any discretionary actionor exercise any discretionary powers, except discretionary rights and powersexpressly contemplated hereby that the Administrative Agent is required toexercise in writing by the Required Lenders (or such other number or percentageof the Lenders as shall be necessary under the circumstances as provided in Section 9.02),and (c) except as expressly set forth herein, the Administrative Agentshall not have any duty to disclose, and shall not be liable for the failure todisclose, any information relating to the Borrower or any of its Subsidiariesthat is communicated to or obtained by the bank serving as Administrative Agentor any of its Affiliates in any capacity.  The Administrative Agent shall not be liablefor any action taken or not taken by it with the consent or at the request ofthe Required Lenders (or such other number or percentage of the Lenders asshall be necessary under the circumstances as provided in Section 9.02) orin the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed notto have knowledge of any Default unless and until written notice thereof isgiven to the Administrative Agent by the Borrower or a Lender, and theAdministrative Agent shall not be responsible for or have any duty to ascertainor inquire into (i) any statement, warranty or representation made in orin connection with this Agreement, (ii) the contents of any certificate,report or other document delivered hereunder or in connection herewith, (iii) theperformance or observance of any of the covenants, agreements or other terms orconditions set forth herein, (iv) the validity, enforceability,effectiveness or genuineness of this Agreement or any other agreement,instrument or document, or (v) the satisfaction of any condition set forthin Article IV or elsewhere herein, other than to confirm receipt of itemsexpressly required to be delivered to the Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall notincur any liability for relying upon, any notice, request, certificate,consent, statement, instrument, document or other writing believed by it to begenuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely uponany statement made to it orally or by telephone and believed by it to be madeby the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult withlegal counsel (who may be counsel for the Borrower), independent accountantsand other experts selected by it, and shall not be liable for any action takenor not taken by it in accordance with the advice of any such counsel,accountants or experts.

 

The Administrative Agent may perform any and all its duties andexercise its rights and powers by or through any one or more sub-agentsappointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and allits duties and exercise its rights and powers through their respective RelatedParties.  The exculpatory provisions ofthe preceding paragraphs shall apply to any such sub-agent and to the RelatedParties of the Administrative Agent and any such sub-agent, and shall apply totheir respective activities in connection with the syndication of the creditfacilities provided for herein as well as activities as Administrative Agent.

 

Subject to the appointment and acceptance of a successor AdministrativeAgent as provided in this paragraph, the Administrative Agent may resign at anytime by notifying the

 

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Lenders, and the Borrower.  Uponany such resignation, the Required Lenders shall have the right, inconsultation with the Borrower, to appoint a successor.  If no successor shall have been so appointedby the Required Lenders and shall have accepted such appointment within30 days after the retiring Administrative Agent gives notice of itsresignation, then the retiring Administrative Agent may, on behalf of theLenders, appoint a successor Administrative Agent which shall be a bank with anoffice in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment asAdministrative Agent hereunder by a successor, such successor shall succeed toand become vested with all the rights, powers, privileges and duties of theretiring Administrative Agent, and the retiring Administrative Agent shall bedischarged from its duties and obligations hereunder.  The fees payable by the Borrower to asuccessor Administrative Agent shall be the same as those payable to itspredecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignationhereunder, the provisions of this Article and Section 9.03 shallcontinue in effect for the benefit of such retiring Administrative Agent, itssub-agents and their respective Related Parties in respect of any actions takenor omitted to be taken by any of them while it was acting as AdministrativeAgent.

 

Each Lender acknowledges that it has, independently and withoutreliance upon the Administrative Agent or any other Lender and based on suchdocuments and information as it has deemed appropriate, made its own credit analysisand decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and withoutreliance upon the Administrative Agent or any other Lender and based on suchdocuments and information as it shall from time to time deem appropriate,continue to make its own decisions in taking or not taking action under orbased upon this Agreement, any related agreement or any document furnishedhereunder or thereunder.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01.  Notices.  Except in the case of notices and othercommunications expressly permitted to be given by telephone, all notices andother communications provided for herein shall be in writing and shall bedelivered by hand or overnight courier service, mailed by certified or registeredmail or sent by telecopy, as follows:

