CREDIT AGREEMENT Dated as of December 31, 2010 by and among ACETO CORPORATION, ACETO AGRICULTURAL CHEMICALS CORPORATION, CDC PRODUCTS CORPORATION, ACCI REALTY CORP., ACETO PHARMA CORP., ARSYNCO INC., ACETO REALTY LLC and SUN ACQUISITION CORP. and JPMORGAN CHASE BANK, N.A. as Administrative Agent and THE LENDERS PARTY HERETO JPMORGAN CHASE BANK, N.A. as Lead Arranger and Book Manager

 

 

 

 

 

 

 

as Lead Arranger and Book Manager

 

 

CREDIT AGREEMENT dated as of December 31, 2010, by and among ACETO CORPORATION, a New York corporation, ACETO AGRICULTURAL CHEMICALS CORPORATION, a New York corporation, CDC PRODUCTS CORPORATION, a New York corporation, ACETO PHARMA CORP., a Delaware corporation, ACCI REALTY CORP., a New York corporation, ARSYNCO INC., a New Jersey corporation, ACETO REALTY LLC, a New York limited liability company, and SUN ACQUISITION CORP., a Delaware corporation, jointly and severally, (each a “Company” and collectively the “Companies”), the LEND ERS which from time to time are parties to this Agreement (individually, a “Lender” and, collectively, the “Lenders”) and JPMORGAN CHASE BANK, N.A., a national banking association as Administrative Agent for the Lenders.

 

 

 

Accordingly, the parties hereto agree as follows:

 

 

 

“Aceto” shall mean Aceto Corporation, a New York corporation.

 

 

 

 

 

 

 

“Aggregate Letters of Credit Outstanding” shall mean, at a particular time, the sum of (a) the aggregate maximum stated amount at such time which is available or available in the future to be drawn under all outstanding Letters of Credit and (b) the aggregate amount of all payments made by the Issuing Lender on behalf of the Lenders under any Letter of Credit that has not been reimbursed by any Company at such time.

 

“Aggregate Outstandings” shall mean, at a particular time, the sum of (a) the Aggregate Letters of Credit Outstandings at such time and (b) the aggregate outstanding principal amount of all Revolving Credit Loans at such time.

 

 

 

“Alternate Base Rate Loans” shall mean any Loans when and to the extent that it is being made and/or maintained at a rate of interest determined by reference to the Alternate Base Rate.

 

“Applicable Margin” shall mean (a) with respect to each Alternate Base Rate Loan, the percentage set forth below under the heading “ABR Margin” opposite the applicable ratio of Consolidated Adjusted Total Funded Debt to Consolidated EBITDA (the “Applicable Ratio”), (b) with respect to each Adjusted Libor Loan, the percentage set forth below under the heading “LIBOR Margin” opposite the Applicable Ratio and (c) with respect to the Unused Fee payable pursuant to Section 3.04(b) of this Agreement, the percentage set forth below under the heading “Unused Fee Rate” opposite the Applicable Ratio:

 

Category		Consolidated Adjusted Total Funded Debt to Consolidated EBITDA	ABR Margin (360 day basis)	LIBOR Margin	Unused Fee Rate
I		Less than 2.00:1.00	0.00%	2.25%	0.25%
II		Greater than or equal to 2.00:1.00 But less than 3.55:1.00	0.25%	2.75%	0.37%
III		Greater than or equal to 3.55:1.00	1.00%	3.50%	0.50%

 

 

Notwithstanding the foregoing, during the period commencing on the Closing Date and ending on the date of reset of the Applicable Margin in accordance with this paragraph the Applicable Margin shall be based on the Applicable Ratio set forth in Category II above.  The Applicable Margin will be set or reset with respect to each Loan on the date which is fifteen (15) days following the date of receipt by the Administrative Agent of the financial statements referred to in Section 6.03(a) and Section 6.03(b) together with a certificate of the Chief Financial Officer of each Company certifying the Applicable Ratio and setting forth the calculation thereof in detail; provided, however, (a) the Applicable Margin will first be reset based on the financial statements for the fiscal quarter ended December 31, 2010, and (b) if any such financial statement and certificate are not received by the Administrative Agent within the time period required pursuant to Section 6.03(a) or Section 6.03(b), as the case may be, the Applicable Margin will be set or reset, based on the Applicable Ratio set forth in Category III above from the date such financial statements and certificate were due until the date which is fifteen (15) days following the receipt by the Administrative Agent of such financial statements and certificate.  The Lenders shall not in any way be deemed to have waived any Default or Event of Default, including without limitation, an Event of Default resulting from the failure of the Companies to comply with Section 7.12 of this Agreement, or any rights or remedies hereunder or under any other Loan Docume nt in connection with the foregoing proviso.  During the occurrence and continuance of an Event of Default, no downward adjustment, and only upward adjustments, shall be made to the Applicable Margin.

 

“Assignment and Acceptance Agreement” shall mean the Assignment and Acceptance Agreement in the form attached hereto as Exhibit F.

 

“Availability” shall mean (a) the Total Revolving Credit Commitment  minus (b) Aggregate Outstandings.

 

 

 

 

“Borrowing Date” shall mean, with respect to any Loan, the date on which such Loan is disbursed to the applicable Company.

 

“Business Day” shall mean (a) any day not a Saturday, Sunday or legal holiday, on which banks in New York City are open for business and (b) as it relates to any payment, determination, funding or notice to be made or given in connection with any Adjusted Libor Loan, any day specified in clause (a) on which trading is carried on by and between banks in Dollar deposits in the London interbank eurodollar market.

 

 

“Carlstadt Real Property” shall mean the real property of Arsynco, Inc. located at 13th Street, Carlstadt, New Jersey 07072.

 

“Cash Collateral” shall mean the pledge and deposit by the Companies with the Administrative Agent, as collateral for the Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent.

 

 “Cash and Cash Equivalents” shall mean (1) lawful money of the United States of America; (2) marketable securities issued or directly and fully or unconditionally guaranteed or insured by the United States or any agency or instrumentality thereof (provided that that full faith and credit of the United States is pledged in support thereof) having maturities of not more than one (1) year from the date of acquisition thereof; (3) time deposits and certificates of deposit of any commercial bank (including, without limitation, a Lender) having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any State thereof, or the District of Columbia havin g, capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one (1) year from the date of acquisition thereof; (4) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s Corporation, or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc., and in each case maturing not more than one (1) year after the date of acquisition thereof; and (5) investments in money market or mutual funds substantially all of whose assets are comprised of securities of the types described in clauses (1) through (4) above.

 

“Capital Expenditures” shall mean additions to property and equipment of Aceto and its Subsidiaries which, in conformity with Generally Accepted Accounting Principles, are included as “additions to property, plant or equipment” or similar items which would be reflected in the consolidated statement of cash flow of Aceto and its Subsidiaries, including without limitation, property and equipment which are the subject of Capital Leases.

 

“Capital Lease” shall mean any lease the obligations of which are required to be capitalized on the balance sheet of Aceto and its Subsidiaries in accordance with Generally Accepted Accounting Principles.

 

“Change of Control” shall mean any event which results in (i) any Person, or two or more Persons acting in concert, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of securities of Aceto (or other securities convertible into such securities) representing 30% or more of the combined voting power of all securities of Aceto entitled to vote in the election of directors; or (ii) during any period of up to 12 consecutive months, individuals who at the beginning of such 12-month period were directors of Aceto, together with any director approved or nominated by the then majority of the Board of Directors of Aceto, ceasing for any reason to constitute a majority of the Board of Directors of Aceto; or (iii) any Person, or two or more Persons acting in concert, acquiring by contract or otherwise, or entering into a contract or arrangement which upon consummation will results in its or their acquisition of, or control over, securities of Aceto (or securities convertible into such securities) representing 30% or more of the combined voting power of all securities of Aceto entitled to vote in the election of directors

 

“Chief Financial Officer” shall mean the Chief Financial Officer of Aceto.

 

“Closing Date” shall mean December 31, 2010.

 

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

 “Commercial Letter of Credit” shall mean any sight and time letter of credit issued for the account of a Person, including any Existing Commercial Letters of Credit.

