Amendment No. 2 to Amended & Restated Credit Agreement among American Biltrite Inc., K&M Associates L.P., American Biltrite (Canada) Ltd., and Bank of America

Summary

This agreement amends the existing credit agreement among American Biltrite Inc., K&M Associates L.P., American Biltrite (Canada) Ltd., and Bank of America. It modifies a financial covenant related to net income and loss requirements for certain fiscal quarters and waives a previous default under that covenant as of March 31, 2007. The parties confirm that the rest of the credit agreement remains in effect, and all parties agree that no default exists after this amendment. The agreement is governed by Massachusetts law.

EX-10.1 2 ex10-1.txt Exhibit 10.1 AMERICAN BILTRITE INC. K&M ASSOCIATES L.P. AMENDED & RESTATED CREDIT AGREEMENT Amendment No. 2 This Agreement, dated as of March 31, 2007 (the "Agreement"), is among American Biltrite Inc., a Delaware corporation (the "Company"), K&M Associates L.P., a Rhode Island limited partnership ("K&M"; the Company and K&M being collectively but jointly and severally, the "Domestic Borrower"), American Biltrite (Canada) Ltd., a corporation governed by the Canada Business Corporations Act (the "Canadian Borrower"), the Canadian Lenders and Domestic Lenders from time to time party hereto, Bank of America, National Association, successor by merger to Fleet National Bank, both in its capacity as a Domestic Lender and in its capacity as domestic administrative agent for the Lenders, and Bank of America, National Association, acting through its Canada branch, both in its capacity as a Canadian Lender and in its capacity as Canadian administrative agent for the Lenders. 1. Credit Agreement; Definitions. Reference is made to the Amended and Restated Credit Agreement dated as of September 26, 2006 (as amended and in effect prior to giving effect to this Agreement, the "Credit Agreement") among the Company, K&M, the Canadian Borrower to Canadian Lenders and the Domestic Lenders from time to time party thereto, Bank of America, as Domestic Agent, and Bank of America Canada, as Canadian Agent. This Agreement amends the Credit Agreement. Terms defined in the Credit Agreement as amended hereby and not otherwise defined herein are used with the meaning so defined. 2. Amendment of Credit Agreement. Effective upon the date hereof Section 6.5.3 of the Credit Agreement is hereby amended and restated to read in its entirety as follows: "6.5.3 Income of Loss from Continuing Operations. Net income from continuing operations of the Borrower and its Subsidiaries reporting Congoleum on the equity method shall equal or exceed $1.00 in at least one of any two consecutive fiscal quarters of the Company for any two consecutive fiscal quarters of the Company ending September 30, 2006 and thereafter; provided, however, that for each of the two consecutive fiscal quarters of the Company ending December 31, 2006 and March 31, 2007 the net loss from continuing operations of the Borrower and its Subsidiaries reporting Congoleum on the equity method shall not be greater than $400,000." 3. Waiver. This Agreement hereby expressly waives the covenant default under Section 6.5.3 of the Credit Agreement that would otherwise have existed as of March 31, 2007. 4. Representations and Warranties. In order to induce the Lenders to enter into this Agreement, each of the Borrowers jointly and severally represents and warrants that, immediately after giving effect to this Agreement, no Default exists. 5. General. The Credit Agreement and all of the Credit Documents are each confirmed as being in full force and effect. This Agreement, the Credit Agreement and the other Credit Documents referred to herein or therein constitute the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior and current understandings and agreements, whether written or oral. Each of this Agreement and the Credit Agreement is a Credit Document and may be executed in any number of counterparts (including by way of facsimile transmission), which together shall constitute one instrument, and shall bind and inure to the benefit of the parties and their respective successors and assigns, including as such successors and assigns all holders of any Credit Obligation. This Agreement shall be governed by and construed in accordance with the laws (other than the conflict of law rules) of The Commonwealth of Massachusetts. [The remainder of this page intentionally has been left blank.] -2- Each of the undersigned has caused this Agreement to be executed and delivered by its duly authorized officer as an agreement under seal as of the date first above written. AMERICAN BILTRITE INC. By: /s/ Howard N. Feist III ----------------------------------------- Name: Howard N. Feist III Title: Vice President-Finance K&M ASSOCIATES L.P. By: AIMPAR, INC., its General Partner By /s/ Howard N. Feist III ----------------------------------------- Name: Howard N. Feist III Title: Vice President-Finance AMERICAN BILTRITE (CANADA) LTD. By /s/ Richard G. Marcus ----------------------------------------- Name: Richard G. Marcus Title: President Domestic Lender: BANK OF AMERICA, NATIONAL ASSOCIATION By /s/ Thomas F. Brennan ----------------------------------------- Name: Thomas F. Brennan Title: Senior Vice President Bank of America, N.A. Massachusetts Middle Market Division 100 Federal Street Boston, Massachusetts 02110 Facsimile: (617) 434-8102 Canadian Lender: BANK OF AMERICA, NATIONAL ASSOCIATION, ACTING THROUGH ITS CANADA BRANCH By /s/ Medina Sales de Andrade ------------------------------------------ Name: Medina Sales de Andrade Title: Vice President Bank of America, N.A., acting through its Canada branch 200 Front Street, Suite 2700 Toronto, Ontario M5V 3L2 Canada