Exhibit 10.1
AMENDMENT NO. 7 TO RATIFICATION AND AMENDMENT AGREEMENT AND
AMENDMENT NO. 9 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 7 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO.
9 TO LOAN AND SECURITY AGREEMENT, dated as of June 12, 2007 (this "Seventh
Ratification Amendment"), by and among CONGOLEUM CORPORATION, a Delaware
corporation, as debtor and debtor-in-possession ("Borrower"), CONGOLEUM FISCAL,
INC., a New York corporation, as debtor and debtor-in-possession ("CFI"),
CONGOLEUM SALES, INC., a New York corporation, as debtor and
debtor-in-possession ("CSI" and together with CFI, collectively, "Guarantors"
and each individually, a "Guarantor"), and WACHOVIA BANK, NATIONAL ASSOCIATION,
successor by merger to Congress Financial Corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Lender, Borrower and Guarantors have entered into financing
arrangements pursuant to which Lender may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement, dated December 10, 2001, between Lender and Borrower, as amended by
Amendment No. 1 to Loan and Security Agreement, dated September 19, 2002,
between Lender and Borrower, Amendment No. 2 to Loan and Security Agreement,
dated as of February 27, 2003, among Lender, Borrower and Guarantors, and as
further amended and ratified by the Ratification and Amendment Agreement, dated
as of January 7, 2004 (the "Ratification Agreement"), between Lender and
Borrower, as acknowledged by Guarantors, Amendment No. 1 to Ratification
Agreement and Amendment No. 3 to Loan and Security Agreement, dated as of
December 14, 2004, between Lender and Borrower, as acknowledged by Guarantors,
Amendment No. 2 to Ratification Agreement and Amendment No. 4 to Loan and
Security Agreement, dated as of January 13, 2005, between Lender and Borrower,
as acknowledged by Guarantors, Amendment No. 3 to Ratification Agreement and
Amendment No. 5 to Loan and Security Agreement, dated as of June 7, 2005,
between Lender and Borrower, as acknowledged by Guarantors, Amendment No. 4 to
Ratification Agreement and Amendment No. 6 to Loan and Security Agreement, dated
as of December 19, 2005, as acknowledged by Guarantors, Amendment No. 5 to
Ratification Agreement and Amendment No. 7 to Loan and Security Agreement, dated
as of September 27, 2006 between Lender and Borrower, as acknowledged by
Guarantors, and Amendment No. 6 to Ratification Agreement and Amendment No. 8 to
Loan and Security Agreement, dated as of November 27, 2006 between Lender and
Borrower, as acknowledged by Guarantors, permitting debtor and
debtor-in-possession financing for Borrower and Guarantors, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced (all of the foregoing, as amended hereby and as the same
may hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, collectively, the "Loan Agreement", and together with all
agreements, documents and instruments at any time executed and/or delivered in
connection therewith or related thereto, including the Reaffirmation and
Amendment of Guarantor Documents, dated as of January 7, 2004, between Lender
and Guarantors, as from time to time amended, modified, supplemented, extended,
renewed, restated or replaced, collectively, the "Financing Agreements");
WHEREAS, Borrower and each Guarantor has commenced a case under Chapter 11
of Title 11 of the United States Code in the United States Bankruptcy Court for
the District of New Jersey and has retained possession of its assets and is
authorized under the Bankruptcy Code to continue the operation of its businesses
as a debtor-in-possession;
WHEREAS, Borrower and Guarantors have requested that Lender make certain
amendments to the Loan Agreement, and Lender is willing to agree to such
request, subject to the terms and conditions contained herein;
WHEREAS, by this Seventh Ratification Amendment, Lender, Borrower and
Guarantors desire and intend to evidence such amendments;
WHEREAS, this Seventh Ratification Amendment has been filed with the
Bankruptcy Court and notice thereof has been served upon all parties that have
requested notice in the Borrower's and Guarantors' bankruptcy cases pursuant to
the Final Order (1) Authorizing Debtors' Use of Cash Collateral, (2) Authorizing
Debtors to Obtain Post-Petition Financing, (3) Granting Senior Liens and
Priority Administrative Expense Status Pursuant to 11 U.S.C. ss.ss.105 and
364(c), (4) Modifying the Automatic Stay Pursuant to 11 U.S.C. ss.362, and (5)
Authorizing Debtors to Enter Into Agreements with Congress Financial Corporation
(the "Final DIP Financing Order"), which was approved by the Bankruptcy Court on
February 2, 2004;
WHEREAS, no objection has been filed by any interested party to the terms
and conditions of this Seventh Ratification Amendment and Borrower and Guarantor
are authorized to execute and deliver this Seventh Ratification Amendment in
accordance with the terms of the Final DIP Financing Order; and
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender, Borrower and
Guarantors hereby covenant, warrant and agree as follows:
