Document:

EX-10.35

Exhibit 10.35

STOCK
PURCHASE AGREEMENT

        This
Stock Purchase Agreement (this “Agreement”), dated as of January
7, 2005, is by and between Steven Haimowitz (the “Purchaser”) and
Le@P Technology, Inc. (the “Seller”).  

        WHEREAS,
the Seller, the Purchaser, Healthology, Inc. (the “Company”),
iVillage Inc. (“Parent” or the “Issuer”)
and other parties are contemporaneously entering into that certain Stock Exchange and
Merger Agreement dated as of date hereof (the “Merger Agreement”).  

        WHEREAS,
the Merger Agreement contemplates a Stock Exchange prior to the Merger described therein
pursuant to which the Purchaser (among others) will sell to Parent certain shares of
Common Stock of the Company then held by the Purchaser (including a pro rata portion of
the Shares being acquired by the Purchaser from the Seller pursuant to this Agreement) in
exchange for shares of common stock of the Issuer.  

        WHEREAS,
following the Stock Exchange, the Merger will occur pursuant to which the Purchaser
(among others) will exchange the remaining shares of Common Stock of the Company then
held by the Purchaser (including the remaining Shares being acquired by the Purchaser
pursuant to this Agreement) for cash.  

        WHEREAS,
the Seller desires to sell to the Purchaser, and the Purchaser agrees to purchase from
the Seller, immediately prior to the Stock Exchange, the 800,000 shares of Common Stock
of the Company currently held by the Seller, all in accordance with the terms and
conditions set forth herein (the “Transaction”).  

        NOW,
THEREFORE, in consideration of the mutual premises, representations, warranties,
covenants and conditions as set forth in this Agreement, the parties to this Agreement,
intending to be legally bound, mutually agree as follows:  

1. Sale and Purchase
of Purchased Shares. 

        1.1
Sale and Purchase of Purchased Shares. The Seller hereby sells, transfers, assigns
and delivers to the Purchaser and the Purchaser hereby purchases from the Seller, in
accordance with the terms and conditions set forth herein and in reliance on the
representations and warranties set forth herein and on Exhibit B hereto, an
aggregate of 800,000 shares of the Common Stock of the Company held by the Seller and
represented by stock certificate number C-42 (the “Shares”), receipt of which is hereby acknowledged, in
consideration for the delivery to the Seller of the combination of Parent Common Stock and
cash delivered by the Issuer to the Purchaser in respect of the Shares in the Stock
Exchange and the Merger as set forth on Exhibit A hereto (the “Purchase
Price”).  

        1.2
Defined Terms. Capitalized terms used herein shall have the meaning ascribed
to them in the Merger Agreement unless otherwise defined herein.  

        1.3
 Deliveries.  

        
        (a)
The Seller is delivering herewith to the Purchaser: (i) a stock certificate
evidencing the Shares, free and clear of all liens and encumbrances, except for liens,
encumbrances, and restrictions arising by reason of the federal securities laws, and
applicable state “blue sky” and comparable securities laws, accompanied by a
stock power duly endorsed in blank; (ii) an executed investor representation statement
for the benefit of the Purchaser and Parent in the form attached hereto as Exhibit B; and
(iii) upon receipt of the Purchase Price as set forth in Section 1.3(b) below, an
executed receipt against the Purchase Price in the form attached hereto as Exhibit C.  

53 

 

        
        (b)
      In payment for the Shares,  the  Purchaser  will  promptly  deliver,  or cause to
be  delivered,  to the Seller the Purchase Price as follows: (i) the cash portion on the
Purchase Price by wire transfer to the following bank account: 

	 	
BankAtlantic
ABA
#267083763
For further credit to: Le@P Technology, Inc.
Money Market Account
#0055347908; 

and (ii) the stock certificate
evidencing the Parent Common Stock portion of the Purchase Price (the
“Stock”), registered in the Purchaser’s name, free and
clear of all liens and encumbrances, except for liens, encumbrances, and restrictions
arising by reason of the federal securities laws, and applicable state “blue
sky” and comparable securities laws, together with a stock power, duly endorsed in
blank. 

2. Representations
and Warranties of the Seller. 

        The
Seller hereby represents and warrants to the Purchaser as set forth on Exhibit B
(which representations and warranties are incorporated by reference as if set forth
herein) and as follows:  

        2.1
 Organization. It has full right, power and authority to enter into, perform and consummate
the transactions contemplated by this Agreement. This Agreement has been duly executed and
delivered by it and is a legal, valid and binding obligation of it, enforceable against it
in accordance with its terms except that such enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting or relating to creditors’ rights
generally, and is subject to general principles of equity. It is a corporation duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite corporate power and authority, as applicable, to own,
lease and operate its assets and properties and to carry on its business as presently
conducted.  

