Document:

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

 

 

 

 

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

  	
   

  

 

i

 

	
  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

  	
   

  

 

ii

 

	
  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

  	
   

  

 

iii

 

	
  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

  	
   

  

 

iv

 

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

 

The parties hereto agree as
follows:

 

ARTICLE I

 

Definitions

 

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

 

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

 

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

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.

 

“Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, (i) Controls or is Controlled by or is
under common Control with the Person specified, (ii) owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or a
Guarantor or any Subsidiary thereof, or (iii) five percent (5%) or more of
the voting stock of which is directly or indirectly beneficially owned or held
by the Borrower or any Guarantor or any Subsidiary thereof; except for purposes
of identifying Affiliates of the Borrower or a Subsidiary, a natural Person
shall only be deemed to be an Affiliate to the extent that such Person owns in
excess of twenty percent (20%) or more of the voting stock of the Borrower or
such Subsidiary.

 

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

 

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

 

 

“Applicable LIBOR Margin”
means, for each of the Revolving Loan and the Term Loan, respectively, the
Applicable Margin set forth below corresponding to the Leverage Ratio most
recently 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 Applicable
Margin resulting from changes in the Leverage Ratio shall become effective on
the date (the “Adjustment Date”) on which financial statements are
delivered 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 each
of the first three Fiscal Quarters of the Borrower or the 120th day
after the end of each Fiscal Year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph.  If any financial statements referred to above
are not delivered within the time periods specified above, then, until such
financial statements are delivered, the Leverage Ratio most recently determined
shall govern subject to retroactive adjustment upon the next succeeding
delivery of said financial statements. 
Each determination of the Leverage Ratio pursuant to this pricing grid
shall be made with respect to the period of the prior four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.

 

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

 

“Approved Fund” has
the 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 is
payable by a member of the Bank Insurance Fund classified as “well-capitalized”
and within supervisory subgroup “B” (or a comparable successor risk
classification) within the meaning of 12 C.F.R. Part 327 (or any successor
provision) to the Federal Deposit Insurance Corporation for insurance by such
Corporation of time deposits made in dollars at the offices of such member in
the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the
Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.

 

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

 

2

 

“Assignment and
Acceptance” means an assignment and acceptance entered into by a Lender and
an 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 any
other form approved by the Administrative Agent.

 

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

 

“Base Rate” when used
in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.

 

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

 

“Borrower” means
ALBANY MOLECULAR RESEARCH, INC., a Delaware corporation.

 

“Borrowing” means
Revolving Loans of the same Type, made, converted or continued on the same date
and, in the case of Eurodollar Loans, as to which a single Interest Period is
in 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” means
in respect of any date that is specified to be subject to adjustment in
accordance with the Following Business Day Convention, a day which commercial
banks settle payment in (i) London, if the payment obligation is
calculated by reference to any LIBOR Rate or (ii) New York City, if the
payment obligation is calculated by reference to the Alternate Base Rate.

 

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

 

“Capital Lease
Obligations” of any Person means the obligations of such Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP, and the amount of such obligations shall be
the 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 voting
or non-voting) of or interests in corporate or capital stock, including without
limitation, shares of preferred

 

3

 

or
preference stock of such Person, (b) all partnership interests (whether
general or limited) of such Person, (c) all membership interests or
limited liability interests in such Person, (d) all other equity or
ownership 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 direct
obligations issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition; (b) certificates of deposit, time deposits,
Eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying
an equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30
days, with respect to securities issued or fully guaranteed or insured by the United
States government; (e) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of
this definition.

 

“Change in Law” means
(a) the adoption of any law, rule or regulation after the date of
this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.14(b), by any lending office of such Lender or by
such 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 or
issued after the date of this Agreement.

 

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

 

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

 

“Code” means the
Internal Revenue Code of 1986, as amended from time to time together with the
regulations promulgated thereunder.

 

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

 

4

 

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

 

“Commonly Controlled
Entity” means an entity, whether or not incorporated, that is under common
control with the Borrower within the meaning of Section 4001 of ERISA or
is part of a group that includes the Borrower and that is treated as a single
employer under Section 414 of the Code.

 

“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability 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 as
or similar to that of such business entity.

 

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

 

“Current Ratio” means
for the Borrower on a consolidated basis with all Subsidiaries, the ratio of (i) Current
Assets to (ii) Current Liabilities plus Revolving Loans
outstanding.

 

“Default” means any
event 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 of
Default.

 

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

 

“Disbursement” is
defined in Section 2.19 (e) hereof.

 

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

 

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

 

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

 

5

 

“Domestic Subsidiary”
means any Subsidiary of the Borrower organized under the laws of any
jurisdiction 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 Net
Income 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 ratio
of (i) EBIT to Interest Expense.

 

“EBITDA” means, for
any period, EBIT for such period, plus the sum (without duplication) of the
amounts for such period included in determining EBIT of (i) depreciation
expense, and (ii) amortization expense, calculated in accordance with
GAAP.

 

“Effective Date”
means the date on which the conditions specified in Section 4.01 are
satisfied (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 or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters.

 

“Environmental Liability”
means any liability, contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines, penalties or indemnities),
of the Borrower or any Subsidiary, including the Guarantors, directly or
indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment
or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

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

 

“ERISA” means the
Employee 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 with
the 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 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

6

 

“ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant
to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any Commonly Controlled Entity
of any liability under Title IV of ERISA with respect to the termination
of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by the Borrower or any Commonly Controlled Entity of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any Commonly
Controlled Entity of any notice, or the receipt by any Multiemployer Plan from
the Borrower or any Commonly Controlled Entity of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

 

“Eurodollar” when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference 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 other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction
in 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 Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.16(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a).

 

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

 

7

 

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

 

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

 

“Fiscal Year” means
any 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 31
of such calendar year.

 

“Following Business Day
Convention” means that an adjustment will be made if that date would
otherwise fall on a day that is not a Business Day so that the date will be the
first following day that is a Business Day.

 

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

 

“Funded Debt” means,
as to any Person, the sum, without duplication, of (a) the aggregate
amount of Indebtedness of the Borrower and its Subsidiaries, on a consolidated
basis, that would be reflected on a consolidated balance sheet of the Borrower
and its Subsidiaries prepared as of the date of determination in accordance
with GAAP, plus (b) the aggregate amount of the cash advances
pursuant to any Synthetic Lease Obligations ; plus (c) the
aggregate amount of Indebtedness of the Borrower and its Subsidiaries relating
to the maximum drawing amount of all letters of credit outstanding and bankers
acceptances plus, (d) Indebtedness of the type referred to in
clauses (a) – (c) hereof of another Person guaranteed by the Borrower
or any of its Subsidiaries..

 

“GAAP” means those
generally accepted accounting principles and practices which are recognized as
such by the American Institute of Certified Public Accountants acting through
its Accounting Principles Board or by the Financial Accounting Standard Board
or through other appropriate boards or committees thereof and which are
consistently applied so as to properly reflect the financial condition, and the
results of operations and changes in financial position, of the Borrower and
its Subsidiaries, except that any change in any accounting principle or practice
approved by the Borrower’s independent certified public accountants, disclosed
in the Borrower’s financial statements and required or permitted to be made by
the Accounting Principles Board or Financial Accounting Standard Board (or
other appropriate board or committee of said Boards) in order to continue as a
generally accepted accounting principle or practice or consistent with existing
generally accepted accounting principles may be so made and shall be recognized
by the Lenders and the Administrative Agent.

