Exhibit 10.11.3
RATIFICATION AND AMENDMENT AGREEMENT
THIS RATIFICATION AND AMENDMENT AGREEMENT (this "Agreement"), dated
January 7th, 2004, is by and between CONGRESS FINANCIAL CORPORATION, a Delaware
corporation ("Lender"), and CONGOLEUM CORPORATION, a Delaware corporation, as
debtor and debtor-in-possession ("Chapter 11 Borrower" as hereinafter further
defined).
W I T N E S S E T H:
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WHEREAS, on December 31, 2003, Chapter 11 Borrower and Chapter 11
Guarantors (as hereinafter defined) each commenced a case under Chapter 11 of
the Bankruptcy Code (as hereinafter defined) in the Bankruptcy Court (as
hereinafter defined) and each of Chapter 11 Borrower and Chapter 11 Guarantors
has retained possession of its assets and is authorized under the Bankruptcy
Code to continue the management and operation of its business as a debtor-in-
possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, prior to the commencement of the Chapter 11 Cases (as hereinafter
defined), (a) Lender made loans and advances and to provided other financial
accommodations to Chapter 11 Borrower secured by certain assets and properties
of Chapter 11 Borrower as set forth in the Existing Financing Agreements (as
hereinafter defined) and (b) Chapter 11 Guarantors have guaranteed all of the
Obligations of Chapter 11 Borrower owed to Lender as set forth in the Guarantor
Documents;
WHEREAS, Chapter 11 Borrower has applied to Lender for a post-petition
credit facility;
WHEREAS, the Bankruptcy Court has entered a Financing Order (as
hereinafter defined) pursuant to which Lender may make post-petition loans and
advances and provide other financial accommodations to Chapter 11 Borrower
secured by certain assets and properties of Chapter 11 Borrower as set forth in
the Financing Order and the Financing Agreements;
WHEREAS, the Financing Order provides that as a condition to the making of
such post-petition loans and advances and providing such other financial
accommodations to Chapter 11 Borrower, Chapter 11 Borrower shall execute and
deliver this Agreement;
WHEREAS, Chapter 11 Borrower and each Chapter 11 Guarantor desires to
reaffirm its obligations to Lender pursuant to the Financing Agreements, ratify
the Existing Financing Agreements and acknowledge its continuing liabilities to
Lender thereunder as set forth herein in order to induce Lender to make such
post-petition loans and advances and provide such financial accommodations to
Chapter 11 Borrower; and
WHEREAS, Chapter 11 Borrower has also requested that Lender agree to amend
the Loan Agreement (as hereinafter defined) and Lender is willing to do so,
subject to the terms and conditions contained herein;
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 and Chapter 11
Borrower mutually covenant, warrant and agree as follows:
1. DEFINITIONS
1.1 Additional Definitions. As used herein, the following terms
shall have the respective meanings given to them below and the Existing
Financing Agreements shall be deemed and are hereby amended to include, in
addition and not in limitation, each of the following definitions:
(1) "Bankruptcy Code" shall mean the United States Bankruptcy
Code, being Title 11 of the United States Code as enacted in 1978, as the same
has heretofore been or may hereafter be amended, recodified, modified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
(2) "Bankruptcy Court" shall mean the United States Bankruptcy
Court for the District of New Jersey or the United States District Court for the
District of New Jersey or any other court having jurisdiction over the Chapter
11 Cases from time to time.
(3) "Budget" shall mean the Budget attached hereto as Exhibit
A delivered to Lender pursuant to Section 5.3 hereof setting forth the cash
expenditures of Chapter 11 Borrower and Chapter 11 Guarantors on a monthly or
quarterly basis, as applicable, for the estimated and projected periods covered
thereby, together with any amendments, modifications and supplements thereto or
any subsequent budget, satisfactory in form and substance to Lender, setting
forth such information for any subsequent period or periods.
(4) "Chapter 11 Borrower" shall mean Congoleum Corporation, a
Delaware corporation, as a debtor and debtor-in-possession, and its successors
and assigns (including, without limitation, any trustee or other fiduciary
hereafter appointed as its legal representative or with respect to the property
of the estate of any such party, whether under Chapter 11 of the Bankruptcy Code
or any subsequent Chapter 7 case and its successor upon conclusion of the
Chapter 11 Case of such corporation).
(5) "Chapter 11 Cases" shall mean the Chapter 11 cases of
Chapter 11 Borrower and Chapter 11 Guarantors referred to as In re Congoleum
Corporation, Congoleum Sales, Inc. and Congoleum Fiscal, Inc., Case Nos.
03-51524, 03-51525 and 03-51526, respectively, which are being jointly
administered under the Bankruptcy Code, and are pending in the Bankruptcy Court.
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(6) "Chapter 11 Guarantors" shall mean, collectively, the
following (together with their respective successors and assigns): (i) Congoleum
Fiscal, Inc., a New York corporation, as a debtor and debtor-in-possession; (ii)
Congoleum Sales, Inc., a New York corporation, as a debtor and
debtor-in-possession; and (iii) any other Person that from time to time
guarantees any or all of the Obligations (including, without limitation, any
trustee or other fiduciary hereafter appointed as its legal representative or
with respect to the property of the estate of any such party, whether under
Chapter 11 of the Bankruptcy Code or any subsequent Chapter 7 case and its
successor upon conclusion of the Chapter 11 Case of such corporation); each
sometimes being referred to herein individually as a "Chapter 11 Guarantor".
(7) "Debtors" shall mean, collectively, Chapter 11 Borrower
and Chapter 11 Guarantors; each sometimes being referred to herein individually
as a "Debtor".
(8) "Existing Financing Agreements" shall mean the Financing
Agreements (as defined in the Loan Agreement) as in effect immediately prior to
the Petition Date.