1. DEFINITIONS.
1.1 Additional Definition. "Seventh Ratification Amendment" shall mean
this Seventh Ratification Amendment, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.2 Amendments to Definitions in Financing Agreements.
(a) All references to the term "Financing Agreements" in this
Seventh Ratification Amendment and in any of the Financing Agreements shall be
deemed and each such reference is hereby amended to include, in addition and not
in limitation, this Seventh Ratification Amendment, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(b) All references to the term "Ratification Agreement" in this
Seventh Ratification Amendment and in any of the Financing Agreements shall be
deemed and each such reference is hereby amended to mean the Ratification
Agreement, as amended hereby, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.3 Interpretation. For purposes of this Seventh Ratification Amendment,
unless otherwise defined herein, all capitalized terms used herein, including,
but not limited to, those terms used and/or defined in the recitals above, shall
have the respective meanings assigned to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT
2.1 Minimum EBITDA. Section 9.23(c) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(c) Borrower and its Subsidiaries shall not, for any period set
forth below during fiscal year 2007 of Borrower and its Subsidiaries
(each, a "Test Period"), permit EBITDA of Borrower and its Subsidiaries on
a rolling four (4) quarter basis to be less than the respective amount set
forth below opposite such Test Period; provided, that, if Excess
Availability was equal to or greater than $15,000,000 for each of the
ninety (90) consecutive days immediately preceding the last day of any
such Test Period, then Borrower and its Subsidiaries shall not be required
to comply with the terms of this Section 9.23(c) for such Test Period:
Test Period Minimum EBITDA
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For the four (4) quarters
ending June 30, 2007 $20,000,000
For the four (4) quarters
ending September 30, 2007 $20,000,000
For the four (4) quarters
ending December 31, 2007 $20,000,000"
2.2 Term.
(a) The first sentence of Section 12.1(a) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the earlier of (i)
December 31, 2007 and (ii) the date the plan of reorganization in the
Borrower's and Guarantors' bankruptcy cases, as confirmed by the
Bankruptcy Court, becomes effective (such earlier date, the "Termination
Date")."
(b) Section 12.1(c)(iii) of the Loan Agreement is hereby amended by
deleting the reference to "June 30, 2007" and replacing it with "December 31,
2007".
3. AMENDMENT FEE. In addition to and not in limitation of all other fees,
costs and expenses payable to Lender under the Financing Agreements, in
consideration of this Seventh Ratification Amendment, Borrower shall pay Lender
an amendment fee in the amount of $100,000 (the "Amendment Fee"), which fee
shall be fully earned as of and payable on the date hereof and may be charged
directly to the loan account of Borrower.
4. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to
the continuing representations, warranties and covenants heretofore made in the
Loan Agreement or otherwise and hereafter made by Borrower and Guarantors to
Lender, whether pursuant to the Financing Agreements or otherwise, and not in
limitation thereof, Borrower and Guarantors hereby represent, warrant and
covenant with, to and in favor of Lender the following (which shall survive the
execution and delivery of this Agreement), the truth and accuracy of which, or
compliance with, to the extent such compliance does not violate the terms and
provisions of the Bankruptcy Code, being a continuing condition of the making of
loans by Lender:
4.1 This Seventh Ratification Amendment has been duly authorized, executed
and delivered by Borrower and Guarantors and the agreements and obligations of
Borrower and Guarantors contained herein constitute legal, valid and binding
obligations of Borrower and Guarantors enforceable against Borrower and
Guarantors in accordance with their respective terms.
4.2 No Default or Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default exists or
has occurred as of the date of this Seventh Ratification Amendment.