 

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

 

8

 

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

 

“Guarantee” of or by
any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; provided, that the term
guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

 

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

 

“Guaranty” means that certain written guaranty
delivered by the Guarantors to the Lenders under the terms of this Credit
Agreement whereby the Guarantors unconditionally, absolutely and irrevocably
guaranty to the Lenders the payment and performance of the Credit Agreement, as
well as all other present and future indebtedness of any name, nature or kind
due or to become due the Lenders by the Borrower.

 

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

 

“Income Tax Expense” shall mean, for any period, all provisions
for taxes based upon Net Income (including, without limitation, any additions
to such taxes, any penalties and interest with respect thereto), calculated in
accordance with GAAP.

 

“Indebtedness” of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services

 

9

 

(excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all
net liabilities of such Person under any Swap Agreements, (j) all Synthetic
Lease Obligations of such Person, (k) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (l) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances. 
The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor.

 

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

 

“Index Debt” means
senior, unsecured, long-term indebtedness for borrowed money of the Borrower
that is not guaranteed by any other Person or subject to any other credit
enhancement.

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

is
one, two, three, six months or one year thereafter, as the Borrower may
elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Loan only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurodollar Loan that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest
Period.  For purposes hereof, the date of
a Loan initially shall be the date on which such Loan is made and, in the case
of a Revolving Loan, thereafter shall be the effective date of the most recent
conversion or continuation of such Loan.

 

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

 

“Issuer” means Fleet
National 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 of
Credit pursuant to Section 2.01 (b) hereof and, with respect to each
Revolving Lender, the obligation of each such Lender to participate in such
Letters 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 may
be 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 the
Persons listed on Schedule 2.01 and 2.02 and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.

 

“Letter of Credit
Outstandings” means, at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit
that 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) the
sum of (i) Funded Debt plus, without duplication, (ii) contingent
obligations for Funded Debt divided by (b) EBITDA.

 

“LIBOR Rate” means
the rate per annum as determined on the basis of the offered rates for deposits
in U.S. Dollars for the applicable Interest Period which appears on the Telerate
page 3750

 

11

 

as
of 11:00 a.m. London time on the day which is two (2) London Banking
Days 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 on
any applicable interest determination date, the LIBOR Rate shall be the rate
(rounded upward if necessary, to the nearest one-hundred thousandth of a
percentage point) determined on the basis of the offered rates for deposits in
U.S. Dollars for the applicable Interest Period which are offered by four major
banks in the London Interbank Market at approximately 11:00 a.m. London
time on the day which is two (2) London Banking Days prior to the first
day of the Interest Period in question as selected by the Lender.  The principal London office of each of the
four major London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate.  If at least
two such quotations are provided, the rate for that date will be the arithmetic
mean of the quotations.  If fewer than
two quotations are provided as requested, then the LIBOR Rate will be
determined on the basis of the rates quoted for loans in U.S. Dollars to
leading European banks for the applicable Interest Period as offered by major
banks in New York City at approximately 11:00 a.m. New York City time on
the day which is two (2) London Banking Days prior to the first day of the
Interest Period in question.  In the
event the Lender is unable to obtain any such quotation as provided above, it
will be deemed that LIBOR pursuant to a Eurodollar Loan cannot be
determined.  Notwithstanding anything to
the contrary set forth herein, in the event the Board of Governors of the
United States Federal Reserve System shall impose a Reserve Percentage with
respect to LIBOR deposits of the Lender, then for any period during which said
Reserve Percentage shall apply, the LIBOR Rate shall equal the rate as
determined above divided by an amount equal to one (1) minus said Reserve
Percentage.

 

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

 

“Loan(s)” means the
loan(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 or
occurrence of whatever nature (including any adverse determination in any
litigation, 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 its
Subsidiaries, 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 or
enforceability of this Agreement or any other Loan document, or the rights or
remedies available to the Administrative Agent or any Lender under any such
Loan document.

 

12

 

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

 

“Moody’s” means Moody’s
Investors 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, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise,
but only as and when received) of such Asset Sale or Recovery Event, net of
attorneys’ fees, accountants’ fees, investment banking fees, amounts required
to be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Asset Sale or
Recovery Event) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of attorneys’ fees, investment banking fees,
accountants’ fees, underwriting discounts and commissions and other customary
fees 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 a
single accounting period and calculated in accordance with GAAP.

 

“Obligations” means
all of the obligations of the Borrower and the Subsidiaries, including the
Guarantors, under this Agreement and the other loan documents, whether for
principal, interest, fees, costs, expenses, taxes, or otherwise and any and all
other obligations of the Borrower and its Subsidiaries, including the
Guarantors, 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 Flow
Coverage Ratio” means for the Borrower on a consolidated basis with all
Subsidiaries the ratio of (i) EBITDA less (ii) cash taxes paid
less (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) Interest
Expense.

 

13

 

“Operating Lease Payments”
means those payments made by the Borrower, its Subsidiaries, including the
Guarantors, for any Fiscal Year, including real estate rents, and any other
lease payments which are not treated for financial statement purposes as
Capital 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 of
incorporation, by-laws, certificate of partnership, partnership agreement, certificate
of formation, limited liability agreement and all shareholder agreements,
voting trusts and similar arrangements applicable to any of such Obligor’s
partnership interests, limited liability company interests or authorized shares
of Capital Securities.

 

“Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement.

 

“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.

 

“Participant” has the
meaning 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 Borrower
from any Person in which each of the following conditions are satisfied:

 

(a)           immediately before and after giving effect to such
acquisition no Default or Event of Default shall have occurred and be
continuing or would result therefrom ;

 

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

 

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

 

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

 

14

 

Subsidiaries through the
Stated Maturity Date for the Term Loans giving pro  forma effect
to such acquisition, based on assumptions reasonably satisfactory to the
Administrative Agent and demonstrating pro forma compliance with all covenants
contained in this Agreement, including those contained in Section 6.12
hereof, in each case, prepared in good faith and in a manner and using such
methodology which is consistent with the most recent financial statements
delivered pursuant to Section 5.01 (b) and in form and substance
reasonably satisfactory to the Administrative Agent;

 

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

 

(f)                                    the Borrower shall have delivered to the
Administrative Agent, at least 20 days prior to the consummation of the
proposed acquisition (unless the Administrative Agent shall otherwise consent
in writing to a shorter period), the Permitted Acquisition Documentation
relating to such acquisition, and such documentation shall be reasonably
satisfactory in form and substance to the Administrative Agent and shall be
accompanied by lien searches, payoff letters and other customary requirements
as the Administrative Agent may reasonably impose, in each case reasonably
satisfactory to the Administrative Agent;

 

(g)                                 the maximum purchase price for such
acquisition (including any Indebtedness to be assumed in connection therewith)
must not exceed $75,000,000.00 and when added to the purchase price with
respect 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 of
such acquisition must be in the same or related line of business to that of the
Borrower or otherwise related to the drug development and discovery business ;
and