 

 “Commitment Proportion” shall mean, with respect to each Lender at the time of determination, the ratio, expressed as a percentage, which such Lender’s Commitments bear to the Total Commitment or, if the Commitments have expired or have been terminated, the ratio, expressed as a percentage, which (a) the sum of Revolving Credit Exposure and Term Loan Exposure of such Lender to (b) the Aggregate Outstandings plus the aggregate amount of Term Loans outstanding, at such time.

 

“Commitments” shall mean, collectively, the Revolving Credit Commitment and the Term Loan Commitment.

 

“Company” and “Companies” shall have the meaning set forth in the preamble hereto.

 

“Consolidated Domestic EBITDA” shall mean for Aceto and its Domestic Subsidiaries for any period, Consolidated Net Income (or consolidated net loss) for such period, plus the sum, without duplication, of (a) Consolidated Interest Expense, (b) depreciation and amortization expenses or charges, (c) all income taxes to any Governmental Authority expensed on Aceto’s or any of its Domestic Subsidiaries’ books (whether paid or accrued), in each case, determined on a consolidated basis for Aceto and its Domestic Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated EBITDA” shall mean for Aceto and all of its Subsidiaries for any period, Consolidated Net Income (or consolidated net loss) for such period, plus the sum, without duplication, of (a) Consolidated Interest Expense, (b) depreciation and amortization expenses or charges, (c) all income taxes to any Governmental Authority expensed on Aceto’s or any of its Subsidiaries’ books (whether paid or accrued), in each case, determined on a consolidated basis for Aceto and all of its Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated Debt Service Coverage Ratio” shall mean, for Aceto and its Subsidiaries, for any period, the ratio of (a) Consolidated EBITDA plus non-cash unrealized losses in connection with Hedging Agreements minus the sum of (i) Consolidated Unfunded Capital Expenditures, (ii) cash dividends, distributions, stock repurchases and redemptions, (iii) cash income taxes and (iv) non-cash unrealized gains in connection with Hedging Agreements, to (b) the sum of (i) Consolidated Interest Expense plus (ii) the scheduled installments of principal on all Indebtedness (including Capital Leases) having a final maturity of one year or more from the date of incurrence thereof.  All the foregoing categories shall be determined on a consolidated basis for Aceto and its Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis and shall be calculated (without duplication) over the four fiscal quarters then most recently ended, provided that for the period from March 31, 2011 through and including September 30, 2011, Consolidated Debt Service Coverage Ratio shall be determined with respect to one fiscal quarter, two fiscal quarters and three fiscal quarters, respectively, then ending.

 

“Consolidated Domestic Debt Service Coverage Ratio” shall mean, for Aceto and its Domestic Subsidiaries, for any period, the ratio of (a) Consolidated Domestic EBITDA plus the sum of (i) non-cash unrealized losses in connection with Hedging Agreements and (ii) for the fiscal quarters ending March 31, 2011 and June 30, 2011 only, provided that Cash and Cash Equivalents plus Availability is not less than $1,000,000, in the aggregate, as of March 31, 2011 and June 30, 2011, respectively, an amoun t equal to $1,000,000, minus the sum of (iii) Consolidated Unfunded Capital Expenditures, (iv) cash dividends, distributions, stock repurchases and redemptions for the applicable period, (v) cash income taxes and (vi) non-cash unrealized gains in connection with Hedging Agreements to (b) the sum of (i) Consolidated Interest Expense plus (ii) the scheduled installments of principal on all Indebtedness (including Capital Leases) having a final maturity of one year or more from the date of incurrence thereof, in each case, determined on a consolidated basis for Aceto and its Domestic Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis,.  All of the foregoing categories shall be calculated (without duplication) over the four fiscal quarters then most recently ended provided that for the period from March 31, 2011 through and including September 30, 2011, Consolidated Debt Service Coverage Ratio shall be determined with respect to one fiscal quarter, two fiscal quarters and three fiscal quarters, respectively, then ending.

 

 

“Consolidated Adjusted Total Funded Debt” shall mean the sum of all Indebtedness for borrowed money having an original maturity of one year or more (including, without limitation, the outstanding Revolving Credit Loans and the outstanding principal balance of the loans owing by any of Aceto’s Subsidiaries to Deutsche Bank or any of Aceto’s Subsidiaries to ING Bank) but excluding Subordinated Indebtedness, in each case determined on a consolidated basis for Aceto and its Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

 

 “Consolidated Total Funded Debt” shall mean the sum of all Subordinated Indebtedness and all Indebtedness for borrowed money having an original maturity of one year or more (including, without limitation, the outstanding Revolving Credit Loans and the outstanding principal balance of the loans owing by any of Aceto’s Subsidiaries to Deutsche Bank or any of Aceto’s Subsidiaries to ING Bank), in each case determined on a consolidated basis for Aceto and its Subsidiaries in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated Interest Expense” shall mean the consolidated gross interest expense of Aceto and its Subsidiaries and/or Domestic Subsidiaries, as applicable, in each case determined on a consolidated basis for such period in accordance with Generally Accepted Accounting Principles applied on a consistent basis and calculated over the four fiscal quarters then most recently ended.

 

“Consolidated Net Income” shall mean, for any period, the net income (or net loss) of Aceto and its Subsidiaries and/or Domestic Subsidiaries, as applicable, calculated exclusive of extraordinary gains, in each case determined on a consolidated basis for such period determined in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated Unfunded Capital Expenditures” shall mean Capital Expenditures of Aceto and its Subsidiaries and/or Domestic Subsidiaries, as applicable, financed other than by the incurrence of Indebtedness, in each case determined on a consolidated basis for such period.

 

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or (iii) pay over to any Lender Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and i ncluding the particular default, if any) has not been satisfied, (b) has notified the Companies or any Lender Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Lender Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Lender Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

 

 

“Dollar” and the symbol “$” shall mean lawful money of the United States of America.

 

“Domestic Subsidiary” shall mean any Subsidiary of Aceto organized under the laws of any state of the United States of America.

 

“Eligible Investments” shall mean (a) direct obligations of the United States of America or any governmental agency thereof which are fully guaranteed by the United States of America, provided that such obligations mature within one year from the date of acquisition thereof; or (b) dollar denominated certificates of time deposit maturing within one year issued by any bank organized and existing under the laws of the United States or any state thereof and having aggregate capital and surplus in excess of $1,000,000,000; or (c) money market mutual funds having assets in excess of $2,500,000,000; or (d) commercial paper rated not less than P-1 or A-1 or their equivalent by Moody’s Investor Service, Inc. or Sta ndard & Poor’s Ratings Group, respectively; or (e) tax exempt securities of a U.S. issuer rated A or better by Standard and Poor’s Ratings Group or Moody’s Investor Service, Inc.

 

“Environmental Law” shall mean any law, ordinance, rule, regulation, or policy having the force of law of any Governmental Authority relating to pollution or protection of the environment or to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations promulgated pursuant thereto.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which together with any Company or any Affiliate of any Company would be deemed to be a member of the same “controlled group” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“Event of Default” shall have the meaning set forth in Article VIII.

 

“Executive Officer” shall mean any of the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or the Corporate Comptroller of Aceto or any of its Subsidiaries, as applicable, and their respective successor, if any, designated by the board of directors thereof.

 

 

 

“Existing Commercial Letters of Credit” shall mean the commercial letters of credit described on Schedule 1.01(a)(i) hereto.

 

 “Existing Letters of Credit” shall mean the Existing Commercial Letters of Credit and the Existing Standby Letters of Credit.

 

“Existing Standby Letters of Credit” shall mean the standby letters of credit described on Schedule 1.01(a)(ii) hereto.

 

“Existing Loans” shall mean the loans outstanding pursuant to the Prior Agreement as of the Closing Date.

 

 

“First-Tier Foreign Subsidiary” shall mean, with respect to Aceto or any Domestic Subsidiary, a Foreign Subsidiary that is directly owned by Aceto and/or such Domestic Subsidiary.

 

“Foreign Subsidiary” shall mean any Subsidiary of any Company which is not a Domestic Subsidiary.

 

“Generally Accepted Accounting Principles” shall mean those Generally Accepted Accounting Principles in the United States of America, as in effect from time to time.