(9) "Financing Agreements" shall mean, collectively, this
Agreement, the Loan Agreement, all of the other Existing Financing Agreements,
the Guarantor Documents and the Financing Order, together with all supplements,
agreements, notes, documents, mortgages, deeds of trust, instruments and
guarantees at any time executed or delivered in connection herewith or therewith
or related hereto or thereto, as each of the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(10) "Financing Order" shall mean, collectively, the Interim
Financing Order, the Permanent Financing Order and such other orders relating
thereto or authorizing the granting of credit by Lender to Chapter 11 Borrower
on an emergency, interim or permanent basis pursuant to Section 364 of the
Bankruptcy Code as may be issued or entered by the Bankruptcy Court in the
Chapter 11 Cases.
(11) "Guarantor Documents" shall mean, individually and
collectively, the following: (1) the Limited Guarantee, dated December 10, 2001,
by Congoleum Financial Corporation (predecessor in interest to Congoleum Fiscal,
Inc.) and Congoleum Intellectual Properties Corporation in favor of Lender, (ii)
the Limited Guarantee, dated as of February 27, 2003, by Chapter 11 Guarantors
in favor of Lender, (iii) the Reaffirmation and Amendment of Guarantor
Documents, dated of even date herewith, by Chapter 11 Guarantors in favor of
Lender, and (iv) all supplements, agreements, notes, documents, instruments and
mortgages at any time executed and/or delivered by any Chapter 11 Guarantor in
connection with or related to any of the foregoing, as all of the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
(12) "Interim Financing Order" shall mean have the meaning
given to such term in Section 9.7 hereof.
(13) "Loan Agreement" shall mean the Loan and Security
Agreement, dated December 10, 2001, by and between Lender and Chapter 11
Borrower, as amended by Amendment No. 1 to Loan and Security Agreement, dated
September 19, 2002, by and between
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Lender and Chapter 11 Borrower, and Amendment No. 2 to Loan and Security
Agreement, dated as of February 27, 2003, by and among Lender, Chapter 11
Borrower and Chapter 11 Guarantors, and otherwise as in effect immediately prior
to the Petition Date.
(14) "Permanent Financing Order" shall have the meaning given
to such term in Section 9.8 hereof.
(15) "Petition Date" shall mean the date of the commencement
of the Chapter 11 Cases.
(16) "Post-Petition Collateral" shall mean, collectively, all
of the following property of Chapter 11 Borrower's estate, whether now existing
or hereafter acquired, wherever located, upon which Lender is granted a security
interest or lien pursuant to the Financing Agreements or the Financing Order or
any other order entered or issued by the Bankruptcy Court, and shall include,
without limitation, all of the following property of Chapter 11 Borrower:
(1) all of the Collateral (as defined in the Loan
Agreement);
(2) all present and future Accounts;
(3) all present and future acquired Inventory; and
(4) all Documents of Title.
(17) "Post-Petition Obligations" shall mean all Revolving
Loans, Letter of Credit Accommodations and all other advances, including,
without limitation, all debts, obligations, liabilities, indebtedness, covenants
and duties of Chapter 11 Borrower to Lender of every kind, nature and
description, however evidenced , whether direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or not due, primary or
secondary, liquidated or unliquidated, arising on and after the Petition Date
(including, without limitation, all obligations arising from the use of Cash
Collateral (as defined in Section 363 of the Bankruptcy Code)) and whether
arising on or after the conversion or dismissal of the Chapter 11 Cases, or
before, during and after the confirmation of any plan of reorganization in the
Chapter 11 Cases, and arising under or related to this Agreement, the other
Financing Agreements, a Financing Order or by operation of law or otherwise and
whether incurred by Chapter 11 Borrower as principal, surety, endorser,
guarantor or otherwise and including, without limitation, all principal,
interest, financing charges, letter of credit fees, unused line fees, servicing
fees, line increase fees, early termination fees, prepayment penalties, late
payment fees, other fees, commissions, costs, expenses (including, without
limitation, audit and appraisal fees and expenses) and reasonable attorneys',
accountants' and consultants' fees and expenses incurred by Lender in connection
with any of the foregoing.
(18) "Pre-Petition Collateral" shall mean all "Collateral" as
such term is defined in the Loan Agreement and all other security for the
Pre-Petition Obligations as provided in the Existing Financing Agreements
immediately prior to the Petition Date.
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(19) "Pre-Petition Obligations" shall mean all Revolving
Loans, Letter of Credit Accommodations and all other advances, including,
without limitation, all debts, obligations, liabilities, indebtedness, covenants
and duties of Chapter 11 Borrower to Lender of every kind, nature and
description, however evidenced, whether direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or not due, primary or
secondary, liquidated or unliquidated, arising prior to the Petition Date and
arising under or related to the Existing Financing Agreements or by operation of
law and whether incurred by Chapter 11 Borrower as principal, surety, endorser,
guarantor or otherwise and including, without limitation, all principal,
interest, financing charges, letter of credit fees, unused line fees, servicing
fees, line increase fees, early termination fees, prepayment penalties, late
payment fees, other fees, commissions, costs, expenses (including, without
limitation, audit and appraisal fees and expenses) and reasonable attorneys',
accountants' and consultants' fees and expenses incurred by Lender in connection
with any of the foregoing.
1.2 Amendments to Definitions in Financing Agreements.
(1) All references to the term "Borrower" in any of the
Existing Financing Agreements, shall be deemed and each such reference is hereby
amended to mean and include Chapter 11 Borrower as defined herein and all
references to the term "Guarantors" in any of the Existing Financing Agreements,
shall be deemed and each such reference is hereby amended to mean and include
Chapter 11 Guarantors as defined herein.
(2) All references to the term "Collateral" in any of the
Existing Financing Agreements or any other term referring to the security for
the Pre-Petition Obligations shall be deemed and each such reference is hereby
amended to include, without limitation, the Pre-Petition Collateral and the
Post-Petition Collateral.
