Document:

ex10-1114.htm

    Exhibit
10.11.14

    

    

    AMENDMENT
NO. 11 TO RATIFICATION AND AMENDMENT AGREEMENT AND 
AMENDMENT NO. 13 TO LOAN AND
SECURITY AGREEMENT

     

    AMENDMENT
NO. 11 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO. 13 TO LOAN AND
SECURITY AGREEMENT, dated as of March 16, 2009 (this “Eleventh Ratification
Amendment”), by and among
CONGOLEUM CORPORATION, a Delaware corporation, as debtor and
debtor-in-possession (“Borrower”), CONGOLEUM FISCAL, INC., a New York
corporation, as debtor and
debtor-in-possession
(“CFI”), CONGOLEUM SALES, INC., a New York
corporation, as debtor and
debtor-in-possession
(“CSI” and together with CFI, collectively,
“Guarantors” and each individually, a “Guarantor”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, successor by merger to Congress Financial Corporation (“Lender”).

     

    W I T N E S S E T H:

     

    WHEREAS,
Lender, Borrower and Guarantors have entered into financing arrangements
pursuant to which Lender may make loans and advances and provide other financial
accommodations to Borrower as set forth in the Loan and Security Agreement,
dated December 10, 2001, between Lender and Borrower, as amended by
Amendment No. 1 to Loan and Security Agreement, dated September 19, 2002,
between Lender and Borrower, Amendment No. 2 to Loan and Security Agreement,
dated as of February 27, 2003, among Lender, Borrower and Guarantors, and as
further amended and ratified by the Ratification and Amendment Agreement, dated
as of January 7, 2004 (the “Ratification Agreement”), 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, 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, Amendment No. 6 to Ratification Agreement and Amendment No. 8 to
Loan and Security Agreement, dated as of November 27, 2006 between Lender and
Borrower, as acknowledged by Guarantors, Amendment No. 7 to Ratification
Agreement and Amendment No. 9 to Loan and Security Agreement dated as of June
12, 2007 between Lender and Borrower, as acknowledged by Guarantors, Amendment
No. 8 to Ratification and Amendment Agreement and Amendment No. 10 to Loan and
Security Agreement dated as of December 11, 2007, between Lender and Borrower,
as acknowledged by Guarantors, Amendment No. 9 to Ratification and Amendment
Agreement and Amendment No. 11 to Loan and Security Agreement dated as of June
4, 2008, between Lender and Borrower, as acknowledged by Guarantors, and
Amendment No. 10 to Ratification and Amendment Agreement and Amendment No. 12 to
Loan and Security Agreement dated as of October 6, 2008, 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 have each 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 have each 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 notified Lender that as of December 31, 2008,
Borrower and Guarantors will be unable to comply with the Minimum EBITDA
covenant as set forth in Section 9.23(c) of the Loan Agreement;

     

    WHEREAS,
Borrower and Guarantors hereby acknowledge and agree that the foregoing
constitutes an Event of Default under the Loan Agreement and/or the other
Financing Agreements (the “Specified Event of Default”);

     

    WHEREAS,
Borrower and Guarantors have requested that Lender (i) waive the Specified Event
of Default, and (ii) 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 Eleventh Ratification Amendment, Lender, Borrower and Guarantors desire
and intend to evidence such amendments;

     

    WHEREAS,
this Eleventh 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. §§105 and 364(c), (4)
Modifying the Automatic Stay Pursuant to 11 U.S.C. §362, and (5) Authorizing
Debtors to Enter Into Agreements with Congress Financial Corporation (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, 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 Eleventh Ratification
Amendment and Borrower and Guarantors are authorized to execute and deliver this
Eleventh 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:

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    1.  DEFINITIONS.

     

    1.1   Additional
Definition.  “Eleventh Ratification Amendment” shall mean this
Eleventh 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

     

    Eleventh
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 Eleventh 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 Eleventh 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 Eleventh 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.  WAIVER OF THE SPECIFIED
EVENT OF DEFAULT

     

    2.1  Subject
to all terms, conditions, and conditions precedent contained in this Eleventh
Ratification Amendment, Lender waives the Specified Event of
Default.