 

“Governmental Authority” shall mean any nation or government, any state, province, city or municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board or similar body, whether federal, state, provincial, territorial, local or foreign.

 

“Hazardous Materials” shall mean any explosives, radioactive materials, or other materials, wastes, substances, or chemicals regulated as toxic, hazardous or as a pollutant, contaminant or waste under any applicable Environmental Law.

 

“Hedging Agreement” shall mean any interest rate swap, collar, cap, floor or forward rate agreement, any foreign currency exchange agreement or other agreement regarding the hedging of interest rate risk exposure executed in connection with hedging the interest rate exposure of a Person, and any confirming letter executed pursuant to such agreement, all as amended, supplemented, restated or otherwise modified from time to time.

 

“IDA Transaction” shall mean the conveyance by Aceto Realty LLC of its fee interest in the real property and improvements located at 4 Tri Harbor Court, Port Washington, New York to the Nassau County Industrial Development Agency (the “Agency”) subject to a lease-back of such property pursuant to the terms of a lease (“Lease”) for a period of ten (10) years and a right of Aceto Realty LLC to repurchase such real property and improvements for $1.00 (i) upon expiration of the Lease from the Agency, or (ii) at any time Aceto Realty LLC determines to do so provided in connection therewith it reimburses the Agency for any benefits that it received from the Lease and the payment in lieu of taxes agreement executed in connection with the Lease, which reimbursement obligations are secured by a so-called “Pilot Mortgage” granted by Aceto Realty LLC in favor of the Agency (the “Pilot Mortgage”).  The IDA Transaction shall include a sublease by Aceto Realty LLC of its rights under the Lease to Aceto.

 

 

“Immaterial Subsidiary” has the meaning set forth in Section 6.12 hereof.

 

 

        “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each calendar month during the term hereof, (b) with respect to any Adjusted Libor Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of an Adjusted Libor Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, and (c) as to any Loan, the date such Loan is paid in full or in part.

 

“Interest Period” shall mean with respect to any Adjusted Libor Loan:

 

(a)           initially, the period commencing on the date such Adjusted Libor Loan is made and ending one, two, three or six months thereafter, as selected by the Administrative Borrower on behalf of the Companies in its notice of borrowing or in their notice of conversion from an Alternate Base Rate Loan provided, in each case, in accordance with the terms of Articles II and III hereof; and

 

(b)          thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Adjusted Libor Loan and ending one, two, three or six months thereafter, as selected by the Companies by irrevocable written notice to the Administrative Agent not later than 11:00 a.m. New York, New York time three Business Days prior to the last day of the then current Interest Period with respect to such Adjusted Libor Loan; provided, however, that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

 

 

(ii)          if the Companies shall fail to give notice as provided in clause (b) above, the Companies shall be deemed to have requested conversion of the affected Adjusted Libor Loan to an Alternate Base Rate Loan on the last day of the then current Interest Period with respect thereto;

 

(iii)        any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month;

 

(iv)        no more than six (6) Interest Periods with respect to the Loans may exist at any one time; and

 

(v)         the Administrative Borrower on behalf of the Companies shall select Interest Periods so as not to require a payment or prepayment of any Adjusted Libor Loan during an Interest Period for such Adjusted Libor Loan.

 

“Issuing Lender” shall mean the Administrative Agent, in its capacity as the issuer of Letters of Credit hereunder or its successor Issuing Lender permitted pursuant to Section 2.05(e) hereof.

 

“Joinder Agreement” shall mean the Joinder Agreement in the form attached as Exhibit D to be executed and delivered by any Domestic Affiliate who is required to execute the same pursuant to Section 6.12 hereof, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

        “LC Exposure” shall mean, with respect to Lender its Commitment Proportion of the Aggregate Letters of Credit Outstanding.

 

“LC Sublimit” shall mean $3,000,000.

 

 

“Lender Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

 

“Lenders” shall have the meaning set forth in the preamble hereto.

 

“Lending Office” shall mean for each Lender, the office specified under such Lender’s name on the signature pages hereof with respect to each Type of Loan, or such other office as such Lender may designate in writing from time to time to the Companies and the Administrative Agent with respect to such Type of Loan.

 

“Letter of Credit” shall mean standby and commercial letter of credit issued by the Issuing Lender for the account of a Company pursuant to the terms of this Agreement, including the Existing Letters of Credit.

 

“Leverage Purpose Transaction” shall mean any transaction that (a) causes the ratio of consolidated liabilities to consolidated assets to exceed 75% or (b) causes the ratio of the consolidated liabilities to consolidated assets to exceed 50% and increases the consolidated liabilities by 100% or more, in each case determined in accordance with Generally Accepted Accounting Principles, applied on a consistent basis with respect to Aceto and its consolidated Subsidiaries.

 

 

“LIBO Rate” means, with respect to any Adjusted Libor Loan for any Interest Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such page) providing rate quotations comparable to those currently provided on such page of such page, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Adjusted Libor Loan for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

 “Lien” shall mean any lien (statutory or otherwise), security interest, mortgage, deed of trust, pledge, charge, conditional sale, title retention agreement, Capital Lease or other encumbrance or similar right of others, or any agreement to give any of the foregoing.

 

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the Security Documents, the Guaranties, the Subordination Agreement, any Pledge Agreements, any Related Hedging Agreements and each other agreement executed in connection with the transactions contemplated hereby or thereby, as each of the same may hereafter be amended, restated, supplemented or otherwise modified from time to time.

 

“Loans” shall mean the Revolving Credit Loans and the Term Loans.

 

“Material Adverse Effect” shall mean a material adverse effect upon (a) the business, operations, property, prospects or condition (financial or otherwise) of Aceto and its Subsidiaries taken as a whole, or (b) the validity or enforceability of (i) this Agreement or any of the other Loan Documents or (ii) the rights or remedies of the Administrative Agent and the Lenders hereunder or thereunder.

 

“Material Contract” shall mean each contract, instrument or agreement (a) to which Aceto or any of its Subsidiaries is a party which is material to the business, operations or condition (financial or otherwise), prospects, or properties of any Company or of Aceto and its Subsidiaries taken as a whole, or (b) which is not a contract, instrument or agreement to purchase inventory in the ordinary course of business and which requires the payment during the term thereof in excess of $2,500,000.

 

“MPLLC” shall mean Mirror Pharmaceuticals, LLC, a New Jersey limited liability company.

 

“MPLLC Transaction” shall mean the acquisition by SAC or Aceto of a minority interest in MPLLC.

 

“Multi-Employer Plan” means a Multi-Employer Pension Plan as defined by ERISA Section 3(37) with respect to which any Company, any Subsidiary, or any ERISA Affiliate has an obligation to contribute on account of their employees or has any present or contingent withdrawing liability on account of any such employees.

 

“Notes” shall mean, collectively, the Revolving Credit Notes and the Term Loan Notes.

 

 

“Obligations” shall mean all obligations, liabilities and indebtedness of each Company to the Lenders, the Issuing Lender and the Administrative Agent, whether now existing or hereafter created, absolute or contingent, direct or indirect, due or not, whether created directly or acquired by assignment or otherwise, including, without limitation, all obligations, liabilities and indebtedness of the Company and the Subsidiaries arising under this Agreement, the Notes or any other Loan Document including, without limitation, all obligations, liabilities and indebtedness of the Companies with respect to the principal of and interest on the Loans, reimbursement of Letters of Credit, obligations under any Related Hedgin g Agreement, any Banking Services Obligations and all fees, costs, expenses and indemnity obligations of the Companies hereunder or under any other Loan Document (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, and interest that, but for the filing of  petition in bankruptcy with respect to the Company or any Subsidiary, would accrue on such obligations, whether or not a claim is allowed against the Companies for such interest in the related bankruptcy proceeding.    The Obligations of the Companies shall be joint and several.

 

“Participant” shall have the meaning set forth in Section 10.05.

 

“Participation” shall have the meaning set forth in Section 10.05.