(3) All references to the term "Financing Agreements" in any
of the Existing Financing Agreements, shall be deemed and each such reference is
hereby amended to include, in addition and not in limitation, this Agreement,
the Loan Agreement, all of the other Existing Financing Agreements, as ratified,
assumed and adopted by Chapter 11 Borrower pursuant to the terms hereof, as
amended and supplemented hereby, the Guarantor Documents and the Financing
Order, together with all supplements, agreements, notes, documents, mortgages,
deeds of trust, instruments and guarantees at any time executed or delivered in
connection herewith or therewith or related hereto or thereto, as each of the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(4) All references to the term "Loan Agreement" in any of the
Existing Financing Agreements shall be deemed and each such reference is hereby
amended to mean the Loan Agreement, as amended by this Agreement and as
ratified, assumed and adopted by Chapter 11 Borrower pursuant to the terms
hereof and the Financing Order, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(5) All references to the term "material adverse effect" and
"material adverse change" in this Agreement and in any of the Existing Financing
Agreements shall be deemed and
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each reference is amended to add at the end of such term "; provided, that, the
commencement of the Chapter 11 Cases shall not constitute a material adverse
effect or material adverse change".
(6) All references to the term "Obligations" in this Agreement
and in any of the Existing Financing Agreements shall be deemed and each such
reference in the Existing Financing Agreements is hereby amended to include,
without limitation, the Pre-Petition Obligations and the Post-Petition
Obligations.
1.3 Interpretation.
(1) For purposes of this Agreement, unless otherwise defined
or amended herein, including, but not limited to, those terms used and/or
defined in the recitals hereto, all terms used herein shall have the respective
meanings assigned to such terms in the Loan Agreement.
(2) All references to the terms "Lender" or any other person
pursuant to the definitions in the recitals hereto or otherwise shall include
its or their respective successors and assigns.
(3) All references to any term in the singular shall include
the plural and all references to any term in the plural shall include the
singular.
(4) All terms not specifically defined herein which are
defined in the UCC shall have the meaning set forth therein, except that the
term "Lien" or "lien" shall have the meaning set forth in ss.101 of the
Bankruptcy Code.
2. ACKNOWLEDGMENT
2.1 Pre-Petition Obligations. Chapter 11 Borrower hereby
acknowledges, confirms and agrees that Chapter 11 Borrower is indebted to Lender
for the Pre-Petition Obligations, as of the close of business on December 31,
2003, in the principal amount of not less than $14,325,937 in the aggregate, all
of which Pre-Petition Obligations are unconditionally owing by Chapter 11
Borrower to Lender, together with interest accrued and accruing thereon, in each
case together with costs, expenses, fees (including, without limitation,
reasonable attorneys' fees and legal expenses) and all other charges now or
hereafter owed by Chapter 11 Borrower to Lender, all of which are
unconditionally owing by Chapter 11 Borrower to Lender, without offset, defense
or counterclaim of any kind, nature and description whatsoever.
2.2 Acknowledgment of Security Interests and Liens. Chapter 11
Borrower hereby acknowledges, confirms and agrees that Lender has and shall
continue to have valid, enforceable and perfected first priority, subject only
to liens or security interests expressly permitted under the Loan Agreement, and
senior security interests in and liens upon all Pre-Petition Collateral
heretofore granted by Chapter 11 Borrower to Lender pursuant to the Existing
Financing Agreements as in effect immediately prior to the Petition Date, as
well as valid and enforceable first priority and senior security interests in
and liens upon all Post-Petition Collateral granted to Lender under the
Financing Order or hereunder or under any of the other Financing Agreements or
otherwise granted to or held by Lender, to secure all of the Obligations.
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2.3 Binding Effect of Documents. Chapter 11 Borrower hereby
acknowledges, confirms and agrees that: (a) each of the Existing Financing
Agreements to it is a party has been duly executed and delivered to Lender by
Chapter 11 Borrower and is in full force and effect as of the date hereof, (b)
the agreements and obligations of Chapter 11 Borrower contained in the Existing
Financing Agreements constitute the legal, valid and binding obligations of
Chapter 11 Borrower enforceable against Chapter 11 Borrower in accordance with
their respective terms, (c) Chapter 11 Borrower has no valid defense, offset or
counterclaim to the enforcement of such obligations, and (d) Lender is and shall
be entitled to all of the rights, remedies and benefits provided for in the
Financing Agreements and the Financing Order.
3. ADOPTION AND RATIFICATION
3.1 Chapter 11 Borrower hereby ratifies, assumes, adopts and agrees
to be bound by the Existing Financing Agreements, as modified by this Agreement,
and agrees to pay all of the Pre-Petition Obligations in accordance with the
terms of the Existing Financing Agreements, as modified by this Agreement and
the Financing Order. All of the Existing Financing Agreements are hereby
incorporated herein by reference as amended herein, and hereby are and shall be
deemed adopted and assumed in full by Chapter 11 Borrower, as a debtor and
debtor-in- possession, and considered as agreements between Chapter 11 Borrower
and Lender.
3.2 Chapter 11 Borrower hereby ratifies, restates, affirms and
confirms all of the terms and conditions of the Existing Financing Agreements,
as amended and supplemented pursuant to this Agreement and the Financing Order,
and Chapter 11 Borrower agrees to be fully bound, as a debtor and
debtor-in-possession, by the terms of the Financing Agreements as amended hereby
to which Chapter 11 Borrower is a party.
4. GRANT OF SECURITY INTEREST
As collateral security for the prompt performance, observance and
payment in full of all of the Obligations (including the Pre-Petition
Obligations and the Post-Petition Obligations), Chapter 11 Borrower, as debtor
and debtor-in-possession, hereby grants, pledges and assigns to Lender, and also
confirms, reaffirms and restates the prior grant to Lender of, continuing
security interests in and liens upon, and rights of setoff against, all of the
Collateral. Chapter 11 Borrower hereby confirms, reaffirms and restates the
prior grant to Lender of, continuing security interests in and liens upon, and
rights of setoff against, all of the Collateral.
5. 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 Chapter 11 Borrower to Lender (which representations, warranties and
covenants shall not be deemed violated solely by the commencement of the Chapter
11 Cases), whether pursuant to the Financing Agreements or otherwise, and not in
limitation thereof, Chapter 11 Borrower hereby represents, warrants and
covenants 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
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such compliance does not violate the terms and provisions of the Bankruptcy
Code, being a continuing condition of the making of loans by Lender:
5.1 Financing Order. Either the Interim Financing Order or the
Permanent Financing Order, as the case may be, has been duly entered, is valid,
subsisting and continuing and has not been vacated, modified, reversed on
appeal, or vacated or modified by any order of the Bankruptcy Court other than
as consented to by Lender and is not subject to any pending appeal or stay.