        2.2
 Ownership. It has good and valid title to the Shares, free and clear of any lien,
pledge, charge, security interest, encumbrance, title retention agreement, hypothecation,
adverse claim, option, or equity, except for liens, encumbrances, and restrictions arising
by reason of the federal securities laws, and applicable state “blue sky” and
comparable securities laws. Upon the delivery to the Purchaser of the Shares, good and
valid title to the Shares will have been acquired by the Purchaser, free and clear of all
liens, pledges, charges, security interests, encumbrances, title retention agreements,
hypothecations, adverse claims, options, or equities whatsoever, except for liens,
encumbrances, and restrictions arising by reason of the federal securities laws, and
applicable state “blue sky” and comparable securities laws or by reason of
actions of the Purchaser.  

        2.3
 Enforceability. It has the requisite corporate power and authority to execute and
deliver this Agreement and all other documents contemplated by this Agreement and to
perform its obligations hereunder. This Agreement is a valid and binding obligation of the
Seller, enforceable against it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, moratorium, insolvency or other similar laws generally
affecting the enforcement of creditors’ rights, specific performance, injunctive or
other equitable remedies.  

        2.4
 Authority; Noncontravention. The execution, delivery and performance of this Agreement and
all other agreements and documents contemplated by this Agreement by it and the
consummation of the transactions contemplated hereby and thereby (i) have been duly and
validly authorized by all necessary corporate action on its part, as applicable, and no
other corporate proceedings on its part are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby and (ii) will not violate, conflict with
or otherwise result in the breach of any of the terms and conditions of, result in a
material modification of or constitute (or with notice or lapse of time or both would
constitute) a default under (x) any of its organizational documents or (y) any law
applicable to it or any of its properties or operations.  

54 

 

        2.5
 No Brokers. Neither it nor any of its officers, directors or partners has employed any
investment banker, business consultant, financial advisor, broker or finder in connection
with the transactions contemplated by this Agreement, or obligated it to pay any
investment banking, business consultancy, financial advisory, brokerage or finders’
fees or commissions in connection with the transactions contemplated hereby.  

        2.6
 Investment Intention; Sophisticated Investor. It is acquiring the Stock for its own
account, for investment purposes and not with a view to the distribution thereof. It has
had access to such information concerning iVillage as it has deemed appropriate in
connection with the acquisition of the Stock hereunder, and by reason of its business and
financial experience, it has such knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risks of the prospective
investment in the Stock, is able to bear the economic risk of such investment and is able
to afford a complete loss of such investment.  

        2.7
 No Reliance or Solicitation. Except as are set forth in this Agreement, it has not
received any representations or warranties from the Purchaser or its respective
representatives or agents concerning the Issuer, the Stock or the transactions
contemplated hereby. It is not purchasing the Stock as a result of (1) any general,
solicitation, advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or (2) any
seminar or meeting whose attendees, including the Purchaser, had been invited as a result
of any of the foregoing.  

        2.8
 No Securities Act Registration. It understands that the Stock to be acquired by it has not
been registered under the Securities Act of 1933, as amended (“Securities
Act”), may not be sold or otherwise transferred without registration
under the Securities Act or pursuant to an exemption from such registration requirements,
and is currently legended and will continue to be legended to the effect that the Stock
may not be sold or transferred in the absence of such registration.  

3. Representations
and Warranties of the Purchaser. 

        The
Purchaser hereby represents and warrants to the Seller as follows: 

        3.1
 Ownership. Immediately prior to his transfer thereof to the Seller, the Purchaser will
have good and valid title to the Stock, free and clear of any lien, pledge, charge,
security interest, encumbrance, title retention agreement, hypothecation, adverse claim,
option, or equity, except for liens, encumbrances, and restrictions arising by reason of
the federal securities laws, and applicable state “blue sky” and comparable
securities laws. Upon the delivery to the Seller of the Stock, good and valid title to the
Stock will have been acquired by the Seller, free and clear of all liens, pledges,
charges, security interests, encumbrances, title retention agreements, hypothecations,
adverse claims, options, or equities whatsoever except for liens, encumbrances, and
restrictions arising by reason of the federal securities laws, and applicable state
“blue sky” and comparable securities laws or by reason of actions of the Seller.  

        3.2
 No Brokers. He has not employed any investment banker, business consultant, financial
advisor, broker or finder in connection with the transactions contemplated by this
Agreement, and is not obligated to pay any investment banking, business consultancy,
financial advisory, brokerage or finders’ fees or commissions in connection with the
transactions contemplated hereby.  

        3.3
 Solicitation, Dealer. He has not engaged in any form of general solicitation or
advertising in connection with the transfer of the Stock, and is not a “dealer” as
defined in the Securities Act.  

        3.4
 Affiliate. He is not, as of the time he is making this representation, and at no time
prior to the time he is making this representation has ever been, an “affiliate”
of the Issuer for purposes of Rule 144 (“Rule 144”)
promulgated under the Securities Act. Without limiting the generality of the foregoing, he
(i) is not nor has been an officer or director of the Issuer and (ii) has never
beneficially owned (within the meaning of Rule 13d-3 under the U.S. Securities and
Exchange Act of 1934, as amended) 10% or more of the issued and outstanding shares of any
class of stock (or, if different, the aggregate voting securities) of the Issuer.  

