Exhibit 10(46)
AMENDMENT NO. 6 TO RATIFICATION AND AMENDMENT AGREEMENT AND
AMENDMENT NO. 8 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 6 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO.
8 TO LOAN AND SECURITY AGREEMENT, dated as of November 27, 2006 (this "Sixth
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").
WITNESSETH:
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, and 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, 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 Sixth Ratification Amendment, Lender, Borrower and
Guarantors desire and intend to evidence such amendments;
WHEREAS, this Sixth 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 Sixth Ratification Amendment and Borrower and Guarantor
are authorized to execute and deliver this Sixth 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. "Sixth Ratification Amendment" shall mean
this Sixth 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
Sixth 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 Sixth 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 Sixth 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.
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1.3 Interpretation. For purposes of this Sixth 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 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 one-quarter (.25%) 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
one-quarter (2.25%) 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 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)."
2.2 Unused Line Fee. Section 3.4 of the Loan Agreement is deleted in
its entirety and replaced with the following:
"3.4 Unused Line Fee. 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 $28,000,000 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."
2.3 Minimum Excess Availability. Section 9.18 of the Loan Agreement
is hereby deleted in its entirety and replaced with the following:
"9.18 Minimum Excess Availability. The Excess Availability of
Borrower shall at all times be equal to or greater than $2,000,000."
2.4 Capital Expenditures. Section 9.19 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"Section 9.19 Capital Expenditures. Borrower and its
Subsidiaries shall not, directly or indirectly, make any Capital
Expenditures in excess of $7,000,000 in the aggregate in any fiscal
year."
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2.5 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 2006 and 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
----------- --------------
For the four (4) quarters ending $20,000,000
December 31, 2006
For the four (4) quarters ending $20,000,000
March 31, 2007
For the four (4) quarters ending $20,000,000"
June 30, 2007
2.6 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) June 30, 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 "December 31, 2006" and replacing it with
"June 30, 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 Sixth 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
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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 Sixth 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 Sixth 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 Sixth 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 Sixth 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 Sixth
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this Sixth 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 Sixth Ratification Amendment and Borrower and Guarantor
are authorized to execute and
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deliver this Sixth 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 Sixth 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 Sixth 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 Sixth
Ratification Amendment.
6.4 Counterparts. This Sixth 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 Sixth 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 Sixth 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:
---------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
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: /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
---------------------------