5.2 Use of Proceeds. All Revolving Loans made and Letter of Credit
Accommodations provided by Lender to Chapter 11 Borrower pursuant to the
Financing Order, the Loan Agreement or otherwise, shall be used by Chapter 11
Borrower exclusively for general operating and working capital purposes in the
ordinary course of Chapter 11 Borrower's business as set forth in the Budget. No
portion of any administrative expense claim or other claim relating to any
Chapter 11 Case shall be paid with the proceeds of such Revolving Loans made and
Letter of Credit Accommodations provided by Lender to Chapter 11 Borrower, other
than those administrative expense claims and other claims relating to any
Chapter 11 Case (i) directly attributable to the operation of the business of
Chapter 11 Borrower in accordance with the terms and conditions of the Interim
Financing Order or (ii) as otherwise authorized by the Bankruptcy Court and
expressly authorized by Lender in writing.
5.3 Budget. The Budget has been thoroughly reviewed by Chapter 11
Borrower and Chapter 11 Guarantors and their respective appropriate management
and sets forth, among other things, the actual through September 30, 2003 and
the projected through December 31, 2004 quarterly statements of cash flow,
including cash receipts and cash disbursements, quarterly statements of loan
availability of Chapter 11 Borrower on a quarterly "roll-forward" basis and
monthly statements of asbestos/bankruptcy costs. Chapter 11 Borrower and Chapter
11 Guarantors hereby acknowledge, confirm and agree that Lender has relied upon
the Budget and on the information set forth in the Budget in determining to
enter into the post-petition financing arrangements provided for herein and in
the Financing Order. Chapter 11 Borrower shall furnish to Lender all other
financial information, projections, budgets, business plans, cash flows and such
other information as Lender shall reasonably request from time to time.
5.4 Sales or other Disposition of Assets. Notwithstanding anything
to the contrary contained in Sections 9.7(b) of the Loan Agreement or any other
provision in the Loan Agreement or any of the other Financing Agreements,
Chapter 11 Borrower shall not sell, transfer, lease, encumber or otherwise
dispose of any portion of the Collateral without the prior written consent of
Lender or an order of the Bankruptcy Court (and no such consent shall be
implied, from any other action, inaction or acquiescence by Lender), except for
sales of Chapter 11 Borrower's Inventory in the ordinary course of its business.
5.5 ERISA. That (a) there are no liens, security interests or
encumbrances upon, in or against any assets or properties of Chapter 11 Borrower
arising under ERISA, whether held by the Pension Benefit Guaranty Corporation
(the "PBGC") or the controlling sponsor of, or a member of the controlled group
of, any pension benefit plan of Chapter 11 Borrower and (b) no
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notice of lien has been filed by the PBGC (or any other Person) pursuant to
ERISA against any assets or properties of Chapter 11 Borrower.
5.6 Environmental. That (a) there are no liens, security interests
or encumbrances upon, in or against any assets or properties of Chapter 11
Borrower arising under any Environmental Law, whether held by the environmental
protection authorities of the state of New Jersey or any other jurisdiction, or
any other Person, and (b) no notice of lien has been filed by any environmental
protection authority of the state of New Jersey or any other jurisdiction (or
any other Person) pursuant to any Environmental Law against any assets or
properties of Chapter 11 Borrower.
6. DIP FACILITY FEE
In addition to and not in limitation of all other fees, costs and
expenses payable to Lender under the Financing Agreements, Chapter 11 Borrower
shall pay Lender a facility fee of $300,000 in respect of the financing provided
by Lender to Chapter 11 Borrower in the Chapter 11 Cases, which fee shall be
fully earned as of the date hereof and payable as follows: (a) $200,000 shall be
due and payable on the date hereof and (b) $100,000 shall be due and payable on
April 1, 2004; provided, that, the entire amount of such fee shall become
immediately due and payable, without notice or demand, at Lender's option upon
the occurrence of an Event of Default or termination or non-renewal of the Loan
Agreement.
7. AMENDMENTS TO EXISTING FINANCING AGREEMENTS
7.1 Interest Rate. Section 1.41 of the Loan Agreement is deleted in
its entirety and replaced with the following:
"1.41 'Interest Rate' shall mean, as to Prime Rate Loans, a
rate equal to three-quarters (.75%) percent per annum in excess of
the Prime Rate; provided, that, notwithstanding anything to the
contrary contained herein, the Interest Rate shall mean the rate of
two and three-quarters (2.75%) percent per annum in excess of the
Prime Rate as to Prime Rate Loans, at Lender's option, without
notice, (a) either (i) for the period on and after the date of
termination or non-renewal hereof until such time as all Obligations
are indefeasibly paid and satisfied in full in immediately available
funds, or (ii) for the period from and after the date of the
occurrence of any Event of Default, and for so long as such Event of
Default is continuing as determined by Lender in good faith and (b)
on the Revolving Loans at any time outstanding in excess of the
amounts available to Chapter 11 Borrower under Section 2 hereof
(whether or not such excess(es) arise or are made with or without
Lender's knowledge or consent and whether made before or after an
Event of Default)."
7.2 Reserves. Section 1.64 of the Loan Agreement is hereby amended
by adding the following sentence at the end of thereof:
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"Without limiting the generality of the foregoing, the
Revolving Loans and Letter of Credit Accommodations otherwise
available to Chapter 11 Borrower shall be subject to a special
reserve, in an amount equal to all claims for all outstanding and
unpaid administrative expenses or other claims which are or may be
senior or pari passu to Lender's liens in the property of Chapter 11
Borrower or Lender's super-priority claims pursuant to the Financing
Order, including, but not limited to (i) the fees and expenses of
the Clerk of the Bankruptcy Court, (ii) the fees of the United
States Trustee as provided in the Financing Order and (iii) the
Professional Fee Carve-Out (as such term is defined in the Interim
Financing Order)."