 

“Payment Office” shall mean, with respect to the Administrative Agent, its office located at 395 North Service Road, Melville, New York 11747 or such other office as the Administrative Agent may designate from time to time.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Acquisitions” shall mean any acquisition (whether by merger or otherwise) by Aceto or any Subsidiary of Aceto of more than 50% of the outstanding capital stock, membership interests, partnership interests or other similar ownership interests of a Person which is engaged in a line of business similar to the business of Aceto or such Subsidiary (or reasonable extensions thereof) or the purchase of all or substantially all of the assets owned by such Person; provided (a) the Administrative Agent shall have received, within ten (10) Business Days of the closing of such Permitted Acquisition, (i) with respect to a Person which constitutes a Material Domestic Subsidiary, to the extent not previously received , a duly executed Joinder Agreement in accordance with Section 6.12 hereof, and (ii) with respect to a Person which constitutes a First-Tier Foreign Subsidiary, to the extent not previously received, a duly executed Pledge Agreement by the parent of such First-Tier Foreign Subsidiary, to the extent such documents are required to be delivered pursuant to Section 6.12 hereof; (b) the Administrative Agent and the Lenders shall have received evidence reasonably satisfactory to them that the shares or other interests in the Person, or the assets of the Person, which is the subject of the Permitted Acquisition are, or will be promptly following the closing of such Permitted Acquisition, free and clear of all Liens, except Permitted Liens, including, without limitation, with respect to the acquisition of shares or other equity interests, free of any restrictions on transfer other than restrictions applicable to the sale of securities under federal and state securities laws and regulations generally or, with respect to the acquisition of any Foreign Subsidiary, restrictions applicable to the sale of securities under applicable laws or regulations of the applicable foreign jurisdiction;  (c) the Administrative Agent shall have received not less than five (5) Business Days preceding the closing of such Permitted Acquisition, the documentation governing the proposed acquisition, including, without limitation, the purchase agreement with respect thereto, together with such other additional documentation or information with respect to the proposed acquisition as the Lenders may reasonably require; (d) no Default or Event of Default shall have occurred and be continuing immediately prior to or would occur after giving effect to the acquisition on a pro forma basis; (e) the Lenders shall have received projections and pro forma financial statements showing that, after giving effect to such acquisition, (i) no Default or Event of Default shall have occurred and (ii) such acquisition will not be a Leveraged Purpose Tra nsaction; (e) the acquisition has either (i) been approved by the Board of Directors or other governing body of the Person which is the subject of the acquisition or (ii) been recommended for approval by the Board of Directors or other governing body of such Person to the shareholders or other members of such Person and subsequently approved by the shareholders or such members if shareholder or such member approval is required under applicable law or the by-laws, certificate of incorporation or other governing instruments of such Person; (f) prior to the closing of any such acquisition, the Companies shall have delivered evidence to the Lenders that, on a pro forma basis, the Companies will be in compliance with the financial condition covenants of Section 7.12 hereof upon completion of s uch acquisition; (g) the aggregate purchase price for each such purchase (including any assumed Indebtedness in connection therewith and including the purchase price paid in connection with the MPLLC Transaction), and when aggregated with the purchase price of all other Permitted Acquisitions in the same fiscal year in which such Permitted Acquisition shall occur, does not exceed $5,000,000, and (h) with respect to each purchase, the purchase price of which exceeds $5,000,000, the Lenders shall have provided its prior written consent to the consummation thereof.

 

 

“Permitted Liens” shall mean the Liens specified in clauses (a) through (k) of Section 7.01.

 

“Person” shall mean any natural person, corporation, limited liability company, limited liability partnership, business trust, joint venture, association, company, partnership or Governmental Authority.

 

“Pilot Mortgage” has the meaning set forth in the definition of the term “IDA Transaction”.

 

“Plan” shall mean any multi-employer or single-employer plan defined in Section 4001 of ERISA, which covers, or at any time during the five calendar years preceding the date of this Agreement covered, employees of Aceto or any Subsidiary of Aceto or an ERISA Affiliate on account of such employees’ employment by Aceto, such Subsidiary or an ERISA Affiliate.

 

 

 

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time.

 

“Related Hedging Agreements” means, collectively, all Hedging Agreements which are now or hereafter entered into or maintained with a Lender or an Affiliate of a Lender and with respect to which the Administrative Borrower and the Lender or other Person referred to above in this definition party thereto (except in the case of the Administrative Agent) shall have delivered written notice to the Administrative Agent, at or prior to the time that the Hedging Agreement relating to such Obligation (other than with respect to a foreign exchange transaction) is entered into or, if later, the time that such Lender becomes a party to this Agreement, that such a transaction has been entered into and that it constitutes a R elated Hedging Agreement entitled to the benefits of this Agreement and the Security Documents.

 

 

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan as to which the 30 day notice requirement has not been waived by the PBGC.

 

“Required Lenders” shall mean Lenders owed at least 66 2/3% of the sum of the aggregate outstanding principal amount of the Loans or, if no Loans are outstanding, Lenders having at least 66 2/3% of the Total Revolving Credit Commitment.

 

“Revolving Credit Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make Revolving Credit Loans to the Companies and acquire participations in Letters of Credit in an aggregate amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.01(b) hereto, as such amounts may be adjusted in accordance with the terms of this Agreement.

 

“Revolving Credit Commitment Period” shall mean the period from and including the Closing Date to, but not including, the Revolving Credit Commitment Termination Date or such earlier date as the Revolving Credit Commitment shall terminate as provided herein.

 

“Revolving Credit Commitment Termination Date” shall mean December 31, 2015.

 

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

 

 “Revolving Credit Loans” shall have the meaning set forth in Section 2.01(a).

 

“Revolving Credit Notes” shall have the meaning set forth in Section 2.02.

 

“RP Acquisition” shall mean the acquisition of the assets of the Seller pursuant to the RP Acquisition Documents.

 

“RP Acquisition Documents” shall mean the RP Purchase Agreement, and the documents and agreements executed in connection therewith, all as amended, restated, supplemented or otherwise modified, in accordance with the terms of this Agreement.

 

“RP Purchase Agreement” shall mean the Asset Purchase Agreement by and among Aceto, SAC, the Seller, Ronald Gold and David B. Rosen, dated as of December 15, 2010, pursuant to which SAC will acquire the Assets (as defined therein) of the Seller.

 

“SAC” shall mean Sun Acquisition Corp., a Delaware corporation, and wholly-owned subsidiary of Aceto.

 

“Security Agreement” shall mean the Security Agreement in the form attached as Exhibit C to be executed and delivered on the Closing Date by each Company, and, thereafter, by any Domestic Affiliate who is required to execute the same pursuant to Section 6.12 hereof, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Security Documents” shall mean, collectively, the Security Agreement, each Pledge Agreement and each other collateral security document delivered to the Administrative Agent hereunder.

 

“Seller” shall mean Rising Phamaceuticals, Inc., a New Jersey corporation.

 

 

“Solvent” shall mean with respect to any Person as of the date of determination thereof that such Person has a reasonable basis to believe that (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required on its debts as such debts become absolute and matured, (c) such Person will not have as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature.  For such purposes, any contingent liability is valued at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Standby LC Disbursement” shall mean a payment made by the Issuing Lender pursuant to a Standby Letter of Credit.

 

“Standby LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Standby Letters of Credit at such time, plus (b) the aggregate amount of all Standby LC Disbursements that have not yet been reimbursed by or on behalf of the Companies at such time.

 

“Standby Letter of Credit” shall mean any letter of credit issued to support an obligation of a Person and which may be drawn on only upon the failure of such Person to perform such obligation or other contingency, including any Existing Standby Letters of Credit.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentage shall include those imposed pursuant to s uch Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

 “Subordination Agreement” shall mean the Subordination Agreement in the form attached hereto as Exhibit G to be executed and delivered on the Closing Date by Aceto, SAC, the Seller and the Administrative Agent, as the same may be amended, restated supplemented or otherwise modified from time to time.

 

“Subordinated Indebtedness” shall mean the indebtedness owed to Seller which is subject to the Subordination Agreement and all other indebtedness which is subordinated in right of payment to the prior final and indefeasible payment in full of the obligations of the Companies and their Subsidiaries to the Lenders hereunder and under any other Loan Document on terms satisfactory to and approved in writing by the Required Lenders.