 

(a)           if to the Borroweror any Guarantor, to it at 21 Corporate Circle, P.O. Box 15098, Albany,New York 12212-5098, Chief Financial Officer (Telecopy No. (518) 464-0289);with a copy to Segel, Goldman, Mazzotta & Siegel, P.C., 9 WashingtonSquare, Albany, New York 12205, Attention: Paul J. Goldman, Esq. (TelecopyNo. 518-452-0417);

 

(b)           if to theAdministrative Agent, to Fleet National Bank, Corporate Banking Department,Mail Stop: NY EH 34303D, Peter D. Kiernan Plaza, Albany, New York 12207,Attention of Pamela A. Opperman (Telecopy No. (518) 447-3768); with a copyto Lemery Greisler LLC, 10 Railroad Place, Saratoga Springs, New York 12866,Attention: James A. Carminucci, Esq. (Telecopy No. (518) 581-8823);

 

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(c)           if to JPMorgan ChaseBank, to JPMorgan Chase Bank, 12 Corporate Woods Boulevard, Albany, New York12211, Attention of Dean J. Burns (Telecopy No. (518) 436-9811); with acopy to DeGraff, Foy, Holt-Harris, Kunz & Devine LLP, 90 State Street,Albany, New York 12207, Attention of Terence J. Devine, Esq. (Telecopy No. (518)436-0210);

 

(d)           if to Citizens Bankof Massachusetts, to Citizens Bank of Massachusetts, 28 State Street, Boston,Massachusetts, 02109, Attention of Ann M. Meade (telecopy No. (617) 263-0442);with a copy to Hinckley, Allen & Snyder LLP, 28 State Street, Boston,Massachusetts 02109, Attention of Paula K. Andrews, Esq. (Telecopy No. (617)345-9020);

 

(e)           if to any otherLender, to it at its address (or telecopy number) set forth in itsAdministrative Questionnaire.

 

Any party hereto may change its address or telecopy number for noticesand other communications hereunder by notice to the other parties hereto.  All notices and other communications given toany party hereto in accordance with the provisions of this Agreement shall bedeemed to have been given on the date of receipt.

 

SECTION 9.02.  Waivers; Amendments.

 

(a)           No failure or delayby the Administrative Agent or any Lender in exercising any right or powerhereunder shall operate as a waiver thereof, nor shall any single or partialexercise of any such right or power, or any abandonment or discontinuance ofsteps to enforce such a right or power, preclude any other or further exercisethereof or the exercise of any other right or power.  The rights and remedies of the AdministrativeAgent and the Lenders hereunder are cumulative and are not exclusive of anyrights or remedies that they would otherwise have.  No waiver of any provision of this Agreementor consent to any departure by the Borrower therefrom shall in any event beeffective unless the same shall be permitted by paragraph (b) of thisSection, and then such waiver or consent shall be effective only in thespecific instance and for the purpose for which given.  Without limiting the generality of theforegoing, the making of a Loan shall not be construed as a waiver of anyDefault, regardless of whether the Administrative Agent or any Lender may havehad notice or knowledge of such Default at the time.

 

(b)           Neither thisAgreement nor any provision hereof may be waived, amended or modified exceptpursuant to an agreement or agreements in writing entered into by the Borrowerand the Required Lenders or by the Borrower and the Administrative Agent withthe consent of the Required Lenders; provided that no such agreementshall (i) increase the Commitment of any Lender without the writtenconsent of such Lender, (ii) reduce the principal amount of any Loan orreduce the rate of interest thereon, or reduce any fees payable hereunder,without the written consent of each Lender affected thereby, (iii) postponethe scheduled date of payment of the principal amount of any Loan, or anyinterest thereon, or any fees payable hereunder, or reduce the amount of, waiveor excuse any such payment, or postpone the scheduled date of expiration of anyCommitment, without the written consent of each Lender affected thereby, (iv) changeSection 2.17(b) or (c) in a manner that would alter the pro ratasharing of payments required thereby, without the written consent of

 

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each Lender, (v) change any of the provisions of this Section orthe definition of “Required Lenders” or any other provision hereof specifyingthe number or percentage of Lenders required to waive, amend or modify anyrights hereunder or make any determination or grant any consent hereunder,without the written consent of each Lender; or (vi) release any Guarantorwithout the written consent of each Lender; provided further that no such agreement shall amend, modify orotherwise affect the rights or duties of the Administrative Agent hereunderwithout the prior written consent of the Administrative Agent.

