EXHIBIT 10.1
AMERICAN BILTRITE INC.
K&M ASSOCIATES L.P.
CREDIT AGREEMENT
Amendment No. 1
This Agreement, dated as of January 29, 2004 (this "Agreement"), is
among American Biltrite Inc., a Delaware corporation ("American Biltrite"),
K&M Associates L.P., a Rhode Island limited partnership ("K&M"; American
Biltrite and K&M being collectively but jointly and severally, the
"Borrower"), the Lenders under the Credit Agreement (as defined below) and
Fleet National Bank, as Agent for itself and such Lenders. The parties agree
as follows:
1. Credit Agreement; Definitions. This Agreement amends the Credit
Agreement dated as of October 14, 2003 among the parties hereto (as in effect
prior to giving effect to this Agreement, the "Credit Agreement"). Terms
defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") and not otherwise defined herein are used with the meaning so
defined.
2. Amendment of Credit Agreement. Effective upon the date all the
conditions set forth in Section 4 hereof are satisfied or waived (the
"Amendment Date"), which conditions must be satisfied or waived no later than
the date provided therein, the Credit Agreement is amended as follows:
2.1. Amendment of Recitals. The recitals to the Credit Agreement are
amended in their entirety as follows:
"Recitals: Pursuant to this Agreement, the Lenders are
extending to the Borrower a $20,000,000 secured revolving
credit facility, including a $5,000,000 sub-allotment for
Letters of Credit. All the credit facilities mature on December
31, 2004. The proceeds of these credit facilities may be used
for general corporate purposes as provided herein."
2.2. Amendments of Section 1. Section 1 of the Credit Agreement is
amended as follows:
(a) The definition of "Applicable Margin" is amended to read in
its entirety as follows:
"'Applicable Margin' means the amount in the table below set
opposite the Reference Leverage Ratio for such date:
"Reference Leverage Ratio Applicable Margin
------------------------ -----------------
[> or =] 325% 275 b.p.
[> or =] 300% < 325% 250 b.p.
[> or =] 250% < 300% 200 b.p.
[> or =] 201% < 250% 150 b.p.
[> or =] 101% < 200% 125 b.p.
[< or =] 100% 100 b.p.
Changes in the Applicable Margin shall occur on the third
Banking Day after quarterly financial statements have been
furnished to the Agent in accordance with Sections 6.4.1 or
6.4.2 from time to time. In the event that the financial
statements required to be delivered pursuant to Section 6.4.1
or 6.4.2, as applicable, are not delivered when due, then
during the period from the third Banking Day following the date
such financial statements were due until the third Banking Day
following the date on which they are actually delivered, the
Applicable Margin shall be the maximum amount set forth in the
table above."
(b) The definition of "Final Maturity Date" is amended to read in
its entirety as follows:
"'Final Maturity Date' means December 31, 2004."
2.3. Amendment of Section 2.1.2. Section 2.1.2 of the Credit
Agreement is amended to read in its entirety as follows:
"2.1.2. Maximum Amount of Revolving Credit. The term "Maximum
Amount of Revolving Credit" means $20,000,000 minus Net Asset
Sale Proceeds required to be prepaid pursuant to Section 4.5
hereof."
2.4. Amendment of Section 6.5.1. Section 6.5.1 of the Credit
Agreement is amended to read in its entirety as follows:
"6.5.1. Consolidated Total Liabilities to Consolidated Tangible
Net Worth. On the last day of each fiscal quarter of the
Company, Consolidated Total Liabilities shall not exceed the
percentage set forth in the table below of Consolidated
Tangible Net Worth on such date.
Quarter Ending Percentage
-------------- ----------
9/30/03 to 6/30/04 225%
9/30/04 and thereafter 200%"
2.5. Amendment of Section 6.5.2. Section 6.5.2 of the Credit
Agreement is amended to read in its entirety as follows:
"6.5.2. Consolidated Adjusted EBITDA to Consolidated Interest
Expense. For each period of four consecutive fiscal quarters of
the Company, Consolidated Adjusted EBITDA shall equal or exceed
the percentage set forth in the table below of Consolidated
Interest Expense.
