Document:

Amended and Restated Promissory Note dated February 6, 2006

    EXHIBIT
      10.4

    

    AMENDED
      AND RESTATED PROMISSORY NOTE

    (Revolving
      Line of Credit)

     

    

    
      	
               $3,000,000.00

            	
               February
                6, 2006

            
	 	
               Albany,
                New York

            

    

     

    FOR
      VALUE
      RECEIVED, the undersigned, BALCHEM CORPORATION, a corporation organized and
      existing under the laws of the State of Maryland and having an address of P.
      O.
      Box 600, 52 Sunrise Park Road, New Hampton, New York 10958 (herein called the
      “Company”), hereby promises to pay to the order of BANK OF AMERICA, N.A.
      (successor by merger to Fleet National Bank), a national banking association
      organized and existing under the laws of the United States of America, its
      successors and assigns (herein called the “Payee” or the “Bank”), at such
      Payee’s office at Peter D. Kiernan Plaza, Albany, New York 12207, or such other
      location as the Payee shall designate in writing from time to time, the unpaid
      amount of all sums that have been advanced to or for the benefit of the Company
      in accordance with the terms hereof in an amount not to exceed the principal
      sum
      of Three
      Million and no/100 Dollars ($3,000,000.00),
      less
      the face amount of all commercial letters of credit and standby letters of
      credit issued by the Lender at the request of the Borrower during the term
      hereof, which aggregate face amount of said letters of credit cannot exceed
      Three Million Dollars ($3,000,000.00) at any one time outstanding, together
      with
      interest on the disbursed, unpaid principal, or, if less, the aggregate unpaid
      principal amount due hereunder, together with interest at the rate specified
      below until paid in full. The records of the Payee maintained in the ordinary
      course of business shall be prima facie evidence of the existence and amounts
      of
      the Company’s obligations recorded therein. All computations of interest under
      this Note shall be made on the basis of a three hundred sixty (360) day year
      and
      the actual number of days elapsed.

    

    DEFINITIONS.
      As used
      herein, the following terms shall have the following meanings:

    

    “Adjusted
      Libor Rate” - Means a rate per annum subject to adjustment approximately each
      one month, two months, three months or six months, as applicable equal to the
      Libor Rate plus one percent (1.00%).

    

    “Business
      Day” - In respect of any date that is specified in this Note to be subject to
      adjustment in accordance with applicable Following Business Day Convention,
      a
      day which commercial banks settle payment in London if the payment obligation
      is
      calculated by reference to any Libor Rate.

    

    “Default
      Rate” - A per annum rate to two
      percent (2%) above the rate of interest otherwise applicable to the
      Note.

    

    “Election
      Notice” - The Loan Portion and the Libor Interest Rate Period notice to be
      delivered by the Company to the Bank from time to time in the form of Exhibit
      “A” attached hereto, in which the Company shall irrevocably indicate a Loan
      Portion and a Libor Interest Rate Period. The Election Notice shall also serve
      as a request by the Company for a Loan advance from the Bank.

    

    “Event
      of
      Default” - Any of those events defined as an Event of Default under the Loan
      Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Following
      Business Day Convention” - The convention for adjusting any relevant date if it
      would otherwise fall on a day that is not a Business Day. The term “Business
      Day” when used in conjunction with the term “Following Business Day Convention”
and a date, shall mean that an adjustment will be made if that date would
      otherwise fall on a day that is not a Business Day so that the date will be
      the
      first following day that is a Business Day.

    

    “Libor
      Interest Rate Period” - The one month, two month or three month, as applicable,
      (or slightly longer or shorter) period during which the Adjusted Libor Rate
      is
      in effect provided, however, that in no event shall any Interest Rate Election
      Period extend beyond the Maturity Date of this Loan.

    

    “Libor
      Rate” - Means,
      the interest rate determined by the following formula (all amounts in the
      calculation will be determined by the Bank as of the first day of the Libor
      Interest Rate Period):

    

    
      	
              Libor
                Rate=    
                

            	
              London
                Inter-Bank Offered Rate

            
	 	
                 (1.00-Reserve
                Percentage)

            

    

    

    

    “Loan”
-
      The Loan of up to $3,000,000.00 by the Lender to the Company that is the subject
      of this Note.

    

    “Loan
      Agreement” - Means the amended and restated loan agreement dated the date hereof
      by and between the Company and the Bank, as such may be further amended or
      supplemented from time to time.

    

    “Loan
      Portion” - Each advance of Loan proceeds by the Bank to the Company, each of
      which advances will be treated separately for the purposes of computing
      interest. Each such advance shall accrue interest at the Adjusted Libor
      Rate.

    

    “London
      Inter-Bank Offered Rate” Means, for any applicable Libor Interest Rate Period,
      the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
      LIBOR”), as published by Reuters (or other commercially available source
      providing quotations of BBA LIBOR as selected by the Bank from time to time)
      at
      approximately 11:00 a.m. London time two (2) London Banking Days before the
      commencement of the applicable Libor Rate Interest Period, for U.S. Dollar
      deposits (for delivery on the first day of such interest period) with a term
      equivalent to such Libor Rate Interest Period. If such rate is not available
      at
      such time for any reason, then the rate for that Libor Rate Interest Period
      will
      be determined by such alternate method as reasonably selected by the Bank.
      A
      "London Banking Day" is a day on which banks in London are open for business
      and
      dealing in offshore dollars.

    

    “Maturity
      Date” - May 31, 2007.

    

    “Prime
      Rate” - Means the rate of interest publicly announced from time to time by the
      Bank as its Prime Rate. The Prime Rate is set by the Bank based on various
      factors, including the Bank’s costs and desired return, general economic
      conditions and other factors, and is used as a reference point for pricing
      some
      loans. The Bank may price loans to its customers at, above, or below the Prime
      Rate. Any change in the Prime Rate shall take effect at the opening of business
      on the day specified in the public announcement of a change in the Bank’s Prime
      Rate.

    

    “Reserve
      Percentage” - Means the total of the maximum reserve percentages for determining
      the reserves to be maintained by member banks of the Federal Reserve System
      for
      Eurocurrency Liabilities, as defined in the Federal Reserve Board Regulation
      D,
      rounded upward to the nearest 1/100 of one

    
      
        
        

      

      
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    percent.
      The percentage will be expressed as a decimal, and will include, but not be
      limited to, marginal, emergency, supplemental, special and other reserve
      percentages.

