Document:

ASSOCIATES FIRST CAPITAL CORPORATION

DISCOUNTED EMPLOYEE STOCK PURCHASE PLAN

1. Purpose.

The purpose of the Associates First Capital Corporation Discounted Employee Stock Purchase Plan (the "Plan") is to provide Eligible Employees of the
Company and its Subsidiaries an opportunity to purchase shares of Common Stock of the Company at a discount from market prices through accumulated
payroll deductions or Alternative Contributions, thereby encouraging and increasing employee ownership of the Company's Common Stock. It is the intention
of the Company that the Plan not be subject to the Employee Retirement Income Security Act of 1974, as amended, and that the Plan not qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended, or any successor legislation.

2. Definitions.

		(a)	"Additional Jurisdiction" means any territory of the United States of America or any foreign jurisdiction or political subdivision thereof in
which the Plan is hereafter implemented, as determined by the Plan Administrator in the exercise of its sole discretion.
		(b)	"Alternative Contributions" has the meaning given that term in Section 5(a).
		(c)	"Board" means the Board of Directors of the Company.
		(d)	"Committee" means the Compensation Committee of the Board.
		(e)	"Common Stock" means the Class A common stock, par value $.01 per share, of the Company.
		(f)	"Company" means Associates First Capital Corporation, a Delaware corporation.
		(g)	"Custodian" means First Chicago Trust Division of EquiServe, whose address is Employee Shareholder Plans Group, P.O. Box 2596,
Jersey City, New Jersey, 07303-2596, or such other person as the Plan Administrator shall designate from time to time to serve as record
keeper and custodian under the Plan.
		(h)	"Determination Date" means the last Trading Day of each Offering Period.
		(i)	"Eligible Employee" means any individual who satisfies both of the following conditions:

 is a full-time or part-time (but not temporary) employee of the Company or any Subsidiary, or a comparable class of employee in any
Additional Jurisdiction, who has reached the age of majority in the state or jurisdiction of such individual's residence; and

 lives and works in one or more States in the United States of America or the District of Columbia (provided that the Plan Administrator
may determine, from time to time in the exercise of its sole discretion, to expand this portion of the definition of "Eligible Employee" to
include any Additional Jurisdiction), or is designated by the Company as an expatriate employee and is paid on the Company's United
States payroll.

		(j)	"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor legislation.
		(k)	"Exercise Date" has the meaning given that term in Section 6(c).
		(l)	"Exercise Price" means, with respect to any Offering Period, the lesser of (i) eighty-five percent (85%) of the Fair Market Value of a share
of the Common Stock on the Grant Date, and (ii) eighty-five percent (85%) of the Fair Market Value of a share of the Common Stock on
the Determination Date.
		(m)	"Fair Market Value" means, as of any date, the closing sales price for the Common Stock (or the closing bid, if no sales were reported),
denominated in U.S. Dollars, on such date as quoted on the New York Stock Exchange and reported in The Wall Street Journal or such
other source as the Plan Administrator deems reliable, provided that, in the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the Plan Administrator.
		(n)	"Former Participant" has the meaning given that term in Section 8(c).
		(o)	"Grant Date" means the first Trading Day of each Offering Period.
		(p)	"Offering Period" has the meaning given that term in Section 4(b).
		(q)	"Participant" means an Eligible Employee who elects to participate in the Plan pursuant to Section 3(b).
		(r)	"Plan Account" means a book-entry account maintained by the Custodian for the benefit of each Participant to which shares of Common
Stock purchased for such Participant are credited.
		(s)	"Plan Administrator" has the meaning given that term in Section 9(c).
		(t)	"Reserves" has the meaning given that term in Section 13(a).
		(u)	"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, or any successor provision.
		(v)	"Subsidiary" means any corporation (or other form of business association that is treated as a corporation for tax purposes), domestic or
foreign, of which shares (or other ownership interests) having more than fifty percent (50%) of the voting power are owned or controlled,
directly or indirectly, by the Company, and which is designated by the Plan Administrator for the purposes of participation in the Plan. The
Subsidiaries are set forth on Exhibit A hereto and are subject to change by the Plan Administrator from time to time.
		(w)	"Trading Day" means any day on which the New York Stock Exchange (or any other established stock exchange or national market system
the Plan Administrator deems appropriate) is open for trading.

3. Eligibility and Participation.

(a) All Eligible Employees are eligible to participate in the Plan.

(b) An Eligible Employee may elect to participate in the Plan by complying with the Company's procedures for enrolling in the Plan as established and in
effect from time to time, which may include, but are not limited to, (i) completing and filing with the Company or the Custodian an enrollment form
authorizing payroll deductions from such employee's compensation, (ii) completing and filing with the Company or the Custodian an enrollment form and
making Alternative Contributions, or (iii) responding to enrollment procedures set forth in an automated voice response system maintained by the Custodian.
Enrollment for any Offering Period shall be completed no later than the twenty-fifth (25th) day of the calendar month immediately preceding the Grant Date of
such Offering Period or, with respect to any Additional Jurisdiction in which the Plan is implemented, the twenty-fourth (24th) day of such calendar month
(provided that if the twenty-fourth (24th) day is not a business day in such Additional Jurisdiction, enrollment shall be completed no later than the business day
next preceding the twenty-fourth (24th) day).

4. Stock Subject to Plan and Offering Periods.

(a) The Board shall make available two million (2,000,000) shares of Common Stock for purchase under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in Section 13. The Board may make available additional shares of Common Stock for purchase under the Plan from
time to time. If on a given Exercise Date the number of shares of Common Stock with respect to which options are to be exercised exceeds the number of
shares of Common Stock then available for purchase, the Company or the Custodian shall make a pro rata allocation of the remaining shares available for
purchase in as uniform a manner as shall be practicable and equitable, and the Company shall refund or cause to be refunded to Participants any accumulated
payroll deductions or Alternative Contributions held on their behalf not used to purchase shares of Common Stock.

(b) Except as described below with respect to the first year the Plan is in effect, the Plan will be implemented by four quarterly offerings of the Common Stock
each calendar year, with the first offering being during the period commencing on the first day and ending on the last day of the first calendar quarter of such
year, the second offering being during the period commencing on the first day and ending on the last day of the second calendar quarter of such year, the third
offering being during the period commencing on the first day and ending on the last day of the third calendar quarter of such year, and the fourth offering
being during the period commencing on the first day and ending on the last day of the fourth calendar quarter of such year (each such period, an "Offering
Period"). There will be only one offering during calendar year 1999, which will occur during the first Offering Period under the Plan commencing on October
1, 1999 and ending on December 31, 1999.

5. Payroll Deductions/Alternative Contributions.

(a) At the time a Participant enrolls in the Plan, the Participant shall elect to have payroll deductions made for each pay period during the Offering Period or, if
payroll deductions are not permitted under applicable law in any Additional Jurisdiction, to make contributions under the Plan for each such pay period by
personal check or such other means of payment as may be permitted by law and approved by the Plan Administrator ("Alternative Contributions"). Payroll
deductions and Alternative Contributions shall be made in whole currency amounts and in the minimum amounts per pay period as set forth on Exhibit B
attached hereto (as the same may be updated and amended by the Plan Administrator from time to time), subject to the following conditions:

(i) The aggregate payroll deductions or Alternative Contributions for any Participant for all Offering Periods during any calendar year shall not exceed the
maximum amount set forth on Exhibit B;

(ii) The total amount of payroll deductions or Alternative Contributions during any pay period shall not exceed the total amount of a Participant's pay for such
pay period, net of any other applicable deductions; and

(iii) If a Participant has authorized payroll deductions or Alternative Contributions in an amount equal to or greater than the minimum amount and, due to
extraordinary circumstances occurring during any one pay period (e.g., temporary reduction in number of hours worked for a part-time employee, change in
status of employment to short-term disability, etc.), such Participant's net pay for such period is insufficient to permit deductions in the authorized amount,
such Participant's total net pay for such pay period shall be deducted and held in accordance with the provisions of subsection (b) of this Section 5.

(b) Each Participant's payroll deductions or Alternative Contributions will be held in accordance with the provisions of Section 12 pending application to the
purchase of shares of Common Stock and crediting of same to such Participant's Plan Account. A Participant may not make payments or contributions to
purchase shares of Common Stock in addition to amounts contributed through regular payroll deductions or Alternative Contributions. Except for shares of
Common Stock transferred to a Participant's Plan Account from a brokerage account maintained for such Participant under the Company's predecessor
Employee Stock Purchase Plan (which will terminate upon the Plan becoming effective) and shares of Common Stock credited to a Participant's Plan Account
upon purchase hereunder, a Participant may not transfer or deposit shares of Common Stock to such Participant's Plan Account. No interest shall be paid on
any amounts held from time to time pending application to the purchase of shares of Common Stock on behalf of a Participant unless otherwise required by
applicable law.

(c) Subject to the provisions of Section 8, a Participant may change the amount of payroll deductions or Alternative Contributions by complying with the
Company's procedures for effecting such changes as established and in effect from time to time, which may include, but are not limited to, completing and
filing with the Company or the Custodian a change form authorizing a change in the amount of payroll deductions or Alternative Contributions or responding
to change procedures set forth in an automated voice response system maintained by the Custodian. Any such change shall be effected no later than the
twenty-fifth (25th) day of the calendar month immediately preceding the next applicable Grant Date or, with respect to any Additional Jurisdiction in which
the Plan is implemented, the twenty-fourth (24th) day of such calendar month (provided that if the twenty-fourth (24th) day is not a business day in such
Additional Jurisdiction, such change shall be effected no later than the business day next preceding the twenty-fourth (24th) day), and shall become effective for
the Offering Period during which such Grant Date occurs.