5. CONDITIONS PRECEDENT. In addition to any other conditions contained
herein or in the Loan Agreement, as in effect immediately prior to the date
hereof, with respect to the Loans, Letter of Credit Accommodations and other
financial accommodations available to Borrower (all of which conditions, except
as modified or made pursuant to this Seventh Ratification Amendment shall remain
applicable to the Loans and be applicable to Letter of Credit Accommodations and
other financial accommodations available to Borrower), the following are
conditions to Lender's obligation to extend further loans, advances or other
financial accommodations to Borrower pursuant to the Loan Agreement:
5.1 Borrower and Guarantors shall execute and/or deliver to Lender this
Seventh Ratification Amendment, and all other Financing Agreements that Lender
may request to be delivered in connection herewith, in form and substance
satisfactory to Lender;
5.2 No trustee, examiner or receiver or the like shall have been appointed
or designated with respect to Borrower or any Guarantor, as debtor and
debtor-in-possession, or its business, properties and assets;
5.3 Borrower and Guarantors shall execute and/or deliver to Lender all
other Financing Agreements, and other agreements, documents and instruments, in
form and substance satisfactory to Lender, which, in the good faith judgment of
Lender are necessary or appropriate and implement the terms of this Seventh
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this Seventh Ratification Amendment, all of which contains provisions,
representations, warranties, covenants and Events of Default, as are reasonably
satisfactory to Lender and its counsel;
5.4 Each of Borrower and Guarantors shall comply in full with the notice
and other requirements of the Bankruptcy Code, the applicable Federal Rules of
Bankruptcy Procedure, and the terms and conditions of the Final DIP Financing
Order in a manner acceptable to Lender and its counsel;
5.5 No objection has been filed by any interested party to the terms and
conditions of this Seventh Ratification Amendment and Borrower and Guarantor are
authorized to execute and deliver this Seventh Ratification Amendment in
accordance with the terms of the Final DIP Financing.
5.6 No Default or Event of Default shall be continuing under any of the
Financing Agreements, as of the date hereof.
6. MISCELLANEOUS.
6.1 Amendments and Waivers. Neither this Seventh Ratification Amendment
nor any other instrument or document referred to herein or therein may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
6.2 Further Assurances. Each of Borrower and Guarantors shall, at its
expense, at any time or times duly execute and deliver, or shall cause to be
duly executed and delivered, such further agreements, instruments and documents,
and do or cause to be done such further acts as may be necessary or proper in
Lender's opinion to evidence, perfect, maintain and enforce the security
interests of Lender, and the priority thereof, in the Collateral and to
otherwise effectuate the provisions or purposes of this Seventh Ratification
Amendment, any of the other Financing Agreements or the Financing Order.
6.3 Headings. The headings used herein are for convenience only and do not
constitute matters to be considered in interpreting this Seventh Ratification
Amendment.
6.4 Counterparts. This Seventh Ratification Amendment may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all of which shall together constitute one and the same agreement.
6.5 Additional Events of Default. The parties hereto acknowledge, confirm
and agree that the failure of Borrower or any Guarantor to comply with any of
the covenants, conditions and agreements contained herein or in any other
agreement, document or instrument at any time executed by Borrower or any
Guarantor in connection herewith shall constitute an Event of Default under the
Financing Agreements.
6.6 Effectiveness. This Seventh Ratification Amendment shall become
effective upon the execution hereof by Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Ratification Amendment to be duly executed as of the day and year first above
written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
successor by merger to Congress Financial Corporation
By:
-----------------------------------
Title:
--------------------------------
CONGOLEUM CORPORATION,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: CFO
--------------------------------
CONGOLEUM SALES, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: VP
--------------------------------
CONGOLEUM FISCAL, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: VP
--------------------------------
6.6 Effectiveness. This Seventh Ratification Amendment shall become
effective upon the execution hereof by Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Ratification Amendment to be duly executed as of the day and year first above
written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
successor by merger to Congress Financial Corporation
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Title: Vice President
--------------------------------
CONGOLEUM CORPORATION,
as Debtor and Debtor-in-Possession
By:
-----------------------------------
Title:
--------------------------------
CONGOLEUM SALES, INC.,
as Debtor and Debtor-in-Possession
By:
-----------------------------------
Title:
--------------------------------
CONGOLEUM FISCAL, INC.,
as Debtor and Debtor-in-Possession
By:
-----------------------------------
Title:
--------------------------------