 

“subsidiary” shall mean, with respect to any Person, any corporation, association or other business entity more than 50% of the voting stock or other ownership interests (including, without limitation, membership interests in a limited liability company) of which is at the time owned or controlled, directly or indirectly, by such Person or one or more of its subsidiaries or a combination thereof.

 

“Subsidiary” shall mean any subsidiary of a Company and “Subsidiaries” shall mean all subsidiaries of all Companies.

 

 

“Taxes” shall have the meaning set forth in Section 3.09.

 

“Term Loan” shall have the meaning set forth in Section 2.03 hereof.

 

“Term Loan Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make a Term Loan to the Company in an amount not to exceed the amount set forth on Schedule 1.01(b) hereto, as such amounts may be reduced or adjusted to reflect assignments in accordance with the terms of this Agreement.

 

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

 

 “Term Loan Maturity Date” shall mean December 31, 2015.

 

“Term Loan Notes” shall have the meaning set forth in Section 2.04 hereof.

 

“Total Commitment” shall mean, at any time, the aggregate of the Revolving Credit Commitments and the Term Loan Commitment in effect at such time which, initially, shall be $80,000,000.

 

“Total Revolving Credit Commitment” shall mean, at any time, the aggregate of the Revolving Credit Commitments in effect at such time, which, initially shall be $40,000,000.

 

“Total Term Loan Commitment” shall mean the aggregate of the Term Loan Commitments in effect on the Closing Date, which shall be $40,000,000.00.

 

“Type” shall mean as to any Loan its status as an Alternate Base Rate Loan or an Adjusted Libor Loan.

 

“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which the present value of the accrued benefits under the Plan as of the close of its most recent plan year exceeds the fair market value of the assets allocable thereto, determined in accordance with Section 412 of the Code.

 

“Unused Fee” shall have the meaning specified in Section 3.04(b) hereof.

 

 

 

SECTION 2.01.                  ­Revolving Credit Loans.  (a) Subject to the terms and conditions, and relying upon the representations and warranties, set forth herein, each Lender severally agrees to make loans (individually a “Revolving Credit Loan” and, collectively , the “Revolving Credit Loans”) to the Administrative Borrower on behalf of the Companies from time to time during the Revolving Credit Commitment Period, up to but not exceeding at any one time outstanding the amount of its Revolving Credit Commitment; provided, however, that no Revolving Credit Loan shall be made if, after giving effect to such Revolving Credit Loan, the Aggregate Outstandings would exceed the Total Revolving Credit Commitment in effect at such time.  During the Revolving Credit Commitment Period, the Companies may from time to time borrow, repay and re-borrow hereunder on or after the date hereof and prior to the Revolving Credit Commitm ent Termination Date, subject to the terms, provisions and limitations set forth herein.  The Revolving Credit Loans may be (i) Adjusted Libor Loans, (ii) Alternate Base Rate Loans or (iii) a combination thereof.

 

 

(b)           The Administrative Borrower on behalf of the Companies shall give the Administrative Agent irrevocable written notice (or telephonic notice promptly confirmed in writing) not later than 11:00 a.m., New York, New York time, three Business Days prior to the date of each proposed Adjusted Libor Loan under this Section 2.01 or prior to 11:00 a.m. New York, New York time on the date of each proposed Alternate Base Rate Loan under this Section 2.01.  Such notice shall be irrevocable and shall specify (i) the amount and Type of the proposed borrowing, (ii) the proposed use of the loan proceeds, (iii) initial Interest Period if an Adjusted Libor Loan, and (iv) the proposed Borrowing Date. Upon receipt of such notice from the Administrative Borrower, the Administrat ive Agent shall promptly notify each Lender thereof.  Except for borrowings which utilize the full remaining amount of the Total Revolving Credit Commitment, each borrowing of an Alternate Base Rate Loan Loan shall be in an amount not less than $500,000 or, if greater, whole multiples of $100,000 in excess thereof.  Each borrowing of an Adjusted Libor Loan shall be in an amount not less than $1,000,000 or whole multiples of $500,000 in excess thereof.

 

(c)           The Administrative Borrower on behalf of the Companies shall have the right, upon not less than three Business Days’ prior written notice to the Administrative Agent to terminate the Total Revolving Credit Commitment or from time to time to permanently reduce the amount of the Total Revolving Credit Commitment; provided, however, that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the Aggregate Outstandings would exceed the Total Revolving Credit Commitment as then reduced; provided, further, that any such termination or reduction requiring prepayment of any Adjusted Libor Loan shall be made only on the last day of the Interest Period wi th respect thereto or on the date of payment in full of all amounts owing pursuant to Section 3.08 as a result of such termination or reduction.  Any such reduction shall be in the amount of $2,500,000 or whole multiples of $1,000,000 in excess thereof, and shall reduce permanently the amount of the Total Revolving Credit Commitment then in effect.

 

(d)           The several agreements of the Lenders to make Revolving Credit Loans pursuant to this Section 2.01 shall automatically terminate on the Revolving Credit Commitment Termination Date.  Upon such termination, the Companies shall immediately repay in full the principal amount of the Revolving Credit Loans then outstanding, together with all accrued interest thereon and all other amounts due and payable hereunder.

 

SECTION 2.02.                  ­Revolving Credit Note.   The Revolving Credit Loans made by each Lender shall be evidenced by a promissory note of the Companies, (individually the “Revolving Credit Note” and collectively the “Revolving Credit Notes”), substantially in the form attached hereto as Exhibit A, each appropriately completed, duly executed and delivered on behalf of the Companies and payable to the order of such Lender in a principal amount equal to the Revolving Credit Commitment of such Lender.  Each Revolving Credit Note shall (a) be dated the Closing Date, (b) be stated to mature on the Revolving Credit Commitment Termination Date, and (c) bear interest from the date thereof until paid in full on the unpaid principal amount thereof from time to time outstanding as provided in Section 3.01.  Each Lender is authorized to record the date, Type and amount of each Revolving Credit Loan and the date and amount of each payment or prepayment of principal of each Revolving Credit Loan in such Lender’s records or on the grid schedule annexed to the Revolving Credit Note; provided, however, that the failure of a Lender to set forth each such Revolving Credit Loan, payment and other information shall not in any manner affect the obligation of the Companies to repay each Revolving Credit Loan made by such Lender in accordance with the terms of its Revolving Credit Note and this Agreement.  The Revolving Credit Note, the grid schedule and the books and records of each Lender shall constitute conclusive evidence of the information so recorded absent manifest error.

 

 

SECTION 2.03.                  ­Term Loans. Subject to the terms and conditions hereof, each Lender severally agrees to make a term loan (individually, a “Term Loan” and, collectively, the “Term Loans”) to the Administrative Borrower on behalf of the Companies on the Closing Date in an amount not to exceed its Term Loan Commitment.  The Administrative Borrower shall give the Administrative Agent irrevocable written notice (or telephonic notice promptly confirmed in writing) not later than 11:00 a.m. New York, New York time three Business Days prior to the Closing Date specifying (i) the amount to be borrowed, which shall not exceed the Total Term Loan Commitment, (ii) the Type or Types of such Term Loans and the related amounts for each, and (iii) if such Term Loan is a Adjusted Libor Loan, the initial Interest Period selected for such Term Loan.  Upon receipt of such notice from the Administrative Borrower, the Adminis trative Agent shall promptly notify each Lender thereof.  The Term Loans shall be (i) Adjusted LIBOR Loans, (ii) Alternate Base Rate Loans, or (iii) a combination thereof.  The Total Term Loan Commitment shall terminate upon funding of the Term Loans on the Closing Date.