(d) So long as a Participant remains an employee of the Company, payroll deductions or Alternative Contributions will continue in effect from Offering Period
to Offering Period unless the Participant elects a different rate of payroll deductions or Alternative Contributions in accordance with the provisions of Section
5(c) or terminates participation in the Plan in accordance with the provisions of Section 8.

6. Grant and Exercise of Option; Purchase of Common Stock. 

(a) Subject to the provisions of subsection (b) of this Section 6, on each Grant Date of each Offering Period, each Participant shall be deemed to have been
granted an option to purchase on the following Exercise Date a number of shares of Common Stock equal to the quotient of (i) the balance of funds held on
behalf of such Participant pending application to the purchase of shares of Common Stock as of such Exercise Date (which funds, if denominated in a currency
other than U.S. Dollars, shall be converted into U.S. Dollars at the exchange rate in effect and used by the Company on the date on which the Company
converts said funds into U.S. Dollars), divided by (ii) the Exercise Price. Each Participant shall bear the risk of any currency exchange rate fluctuations
between the date on which any funds held on behalf of such Participant and denominated in a currency other than U.S. Dollars are converted to U.S. Dollars
and the following Exercise Date. 

(b) No Participant shall be granted an option to purchase shares of Common Stock on any Grant Date if such Participant, immediately after the option is
granted, owns stock constituting five percent (5%) or more of the Company's outstanding Common Stock or five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or any Subsidiary. For purposes of this Section 6(b), the rules of Section 424(d) of the Internal
Revenue Code of 1986, as amended (relating to attribution of stock ownership), shall apply in determining the stock ownership of the Participant, and stock
that the Participant may purchase under outstanding options shall be treated as stock owned by such Participant.

(c) Unless a Participant terminates participation in the Plan in accordance with the provisions of Section 8, such Participant's option to purchase shares of
Common Stock during an Offering Period will be exercised automatically on the first Trading Day following the Determination Date of such Offering Period
or as soon as practicable thereafter (the "Exercise Date"), and the maximum number of full and/or fractional shares of Common Stock shall be purchased for
such Participant at the applicable Exercise Price and credited to such Participant's Plan Account. 

(d) During a Participant's lifetime, a Participant's option to purchase shares of Common Stock hereunder is exercisable only by the Participant.

(e) As soon as practicable after each Exercise Date, the Company shall deliver or shall cause the Custodian to deliver a statement to the Participant regarding
such Participant's Plan Account, which may include, among other things and to the extent necessary and appropriate: (i) the name, address and federal tax
identification number (or other applicable unique identification number) of the Company and the Participant, (ii) the amount of payroll deductions withheld on
behalf of such Participant or amount of Alternative Contributions made by such Participant pending application to the purchase of shares of Common Stock;
(iii) the exchange rate used to convert foreign currency denominated amounts to U.S. Dollars in accordance with Section 6(a); (iv) the Exercise Price for the
Offering Period corresponding to such Exercise Date; (v) the date of purchase; (vi the number of full and fractional shares of Common Stock purchased; and
(vii) the balance of shares of Common Stock in the Plan Account.

7. Rights as a Stockholder; Sale of Shares.

(a) As promptly as practicable after each Exercise Date, a Participant shall be treated as the beneficial owner of the shares of Common Stock purchased for
such Participant pursuant to the Plan, and such shares shall be credited to the Plan Account maintained for the benefit of the Participant by the Custodian. A
Participant may request that a stock certificate for all or a portion of the whole shares of Common Stock credited to the Participant's Plan Account be issued,
provided that the Participant shall be responsible for the payment of any applicable fees associated with the issuance of such stock certificate. A cash payment
(less any applicable fees to sell a fractional share) shall be made for any fraction of a share of Common Stock in the Plan Account, if necessary to close the
Plan Account.

(b) A Participant shall have all ownership rights with respect to the number of shares of Common Stock credited to the Plan Account, including the right to
vote such shares of Common Stock and to receive dividends or other distributions, if any.  Unless otherwise required by applicable law, any dividends or
distributions that may be declared on such shares by the Board will be reinvested by the Custodian in additional shares of Common Stock for the Participant on
or promptly following such dividend payment date or distribution date, and shall be invested based upon the current sales price for the Common Stock as
quoted on the New York Stock Exchange on the date and at the time of such investment (without any discount). All such shares purchased through
reinvestment of dividends or distributions will be credited to the Participant's Plan Account.

(c) In the event that a Participant elects to sell any shares of Common Stock purchased under the Plan or transfer any such shares to a general brokerage
account maintained for the benefit of such Participant, the Participant shall be responsible for the payment of any applicable brokerage fees and associated
costs related to such sale or transfer. Sales requested by a Participant shall occur as soon as administratively feasible after the receipt of such request, but none
of the Company, the Board, the Committee nor the Plan Administrator shall be liable for any delay in the execution of such request. Each Participant shall bear
the risk of stock price fluctuations and currency exchange rate fluctuations (if applicable) between the time such Participant places an order to sell and the time
the shares of Common Stock are actually sold. 

8. Termination of Participation.

(a) A Participant may, at any time and for any reason, voluntarily terminate participation in the Plan by complying with the Company's procedures for
terminating participation as established and in effect from time to time, which may include, but are not limited to, delivering written notification of termination
to the Company or the Custodian or responding to termination procedures set forth in an automated voice response system maintained by the Custodian. Any
such voluntary termination will become effective, and payroll deductions will cease to be made on behalf of such Participant or Alternative Contributions will
cease to be accepted from such Participant, as soon as practicable following receipt by the Company of notice of termination. All accumulated payroll
deductions or Alternative Contributions held on behalf of any Participant so terminating participation in the Plan will be applied to purchase shares of
Common Stock on the Exercise Date corresponding to the Offering Period during which such termination occurs; provided, however, that the Plan
Administrator may determine, in the exercise of its sole discretion and on a case-by-case basis, to refund any accumulated payroll deductions or Alternative
Contributions so held if necessary to avoid financial hardship on the part of such Participant.

(b) Except as set forth herein, and unless otherwise required by applicable law, a Participant's participation in the Plan will be terminated involuntarily upon
termination or other change in the status of a Participant's employment with the Company or its Subsidiaries, and authorized payroll deductions or Alternative
Contributions will cease, and any payroll deductions or Alternative Contributions previously accumulated will be applied to purchase shares of Common Stock
or be refunded, as follows:

(i) In the event of termination or change in the status of employment due to a Participant's death, retirement, long-term disability or unpaid leave of absence,
authorized payroll deductions or Alternative Contributions shall cease as of the date of such termination or change, and all payroll deductions or Alternative
Contributions previously accumulated and held on behalf of such Participant pending application to purchase shares of Common Stock shall be used to
purchase shares of Common Stock on the Exercise Date corresponding to the Offering Period during which such termination or change occurs;

(ii) In the event of termination or change in the status of a Participant's employment for any reason other than the reasons set forth in the foregoing clause (i) of
this subsection (b), authorized payroll deductions or Alternative Contributions shall cease as of the date of such termination or change, and all payroll
deductions or Alternative Contributions previously accumulated and held on behalf of such Participant pending application to purchase shares of Common
Stock shall be refunded to the Participant, without interest (except as otherwise required by applicable law), as soon as practicable following such termination
or change; provided, however, that if such termination or change occurs without sufficient time to process same prior to the Exercise Date corresponding to the
Offering Period during which such termination or change occurs (generally the twenty-fifth (25th) day of the calendar month immediately preceding the month
in which such Exercise Date occurs or, with respect to any Additional Jurisdiction in which the Plan is implemented, the twenty-fourth (24th) day of such
calendar month, provided that if the twenty-fourth (24th) day is not a business day in such Additional Jurisdiction, such deadline shall be the business day next
preceding the twenty-fourth (24th) day), all such accumulated payroll deductions will be applied to purchase shares of Common Stock on the Exercise Date
corresponding to the Offering Period during which such termination or change occurs; provided further, however, that the Plan Administrator may determine,
in the exercise of its sole discretion and on a case-by-case basis, to refund any such accumulated payroll deductions if necessary to avoid financial hardship on
the part of such Participant; and

(iii) In the event of a change in the status of a Participant's employment due to short-term disability, such Participant shall not be deemed to have terminated
participation in the Plan, and authorized payroll deductions or Alternative Contributions and purchases of shares of Common Stock shall continue in
accordance with the provisions of the Plan unless terminated by such Participant in accordance with the provisions of subsection (a) of this Section 8.