 

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

 

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

 

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

 

15

 

“Permitted
Encumbrances” means:

 

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

 

(b)                                 other encumbrances consisting of zoning
restrictions, easements, restrictions on the use of real property, or minor
irregularities in title thereto, which do not arise in connection with the
borrowing of, or in the obligation for the payment of money, and which, in the
aggregate, do not materially impair the use or enjoyment of such property or
assets;

 

(c)                                  involuntary liens including mechanic’s and
materialmen’s liens and liens arising out of judgments and/or awards, in
respect of which the Borrower and/or the Guarantors shall in good faith be
prosecuting an appeal or proceedings for review and in respect of which the
Borrower and/or the Guarantors shall have secured a subsisting stay of
execution pending such appeal or proceeding for review, provided the Borrower
and/or the Guarantors shall have set aside on their books adequate reserves
with respect to such judgment and/or award;

 

(d)                                 liens for taxes, assessments, governmental
charges or levies that are not yet due or are being contested in compliance
with Section 5.04;

 

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

 

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

 

(g)                                 liens securing Indebtedness described in Section 6.01(d) or
6.01(g) hereof; and

 

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

 

“Permitted
Investments” means:

 

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

 

(b)                                 bonds, debentures, notes, participation
certificates or other evidences of indebtedness issued or fully guaranteed by
Farmers Home Administration, Federal National Mortgage Association, Federal
Home Loan Bank System, Federal Home Loan Mortgage Association or any agency or
instrumentality of the United States of America or any other corporation
wholly-owned by the United States of America;

 

16

 

(c)                                  direct and general obligations, to the
payment of the principal of and interest on which the full faith and credit of
the issuer thereof is pledged, of any of the following: any state of the United
States of America, or any political subdivision of such state; provided, that (i) as
to such obligations of a political subdivision, all of the taxable real
property within such political subdivision shall be subject to taxation thereby
to pay such obligations and the interest thereon, without limitation as to rate
or amount, or the revenues of such political subdivision shall be pledged to
pay such obligations and the interest thereon and (ii) at the time of the
purchase of such obligations, such obligations of any such state or political
subdivision are rated in either of the two highest ratings categories of both
S&P and Moody’s;

 

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

 

(e)                                  investments in certificates of deposit,
banker’s acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;

 

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

 

(g)                                 direct obligations of the Federal Reserve
System; and

 

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

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.

 

“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 the
Code or Section 302 of ERISA, and in respect of which the Borrower or any
Commonly Controlled Entity is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Prime
Rate” means the variable per annum rate of interest so designated from time
to time by Fleet National Bank as its prime rate.  The Prime Rate is a reference and does not
necessarily represent the lowest or best rate being charged to any
customer.  Changes in the rate of interest
hereunder resulting from changes in the Prime Rate shall take place immediately
without notice or demand of any kind.

 

17

 

“Recovery
Event” means any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset
of 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 or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

 

“Reimbursement
Obligation” means the obligation of the Borrower to reimburse the Issuer
pursuant to Section 2.19 hereof for amounts drawn under Letters of Credit.

 

“Reinvestment
Notice” means a written notice executed by the Borrower stating that no
Default or Event of Default has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary) intends and expects to
use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire assets useful in its business.

 

“Related
Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

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

 

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

 

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

 

“Reserve
Percentage” means the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against “Euro-currency Liabilities” as
defined in Regulation D

 

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

 

18

 

retirement, acquisition, cancellation or
termination 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 the
Borrower.

 

“Revolving
Extensions of Credit” means as to any Lender at any time, an amount equal
to the sum of (a) the aggregate principal amount of all Revolving Loans
held by such Lender then outstanding plus (b) such Lender’s
percentage of the Letter of Credit Outstandings then outstanding.

 

“Revolving
Loan Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans including the issuance of, or participation in,
Letters of Credit, expressed as an amount representing the maximum aggregate
amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment
may be reduced from time to time pursuant to Section 2.09 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.  The
initial 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 have
assumed its Revolving Loan Commitment, as applicable.  The initial aggregate amount of the Lenders’
Revolving Loan Commitment is $35,000,000.00

 

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

 

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

 

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

 

“Single
Employer Plan” means any Plan that is covered by Title IV of ERISA, but
that is not a Multiemployer Plan.

 

“Solvent”
means, when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the
assets of such Person will, as of such date, exceed the amount of all “liabilities
of such Person, contingent or otherwise”, as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such Person will, as of such date, be greater than the
amount that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they
mature.  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 

 

19

 

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

 

“S &
P” means Standard & Poor’s.

 

“Stated
Amount” 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.

 

“Stated
Maturity Date” means with reference to the Term Loans, the Term Loan
Maturity Date and with reference to the Revolving Loans, the Revolving Credit
Termination Date.

 

“subsidiary”
means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing
more 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 partnership
interests 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 more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

 

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

 

“Swap
Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants 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 other
amounts under any lease (including leases that may be terminated by the lessee
at any time) of any property (whether real, personal or mixed) (i) that is
not a capital lease in accordance with GAAP and (ii) in respect of which
the lessee retains or obtains ownership of the property so leased for federal
income tax purposes, other than any such lease under which such Person is the
lessor.

 

“Target
Acquisition” means the acquisition of the outstanding common stock of
Organichem 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.

 

20

 

“Term
Loan” means the Loans referred to in Section 2.02.

 

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

 

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

 

“Term
Loan Maturity Date” means the date which is five (5) years from the
Effective Date.

 

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

 

“Transactions”
means the execution, delivery and performance by the Borrower of this
Agreement, 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 of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBOR Rate or Alternate Base Rate.

 

“Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Wholly
Owned Subsidiary” means as to any Person, any other Person all of the
Capital Securities of which (other than directors’ qualifying shares required
by law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

 

“Wholly
Owned Subsidiary Guarantor” means any Guarantor that is a Wholly Owned
Subsidiary 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 “Revolving
Loan” or “Term

 

21

 

Loan”) or by Type (e.g., a “Eurodollar
Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan” or
a “Eurodollar Term Loan”).  Borrowings
also may be classified and referred to by Class (e.g., a “Revolving
Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and
Type (e.g., a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03.  Terms
Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules 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 and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

SECTION 1.04.  Accounting
Terms; GAAP.  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.  Revolving
Loan Commitments.

 

a.
Revolving Loans                                         Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in such Lender’s Revolving Loan Credit Exposure exceeding such
Lender’s Revolving Loan Commitment as set forth in Schedule 2.01.

 

22

 

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

 

All
Revolving Loan Borrowings shall be repaid in full on the Revolving Credit
Termination Date.

 

b.
Letters of Credit.  The Issuer
agrees that it will, from time to time on any Business Day occurring during the
Revolving Commitment Period,

 

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

 

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

 

provided, however, that the Issuer shall have
no obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the Letter of Credit Outstandings would exceed the L/C
Commitment Amount or (ii) the aggregate outstanding Revolving Extensions
of Credit of all Lenders would exceed the Revolving Loan Commitment
Amount.  Furthermore, the Issuer shall not
at any time be obligated to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuer or any L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law.  Each Letter of Credit shall be denominated in
Dollars.

 

SECTION 2.02.  Term
Loan Commitment.