     

    3.  AMENDMENTS TO LOAN
AGREEMENT

     

    3.1  Interest
Rate.  Section 1.41 of the Loan Agreement is hereby 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 and three-quarters (1.75%) percent per
annum in excess of the Prime Rate; provided, that, notwithstanding anything to the
contrary contained herein, the Interest Rate shall mean the rate of three and
three-quarters (3.75%) percent per annum in excess of the Prime Rate as to Prime
Rate Loans, at Lender’s option, without notice, (a) either (i) for the period on
and after the date of termination or non-renewal hereof until such time as all
Obligations are indefeasibly paid and satisfied in full in immediately available
funds, or (ii) for the period from and after the date of the occurrence of any
Event of Default, and for so long as such Event of Default is continuing as
determined by Lender in good faith and (b) on the Revolving Loans at any time
outstanding in excess of the amounts available to 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).”

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.2  Minimum
EBITDA.  Section 9.23(c) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

     

    “(c)  Borrower
and its Subsidiaries shall not, for any period set forth below during fiscal
year 2009 of Borrower and its Subsidiaries commencing on or after January 1,
2009 (each, a “Test Period”), permit EBITDA of Borrower and its
Subsidiaries to be
less than the respective amount set forth below opposite such Test Period; provided, that,
Borrower and its Subsidiaries shall not be required to comply with this Minimum
EBITDA covenant in the event Excess Availability (including any Excess
Availability considered in satisfaction of Section 9.18) on each Business Day
during the Test Period is greater than $5,000,000.  In the event (A)
Excess Availability (including any Excess Availability considered in
satisfaction of Section 9.18) is less than $5,000,000 (x) on any Business Day up
to a maximum of three (3) Business Days during the period from the effective
date of this Eleventh Ratification Amendment through March 31, 2009 or (y) on
any Business Day up to a maximum of four (4) Business Days for the ninety (90)
day period ending on June 30, 2009, and (B) Borrower and its Subsidiaries are in
possession of at least $3,000,000 of unrestricted cash during any day that
Excess Availability (including any Excess Availability considered in
satisfaction of Section 9.18) is less than $5,000,000, then Borrower and its
Subsidiaries shall not be required to comply with the terms of this Minimum
EBITDA covenant for such Test Period:

     

    
      
        	 
      	
                 

                Test
      Period

                 

              	
                 

                Minimum
      EBITDA

                 

              
	 
      	
                 

                For the month ending January 31,
      2009

                 

              	
                 

                $400,000

                 

              
	 
      	
                 

                For the two (2) months ending
      February 28, 2009

                 

              	
                 

                $900,000

                 

              
	 
      	
                 

                For the three (3) months ending
      March 31, 2009

                 

              	
                 

                $1,600,000

                 

              
	 
      	
                For the four (4) months ending
      April 30, 2009

                 

              	
                $2,400,000

                 

              
	 
      	
                For the five (5) months ending May
      31, 2009

                 

              	
                $3,350,000

                 

              
	 
      	
                For the six (6) months ending June
      30, 2009

                 

              	
                $4,300,000”

              

      

    

    

    4.  COVENANT MODIFICATION AND
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 Eleventh Ratification Amendment, Borrower shall pay
Lender a covenant modification and amendment fee (the “Amendment Fee”) in the
amount of $30,000, which Amendment Fee shall be fully earned and payable upon
the entry of an order approving and authorizing this Eleventh
Amendment.  The Amendment Fee may be charged directly to the loan
account of Borrower.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    5.  ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS.  In addition to the continuing
representations, warranties and covenants heretofore made in the Loan Agreement
or otherwise and hereafter made by 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:

     

    5.1  This
Eleventh 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.

     

    5.2  Other
than the Specified Event of Default, 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 Eleventh
Ratification Amendment.

     

    6.  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 Eleventh 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:

     

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

     

    6.2  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;

     

    6.3  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 Eleventh
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this Eleventh Ratification Amendment, all of which contains provisions,
representations, warranties, covenants and Events of Default, as are reasonably
satisfactory to Lender and its counsel;

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    6.4  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;

     

    6.5  No
objection has been filed by any interested party to the terms and conditions of
this Eleventh Ratification Amendment and Borrower and Guarantors are authorized,
in accordance with the terms of the Final DIP Financing Order, to execute,
deliver, comply with and fully be bound by this Eleventh Ratification Amendment;
and

     

    6.6  Other
than the Specified Event of Default, no Default or Event of Default shall be
continuing under any of the Financing Agreements, as of the date
hereof.

     

    7.  MISCELLANEOUS.

     

    7.1  Amendments and
Waivers.  Neither this Eleventh 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.

     

    7.2  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 Eleventh Ratification
Amendment, any of the other Financing Agreements or the Financing
Order.