(c) In the event a Participant's participation in the Plan is terminated pursuant to the provisions of this Section 8 (a "Former Participant"), the shares of
Common Stock credited to such Former Participant's Plan Account shall remain therein or be withdrawn therefrom as follows:

(i) If such Former Participant's participation in the Plan is terminated voluntarily under Section 8(a) or involuntarily under Section 8(b) due to the termination
or change in the status of such Former Participant's employment as a result of retirement, long-term disability or unpaid leave of absence, all shares of
Common Stock credited to such Former Participant's Plan Account shall automatically remain therein, subject to the provisions of Sections 7 and 16; and

(ii) If such Former Participant's participation in the Plan is terminated involuntarily under Section 8(b) due to the termination or change in the status of such
Former Participant's employment as a result of death or for any reason other than those set forth in the foregoing clause (i) of this subsection (c), all shares of
Common Stock credited to such Former Participant's Plan Account shall automatically remain therein, subject to the provisions of Sections 7, 10 and 16 (as
applicable), provided that, from and after the end of the Offering Period in which such termination or change occurs, the Company will no longer be
responsible for the payment of any fees related to the maintenance of such Former Participant's Plan Account with the Custodian or the reinvestment of any
dividends or distributions on shares of Common Stock credited thereto, but the Custodian will debit to such Plan Account during each Offering Period a
number of shares of Common Stock (whole or fractional) having a Fair Market Value equal to the dollar amount of the Custodian's then-current account
maintenance fee and any applicable dividend reinvestment fees.

(d) As used in this Section 8, the following terms have the meanings indicated:

	"retirement" means a voluntary termination of a Participant's employment with the Company or a Subsidiary on or after such date as the Participant is
eligible for a pension under the Company's defined benefit pension plan or, if applicable, separate pension plan sponsored by the Company or any of its
Subsidiaries or other pension benefit plan as may be required under applicable law in effect in any Additional Jurisdiction, in each case as such plan is then
in effect;

  	"long-term disability" means a Participant's complete and total disability as determined under the Company's long-term disability plan or, if applicable,
separate similar plan in effect or as may be required under applicable law in any Additional Jurisdiction, in each case as such plan is in effect at the time of
such determination;

  	"unpaid leave of absence" has the meaning given such term in the Company's Human Resources Policy No. 405, as amended, or, if applicable, separate
similar policy in effect or as may be required under applicable law in any Additional Jurisdiction, in each case as such policy is in effect from time to time;
and

  	"short-term disability" means a Participant's inability to work due to a disabling illness, condition or injury that is expected to last more than one week as
determined under the Company's short-term disability plan or, if applicable, separate similar plan in effect or as may be required under applicable law in
any Additional Jurisdiction, in each case as such plan is in effect at the time of such determination.

(e) A Participant's voluntary termination of participation in the Plan pursuant to Section 8(a) will not have any effect upon the Participant's eligibility to
participate in the Plan during any succeeding Offering Periods commencing after termination of the Offering Period during which the Participant so elects to
terminate or in any similar plan which may hereafter be adopted by the Company.

9. Administration.

(a) The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have plenary authority in its full and
exclusive discretion to construe, interpret and apply the terms of the Plan, determine eligibility, adjudicate all disputed claims filed under the Plan and establish
such limitations and procedures as the Committee determines in its sole discretion are advisable and consistent with the Plan. Every finding, decision and
determination made by the Committee shall, to the fullest extent permitted by law, be final and binding upon all parties.

(b) Members of the Board who are Eligible Employees may participate in the Plan; provided, however, that (i) any such member of the Board may not vote on
any matter affecting the administration of the Plan or the grant of any option pursuant to the Plan, and (ii) no such member of the Board may be a member of
the Committee.

(c) The Committee may delegate authority to administer the Plan to the Company's Nonqualified Plan Committee or such other committee of officers and/or
directors of the Company or its Subsidiaries as may from time to time be responsible for administering the Company's nonqualified employee benefit plans
(the "Plan Administrator"), who may, in turn, further delegate authority for managing the administration of the Plan to such employees of the Company as the
Plan Administrator may determine. Any such employees designated as responsible for managing the administration of the Plan may serve indefinitely in that
capacity, subject to removal at any time by the Plan Administrator. The Plan Administrator may delegate authority for the day-to-day operations of the Plan to
the Custodian. The Custodian shall establish and maintain, as agent for the Participants, such Plan Accounts as may be necessary or desirable for the
administration of the Plan.

(d) Notwithstanding the provisions of subsections (a), (b) and (c) of this Section 9, in the event that Rule 16b-3 provides specific requirements for
administrators of plans such as the Plan, the Plan shall only be administered by such body and in such manner as shall comply with the applicable requirements
of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions regarding the Plan shall be afforded to any person that is not a
"Non-Employee Director" or to the Committee or any other committee of the Board that is not composed of "Non-Employee Directors", as such term is
defined in Rule 16b-3.

10. Disposition upon Death of Participant.

(a) In the event of the death of a Participant, and upon receipt of a request from the executor or administrator of such Participant's estate or, if no such executor
or administrator has been appointed, the spouse or one or more dependents or relatives of such Participant or other persons entitled by law thereto, the
Custodian shall, upon completion and receipt of its required documentation, deliver a certificate evidencing any shares of Common Stock credited to such
Participant's Plan Account to, or sell any such shares of Common Stock, or transfer any such shares of Common Stock to a general brokerage account
maintained, for the benefit of, such executor or administrator of such Participant's estate, or such spouse, dependents or relatives of such Participant or such
other persons entitled by law thereto; provided, however, that such issuance, sale or transfer shall be subject to the provisions of Sections 7 and 16 with respect
to payment of any applicable fees and costs related to the issuance of such certificate or the sale or transfer of such shares. 

(b) The Plan Administrator may adopt procedures providing for the designation by a Participant of a beneficiary who is to receive any shares of Common
Stock credited to such Participant's Plan Account in the event of such Participant's death. In the event that the Plan Administrator adopts such procedures,
disposition of any shares of Common Stock credited to such Participant's Plan Account upon the death of such Participant shall be made in accordance with
such designation and procedures.

11. Transferability.

Neither payroll deductions withheld or Alternative Contributions received on behalf of a Participant pending application to the purchase of shares of Common
Stock nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way by such Participant other than by will, the laws of descent and distribution or as provided in Section 10. Any such attempted
assignment, transfer, pledge or other disposition shall be of no force and effect.

12. Application of Funds.

Unless otherwise prohibited by applicable law, all payroll deductions withheld or Alternative Contributions received on behalf of a Participant under the Plan
may be commingled with the general funds and assets of the Company and used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate any such payroll deductions.

13. Adjustments upon Changes in Capitalization.

(a) The number of shares of Common Stock covered by each option under the Plan which has not yet been exercised and the number of shares of Common
Stock that have been made available for purchase under the Plan but have not yet been placed under option (collectively, the "Reserves"), as well as the price
per share of Common Stock covered by each option under the Plan which has not yet been exercised, may be proportionately adjusted, in the Committee's sole
discretion, for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, reorganization, recapitalization, rights offering or any other similar event. Such adjustment shall be
made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to an option. 

(b) In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new
Determination Date (the "New Determination Date") and a new Exercise Date (the "New Exercise Date") and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless otherwise provided by the Committee. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Plan Administrator shall notify each Participant in writing, at least ten (10) Trading Days prior to the New
Exercise Date, (i) that the Determination Date and the Exercise Date for the Participant's option have been changed to the New Determination Date and the
New Exercise Date, respectively, (ii) that the Exercise Price for the Offering Period then in progress shall be equal to the lesser of (A) eighty-five percent
(85%) of the Fair Market Value of a share of the Common Stock on the Grant Date of such Offering Period, and (B) eighty-five percent (85%) of the Fair
Market Value of a share of the Common Stock on the New Determination Date, and (iii) that the Participant's option shall be exercised automatically on the
New Exercise Date unless the Participant has terminated participation in the Plan prior to such date and accumulated payroll deductions withheld or
Alternative Contributions received on behalf of such Participant have been returned to such Participant in accordance with the provisions of Section 8.

(c) In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, the
Committee may take such action as it deems necessary including, without limitation, (i) providing that each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a parent or subsidiary of such successor corporation, (ii) setting a New Exercise Date and a New
Determination Date for the Offering Period then in progress, terminating such Offering Period on such New Exercise Date and terminating the Plan on or at
any time after such New Exercise Date, or (iii) making provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, in the event of such consolidation or merger. In the event the Committee elects to set a New Exercise
Date and a New Determination Date in accordance with clause (ii) of the preceding sentence, the New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Plan Administrator shall notify each Participant in writing, at least ten (10) Trading Days prior to the New Exercise Date, (i) that
the Determination Date and the Exercise Date for the Participant's option have been changed to the New Determination Date and the New Exercise Date,
respectively, (ii) that the Exercise Price for the Offering Period then in progress shall be equal to the lesser of (A) eighty-five percent (85%) of the Fair Market
Value of a share of the Common Stock on the Grant Date of such Offering Period, and (B) eighty-five percent (85%) of the Fair Market Value of a share of the
Common Stock on the New Determination Date, and (iii) that the Participant's option shall be exercised automatically on the New Exercise Date unless the
Participant has terminated participation in the Plan prior to such date and accumulated payroll deductions withheld or Alternative Contributions received on
behalf of such Participant have been returned to such Participant in accordance with the provisions of Section 8.