 

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

 

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

 

23

 

principal remaining unpaid plus accrued and
unpaid interest and all other charges due or to become due hereunder and under
all 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.  Loans
and Borrowings.

 

(a)                                  Each Revolving Loan shall be made as part of
a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance 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 not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.

 

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

 

(d)                                 At the commencement of each Interest Period
for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000.00 and not less than
$1,000,000.00.  At the time that each
Base Rate Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount 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 aggregate
amount that is equal to the entire unused balance of the total Revolving Loan
Commitments.  Borrowings of more than one
Type and Class may be outstanding at the same time; provided that
there shall not at any time be more than a total of ten (10) Eurodollar
Revolving Borrowings outstanding.

 

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

 

24

 

SECTION 2.04.  Requests
for Revolving Loans.

 

To
request a Revolving Borrowing, the Borrower shall notify the Administrative
Agent 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 Days
before the date of the proposed Loan or (b) in the case of a Base Rate
Loan, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Loan. 
Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of
a written Borrowing Request in a form approved by the Administrative Agent and
signed by the Borrower.  Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.03 and shall be in the form
attached hereto as Exhibit B-1:

 

(i)                                     the aggregate amount of the requested Loan;

 

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

 

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

 

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

 

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

 

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

 

SECTION 2.05. 
INTENTIONALLY OMITTED.

 

SECTION 2.06.  Funding
of Loans.

 

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

 

25

 

(b)                                 Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Loan that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Loan, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Administrative Agent, then the applicable Lender agrees to pay
to the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent at, the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.  A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection (b) shall be conclusive in
the absence of manifest error.  If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.  If such Lender’s share of such Loan is not
made available to the Administrative Agent by such Lender within three (3) Business
Days of such date such amount is made available to the Borrower, the
Administrative Agent shall also be entitled to seek recovery of such amount
with interest thereon at the rate applicable to such Loan, on demand, from the
Borrower.

 

SECTION 2.07.  Interest
Elections for Revolving Loans.

 

(a)                                  Each Revolving Loan initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Loan, shall,  have an initial
Interest Period as specified in such Borrowing Request.  Thereafter, in the case of a Revolving Loan
Borrowing, the Borrower may elect to convert such Revolving Loan Borrowing to a
different Type or to continue such Revolving Loan Borrowing and, in the case of
a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section.  The Borrower
may elect different options with respect to different portions of the affected
revolving Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Revolving Loan Borrowing,
and the Loans comprising each such portion shall be considered a separate
Revolving Loan Borrowing.

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

If
any such Interest Election Request requests a Eurodollar Borrowing of a
Revolving Loan but does not specify an Interest Period, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.

 

(d)                                 Promptly following receipt of an Interest
Election Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender’s portion of each resulting Borrowing
Request.

 

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

 

SECTION 2.08.  Termination
and Reduction of Revolving Loan Commitment.

 

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

 

(b)                                 The Borrower may at any time terminate, or
from time to time reduce, the Revolving Loan Commitment; provided that (i) each
reduction of the Revolving Loan Commitment shall be in an amount that is an
integral multiple of $1,000,000.00 and not less than $1,000,000.00 and (ii) the
Borrower shall not terminate or reduce the Revolving Loan Commitment if, after
giving

 

27

 

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

 

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

 

SECTION 2.09.  Repayment of
Loans; Evidence of Debt.

 

(a)                                  The Borrower hereby unconditionally promises
to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Loan as required herein, on the Revolving
Credit Termination Date.

 

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

 

(c)                                  The Administrative Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for the
account of the Lenders and each Lender’s share thereof.

 

(d)                                 The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall
be prima  facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.

 

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

 

28

 

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

 

SECTION 2.10.  Prepayment
of Loans.

 

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

 

(ii)                                  The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the 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)  in
the case of prepayment of a Base Rate Loan, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment.  Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Loan or
portion thereof to be prepaid; provided that, if a notice of prepayment
is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. 
Promptly following receipt of any such notice relating to a Loan, the
Administrative Agent shall advise the Lenders of the contents thereof.   Each
partial prepayment of any Loan shall be in an amount that would be permitted in
the case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.03.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.  Provided there is no Event of Default, each
Prepayment 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 make
payments and prepayments of the Loans as set forth in this Section 2.10
(b).

 

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

 

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

 

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

 

29

 

Asset Sales and Recovery Events that may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice shall
not exceed $20,000,000.00 in any Fiscal Year of the Borrower and (ii) on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied toward the prepayment of the Term Loans and the reduction of the
Revolving Loan Commitment Amount as set forth in subsection (c) of
this Section 2.10.

 

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

 

Each prepayment of any
Loans 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 Commitment
Reductions.  Amounts permitted or required to be applied
to the prepayment of the Loans or the reduction of the Revolving Loan
Commitment Amount pursuant to this Section 2.10, and all other amounts
prepaid pursuant to this Section 2.10, shall be applied as follows:

 

(i)                                     Subject to clause (b), the application
of 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 Loans
and, second, to Eurodollar Loans.

 

(ii)                                  Amounts to be applied pursuant to subsection (b) of
this 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) and
then to the prepayment of the Revolving Loans.

 

(iii)                               Except as provided above, all prepayments
received shall be applied first to the payment of all fees, expenses and other
amounts due to the Lenders (excluding principal and interest), then to accrued
interest, and the balance on account of outstanding principal; provided,
however, that after a Default or demand for payments, payments will be applied
to the obligations of Borrower to the Lenders as the Lenders determine in their
sole discretion.

 

(iv)                              All prepayments of the Term Loan shall be
deemed to have been applied first to any portion thereof which is not
subject to a Swap Agreement.

 

SECTION 2.11.  Fees.

 

(a)                                  The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the percentage rate set forth below for the period in question
corresponding to the Leverage Ratio most recently determined on the daily
amount of the unused Revolving Loan Commitment of such Lender during the period
from and including the Effective Date to but excluding the date on which such
Revolving Loan Commitment terminates:

 

30

 

	
  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 its
Revolving Loan Commitment terminates, then such facility fee shall continue to
accrue on the daily amount of such Lender’s Revolving Loan Credit Exposure from
and including the date on which its Revolving Loan Commitment terminates to but
excluding the date on which such Lender ceases to have any Revolving Loan
Credit Exposure.  Accrued facility fees
shall be payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Revolving Loan Commitment terminate,
commencing on the first such date to occur after the date hereof; provided
that any facility fees accruing after the date on which the Revolving Loan
Commitment terminates shall be payable on demand.  All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

 

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

 

	
  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 the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.

 

(d)                                 All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the Administrative Agent for
distribution, in the case of facility fees and participation fees and issuance
fees, to the Lenders.  Fees paid shall
not be refundable under any circumstances.

 

SECTION 2.12.  Interest;
Late Charges.

 

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

 

31

 

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

 

(c)                                  Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan 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 Base
Rate Loans as provided in paragraph (a) of this Section.

 

(d)                                 Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and, in the case
of Revolving Loans, upon termination of the Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (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 the
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any Eurodollar Revolving Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)                                  All interest accruing on Eurodollar Loans
shall be computed on the basis of a year of 360 days, and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  All interest
accruing on Base Rate Loans shall be computed on the basis of a year of 365
days, 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 or
Adjusted LIBOR Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

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

 

SECTION 2.13.  Alternate
Rate of Interest.