7.3 Limits and Sublimits. Section 2 of the Loan Agreement is hereby
amended by adding the following Section 2.3 at the end thereof:
"2.3 Limits and Sublimits. All limits and sublimits set forth
in this Agreement shall be determined on an aggregate basis
considering together both the Pre-Petition Obligations and the
Post-Petition Obligations and in respect thereof or with respect to
any formula or other provision to which a limit or sublimit may
apply."
7.4 Eurodollar Rate Loans. Notwithstanding anything to the contrary
contained in the Loan Agreement, including, without limitation, Sections 3.1(b)
and (c), effective as of the date hereof:
(1) Chapter 11 Borrower shall not request and Lender shall not
make any Eurodollar Rate Loans;
(2) the Interest Rate in respect of all Revolving Loans made
on or after the date hereof shall be the Interest Rate applicable to Prime Rate
Loans;
(3) Chapter 11 Borrower shall not request that any Eurodollar
Rate Loans outstanding prior to the date hereof continue for any additional
Interest Period; and
(4) Chapter 11 Borrower shall not request that any Prime Rate
Loans be converted to Eurodollar Rate Loans and Lender shall not be obligated to
convert any such Prime Rate Loans to Eurodollar Rate Loans; provided, however,
that the provisions applicable to Eurodollar Rate Loans shall remain in effect
with respect to any Revolving Loans for which Chapter 11 Borrower had elected to
be treated as a Eurodollar Rate Loan prior to the Petition Date until the end of
the then-applicable Interest Period.
7.5 Unused Line Fee. Section 3.4 of the Loan Agreement is deleted in
its entirety and replaced with the following:
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"3.4 Unused Line Fee. Chapter 11 Borrower shall pay to Lender
monthly an unused line fee at a rate equal to three-eighths (.375%)
percent per annum calculated upon the amount by which $25,000,000
exceeds the average daily principal balance of the outstanding
Revolving Loans and Letter of Credit Accommodations during the
immediately preceding month (or part thereof) while this Agreement
is in effect and for so long thereafter as any of the Obligations
are outstanding, which fee shall be payable on the first day of each
month in arrears.
7.6 Payments. Section 6.4 of the Loan Agreement is hereby amended by
adding the following subsection (c) at the end of thereof:
"(c) Without limiting the generality of the foregoing, Lender
may, in its discretion, apply any such payments or proceeds received
from Pre-Petition Collateral first to the Pre-Petition Obligations
until such Pre-Petition Obligations are paid and satisfied in full."
7.7 Additional Financial Reporting Requirements. Section 9.6 of the
Loan Agreement is hereby amended by adding new Section 9.6(f) immediately after
Section 9.6(e) as follows:
"(f) Chapter 11 Borrower shall promptly provide Lender with
copies of all financial reports, schedules and other materials and
information related to the Collateral at any time furnished by
Chapter 11 Borrower, or on its behalf, to the Bankruptcy Court, or
the United States Trustee or to any creditors' committee or Chapter
11 Borrower's shareholders, concurrently with the delivery thereof
to the Bankruptcy Court, United States Trustee, creditors' committee
or shareholders, as the case may be."
7.8 Transactions with Affiliates. Section 9.12 of the Loan Agreement
is hereby amended by adding the following sentence to the end thereof:
"Notwithstanding anything contained herein to the contrary,
Chapter 11 Borrower shall not, and shall not permit its Subsidiaries
and Affiliates to, make any loans or provide other financial
accommodations to, share proceeds of any Revolving Loans with, or
pay any management fees to, any other person that is the subject of
a petition for relief under the Bankruptcy Code other than Chapter
11 Borrower."
7.9 Adjusted Tangible Net Worth. Section 9.17 of the Loan Agreement
is hereby deleted in its entirety and replaced with the following:
"9.17 Adjusted Tangible Net Worth. At any time that Excess
Availability is less than $15,000,000, Chapter 11 Borrower and its
Subsidiaries on a consolidated basis
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shall have and maintain Adjusted Tangible Net Worth of not less than
the amounts set forth below at all times during the periods set
forth below:
Period Minimum Adjusted Tangible Net Worth
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January 1, 2003 through
March 31, 2003 ($25,500,000)
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April 1, 2003 through
June 30, 2003 ($29,000,000)
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July 1, 2003 through
September 30, 2003 ($34,000,000)
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October 1, 2003 through
December 31, 2003 ($28,500,000)
------------------------------------------------------------
January 1, 2004 through
March 31, 2004 ($30,875,000)
------------------------------------------------------------
April 1, 2004 through
June 30, 2004 ($32,000,000)
------------------------------------------------------------
July 1, 2004 through
September 30, 2004 ($31,250,000)
------------------------------------------------------------
October 1, 2004 through
December 31, 2004 ($29,000,000)
------------------------------------------------------------
The use of the parentheses in this Section 9.17 is intended to
reflect negative numbers. Compliance with this Section 9.17 shall be
determined utilizing the formula set forth on Exhibit 9.17 hereto."
7.10 EBITDA. Section 9.23 of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:
"9.23 EBITDA.