14. Amendment or Termination.

The Board or the Committee may at any time and for any reason terminate or amend the Plan. Except as provided in Section 13, no such termination or
amendment shall affect options previously granted or adversely affect the rights of any Participant with respect thereto. Without stockholder consent and
without regard to whether any Participant's rights may be considered to have been "adversely affected", the Board or the Committee shall be entitled to amend
the Plan, among other things, to change the Offering Period, the Grant Date or the Exercise Date, to increase the Exercise Price or limit the frequency and/or
number of changes in the amount of payroll deductions withheld or Alternative Contributions received during an Offering Period, to change the provisions
regarding liability of the Company for payment of any costs, expenses or fees incurred in connection with the administration and maintenance of the Plan, to
establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of shares
of Common Stock for each Participant properly correspond with payroll deductions withheld from such Participant's compensation or Alternative
Contributions received from such Participant, and to establish such other limitations or procedures as the Board or the Committee determines in its sole
discretion to be necessary or advisable and which are consistent with the Plan, in each case with prospective application and effect.

15. Effective Date and Term of Plan.

The Plan shall become effective as of October 1, 1999 and shall continue in effect thereafter until terminated in accordance with the provisions of Section 14.
The Plan Administrator may, from time to time in the exercise of its sole discretion, elect to implement the Plan in any Additional Jurisdiction, and the Plan
shall become effective for such Additional Jurisdiction as of the date so implemented therein.

16. Costs.

The costs, expenses and fees incurred in connection with the purchase of shares of Common Stock under the Plan, the general administration of the Plan and
the maintenance of the Plan Accounts with the Custodian will be paid by the Company. Any fees associated with the issuance to a Participant of certificates
evidencing shares of Common Stock, any brokerage fees and associated costs related to a sale by a Participant of shares of Common Stock or a transfer of
shares of Common Stock to a general brokerage account maintained for the benefit of such Participant, and any other fees and expenses under the Plan shall be
paid by such Participant. 

17. Taxes.

At the time an option to purchase shares of Common Stock is exercised, a Participant must make adequate provision for the Company's federal, state, national,
provincial or other tax, pension or insurance withholding obligations under applicable law which arise upon the exercise of the option. At any time, the
Company may withhold from a Participant's compensation or other amounts payable to such Participant (regardless of whether such person at the time
continues to participate or be eligible to participate in the Plan, and regardless of whether or not such person at the time continues to be employed by the
Company or any Subsidiary) the amount necessary for the Company to meet applicable withholding obligations.

18. Effect on Employment.

Participation in the Plan will not impose any obligation upon the Company or any Subsidiary to continue the employment of a Participant for any specific
period of time and will not affect the right of the Company or any Subsidiary to terminate a Participant's employment at any time, with or without cause. Any
income a Participant may realize as a result of participation in the Plan shall not be considered as a part of such Participant's compensation or used for the
calculation of any other pay, allowance, pension or other benefit unless otherwise required under other benefit plans provided by the Company or its
Subsidiaries or required by applicable law or contractual obligation of the Company or its Subsidiaries.

19. Compliance with Law.

Notwithstanding any other provision of the Plan, options to purchase shares of Common Stock under the Plan shall not be exercisable or exercised, and shares
of Common Stock shall not be issued with respect to any such option, unless the exercise of such option and the issuance and delivery of such shares of
Common Stock pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, and the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which shares of
Common Stock may then be listed.

Without limiting the generality of the foregoing, the terms and conditions of all options granted under the Plan to, and the purchase of all shares of Common
Stock by, any Participant subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. The Plan and any options
thereunder shall be deemed to contain, and the shares issued upon exercise of such options shall be subject to, such additional conditions and restrictions as
may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to transactions under the Plan.

20. Notices.

All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person, designated by the Company for receipt thereof. All notices and other
communications to any Participant required hereunder shall be made to the address maintained on the Company's payroll records.

21. Governing Law.

The Plan and any rules and regulations relating to the Plan will be governed by, and construed in accordance with, the laws of the State of Delaware, without
giving effect to principles of conflicts of laws, and applicable Federal law. The Plan is not to be subject to the Employee Retirement Income Security Act of
1974, as amended, and is not intended to qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended,
or any successor legislation.

Exhibit A

Subsidiaries

All Subsidiaries of the Company

Exhibit B

Payroll Deduction/Alternative Contribution Amounts 

	Country 

of Residence	Minimum Amount

per Pay Period 	Maximum Amount

per Year
	United States	US$25.00 (full-time employee)

US$12.00 (part-time employee)
	US$25,000.00
	Puerto Rico	US$12.00 (full-time employee)

US$6.00 (part-time employee)
	US$25,000.00
	Canada	C$25.00 (full-time employee)

C12.00 (part-time employee)
	C$25,000.00
	Japan	Y5,000 (regular employee)	Y2,500,000.00
	United Kingdom	&pound50 (all employees)	&pound13,000
	Ireland	&pound50 (all employees	&pound13,000
	Sweden	SEK 840:-(all employees)	SEK 210 000:-
	Spain	8.400 pts. (All employess)	2.100.000 pts.
	France	500 FF (all employees)	120 000 FF
	Taiwan	NT$775 (all employees)	NT$390,000
	India	Rs2,150 (all employees)	Rs equivalent of US$10,000 per 5-year period
	Hong Kong	HK$350 (all employees)	HK$170,000Ex-4-1

Exhibit 4.1

THIRD AMENDMENT TO

SECOND AMENDED AND RESTATED LOAN AGREEMENT

 

     THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT (this "Amendment") is made and entered into as of this 27th day of April, 2000 (the "Agreement Date"), by and between CPAC, INC
 ., a New York corporation, as borrower (the "Borrower"), and BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.), a national banking association, as lender (the "Lender").

W I T N E S S E T H:

     WHEREAS, the Borrower and the Lender are parties to that certain Second Amended and Restated Loan Agreement, dated as of October 13, 1994, as amended by the First Amendment to Second Amended
and Restated Loan Agreement, dated as of October 31, 1996 and as amended by the Second Amendment to Second Amended and Restated Loan Agreement, dated as of July 10, 1998 (as amended, the "Loan Agreement"), pursuant to which the Lender extended
certain financial accommodations to the Borrower; and

     WHEREAS, the Borrower has requested, and the Lender has agreed, subject to the terms hereof, to amend certain provisions of the Loan Agreement, including an extension of the maturity date from
October 31, 2000 to October 31, 2002; and

     NOW, THEREFORE, in consideration of the premises, the terms and conditions contained herein, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     1.   Definitions. All capitalized terms used herein and not expressly defined herein shall have the same respective meanings given to such terms in the Loan Agreement.

     2.   Amendment to Article I.

     (a)  Article I of the Loan Agreement, Particular Terms and Definitions, is hereby amended by deleting the definitions of "Commitment," "Lender" and "Note" in
their entireties and substituting in lieu thereof the following new definitions to read as follows in the proper alphabetical order:
"Commitment:That certain agreement dated as of September 29, 1994 between the Borrower and the Lender, a copy of which is attached hereto as Exhibit 'A,' as amended and supplemented by that certain agreement dated as of
October 25, 1996 between the Borrower and the Lender, a copy of which is attached as Exhibit 'A' to the First Amendment to the Loan Agreement dated as of October 31, 1996 by and between the Borrower and the Lender, as amended and supplemented by
that certain agreement dated as of June 19, 1998 between the Borrower 

<PAGE 49>
 

and the Lender, a copy of which is attached as Exhibit 'A' to the Second Amendment to the Loan Agreement dated as of July 10, 1998 by and between the Borrower and the Lender, and as further amended and supplemented by that certain
agreement dated as of March 28, 2000 between the Borrower and the Lender, a copy of which is attached as Exhibit 'A' to the Third Amendment to the Loan Agreement dated as of April 27, 2000 by and between the Borrower and the Lender.

Lender:  Bank of America, N.A., (f/k/a NationsBank, N.A.) a national banking association, chartered under the laws of the United States of America, and having as its address:

	
 
	
Bank of America, N.A.

600 Peachtree Street, N.E.

19th Floor

Atlanta, Georgia 30308-2214

Attention: Ché Watkins
	
 

Note:  The Third Amended and Restated Promissory Note, dated as of April 27, 2000 (the 'Revolving Note') in the principal amount of its Loan Amount made by the Borrower to the order of the Lender."

     (b)  Article I of the Loan Agreement, Particular Terms and Definitions is hereby amended by adding to the end of the definition of "Guarantor" therein the following new text:

	
 
	
"CPAC Italia, SRL

f/k/a Chimifoto Orrano

Via Bolzano 29

Milano 20127

Italy

CPAC Asia

112 Moo 9, Bangna-Trad Highway KM 36

Bangwua, Bangpakong

Chachoengsao 24180

Thailand"
	
 

     3.   Amendments to Article III.

     (a)  Article III of the Loan Agreement, Covenants of the Borrower, is hereby further amended by deleting Section 3.12 in its entirety and substituting in lieu thereof:

     "On any date of determination, the Borrower will maintain a minimum Net Worth 

<PAGE 50>
 

of no less than Fifty Million Dollars ($50,000,000) plus seventy-five percent (75%) of the cumulative, positive Net Income generated from March 31, 2000 to the date on which the computation of Net Worth is being made calculated
as of the end of the most recently completed fiscal quarter minus up to Two Million Five Hundred Thousand Dollars ($2,500,000.00) in common stock repurchases, to the extent transacted in the most recently completed four fiscal quarter period; provided, however, that during any fiscal
quarter during which the Borrower institutes and/or maintains a monetary dividend payment on its Capital Stock, sixty-five percent (65%) of the Net Income generated for such fiscal quarter instead of seventy-five percent (75%) of the Net Income generated
shall be included in the computation of Net Worth. 'Net Worth' shall be defined as the Total Capital Stock of the Borrower plus the Borrower's Paid-in-Capital plus Retained Earnings of the Borrower, net of the Borrower's Treasury Stock and net of foreign currency translation adjustments; 'Net
Income' shall be defined as net income of the Borrower and its subsidiaries on a consolidated basis determined in accordance with GAAP."