 

SECTION 9.03.  Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrower shallpay (i) all reasonable out-of-pocket expenses incurred by theAdministrative Agent and its Affiliates, including the reasonable fees, chargesand disbursements of counsel for the Administrative Agent, in connection with thesyndication of the credit facilities provided for herein, the preparation andadministration of this Agreement or any amendments, modifications or waivers ofthe provisions hereof (whether or not the transactions contemplated hereby orthereby shall be consummated), and (ii) all out-of-pocket expensesincurred by the Administrative Agent or any Lender, including the fees, chargesand disbursements of any counsel for the Administrative Agent or any Lender, inconnection with the enforcement or protection of its rights in connection withthis Agreement, including its rights under this Section, or in connection withthe Loans made, including all such out-of-pocket expenses incurred during anyworkout, restructuring or negotiations in respect of such Loans.

 

(b)           The Borrower shallindemnify the Administrative Agent, Lender, and each Related Party of any ofthe foregoing Persons (each such Person being called an “Indemnitee”)against, and hold each Indemnitee harmless from, any and all losses, claims,damages, liabilities and related expenses, including the fees, charges anddisbursements of any counsel for any Indemnitee, incurred by or assertedagainst any Indemnitee arising out of, in connection with, or as a result of (i) theexecution or delivery of this Agreement or any agreement or instrumentcontemplated hereby, the performance by the parties hereto of their respectiveobligations hereunder or the consummation of the Transactions or any othertransactions contemplated hereby, (ii) any Loan or the use of the proceedstherefrom, (iii) any actual or alleged presence or release of HazardousMaterials on or from any property owned or operated by the Borrower or any ofits Subsidiaries, or any Environmental Liability related in any way to theBorrower or any of its Subsidiaries, or (iv) any actual or prospectiveclaim, litigation, investigation or proceeding relating to any of theforegoing, whether based on contract, tort or any other theory and regardlessof whether any Indemnitee is a party thereto; provided that suchindemnity shall not, as to any Indemnitee, be available to the extent that suchlosses, claims, damages, liabilities or related expenses are determined by acourt of competent jurisdiction by final and nonappealable judgment to haveresulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c)           To the extent thatthe Borrower fails to pay any amount required to be paid by it to theAdministrative Agent under paragraph (a) or (b) of this Section, eachLender severally agrees to pay to the Administrative Agent, such Lender’sApplicable Percentage (determined as of the time that the applicableunreimbursed expense or indemnity payment is sought) of such unpaid amount; providedthat the unreimbursed expense or indemnified loss, claim, damage, liability orrelated

 

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expense, as the case may be, was incurred by or asserted against theAdministrative Agent in its capacity as such.

 

(d)           To the extentpermitted by applicable law, the Borrower shall not assert, and hereby waives,any claim against any Indemnitee, on any theory of liability, for special,indirect, consequential or punitive damages (as opposed to direct or actualdamages) arising out of, in connection with, or as a result of, this Agreementor any agreement or instrument contemplated hereby, the Transactions, any Loanor the use of the proceeds thereof.

 

(e)           All amounts dueunder this Section shall be payable promptly after written demandtherefor.

 

SECTION 9.04.  Successors and Assigns.

 

 (a)          The provisions of this Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns permitted hereby, except that (i) the Borrower may not assign orotherwise transfer any of its rights or obligations hereunder without the priorwritten consent of each Lender (and any attempted assignment or transfer by theBorrower without such consent shall be null and void) and (ii) no Lendermay assign or otherwise transfer its rights or obligations hereunder except inaccordance with this Section.  Nothing inthis Agreement, expressed or implied, shall be construed to confer upon anyPerson (other than the parties hereto, their respective successors and assignspermitted hereby, Participants (to the extent provided in paragraph (c) ofthis Section) and, to the extent expressly contemplated hereby, the RelatedParties of each of the Administrative Agent and the Lenders) any legal orequitable right, remedy or claim under or by reason of this Agreement.