 

If
prior to the commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBOR Rate for such Interest Period then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (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 be
conclusive absent manifest error.

 

32

 

SECTION 2.14.  Increased
Costs.

 

(a)                                  If any Change in Law shall:

 

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

 

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

 

and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any Eurodollar Loan (or of maintaining its obligation
to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.

 

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

 

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

 

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

 

33

 

SECTION 2.15.  Break
Funding Payments.

 

In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Revolving Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period 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 the
loss, 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 determined
by such Lender to be the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount of such Loan had such event
not occurred, at the Adjusted LIBOR Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then 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 Period
for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.  A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
Borrower shall pay such Lender the amount shown as due on any such certificate
within ten (10) days after receipt thereof.

 

SECTION 2.16.  Taxes.

 

(a)                                  Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

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

 

(c)                                  The Borrower shall indemnify the
Administrative Agent and each Lender, within ten (10) days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section)

 

34

 

and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or by
the Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(d)                                 As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

 

(e)                                  Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

 

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

 

(a)                                  The
Borrower shall make each payment required to be made by it hereunder (whether
of 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 the
date when due, in immediately available funds, without set-off or
counterclaim.  Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon.  All
such payments shall be made to the Administrative Agent at its offices at One
Kiernan Plaza, Albany, New York, except that payments pursuant to Sections
2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall
be made in dollars.

 

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

 

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

 

35

 

resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its Revolving Loans and accrued interest thereon than
the proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered,  such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans to any assignee or participant, other than to the Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).  The Borrower consents to
the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the
account of the Lenders hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such 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, then
each of the Lenders severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation.

 

(e)                                  If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.06(b) or 2.17(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

 

SECTION 2.18.  Mitigation Obligations; Replacement of
Lenders.

 

(a)                                  If
any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as
the case may be, in the future and (ii) would not subject such Lender to
any

 

36

 

unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.  The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)                                 If
any Lender requests compensation under Section 2.14, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, or if
any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 9.04),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.14 or payments required to be made
pursuant to Section 2.16, such assignment will result in a reduction in
such compensation or payments.  A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.

 

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

 

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

 

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

 

37

 

furnish
to the Administrative Agent, which shall in turn promptly furnish to the
Lenders, notice of the issuance of each Letter of Credit (including the amount
thereof).

 

(c).                               Letter of Credit Fees and Other Charges.  In
addition to any fee payable under Section 2.11 hereof, the Borrower shall
pay or reimburse the Issuer for such normal and customary costs and expenses as
are incurred or charged by the Issuer in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit which
costs and expenses shall be shared with the Lenders on a pro-rata basis.

 

(d).                              L/C Participations.  (i) The
Issuer 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/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuer, on the terms and conditions hereinafter stated, for
such L/C Participant’s own account and risk an undivided interest equal to such
L/C Participant’s percentage in the Issuer’s obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuer thereunder.  Each L/C Participant
unconditionally and irrevocably agrees with the Issuer that, if a draft is paid
under any Letter of Credit for which the Issuer is not reimbursed in full by
the Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuer upon demand at the Issuer’s address for notices
specified herein an amount equal to such L/C Participant’s percentage of the
amount of such draft, or any part thereof, that is not so reimbursed.

 

(ii)                                  If any amount required to be paid by any L/C
Participant to the Issuer pursuant to clause (i) in respect of any
unreimbursed portion of any payment made by the Issuer under any Letter of
Credit is paid to the Issuer within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuer on demand an
amount equal to the product of (x) such amount, times (y) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuer, times (z) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360.  If any such amount required to
be paid by any L/C Participant pursuant to clause (i) is not made
available to the Issuer by such L/C Participant within three Business Days
after the date such payment is due, the Issuer shall be entitled to recover
from such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Revolving Loans.  A certificate of the Issuer submitted to any
L/C Participant with respect to any amounts owing under this Section shall
be conclusive in the absence of manifest error.

 

(iii)                               Whenever, at any time after the Issuer has
made payment under any Letter of Credit and has received from any L/C
Participant its pro  rata share of such payment in accordance with
clause (i), the Issuer receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuer), or any payment of interest on
account thereof, the Issuer will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event
that any such payment received by the Issuer shall be required to be returned
by the Issuer, such L/C Participant shall return to the Issuer the portion
thereof previously distributed by the Issuer to it.

 

38

 

(e).                               Letter of Credit Payments.  If
any draft shall be presented for payment under any Letter of Credit, the Issuer
shall promptly notify the Borrower of the date (the “Disbursement Date”)
such payment (each such payment, a “Disbursement”) shall be made and the
amount thereof.  The responsibility of
the Issuer to the Borrower in connection with any draft presented for payment
under any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.

 

(f).                                 Reimbursement Obligation of the Borrower.  The
Borrower agrees to reimburse the Issuer on each date on which the Issuer
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuer for the amount of (a) such draft
so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuer in connection with such payment.  Each such payment shall be made to the Issuer
at its address for notices specified herein in Dollars and in immediately
available funds.  Interest shall be payable
on any and all amounts due by the Borrower under this Section from the
Disbursement Date until payment in full at the rate applicable thereto set
forth in Section 2.12 hereof. 
Without limiting in any way the foregoing and notwithstanding anything to
the contrary contained herein or in any Application, the Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer upon
each Disbursement of a Letter of Credit, and it shall be deemed to be the
obligor for purposes of each Letter of Credit issued hereunder (whether the
account party on such Letter of Credit is the Borrower or any Subsidiary of the
Borrower).

 

(g).                              Obligations Absolute, etc.  (i) The
Borrower’s obligations under this Section 2.19 shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense 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 any
defense based upon the failure of any Disbursement to conform to the terms of
the applicable Letter of Credit (if, in the Issuer’s good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit; provided,
however, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of the Borrower to
commence any proceeding against the Issuer for any wrongful Disbursement made
by the Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of the Issuer.

 

(ii)                                  The Borrower, each other Obligor and, to the
extent 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 Credit
by the beneficiary thereof.  The Issuer
shall not (except to the extent of its own gross negligence or wilful misconduct)
be responsible or liable for, and the Borrower’s Reimbursement Obligations
shall 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 submitted
by any party in connection with the application for and issuance of a Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;

 

39

 

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

 

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

 

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

 

(bb)                          errors, omissions, interruptions or delays in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the Issuer; or

 

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

 

None
of the foregoing shall affect, impair or prevent the vesting of any of the rights
or powers granted to the Issuer or any L/C Participant hereunder.  In furtherance and not in limitation or
derogation of any of the foregoing, the Borrower agrees that any action taken
or omitted by the Issuer under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuer to the Borrower.

 

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

 

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

 

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

 

Amounts
payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as
collateral security for the Reimbursement Obligations. When all Events of
Default giving rise to the deemed disbursements under this

 

40

 

Section have
been cured or waived the Administrative Agent shall return to the Borrower all
amounts then on deposit with the Administrative Agent pursuant to this Section which
have not been applied to the satisfaction of the Reimbursement Obligations.