     (b)  Article III of the Loan Agreement, Covenants of the Borrower, is hereby further amended by deleting the existing Section 3.13 in its entirety and substituting in lieu
thereof:
     "3.13  The Borrower will maintain as of the end of each fiscal quarter a Funded Debt to Cash Flow ratio of not more than 2.5 to 1.0. 'Cash Flow' shall be defined as Net Income of the
Borrower for the most recently completed four (4) fiscal quarters, plus, to the extent deducted in determining Net Income, the sum of each of the following for such period:  (a) depreciation and amortization allowances, (b) interest
expense (net of any interest income) and (c) income tax expense. 'Funded Debt' shall be defined as Debt for money borrowed and Debt represented by notes payable and drafts accepted representing extensions of credit, all obligations evidenced by
bonds, debentures, notes or other similar instruments, all Debt upon which interest charges are customarily paid, all Capitalized Lease Obligations, all reimbursement obligations with respect to outstanding letters of credit, all Debt issued or assumed as
full or partial payment for property or services (other than trade payables arising in the ordinary course of business, but only if and so long as such accounts are payable on customary trade terms), whether or not any such notes, drafts, obligations or
Debt represent Debt for money borrowed, and, without duplication, guaranties of any of the foregoing."

     (c)  Article III of the Loan Agreement, Covenants of the Borrower, is hereby further amended by inserting in the following new text thereof:
     "3.19  The Borrower shall prepay the Revolving Loan in an aggregate amount equal to 100% of the net cash proceeds of any material asset sales, insurance proceeds, any issuance of debt,
equity or other capital."

<PAGE 51>

 

 

 

     4.   Amendments to Article V.

     (a)  Article V of the Loan Agreement, General Conditions, is hereby amended by deleting the existing Section 5.1 in its entirety and substituting in lieu thereof:
     "5.1  The Borrower agrees to pay the Lender an unused fee on the aggregate unborrowed balance of the Revolving Loan, for each day from April 27, 2000 until the Revolving Loan maturity
date, (a) at all times that the aggregate unborrowed balance of the Revolving Loan is greater than Ten Million Dollars ($10,000,000.00), at a rate of one-quarter of one percent (1/4%) per annum or (b) at all times that the aggregate borrowed balance of
the Revolving Loan is equal to or less than Ten Million Dollars ($10,000,000.00), at a rate of one-eighth of one percent (1/8%) per annum.  Such unused fee shall be computed on the basis of a year of 365/366 days for the actual number of days
elapsed, shall be billed quarterly in arrears on the last day of each calendar quarter, commencing on June 30, 2000, shall be fully earned when due, and shall be non-refundable when paid. A final payment of any unused fee then payable shall also be due
and payable on the Revolving Loan maturity date."

     (b)  Article V of the Loan Agreement, General Conditions, is hereby further amended by deleting the existing Section 5.2 in its entirety and substituting in lieu thereof:
     "5.2  The Borrower may borrow, repay and reborrow funds under the Revolving Loan at its option in increments of no less than Ten Thousand Dollars ($10,000.00) during the term of the Revolving Loan so long
as there exists no Event of Default thereunder."

     (c)  Article V of the Loan Agreement, General Conditions, is hereby further amended by deleting the existing Section 5.3 in its entirety and substituting in lieu thereof:
     "5.3  The Loans shall be cross-collateralized by the following described collateral; and all of said collateral shall serve as security for the Loans. The Lender shall have a valid,
perfected first security interest in:
(a)  All accounts, documents, instruments, contract rights, chattel paper and general intangibles of the Borrower and its subsidiaries, excluding CPAC-Europe and CPAC Asia.

(b)  All inventory and equipment of the Borrower and its subsidiaries, excluding CPAC-Europe and CPAC Asia.

(c)  All products and proceeds of the foregoing collateral, excluding those of CPAC-Europe and CPAC Asia.

(d)  All Collateral described in each Security Agreement." 

 

<PAGE 52>

 

     5.   Representations and Warranties. The Borrower hereby represents and warrants to and in favor of the Lender as follows:

     (a)  Each representation and warranty set forth in Article II of the Loan Agreement, as amended hereby, is hereby restated and affirmed as true and correct in all material respects as of the date hereof,
except to the extent (i) previously fulfilled in accordance with the terms of the Loan Agreement, as amended hereby, (ii) Borrower has provided the Lender updates to information provided to the Lender in accordance with the terms of such
representations and warranties, or (iii) relating specifically to the Agreement Date or otherwise inapplicable;

     (b)  The Borrower has the corporate power and authority (i) to enter into this Amendment, and (ii) to do all acts and things as are required or contemplated hereunder to be done, observed and
performed by it; 

     (c)  This Amendment has been duly authorized, validly executed and delivered by one or more Authorized Signatories of the Borrower, and constitutes the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its terms, subject, as to enforcement of remedies, to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular,
may not be available where damages are considered an adequate remedy at law, and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights
generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower); and

     (d)  The execution and delivery of this Amendment and performance by the Borrower under the Loan Agreement, as amended hereby, does not and will not require the consent or approval of any regulatory
authority or governmental authority or agency having jurisdiction over the Borrower which has not already been obtained, nor be in contravention of or in conflict with the Articles of Incorporation or By-Laws of the Borrower, or any provision of any
statute, judgment, order, indenture, instrument, agreement, or undertaking, to which the Borrower is party or by which the Borrower's assets or properties are bound. 

     6.   Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment is subject to:
     (a)  all of the representations and warranties of the Borrower under Section 5 hereof which are made as of the date hereof, shall be true and correct in all material respects; 

     (b)  receipt by Lender of duly executed Amendment; 

     (c)  receipt by the Lender of a certificate of the chief financial officer of the Borrower certifying that no Default exists both before and after giving effect to this Amendment, and there has been
no material adverse change in the financial condition of the Borrower both before and after giving effect to this Amendment; 

 

<PAGE 53>

 
     (d)  receipt by the Lender of duly executed Third Amended and Restated Revolving Note in substantially the form attached hereto as Exhibit "A", which promissory note shall be deemed to be
a "Note" under the Loan Agreement and the other Loan Documents for all purposes hereafter; and

     (e)  receipt by Lender of duly executed AutoBorrow Service Agreement (as defined and set forth in the Note); 

     (f)  receipt by Lender of duly executed Affirmation of Guaranty and Confirmation of Security Documents;
     (g)  receipt by Lender of Guaranty executed by CPAC Asia; 

     (h)  receipt by Lender of duly executed opinion of counsel for Borrower and the Guarantors in form and substance satisfactory to the Lender;
     (i)  receipt by the Lender from the Borrower of funds in payment of an upfront fee in the amount of Twenty-Five Thousand Dollars ($25,000); and

     (j)  receipt of any other documents or instruments that the Lender may reasonably request, certified by an officer of the Borrower if so requested. 

     7.   Effect of Amendment; No Novation. Except for the amendments set forth above and the amendment and restatement of the Amended and Restated Promissory Note pursuant to the
Third Amended and Restated Promissory Note dated of even date herewith (the "Revolving Note"), the text of the Loan Agreement and all other Loan Documents shall remain unchanged and in full force and effect. No waiver by the Lender under the Loan
Agreement or any other Loan Document is granted or intended except as expressly set forth herein, and the Lender expressly reserves the right to require strict compliance in all other respects. Except as set forth herein and in the Revolving Note, the
amendments agreed to herein shall not constitute a modification of the Loan Agreement or any of the other Loan Documents, or a course of dealing with the Lender, at variance with the Loan Agreement or any of the other Loan Documents, such as to require
further notice by the Lender to require strict compliance with the terms of the Loan Agreement and the other Loan Documents in the future. The terms of this Amendment are not intended to and do not serve as a novation as to the Loan Agreement or the
Revolving Note or the indebtedness evidenced thereby. The parties hereto expressly do not intend to extinguish any debt or security interest created pursuant to the Loan Agreement or any document executed in connection therewith. Instead it is the express
intention to affirm the Loan Agreement and the security created thereby.

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

     9.   Successors and Assigns. This Amendment shall be binding upon and inure to the 

<PAGE 54>

benefit of the successors and permitted assigns of the parties hereto.

     10.  GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

     11.  Arbitration.

     (a)  THIS PARAGRAPH CONCERNS THE RESOLUTION OF ANY CONTROVERSIES OR CLAIMS BETWEEN THE BORROWER AND THE LENDER, WHETHER ARISING IN CONTRACT, TORT OR BY STATUTE, INCLUDING BUT NOT LIMITED
TO CONTROVERSIES OR CLAIMS THAT ARISE OUT OF OR RELATE TO: (i) THIS AMENDMENT (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS); OR (ii) ANY DOCUMENT RELATED TO THIS AMENDMENT; (COLLECTIVELY A "CLAIM").