 

(b)           (i)            Subjectto the conditions set forth in paragraph (b) (ii) below, any Lendermay assign to one or more assignees all or a portion of its rights andobligations under this Agreement (including all or a portion of its Commitmentand the Loan at the time owing to it) with the prior written consent (suchconsent not to be unreasonably withheld) of:

 

(A)          the Borrower, providedthat no consent of the Borrower shall be required for an assignment to aLender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if anEvent of Default has occurred and is continuing, any other assignee; and

 

(B)           the AdministrativeAgent, provided that no consent of the Administrative Agent shall berequired for an assignment to an assignee that is a Lender immediately prior togiving effect to such assignment.

 

(ii)           Assignments shall besubject to the following additional conditions:

 

(A)          except in the case ofan assignment to a Lender or an Affiliate of a Lender or an assignment of theentire remaining amount of the assigning Lender’s Commitment, the amount of theCommitment of the assigning Lender subject to each such assignment (determinedas of the date of the Assignment and Acceptance with respect to such assignmentis delivered to the

 

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Administrative Agent) shall not be less than $1,000,000, unless each ofthe Borrower and the Administrative Agent otherwise consent, provided that nosuch consent of the Borrower shall be required if an Event of Default underclause (a), (b), (h), or (i) of Article VII has occurred and iscontinuing;

 

(B)           each partialassignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement, provided that thissection shall not be construed to prohibit assignment of a proportionatepart of all the assigning Lender’s rights and obligations in respect of one Class ofCommitments or Loans;

 

(C)           the parties to eachassignment shall execute and deliver to the Administrative Agent an Assignmentand Acceptance, together with a processing and recordation fee of $3,500:

 

(D)          the assignee, if itshall not be a Lender, shall deliver to the Administrative Agent anAdministrative Questionnaire; and

 

(E)           in the case of anassignment to a CLO (as defined below), the assigning Lender shall retain thesole right to approve any amendment, modification or waiver of any provision ofthis Agreement, provided that the Assignment and Acceptance between suchLender and such CLO may provide that such Lender will not, without the consentof such CLO, agree to any amendment, modification or waiver described in thefirst proviso to Section 9.02(b) that affects such CLO.

 

 For the purpose of this Section 9.04(b),the terms “Approved Fund” and “CLO” have the following meanings:

 

“Approved Fund” means (a) a CLO and (b) with respectto any Lender that is a fund which invests in bank loans and similar extensionsof credit, any other fund that invests in bank loans and similar extensions ofcredit and is managed by the same investment advisor as such Lender or by anAffiliate of such investment advisor.

 

“CLO” means any entity (whether a corporation, partnership, trust orotherwise) that is engaged in making, purchasing, holding or otherwise investingin bank loans and similar extensions of credit in the ordinary course of itsbusiness and is administered or managed by a Lender or an Affiliate of suchLender.

 

(iii)          Subject toacceptance and recording thereof pursuant to paragraph (b)(iv) of thisSection, from and after the effective date specified in each Assignment andAcceptance the assignee thereunder shall be a party hereto and, to the extentof the interest assigned by such Assignment and Acceptance, have the rights andobligations of a Lender under this Agreement and the assigning Lenderthereunder shall, to the extent of the interest assigned by such Assignment andAcceptance, be released from its obligations under this Agreement (and, in thecase of an Assignment and Acceptance covering all of the assigning Lender’srights and obligations under this Agreement, such Lender shall cease to be aparty hereto but shall continue to be entitled to the benefits of 

 

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Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender or rights or obligations underthis Agreement that does not comply with this Section 9.04 shall betreated for purposes of this Agreement as a sale by such Lender of aparticipation in such rights and obligations in accordance with paragraph (c) ofthis Section.

 

(iv)          The AdministrativeAgent, acting for this purpose as an agent of the Borrower, shall maintain atone of its offices a copy of each Assignment and Acceptance delivered to it anda register for the recordation of the names and addresses of the Lenders, andthe Commitment of, and principal amount of the Loans and LC Disbursements owingto, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent, and the Lenders maytreat each Person whose name is recorded in the Register pursuant to the termshereof as a Lender hereunder for all purposes of this Agreement,notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and anyLender, at any reasonable time and from time to time upon reasonable priornotice.