55 

 

        3.5
 No Distribution. He will have acquired the Stock directly from the Issuer upon the
effectiveness of the Stock Exchange in a transaction exempt from the registration
requirements of the 1933 Act, and will have acquired such Stock without a view to
distribution.  

        4.
Survival of Representations and Warranties. The representations and
warranties contained in Sections 2 and 3 hereof shall survive the consummation of the
transactions contemplated by this Agreement.  

        5.
Miscellaneous  

        
        5.1
 Counterparts. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original, but all
of which together will constitute one and the same instrument.  

        
        5.2
 Successors and Assigns. This Agreement will bind and inure to the benefit of
the parties hereto and their respective successors, heirs and permitted assigns. Nothing
in this Agreement is intended to or will confer any rights or remedies on any person
other than the parties hereto and their respective successors, heirs and permitted
assigns. Notwithstanding anything to the contrary herein, the parties hereto agree that
the representations and warranties set forth herein and on Exhibit B hereto may be
relied upon by Weil, Gotshal & Manges LLP (“Weil”) for the
purpose of that certain opinion to be issued by Weil and delivered to the Issuer in
connection with the Transaction and by Parent.  

        
        5.3
 Governing Law. This Agreement will be governed by and interpreted and construed
in accordance with the internal laws of the State of New York, without regard to
conflicts of laws principles.  

        
        5.4
 Notices. All notices, requests, consents and other communications hereunder
to any party shall be deemed to be sufficient if contained in a written instrument
delivered in person or sent by telecopy, facsimile, nationally-recognized overnight
courier or first class registered or certified mail, return receipt requested, postage
prepaid, addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by such party to the other parties:  

	         	If to the Purchaser:               	430 West
      24th Street 

      Apt. 2F 

      New York, NY 10011 

      Telephone: 917-885-0996
	  		
		If to the Seller:	Le@P Technology, Inc.
      

      5601 N Dixie Highway 

      Ft. Lauderdale, FL 33334 

      Attention: Timothy Lincoln, Esq.

      Telephone: 954-771-1772 

      Facsimile: 954-928-0978

All such notices, requests, consents
and other communications shall be deemed to have been delivered (a) in the case of
personal delivery or delivery by facsimile or telecopy, on the date of such delivery, (b)
in the case of dispatch by nationally-recognized overnight courier, on the next business
day following such dispatch and (c) in the case of mailing, on the third business day
after the posting thereof. 

        
        5.5
 Headings. The Article and Section headings used or contained in this Agreement
are for convenience of reference only and shall not affect the construction of this
Agreement.  

[Signature Page Follows] 

56 

 

        IN
WITNESS WHEREOF, the Purchaser and the Seller have executed this Stock Purchase Agreement
as of the date first above written. 

	PURCHASER:

/s/ Steven Haimowitz                                          

Steven Haimowitz 
 
	SELLER: 

Le@P Technology, Inc. 

By /s/  Timothy C. Lincoln                                          

Name: Timothy C. Lincoln

Title:  Acting Perincipal Executive Officer

57 

 

EXHIBIT A

Purchase Price  

	
      

    
	
      The Shares (Common

      Stock of Healthology, 

      Inc.) 

      	The
      Cash Consideration	The
      Stock Consideration
	
      

    
	  		
	
      

    
	800,000	$347,412.88	17,347
      shares of Parent Common Stock
	
      

    
	  		
	
      

    

 

 

EXHIBIT B

Investor Representation
Statement 

 

 

EXHIBIT C

	TO:  	Steven
Haimowitz

	RE:  	STOCK
PURCHASE AGREEMENT - CONSIDERATION

RECEIPT 

        We
hereby acknowledge receipt of $347,413 and a share certificate representing the
Stock, which collectively represent the full and complete Purchase Price in accordance
with that certain Stock Purchase Agreement by and between Steven Haimowitz and Le@P
Technology, Inc. dated January 7, 2005 (the “Agreement”).
We also acknowledge receipt of a stock power related to the Stock, duly endorsed in blank.
Capitalized terms used but not defined herein shall have the meanings ascribed to such
terms in the Agreement. 

	
      

    
	

      Date: January 7, 2005		

      LE@P TECHNOLOGY, INC.

      

      

      By: /s/  Timothy C. Lincoln                                          

      Title: Acting Principal Executive OfficerExhibit 10.11.4

                                                                     [Execution]

           AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND
                 AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

      AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO.
3 TO LOAN AND SECURITY AGREEMENT, dated as of December 14, 2004 (this "First
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 CONGRESS FINANCIAL CORPORATION, a
Delaware corporation ("Lender").