     

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

     

    7.4  Counterparts.  This
Eleventh 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.

     

    7.5  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.

     

    7.6  Effectiveness.  This
Eleventh Ratification Amendment shall become effective upon the execution hereof
by Lender.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Eleventh 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/
Marc J.
Breier        

    

    Title: Managing
Director           

    

    

    CONGOLEUM
CORPORATION,

    as Debtor and
Debtor-in-Possession

    

    By:   /s/ Howard
N. Feist III    

    

    Title:  CFO                 

    

    

    CONGOLEUM SALES,
INC.,

    as Debtor and
Debtor-in-Possession

    

    By:   /s/ Howard
N. Feist III    

    

    Title:  VP                    

    

    

    CONGOLEUM FISCAL,
INC.,

    as Debtor and
Debtor-in-Possession

    

    By:   /s/ Howard
N. Feist III    

    

    Title:  VP                    

    

     

    7ex4-19.htm

    Exhibit
4 (19)

    

    EXECUTION
COPY

    

    INSTRUMENT
OF RESIGNATION, APPOINTMENT AND ACCEPTANCE, dated as of December 14, 2005 (this
"Instrument"), among CONGOLEUM CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware, having its principal office at
3705 Quakerbridge Road, Mercerville, New Jersey 08619 (the "Issuer"), WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association duly organized and
existing under the laws of the United States, having its corporate trust office
at 401 South Tryon Street, 12th Floor, Charlotte, North Carolina 28288, as
resigning Trustee (the "Resigning Trustee"), and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States, having its corporate trust office at 452 Fifth
Avenue, New York, New York 10018, as successor Trustee (the "Successor
Trustee").

    

    RECITALS

    

    WHEREAS,
there are presently outstanding under an Indenture, dated as of August 3, 1998,
as supplemented by the First Supplemental Indenture, dated as of March 28, 2003,
and as further supplemented by a Second Supplemental Indenture, dated as of
August 3, 2003 between the Issuer and the Resigning Trustee (the
"Indenture"),

    

    (i)
$100,000,000 in aggregate principal amount of the Issuer's 8 5/8% Senior Notes
due 2008(the Notes"), issued pursuant to the Indenture.

    

    WHEREAS,
the Resigning Trustee wishes to resign as Trustee, Registrar and Paying Agent
(the "Agent") under the Indenture; the Issuer wishes to appoint the Successor
Trustee to succeed the Resigning Trustee as Trustee, Registrar and Paying Agent
under the Indenture; and the Successor Trustee wishes to accept appointment as
Trustee, Registrar,and Paying Agent under the Indenture.

    

    NOW,
THEREFORE, in consideration of the mutual covenants and promises herein, the
receipt and sufficiency of which are hereby acknowledged, the Issuer, the
Resigning Trustee and the Successor Trustee agree as follows:

    

    ARTICLE
ONE

    THE
RESIGNING TRUSTEE

    

    Section
101. Pursuant to Section 6.10 of the Indenture, the Resigning Trustee hereby
notifies the Issuer that the Resigning Trustee is hereby resigning as Trustee
under the Indenture.

    

    Section
102. The Resigning Trustee hereby represents and warrants to the Successor
Trustee that:

    

    
      	
               
      

            	
              (a)

            	
              No
      covenant or condition contained in the Indenture has been waived by the
      Resigning Trustee.

            

    

    

    
      	
               
      

            	
              (b)

            	
              There
      is no action, suit or proceeding pending or, to the best of the knowledge
      of the Responsible Officers of the Resigning Trustee assigned to its
      corporate trust department, threatened against the Resigning Trustee
      before any court or governmental authority arising out of any action or
      omission by the Resigning Trustee as Trustee under the
      Indenture.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              This
      Instrument has been duly authorized, executed and delivered on behalf of
      the Resigning Trustee.

            

    

    

    
      	
               
      

            	
              (d)

            	
              $100,000,000.00
      in aggregate principal amount of the Notes are
  outstanding.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Interest
      on the Notes has been paid through August 1,
  2003.