 

(v)           Upon its receipt ofa duly completed Assignment and Acceptance executed by an assigning Lender andan assignee, the assignee’s completed Administrative Questionnaire (unless theassignee shall already be a Lender hereunder), the processing and recordationfee referred to in this Section, the Administrative Agent shall accept suchAssignment and Acceptance and record the information contained therein in theRegister.  No assignment shall beeffective for purposes of this Agreement unless it has been recorded in theRegister as provided in this paragraph.

 

(c)                                  (i)            Any Lender may, without consent ofthe Borrower, or the Administrative Agent, sell participations to one or morebanks or other entities (a “Participant”) in all or a portion of suchLender’s rights and obligations under this Agreement (including all or aportion of its Commitment and the Loans owing to it); provided that (A) suchLender’s obligations under this Agreement shall remain unchanged, (B) suchLender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (C) the Borrower, the AdministrativeAgent and the other Lenders shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under thisAgreement.  Any agreement or instrumentpursuant to which a Lender sells such a participation shall provide that suchLender shall retain sole right to enforce this Agreement and to approve anyamendment, modification or waiver of any provision of this Agreement; providedthat such an agreement or instrument may provide that such Lender will not,without the consent of the Participant, agree to any amendment, modification orwaiver described in the first proviso to Section 9.02(b) that affectssuch Participant.  Subject to paragraph(c)(ii) of this Section, the Borrower agrees that each Participant shallbe entitled to the benefits of Section 2.14, 2.15, 2.16 and 9.03 to thesame extent as if it were a Lender and had acquired its interest by assignmentpursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitledto the benefits of Section 9.09 as though it were a Lender, provided suchParticipant agrees to be subject to Section 2.17(c) as though it werea Lender.

 

(ii)           A Participant shallnot be entitled to receive any greater payment under Section 2.14 or 2.16than applicable Lender would have been entitled to receive with respect to the

 

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participation sold to such Participant, unless the sale of theparticipation to such Participant is made with the Borrower’s prior writtenconsent.  A Participant that would be aForeign Lender if it were a Lender shall not be entitled to the benefits of Section 2.18unless the Borrower is notified of the participation sold to such Participantand such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as though it were a Lender.

 

(d)           Any Lender may atany time pledge or assign a security interest in all or any portion of itsrights under this Agreement to secure obligations of such Lender, including anypledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shallnot apply to any such pledge or assignment of a security interest; providedthat no such pledge or assignment of a security interest shall release a Lenderfrom any of its obligations hereunder or substitute any such pledgee orassignee for such Lender as a party hereto.

 

SECTION 9.05.  Prior Agreements.  The Borrower, the Guarantors and theirSubsidiaries have previously entered into loan agreements with certain of theLenders.  Existing loan agreements arelisted on Schedule 9.05.  Nothingcontained herein shall be deemed to supersede or alter any term, provision orcondition set forth in any of such existing loan agreements..

 

SECTION 9.06.  Survival.  All covenants, agreements, representationsand warranties made by the Borrower herein and in the certificates or otherinstruments delivered in connection with or pursuant to this Agreement shall beconsidered to have been relied upon by the other parties hereto and shallsurvive the execution and delivery of this Agreement and the making of anyLoans, regardless of any investigation made by any such other party or on itsbehalf and notwithstanding that the Administrative Agent or any Lender may havehad notice or knowledge of any Default or incorrect representation or warrantyat the time any credit is extended hereunder, and shall continue in full forceand effect as long as the principal of or any accrued interest on any Loan orany fee or any other amount payable under this Agreement is outstanding andunpaid and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15, 2.16and 9.03 and Article VII shall survive and remain in full force and effectregardless of the consummation of the transactions contemplated hereby, therepayment of the Loans, the expiration or termination of the Commitments or thetermination of this Agreement or any provision hereof.