(a) Chapter 11 Borrower and its Subsidiaries shall not,
as to any fiscal quarter during the fiscal year 2003 of
Chapter 11 Borrower and its Subsidiaries, permit EBITDA of
Chapter 11 Borrower and its Subsidiaries commencing on the
first day of such fiscal year and ending on the last day of
the applicable fiscal quarter set forth below on a cumulative
year-to-date basis to be less than the respective amount set
forth below opposite such fiscal quarter end year-to-date
period:
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-------------------------------------------------------
Period Minimum EBITDA
-------------------------------------------------------
January 1, 2003 through
March 31, 2003 ($8,000,000)
-------------------------------------------------------
January 1, 2003 through
June 30, 2003 ($7,750,000)
-------------------------------------------------------
January 1, 2003 through
September 30, 2003 ($7,500,000)
-------------------------------------------------------
January 1, 2003 through
December 31, 2003 $13,500,000
-------------------------------------------------------
(b) Chapter 11 Borrower and its Subsidiaries shall not,
as to any fiscal quarter during the fiscal year 2004 of
Chapter 11 Borrower and its Subsidiaries, permit EBITDA of
Chapter 11 Borrower and its Subsidiaries commencing on the
first day of such fiscal year and ending on the last day of
the applicable fiscal quarter set forth below on a cumulative
year-to-date basis to be less than the respective amount set
forth below opposite such fiscal quarter end year-to-date
period:
-------------------------------------------------------
Period Minimum EBITDA
-------------------------------------------------------
January 1, 2004 through
March 31, 2004 $2,650,000
-------------------------------------------------------
January 1, 2004 through
through June 30, 2004 $9,250,000
-------------------------------------------------------
January 1, 2004 through
September 30, 2004 $16,000,000
-------------------------------------------------------
January 1, 2004 through
December 31, 2004 $22,000,000
-------------------------------------------------------
The use of the parentheses in this Section 9.23 is intended to
reflect negative numbers."
7.11 Events of Default. Section 10.1 of the Loan Agreement is hereby
amended as follows:
(1) Section 10.1(a) of the Loan Agreement is deleted in its
entirety and replaced with the following:
"(a) Chapter 11 Borrower fails to pay when due any of
the Obligations or fails to perform any of the terms,
covenants, conditions or provisions contained in
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this Agreement or any of the other Financing Agreements;"
(2) Section 10.1(h) is hereby amended to add at the end of
such Section the following:
"provided, that, it shall not constitute an Event of
Default hereunder to the extent that any default as described
in this Section 10.1(h), has been or would be triggered
exclusively by the existence of a Chapter 11 Case."
(3) Section 10.1 of the Loan Agreement is hereby amended by
deleting the word "or" at the end of Section 10.1(o), changing the period at the
end of Section 10.1(p) to a semi-colon and adding new Sections 10.1(q) through
10.1(cc) immediately after 10.1(p) as follows:
"(q) the occurrence of any condition or event that
permits Lender to exercise any of the remedies set forth in
the Financing Order, including, without limitation, any "Event
of Default", as such term is defined in the Financing Order;
(r) the termination or non-renewal of the Financing
Agreements as provided for in the Financing Order as the
result of the objection of any third party being sustained;
(s) Chapter 11 Borrower suspends or discontinues or is
enjoined by any court or governmental agency from continuing
to conduct all or any part or parts of its business, or a
trustee, receiver or custodian is appointed for Chapter 11
Borrower or any of its properties;
(t) any act, condition or event occurring after the date
of the commencement of the Chapter 11 Cases that has a
material adverse effect upon the assets of Chapter 11 Borrower
or the Collateral or the rights and remedies of Lender under
this Agreement or any of the other Financing Agreements;
(u) entry by the Bankruptcy Court of an order converting
any Chapter 11 Case to a Chapter 7 case under the Bankruptcy
Code;
(v) entry by the Bankruptcy Court of an order dismissing
any Chapter 11 Case or any subsequent Chapter 7 case either
voluntarily or involuntarily;
(w) the grant of a lien on or other interest in Chapter
11 Borrower's property (other than a lien or encumbrance
permitted by Section 9.8 hereof or by the Financing Order) or
an administrative expense claim (other than any such
administrative expense claim permitted by the Financing Order
or this Agreement) that is superior to or ranks in parity with
Lender's security interest in or lien upon the Collateral or
administrative expense priority;
(x) the Financing Order shall be modified, reversed,
revoked, remanded, stayed, rescinded, vacated or amended on
appeal or by the Bankruptcy Court without
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the prior written consent of Lender (and no such consent shall
be implied from any other authorization or acquiescence by
Lender);
(y) the Permanent Financing Order shall not have been
entered by the Bankruptcy Court by the date that is
thirty-five (35) days after the date of the entry of the
Interim Financing Order;
(z) the appointment of a trustee in the Chapter 11 Cases
pursuant to Sections 1104(a)(1) or 1104(a)(2) of the
Bankruptcy Code;
(aa) the appointment of an examiner in the Chapter 11
Cases with expanded powers pursuant to Section 1104(a) of the
Bankruptcy Code;
(bb) the filing of a plan of reorganization by Chapter
11 Borrower and Chapter 11 Guarantors that does not provide
for payment in full of the Obligations on the effective date
of such plan; or
(cc) Chapter 11 Borrower shall at any time seek an order
of the Bankruptcy Court authorizing Chapter 11 Borrower to use
any of Lender's cash collateral.
Notwithstanding anything to the contrary contained herein, the
commencement of the Chapter 11 Cases shall not constitute an Event
of Default under Section 10.1(a), (b), (f), (g) or (h) hereof."
7.12 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. Section 11.1(a) of the Loan Agreement is hereby amended by adding the
following at the end thereof: "except to the extent that the provisions of the
Bankruptcy Code are applicable and specifically conflict with the foregoing."
7.13 Term.
(1) The first two sentences of Section 12.1(a) of the Loan
Agreement are hereby deleted in their entirety and replaced with the following
sentence:
"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, 2004 (the "Termination Date")."
(2) The first sentence of Section 12.1(c) of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"(c) If for any reason this Agreement is terminated
prior to the end of the then current term of this Agreement
and Lender does not provide exit financing to Chapter 11
Borrower, in view of the impracticality and extreme difficulty
of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable
-15-
calculation of Lender's lost profits as a result thereof,
Chapter 11 Borrower agrees to pay to Lender, upon the
effective date of such termination, an early termination fee
in the amount set forth below if such termination is effective
in the period indicated:
Amount Period
------ ------
(1) three (3%) From the date hereof to and
percent of including December 10, 2002
the Maximum
Credit
(2) two (2%) From December 11, 2002 to and
percent of including December 31, 2003
the Maximum
Credit
(3) one (1%) of From January 1, 2004 to and
the Maximum including December 31, 2004"
Credit
(3) Section 12.1 of the Loan Agreement is hereby amended by
adding a new Section 12.1(d) immediately after Section 12.1(c) as follows:
"(d) Notwithstanding any other provision of this
Agreement to the contrary, upon the earlier to occur of (i)
the Termination Date, or (ii) the occurrence of an Event of
Default, Lender may, without prejudice to Lender's other
rights or remedies under the Financing Agreements and the
Financing Order, in its sole discretion, without notice (A)
cease making loans or reduce the lending formulas or amounts
of Revolving Loans available to Chapter 11 Borrower hereunder,
and (B) declare all Obligations to be then immediately due and
payable."