    

    ADVANCES.
      Advances under this Note shall be reflected on the records of the Payee. In
      absence of an Event of Default by the Company, as the Company makes repayments
      of principal, it shall be permitted to re-borrow hereunder until the Maturity
      Date. When requesting each advance of Loan proceeds from the Bank, the Company
      shall deliver to the Bank an Election Notice setting forth the Loan Portion,
      and
      indicating a Libor Interest Rate Period for such Loan Portion. The Interest
      Rate
      Election for each Loan Portion shall remain in effect until expiration of the
      Libor Interest Rate Period for that Loan Portion. Prior to the end of the Libor
      Interest Rate Period at issue, the Company shall deliver to the Bank a new
      Election Notice designating the new Libor Interest Rate Period to apply to
      the
      Loan Portion. In the event the Company fails to deliver an Election Notice
      to
      the Bank prior to the expiration of any Libor Interest Rate Period, the current
      Libor Interest Rate Period then in effect interest shall apply to that Loan
      Portion until the Company again designates a Libor Interest Rate Period. Once
      chosen, the Loan Portion and the Libor Interest Rate Period shall remain in
      effect until the expiration of the Libor Interest Rate Period. Notwithstanding
      anything to the contrary set forth herein, (i) there shall be no more than
      three
      (3) Loan Portions outstanding at any one time bearing interest at the Adjusted
      Libor Rate (ii) the Company’s ability to elect to have the Adjusted Libor Rate
      apply to the Loan or a Loan Portion shall be conditioned upon the absence of
      an
      Event of Default that is then continuing and (iii) Bank shall not be obligated
      to honor an Election Notice in the event either (x) dollar deposits in the
      principal amount requested, and for the periods equal to the applicable Libor
      Interest Rate Period selected, are not available in the London inter-bank market
      or (y) the Libor Rate does not accurately reflect the cost of said requested
      principal amount, in which event the interest rate shall be determined by the
      Bank based upon a comparable Prime Rate based rate of interest until such time
      as said conditions no longer exist.

    

    PAYMENTS.
      In the
      event the entire amount of any payment due hereunder is not paid within ten
      (10)
      days after the same is due a late fee equal to five percent (5%) of the required
      payment will be charged by the Payee provided, however, that
      such
      late fee shall not exceed $10,000.00 in the aggregate per incident and shall
      not
      exceed $10,000 in the aggregate upon the maturity or acceleration of the
      Principal Balance.

    

    Accrued
      interest shall be payable on the first day of the month immediately succeeding
      the date of this Note, and on the first day of each succeeding month thereafter
      during the term of this note and all disbursed unpaid principal together with
      accrued interest will be paid in full no later than the Maturity Date. All
      payments shall be applied first to the payment of all fees, expenses and other
      amounts due to the Payee (excluding principal and interest), then to accrued
      interest, and the balance on account of outstanding principal; provided, however
      that after the occurrence of an Event of Default, payments will be applied
      to
      the obligations of the Company to the Payee as the Payee determines in its
      sole
      discretion. All payments shall be in lawful money of the United States in
      immediately available funds, without counterclaim or set off and free and clear
      of and without any deduction or withholding for, any taxes or other payments,
      and are subject to the Following Business Day Convention with respect to date
      of
      payment.

    

    PREPAYMENT.
      The
      Company may prepay a Libor Advance only upon at least three (3) Business Days
      prior written notice to the Bank (which notice shall be irrevocable), and any
      such prepayment shall occur only on the last day of the Libor Interest Rate
      Period. Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason
      of
      acceleration or otherwise, will be accompanied by the amount of accrued interest
      on the amount prepaid and a prepayment fee as described below. A “prepayment” is
      a payment of an amount on a date earlier than the scheduled payment date for
      such amounts as required by this

    
      
        
        

      

      
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    Note.
      The
      prepayment fee will be the sum of fees calculated separately for each Prepaid
      Installment, as follows:

    

    
      	                  
	(i)       	
              The
                Bank will first determine the amount of interest which would have
                accrued
                each month for the Prepaid Installment had it remained outstanding
                until
                the applicable Original Payment Date, using the interest rate applicable
                to the Prepaid Installment under this
                Note.

            

    

    

    
      
        	                 
 	(ii)      	
                The
                  Bank will then subtract from each monthly interest amount determined
                  in
                  (i) above, the amount of interest which would accrue for that Prepaid
                  Installment if it were reinvested from the date of prepayment through
                  the
                  Original Payment Date, using the Treasury
                  Rate.

              

      

    

    

    
      	                 
	(iii)     
	
              If
                (i) minus (ii) for the Prepaid Installment is greater than zero,
                the Bank
                will discount the monthly differences to the date of prepayment by
                the
                Treasury Rate. The Bank will then add together all of the discounted
                monthly differences for the Prepaid
                Installment.

            

    

    

    The
      following definitions will apply to the calculation of the prepayment
      fee:

    

    
      	
            	
              (i)         

            	
              “Original
                Payment Dates” mean the dates on which the prepaid principal would have
                been paid if there had been no prepayment. If any of the principal
                would
                have been paid later than the end of the fixed rate interest period
                in
                effect at the time of prepayment, then the Original Payment Date
                for that
                amount will be the last day of the interest
                period.

            

    

    

    
      	 	
              (ii)       

            	
              “Prepayment
                Installment” means the amount of the prepaid principal which would have
                been paid on a single Original Payment
                Date.

            

    

    

    
      	 	
              (iii)      

            	
              “Treasury
                Rate” means the interest rate yield for U.S. Government Treasury
                Securities which the Bank determines could be obtained by reinvesting
                a
                specified Prepaid Installment in such securities from the date of
                prepayment through the Original Payment Date. The Bank may adjust
                the
                Treasury Rate to reflect the compounding, accrual basis, or other
                costs of
                the prepaid amount. Each of the rates is the Bank’s estimate only and the
                Bank is under no obligation to actually reinvest any prepayment.
                The rates
                will be based on information from either the Telerate or Reuters
                information services, The
                Wall Street Journal,
                or other information sources the Bank deems
                appropriate.

            

    

    

    If
      by
      reason of an Event of Default the Bank elects to declare this Note to be
      immediately due and payable, then any prepayment fee with respect to the
      resulting prepayment shall become due and payable in the same manner as though
      the Company had exercised a right of prepayment.