 

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

 

ARTICLE III

 

Representations and Warranties

 

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

 

SECTION 3.01.  Organization; Powers.  Each of the Borrower, and the Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry 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 in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.

 

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

 

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

 

SECTION 3.04.  Financial Condition; No Material Adverse
Change.

 

(a)                                  The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year

 

41

 

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

 

(b)                                 Since
September 30, 2002, there has been no material adverse change in the
business, 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 good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

 

(b)                                 Each
of the Borrower and the Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect or infringements
which are being challenged by the Borrower and which are disclosed in the
financial statements of the Borrower.

 

SECTION 3.06.  Litigation and Environmental Matters.

 

(a)                                  There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of the Subsidiaries (i) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters) and pending patent challenges
maintained against the Borrower’s patents as disclosed in the financial
statements of the Borrower or (ii) that involve this Agreement or the
Transactions.

 

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

 

42

 

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

 

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

 

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

 

SECTION 3.09.  Taxes. 
Each of the Borrower and the Subsidiaries has timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10.  ERISA. 
Neither an ERISA Event has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code.  No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. 
The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. 
Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation 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 and
belief, the Borrower has disclosed to the Lenders all agreements, instruments
and corporate or other restrictions to which it or any of its Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other

 

43

 

information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

SECTION 3.12.  Subsidiaries.  Set forth in Schedule 3.12 is a complete
and accurate list of all of the Subsidiaries of the Borrower and the
Guarantors.  All of the outstanding
capital stock of all classes of the Subsidiaries has been validly issued, is
fully paid and non-assessable, and is owned by the Borrower and/or one or more
of 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 Solvent
and has not: (i) filed a petition seeking relief under any provision of
any bankruptcy, reorganization, arrangement or dissolution law of any
jurisdiction; (ii) made an assignment for the benefit of creditors; (iii) had
a receiver, custodian, liquidator or trustee of their assets appointed by court
order or otherwise; or (iv) failed to pay or admitted in writing their
inability to pay debts generally as they become due.

 

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

 

SECTION 3.15  Federal
Regulations.  No part of the proceeds of any Loans will be
used for “buying” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board.  If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.

 

SECTION 3.16  Labor Matters.  Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment
made to employees of the Borrower and its Subsidiaries while employed by the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the Borrower or the relevant
Subsidiary in accordance with ERISA.

 

44

 

ARTICLE IV

 

Conditions

 

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

 

(a)                                  The
Administrative Agent shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii) written
evidence satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement.

 

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

 

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

 

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

 

(e)                                  The Administrative Agent
shall have received all fees and other amounts due and payable on or prior to
the Effective Date, including, (i) a fee in the amount of $30,000.00 for
distribution to the Lenders on a pro-rata basis and (ii) to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

 

(f)                                    The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory to
the Lenders:

 

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

 

(ii)                                              the Administrative Agent shall have received
satisfactory evidence that, on the Closing Date, (x) all Indebtedness
identified on Schedule 4.01 hereof shall be paid in full and all
commitments thereunder shall be terminated and (y) all Liens securing
payment of said Indebtedness shall be released, in form and substance 

 

45

 

satisfactory
to the Administrative Agent, and receipt of all Uniform Commercial Code Form UCC-3
termination statements, terminations of security interests in intellectual
property or other instruments as may be suitable or appropriate in connection
with the release of any such Liens.

 

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

 

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

 

(a)                                  The
representations and warranties of the Borrower and the Guarantors set forth in
this Agreement, including the material adverse change and litigation
representations, shall be true and correct on and as of the date of such
Borrowing.

 

(b)                                 At
the time of and immediately after giving effect to such Borrowing, no Default
shall have occurred and be continuing.

 

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

 

ARTICLE V

 

Affirmative Covenants

 

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

 

SECTION 5.01.  Financial Statements; Ratings Change and
Other Information.  The Borrower will
furnish to the Administrative Agent and each Lender:

 

(a)                                  within
120 days after the end of each fiscal year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by PricewaterhouseCoopers LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied together with a copy of any
management letter issued in connection therewith;

 

46

 

(b)                                 within
60 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.  Notwithstanding anything to the contrary
contained herein, for the period during which the Borrower is required to file Form 10-Q
with the U.S. Securities and Exchange Commission, the submission of said Form 10-Q
in the time period provided in this subsection (b) shall be deemed to
satisfy the requirements of this subsection (b);

 

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

 

(d)                                 within
sixty (60) days of the end of each Fiscal Year, a one-year projection of the
Borrower and the Guarantors, such projection to include an income statement and
balance sheet; and

 

(e)                                  promptly
following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.

 

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

 

(a)                                  the
occurrence and continuance of any material Default;

 

(b)                                 the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any
ERISA Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

 

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

 

(d)                                 any
other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

 

47

 

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

 

SECTION 5.03.  Existence; Conduct of Business.  The Borrower and the Guarantors will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.05.

 

SECTION 5.04.  Payment of Obligations.  The Borrower and the Guarantors will, and
will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower, the Guarantors, or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.05.  Maintenance of Properties; Insurance.  The Borrower and the Guarantors will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations, including, but not
limited to, fire insurance.

 

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

 

SECTION 5.07.  Compliance with Laws.  The Borrower and the Guarantors will, and
will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, 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 only
for the following corporate purposes:

 

48

 

(a)                                  to
fund the Target Acquisition;

 

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

 

(c)                                  to
support issuances of commercial letters of credit, direct pay letters of credit
and bankers’ acceptances, all in the ordinary course of the Borrower’s
business; and

 

(d)                                 general
working capital purposes, including Permitted Acquisitions.

 

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

 

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

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in
full, 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 any
Indebtedness, except:

 

(a)                                  Indebtedness in respect of the Obligations;

 

(b)                                 Indebtedness existing as of the Effective
Date which is identified in Schedule 6.01, and refinancing of such
Indebtedness;

 

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

 

49

 

(d)                                 Indebtedness (i) evidencing the deferred
purchase price of newly acquired property or incurred to finance the
acquisition of equipment of the Borrower and its Subsidiaries (pursuant to purchase
money mortgages or otherwise, whether owed to the seller or a third party) used
in the ordinary course of business of the Borrower and its Subsidiaries (provided,
that such Indebtedness is incurred within 60 days of the acquisition of such
property), (ii) in respect of Capital Lease Obligations and (iii) under
Synthetic Leases; provided, that the aggregate amount of all
Indebtedness outstanding pursuant to this clause and clause (f) below
shall not at any time exceed $20,000,000.00;

 

(e)                                  Indebtedness of any Wholly Owned Subsidiary
Guarantor owing to the Borrower or any other Subsidiary, which Indebtedness
shall be evidenced by one or more promissory notes in form and substance
reasonably satisfactory to the Administrative Agent, duly executed, and shall
not be forgiven or otherwise discharged for any consideration other than
payment in full or in part in cash (provided, that only the amount
repaid in part shall be discharged);

 

(f)                                    other Indebtedness of the Borrower and its
Subsidiaries provided, that the aggregate amount of all Indebtedness
outstanding pursuant to this clause and clause (d) above shall not at any
time exceed $20,000,000.00; and

 

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

 

provided, however, that no Indebtedness
otherwise permitted by clauses (d), (e), (f) or (g) shall be
assumed or otherwise incurred if an Event of Default has occurred and is then
continuing or would result therefrom.