            

    

    

    Section
103. The Resigning Trustee hereby assigns, transfers, delivers and confirms to
the Successor Trustee all right, title and interest of the Resigning Trustee in
and to the trust under the Indenture, all the rights, powers and trusts of the
Resigning Trustee under the Indenture and all property and money held or to be
held under the Indenture, with like effect as if the Successor Trustee was
originally named as Trustee under the Indenture. The Resigning Trustee shall
execute and deliver such further instruments and shall do such other things as
the Successor Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, powers and trusts
hereby assigned, transferred, delivered and confirmed to the Successor
Trustee.

    

    Section
104. The Resigning Trustee hereby resigns as Security Registrar, Agent and
Paying Agent under the Indenture.

    

    Section
105. The Resigning Trustee shall deliver to the Successor Trustee, as of or
immediately after the effective date hereof, all property held by it as Trustee
under the Indenture and all of the documents listed on Exhibit A
hereto.

    

    ARTICLE
TWO

    THE
ISSUER

    

    Section
201. The Issuer hereby certifies that Exhibit B annexed hereto is a copy of the
resolutions which were duly adopted by the Board of Directors of the Issuer,
which are in full force and effect on the date hereof, and which authorize
certain officers of the Issuer to: (a) accept the Resigning Trustee's
resignation as Trustee, Security Registrar, Agent and Paying Agent under the
Indenture; (b) appoint the Successor Trustee as Trustee, Security Registrar,
Agent and Paying Agent under the Indenture; and (c) execute and deliver such
agreements and other instruments as may be necessary to effectuate the
succession of the Successor Trustee as Trustee, Security Registrar, Agent and
Paying Agent under the Indenture.

    

    Section
202. The Issuer hereby accepts the resignation of the Resigning Trustee as
Trustee, Registrar and Paying Agent under the Indenture. Pursuant to Section
6.10 of the Indenture, the Issuer hereby appoints the Successor Trustee as
Trustee under the Indenture and confirms to the Successor Trustee all the
rights, powers and trusts of the Resigning Trustee under the Indenture and with
respect to all property and money held or to be held under the Indenture, with
like effect as if the Successor Trustee was originally named as Trustee under
the Indenture. The Issuer shall execute and deliver such agreements and other
instruments as may be necessary to effectuate the succession of the Successor
Trustee as Trustee, Registrar and Paying Agent under the Indenture.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Section
203. The Issuer hereby represents and warrants to the Successor Trustee and the
Resigning Trustee that:

    

    
      	
               
      

            	
              (a)

            	
              The
      Indenture has not been amended or modified except as set forth
      herein.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Issuer is a corporation duly incorporated and validly existing under the
      laws of the State of Delaware.

            

    

    

    
      	
               
      

            	
              (d)

            	
              No
      event has occurred and is continuing which is, or after notice or lapse of
      time would become, an Event of Default under the Indenture other than the
      Issuer commencing a voluntary Chapter 11 Bankruptcy filing and failing to
      pay interest due since February 1,
2004.

            

    

    

    
      	
               
      

            	
              (e)

            	
              No
      covenant or condition contained in the Indenture has been waived by the
      Holders of a majority in aggregate principal amount of the Notes required
      to effect any such waiver.

            

    

    

    
      	
               
      

            	
              (f)

            	
              This
      Instrument has been duly authorized, executed and delivered on behalf of
      the Issuer.

            

    

    

    Section
204. The Issuer hereby appoints the Successor Trustee as Security Registrar,
Agent and Paying Agent under the Indenture.

    

    ARTICLE
THREE

    THE
SUCCESSOR TRUSTEE

    

    Section
301. The Successor Trustee hereby represents and warrants to the Resigning
Trustee and the Issuer that:

    

    
      	
               
      

            	
              (a)

            	
              The
      Successor Trustee is eligible under the provisions of Section 6.9 of the
      Indenture to act as Trustee under the
Indenture.

            

    

    

    
      	
               
      

            	
              (b)

            	
              This
      Instrument has been duly authorized, executed and delivered on behalf of
      the Successor Trustee.

            

    

    

    Section
302. Pursuant to Section 6.11 of the Indenture, the Successor Trustee hereby
accepts its appointment as Trustee under the Indenture and shall hereby be
vested with all the rights, powers and trusts of the Resigning Trustee under the
Indenture and with respect to all property and money held or to be held under
the Indenture, with like effect as if the Successor Trustee was originally named
as Trustee under the Indenture

    

    Section
303. The Successor Trustee hereby accepts its appointment as Registrar and
Paying Agent under the Indenture.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Section
304. Promptly after the execution and delivery of this Instrument, the Successor
Trustee, on behalf of the Issuer, shall cause a notice, the form of which is
annexed hereto marked Exhibit C, to be sent to each Holder of the Notes in
accordance with Section 6.11of the Indenture.