(4) Notwithstanding the amendment of the term of the Financing
Agreements to a date that is earlier than then the original term of the Loan
Agreement and the other Financing Agreements, Chapter 11 Borrower shall pay the
early termination fee otherwise payable pursuant to Section 12.1(c) of the Loan
Agreement in accordance with the terms thereof.
7.14 Notices. Section 12.2 of the Loan Agreement is hereby amended
by adding that any notices, requests and demands also be sent to the following
parties:
If to Chapter 11 Borrower
with a copy to: Xxxx Xxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No. (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
-16-
If to Lender
with a copy to: Otterbourg, Steindler, Houston & Xxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No. (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
8. RELEASE
8.1 Release.
(1) In consideration of the agreements of Lender contained
herein and the making of any Revolving Loans by Lender to Chapter 11 Borrower,
pursuant to the Financing Agreements, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Chapter 11 Borrower, on behalf of itself and its respective successors, assigns,
and other legal representatives, hereby absolutely, unconditionally and
irrevocably releases, remises and forever discharges the Lender, its successors
and assigns, and its present and former shareholders, affiliates, subsidiaries,
divisions, predecessors, directors, officers, attorneys, employees, agents and
other representatives (the Lender and all such other parties being hereinafter
referred to collectively as the "Releasees" and individually as a "Releasee"),
of and from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of
set-off, demands and liabilities whatsoever (individually, a "Claim" and
collectively, "Claims") of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which Chapter 11 Borrower, or any of its
successors, assigns, or other legal representatives may now or hereafter own,
hold, have or claim to have against the Releasees or any of them for, upon, or
by reason of any nature, cause or thing whatsoever which arises at any time on
or prior to the day and date of this Agreement, including, without limitation,
for or on account of, or in relation to, or in any way in connection with the
Existing Financing Agreements, as amended and supplemented through the date
hereof and the other Financing Agreements.
(2) Chapter 11 Borrower understands, acknowledges and agrees
that the release set forth above may be pleaded as a full and complete defense
and may be used as a basis for an injunction against any action, suit or other
proceeding which may be instituted, prosecuted or attempted in breach of the
provisions of such release.
(3) Chapter 11 Borrower agrees that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final and unconditional
nature of the release set forth above.
8.2 Covenant Not to Xxx. Chapter 11 Borrower, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with each Releasee that it
will not xxx (at law, in equity, in any regulatory proceeding or otherwise) any
Releasee on the basis of any Claim released, remised and discharged by Chapter
11 Borrower pursuant to Section 8.1 hereof. If Chapter 11 Borrower
-17-
violates the foregoing covenant, Chapter 11 Borrower agrees to pay, in addition
to such other damages as any Releasee may sustain as a result of such violation,
all reasonable attorneys' fees and costs incurred by any Releasee as a result of
such violation.
9. CONDITIONS PRECEDENT
In addition to any other conditions contained herein or in the Loan
Agreement, with respect the Revolving Loans and other financial accommodations
available to Chapter 11 Borrower (all of which conditions, except as modified or
made pursuant to this Agreement shall remain applicable to the Revolving Loans
and be applicable to other financial accommodations available to Chapter 11
Borrower), the following are conditions to Lender's obligation to extend further
loans, advances or other financial accommodations to Chapter 11 Borrower
pursuant to the Financing Agreements as amended hereby:
9.1 Lender shall have received, in form and substance satisfactory
to Lender, an original of this Agreement, duly executed and delivered by Chapter
11 Borrower and acknowledged by Chapter 11 Guarantors;
9.2 Lender shall have received, in form and substance satisfactory
to Lender, an original of the Reaffirmation and Amendment of Guarantor
Documents, duly executed and delivered by each Chapter 11 Guarantor;
9.3 Lender shall have received within fifteen (15) days of the date
hereof, in form and substance satisfactory to Lender, the written agreement of
Wachovia Bank, National Association, formerly known as First Union National Bank
("Wachovia"), and Chapter 11 Borrower to the continued effectiveness of the
Deposit Account Control Agreement, dated December 10, 2001, among Lender,
Chapter 11 Borrower and Wachovia (the "Deposit Account Control Agreement") and
the Deposit Account Control Agreement shall have been ratified and amended by
the parties thereto, to reflect the commencement of the Chapter 11 Cases, that
Chapter 11 Borrower, as debtor and debtor-in-possession, is the successor in
interest to Chapter 11 Borrower, that the Obligations include both the
Pre-Petition Obligations and the Post-Petition Obligations, that the Collateral
includes both the Pre-Petition Collateral and the Post-Petition Collateral as
provided for herein and the other terms and conditions of this Agreement;
9.4 Lender shall have received, promptly following the execution and
delivery thereof, in form and substance satisfactory to Lender, true, correct
and complete photocopies of any ratification of and/or amendment to the Senior
Note Indenture and all agreements, documents and instruments executed and/or
delivered in connection therewith or related thereto, in each case duly
authorized, executed and delivered by Chapter 11 Borrower and each of the other
parties thereto, and Lender shall have promptly received any other information
with respect thereto as Lender may reasonably request;
9.5 as of the Petition Date, the Existing Financing Agreements shall
not have been terminated;
-18-
9.6 no trustee or examiner with expanded powers or the like shall
have been appointed or designated with respect to any Debtor, as a debtor or
debtor-in-possession, or its business, properties and assets;
9.7 each Debtor shall have complied in full with the notice and
other requirements of the Bankruptcy Code and the applicable Bankruptcy Rules
with respect to any relevant Financing Order in a manner acceptable to Lender
and its counsel, and an interim Financing Order, in form and substance
acceptable to Lender, shall have been entered by the Bankruptcy Court
authorizing the secured post-petition financing under the Financing Agreements
as ratified and amended hereunder on the terms and conditions set forth herein
and in an amount acceptable to Lender, in its sole discretion, and, among other
things, modifying the automatic stay, authorizing and granting to Lender the
senior security interest and liens described herein and in the Financing Order,
granting super-priority administrative expense claims to Lender with respect to