                              W I T N E S S E T H:
                               - - - - - - - - - -

      WHEREAS, Lender, Borrower and Guarantors have entered into financing
arrangements pursuant to which Lender may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement, dated December 10, 2001, between Lender and Borrower, as amended by
Amendment No. 1 to Loan and Security Agreement, dated September 29, 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, 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;
<PAGE>

      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 First Ratification Amendment, Lender, Borrower and
Guarantors desire and intend to evidence such amendments; and

      WHEREAS, this First Ratification Amendment has been authorized by the
Bankruptcy Court pursuant to an Order entered by the Bankruptcy Court
authorizing Borrower and Guarantors to execute and deliver this First
Ratification Amendment;

      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. "First Ratification Amendment" shall mean this
First 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 "Budget" in the Ratification
Agreement and any of the other Financing Agreements shall be deemed and each
such reference is hereby amended to mean the Budget attached to the Ratification
Agreement as Exhibit A, as supplemented by the Budget attached hereto as Exhibit
A, in each case delivered to Lender pursuant to Section 5.3 of the Ratification
Agreement and setting forth the cash expenditures of Borrower and Guarantors on
a monthly or quarterly basis, as applicable, for the estimated and projected
periods covered thereby, together with any further 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.

            (b) All references to the term "Financing Agreements" in this First
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 First Ratification Amendment, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

            (c) All references to the term "Ratification Agreement" in this
First Ratification Amendment and in any of the Financing Agreements shall be
deemed and each such reference is hereby amended to mean the Ratification
Agreement, as amended hereby, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

      1.3 Interpretation. For purposes of this First Ratification Amendment,
unless otherwise defined herein, all capitalized terms used herein, including,

                                        2
<PAGE>

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 Capital Expenditures. Section 9.19 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

            "9.19 Capital Expenditures. Borrower and its Subsidiaries shall not,
      directly or indirectly, make any Capital Expenditures in excess of: (i)
      $8,500,000 in fiscal year 2003 and (ii) $7,000,000 in any other fiscal
      year, provided, that, if the aggregate amount of Capital Expenditures made
      by Borrower and its Subsidiaries during fiscal year 2004 is less than
      $5,000,000, then the amount of Capital Expenditures permitted to be made
      by Borrower and its Subsidiaries hereunder during fiscal year 2005 shall
      be increased by $2,000,000."

      2.2 EBITDA. Section 9.23 of the Loan Agreement is hereby amended by adding
the following subsection (c) to the end of such Section:

            "(c) Borrower and its Subsidiaries shall not, as to any fiscal
      quarter during the fiscal year 2005 of Borrower and its Subsidiaries,
      permit EBITDA of 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, 2005 through     $3,500,000
                 March 31, 2005

                 January 1, 2005 through     $9,500,000"
                 June 30, 2005

      2.3 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 June 30, 2005 (the
      "Termination Date")."

                                        3
<PAGE>

            (b) Section 12.1(c)(iii) of the Loan Agreement is hereby amended by
deleting the reference to "December 31, 2004" and replacing it with "June 30,
2005".

      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 First Ratification Amendment, Borrower shall pay Lender an
amendment fee in the amount of $150,000, which fee shall be fully earned as of
and payable on the date hereof and may be charged directly to the loan account
of Borrower.

      4. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to
the continuing representations, warranties and covenants heretofore made in the
Loan Agreement or otherwise and hereafter made by Borrower and Guarantors to
Lender, whether pursuant to the Financing Agreements or otherwise, and not in
limitation thereof, Borrower and Guarantors hereby represent, warrant and
covenant with, to and in favor of Lender the following (which shall survive the
execution and delivery of this Agreement), the truth and accuracy of which, or
compliance with, to the extent such compliance does not violate the terms and
provisions of the Bankruptcy Code, being a continuing condition of the making of
loans by Lender:

      4.1 The Budget attached hereto as Exhibit A has been thoroughly reviewed
by Borrower and Guarantors and their respective appropriate management and sets
forth, among other things, the actual through September 30, 2004 and the
projected through June 30, 2005 quarterly statements of cash flow, including
cash receipts and cash disbursements, quarterly statements of loan availability
of Borrower on a quarterly "roll-forward" basis and monthly statements of
asbestos/bankruptcy costs. Borrower and Guarantors hereby acknowledge, confirm
and agree that Lender has relied upon the Budget and on the information set
forth therein in determining to enter into this First Ratification Amendment.
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.

      4.2 This First 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.

      4.3 No Event of Default or act, condition or event which with notice or
passage of time or both would constitute an Event of Default exists or has
occurred as of the date of this First 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 First 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

                                        4
<PAGE>

conditions to Lender's obligation to extend further loans, advances or other
financial accommodations to Borrower pursuant to the Loan Agreement:

      5.1 No trustee, examiner or receiver or the like shall have been appointed
or designated with respect to Borrower or any Guarantor, as debtor and
debtor-in-possession, or its business, properties and assets;

      5.2 Borrower and Guarantors shall execute and/or deliver to Lender this
First Ratification Amendment, and all other Financing Agreements that Lender may
request to be delivered in connection herewith, in form and substance
satisfactory to Lender;