    

    LETTERS
      OF CREDIT.
      All
      commercial letters of credit and standby letters of credit issued hereunder
      shall be issued pursuant to the standard documentation provided by the Bank
      and
      shall be subject to the payment of an annual fee equal to one percent (1.00%)
      of
      the face amount of all standby letters of credit and one quarter of one percent
      (.25%) of the face amount of all commercial letters of credit, so issued and
      outstanding, such fee to be due and payable in advance in quarterly installments
      on the first day of each calendar quarter based upon the total outstanding
      commercial letters of credit and standby letters of credit hereunder as of
      January 1 of each year. Any outstanding commercial letters of credit
      issued

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    pursuant
      to the terms hereof shall expire no later than 180 days following the Maturity
      Date and any outstanding stand by letter of credit issued pursuant to the terms
      hereof shall expire no later than 360 days following the Maturity
      Date.

    

    DEFAULT.
      Upon
      the occurrence of one or more Events of Default under the Loan Agreement, the
      entire principal and interest on this Note shall become immediately due and
      payable without presentment or protest or other notice of demand, all of which
      are expressly waived by the Company. If the Bank, in its sole and absolute
      discretion, elects not to demand payment by the Company, notwithstanding said
      failure to demand, the Bank shall be under no obligation to make advances
      pursuant to the terms of this Note unless and until the Event of Default is
      cured to the satisfaction of the Bank.

    

    If
      an
      Event of Default should occur and be continuing or after the Maturity Date
      or
      after judgment has been rendered on this Note, all Loan Portions shall bear
      interest at the Default Rate until the earlier of (i) the Event of Default
      is
      cured, or (ii) all Loan Portions are paid in full.

    

    The
      powers and remedies given hereby shall not be exclusive of any other powers
      and
      remedies available to the Payee. No course of dealings between the Company
      and
      the Payee and no delay on the part of the Payee in exercising any rights with
      respect to any default shall operate as a waiver of any rights of the Payee.
      Failure upon the part of the Payee to exercise any rights with respect to any
      default shall not operate as a waiver of any rights with respect to any other
      default.

    

    Interest
      after maturity (whether by acceleration or otherwise) shall be payable at the
      Default Rate set forth herein until this Note is paid in full.

    

    PARTIAL
      INVALIDITY.
      If any
      provision of this Note or the application of it to any person or circumstance,
      shall be invalid or unenforceable, the remainder of this Note or the application
      of that provision to persons or circumstances other than those as to which
      it is
      held invalid or unenforceable, shall not be affected and every other provision
      of this Note shall be valid and fully enforceable.

    

    WAIVER,
      CHANGE, MODIFICATION OR DISCHARGE.
      This
      Note may not be waived, changed, modified or discharged orally, but only by
      agreement in writing signed by the party against whom any enforcement of any
      waiver, change, modification or discharge is sought.

    

    COVENANT
      AGAINST USURY.
      All
      agreements between the Company and the Bank are hereby expressly limited so
      that
      in no contingency or event whatsoever, whether by reason of acceleration of
      maturity of the indebtedness evidenced hereby or otherwise, shall the amount
      paid or agreed to be paid to the Bank for the use or the forbearance of the
      indebtedness evidenced hereby exceed the maximum permissible under applicable
      law. As used herein, the term “applicable law” shall mean the law in effect as
      of the date hereof provided, however that in the event there is a change in
      the
      law which results in a higher permissible rate of interest, then this Note
      shall
      be governed by such law as of its effective date. In this regard, it is
      expressly agreed that it is the intent of the Company and the Bank in the
      execution, delivery and acceptance of this Note to contract in strict compliance
      with the laws of the State of New York from time to time in effect. If, under
      or
      from any circumstances whatsoever, fulfillment of any provision hereof at the
      time of performance of such provision shall be due, shall involve transcending
      the limit of such validity prescribed by applicable law, then the obligation
      to
      be fulfilled shall automatically be reduced to the limits of such validity,
      and
      if under or from circumstances whatsoever the Bank should ever receive as
      interest an amount which would exceed the highest lawful rate, such amount
      which
      would be excessive interest shall be applied to the reduction of the principal
      balance evidenced hereby and not to the payment of interest. This provision
      shall control every other provision of all agreements between the Company and
      the Bank.

    
      
        
        

      

      
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    WAIVER
      OF DILIGENCE, PRESENTMENT, DEMAND, ETC.
      The
      Company hereby waives with respect to this Note: diligence, presentment, demand
      for payment, filing of claims with a court in the event of bankruptcy of the
      Company or any other person or entity liable in respect to this Note, any right
      to require a proceeding first against the Company or any other such person;
      protest, notice of dishonor or nonpayment of any such liabilities and any other
      notice and all demands whatsoever except as specifically set forth in this
      Note.

    

    TRANSFER
      AND ASSIGNMENT OF NOTE; PLEDGE OF RIGHTS; PARTICIPATION.
      (A) The
      Bank may at any time pledge all or any portion of its rights under this Note
      to
      any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
      Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
      thereof shall release the Bank from its obligations hereunder.

    

    (B)     The
      Bank
      shall have the unrestricted right at any time and from time to time, and without
      the consent of or notice to the Company, to grant to one or more banks or other
      financial institutions (each, a “Participant”) participating interests in the
      Bank’s obligation to lend hereunder and/or any or all of the loans held by the
      Bank hereunder. In the event of any such grant by the Bank of a participating
      interest to a Participant, whether or not upon notice to the Company, the Bank
      shall remain responsible for the performance of its obligations hereunder and
      the Company shall continue to deal solely and directly with the Bank in
      connection with the Bank’s rights and obligations hereunder.

    

    The
      Bank
      shall have the unrestricted right at any time or from time to time, to assign
      all or any portion of its rights and obligations hereunder and under the other
      Financing Documents to one or more banks or other financial institutions (each,
      an “Assignee”), and the Company agrees that it shall execute, or cause to be
      executed, such documents, including without limitation, amendments to this
      Loan
      Agreement and to the other Financing Documents as the Bank shall deem necessary
      to effect the foregoing. In addition, at the request of the Bank and any such
      Assignee, the Company shall issue one or more new promissory notes, as
      applicable, to any such Assignee and, if the Bank has retained any of its rights
      and obligations hereunder following such assignment, to the Bank, which new
      promissory notes shall be issued in replacement of, but not in discharge of,
      the
      liability evidenced by the promissory note held by the Bank prior to such
      assignment and shall reflect the amount of the respective commitments and loans
      held by such Assignee and the Bank after giving effect to such assignment.
      Upon
      the execution and delivery of appropriate assignment documentation, amendments
      and any other documentation required by the Bank in connection with such
      assignment, and the payment by Assignee of the purchase price agreed to by
      the
      Bank, and such Assignee, such Assignee shall be a party to this Loan Agreement
      and shall have all of the rights and obligations of the Bank hereunder and
      under
      the other Financing Documents to the extent that such rights and obligations
      have been assigned by the Bank pursuant hereto and to the assignment
      documentation between the Bank and such Assignee, and the Bank shall be released
      from its obligations hereunder and thereunder to a corresponding
      extent.

