new bank loan agreement (Bank Agreement), described below, were  used to repay $439.5 million  outstanding under the Company’s previous bank agreement, redeem all  outstanding senior subordinated notes  totaling $148.7 million (including the  call premium of $4.7 million) and to pay  other fees and expenses associated with  the refinancing of $8.9 million. A  prepayment of the new bank loan of  $37.0 million was made in June with  excess borrowing proceeds and cash  flow from operations and additional  prepayments of $89.0 million were  made in the second half of 2003. The  2003 refinancing had the effect of  extending the maturity of the Company’s debt coming due in 2003  through 2007. In November 2004, the  Company amended the credit agreement. The primary effects of the  amendment were to lower interest cost,  and reduce limitations relative to additional indebtedness and restricted  payments including repurchase of the  Company’s common stock and dividends.  The Company’s new Bank Agreement includes a Term Loan,  consisting of a Tranche A and B, and a  $125.0 million revolving credit facility. At December 31, 2004, the Tranche A  had a balance of $13.0 million and  matures in 2008, and the Tranche B had  a balance of $400.0 million and matures  over the period 2005 to 2010 with  annual payments of $4 million and a  balloon payment due at maturity. The  revolving credit facility expires in 2008;  availability under the facility at December 31, 2004 was $116.2 million,  after a reduction of $8.8 million for  outstanding letters of credit. The  Company’s interest rate on loans under  the new Bank Agreement is LIBOR plus  150 basis points. The Bank Agreement  is secured by a first priority pledge of  100% of the capital stock of the  Company’s direct domestic subsidiaries  and 65% of the capital stock of direct  material foreign subsidiaries, as defined  in the Bank Agreement. In addition, if  the Company’s credit rating as assigned  by Standard & Poor’s or Moody’s were  to decline to BB- or Ba3, respectively,  the Company would be required to  perfect liens in favor of participants in  the Bank Agreement in substantially all  of the Company’s U.S.-based assets. At  December 31, 2004, the Company’s  credit rating from Standard and Poor’s  was BB+ and from Moody’s was Ba1.  The Bank Agreement requires that the  Company satisfy certain financial covenants including an interest coverage ratio of higher than 3x  (EBITDA divided by interest expense)  and a leverage test (Debt divided by  EBITDA) lower than 3.75x and 3.50x  based on total debt and senior debt,  respectively. At December 31, 2004,  such ratios as defined in the Bank  Agreement, were 12.91x, 1.65x and  1.65x, respectively. The Bank Agreement also includes limitations  with respect to, among other things,  indebtedness in excess of $50 million  for capital leases, $450 million for  general indebtedness and $200 million  for acquisition indebtedness, of which  approximately $6.9 million, $0 and  $4.2, respectively, were outstanding at  December 31, 2004, and restricted  payments, including dividends on the  Company’s common stock, in excess of  50% of consolidated cumulative net  income plus $50 million, or approximately $170.6 million at  December 31, 2004. In conjunction  with entering into the new Bank  Agreement the Company entered into  interest rate swap agreements that fixed  the Company’s LIBOR interest rate on  $250.0 million and $50.0 million of  floating rate bank debt at 2.44% and  3.01%, expiring in May 2006 and June  2006, respectively.  The Company's primary ongoing  cash requirements will be for operating  and capital expenditures, product development activities, repurchase of its  common stock, dividends and debt  service. The Company's debt service  requirements consist primarily of principal and interest on bank borrowings. The Company's primary  sources of liquidity are internally generated cash flow, the Company's  revolving credit facility and the sale of  receivables under the Company's accounts receivable securitization agreement. The Company expects that  ongoing requirements for operating and  capital expenditures, product development activities, repurchase of its  common stock, dividends and debt  service requirements will be funded from  these sources; however, the Company's  sources of liquidity could be adversely  affected by, among other things, a  decrease in demand for the Company's  products, a deterioration in certain of the  Company's financial ratios or a deterioration in the quality of the  Company's accounts receivable. The Company expects that capital  expenditures in 2005 will be approximately $50 million. The Company's required debt and capital  lease amortization in 2005 is $16.9  million; the Company's required cash  interest payments for 2005, at current  interest rates, are estimated at approximately $19 million. The Company may also use cash to fund part  or all of the cost of future acquisitions. Since its initial public offering in 1991,  the Company has not paid any dividends.  However, on January 19, 2005, the  Company announced that it will commence payment of a quarterly dividend on its common stock of $.03 per  share. The Company expects the first  dividend payment to be made on or about  April 6, 2005 to shareholders of record as  of March 15, 2005. The Company  intends to retain the remainder of its  earnings to provide funds for the  operation and expansion of the Company's business, repurchase of its  common stock and to repay outstanding  indebtedness. Management believes that  the Company's working capital position,  ability to generate strong cash flow from  operations and access to credit markets  will allow it to meet its obligations for the  next twelve months and the foreseeable  future. A subsidiary of the Company has an  agreement with a financial institution  whereby the subsidiary can sell an  undivided interest of up to $85.0 million  in a designated pool of qualified accounts  Off-Balance Sheet Arrangement - Accounts Receivable Securitization  31 A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 