      5.3 Borrower and Guarantors shall execute and/or deliver to Lender all
other Financing Agreements, and other agreements, documents and instruments, in
form and substance satisfactory to Lender, which, in the good faith judgment of
Lender are necessary or appropriate and implement the terms of this First
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this First 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 and the applicable Federal Rules
of Bankruptcy Procedure with respect to any relevant Order approving this First
Ratification Amendment in a manner acceptable to Lender and its counsel, and an
Order shall have been entered by the Bankruptcy Court authorizing Borrower and
Guarantors to execute and deliver this First Ratification Amendment; and

      5.5 No Event of Default shall be continuing under any of the Financing
Agreements, as of the date hereof.

      6. MISCELLANEOUS.

      6.1 Amendments and Waivers. Neither this First 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,
including, without limitation, additional security agreements, collateral
assignments, Uniform Commercial Code financing statements or amendments or
continuations thereof, 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 First
Ratification Amendment, any of the other Financing Agreements or the Financing
Order. Upon the request of Lender, at any time and from time to time, Borrower
and Guarantors shall, at its cost and expense, do, make, execute, deliver and

                                        5
<PAGE>

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.

      6.3 Headings. The headings used herein are for convenience only and do not
constitute matters to be considered in interpreting this First Ratification
Amendment.

      6.4 Counterparts. This First 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 First Ratification Amendment shall become
effective upon the execution hereof by Lender.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                        6
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this First Ratification
Amendment to be duly executed as of the day and year first above written.

                         CONGRESS FINANCIAL CORPORATION

                         By: /s/ Dionne S. Rice
                             ---------------------------------------

                         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:
                                ------------------------------------

                                        7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this First Ratification
Amendment to be duly executed as of the day and year first above written.

                         CONGRESS FINANCIAL CORPORATION

                         By:
                             ---------------------------------------

                         Title:
                                ------------------------------------

                         CONGOLEUM CORPORATION, as Debtor and
                         Debtor-in-Possession

                         By: /s/ Howard N. Feist III
                             ---------------------------------------

                         Title: Chief Financial Officer
                                ------------------------------------

                         CONGOLEUM SALES, INC.,
                         as Debtor and Debtor-in-Possession

                         By: /s/ Howard N. Feist III
                             ---------------------------------------

                         Title: Vice President
                                ------------------------------------

                         CONGOLEUM FISCAL, INC.,
                         as Debtor and Debtor-in-Possession

                         By: /s/ Howard N. Feist III
                             ---------------------------------------

                         Title: Vice President
                                ------------------------------------

                                        8
<PAGE>

                                    EXHIBIT A
                                       TO
           AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND
                 AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

                                     Budget

                                  See attached

                                        9
<PAGE>

                                                                          Page 1
                              CONGOLEUM CORPORATION
                           Quarterly Operating Results
                                  ($ in 000's)

<TABLE>
<CAPTION>
                                        Actual        Est        Actual        Est       Actual      Proj.                  Total
                                       March 31,   March 31,    June 30,    June 30,    Sept 30,    Dec 31,     Total      1st Half
                                         2004         2005        2004        2005        2004       2004*       2004        2005
                                      ---------------------------------------------------------------------------------------------

<S>                                    <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Net sales                              $ 52,000    $ 54,411    $ 62,951    $ 64,000    $ 58,871    $ 52,410    $226,232    $118,411
Cost of sales                            38,450      39,971      46,064      46,940      41,812      38,792     165,118      86,911
Selling, general and
  administrative expenses                11,985      12,274      13,017      13,050      12,959      10,814      48,775      25,324
                                      ---------------------------------------------------------------------------------------------
      Income (loss) from operations       1,565       2,166       3,870       4,010       4,100       2,804      12,339       6,176
Other income (expense):
  Interest income                            --          15          --          15          26          --          26          30
  Interest expense                       (2,244)     (2,400)     (2,315)     (2,400)     (2,417)     (2,443)     (9,419)     (4,800)
  Other income /(expense):                  244         250         421         460         212         125       1,002         710
  Other expense                              --          --          --          --          --          --          --          --
                                      ---------------------------------------------------------------------------------------------
      Income (loss) before
        income taxes                       (435)         31       1,976       2,085       1,921         486       3,948       2,116
  Provision (benefit) for
    income taxes                             --          12         616         834         768         194       1,578         846
                                      ---------------------------------------------------------------------------------------------

      Net income(loss) *               $   (435)   $     19    $  1,360    $  1,251    $  1,153    $    292       2,370       1,270
                                      =============================================================================================

  Net Income (Loss)                    $   (435)   $     19    $  1,360    $  1,251    $  1,153    $    292    $  2,370    $  1,270
    Interest Expense                      2,244       2,400       2,315       2,400       2,417       2,443       9,419       4,800
    Depreciation                          2,752       2,700       2,659       2,700       2,684       2,646      10,741       5,400
    Amortization                            138         138         138         138         138         138         552         276
    Taxes                                    --          12         616         834         768         194       1,578         846
                                      ---------------------------------------------------------------------------------------------
  EBITDA                               $  4,699    $  5,269    $  7,088    $  7,323    $  7,160    $  5,713    $ 24,660    $ 12,592
                                      =============================================================================================
</TABLE>

