Exhibit 10(43)
[Execution]
AMENDMENT NO. 3 TO RATIFICATION AND AMENDMENT AGREEMENT AND
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO.
5 TO LOAN AND SECURITY AGREEMENT, dated as of June 7, 2005 (this "Third
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"), Amendment No. 1 to
Ratification and Amendment Agreement and Amendment No. 3 to Loan and Security
Agreement, dated as of December 14, 2004, between Lender and Borrower, as
acknowledged by Guarantors, and Amendment No. 2 to Ratification and Amendment
Agreement and Amendment No. 4 to Loan and Security Agreement, dated as of
January 13, 2005, 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 Third Ratification Amendment, Lender, Borrower and
Guarantors desire and intend to evidence such amendments;
WHEREAS, this Third Ratification Amendment has been filed with the
Bankruptcy Court and notice thereof has been served upon all parties that have
requested notice in the Borrowers 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. ss105 and 364(c),
(4) Modifying the Automatic Stay Pursuant to 11 U.S.C. ss362, 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, this Third Ratification Amendment has been authorized by the
Bankruptcy Court pursuant to an order entered by the Bankruptcy Court
authorizing Borrower and Guarantor to execute and deliver this Third
Ratification Amendment; 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. "Third Ratification Amendment" shall mean
this Third 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
Third 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 Third 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 Third 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 Third Ratification
Amendment, unless otherwise defined herein, all capitalized terms used herein,
including, but not limited to, those
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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 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
December 31, 2005 (the "Termination Date")."
(b) Section 12.1(c)(iii) of the Loan Agreement is hereby
amended by deleting the reference to "June 30, 2005" and replacing it with
"December 31, 2005".
2.2 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 2005 of Borrower and its
Subsidiaries (each, a "Test Period"), permit EBITDA of Borrower and
its Subsidiaries on a cumulative year-to-date 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
----------- --------------
January 1, 2005 through March 31, 2005 $3,500,000
January 1, 2005 through June 30, 2005 $9,500,000
January 1, 2005 through September 30, 2005 $16,000,000
January 1, 2005 through December 31, 2005 $20,000,000"
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 Third Ratification Amendment, Borrower shall pay Lender an
amendment fee in the amount of $125,000 (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; provided, that, in the event that the Loan
Agreement is amended and restated prior to December 31, 2005 pursuant to a
credit facility provided by Lender (or group of lenders for which Wachovia Bank,
National Association is acting as agent) in connection with the emergence by
Borrower and Guarantors from the Chapter 11 Cases, then the closing fee payable
by Borrower pursuant to such amended
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and restated credit facility shall be reduced by the amount of the Amendment
Fee, to the extent the Amendment Fee is paid to and received by Lender from or
on behalf 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 present, 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 Third 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 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 Third 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 Third 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 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;
5.2 Borrower and Guarantors shall execute and/or deliver to Lender
this Third Ratification Amendment, and all other Financing Agreements that
Lender may request to be delivered in connection herewith, in form and substance
satisfactory to Lender;
5.3 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 Third
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this Third Ratification Amendment, all of which contains provisions,
representations, warranties, covenants and Events of Default, as are reasonably
satisfactory to Lender and its counsel;
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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 The Bankruptcy Court shall have entered an Order authorizing
Borrower and Guarantor to execute and deliver this Third Ratification Amendment.
5.6 No 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 Third 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 Third 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 Third
Ratification Amendment.
6.4 Counterparts. This Third 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 Third Ratification Amendment shall become
effective upon the execution hereof by Lender.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Second
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 III
--------------------------------
Title: CFO
-----------------------------
CONGOLEUM SALES, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
--------------------------------
Title: VP
-----------------------------
CONGOLEUM FISCAL, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
--------------------------------
Title: VP
-----------------------------
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IN WITNESS WHEREOF, the parties hereto have caused this Second
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:
-----------------------------
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