    

    Provided
      no Event of Default has occurred and is continuing and except with respect
      to an
      assignment or transfer of the Loans mandated by a Governmental Authority, the
      Company shall have the right to approve the identity of any Participant or
      Assignee under this subsection (B), which approval shall not be unreasonably
      withheld, delayed or conditioned. Except as aforesaid, the right of the Bank
      to
      assign or grant a participation interest shall not require notice to or consent
      of the Company.

    

    The
      Bank
      may furnish any information concerning the Company in its possession from time
      to time to prospective Assignees and Participants, provided that the Bank shall
      require any such prospective Assignee or Participant to agree in writing for
      the
      benefit of the Company to maintain the confidentiality of such
      information.

    
      
        
        

      

      
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    JURY
      TRIAL WAIVER.
      THE
      COMPANY AND THE BANK (BY ACCEPTANCE OF THIS NOTE) MUTUALLY HEREBY KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
      OF
      ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE
      OR
      ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
      WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE
      OF
      CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE BANK RELATING TO
      THE
      ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THIS NOTE, AND AGREE THAT NEITHER
      PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH
      A
      JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE
      COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
      LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
      DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY CERTIFIES
      THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY
      OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
      ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSITITUTES A MATERIAL INDUCEMENT
      FOR
      THE BANK TO ACCEPT THIS NOTE AND MAKE THE LOAN.

    

    RIGHT
      OF SET OFF.
      The
      Company hereby grants to the Bank, a continuing lien, security interest and
      right of setoff as security for all liabilities and obligations to the Bank,
      whether now existing or hereafter arising, upon and against all deposits,
      credits, collateral and property, now or hereafter in the possession, custody,
      safekeeping or control of the Bank or any entity under the control of Bank
      of
      America Corporation and its successors and assigns or in transit to any of
      them.
      At any time, without demand or notice (any such notice being expressly waived
      by
      the Company), the Bank may set off the same or any part thereof and apply the
      same to any liability or obligation of the Company even though unmatured and
      regardless of the adequacy of any other collateral securing this Note. ANY
      AND
      ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
      TO ANY OTHER COLLATERAL WHICH SECURES THIS NOTE, PRIOR TO EXERCISING ITS RIGHT
      OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
      COMPANY, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

    

    EXPENSES
      INCURRED IN CONNECTION WITH ENFORCEMENT.
      The
      Company shall pay on demand all reasonable expenses of the Payee in connection
      with the preparation, administration, default, collection, waiver or amendment
      of loan terms, or in connection with the Payee’s exercise, preservation or
      enforcement of any of its rights, remedies or options hereunder, including,
      without limitation, reasonable fees of outside legal counsel or the allocated
      costs of in-house legal counsel, accounting, consulting, brokerage or other
      similar professional fees or expenses, and any reasonable fees or expenses
      associated with travel or other costs relating to any appraisals or examinations
      conducted in connection with the loan or any collateral therefor, and the amount
      of all such expenses shall, until paid, bear interest at the rate applicable
      to
      principal hereunder (including any default rate) and be an obligation secured
      by
      any collateral.

    

    CHOICE
      OF LAW.
      This
      Note and the rights and obligations of the parties hereunder shall be construed
      and interpreted in accordance with the laws of the State of New York (the
“Governing State”) (excluding the laws applicable to conflicts or choice of
      law).

    

    THE
      COMPANY AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT
      IN
      THE COURTS OF THE GOVERNING STATE OR ANY FEDERAL COURT SITTING THEREIN AND
      CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
      IN ANY SUCH SUIT BEING MADE UPON THE COMPANY BY MAIL AT THE ADDRESS SET FORTH
      HEREIN. THE COMPANY HEREBY WAIVES ANY OBJECTION

    
      
        
        

      

      
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    THAT
      IT
      MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
      THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM.

    

    MERGER.
      This
      Note is intended by the parties as the final, complete and exclusive statement
      of the transactions evidenced by this Note. All prior contemporaneous promises,
      agreements and understandings, whether oral or written, are deemed to be
      superceded by this Note, and no party is relying on any promise, agreement
      or
      understanding not set forth in this Note. This Note may not be amended or
      modified except by a written instrument describing such amendment or
      modification executed by the Company and the Bank.

    

    USE
      OR
      PROCEEDS.
      No
      portion of the proceeds of this Note shall be used, in whole or in part, for
      the
      purpose of purchasing or carrying any “margin stock” as such term is defined in
      Regulation U of the Board of Governors of the Federal Reserve
      System.

    

    LOST
      OR DAMAGED NOTE.
      Upon
      receipt of an affidavit of an officer of the Bank as to the loss, theft,
      destruction or mutilation of this Note or any other security document which
      is
      not of public record, and, in the case of any such loss, theft, destruction
      or
      mutilation, upon surrender and cancellation of such Note or other security
      document, the Company will issue, in lieu thereof, a replacement Note or other
      security document in the same principal amount thereof and otherwise of like
      tenor.

    

    AMENDMENT
      AND RESTATEMENT.
      This
      Note amends and restates in its entirety that certain note dated June 1, 2001
      in
      the principal amount of $3,000,000.00 from the Company in favor of Fleet
      National Bank.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
              BALCHEM
                CORPORATION

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Frank Fitzpatrick

            
	 	 	
              Frank
                Fitzpatrick, Chief Financial

            
	 	 	
              Officer

            

    

    

    

     

    
      	STATE
              OF NEW YORK 	)

      	 	)ss.:

      	
              COUNTY
                OF ORANGE

            	
              )

            

    

    

    On
      the
      6th day of February, in the year 2006 before me personally came FRANK
      FITZPATRICK,
      to me
      known, who, being by me duly sworn, did depose and say that he/she/they
      reside(s) in New York; that he/she/they is(are) the CHIEF FINANCIAL OFFICER
      of
      BALCHEM CORPORATION, the corporation described in and which executed the above
      instrument; and that he/she/they signed his/her/their name(s) thereto by
      authority of the board of directors of said corporation.