* excludes any asbestos related charges

<PAGE>

                                                                          Page 2
                              CONGOLEUM CORPORATION
                                  Balance Sheet
                              Dollars in thousands

<TABLE>
<CAPTION>
                                                    Actual        Actual       Actual       Proj         Proj          Proj
                                                   March 31,     June 30,     Sept 30,     Dec 31,     March 31,     June 30,
                                                     2004          2004         2004        2004         2005          2005
                                                  ---------------------------------------------------------------------------

<S>                                                <C>          <C>          <C>          <C>          <C>          <C>
ASSETS
Current assets:
   Cash and cash equivalents, including
      restricted cash                              $  11,835    $  27,523    $  45,663    $  34,851    $  26,459    $  26,815
   Accounts and notes receivable, net                 19,092       24,204       18,569       14,177       20,048       21,487
   Receivable-coverage costs & claims fee              3,587        3,587        5,513       10,715        8,840        9,153
   Inventories                                        44,670       43,191       43,096       42,075       44,255       46,135
   Prepaid expenses and other current assets           3,831        3,393        2,576        2,719        3,717        5,137
   Deferred income taxes                               8,752        8,457        8,456        8,456        8,457        8,457
                                                  ---------------------------------------------------------------------------
      Total current assets                            91,767      110,355      123,873      112,993      111,776      117,184

Property, plant and equipment, net                    85,101       82,949       81,125       80,783       79,536       77,991
Other noncurrent assets                                7,832        7,680        7,552        7,426        7,300        7,174
                                                  ---------------------------------------------------------------------------
      Total assets                                 $ 184,700    $ 200,984    $ 212,550    $ 201,202    $ 198,612    $ 202,348
                                                  ===========================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                $  11,962    $  12,361    $  13,534    $  10,327    $  12,827    $  12,927
   Accrued expenses                                   31,215       42,183       46,205       42,025       44,148       51,558
   Asbestos-related liabilities                        8,678        8,435        7,246        3,529          723       (1,310)
   Insurance recoveries payable to Trust                  --           --       14,466       13,939        9,699        7,334
   Revolver Borrowings                                11,157       15,262        8,638        8,638        8,638        8,638
                                                  ---------------------------------------------------------------------------
      Total current liabilities                       63,012       78,241       90,089       78,458       76,035       79,148

Long-term debt                                        99,786       99,798       99,810       99,822       99,834       99,846
Note to asbestos Trust                                    --           --           --           --           --           --
Other liabilities                                     11,465       11,782       11,603       11,585       11,567       11,549
Deferred taxes                                         4,376        3,900        3,900        3,900        3,900        3,900
Noncurrent pension liability                          23,865       23,259       22,105       22,072       21,906       21,300
Accrued postretirement benefit obligation              8,413        8,309        8,195        8,225        8,210        8,195
                                                  ---------------------------------------------------------------------------
      Total liabilities                              210,917      225,289      235,702      224,062      221,452      223,938

STOCKHOLDERS' EQUITY

Class A common stock, par value $0.01 per                 47           47           47           47           47           47

Class B common stock, par value $0.01 per
   share; 4,608,945 shares authorized, issued             46           46           46           46           46           46

Additional paid-in capital                            49,105       49,105       49,105       49,105       49,105       49,105
Retained deficit                                     (47,218)     (45,857)     (44,704)     (44,412)     (44,393)     (43,142)
Minimum pension liability adjustment                 (20,384)     (19,833)     (19,833)     (19,833)     (19,833)     (19,833)
                                                  ---------------------------------------------------------------------------

Less common stock held in Treasury, at cost            7,813        7,813        7,813        7,813        7,813        7,813
                                                  ---------------------------------------------------------------------------
      Total stockholders' equity                     (26,217)     (24,305)     (23,152)     (22,860)     (22,841)     (21,590)

      Total liabilities and stockholders' equity   $ 184,700    $ 200,984    $ 212,550    $ 201,202    $ 198,612    $ 202,348
                                                  ===========================================================================

-----------------------------------------------------------------------------------------------------------------------------

Gross availability (net of $6mm holdback)          $  16,449    $  17,915    $  12,651    $   8,945    $  15,731    $  16,499
Revolver Borrowing                                    11,157       15,262        8,638        8,638        8,638        8,638
                                                  ---------------------------------------------------------------------------
Additional Credit Line Available                       5,292        2,653        4,013          307        7,093        7,861
  Cash on Hand, excluding restricted amounts          11,835       27,523       31,197       20,912       16,760       19,481
                                                  ---------------------------------------------------------------------------
Cash plus available borrowing                      $  17,127    $  30,176    $  35,210    $  21,219    $  23,852    $  27,342
                                                  ===========================================================================
</TABLE>

<PAGE>

                                                                          Page 3
                              CONGOLEUM CORPORATION
                             Statement of Cash Flows
                                ($ In thousands)