 

SECTION 9.07.  Counterparts; Integration; Effectiveness.  This Agreement may be executed incounterparts (and by different parties hereto on different counterparts), eachof which shall constitute an original, but all of which when taken togethershall constitute a single contract.  ThisAgreement and any separate letter agreements with respect to fees payable tothe Administrative Agent constitute the entire contract among the partiesrelating to the subject matter hereof and supersede any and all previousagreements and understandings, oral or written, relating to the subject matterhereof.  Except as provided in Section 4.01,this Agreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have receivedcounterparts hereof which, when taken together, bear the signatures of each ofthe other parties hereto, and thereafter shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signaturepage of this Agreement by telecopy shall be effective as delivery of amanually executed counterpart of this Agreement.

 

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SECTION 9.08.  Severability.  Any provision of this Agreement held to be invalid,illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, beineffective to the extent of such invalidity, illegality or unenforceabilitywithout affecting the validity, legality and enforceability of the remainingprovisions hereof; and the invalidity of a particular provision in a particularjurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 9.09.  Right of Setoff.  The Borrower and the Guarantors hereby grantsto each Lender and each of its Affiliates, a continuing lien, security interestand right of setoff as security for all liabilities and obligations hereunderto such Lender or Affiliate, whether now existing or hereafter arising, uponand against all deposits, credits, collateral and property, now or hereafter inthe possession, custody, safekeeping or control of such Lender or Affiliate, orin transit to any of them.  At any time,without demand or notice (any such notice being expressly waived by theBorrower and the Guarantors), each Lender and each Affiliate may set off thesame or any part thereof and apply the same to any liability or obligation ofthe Borrower and the Guarantors even though unmatured and regardless of theadequacy of any other collateral securing the same.  ANY AND ALL RIGHTS TO REQUIRE SUCH LENDER ORSUCH AFFILIATE TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHERCOLLATERAL WHICH SECURES SAID OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OFSETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWERAND THE GUARANTORS, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

SECTION 9.10.  Governing Law; Jurisdiction; Consent toService of Process.

 

(a)           This Agreement shallbe construed in accordance with and governed by the law of the State of NewYork.

 

(b)           The Borrower herebyirrevocably and unconditionally submits, for itself and its property, to thenonexclusive jurisdiction of the Supreme Court of the State of New York sittingin Albany County and of the United States District Court of the NorthernDistrict of New York, and any appellate court from any thereof, in any actionor proceeding arising out of or relating to this Agreement, or for recognitionor enforcement of any judgment, and each of the parties hereto herebyirrevocably and unconditionally agrees that all claims in respect of any suchaction or proceeding may be heard and determined in such New York Stateor, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that afinal judgment in any such action or proceeding shall be conclusive and may beenforced in other jurisdictions by suit on the judgment or in any other mannerprovided by law.  Nothing in thisAgreement shall affect any right that the Administrative Agent or any Lendermay otherwise have to bring any action or proceeding relating to this Agreementagainst the Borrower or its properties in the courts of any jurisdiction.

 

(c)           The Borrower herebyirrevocably and unconditionally waives, to the fullest extent it may legallyand effectively do so, any objection which it may now or hereafter have to thelaying of venue of any suit, action or proceeding arising out of or relating tothis Agreement in any court referred to in paragraph (b) of thisSection.  Each of the parties hereto herebyirrevocably 

 

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waives, to the fullest extent permitted by law, the defense of aninconvenient forum to the maintenance of such action or proceeding in any suchcourt.

 

(d)           Each party to thisAgreement irrevocably consents to service of process in the manner provided fornotices in Section 9.01.  Nothing inthis Agreement will affect the right of any party to this Agreement to serveprocess in any other manner permitted by law.

 

SECTION 9.11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY MUTUALLY HEREBYKNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY INRESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITHTHIS CREDIT AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUTLIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OFTHE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THELOANS OR ENFORCEMENT OF THIS AGREEMENT, AND AGREE THAT NEITHER PARTY WILL SEEKTO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIALCANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPTAS PROHIBITED BY LAW, THE BORROWER AND THE GUARANTORS HEREBY WAIVE ANY RIGHTEACH MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR INADDITION TO, ACTUAL DAMAGES INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYSFEES.  EACH PARTY HERETO CERTIFIES THATNO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER HAS REPRESENTED, EXPRESSLY OROTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TOENFORCE THE FOREGOING WAIVER.  THISWAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE LOANS.