    

    ARTICLE
FOUR

    MISCELLANEOUS

    

    Section
401. Except as otherwise expressly provided or unless the context otherwise
requires, all capitalized terms used herein which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

    

    Section
402. The resignation of the Resigning Trustee as Registrar and Paying Agent
under the Indenture, and the appointment of the Successor Trustee in such
capacities, shall each be effective upon the entering by the Court of an order
so confirming such resignation and appointment.

    

    Section
403. Notwithstanding the resignation of the Resigning Trustee effected hereby,
the Resigning Trustee shall be entitled to compensation, reimbursement and
indemnification to the extent provided under Section 6.6 of the Indenture in
connection with its prior trusteeship under the Indenture. The Successor Trustee
shall also be entitled to compensation, reimbursement and indemnification as set
forth in Section 6.6 of the Indenture, which rights and obligations shall
survive the execution hereof.

    

    Section
404. This Instrument shall be governed by and construed in accordance with the
laws of the jurisdiction which govern the Indenture and its
construction.

    

    Section
405. This Instrument may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

    

    Section
406. All notices, whether faxed or mailed, will be deemed received when sent
pursuant to the following instructions:

    

    TO
THE RESIGNING TRUSTEE:

    

    Ms.
Staci Marino

    Vice
President

    Wachovia
Bank, National Association Corporate

    Trust
Advisory Services

    NC
1179

    401
South Tryon Street, 12th Floor

    Charlotte,
North Carolina 28288-1179

    Fax:
(704) 374-6682

    Tel.:
(704) 715-2419

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    TO
THE SUCCESSOR TRUSTEE:

    

    Mr.
Robert Conrad

    Vice
President

    

    Mailing
Address:

    Corporate
Trust and Loan Agency

    HSBC
Bank USA, National Association

    452
Fifth Avenue

    New
York, New York 10018

    

    Courier
Deliveries:

    Corporate
Trust and Loan Agency

    HSBC
Bank USA, National Association

    10
East 40th Street, 14th Floor

    New
York, New York 10016

    

    Fax:
(212) 525-1366

    Tel.:
(212) 525-1314

    

    TO
THE ISSUER:

    

    Congoleum
Corporation

    3705
Quakerbridge Road

    Mercerville,
New Jersey 08619

    

    Attn:
Chief Financial Officer

    

    Fax:
(609) 584-3555

    

    [Remainder
of Page Intentionally Left Blank]

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Instrument of Resignation,
Appointment and Acceptance to be duly executed as of the day and year first
above written.

    

    CONGOLEUM
CORPORATION

    

    By:       /s/ Howard N. Feist    

    Name: Howard N. Feist

    Title: Chief Financial
Officer

    

    

    WACHOVIA
BANK, NATIONAL ASSOCIATION,

    as
Resigning Trustee

    

    By:       /s/ Charles S. Hodges    

    Name: Charles S. Hodges

    Title: Vice President

    

    

    HSBC
BANK USA, NATIONAL ASSOCIATION,

    as
Successor Trustee

    

    By:       /s/ Robert A. Conrad    

    Name: Robert A. Conrad

    Title: Vice President

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    Documents
to be delivered to the Successor Trustee by the Resigning Trustee

    

    
      	
              1.

            	
              Executed
      copy of the Indenture.

            

    

    

    
      	
              2.

            	
              File
      of closing documents.

            

    

    

    
      	
              3.

            	
              Copy
      of the most recent of each of the SEC reports delivered by the Issuer
      pursuant to the Indenture.

            

    

    

    
      	
              4.

            	
              Copies
      of the most recent Compliance Certificate delivered pursuant to the
      Indenture.

            

    

    

    
      	
              5.

            	
              Copies
      of any official notices sent by the Trustee to all the Holders of the
      Notes pursuant to the terms of the Indenture during the past twelve months
      and a copy of the most recent Trustee's Annual Report to Holders, if
      any.

            

    

    

    
      	
              6.

            	
              Certified
      List of Holders as of the date of this Instrument, certificate detail and
      all "stop transfers" and the reason for such "stop transfers" (or,
      alternatively, if there are a substantial number of registered Holders,
      the computer tape reflecting the identity, address, tax identification
      number and detailed holdings of each such
  Holder).