    

    
      	 	
              /s/
                Matthew D. Houston

            
	 	
              Notary
                Public, State of New York

            

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    EXHIBIT
      “A”

    

    FORM
      OF
      ELECTION NOTICE

    

    

    BORROWER:
      BALCHEM
      CORPORATION

    

    DATE:
      _________________

    

    

    All
      Capitalized terms carry the meanings as defined in the Amended and Restated
      Promissory Note dated February ___, 2006 (the “Note”).

    

    This
      Notice serves as an irrevocable Election Notice required under the Note for
      the
      purpose of designating a Loan Portion and selecting a Libor Interest Rate Period
      for said Loan Portion.

    

     

    
      	 Account
              to Credit:	 	 	 
	 	 	 	 
	 	 	 	 
	 Loan
              Portion:	
               $

            	 	**
	 	 	 	 

    

    

    
      	
              Interest
                Rate Election

            	
              ADJUSTED
                LIBOR RATE**

            	 
	 	 	
              ___One
                Month

            	 
	 	 	
              ___Two
                Month

            	 
	 	 	
              ___Three
                Month

            	 
	 	 	
              ___Six
                Month

            	 

    

    

    Adjusted
      Libor Rate (if chosen):       _____________%

    

    Date
      of
      next Interest Rate Election Period:     ___________________

    Subject
      to confirmation and verification by Bank.

    

    

    

    
      	
              Authorized
                by:

            	
              BALCHEM
                CORPORATION

            	 
	 	 	 	 
	 	
              By:

            	 	 
	 	 	
              Authorized
                Representative

            	 

    

    

    _____________________

    **Libor
      Rate Election must be received no later than 12:00 noon (eastern standard time)
      on the London Banking Day preceding the first day of the intended
      advance.

     

     

    A-1Amended and Restated Guaranty dated February 6, 2006

    EXHIBIT
      10.5

    

    

    

    

    

    

    

    

    
      
        

      

    

    

    
 

    

    

    BCP
      INGREDIENTS, INC.

    

    TO

    

    BANK
      OF
      AMERICA, N.A.,

    AS
      HOLDER

    

    
 

    
      	 	 	 
	 	
               

              AMENDED
                AND RESTATED GUARANTY

               

            	 

    

    

    

    

    DATED
      FEBRUARY 6, 2006

    

    

    
      
        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AMENDED
      AND RESTATED GUARANTY

    

    THIS
      AMENDED AND RESTATED GUARANTY dated February 6, 2006 (the “Guaranty”) from
BCP
      INGREDIENTS, INC.,
      a
      Delaware corporation having its principal office at c/o Balchem Corporation,
      P.
      O. Box
      600, 52 Sunrise Park Road, New Hampton, New York 10958
      (the
“Guarantor”) to BANK OF AMERICA, N.A. (successor by merger to Fleet National
      Bank), a national banking association organized and existing under the laws
      of
      the United States and having an office at Peter Kiernan Plaza, Albany, New
      York
      12207 (the “Holder”);

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      the Holder has extended a certain revolving line of credit loan to Balchem
      Corporation
      (the
“Company”) (the “Line of Credit Loan”) the repayment of which is evidenced by an
      amended and restated promissory note (revolving line of credit) dated the date
      hereof in the principal amount of $3,000,000.00 (as modified or supplemented
      or
      extended from time to time, the “Line of Credit Loan Note”); and

    

    WHEREAS,
      the Holder has extended a certain term loan to the Company (the “Term Loan” and
      collectively with the Line of Credit Loan, the “Loans”) the repayment of which
      is evidenced by a promissory note dated the date hereof in the principal amount
      of $10,000,000.00 (as modified or supplemented or extended from time to time,
      the “Term Loan Note” and collectively with the Line of Credit Loan Note, the
“Notes”); and

    

    

    WHEREAS,
      the Loans are being made pursuant to the provisions, terms and conditions of
      an
      amended and restated loan agreement dated the date hereof (as modified or
      supplemented from time to time, the “Loan Agreement”) by and between the Company
      and the Holder; and

    

    WHEREAS,
      the proceeds of the Loans will be made available to the Company upon the terms
      and conditions set forth in the Loan Agreement; and

    

    WHEREAS,
      in connection with the making of the Loans, the Company has offered to have
      the
      Guarantor guaranty repayment of the Notes as set forth herein; and

    

    WHEREAS,
      the Guarantor specifically approves the terms of the Notes and the other
      Financing Documents; and

    

    WHEREAS,
      the Guarantor is willing to enter into this Guaranty in order to induce the
      Holder to make the Loans and thereby achieve interest cost and other savings
      to
      the Company;

    

    NOW,
      THEREFORE, for good and valuable consideration, the receipt whereof is hereby
      acknowledged, the parties agree as follows:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      I

    

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE
      GUARANTOR

    

    The
      Guarantor does hereby represent and warrant to the Holder that:

    

    SECTION
      1.1. AUTHORITY OF THE GUARANTOR. The
      Guarantor represents and warrants that it is a corporation duly incorporated,
      validly existing and in good standing under the laws of the State of Delaware,
      possesses full corporate power and corporate capacity to consummate the
      transactions contemplated hereby and is authorized to conduct business in all
      jurisdictions wherein the nature of its activities requires such except where
      the failure to do so would not have a material adverse effect upon the
      Guarantor.

    

    SECTION
      1.2. NO VIOLATION OF RESTRICTIONS. The
      Guaranty and all other documents to be executed by the Guarantor in connection
      therewith, when executed and delivered by the respective parties thereto, will
      constitute valid and binding obligations of the Guarantor. The execution and
      delivery by the Guarantor of the Financing Documents to which it is a party
      and
      the performance thereof by the Guarantor (1) have been authorized by all
      necessary corporate action and (2) do not and will not conflict with, or result
      in any breach of, or constitute a default under the Guarantor’s articles of
      incorporation or by-laws or any indenture, mortgage, deed of trust, bank loan
      or
      credit agreement or any other agreement or instrument to which the Guarantor
      is
      a party or by which the Guarantor or any of its Property may be bound for which
      a valid consent has not been secured except where the failure to do so would
      not
      have a material adverse effect upon the Guarantor, or result in the creation
      of
      any Lien (other than that created by the Financing Documents) upon or with
      respect to any Property of the Guarantor.

    

    SECTION
      1.3. GOVERNMENTAL CONSENT. No
      approval or other action by any Governmental Authority is required in connection
      with the execution or performance by the Guarantor of the Guaranty.