<TABLE>
<CAPTION>
                                                     March        June    September    December      Total       March       June
                                                     2004         2004       2004        2004        2004         2005       2005
                                                  ---------------------------------------------------------------------------------

<S>                                                <C>         <C>         <C>         <C>         <C>         <C>         <C>
Cash flows from operating activities:
  Net income (loss)                                $   (440)   $  1,361    $  1,153    $    292    $  2,366    $     19    $  1,251
    Adjustments to reconcile net income to net
    cash used by operating activities:
      Deferred taxes                                     --       1,167       2,561         195       3,923          12         804
      Depreciation                                    2,753       2,660       2,684       2,646      10,743       2,646       2,646
      Amortization                                      139         139         139         138         555         138         138

      Changes in certain assets and liabilities:
        Accounts and notes receivable                (5,533)     (5,111)      5,635       4,392        (617)     (5,871)     (1,439)
        Inventories                                     326       1,479          95       1,021       2,921      (2,180)     (1,880)
        Accounts payable                              7,418         400       1,173      (3,207)      5,784       2,500         100
        Other Working Capital                         4,280      10,243         829      (4,539)     10,813         914       4,547
                                                  ---------------------------------------------------------------------------------
          Net cash provided (used) by
            operating activities                      8,943      12,338      14,269         938      36,488      (1,822)      6,167

    Cash flows from investing activities:
      Capital expenditures                             (819)       (509)       (858)     (2,304)     (4,490)     (1,400)     (1,100)
                                                  ---------------------------------------------------------------------------------
          Net cash provided (used) by
            investing activities                       (819)       (509)       (858)     (2,304)     (4,490)     (1,400)     (1,100)

-----------------------------------------------------------------------------------------------------------------------------------
          Free cash flow from operations              8,124      11,829      13,411      (1,366)     31,998      (3,222)      5,067
-----------------------------------------------------------------------------------------------------------------------------------

      Asbestos Reorganization Expenditures           (1,141)       (243)     (1,189)     (3,717)     (6,290)     (2,806)     (2,033)
      Insurance recoveries, net of coverage
        litigation payments                              --          --      12,540      (5,729)      6,811      (2,365)     (2,678)
      Borrowings - Revolver                             925       4,105      (6,624)         --      (1,594)         --          --
                                                  ---------------------------------------------------------------------------------
Net increase (decrease) in cash and
  cash equivalents                                    7,908      15,691      18,138     (10,812)     30,925      (8,393)        356
Cash and cash equivalents:
  Beginning of period                                 3,926      11,834      27,525      45,663       3,926      34,852      26,459
                                                  ---------------------------------------------------------------------------------
  End of period                                    $ 11,834    $ 27,525    $ 45,663    $ 34,851    $ 34,852    $ 26,459    $ 26,815
                                                  =================================================================================

Cash balance                                       $ 11,834    $ 27,525    $ 45,663    $ 34,851    $ 34,852    $ 26,459    $ 26,815
Less restricted amounts                                  --          --     (14,466)    (13,939)    (13,939)     (9,699)     (7,334)
Additional revolver borrowing available               5,292       2,653       4,013         307         307       7,093       7,861
                                                  ---------------------------------------------------------------------------------
  Net Cash plus revolver available                 $ 17,126    $ 30,178    $ 35,210    $ 21,219    $ 21,220    $ 23,853    $ 27,342
                                                  =================================================================================
</TABLE>

<PAGE>

                                                                          Page 4
                 Monthly Statement of Asbestos/Bankruptcy Costs

<TABLE>
<CAPTION>
($ in Thousands)
Reorganization Expenses

Cash basis activity                 Oct-04      Nov-04      Dec-04      Jan-05     Feb-05     Mar-05     Apr-05     May-05    Jun-05

<S>                                <C>        <C>         <C>         <C>         <C>        <C>        <C>        <C>        <C>
Accrual-opening balance            $(7,246)   $ (5,811)   $ (4,375)   $ (3,529)   $(1,864)   $(1,336)   $  (723)   $   (58)   $  625
Charges
Spending                             1,435       1,435         846       1,665        528        613        665        684       684
                                  --------------------------------------------------------------------------------------------------
Ending balance                     $(5,811)   $ (4,375)   $ (3,529)   $ (1,864)   $(1,336)   $  (723)   $   (58)   $   625    $1,309
                                  ==================================================================================================

<CAPTION>
Insurance Coverage Litigation Costs and Claims Handling Fee (Reimbursable from Insurance Recoveries)

<S>                                <C>        <C>         <C>         <C>         <C>        <C>        <C>        <C>        <C>
Receivable-opening balance         $ 5,513    $  7,903    $ 10,293    $ 10,716    $ 9,226    $ 8,874    $ 8,841    $ 9,089    $9,138
Spending                             2,390       2,390       1,004         900        652        867        900        916       916
Receipts                                                       581       2,390      1,004        900        652        867       900
                                  --------------------------------------------------------------------------------------------------
Ending balance                     $ 7,903    $ 10,293    $ 10,716    $  9,226    $ 8,874    $ 8,841    $ 9,089    $ 9,138    $9,154
                                  ==================================================================================================
</TABLE>