 

SECTION 2.04.                  ­Term Loan Notes.  The Term Loan made by each Lender shall be evidenced by a promissory note of the Companies (individually a “Term Loan Note” and collectively the “Term Loan Notes”), substantially in the form attached hereto as Exhibit B, each appropriately completed, duly executed and delivered on behalf of the Companies and payable to the order of such Lender in a principal amount equal to the Term Loan Commitment of such Lender.  Each Term Loan Note shall (a) be dated the Closing Date, (b) be stated to mature on the Term Loan Maturity Date, (c) bear interest from the date thereof until paid in full on the unpaid principal amount thereof from time to time outstanding as provided in Section 3.01 and (d) be payable as to principal in twenty (20) consecutive quarterly installment s, commencing March 31, 2011 and on each June 30, September 30 and December 31st thereafter, each in the amount set forth below opposite the applicable installment, provided that the final payment on the Term Loan Maturity Date shall be in an amount equal to the then outstanding unpaid principal amount of the Term Loan, all for the pro-rata distribution to the Lenders in accordance with their Commitment Percentages:

 

Installment		Amount
1 through 8		$	1,500,000.00
9 through 12		$	1,750,000.00
13 through 16		$	2,000,000.00
17 through 20		$	3,250,000.00

 

Each Lender is authorized to record the date, Type and amount of each Term Loan and the date and amount of each payment or prepayment of principal of each Term Loan in such Lender’s records or on the grid schedule annexed to the Term Loan Note; provided, however, that the failure of a Lender to set forth such Term Loan, payment and other information shall not in any manner affect the obligation of the Companies to repay such Term Loan made by such Lender in accordance with the terms of its Term Loan Note and this Agreement.  The Term Loan Note, the grid schedule and the books and records of each Len der shall constitute conclusive evidence of the information so recorded absent manifest error.  Repayments and prepayments of the Term Loan may not be reborrowed.

 

 

SECTION 2.05.                  ­Letters of Credit.

 

(a)           Generally.  Subject to the terms and conditions set forth in this Agreement, upon the written request of a Company in accordance herewith, the Issuing Lender shall issue Letters of Credit at any time during the Revolving Credit Commitment Period with pro rata participation by all of the Lenders in accordance with their respective Commitment Proportions.  Notwithstanding the foregoing, (i) at no time shall the sum of the Aggregate Letters of Credit Outstanding exceed the LC Sub limit and (ii) no Letter of Credit shall be issued if, after giving effect to the same, the Aggregate Outstandings would exceed the Total Revolving Credit Commitment.  Each request for issuance of a Letter of Credit shall be in writing and shall be received by the Issuing Lender by no later than 12:00 noon, New York, New York time, on the day which is at least two Business Days prior to the proposed date of issuance.  Such issuance shall occur by no later than 5:00 p.m. on the proposed date of issuance or creation (assuming proper prior notice as aforesaid).  Subject to the terms and conditions contained herein, the expiry date, the type of Letter of Credit (i.e., Commercial Letter of Credit or Standby Letter of Credit) and the amount and beneficiary of the Letters of Credit will be as designated by the Administrative Borrower.  The Issuing Lender shall notif y the Administrative Agent and the Lenders quarterly of the amounts of all Letters of Credit issued hereunder and of any extension, reduction, termination or amendment of any Letter of Credit.  Each Letter of Credit issued by the Issuing Lender hereunder shall identify: (i) the dates of issuance and expiry of such Letter of Credit, (ii) the amount of such Letter of Credit (which shall be a sum certain), (iii) the beneficiary of such Letter of Credit, and (iv) the drafts and other documents necessary to be presented to the Issuing Lender upon drawing thereunder.  In no event shall any Letter of Credit expire (or by its terms be required to be paid, extended or renewed), after the Revolving Credit Commitment Termination Date.  The Companies agree to execute and deliver to the Issuing Lender such further documents and instruments in connection with any Letter of Credit issued hereunder (including without limitation, applications therefor) as the Issuing Lender in accordance with it s customary practices may reasonably request.    The Issuing Lender will not be required to issue a Commercial Letter of Credit hereunder with a maturity date (1) more than one hundred eighty (180) days from the date of issuance of such Letter of Credit, or (2) on or after the Revolving Credit Commitment Termination Date.

 

(b)           Drawings Under Letters of Credit.  The Companies hereby absolutely and unconditionally promise to pay the Issuing Lender not later than 12:00 noon (New York, New York time) the amount of each drawing under a Letter of Credit if the Administrative Borrower receive notice of such drawing or payment prior to 10:00 a.m., New York, New York time, on the date of such drawing, or if such notice has not been received by the Administrative Borrower prior to such time on such date, then not later than 12:00 noon, New York, New York time, on the Business Day immediately following the day that the Administrative Borrower receive such notice; provided, however, if any drawing was in an amount not less than $500,000, the Administrative Borrower on behalf of the Companies may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.01 hereof that such payment be financed with a Revolving Credit Loan that is an Alternate Base Rate Rate Loan  in an equivalent amount, and, to the extent so financed, the Companies’ obligation to make such payment shall be discharged and replaced by such Alternate Base Rate Loan. Such request shall be made by the Administrative Borrower on the date of receipt of notice from the Issuing Lender of a drawing under a Letter of Credit.  The Issuing Lender shall notify the Administrative Agent and each Lender of such request in accordance with Section 2.01 hereof.  If the Administrative Borrower has not reque sted that such payment be financed with such Alternate Base Rate Loan and the Companies fail to make such payment when due, the Issuing Lender shall notify each Lender of the amount of the drawing under the applicable Letter of Credit.  Each Lender agrees that on the first Business Day after receipt of such notice, it will immediately make available by no later than 12:00 noon New York, New York time, to the Issuing Lender at its office located at the Payment Office in immediately available funds, its Commitment Proportion of such drawing or payment, provided (i) each Lender’s obligation shall be reduced by its Commitment Proportion of any reimbursement by the Companies in respect of any such drawing pursuant to this Section 2.05 and (ii) no Lender shall be required to make payments to the Issuing Lender with respect to a drawing which the Companies reimbursed with the proceeds of a Revolving Credit Loan, as contemplated above, if such Lender fully funded its Commitment Proportion of such Rev olving Credit Loan in accordance with Section 3.11 hereof.  Any payment made by a Lender pursuant to this Section 2.05(b) to reimburse the Issuing Lender for any drawing under a Letter of Credit (other than an Alternate Base Rate Loan as contemplated above) shall not constitute a Revolving Credit Loan and shall not relieve the Companies of their obligation to reimburse the Issuing Lender for such drawing.  Each drawing under a Letter of Credit, as applicable which is not paid on the date such drawing is made shall accrue interest, for each day from and including the date of such drawing to but excluding the date that the Companies reimburse the Issuing Lender in full for such drawing or payment, at the rate per annum then applicable to Revolving Credit Loans which are Alternate Base Rate Loans; provided, however, that if the Companies fail to reimburse such drawing or payment when due pursuant to this paragraph (b), then the Companies shall pay to the Issuing Lender interest on the amount of such drawing or payment at the rate per annum set forth in Section 3.01(d) hereof.  Interest accruing pursuant to the preceding sentence shall be for the account of the Issuing Lender, except that interest accrued on and after the date of payment by any Lender pursuant to this Section 2.05(b) to reimburse the Issuing Lender shall be for the account of such Lender to the extent of such payment.  The Issuing Lender shall promptly notify the Administrative Agent of each drawing under a Letter of Credit.

 

 

(c)           Letter of Credit Obligations Absolute.

 

(i)           The obligation of the Companies to reimburse the Issuing Lender as provided hereunder in respect of drawings under Letters of Credit shall rank pari passu with the obligation of the Companies to repay the Loans hereunder, and shall be absolute and unconditional under any and all circumstances subject to (ii) below.  Without limiting the generality of the foregoing, the obligation of the Companies to reimburse the Issuing Lender in respect of drawings under Letters of Credit for which the Issuing Lender ha s received documents in accordance with the terms hereof shall not be subject to any defense based on the non-application or misapplication by the beneficiary of the proceeds of any such drawing or the legality, validity, regularity or enforceability of the Letters of Credit or any related document, even though such document shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Companies, the beneficiary of any Letter of Credit, or any financial institution or other party to which any Letter of Credit may be transferred.  The Issuing Lender may accept or pay any draft presented to it under any Letter of Credit regardless of when drawn or made and whether or not negotiated, if such draft, accompanying certificate or documents and any transmittal advice are presented or negotiated on or before the expiry date of such Letter of Credit or any renewal or extension thereof then in effect, and is in substantial compliance with the terms and conditions of such Letter of Credit.  Furthermore, neither the Issuing Lender nor any of its correspondents nor any Lender shall be responsible, as to any document presented under a Letter of Credit which appears to be regular on its face, and appears on its face to be in substantial compliance with the terms of the Letter of Credit, for the validity or sufficiency of any signature or endorsement, for delay in giving any notice or failure of any instrument to bear adequate reference to the Letter of Credit, or for failure of any Person to note the amount of any draft on the reverse of the Letter of Credit.  The Issuing Lender shall have the right, in its sole discretion, to decline to accept any documents and to decline to making payment under any Letter of Credit if the documents presented are not in strict compliance with the terms of such Letter of Credit.