    

    SECTION
      1.4. PENDING LITIGATION. As
      of the
      date hereof, there are no actions, suits or proceedings at law or in equity,
      or
      before or by any Governmental Authority, pending or, to the knowledge of the
      Guarantor, threatened against or affecting the Guarantor which are reasonably
      likely to materially adversely affect the financial condition of the Guarantor
      and of the Company taken as a whole or involving the validity or enforceability
      of the Financing Documents to which it is a party or the priority of the Liens
      thereof, and to the Guarantor’s knowledge it is not in default with respect to
      any material order, writ, judgment, decree or demand of any court or any
      Governmental Authority.

    

    SECTION
      1.5. NO DEFAULTS. No event has occurred and no condition exists which, upon
      the
      execution of this Guaranty, would constitute an Event of Default under Article
      III hereof. 

    

    SECTION
      1.6. TAXES. All
      material Federal, state, county, municipal and city income and other tax returns
      and other reports and documents required to have been filed by the Guarantor
      have been filed and the Guarantor has paid all fees and taxes indicated as
      due
      pursuant to such returns, reports and documents or pursuant to any assessments
      received by the Guarantor, and the Guarantor knows of no basis for any
      additional material assessment in respect of any such taxes which has not been
      or will not be reserved for in accordance with GAAP.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    ARTICLE
      II

    

    COVENANTS
      AND AGREEMENTS

    

    SECTION
      2.1. GUARANTY OF PAYMENT. (A) The Guarantor hereby irrevocably and
      unconditionally guarantees to the Holder full and prompt payment of moneys
      sufficient to pay, or to provide for the payment of, the outstanding principal
      balance of the Notes together with premium, if any, thereon and accrued and
      unpaid interest thereon (the “Guaranteed Amount”). The Guarantor hereby
      irrevocably and unconditionally agrees that, upon the occurrence of an Event
      of
      Default and the acceleration of the principal balance of either or both of
      the
      Notes then outstanding by the Holder, the Guarantor will, upon written demand
      by
      the Holder, promptly pay such Guaranteed Amount.

    

    (B)     All
      payments by the Guarantor shall be paid in lawful money of the United States
      of
      America in immediately available funds.

    

    (C)     Each
      and
      every default in payment of the principal of or interest on the Notes shall
      give
      rise to a separate cause of action hereunder, and separate suits may be brought
      hereunder by the Holder as each cause of action arises.

    

    (D)     The
      Guarantor
      shall pay to the Holder all reasonable costs and expenses (including reasonable
      legal fees) incurred by the Holder in the protection of any of its rights or
      in
      the pursuance of any of its remedies in respect of this Guaranty.

    

    SECTION
      2.2. OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantor under this
      Guaranty shall be absolute and unconditional and shall remain in full force
      and
      effect and, to the extent permitted by law, such obligations shall not be
      affected, modified or impaired by any state of facts or the happening from
      time
      to time of any event including, without limitation, any of the following,
      whether or not with notice to or the consent of the Guarantor:

    

    (A)    the
      invalidity, irregularity, illegality or unenforceability of, or any defect
      in,
      (1) the Notes, (2) the other Financing Documents, or (3) any collateral security
      for any thereof;

    

    (B)     any
      present
      or future law or order of any government (de jure
      or
de facto)
      or of
      any agency thereof purporting to reduce, amend or otherwise affect the Notes
      or
      any other obligation of the Company or any other obligor or to vary any terms
      of
      payment;

    

    (C)     any
      claim
      of immunity on behalf of the Company or any other obligor or with respect to
      any
      Property of the Company or any other obligor;

    

    (D)     the
      waiver, compromise, settlement, release or termination of any or all of the
      obligations, covenants or agreements of (1) the Company under the Notes or
      any
      of the other Financing Documents, (2) a co-guarantor of the Notes;

    

    (E)     the
      failure to give notice to the Guarantor of the occurrence of an Event of Default
      under the Financing Documents;

    

    (F)     the
      transfer,
      assignment or mortgaging, or the purported or attempted transfer, assignment
      or
      mortgaging, of all or any part of the interest of the Company in the Collateral,
      or any failure of or defect in the title with respect to the Company’s interest
      in the Collateral;

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (G)     the
      release, sale, exchange, surrender or other change in any security for payment
      of the Notes;

    

    (H)     the
      extension of the time for payment of any principal of or interest or premium
      on
      the Notes owing or payable on such Notes or under this Guaranty or of the time
      for performance of any other obligations, covenants or agreements under or
      arising out of the other Financing Documents;

    

    (I)     the
      modification or amendment (whether material or otherwise) of any obligation,
      covenant or agreement set forth in the Notes or any other Financing
      Document;

    

    (J)     the
      taking of, or the omission to take, any of the actions referred to in the
      Financing Documents;

    

    (K)    any
      failure, omission or delay on the part of the Holder or any other Person to
      enforce, assert or exercise any right, power or remedy conferred on the Holder
      or such other Person in this Guaranty or the other Financing
      Documents;

    

    (L)     the
      voluntary or involuntary liquidation, dissolution, sale or other disposition
      of
      all or substantially all the assets, marshaling of assets and liabilities,
      receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
      reorganization, arrangement, composition with creditors or readjustment of,
      or
      other similar proceedings affecting the Company or any of the assets of any
      of
      them, or any contest of the validity of the Financing Documents, in any such
      proceedings;

    

    (M)    any
      event
      or action that would, in the absence of this Section 2.2, result in the release
      or discharge of the Guarantor from the performance or observance of any
      obligation, covenant or agreement contained in this Guaranty;

    

    (N)     the
      default or failure of the Guarantor fully to perform any of its obligations
      set
      forth in this Guaranty; or

    

    (O)     any
      other
      circumstances which might otherwise constitute a legal or equitable discharge
      or
      defense of a surety or a guarantor.

    

    SECTION
      2.3. WAIVERS BY THE GUARANTOR. The Guarantor hereby waives with respect to
      the
      Notes, the other Financing Documents, the Guaranty and the indebtedness
      evidenced thereby the following: diligence; presentment; demand for payment;
      any
      right to require a proceeding first against the Company or any other such
      Person; protest; notice of dishonor or nonpayment of any such liabilities and
      any other notice and all demands whatsoever. The Guarantor hereby waives notice
      from the Holder and the Company (A) of the execution and delivery of the Notes,
      and (B) of acceptance of, or notice and proof of reliance on, the benefits
      of
      this Guaranty.