     (b)  AT THE REQUEST OF THE BORROWER OR THE LENDER, ANY CLAIM SHALL BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (TITLE 9, U. S. CODE) (THE "ACT"). THE ACT WILL APPLY
EVEN THOUGH THIS AMENDMENT PROVIDES THAT IT IS GOVERNED BY THE LAW OF A SPECIFIED STATE. 

     (c)  ARBITRATION PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE ACT, THE RULES AND PROCEDURES FOR THE ARBITRATION OF FINANCIAL SERVICES DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF
("J.A.M.S."), AND THE TERMS OF THIS PARAGRAPH. IN THE EVENT OF ANY INCONSISTENCY, THE TERMS OF THIS PARAGRAPH SHALL CONTROL. 

     (d)  THE ARBITRATION SHALL BE ADMINISTERED BY J.A.M.S. AND CONDUCTED IN ANY U. S. STATE WHERE REAL OR TANGIBLE PERSONAL PROPERTY COLLATERAL FOR THIS CREDIT IS LOCATED OR IF THERE IS NO SUCH COLLATERAL, IN
GEORGIA. ALL CLAIMS SHALL BE DETERMINED BY ONE ARBITRATOR; HOWEVER, IF CLAIMS EXCEED $5,000,000, UPON THE REQUEST OF ANY PARTY, THE CLAIMS SHALL BE DECIDED BY THREE ARBITRATORS. ALL ARBITRATION HEARINGS SHALL COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION AND CLOSE WITHIN 90 DAYS OF COMMENCEMENT AND THE AWARD OF THE ARBITRATOR(S) SHALL BE ISSUED WITHIN 30 DAYS OF THE CLOSE OF THE HEARING. HOWEVER, THE ARBITRATOR(S), UPON A SHOWING OF GOOD CAUSE, MAY EXTEND THE COMMENCEMENT OF THE HEARING FOR UP
TO AN ADDITIONAL 60 DAYS. THE ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN STATEMENT OF REASONS FOR THE AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO ANY COURT HAVING JURISDICTION TO BE CONFIRMED AND ENFORCED. 

     (e)  THE ARBITRATOR(S) WILL HAVE THE AUTHORITY TO DECIDE 

<PAGE 55>

WHETHER ANY CLAIM IS BARRED BY THE STATUTE OF LIMITATIONS AND, IF SO, TO DISMISS THE ARBITRATION ON THAT BASIS. FOR PURPOSES OF THE APPLICATION OF THE STATUTE OF LIMITATIONS, THE SERVICE ON J.A.M.S. UNDER APPLICABLE J.A.M.S.
RULES OF A NOTICE OF CLAIM IS THE EQUIVALENT OF THE FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS ARBITRATION PROVISION OR WHETHER A CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR(S). THE ARBITRATOR(S) SHALL HAVE THE POWER TO AWARD LEGAL
FEES PURSUANT TO THE TERMS OF THIS AMENDMENT. 

     (f)  THIS PARAGRAPH DOES NOT LIMIT THE RIGHT OF THE BORROWER OR THE LENDER TO: (i) EXERCISE SELF-HELP REMEDIES, SUCH AS BUT NOT LIMITED TO, SETOFF; (ii) INITIATE JUDICIAL OR NONJUDICIAL FORECLOSURE
AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL; (iii) EXERCISE ANY JUDICIAL OR POWER OF SALE RIGHTS, OR (iv) ACT IN A COURT OF LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WRIT OF POSSESSION OR APPOINTMENT OF A
RECEIVER, OR ADDITIONAL OR SUPPLEMENTARY REMEDIES. 

     12.  Loan Documents. This document shall be deemed to be a Loan Document for all purposes.

[Remainder of Page Intentionally Left Blank]

 

<PAGE 56>

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal as of the day and year first above written.

 

	
BORROWER:
	
 
	
CPAC, INC.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Thomas J. Weldgen                             

Thomas J. Weldgen

Chief Financial Officer

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Attest:
	
/s/ Natalie S. Gayton                         

Name:  Natalie S. Gayton                  

Title:  Corp. Payroll & Tax Manager   

	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
            [CORPORATE SEAL]

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
LENDER:
	
 
	
BANK OF AMERICA, N.A. (f/k/a

NationsBank, N.A.)

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Scott E. Reed                                      
   

Name:  Scott E. Reed                                   

Title:  Senior Vice President                          

 

 

<PAGE 57>

 

 

THIRD AMENDED AND RESTATED PROMISSORY NOTE

 

	
Date:    April 27, 2000
	
 
	
Amount:   $20,000,000.00 

Maturity Date:  October 31, 2002

 

WHEREAS, pursuant to that certain Promissory Note dated December 9, 1992, as amended by that certain Note Modification Agreement dated December 16, 1993, as further amended by that certain Second Note Modification Agreement dated October 13,
1994 (as amended, the "Original Promissory Note"), CPAC, INC., a New York corporation ("Borrower") obtained from BANK OF AMERICA, N.A. (formerly known as NationsBank, N.A., and hereinafter, together with its successors and assigns, called the "Lender"), a
revolving loan not to exceed Four Million Five Hundred Thousand Dollars ($4,500,000.00) with a maturity date of October 31, 1996;

WHEREAS, Borrower and Lender are parties to that certain Second Amended and Restated Loan Agreement dated as of October 13, 1994, as amended by First Amendment thereto dated as of October 31, 1996 and as amended by Second Amendment thereto dated
as of July 10, 1998 (as amended, the "Loan Agreement"), pursuant to which the revolving loan obtained from the lender was increased to Twenty Million Dollars ($20,000,000.00) with a maturity date of October 31, 2000;

WHEREAS, Borrower and Lender are parties to the Third Amendment to Loan Agreement dated as of April 27, 2000, whereby the Borrower has requested that the Original Promissory Note be modified to extend the maturity date thereof and as otherwise
hereinafter set forth and Lender has agreed to such modification; 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, one and no/100 dollar ($1.00) and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Lender and the
Borrower agree that all capitalized terms used herein shall have the meanings ascribed thereto in the Loan Agreement and further to amend and restate the Original Promissory Note subject to the terms and conditions set forth herein.

FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender, at Bank of America, N.A., 600 Peachtree St., N.E., 19th Floor, Atlanta, Georgia 30308-2214 or such other place as Lender may designate in writing to the Borrower, without
set-off, counterclaim or reduction of any kind, the principal sum of TWENTY MILLION AND 00/100s DOLLARS ($20,000,000.00) of United States funds, or, if less, so much thereof as may from time to time be advanced by Lender to Borrower and is outstanding (a)
hereunder, plus interest as hereinafter provided and (b) under that certain AutoBorrow Service Agreement dated as of April 27, 2000 between the Borrower and the Lender (the "AutoBorrow Service Agreement").

THIS NOTE IS GIVEN IN REPLACEMENT OF THE ORIGINAL PROMISSORY NOTE AND SHALL NOT CONSTITUTE A NOVATION WITH RESPECT TO SUCH NOTES OR THE INDEBTEDNESS EVIDENCED THEREBY.

1.   Rate. The Rate shall be, at Borrower's option, the Prime Rate or the LIBOR Basis.

Prime Rate. The Prime Rate, plus zero percent (0%), per annum. The "Prime Rate" is the fluctuating rate of interest established by Lender from time to time, at its discretion, whether or not such rate shall be otherwise published. The Prime Rate
is established by Lender as an index and may or may not at any time be the best or lowest rate charged by Lender on any loan.

 

<PAGE 58>

LIBOR Basis. The LIBOR Basis shall mean a simple per annum interest rate (rounded upward, if necessary, to the nearest one-hundredth (1/100th) of one percent) equal to the sum of (a) the quotient of (i) the LIBOR
Rate divided by (ii) one minus the LIBOR Reserve Percentage, stated as a decimal, plus (b) the Applicable Margin. The "LIBOR Rate" is, for any advance for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1% appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in United States Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "LIBOR Rate" shall mean, for any advance for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in United States Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of such rates. The "Interest Period" is thirty (30) days. Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (ii) any applicable Interest Period which begins on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period is to end shall (subject to clause (i) above) end on the
last day of such calendar month, and (iii) no Interest Period shall extend beyond the Maturity Date or such earlier date as would interfere with the repayment obligations of the Borrower hereunder. The "LIBOR Reserve Percentage" is the percentage which is
in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System, as such regulation may be amended from time to time, as the maximum reserve requirement applicable with respect to Eurocurrency Liabilities (as
that term is defined in Regulation D), whether or not Lender has any such Eurocurrency Liabilities subject to such reserve requirement at that time.  The LIBOR Basis for any advance shall be adjusted as of the effective date of any change in the
LIBOR Reserve Percentage.

CD Collateral. On and after the Agreement Date, the Borrower shall have the option to cash collateralize this Note with a Three Million Dollar ($3,000,000) certificate of deposit on deposit with Lender ("CD Collateral"). Upon the delivery
of the CD Collateral to the Lender and the execution and delivery of the Pledge Agreement pledging such CD Collateral to the Lender, the Applicable Margin shall be reduced as set forth herein.