 

SECTION 9.12.  Headings.  Article and Section headings andthe Table of Contents used herein are for convenience of reference only, arenot part of this Agreement and shall not affect the construction of, or betaken into consideration in interpreting, this Agreement.

 

SECTION 9.13.  Confidentiality.  Each of the Administrative Agent and theLenders agrees to maintain the confidentiality of the Information (as definedbelow), except that Information may be disclosed (a) to its and itsAffiliates’ directors, officers, employees and agents, including accountants,legal counsel and other advisors (it being understood that the Persons to whomsuch disclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential), (b) tothe extent requested by any regulatory authority, (c) to the extentrequired by applicable laws or regulations or by any subpoena or similar legalprocess, (d) to any other party to this Agreement, (e) in connectionwith the exercise of any remedies hereunder or any suit, action or proceedingrelating to this Agreement or the enforcement of rights hereunder, (f) subjectto an agreement containing provisions substantially the same as those of thisSection, to any assignee of or Participant in, or any prospective assignee ofor Participant in, any of its rights or obligations under this Agreement, (g) withthe consent of the Borrower or (h) to the extent such Information (i) becomespublicly available other than as a result of a breach of this Section or

 

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(ii) becomes available to the Administrative Agent or any Lenderon a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information”means all information received from the Borrower relating to the Borrower orits business, other than any such information that is available to theAdministrative Agent or any Lender on a nonconfidential basis prior todisclosure by the Borrower; provided that, in the case of informationreceived from the Borrower after the date hereof, such information is clearlyidentified at the time of delivery as confidential.  Any Person required to maintain the confidentialityof Information as provided in this Section shall be considered to havecomplied with its obligation to do so if such Person has exercised the samedegree of care to maintain the confidentiality of such Information as suchPerson would accord to its own confidential information.

 

SECTION 9.14.  Interest Rate Limitation.  Notwithstanding anything herein to thecontrary, if at any time the interest rate applicable to any Loan, togetherwith all fees, charges and other amounts which are treated as interest on suchLoan under applicable law (collectively the “Charges”), shall exceed themaximum lawful rate (the “Maximum Rate”) which may be contracted for,charged, taken, received or reserved by the Lender holding such Loan inaccordance with applicable law, the rate of interest payable in respect of suchLoan hereunder, together with all Charges payable in respect thereof, shall belimited to the Maximum Rate and, to the extent lawful, the interest and Chargesthat would have been payable in respect of such Loan but were not payable as aresult of the operation of this Section shall be cumulated and theinterest and Charges payable to such Lender in respect of other Loans orperiods shall be increased (but not above the Maximum Rate therefor) until suchcumulated amount, together with interest thereon at the Federal Funds EffectiveRate to the date of repayment, shall have been received by such Lender.

 

SECTION 9.15.  Lost or Damaged Note.  Upon receipt of an affidavit of an officer ofa Lender as to the loss, theft, destruction or mutilation of a note evidencinga Loan or any other security document which is not of public record, and, inthe case of any such loss, theft, destruction or mutilation, upon surrender andcancellation of such note or other security document, the Borrower will issue,in lieu thereof, a replacement note or other security document in the sameprincipal amount thereof and otherwise of like tenor.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beduly executed by their respective authorized officers as of the day and yearfirst above written.

 
|   | ALBANY MOLECULAR RESEARCH, INC.                             |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |
|   | Name:                                                       |   |
|   | Title:                                                      |   |
|   |                                                        |
|   |                                                        |
|   | FLEET NATIONAL BANK, as Lender and as  Administrative Agent |
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |
|   | Name:                                                       |   |
|   | Title:                                                      |   |
|   |                                                        |
|   |                                                        |
|   | JPMORGAN CHASE BANK                                         |
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |
|   | Name:                                                       |   |
|   | Title:                                                      |   |
|   |                                                        |
|   |                                                        |
|   | CITIZENS BANK OF MASSACHUSETTS                              |
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |
|   | Name:                                                       |   |
|   | Title:                                                      |   |
|        |                                                             |  |  |  |  |  |  |  |  |  |

 

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##  

## EXHIBIT A

##  

FORM OF

 

ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Credit Agreement dated as of February      ,2003 (as amended and in effect on the date hereof, the “Credit Agreement”),among Albany Molecular Research, Inc., the Lenders named therein and FleetNational Bank, as Administrative Agent for the Lenders.  Terms defined in the Credit Agreement areused herein with the same meanings.