all obligations due Lender (except as otherwise specifically provided in the
Interim Financing Order) and containing such other terms or provisions as Lender
and its counsel shall require (the "Interim Financing Order");
9.8 with respect to further credit after expiration of the Interim
Financing Order, on or before the expiration of the Interim Financing Order, a
permanent Financing Order, in form and substance acceptable to Lender, shall
have been entered by the Bankruptcy Court authorizing the secured post-petition
financing under the Financing Agreements as ratified and amended hereunder on
the terms and conditions set forth herein and in an amount acceptable to Lender,
in its sole discretion, and, among other things, modifying the automatic stay,
authorizing and granting to Lender the senior security interest and liens
described herein and in the Financing Order, granting super-priority
administrative expense claims to Lender with respect to all obligations due
Lender (except as otherwise specifically provided in the Interim Financing
Order) and containing such other terms or provisions as Lender and its counsel
shall require ("Permanent Financing Order"). Lender shall not make any Revolving
Loans or provide any Letter of Credit Accommodations or other financial
accommodations other than those authorized under the Interim Financing Order
unless, on or before the forty-fifth (45th) day following the entry of the
Interim Financing Order, the Permanent Financing Order shall have been entered,
and there shall be no appeal or other contest with respect to either the Interim
Financing Order or the Permanent Financing Order and the time to appeal to
contest such order shall have expired; and
9.9 no Event of Default shall have occurred and be continuing or be
existing under any of the Existing Financing Agreements, as modified pursuant
hereto.
10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement 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.
-19-
10.2 Further Assurances. Chapter 11 Borrower shall, at any time or
times, duly execute and deliver, or shall cause to be duly executed and
delivered, at its expense, such further agreements, instruments and documents,
including, without limitation, additional security agreements, collateral
assignments, Uniform Commercial Code financing statements or amendments or
continuations thereof, mortgages, deeds of trust, deeds to secure debt,
landlord's or mortgagee's waivers of liens and consents to the exercise by
Lender of all the rights and remedies hereunder, under any of the other
Financing Agreements, any Financing Order or applicable law with respect to the
Collateral, 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 Agreement, any of the
other Financing Agreements or the Financing Order. Upon the request of Lender,
at any time and from time to time, Chapter 11 Borrower shall, at its cost and
expense, do, make, execute, deliver and record, register or file, financing
statements, mortgages, deeds of trust, deeds to secure debt, and other
instruments, acts, pledges, assignments and transfers (or cause the same to be
done) and will deliver to Lender such instruments evidencing items of Collateral
as may be requested by Lender.
10.3 Headings. The headings used herein are for convenience only and
do not constitute matters to be considered in interpreting this Agreement.
10.4 Counterparts. This Agreement 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.
10.5 Additional Events of Default. The parties hereto acknowledge,
confirm and agree that the failure of any Debtor 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 such Debtor in connection
herewith or with the terms and conditions of any Financing Order shall
constitute an Event of Default under the Financing Agreements.
10.6 Costs and Expenses. Chapter 11 Borrower shall pay to Lender on
demand all costs and expenses that Lender pays or incurs in connection with the
negotiation, preparation, consummation, administration, enforcement, and
termination of this Agreement and the other Financing Agreements and the
Financing Order, including, without limitation: (a) reasonable attorneys' and
paralegals' fees and disbursements of counsel to Lender; (b) costs and expenses
(including reasonable attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
this Agreement, the other Financing Agreements, the Financing Order and the
transactions contemplated thereby; (c) costs and expenses of lien searches,
recording and filing fees; (d) taxes, fees and other charges for recording any
agreements or documents with any governmental authority, and the filing of UCC
financing statements and continuations, and other actions to perfect, protect,
and continue the security interests and liens of Lender in the Collateral; (e)
sums paid or incurred to pay any amount or take any action required of any
Debtor under the Financing Agreements or the Financing Order that such Debtor
fails to pay or take; (f) costs of appraisals, inspections and verifications of
the Collateral and including travel, lodging, and meals for inspections of the
Collateral and Chapter 11 Borrower's operations by Lender or its agent and to
attend court
-20-
hearings or otherwise in connection with the Chapter 11 Cases; (g) costs and
expenses of preserving and protecting the Collateral; (h) all out-of-pocket
expenses and costs heretofore and from time to time hereafter incurred by the
Lender during the course of periodic field examinations of the Collateral and
Chapter 11 Borrower's operations, plus a per diem charge at the rate of $750 per
person per day for Lender's examiners in the field and office; and (j) costs and
expenses (including reasonable attorneys' and paralegals' fees and
disbursements) paid or incurred to obtain payment of the Obligations, enforce
the security interests and liens of Lender, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of this Agreement, the other
Financing Agreements and the Financing Order, or to defend any claims made or
threatened against Lender arising out of the transactions contemplated hereby
(including, without limitation, preparations for and consultations concerning
any such matters). The foregoing shall not be construed to limit any other
provisions of the Financing Agreements regarding costs and expenses to be paid
by Chapter 11 Borrower. All sums provided for in this Section 10.6 shall be part
of the Obligations, shall be payable on demand, and shall accrue interest after
demand for payment thereof at the highest rate of interest then payable under
the Financing Agreements. Lender is hereby irrevocably authorized to charge any
amounts payable hereunder directly to any of the account(s) maintained by Lender
with respect to Chapter 11 Borrower.
11.7 Effectiveness. This Agreement shall become and be deemed
effective upon the execution hereof by Lender and the entry of the Interim
Financing Order.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Title: AVP
CONGOLEUM CORPORATION, as Debtor and
Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
--------------------------------
Title: VP
ACKNOWLEDGED AND AGREED:
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
-22-