    

    SECTION
      2.4. DISCHARGE OF THE GUARANTOR’S OBLIGATIONS AND TERMINATION OF THIS GUARANTY.
      This Guaranty shall terminate and the obligations of the Guarantor created
      hereunder shall be discharged when all amounts due under the Financing Documents
      have been paid in full except as set forth below. On the date of such discharge,
      the Guarantor shall be released from any and all conditions, terms, covenants
      or
      restrictions created or placed upon them by this Guaranty and the Guarantor
      shall not have any further obligation or liability hereunder.

    

    SECTION
      2.5. OTHER SECURITY. The Holder may pursue its rights and remedies under this
      Guaranty notwithstanding (A) any other guaranty of or security for the Notes
      or
      the obligations or liabilities of the Company under the other Financing
      Documents, and (B) any action taken or omitted to be taken by,
      any

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    other
      Holder or any other Person to enforce any of the rights or remedies under such
      other guaranty or with respect to any other security.

    

    SECTION
      2.6. NO SET-OFF BY THE GUARANTOR. No set-off, counterclaim, reduction or
      diminution of an obligation, or any defense of any kind or nature (other than
      payment in full of the Guaranteed Amount) which the Guarantor has or may have
      with respect to a claim under this Guaranty, shall be available hereunder to
      the
      Guarantor against the Holder.

    

    SECTION
      2.7. NATURE OF GUARANTY. (A) The Guaranty is a guaranty of payment and not
      of
      collection, and the Guarantor hereby waives any right to require that any action
      be brought against any other Person or to require that resort be had to any
      security or to any balance of any fund or credit held by the Holder in favor
      of
      the Company or any other Person prior to the Holder proceeding under the
      Guaranty. If at any time any payment of the principal of, premium, if any,
      on or
      interest on the Notes or any other amount payable by the Company and guaranteed
      by the Guarantor pursuant to Section 2.1 hereof is rescinded or is otherwise
      required to be restored or returned upon the insolvency, bankruptcy or
      reorganization of the Company or otherwise, the Guarantor’s obligations
      hereunder with respect to such payment shall be reinstated as though such
      payment had been due but not made at such time.

    

    (B)     All
      of
      the rights and remedies of this Guaranty shall inure to the benefit of the
      Holder.

    

    SECTION
      2.8. SUBORDINATION OF DEBT. During the term of the Guaranty, the Guarantor
      agrees with the Holder that upon the occurrence and continuance of an Event
      of
      Default if the Holder so requests, any and all indebtedness of the Company
      owed
      to the Guarantor shall be collected, enforced and received by the Guarantor
      as
      trustee for the Holder and paid over to the Holder on account of the
      indebtedness of the Company to the Holder, but without reducing or affecting
      in
      any manner the liability of the Guarantor under the other provisions of this
      Guaranty except to the extent the principal amount of such outstanding
      indebtedness shall have been reduced by such payment.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    ARTICLE
      III

    

    EVENTS
      OF
      DEFAULT

    

    

    SECTION
      3.1. DEFAULT REMEDIES. If an Event of Default exists, the Holder may proceed
      to
      enforce the provisions hereof and to exercise any other rights, powers and
      remedies available to the Holder. The Holder, in its sole discretion, shall
      have
      the right to proceed first and directly against the Guarantor under this
      Guaranty without proceeding against or exhausting any other remedies which
      it
      may have and without resorting to any other security held by the
      Holder.

    

    SECTION
      3.2. REMEDIES; WAIVER AND NOTICE. (A) No remedy herein conferred upon or
      reserved to the Holder is intended to be exclusive of any other available remedy
      or remedies, but each and every such remedy shall be cumulative and shall be
      in
      addition to every other remedy given under this Guaranty or now or hereafter
      existing at law or in equity or by statute.

    

    (B)     No
      delay
      or omission to exercise any right or power accruing upon the occurrence of
      any
      Event of Default hereunder shall impair any such right or power or shall be
      construed to be a waiver thereof, but any such right or power may be exercised
      from time to time and as often as may be deemed expedient.

    

    (C)     In
      order
      to entitle the Holder to exercise any remedy reserved to it in this Guaranty,
      it
      shall not be necessary to give any notice, other than such notice as may be
      expressly required in this Guaranty.

    

    (D)     In
      the
      event any provision contained in this Guaranty should be breached by any party
      and thereafter duly waived by the other party so empowered to act, such waiver
      shall be limited to the particular breach so waived and shall not be deemed
      to
      waive any other breach hereunder.

    

    (E)     No
      waiver, amendment, release or modification of this Guaranty shall be established
      by conduct, custom or course of dealing.

    

    SECTION
      3.3. RIGHT OF SET-OFF.  The
      guarantor hereby grants to the Holder, a continuing lien, security interest
      and
      right of setoff as security for all liabilities and obligations to the Holder,
      whether now existing or hereafter arising, upon and against all deposits,
      credits, collateral and property, now or hereafter in the possession, custody,
      safekeeping or control of the Holder or any entity under the control of Bank
      of
      America Corporation and its successors and assigns, or in transit to any of
      them. At any time, without demand or notice (any such notice being expressly
      waived by the Guarantor), the Holder may set off the same or any part thereof
      and apply the same to any liability or obligation of the Guarantor even though
      unmatured and regardless of the adequacy of any other collateral securing the
      Notes. ANY AND ALL RIGHTS TO REQUIRE THE HOLDER TO EXERCISE ITS RIGHTS OR
      REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE NOTES, PRIOR
      TO
      EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
      PROPERTY OF THE GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
      WAIVED.

    

    SECTION
      3.4. EXPENSES INCURRED IN CONNECTION WITH ENFORCEMENT. The
      Guarantor shall pay on demand all reasonable expenses of the Holder in
      connection with the preparation, administration, default, collection, waiver
      or
      amendment of loan terms, or in connection with the Holder’s exercise,
      preservation or enforcement of any of its rights, remedies or options hereunder,
      including, without limitation, reasonable fees of outside legal counsel or
      the
      allocated costs of in-house legal counsel, accounting, consulting, brokerage
      or
      other similar professional fees or expenses, and any reasonable fees or expenses
      associated with travel or other costs relating to any appraisals or examinations
      conducted in connection with the Loans or any collateral therefor, and the
      amount of all such expenses shall, until paid,

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    bear
      interest at the rate applicable to principal hereunder (including any default
      rate) and be an obligation secured by any collateral.