Applicable Margin. The Applicable Margin shall be the interest rate margin determined by Lender based upon the ratios for the most recent fiscal quarter end, effective as of the first Business Day of the month after the financial statements
referred to in Section 3.6 of the Loan Agreement are required to be furnished by Borrower to Lender for the fiscal quarter most recently ended, determined as follows:

	
 
	
Funded Debt to Cash Flow
	
Applicable Margin

	
 
	
 
	
Without CD Collateral
	
 
	
With CD Collateral

	
 
	

Greater than 1.75
	
2.00% 
	
 
	
1.875%

	
 
	

Greater than 1.25 but less than

or equal to 1.75
	
1.500%
	
 
	
1.375%

	
 
	

Greater than .075 but less than

or equal to 1.25
	
1.000%
	
 
	
0.875%

	
 
	

Less than or equal to .075
	
0.750%
	
 
	
0.625%

 

 

<PAGE 59>

Notwithstanding any provision of this Note, Lender does not intend to charge and Borrower shall not be required to pay any amount of interest or other charges in excess of the maximum permitted by the applicable law of the
State of Georgia; if any higher rate ceiling is lawful, then that higher rate ceiling shall apply. Any payment in excess of such maximum shall be refunded to Borrower or credited against principal, at the option of Lender.

2.   Accrual Method. Interest at the Rate set forth above will be calculated by the 365/360 day method (a daily amount of interest is computed for a hypothetical year of 360 days; that amount is multiplied by the actual number
of days for which any principal is outstanding hereunder).

3.   Rate Change Date. Any Rate based on a fluctuating index or base rate will change, unless otherwise provided, each time and as of the date that the index or base rate changes. In the event any index is discontinued, Lender
shall substitute an index determined by Lender to be comparable, in its sole discretion.

4.   Payment Schedule. All payments received hereunder shall be applied first to the payment of any expense or charges payable hereunder or under any other loan documents executed in connection with this Note, then to interest
due and payable, with the balance applied to principal, or in such other order as Lender shall determine at its option. Principal shall be paid in full in a single payment on October 31, 2002. Interest thereon shall be paid monthly, on the first day of
each Interest Period, and continuing on the first day of each successive month thereafter, with a final payment of all unpaid interest at the stated maturity of this Note.

5.   Revolving Feature. Borrower may borrow, repay and reborrow hereunder at any time, up to a maximum aggregate amount not to exceed the Available Commitment, provided that Borrower is not in default under any provision of
this Note, any other documents executed in connection with this Note, or any other note or other loan documents now or hereafter executed in connection with any other obligation of Borrower to Lender, and provided that the borrowings hereunder do not
exceed any borrowing base or other limitation on borrowings by Borrower. Lender shall incur no liability for its refusal to advance funds based upon its determination that any conditions of such further advances have not been met. Lender records of the
amounts borrowed from time to time shall be conclusive proof thereof. "Available Commitment" shall mean, on any date of determination, the difference of (a) the Revolving Commitment in effect on such date minus (b) the sum of (i) the aggregate principal amount of all loans outstanding hereunder on such date, and (ii) amounts then outstanding under the AutoBorrow Service Agreement. "Revolving Commitment" shall mean the obligation of the Lender to
make advances hereunder to the Borrower from time to time, pursuant to the terms hereof in the aggregate amount on the date hereof of up to Twenty Million Dollars ($20,000,000.00) as such amount may be reduced pursuant to the terms hereof.

6.   Automatic Payment. Borrower has elected to authorize Lender to effect payment of sums due under this Note by means of debiting Borrower's account number 07908684. This authorization shall not affect the obligation of
Borrower to pay such sums when due, without notice, if there are insufficient funds in such account to make such payment in full on the due date thereof, or if Lender fails to debit the account.

7.   Waivers, Consents and Covenants. Borrower, any indorser or guarantor hereof, or any other party hereto (individually an "Obligor" and collectively "Obligors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of acceleration of maturity, notice of protest, notice of nonpayment, notice of dishonor, and any other notice required to be given under the law to any Obligor in connection with
the delivery, acceptance, performance, default or enforcement of this Note, any indorsement or guaranty of this Note, or any other 

<PAGE 60>

 

documents executed in connection with this Note or any other note or other loan documents now or hereafter executed in connection with any obligation of Borrower to Lender (the "Loan Documents"); (b) consent to all delays, extensions, renewals or other
modifications of this Note or the Loan Documents, or waivers of any term hereof or of the Loan Documents, or release or discharge by Lender of any of Obligors, or release, substitution or exchange of any security for the payment hereof, or the failure to
act on the part of Lender, or any indulgence shown by Lender (without notice to or further assent from any of Obligors), and agree that no such action, failure to act or failure to exercise any right or remedy by Lender shall in any way affect or impair
the obligations of any Obligors or be construed as a waiver by Lender of, or otherwise affect, any of Lender's rights under this Note, under any indorsement or guaranty of this Note or under any of the Loan Documents; and (c) agree to pay, on demand, all
costs and expenses of collection or defense of this Note or of any indorsement or guaranty hereof and/or the enforcement or defense of Lender's rights with respect to, or the administration, supervision, preservation, or protection of, or realization
upon, any property securing payment hereof, including, without limitation, reasonable attorney's fees, including fees related to any suit, mediation or arbitration proceeding, out of court payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any arbitrator or court, whichever is applicable.

8.   "Interest" Limited. As used in this Note and for the purposes of Section 7-4-2 of the Official Code of Georgia Annotated, or any successor thereto, the term "interest" does not include any fees (including, but not limited
to, the Loan Fee) or other charges imposed on Borrower in connection with the indebtedness evidenced by this Note, other than the interest described above.

9.   Prepayments.

     (a)Optional Prepayments. Notwithstanding any other provision in this Note or other Loan Documents, prepayments may be made in whole or in part at any time on any loan under the Revolving Loan. All
prepayments of principal shall be applied in the inverse order of maturity, or in such other order as Lender shall determine in its sole discretion. Any unutilized portion of the Revolving Commitment hereunder in excess of the Maximum Availability (as
defined in and determined in accordance with the AutoBorrow Service Agreement) may be irrevocably reduced in whole or in part. Loans made under the Revolving Commitment using the LIBOR Basis may be prepaid provided that the Borrower shall, within 15 days
of any request by the Lender, reimburse Lender for any loss or out-of-pocket expense incurred by Lender in connection with its cost of funds arising from such prepayment.

     (b)Mandatory Prepayment. The Revolving Loan shall be prepaid by an amount equal to 100% of the net cash proceeds of any material asset sales, insurance proceeds, any reissuance of debt, equity or other capital
 .

10.  Delinquency Charge. To the extent permitted by law, a delinquency charge may be imposed in an amount not to exceed four percent (4%) of any payment that is more than fifteen days late. 

11.  Events of Default. The following are events of default hereunder: (a) the failure to pay or perform any obligation, liability or indebtedness of any Obligor to Lender, or to any affiliate or subsidiary of Bank
of America, N.A., whether under this Note or any Loan Documents, as and when due (whether upon demand, at maturity or by acceleration); (b) the failure to pay or perform any other obligation, liability or indebtedness of any Obligor to any other party;
(c) the death of any Obligor (if an individual); (d) the resignation or withdrawal of any partner or a material owner/guarantor of Borrower, as determined by Lender in its sole discretion; (e) the commencement of a proceeding against any Obligor for
dissolution or liquidation, the voluntary or involuntary termination or dissolution of any Obligor or the merger or consolidation of any Obligor with or into another entity; (f) the insolvency of, the business failure of, the appointment of a custodian,
trustee, liquidator or receiver for or for any of the property of, 

 

<PAGE 61>

 

the assignment for the benefit of creditors by, or the filing of a petition under bankruptcy, insolvency or debtor's relief law or the filing of a petition for any adjustment of indebtedness, composition or extension by or against any Obligor; (g) the
determination by Lender that any representation or warranty made to Lender by any Obligor in any Loan Documents or otherwise is or was, when it was made, untrue or materially misleading; (h) the failure of any Obligor to timely deliver such financial
statements, including tax returns, other statements of condition or other information, as Lender shall request from time to time; (i) the entry of a judgment against any Obligor which Lender deems to be of a material nature, in Lender's sole discretion;
(j) the seizure or forfeiture of, or the issuance of any writ of possession, garnishment or attachment, or any turnover order for any property of any Obligor; (k) the determination by Lender that it is insecure for any reason; (l) the determination by
Lender that a material adverse change has occurred in the financial condition of any Obligor; or (m) the failure of Borrower's business to comply with any law or regulation controlling its operation.

12.  Remedies upon Default. Whenever there is a default under this Note (a) the entire balance outstanding hereunder and all other obligations of any Obligor to Lender (however acquired or evidenced) shall, at the option of Lender,
become immediately due and payable and any obligation of Lender to permit further borrowing under this Note shall immediately cease and terminate, and/or (b) to the extent permitted by law, the Rate of interest on the unpaid principal shall be increased
at Lender's discretion up to the maximum rate allowed by law, or if none, 25% per annum (the "Default Rate"). The provisions herein for a Default Rate shall not be deemed to extend the time for any payment hereunder or to constitute a "grace period"
giving Obligors a right to cure any default. At Lender's option, any accrued and unpaid interest, fees or charges may, for purposes of computing and accruing interest on a daily basis after the due date of the Note or any installment thereof, be deemed to
be a part of the principal balance, and interest shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note until the entire outstanding balance of principal and interest is paid in full. Upon a default under this
Note, Lender is hereby authorized at any time, at its option and without notice or demand, to set off and charge against any deposit accounts of any Obligor (as well as any money, instruments, securities, documents, chattel paper, credits, claims,
demands, income and any other property, rights and interests of any Obligor), which at any time shall come into the possession or custody or under the control of Lender or any of its agents, affiliates or correspondents, any and all obligations due
hereunder. Additionally, Lender shall have all rights and remedies available under each of the Loan Documents, as well as all rights and remedies available at law or in equity.