 

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

 

(a)                                  Guarantees
in favor of the Lenders;

 

(b)                                 Existing
Guarantees given to Persons other than the Lenders and set forth in Schedule 6.02
and extensions, renewals and replacements of any related Indebtedness that does
not increase the amount of the Guarantee;

 

50

 

(c)                                  The
endorsement of negotiable instruments for deposit in the normal course of
business;

 

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

 

(e)                                  Guarantees
securing aggregate Indebtedness not to exceed $20,000,000.00 provided that
written notice thereof has been provided to the Lenders.

 

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

 

(a)                                  Permitted
Encumbrances;

 

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

 

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

 

(d)                                 Liens
on fixed or capital assets acquired, constructed or improved by the Borrower or
any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (d) of Section 6.01, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such fixed
or capital assets and (iv) such security interests shall not apply to any
other property or assets of the Borrower or any Subsidiary.

 

SECTION 6.04  Disposition of Property.  The
Borrower will not, and will not permit any of its Subsidiaries to, dispose of
any of its property, whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital
Securities to any Person, except:

 

51

 

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

 

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

 

(c)                                  the sale or issuance of any Subsidiary’s
Capital 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 the
aggregate when combined with prior Dispositions during the term of this
Agreement not previously consented to by operation of this subsection (d).

 

SECTION 6.05.  Fundamental Changes.

 

(a)                                  The
Borrower will not, and will not permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any substantial part of its
assets, or all or substantially all of the stock of any of its Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Event of Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower
is the surviving corporation, (ii) any Subsidiary may merge into any
Subsidiary in a transaction in which the surviving entity is a Subsidiary, (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the
Borrower or to another Subsidiary and (iv) any Subsidiary may liquidate or
dissolve or dispose of all or substantially all of its assets upon written
notice to the Lenders if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.06.

 

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

 

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

 

SECTION 6.06.  Investments, Loans, Advances, and
Acquisitions.  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 owned
Subsidiary prior to such merger) any

 

52

 

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

 

(a)                                  Permitted
Investments;

 

(b)                                 investments
by the Borrower existing on the date hereof in the capital stock of its
Subsidiaries;

 

(c)                                  loans
or advances between the Borrower and the Guarantors occurring in normal course
of business;

 

(d)                                 loans
other than those described in this paragraph, provided that such loans do not
exceed the amounts set forth in Schedule 6.06(d) in the aggregate as
of the fiscal years set forth in such schedule;

 

(e)                                  investments
constituting Permitted Acquisitions; and

 

(f)                                    the
acquisition of stock in Organichem Corporation comprising the Target
Acquisition.

 

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

 

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

 

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

 

53

 

purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except (a) in
the ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among the
Borrower 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 permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule 6.10
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.

 

SECTION 6.11.  Fiscal Year.  The Borrower will and the Subsidiaries will
not change their Fiscal Year, except upon a prior written notice to the
Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.13  Sales
and Leasebacks.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement with any Person
providing for the leasing by the

 

54

 

Borrower
or any Subsidiary of real or personal property that has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or such
Subsidiary.

 

ARTICLE VII

 

Events of Default

 

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

 

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

 

(b)           the Borrower or any
Guarantor shall fail to pay any interest on any Loan or any Reimbursement
Obligation or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement, when and as the
same shall become due and payable;

 

(c)           any representation
or warranty made or deemed made by or on behalf of the Borrower or Guarantors
in or in connection with this Agreement or any amendment or modification hereof
or waiver hereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, shall prove to have been
materially incorrect when made or deemed made;

 

(d)           the Borrower or any
Guarantors shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.03 (with respect to the Borrower’s
existence only) or 5.08 or in Article VI;

 

(e)           the Borrower or any
Guarantor shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or
(d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to
the 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 such
thirty (30) day period and the Borrower or such Guarantor is diligently
pursuing a cure, such period to cure shall be extended upon written request for
an additional period not to exceed thirty (30) days;

 

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

 

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

 

55

 

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

 

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

 

(i)            the Borrower, or
any Guarantor shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower, a Guarantor or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

(j)            the Borroweror a
Guarantor shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;

 

(k)           one or more
judgments 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 any
combination thereof and the same shall remain undischarged for a period of
60 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach
or levy upon any assets of the Borrower to enforce any such judgment; or

 

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

 

56

 

(m)          any person or group
of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired, either directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of in
excess of 50% of the outstanding shares of voting stock of the Borrower or,
during any period of twelve (12) consecutive calendar months, individuals who
were directors of the Borrower on the first day of such period shall cease to
constitute 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 of
such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of the following
actions, at the same or different times:  (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder (including all amounts of Letter of Credit
Outstandings, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder), shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder (including all amounts of Letter of Credit
Outstandings, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder), shall
automatically become due and payable, without presentment, demand, protest or
other 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 Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof, together with such actions and powers
as are reasonably incidental thereto.

 

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

 

57

 

The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. 
Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of 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 Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02) or
in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions 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 forth
in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or 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 and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. 
The Administrative Agent and any such sub-agent may perform any and all
its duties and exercise its rights and powers through their respective Related
Parties.  The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 

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

 

58

 

Lenders, and the Borrower.  Upon
any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation
hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.

 

Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any related agreement or any document furnished
hereunder or thereunder.

 

ARTICLE IX

 

Miscellaneous

 

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

 

(a)           if to the Borrower
or 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 Washington
Square, Albany, New York 12205, Attention: Paul J. Goldman, Esq. (Telecopy
No. 518-452-0417);

 

(b)           if to the
Administrative 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 copy
to Lemery Greisler LLC, 10 Railroad Place, Saratoga Springs, New York 12866,
Attention: James A. Carminucci, Esq. (Telecopy No. (518) 581-8823);

 

59

 

(c)           if to JPMorgan Chase
Bank, to JPMorgan Chase Bank, 12 Corporate Woods Boulevard, Albany, New York
12211, Attention of Dean J. Burns (Telecopy No. (518) 436-9811); with a
copy 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 Bank
of 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 other
Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

 

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

 

SECTION 9.02.  Waivers; Amendments.

 

(a)           No failure or delay
by the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the Administrative
Agent and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.

 

(b)           Neither this
Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Required Lenders or by the Borrower and the Administrative Agent with
the consent of the Required Lenders; provided that no such agreement
shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone
the scheduled date of payment of the principal amount of any Loan, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv) change
Section 2.17(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of

 

60

 

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

 

SECTION 9.03.  Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), and (ii) all out-of-pocket expenses
incurred by the Administrative Agent or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.

 

(b)           The Borrower shall
indemnify the Administrative Agent, Lender, and each Related Party of any of
the 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 and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and regardless
of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c)           To the extent that
the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related

 

61

 

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

 

(d)           To the extent
permitted 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 actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or the use of the proceeds thereof.

 

(e)           All amounts due
under this Section shall be payable promptly after written demand
therefor.

 

SECTION 9.04.  Successors and Assigns.