 

(ii)           Any action, inaction or omission on the part of the Issuing Lender or any of its correspondents under or in connection with any Letter of Credit or the related instruments, documents or property, if in good faith and in conformity with such laws, regulations or customs as are applicable, shall be binding upon the Companies and shall not place the Issuing Lender or any of its correspondents or any Lender under any liability to the Companies in the absence of (x) gross negligence or willful misconduct by the Issuing Lender or its correspondents or (y) the failure by the Issuing Lender to pay under a Letter of Credit after pre sentation of a draft and documents strictly complying with such Letter of Credit unless the Issuing Lender is prohibited from making such payment pursuant to a court order.  The Issuing Lender’s rights, powers, privileges and immunities specified in or arising under this Agreement are in addition to any heretofore or at any time hereafter otherwise created or arising, whether by statute or rule of law or contract.  All Letters of Credit issued hereunder will, except to the extent otherwise expressly provided hereunder, be governed by the UCP.

 

 

(iii)           Any action, inaction or omission on the part of the Issuing Lender or any of its correspondents under or in connection with any Letter of Credit or the related instruments, documents or property, if in good faith and in conformity with such laws, regulations or customs as are applicable, shall be binding upon the Companies and shall not place the Issuing Lender or any of its correspondents or any Lender under any liability to the Companies in the absence of (x) gross negligence or willful misconduct by the Issuing Lender or its correspondents or (y) the failure by the Issuing Lender to pay under a Letter of Credit after pr esentation of a draft and documents strictly complying with such Letter of Credit unless the Issuing Lender is prohibited from making such payment pursuant to a court order.  The Issuing Lender’s rights, powers, privileges and immunities specified in or arising under this Agreement are in addition to any heretofore or at any time hereafter otherwise created or arising, whether by statute or rule of law or contract.  All Letters of Credit issued hereunder will, except to the extent otherwise expressly provided hereunder, be governed by the UCP.

 

 

(d)           Obligations of Lenders in Respect of Letters of Credit. Each Lender acknowledges that each Letter of Credit issued by the Issuing Lender pursuant to this Agreement is issued by the Issuing Lender on behalf of and with the ratable participation of all of the Lenders (i.e., in accordance with their respective Commitment Proportions), and each Lender agrees to make the payments required by subsection (b) above and agrees to be responsible for its pro rata share of all liabilities incurred by the Issuing Lender with respect to each Letter of Credit issued, established, opened or extended by the Issuing Lender pursuant to this Agreement for the account of the Companies.  Each Lender agrees with the Issuing Lender and the other Lenders that its obligation to make the payments required by subsection (b) above shall not be affected in any way by any circumstances (other than the gross negligence or willful misconduct of the Issuing Lender) occurring before or after the making of any payment by the Issuing Lender pursuant to any Letter of Credit, including, without limitation: (i) any modification or amendment of, or any consent, waiver, release or forbearance with respect to, any of the terms of this Agreement or any other instrument or document referred to herein; (ii) the exi stence of any Default or Event of Default; or (iii) any change of any kind whatsoever in the financial position or credit worthiness of the Companies.

 

(e)           Replacement of the Issuing Lender.  The Issuing Lender may be replaced at any time by written agreement among the Companies, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender.  The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Lender.  At the time any such replacement shall become effective , the Companies shall pay all unpaid fees accrued for the account of the replaced Issuing Lender pursuant to Section 3.04 hereof.  From and after the effective date of any such replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter, and (ii) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require.  After the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued prior to such replacement, but shall not be required to issue additional Letters of Credit.

 

 

 

 

 

(a)           Each Alternate Base Rate Loan shall bear interest for the period from the date thereof on the unpaid principal amount thereof at a fluctuating rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

 

(b)           Each Adjusted Libor Loan shall bear interest for the Interest Period applicable thereto on the unpaid principal amount thereof at a rate per annum equal to the Adjusted LIBO Rate determined for each Interest Period thereof in accordance with the terms hereof plus the Applicable Margin.

 

(c)           Upon the occurrence and during the continuance of an Event of Default the outstanding principal amount of the Loans (excluding any defaulted payment of principal accruing interest in accordance with clause (d) below), shall, at the option of the Required Lenders, bear interest payable on demand at a rate of interest 3% per annum in excess of the interest rate otherwise then in effect or, if no rate is in effect, 3% per annum in excess of the Alternate Base Rate plus the Applicable Margin then in effect.

 

(d)           If any of the Companies shall default in the payment of the principal of or interest on any portion of any Loan or any other amount becoming due hereunder, whether with respect to reimbursement of drawings under Letters of Credit, interest, fees, expenses or otherwise, the Companies shall pay interest on such defaulted amount accruing from the date of such default (without reference to any period of grace) up to and including the date of actual payment (after as well as before judgment) at a rate of 3% per annum in excess of the rate otherwise in effect or, if no rate is in effect, 3% per annum in excess of the Alt ernate Base Rate plus the Applicable Margin then in effect.

 

(e)           The Administrative Borrower on behalf of the Companies may elect from time to time to convert outstanding Loans from Adjusted Libor Loans to Alternate Base Rate Loans by giving the Administrative Agent at least one Business Day’s prior irrevocable written notice of such election, provided that any such conversion of Adjusted Libor Loans shall only be made on the last day of an Interest Period with respect thereto or upon the date of payment in full of any amounts owing pursuant to Section 3.08 as a result of such conversion.  Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender thereof.  The Administrative Borrower on behalf of the Companies may elect from time to time to convert outstanding Loans from Alte rnate Base Rate Loans to Adjusted Libor Loans by giving the Administrative Agent irrevocable written notice of such election not later than 11:00 a.m. New York, New York time, three Business Days prior to the date of the proposed conversion.  Upon receipt of such notice the Administrative Agent shall promptly notify each Lender thereof.  All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein, provided that each conversion shall be in the principal amount of $1,000,000 or whole multiples of $100,000 in excess thereof, and further provided that no Default or Event of Default shall have occurred and be continuing.  Any conversion to or from Adjusted Libor Loans hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of all Adjusted Libor Loans having the same Interest Period shall not be less than $1,000,000.

 

 

(f)           Any Adjusted Libor Loan in a minimum principal amount of $1,000,000 may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Companies with the notice provisions contained in the definition of Interest Period; provided, that no Adjusted Libor Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to an Alternate Base Rate Loan Loan on the last day of the Interest Period in effect when the Administrative Agent is notified, or otherwise has actual knowledge, of such Default or Event of Default.

 

(g)           If the Administrative Borrower shall fail to select the duration of any Interest Period for any Adjusted Libor Loan in accordance with the definition of “Interest Period” set forth in Section 1.01, the Administrative Borrower shall be deemed to have selected an Interest Period of one month.

 

(h)           No Loan may be funded as an Adjusted Libor Loan or converted to or continued as an Adjusted Libor Loan with an Interest Period that extends beyond the Revolving Credit Commitment Termination Date, with respect to Revolving Credit Loans, or the Term Loan Maturity Date, with respect to the Term Loan.

 

(i)           Interest on each Loan shall be payable in arrears on each Interest Payment Date and shall be calculated on the basis year of 360 days and shall be payable for the actual days elapsed.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall, absent manifest error, be conclusive and binding for all purposes.  Any rate of interest on the Loans or other Obligations which is computed on the basis of the Alternate Base Rate shall change when and as the Alternate Base Rate changes in accordance with the definition thereof.

 

(j)           Anything in this Agreement or in any Note to the contrary notwithstanding, the obligation of the Companies to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be paid to a Lender to the extent that the charging or receipt thereof would not be permissible under the law or laws applicable to such Lender limiting the rates of interest that may be charged or collected by such Lender.  In each such event payments of interest required to be paid to such Lender shall be calculated at the highest rate permitted by applicable law until such time as the rates of interest required hereunder may lawfully be charged and collected by such Lender.