            

    

    

    
      	
              7.

            	
              Notes
      debt service records.

            

    

    

    
      	
              8.

            	
              Trust
      account statements for a one-year period preceding the date of this
      Instrument.

            

    

    

    
      	
              9.

            	
              All
      unissued Notes inventory or DTC FAST held global
    certificates.

            

    

    

    
      	
              10.

            	
              Such
      other documents as the Successor Trustee may reasonably require in
      connection with its appointment.

            

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    CERTIFIED
COPY OF RESOLUTIONS

    

    OF
THE BOARD OF DIRECTORS OF

    

    CONGOLEUM
CORPORATION

    

    The
undersigned, Howard N. Feist, hereby certifies that he/she is the duly
appointed, qualified and acting Secretary of Congoleum Corporation, a
corporation duly organized and validly existing under the laws of the State of
Delaware (the "Company"), and further certifies that the following is a true and
correct copy of certain resolutions duly adopted by the Board of Directors of
said Company on December 12, 2005 and that said resolutions have not been
amended, modified or rescinded:

    

    "RESOLVED,
that the Company appoint HSBC Bank USA, National Association (the "Successor
Trustee") as successor Trustee, Security Registrar the office or agency where
notices and demands to or upon the Company in respect of the Securities (as
defined below) and of the Indenture (as defined below) may be served (the
"Agent") and Paying Agent under the Indenture, dated as of August 3, 1998, as
amended (as so amended, the "Indenture"), between the Company and Wachovia Bank,
National Association (the "Resigning Trustee"), as Trustee, pursuant to which
the Company issued $100,000,000 in aggregate principal amount of its 8.625%
Senior Notes due 2008 (together, the "Securities"); and that the Company accept
the resignation of the Resigning Trustee as Trustee, Security Registrar, Agent
and Paying Agent under the Indenture, such resignation to be effective upon the
execution and delivery by the Successor Trustee to the Company of an instrument
or instruments accepting such appointment as successor Trustee, Security
Registrar, Agent and Paying Agent under the Indenture; and it is
further

    

    RESOLVED,
any officer of the Company be, and each of them hereby is, authorized, empowered
and directed to execute and deliver in the name and on behalf of the Company an
instrument or instruments appointing the Successor Trustee as the successor
Trustee, Security Registrar, Agent and Paying Agent; and it is
further

    

    RESOLVED,
that the proper officers of the Company are hereby authorized, empowered and
directed to do or cause to be done all such acts or things, and to execute and
deliver, or cause to be executed or delivered, any and all such other
agreements, amendments, instruments, certificates, documents or papers
(including, without limitation, any and all notices and certificates required or
permitted to be given or made on behalf of the Company to the Successor Trustee
or to the Resigning Trustee), under the terms of any of the executed instruments
in connection with the

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    resignation
of the Resigning Trustee, and the appointment of the Successor Trustee, in the
name and on behalf of the Company as any of such officers, in his/her
discretion, may deem necessary or advisable to effectuate or carry out the
purposes and intent of the foregoing resolutions; and to exercise any of the
Company's obligations under the instruments and agreements executed on behalf of
the Company in connection with the resignation of the Resigning Trustee and the
appointment of the Successor Trustee."

    

    IN
WITNESS WHEREOF, I have hereunto set my hand as Secretary and have affixed the
seal of the Company this 14th day of December, 2005.

    

    By:       /s/ Howard N. Feist    

    Name:  Howard N.
Feist

    Title: Secretary

    

    [SEAL]

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    Notice
to Holders of Congoleum Corporation (the "Issuer") 8.625% Senior Notes due 2008
(the "Notes"):

    

    We
hereby notify you of the resignation of Wachovia Bank, National Association as
Trustee under the Indenture, dated as of August 3, 1998, as amended (as amended,
the "Indenture"), pursuant to which your Notes were issued and are
outstanding.

    

    The
Issuer has appointed HSBC Bank USA, National Association, whose corporate trust
office is located at 452 Fifth Avenue, New York, New York 10018, Attention:
Corporate Trust and Loan Agency (courier deliveries: 10 East 40th Street, 14th
Floor, New York, New York 10016), as successor Trustee under the Indenture,
which appointment has been accepted and has become effective.

    

    HSBC
BANK USA, NATIONAL ASSOCIATION, 
Successor Trustee

    

    Date:  December
12, 2005

    

    
      
         

      

      
        10

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