13.  Non-Waiver. The failure at any time of Lender to exercise any of its options or any other rights hereunder shall not constitute a waiver thereof, nor shall it be a bar to the exercise of any of its options or rights at a later
date. All rights and remedies of Lender shall be cumulative and may be pursued singly, successively or together, at the option of Lender. The acceptance by Lender of any partial payment shall not constitute a waiver of any default or of any of Lender's
rights under this Note. No waiver of any of its rights hereunder, and no modification or amendment of this Note, shall be deemed to be made by Lender unless the same shall be in writing, duly signed on behalf of Lender; each such waiver shall apply only
with respect to the specific instance involved, and shall in no way impair the rights of Lender or the obligations of Obligors to Lender in any other respect at any other time. 

14.  Applicable Law, Venue and Jurisdiction. This Note and the rights and obligations of Borrower and Lender shall be governed by and interpreted in accordance with the law of the State of Georgia. In any litigation in connection
with or to enforce this Note or any indorsement or guaranty of this Note or any Loan Documents, Obligors, and each of them, irrevocably consent to and confer personal jurisdiction on the courts of the State of Georgia or the United States located within
the State of Georgia and expressly waive any objections as to venue in any such courts. Nothing contained herein shall, however, prevent Lender from bringing any action or exercising any rights within any other state or jurisdiction or from obtaining
personal jurisdiction by any other means available under applicable law.

 

<PAGE 62>

 

15.  Partial Invalidity. The unenforceability or invalidity of any provision of this Note shall not affect the enforceability or validity of any other provision herein and the invalidity or unenforceability of any provision of this
Note or of the Loan Documents to any person or circumstance shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances.

16.  Binding Effect. This Note shall be binding upon and inure to the benefit of Borrower, Obligors and Lender and their respective successors, assigns, heirs and personal representatives, provided, however, that no obligations of
Borrower or Obligors hereunder can be assigned without prior written consent of Lender.

17.  Controlling Document. To the extent that this Note conflicts with or is in any way incompatible with any other document related specifically to the loan evidenced by this Note, this Note shall control over any other such
document, and if this Note does not address an issue, then each other such document shall control to the extent that it deals most specifically with an issue.

18.  Indemnity.  The Borrower agrees to indemnify and hold harmless the Lender and their affiliates, employees, representatives, shareholders, officers, directors and counsel (any of the foregoing shall be an "Indemnitee")
from and against any and all claims, liabilities, losses, damages, actions, attorneys' fees and expenses (as such fees and expenses are incurred) and demands by any party, including the costs of investigating and defending such claims, whether or not the
Borrower, any subsidiary or the Person seeking indemnification is the prevailing party (a) resulting from any breach or alleged breach by the Borrower or any subsidiary of the Borrower of any representation or warranty made hereunder; or (b) 
otherwise arising out of (i) the Commitment or otherwise under this Note, any Loan Document or any transaction contemplated hereby or thereby, including, without limitation, the use of the proceeds of Loans hereunder in any fashion by the Borrower or
the performance of their respective obligations under the Loan Documents by the Borrower or any of its subsidiaries, (ii) allegations of any participation by the Lender in the affairs of the Borrower or any of its subsidiaries, or allegations that
the Lender has any joint liability with the Borrower or any of its subsidiaries for any reason, (iii) any claims against the Lender by any shareholder or other investor in or lender to the Borrower or any subsidiary, by any brokers or finders or
investment advisers or investment bankers retained by the Borrower or by any other third party, arising out of the Commitment or otherwise under this Note; or (c) in connection with taxes (not including federal or state income taxes or other taxes
based solely upon the revenues of such Persons), fees, and other charges payable in connection with the Loans, or the execution, delivery, and enforcement of this Note, the other Loan Documents, and any amendments thereto or waivers of any of the
provisions thereof; unless the Person seeking indemnification hereunder is determined in such case to have acted with gross negligence or willful misconduct, in any case, by a final, non-appealable judicial order of a court of competent jurisdiction. The
obligations of the Borrower under this Section 19 are in addition to, and shall not otherwise limit, any liabilities which the Borrower might otherwise have in connection with any warranties or similar obligations of the Borrower in any other Loan Document.

19.  ARBITRATION.

     (a)THIS PARAGRAPH CONCERNS THE RESOLUTION OF ANY CONTROVERSIES OR CLAIMS BETWEEN THE BORROWER AND THE LENDER, WHETHER ARISING IN CONTRACT, TORT OR BY STATUTE, INCLUDING BUT NOT LIMITED TO CONTROVERSIES OR
CLAIMS THAT ARISE OUT OF OR RELATE TO: (I) THIS AGREEMENT (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS); OR (II) ANY DOCUMENT RELATED TO THIS AGREEMENT; (COLLECTIVELY A "CLAIM").

     (b)AT THE REQUEST OF THE BORROWER OR THE LENDER, ANY CLAIM SHALL 

<PAGE 63>

 

BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (TITLE 9, U. S. CODE) (THE "ACT"). THE ACT WILL APPLY EVEN THOUGH THIS AGREEMENT PROVIDES THAT IT IS GOVERNED BY THE LAW OF A SPECIFIED STATE.

     (c)ARBITRATION PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE ACT, THE RULES AND PROCEDURES FOR THE ARBITRATION OF FINANCIAL SERVICES DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND
THE TERMS OF THIS PARAGRAPH. IN THE EVENT OF ANY INCONSISTENCY, THE TERMS OF THIS PARAGRAPH SHALL CONTROL.

     (d)THE ARBITRATION SHALL BE ADMINISTERED BY J.A.M.S. AND CONDUCTED IN ANY U. S. STATE WHERE REAL OR TANGIBLE PERSONAL PROPERTY COLLATERAL FOR THIS CREDIT IS LOCATED OR IF THERE IS NO SUCH COLLATERAL, IN GEORGIA.
ALL CLAIMS SHALL BE DETERMINED BY ONE ARBITRATOR; HOWEVER, IF CLAIMS EXCEED $5,000,000, UPON THE REQUEST OF ANY PARTY, THE CLAIMS SHALL BE DECIDED BY THREE ARBITRATORS. ALL ARBITRATION HEARINGS SHALL COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION
AND CLOSE WITHIN 90 DAYS OF COMMENCEMENT AND THE AWARD OF THE ARBITRATOR(S) SHALL BE ISSUED WITHIN 30 DAYS OF THE CLOSE OF THE HEARING. HOWEVER, THE ARBITRATOR(S), UPON A SHOWING OF GOOD CAUSE, MAY EXTEND THE COMMENCEMENT OF THE HEARING FOR UP TO AN
ADDITIONAL 60 DAYS. THE ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN STATEMENT OF REASONS FOR THE AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO ANY COURT HAVING JURISDICTION TO BE CONFIRMED AND ENFORCED.

     (e)THE ARBITRATOR(S) WILL HAVE THE AUTHORITY TO DECIDE WHETHER ANY CLAIM IS BARRED BY THE STATUTE OF LIMITATIONS AND, IF SO, TO DISMISS THE ARBITRATION ON THAT BASIS. FOR PURPOSES OF THE APPLICATION OF THE STATUTE
OF LIMITATIONS, THE SERVICE ON J.A.M.S. UNDER APPLICABLE J.A.M.S. RULES OF A NOTICE OF CLAIM IS THE EQUIVALENT OF THE FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS ARBITRATION PROVISION OR WHETHER A CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE
ARBITRATOR(S). THE ARBITRATOR(S) SHALL HAVE THE POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS AGREEMENT.

     (f)THIS PARAGRAPH DOES NOT LIMIT THE RIGHT OF THE BORROWER OR THE LENDER TO: (I) EXERCISE SELF-HELP REMEDIES, SUCH AS BUT NOT LIMITED TO, SETOFF; (II) INITIATE JUDICIAL OR NONJUDICIAL FORECLOSURE AGAINST ANY REAL
OR PERSONAL PROPERTY COLLATERAL; (III) EXERCISE ANY JUDICIAL OR POWER OF SALE RIGHTS, OR (IV) ACT IN A COURT OF LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WRIT OF POSSESSION OR APPOINTMENT OF A RECEIVER, OR ADDITIONAL
OR SUPPLEMENTARY REMEDIES.

 

Borrower represents to Lender that the proceeds of this loan are to be used primarily for business, commercial or agricultural purposes. Borrower acknowledges having read and understood, and agrees to be bound by, all terms and conditions of this Note
and hereby executes this Note under seal as of the date here above written.

<PAGE 64>

 

NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

	
 
	
 
	
CPAC, INC., a New York corporation

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Thomas J. Weldgen                              

Name:  Thomas J. Weldgen                        

Title:  VP Finance and Chief Financial Officer

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Attest:
	
/s/ Natalie S. Gayton                           

Name:  Natalie S. Gayton                    

Title:  Corp. Payroll & Tax Manager      

	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
                        [Corporate Seal]

 

<PAGE 65>

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