Quarter Ending Percentage
-------------- ----------
9/30/03 60%
12/31/03 80%
3/31/04 70%
6/30/04 and 9/30/04 100%
12/31/04 and thereafter 150%"
2.6. Amendment of Section 6.5.5. Section 6.5.5 of the Credit
Agreement is amended to read in its entirety as follows:
"6.5.5. Income or Loss from Continuing Operations. Net loss
from continuing operations (excluding, in all events, net
income relating to Janus Flooring Corporation) of the Company
and its Subsidiaries reporting Congoleum on the equity method
shall not exceed $500,000 in the fiscal quarter of the Company
ending December 31, 2003. Net income from continuing operations
(excluding, in all events, net income relating to Janus
Flooring Corporation) of the Company and its Subsidiaries
reporting Congoleum on the equity method shall equal or exceed
$1.00 in at least one of any two consecutive fiscal quarters of
the Company for any two consecutive fiscal quarters of the
Company ending March 31, 2004 and thereafter."
2.7. Amendment of Exhibit 10.1. Exhibit 10.1 to the Credit Agreement
is amended to read in its entirety as set forth in Exhibit 10.1 hereto.
3. Representations and Warranties. Each of the Borrowers jointly and
severally represents and warrants as follows, it being understood that the
transactions contemplated by the Congoleum Plan, the Congoleum Note or the
Congoleum Plan Trust, and the dissolution and performance of Janus Flooring
Corporation, and in each case, the effects thereof, shall be excluded for each
and all of the purposes hereof:
3.1. Legal Existence, Organization. Each of the Borrowers is duly
organized and validly existing and in good standing under the laws of the
jurisdiction of its organization, with all power and authority,
corporate, partnership or otherwise, necessary (a) to enter into and
perform this Agreement and the Amended Credit Agreement and (b) to own
its properties and carry on the business now conducted or proposed to be
conducted by it. Each of the Borrowers has taken all corporate,
partnership or other action required to make the provisions of this
Agreement and the Amended Credit Agreement the valid and enforceable
obligations they purport to be.
3.2. Enforceability. Each of the Borrowers has duly authorized,
executed and delivered this Agreement. Each of this Agreement and the
Amended Credit Agreement is the legal, valid and binding obligation of
each of the Borrowers and is enforceable against the Borrowers in
accordance with its terms.
3.3. No Legal Obstacle to Agreements. Neither the execution, delivery
or performance of this Agreement, nor the performance of the Amended
Credit Agreement, nor the consummation of any other transaction referred
to or contemplated by this Agreement, nor the fulfillment of the terms
hereof or thereof, has constituted or resulted in or will constitute or
result in:
(a) any breach or termination of any material agreement, instrument,
deed or lease to which the Company or any of its Subsidiaries is a party
or by which it is bound, or of the Charter or By-laws of the Company or
any of its Subsidiaries;
(b) the material violation of any law, judgment, decree or
governmental order, rule or regulation applicable to the Company or any
of its Subsidiaries;
(c) the creation under any agreement, instrument, deed or lease of
any Lien (other than the Liens created pursuant to the Security
Agreement) upon any of the assets of the Company or any of its
Subsidiaries; or
(d) any redemption, retirement or other repurchase obligation of the
Company or any of its Subsidiaries under any Charter, By-law, agreement,
instrument, deed or lease.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other
Person is required to be obtained that has not been obtained or made that
has not been made by the Company or any of its Subsidiaries in connection
with the execution, delivery and performance of this Agreement or the
performance of the Amended Credit Agreement, or the consummation of the
transactions contemplated hereby or thereby.
3.4. Defaults. Immediately after giving effect to the amendments set
forth in Section 2 hereof, no Default will exist.
3.5. Incorporation of Representations and Warranties. The
representations and warranties set forth in Section 7 of the Amended
Credit Agreement are true and correct in all material respects on the
date hereof as if originally made on and as of the date hereof, except
for those representations and warranties that relate to an earlier date
which shall be true and correct in all material respects as of that date.
4. Conditions. The effectiveness of this Agreement shall be subject
to the satisfaction or waiver of the following conditions, which conditions
must be satisfied or waived on or before the date hereof:
4.1. Notes. The Borrowers shall have duly authorized, executed and
delivered to the Agent a Revolving Note payable to Fleet National Bank as
Lender in substantially the form of Exhibit 2.1.4 of the Credit
Agreement. The Lenders shall have returned for cancellation the Revolving
Notes dated October 14, 2003.
4.2. Amendment to Note Purchase Agreement. The Company, K&M and
Prudential shall have entered into an amendment to the Note Purchase
Agreement, which amendment shall be effective simultaneously with the
effectiveness of this Agreement and which shall be in form and substance
reasonably satisfactory to the Agent.
4.3. Assignment and Assumption Agreement. Citizens Bank of
Massachusetts ("Citizens") and Fleet shall have entered into an
Assignment and Assumption Agreement in substantially the form of Exhibit
11.1.1 of the Credit Agreement, which Assignment and Assumption Agreement
shall be in effect immediately prior to this Agreement taking effect.