 

The Assignor named on the reverse hereof hereby sells and assigns,without recourse, to the Assignee named on the reverse hereof, and the Assigneehereby purchases and assumes, without recourse, from the Assignor, effective asof the Assignment Date set forth on the reverse hereof, the interests set forthon the reverse hereof (the “Assigned Interest”) in the Assignor’s rights andobligations under the Credit Agreement, including, without limitation, theinterests set forth on the reverse hereof in the Commitment of the Assignor onthe Assignment Date and Revolving Loans (including Letter of CreditOutstandings), and Term Loans owing to the Assignor which are outstanding onthe Assignment Date, but excluding accrued interest and fees to and excludingthe Assignment Date.  The Assignee herebyacknowledges receipt of a copy of the Credit Agreement.  From and after the Assignment Date (i) theAssignee shall be a party to and be bound by the provisions of the CreditAgreement and, to the extent of the Assigned Interest, have the rights andobligations of a Lender thereunder and (ii) the Assignor shall, to theextent of the Assigned Interest, relinquish its rights and be released from itsobligations under the Credit Agreement.

 

This Assignment and Acceptance is being delivered to the AdministrativeAgent together with (i) if the Assignee is a Foreign Lender, anydocumentation required to be delivered by the Assignee pursuant to Section 2.16(e) ofthe Credit Agreement, duly completed and executed by the Assignee, and (ii) ifthe Assignee is not already a Lender under the Credit Agreement, anAdministrative Questionnaire in the form supplied by the Administrative Agent,duly completed by the Assignee.  TheAssignor shall pay the fee payable to the Administrative Agent pursuant to Section 9.04(b) ofthe Credit Agreement.

 

This Assignment and Acceptance shall be governed by and construed inaccordance with the laws of the State of New York.

 

Date of Assignment:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

 

Assignee’s Address for Notices:

 

A-1

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Effective Date of Assignment

(“Assignment Date”):

 
| **Facility**         | ** ** | **Principal Amount Assigned** | ** ** | **Percentage Assigned of  Facility/Commitment (set forth, to at  least 8 decimals, as a percentage of  the Facility and the aggregate  Commitments of all Lenders  thereunder)** | ** ** |
|----------------------|------------|-------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| Commitment Assigned: |       | $                             |       |                                                                                                                                                                             | %          |
| Revolving Loans:     |       |                          |       |                                                                                                                                                                             |       |
| Term Loans:          |       |                          |       |                                                                                                                                                                             |       |

 

 

The terms set forth above and on the reverse side hereof are herebyagreed to:

 
|   | [Name of Assignor], as Assignor |
|--------|---------------------------------|
|   |                            |
|   |                            |
|   | By:                             |   |   |
|   | Name:                           |
|   | Title:                          |
|   |                            |
|   |                            |
|   | [Name of Assignee], as Assignee |
|   |                            |
|   |                            |
|   | By:                             |   |   |
|   | Name:                           |
|   | Title:                          |
|        |                                 |  |  |  |  |

 

The undersigned hereby consent to the within assignment:

 
| Albany Molecular Research, Inc. | Fleet National Bank,     |
|--------------------------------------|--------------------------|
|                                 | as Administrative Agent, |
|                                 |                     |
| By:                                  |                     |   | By: |   |   |
| Name:                                | Name:                    |
| Title:                               | Title:                   |
|                                      |                          |  |  |  |  |

 

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## EXHIBIT B-1

 

## FORM OF BORROWING REQUEST

 

 

B-1-1

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## EXHIBIT B-2

##  

FORM OF ISSUANCE REQUEST

 

 

B-2-1

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## EXHIBIT C

##  

OPINION OF COUNSEL FOR THE BORROWER

 

 

C-1

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