 

 (a)          The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of
this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           (i)            Subject
to the conditions set forth in paragraph (b) (ii) below, any Lender
may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loan at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

 

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

 

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

 

(ii)           Assignments shall be
subject to the following additional conditions:

 

(A)          except in the case of
an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender’s Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment
is delivered to the

 

62

 

Administrative Agent) shall not be less than $1,000,000, unless each of
the Borrower and the Administrative Agent otherwise consent, provided that no
such consent of the Borrower shall be required if an Event of Default under
clause (a), (b), (h), or (i) of Article VII has occurred and is
continuing;

 

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

 

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

 

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

 

(E)           in the case of an
assignment to a CLO (as defined below), the assigning Lender shall retain the
sole right to approve any amendment, modification or waiver of any provision of
this Agreement, provided that the Assignment and Acceptance between such
Lender and such CLO may provide that such Lender will not, without the consent
of such CLO, agree to any amendment, modification or waiver described in the
first 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 respect
to any Lender that is a fund which invests in bank loans and similar extensions
of credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

 

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

 

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

 

63

 

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

 

(iv)          The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans and LC Disbursements owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof 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 any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

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

 

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

 

(ii)           A Participant shall
not be entitled to receive any greater payment under Section 2.14 or 2.16
than applicable Lender would have been entitled to receive with respect to the

 

64

 

participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.18
unless the Borrower is notified of the participation sold to such Participant
and 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 at
any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

SECTION 9.05.  Prior Agreements.  The Borrower, the Guarantors and their
Subsidiaries have previously entered into loan agreements with certain of the
Lenders.  Existing loan agreements are
listed on Schedule 9.05.  Nothing
contained herein shall be deemed to supersede or alter any term, provision or
condition set forth in any of such existing loan agreements..

 

SECTION 9.06.  Survival.  All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15, 2.16
and 9.03 and Article VII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.

 

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

 

65

 

SECTION 9.08.  Severability.  Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

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

 

SECTION 9.10.  Governing Law; Jurisdiction; Consent to
Service of Process.

 

(a)           This Agreement shall
be construed in accordance with and governed by the law of the State of New
York.

 

(b)           The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in Albany County and of the United States District Court of the Northern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement shall affect any right that the Administrative Agent or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any jurisdiction.

 

(c)           The Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto hereby
irrevocably 

 

66

 

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

 

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

 

SECTION 9.11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS CREDIT AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE
LOANS OR ENFORCEMENT OF THIS AGREEMENT, AND AGREE THAT NEITHER PARTY WILL SEEK
TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT
AS PROHIBITED BY LAW, THE BORROWER AND THE GUARANTORS HEREBY WAIVE ANY RIGHT
EACH MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS
FEES.  EACH PARTY HERETO CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER.  THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE LOANS.

 

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

 

SECTION 9.13.  Confidentiality.  Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or

 

67

 

(ii) becomes available to the Administrative Agent or any Lender
on 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 or
its business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information
received from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

SECTION 9.14.  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate 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 of
a Lender as to the loss, theft, destruction or mutilation of a note evidencing
a Loan or any other security document which is not of public record, and, in
the case of any such loss, theft, destruction or mutilation, upon surrender and
cancellation of such note or other security document, the Borrower will issue,
in lieu thereof, a replacement note or other security document in the same
principal amount thereof and otherwise of like tenor.

 

68

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first 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:

  	
   

  
											

 

69

 

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 Fleet
National Bank, as Administrative Agent for the Lenders.  Terms defined in the Credit Agreement are
used 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 Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as
of the Assignment Date set forth on the reverse hereof, the interests set forth
on the reverse hereof (the “Assigned Interest”) in the Assignor’s rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Commitment of the Assignor on
the Assignment Date and Revolving Loans (including Letter of Credit
Outstandings), and Term Loans owing to the Assignor which are outstanding on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date.  The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement.  From and after the Assignment Date (i) the
Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent of the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

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

 

This Assignment and Acceptance shall be governed by and construed in
accordance 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

 

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 hereby
agreed 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:

  
						

 

A-2

 

EXHIBIT B-1

 

FORM OF BORROWING REQUEST

 

 

B-1-1

 

EXHIBIT B-2

 

FORM OF ISSUANCE REQUEST

 

 

B-2-1

 

EXHIBIT C

 

OPINION OF COUNSEL FOR THE BORROWER

 

 

C-1Exhibit 10.2

 

Schedule of Executive Officer Compensation

 

Set forth below is a description of the compensation that the Board of
Directors of Vital Images, Inc. determined to pay to its named executive
officers (defined in Item 402(a)(3) of Regulation S-K) in their current
positions for the year ending December 31, 2005.

 

	
  Name

  	
   

  	
  2005 Base

  Salary(1)

  	
   

  	
  Securities Underlying 2005 Stock Option Awards(#)(2)

  	
   

  	
  Securities Underlying 2005 Restricted Stock Awards(#)(3)

  	
   

  
	
  Jay D. Miller,
  President and Chief

  Executive Officer

  	
   

  	
  $

  	
  240,000

  	
   

  	
  10,000

  	
   

  	
  1,000

  	
   

  
	
  Philip I. Smith,
  Vice President — 

  Marketing and Corporate Development

  	
   

  	
  $

  	
  169,000

  	
   

  	
  20,000

  	
   

  	
  1,500

  	
   

  
	
  Steven P.
  Canakes, Vice President — 

  Sales

  	
   

  	
  $

  	
  161,000

  	
   

  	
  3,000

  	
   

  	
  1,000

  	
   

  
	
  Stephen S.
  Andersen, Vice President — 

  Engineering

  	
   

  	
  $

  	
  140,000

  	
   

  	
  10,000

  	
   

  	
  1,500

  	
   

  
	
  Jeremy A. Abbs,
  Vice President — 

  Quality and Customer Satisfaction

  	
   

  	
  $

  	
  144,000

  	
   

  	
  5,000

  	
   

  	
  1,500

  	
   

  
	
  Vincent J.
  Argiro — Chief Technology 

  Officer

  	
   

  	
  $

  	
  128,000

  	
   

  	
  2,000

  	
   

  	
  1,000

  	
   

  

 

(1)  In addition, each Executive
Officer can earn a bonus in an amount equal to up to 50% of his base salary
(60% in the case of the President and Chief Executive Officer).  Of the total amount of the potential bonus,
45% is based on the Company achieving revenue targets, 30% is based on the
Company achieving certain levels of income before taxes and employment benefit
costs, and 25% is based on the achievement of individual goals and
objectives.  All Executive Officer
bonuses are subject to the discretion of the Board.

 

(2)  Under the Vital Images, Inc.
1997 Stock Option and Incentive Plan, each Executive Officer has been granted
stock option awards for the number of shares noted.  Stock
option awards vest at 28% in the first year from the grant date, and 2% per
month thereafter.  The stock options have
a term expiring on February 15, 2013, and the $15.40 per share exercise price
of the options is equal to the fair market value of the Company’s common stock
on the date each option was granted.

 

(3)   Under the Vital Images,
Inc. 1997 Stock Option and Incentive Plan, each Executive Officer has been granted restricted stock awards for the
number of shares noted.  Restricted stock
awards vest as to 25% of the number of shares subject to the restricted stock
award per year, beginning one year from the date of grant and continuing until
four years from the date of grant.

 

65

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