4.4. Field Audit. The Agent shall have received a field audit
conducted by a third party chosen at the Agent's reasonable discretion.
The Agent shall have had an opportunity to review such field audit and
the substance of such field audit shall be reasonably satisfactory to the
Agent.
4.5. Officer's Certificate. Except, in each case, as may have
occurred with respect to the dissolution or performance of Janus Flooring
Corporation, the representations and warranties of the Company and its
Subsidiaries set forth or incorporated by reference herein shall be true
and correct in all material respects as of the Amendment Date as if
originally made on and as of the Amendment Date, except for those that
relate to an earlier date which shall be true and correct in all material
respects as of that date; no Default shall have occurred on or prior to
the Amendment Date; and the Agent shall have received a certificate to
these effects signed by a Financial Officer.
4.6. Secretary's Certificate. The Agent shall have received a
certificate of the Secretary or Assistant Secretary of each of American
Biltrite and the general partner of K&M, dated the Amendment Date, in
form and substance reasonably satisfactory to the Agent as to (a) the
Charter and By-laws of the Borrower, (b) the actions, corporate or
otherwise, (including copies of relevant votes) taken by its board of
directors to authorize the transactions contemplated hereby, and (c) the
name, title and signatures of the officers of the Borrower executing this
Agreement and the other agreements, instruments and other documents
executed by or on behalf of the Borrower pursuant to this Agreement or
otherwise in connection with the transactions contemplated hereby.
4.7. Payment of Agent's Fees and Expenses. The Company shall have
paid to Fleet National Bank an amendment fee of $62,500 and shall have
authorized Fleet National Bank to charge the loan account for the
reasonable expenses of Ropes & Xxxx LLP in connection with the
negotiation and consummation of this Agreement, each as contemplated by a
separate agreement among the Agent and the Company.
4.8. Proper Proceedings. This Agreement, each other Credit Document
and the transactions contemplated hereby and thereby shall have been
authorized by all necessary proceedings of each Obligor and any of their
respective Affiliates party thereto. All necessary consents, approvals
and authorizations of any governmental or administrative agency or any
other Person with respect to any of the transactions contemplated hereby
or by any other Credit Document shall have been obtained and shall be in
full force and effect. The Agent shall have received copies of all
documents, including certificates, records of corporate, limited
liability company, partnership or other proceedings and opinions of
counsel, which the Agent may have reasonably requested in connection
therewith, such documents where appropriate to be certified by proper
corporate, limited liability company, partnership or governmental
authorities.
5. Reallocation. On the Amendment Date the Agent will reallocate the
Loan and Letter of Credit Exposure held by the Lenders in accordance with
their Percentage Interests as set forth on Exhibit 10.1 hereto including the
payments of any amounts outstanding to Citizens.
6. Certain Calculations. Amounts in respect of interest, commitment
fees, Letter of Credit fees and other amounts payable under the Amended Credit
Agreement shall be payable in accordance with the terms of the Credit
Agreement as in effect prior to giving effect to the amendments provided in
Section 2 hereof for periods prior to the Amendment Date and in accordance
with the Amended Credit Agreement for periods from and after the Amendment
Date.
7. Further Assurances. Each of the Company and its Subsidiaries will,
promptly upon the reasonable request of the Agent from time to time, execute,
acknowledge, deliver, file and record all such instruments and notices, and
take all such other action, as the Agent deems necessary or advisable to carry
out the intent and purposes of this Agreement.
8. General. The Amended Credit Agreement and all of the Credit
Documents are each confirmed as being in full force and effect. This
Agreement, the Amended Credit Agreement and the other Credit Documents
referred to herein or therein constitute the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede
all prior and current understandings and agreements, whether written or oral.
Each of this Agreement and the Amended Credit Agreement is a Credit Document
and may be executed in any number of counterparts (including by way of
facsimile transmission), which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders
of any Credit Obligation. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.
[The remainder of this page is intentionally blank]
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERICAN BILTRITE INC.
By /s/ Xxxxxx X. Xxxxx III
-------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Vice President, Finance
K&M ASSOCIATES L.P.
By: AIMPAR, INC., its General
Partner
By /s/ Xxxxxx X. Xxxxx III
------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Vice President and
Assistant Secretary
FLEET NATIONAL BANK, as
Agent and Lender under the
Credit Agreement
By /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Signature Page to Amendment No. 1 to Credit Agreement