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ARTICLE
      IV

    

    INTERPRETATION
      OF GUARANTY

    

    

    SECTION
      4.1. ACCOUNTING PRINCIPLES. Where the character or amount of any asset or
      liability or item of income or expense is required to be determined or
      consolidated or other accounting computation is required to be made for the
      purposes of this Guaranty, this shall be done in accordance with generally
      accepted accounting principles at the time in effect, to the extent applicable,
      except where such principles are inconsistent with the requirements of this
      Guaranty.

    

    SECTION
      4.2. DIRECTLY OR INDIRECTLY. Where any provision in this Guaranty refers to
      action to be taken by any Person, or which such Person is prohibited from
      taking, such provision shall be applicable whether such action is taken directly
      or indirectly by such Person.

    

    SECTION
      4.3. GOVERNING LAW. This Guaranty and the rights and obligations of the parties
      hereunder shall be construed and interpreted in accordance with the laws of
      the
      State of New York (the “Governing State”) (excluding the laws applicable to
      conflicts or choice of law).

    

    THE
      GUARANTOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY MAY BE
      BROUGHT IN THE COURTS OF THE GOVERNING STATE OR ANY FEDERAL COURT SITTING
      THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
      OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE GUARANTOR BY MAIL AT THE ADDRESS
      SET FORTH HEREIN. THE GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
      OR
      HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
      SUIT
      IS BROUGHT IN AN INCONVENIENT FORUM.

    

    SECTION
      4.4. DEFINITIONS. All defined terms used herein and not otherwise defined herein
      being used herein with the same meanings as set forth in the Loan Agreement.
      As
      used herein, all words of masculine gender shall mean and include correlative
      words of feminine and neuter genders.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    ARTICLE
      V

    

    MISCELLANEOUS

    

    

    SECTION
      5.1. OBLIGATIONS ARISE ON DELIVERY OF THE NOTES. The obligations of the
      Guarantor hereunder shall arise absolutely and unconditionally when the Notes
      shall have been executed and delivered by the Company to the
      Holder.

    

    SECTION
      5.2. SURVIVAL. All warranties, representations, and covenants made by the
      Guarantor herein shall be deemed to have been relied upon by the Holder and
      shall survive the delivery to the Holder of this Guaranty regardless of any
      investigation made by the Holder.

    

    SECTION
      5.3. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the successors
      and permitted assigns of the Guarantor. The provisions of this Guaranty are
      intended to be for the benefit of the Holder, its successors and
      assigns.

    

    SECTION
      5.4. NOTICES. (A) All notices, certificates and other communications under
      this
      Guaranty shall be in writing and shall be sufficiently given and shall be deemed
      given when: (1) delivered to the applicable address stated in subsection (B)
      hereof by registered or certified mail, return receipt requested or by such
      other means as shall provide the sender with documentary evidence of such
      delivery, or (2) delivery is refused by the Guarantor or the Holder, as the
      case
      may be, as evidenced by the affidavit of the Person who attempted to effect
      such
      delivery;

    

    (B)     The
      addresses to which communications under this Guaranty shall be delivered are
      as
      follows:

    

    TO
      THE
      GUARANTOR:

    

    BCP
      Ingredients, Inc.

    c/o
      Balchem Corporation

    P.O.
      Box
      600

    52
      Sunrise Park Road

    New
      Hampton, New York 10958

    Attention:
      Dino A. Rossi, President

    

    

    TO
      THE
      HOLDER:

    

    Bank
      of
      America, N.A.

    Peter
      D.
      Kiernan Plaza

    Albany,
      New York 12207

    Attention:
      Corporate Banking Division

    

    WITH
      A
      COPY TO:

    

    Lemery
      Greisler LLC

    10
      Railroad Place

    Saratoga
      Springs, New York 12866

    Attention:
      James A. Carminucci, Esq.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (C)     The
      Guarantor and the Holder may by notice given hereunder designate any further
      or
      different addresses to which subsequent notices, certificates and other
      communications shall be sent.

    

    SECTION
      5.5. ENTIRE UNDERSTANDING; COUNTERPARTS. This Guaranty constitutes the entire
      agreement and supersedes all prior agreements and understandings, both written
      and oral, among the parties with respect to the subject matter hereof and may
      be
      executed simultaneously in several counterparts, each of which shall be deemed
      an original, but all of which together shall constitute one and the same
      instrument.

    

    SECTION
      5.6. AMENDMENTS. No amendment, change, modification, alteration or termination
      of this Guaranty shall be made except upon the written consent of the Guarantor
      and the Holder.

    

    SECTION
      5.7. PARTIAL INVALIDITY. The invalidity or unenforceability of any one or more
      phrases, sentences, clauses or sections in this Guaranty shall not affect the
      validity or enforceability of the remaining portions of this Guaranty or any
      part thereof.

    

    SECTION
      5.8. SECTION HEADINGS NOT CONTROLLING. The headings of the several sections
      of
      this Guaranty have been prepared for convenience of reference only and shall
      not
      control, affect the meaning or be taken as an interpretation of any provision
      of
      this Guaranty.

    

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

    

    SECTION
      5.10 AMENDMENT AND RESTATEMENT. This Guaranty amends, restates and supersedes
      in
      its entirety that certain guaranty dated June 1, 2001 from the Guarantor in
      favor of Fleet National Bank.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the day and
      year
      first above written.

    

    

    
      	 	
              BCP
                INGREDIENTS, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Frank Fitzpatrick

            
	 	 	
              Frank
                Fitzpatrick, Treasurer
                and

            
	 	 	
              Secretary

            

    

    

    Accepted:

    

    BANK
      OF
      AMERICA, N.A., as Holder

    

    

    

    
      	
              By:

            	
              /s/
                Karen D. Finnerty

            	 
	 	
              Karen
                D. Finnerty, Vice President

            	 

    

    

    

     

    
      	STATE
              OF NEW YORK 	)

      	 	)ss.:

      	
              COUNTY
                OF ORANGE

            	
              )

            

    

    

    On
      the
      6th
      day of
      February, in the year 2006 before me personally came FRANCIS
      FITZPATRICK,
      to me
      known, who, being by me duly sworn, did depose and say that he/she/they
      reside(s) in New York; that he/she/they is(are) the Treasurer and Secretary
      of
      BCP INGREDIENTS, INC., the corporation described in and which executed the
      above
      instrument; and that he/she/they signed his/her/their name(s) thereto by
      authority of the board of directors of said corporation.

    

    
      	 	
              /s/
                Matthew D. Houston

            
	 	
              Notary
                Public, State of New York

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