<PAGE>

Congoleum Corporation                                                     Page 5

<TABLE>
<CAPTION>
Collateral and Borrowing Availability calculation

Description                                     Limits        3/31/2004   6/30/2004   09/30/04    12/31/04     03/31/05    06/30/05
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>           <C>         <C>         <C>         <C>         <C>          <C>
Accounts Receivable:                                          $ 20,560    $ 25,766    $ 19,924    $ 15,378    $  21,500    $ 23,000

Less Ineligibles:                                               10,493      13,545      12,985      12,733       10,533      12,262

Net Eligible Accounts Receivable:                               10,067      12,221       6,939       2,645       10,967      10,738

            Advance Rate:                                           85%         85%         85%         85%          85%         85%

Accounts Receivable Availability:               $30,000       $  8,557    $ 10,388    $  5,898    $  2,249    $   9,322    $  9,128

Inventory:
      Raw Materials                                           $  4,527    $  3,957    $  4,381    $  4,700    $   4,700    $  4,700
      Resin                                                        593         434         716         600          600         600
      WIP                                                        2,429       2,493       2,420       1,500        2,300       2,300
      Finished Goods                                            35,025      33,249      32,863      32,680       34,180      36,180
                                                              ---------------------------------------------------------------------
      Total Inventory                                         $ 42,574    $ 40,133    $ 40,380    $ 39,480    $  41,780    $ 43,780

Less Ineligibles-
      Raw Material                                            $    554    $    471    $    553    $    500    $     500    $    500
      Resin                                                         --          --          --          --           --          --
      WIP                                                        2,429       2,493       2,420       1,500        2,300       2,300
      Finished Goods(incl Laminates)                             2,527       2,242       2,107       2,182        2,257       2,332
                                                              ---------------------------------------------------------------------
Total Ineligibles:                                            $  5,510    $  5,206    $  5,080    $  4,182    $   5,057    $  5,132

      Net Eligible:
      Raw Material                                            $  3,973    $  3,486    $  3,828    $  4,200    $   4,200    $  4,200
            Advance Rate:                                           35%         35%         35%         35%          35%         35%
                                                              ---------------------------------------------------------------------
Raw Material Avail:                             $3,000    A   $  1,391    $  1,220    $  1,340    $  1,470    $   1,470    $  1,470
                                                              ---------------------------------------------------------------------

      Resin                                                   $    593    $    434    $    716    $    600    $     600    $    600
            Advance Rate:                                           50%         50%         50%         50%          50%         50%
                                                              ---------------------------------------------------------------------
Resin Availability                              $3,000    A   $    297    $    217    $    358    $    300    $     300    $    300
                                                              ---------------------------------------------------------------------

WIP Availability                                                          $     --    $     --    $     --    $      --    $     --

      Finished Goods                                          $ 32,498    $ 31,007    $ 30,756    $ 30,498    $  31,923    $ 33,848
            Advance Rate:                                           50%         50%         50%         50%          50%         50%
                                                              ---------------------------------------------------------------------
Finished Goods Availability                     $20,000       $ 16,249    $ 15,503    $ 15,378    $ 15,249    $  15,961    $ 16,924
                                                              ---------------------------------------------------------------------

Inventory Availability:                         $23,000       $ 17,936    $ 16,941    $ 17,076    $ 17,019    $  17,731    $ 18,694

TOTAL AVAILABILITY                                            $ 26,493    $ 27,328    $ 22,974    $ 19,268    $  27,054    $ 27,822
                                                              ---------------------------------------------------------------------

Primary Uses:
            Letters of Credit from First Union                $  4,044    $  3,413    $  4,323    $  4,323    $   5,323    $  5,323

TOTAL USES:                                                   $  4,044    $  3,413    $  4,323    $  4,323    $   5,323    $  5,323
                                                              ---------------------------------------------------------------------

                                                              ---------------------------------------------------------------------
Gross Availability:                                           $ 22,449    $ 23,915    $ 18,651    $ 14,945    $  21,731    $ 22,499
less $3,000 limit                                               (6,000)     (6,000)     (6,000)     (6,000)      (6,000)     (6,000)
                                                              ---------------------------------------------------------------------
NET AVAILABILITY:                                               16,449      17,915      12,651       8,945       15,731      16,499
Borrowings Outstanding                                          11,157      15,262       8,638       8,638        8,638       8,638
                                                              ---------------------------------------------------------------------
Unused Availability                                              5,292       2,653       4,013         307        7,093       7,861
Cash, excluding restricted cash                                 11,835      27,523      31,197      20,912       16,760      19,481
                                                              ---------------------------------------------------------------------
Cash plus unused availability                                 $ 17,127    $ 30,176    $ 35,210    $ 21,219    $  23,852    $ 27,342
                                                              =====================================================================
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]