 

SECTION 3.02.                  ­Use of Proceeds.  The proceeds of the Revolving Credit Loans shall be used solely to (a) to repay the Existing Loans in full on the Closing Date, (b) to finance up to $28,000,000 of the RP Acquisition, (c) to finance general corporate purposes of the Companies and (d) to finance Permitted Ac quisitions, provided that after giving effect to such Permitted Acquisition the Companies are in compliance with the financial covenants set forth in Section 7.12 hereof.  The Term Loans shall be used by the Companies to partially finance the RP Acquisition.  Commercial Letters of Credit issued by the Issuing Lender hereunder shall be for the account of the Companies and shall be issued to provide the primary payment mechanism in connection with the purchase of any materials, goods or services by any Company in the ordinary course of business.  Standby Letters of Credit shall be issued by the Issuing Lender to support the Companies’ obligations to third parties in the ordinary course of business.

 

 

 

(a)           The Administrative Borrower on behalf of the Companies may on the last day of an Interest Period if the Loans to be repaid are Adjusted Libor Loans, or at any time and from time to time if the Loans to be repaid are Alternate Base Rate Loans, repay the then outstanding Loans, in whole or in part, without premium or penalty, except as provided in Section 3.08, upon written notice to the Administrative Agent (or telephonic notice promptly confirmed in writing) not later than 11:00 a.m. New York, New York time, three Business Days before the date of prepayment with respect to prepayments of Adjusted Libor Loans, or 11:00 a.m. New York, New York time one Business Day before the date of prepayment with respect to Alternate Base Rate Loans.  Each notice shall be irrevocable and shall specify the date and amount of repayment and whether such repayment is of Adjusted Libor Loans or Alternate Base Rate Loans or a combination thereof, and if a combination thereof, the amount of repayment allocable to each.  Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender thereof.  If such notice is given, the Companies shall make such repayment, and the payment amount specified in such notice shall be due and payable, on the date specified therein.  Each partial prepayment pursuant to this Section 3.03 of (x) Alternate Base Rate Loans shall be in a principal amount of $500,000 or whole multiples of $100,000 in excess thereof and (y) of Adjusted LIBOR Loans shall be in a principal amount of $1,000,000 or whole multiples of $100,000 in excess thereof.

 

(b)           Commencing with the calendar year ending December 31, 2011 and annually thereafter, the Company shall repay the Term Loan, on or before March 31st of the immediately following fiscal year, in an amount equal to (i) the product of (A) Excess Cash Flow times (B) 50% less (ii) any voluntary principal repayments of the Term Loan prepaid by the Companies during such year; provided that the maximum amount of mandatory prepayments under this Section 3.03(b) shall not exceed (x ) $5,000,000, during the term of the Term Loan and (y) (A) $1,000,000, with respect to the calendar year ending December 31, 2011, (B) $1,000,0000, with respect to the calendar year ending December 31, 2012, (C) $2,000,000, for the calendar year ending December 31, 2013 or (D) $1,000,000, with respect to the calendar year ending December 31, 2014 (as calculated, the “Required Amount”).   Notwithstanding the foregoing, in the event that the amount of cash available in the United States (the “Available Cash”) to be used to prepay the Term Loan in accordance with this Section 3.03(b) is less than the Required Amount as of the date of determination, then (I) the Companies shall repay the Term Loan in an amount equal to Available Cash and (II) Aceto or on e of the Companies shall (x) open a certificate of deposit or similar account with an office of JPMorgan Chase Bank, N.A. located in Europe in an amount equal to the difference between the Required Amount and Available Cash, (y) maintain such amount in such account during the term of this Agreement and (z) provide evidence to the Lenders that such account has been opened and is being maintained not less than once in each twelve (12) month period.

 

(c)           Each prepayment of principal of a Loan pursuant to this Section 3.03 shall be accompanied by accrued interest to the date prepaid on the amount prepaid.  Unless directed by the Administrative Borrower pursuant to Section 3.03(a) partial prepayments of any Loan shall be applied first to outstanding Alternate Base Rate Loans and then to Adjusted Libor Loans having the shortest remaining Interest Periods.  Any partial prepayment of the Term Loans shall be applied to the remaining installments thereof in inverse order of maturity.

 

 

(a)           The Companies agree to pay to the Administrative Agent a non-refundable commitment fee in the aggregate amount of $300,000 (equal to 0.375% of the Total Commitment), on the Closing Date, for the account of, and pro rata distribution to, each Lender.

 

           (b)           The Companies agrees to pay to the Administrative Agent for the account of, and pro rata distribution to, each Lender an unused fee (the “Unused Fee”) on the average daily unused portion of the Total Revolving Credit Commitment from the date of this Agreement until the Revolving Credit Commitment Termination Date at a rate per annum equal to the Applicable Margin, based on a year of 360 days, payable in arrears on the last day of March, June, September, and December of each year commencing March 31, 2011, on the Revolving Credit Commitment Termination Date and on each date the Rev olving Credit Commitment is permanently reduced in whole or in part.

 

 

(c)           The Companies shall pay to the Administrative Agent for the account of, and pro rata distribution to, the Lenders a commission with respect to the Lenders’ participation in Letters of Credit equal to the Applicable Margin for Adjusted Libor Loans multiplied by the average daily amount of the Standby LC Exposure during the period from and including the Closing Date but excluding the later of (a) the Revolving Credit Commitment Termination Date and (b) the date on which such Lender ceases to have any Standby LC Exposure.  Such commissions with respect to Standby Letters of Credit shall be payable in arrears on the last Business Day of March, June, September and December of each year, commencing March 31, 2011; provided that all such fees shall be payabl e on the date on which the Total Revolving Credit Commitment terminates and any such fees accruing after the date on which the Total Revolving Credit Commitment terminates shall be payable on demand.  All commissions with respect to Standby Letters of Credit shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed.

 

(d)           The Companies shall pay to the Administrative Agent for the account of, and pro rata distribution to each Lender, a payment fee equal to 0.25% of the stated amount of each Commercial Letter of Credit upon payment by the Issuing Lender of such Commercial Letter of Credit.

 

(e)           The Companies agree to pay the Administrative Agent for the Administrative Agent’s own account, such agency, syndication and other fees as separately agreed between the Administrative Agent and the Companies.

 

SECTION 3.05.                 ­Inability to Determine Interest Rate. In the event that the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Companies) that, by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate applicable pursuant to Section 3.01(b) for any requested Interest Period with respect t o (a) the making of an Adjusted Libor Loan, (b) an Adjusted Libor Loan that will result from the requested conversion of an Alternate Base Rate Loan into an Adjusted Libor Loan, or (c) the continuation of an Adjusted Libor Loan beyond the expiration of the then current Interest Period with respect thereto, the Administrative Agent shall forthwith give notice by telephone of such determination, promptly confirmed in writing, to the Companies of such determination.  Until the Administrative Agent notifies the Companies that the circumstances giving rise to the suspension described herein no longer exist, the Companies shall not have the right to request or continue an Adjusted Libor Loan or to convert an Alternate Base Rate Loan Loan to an Adjusted Libor Loan.

 

SECTION 3.06.                 ­Illegality. Notwithstanding any other provisions herein, if any introduction of or change in any law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Adjusted Libor Loans as contemplated by this Agreement, such Lender shall forthwith give notice by telephone of such circumstances, promptly confirmed in writing, to the Administrative Agent, which notice the Administrative Agent shall promptly transmit to the Companies and the other Lenders whereupon until such Lender notifies the Companies and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, and (a) the commitment of such Lender to make and to allow conversion to or continuations of Adjusted Libor Loans shall forthwith be suspended for the duration of such illegality and (b) the Loans then outstanding as Adjusted Libor Loans, if any, shall be converted automatically to Alternate Base Rate Loans on the next succeeding last day of each Interest Period applicable to such Adjusted Libor Loans or, within such earlier period as may be required by law.  The Companies shall pay to such Lender, upon demand, any additional amounts r equired to be paid pursuant to Section 3.08 hereof.