Exhibit 10.1
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") dated as of July 17, 1997 is by and between BAGCRAFT
CORPORATION OF AMERICA, a Delaware corporation ("Borrower"), and GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders.
R E C I T A L S:
WHEREAS, Borrower, Agent and Lenders are parties to an Amended
and Restated Credit Agreement dated as of December 30, 1996 (as from time to
time amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), pursuant to which Lenders have agreed to make loans and other
extensions of credit to Borrower in accordance with the terms thereof;
WHEREAS, Borrower wishes, and Agent and Lenders are willing,
to amend the Credit Agreement, subject the terms and conditions of this
Amendment; and
WHEREAS, this Amendment shall constitute a Loan Document,
these Recitals shall be construed as part of this Amendment and capitalized
terms used but not otherwise defined in this Amendment shall have the meanings
ascribed to them in Annex A to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
agreements, promises and covenants set forth below, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendment The Credit Agreement is hereb amended as
follows:
(a) The following text is inserted as subsections 1.2(g) through
(i) of the Credit Agreement:
"(g) Upon and subject to the terms and conditions hereof, each
Lender agrees to provide its Pro Rata Share of a term loan to Borrower
on the Second Effective Date, in the amount of Seven Million Five
Hundred Thousand Dollars ($7,500,000) ("Term Loan C"). Amounts repaid
under Term Loan C may not thereafter be reborrowed.
(h) Borrower shall pay the entire unpaid balance of Term Loan
C upon the first to occur of (i) July 15, 2000, (ii) the Commitment
Termination Date and (iii) the acceleration of the Revolving Credit
Loan.
(i) Borrower shall execute and deliver to each Lender a note
to evidence Term Loan C, such note to be in a principal amount equal to
the amount of Term Loan C provided by such Lender, dated the Second
Effective Date and substantially in the form of Exhibit D-2 (each, as
executed and as it may be amended, restated, supplemented or otherwise
modified and in effect from time to time, a "Term Loan
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C Note" and, collectively, the "Term Loan C Notes"). The Term Loan C
Notes shall represent the obligation of Borrower to pay the amount of
Term Loan C and all other obligations with interest thereon as
prescribed in Section 1.8. The date and amount of each payment of
principal and interest on Term Loan C shall be recorded on the books
and records of Agent, which books and records shall constitute prima
facie evidence of the accuracy of the information therein recorded."
(b) The text "(including, in the Agent's sole discretion, the Preferred
Stock Reserve)" is inserted immediately the text "reserves" contained in the
first sentence of subsection 1.1(a) of the Credit Agreement.
(c) The following text is inserted as the fourth sentence of subsection
1.5(c) of the Credit Agreement:
"Any prepayments of less than all of the outstanding balance of Term
Loan C shall be applied to the then remaining outstanding balance of
Term Loan C until paid in full."
(d) The initial set of clauses (iii) and (iv) of subsection 1.5(d) of
the Credit Agreement are renamed clauses (iv) and (v) respectively, and the
following text is inserted as initial clause (iii) of such subsection:
"(iii) to the then remaining outstanding balance of Term Loan C,"
(e) Clauses (iii) and (iv) of subsection 1.5(e) of the Credit Agreement
are renamed clauses (iv) and (v) respectively, and the following text is
inserted as clause (iii) of such subsection:
"(iii) to the then remaining outstanding balance of Term Loan C,"
(f) The following text is inserted as the final sentence of Section 1.7
of the Credit Agreement:
"Borrower shall utilize the proceeds of Term Loan C to finance an
intercompany demand loan to ARTRA on the Second Effective Date in an
aggregate amount not in excess of $7,500,000, which loan shall be
payable in full not later than July 15, 2000 and shall be evidenced by
a demand promissory note in the form of Appendix B to the Third
Amendment (the "Second ARTRA Note") and pledged to Agent as additional
Collateral securing the Obligations."
(g) The following text is inserted as the final column of the grid
contained in subsection 1.8(c) of the Credit Agreement:
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"Term Loan C
LIBOR Margin Index Margin
------------ ------------
3.75 1.00
3.75 1.00
3.75 1.00
provided that each of the foregoing margins
shall be permanently increased by
one-quarter of one percent (.25%) per annum
above the margin in effect pursuant to this
proviso immediately prior to such increase
on the first day of February, May, August
and November of each year, commencing
February 1, 1998."
(h) Clauses (iii), (iv) and (v) of subsection 1.8(g) of the Credit
Agreement are renamed clauses (iv), (v) and (vi) respectively, and the following
text is inserted as new clause (iii) of such subsection:
"(iii) to any interest due and not yet paid hereunder in respect of Term
Loan C,"
(i) Clauses (vii), (viii), (ix) and (x) of subsection 1.8(g) of the
Credit Agreement are renamed clauses (viii), (ix), (x) and (xi) respectively,
and the following text is inserted as new clause (vii) of such subsection:
"(vii) to the then remaining outstanding balance of Term Loan C,"
(j) The following definitions are inserted into Annex A to the Credit
Agreement in appropriate alphabetical order among the definitions contained
therein:
""Preferred Stock Reserve" shall mean, as of any date of
determination, any amount determined by Agent in its sole discretion as
sufficient to redeem or otherwise repurchase that number of shares of
any class of Borrower's preferred stock as Agent in its sole discretion
determines, together with all costs and expenses to be incurred in
connection therewith.
"Second Effective Date" shall have the meaning ascribed
thereto in the Third Amendment.
"Third Amendment" shall mean the Third Amendment to Amended
and Restated Credit Agreement dated as of July 17, 1997 among the
Borrower, the Agent and the Lenders.
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"Term Loan C" shall have the meaning assigned to it in Section
1.2(g).
"Term Loan C Commitment" shall mean (a) as to any Lender with
a Term Loan C Commitment, the aggregate commitment of such Lender to
make Term Loan C as set forth on the signature page to the Agreement or
in the most recent Lender Addition Agreement executed by such Lender
and (b) as to all Lenders with a Term Loan C Commitment, the aggregate
commitment of all Lenders to make Term Loan C, which maximum aggregate
commitment shall be Seven Million Five Hundred Thousand Dollars
($7,500,000).
"Term Loan C Note" shall have the meaning assigned to it in
Section 1.2(i)."
(k) The definition of ""Commitment" or "Commitments"" contained in
Annex A to the Credit Agreement is replaced with the following definition:
""Commitment" or "Commitments" shall mean (a) as to any
Lender, the aggregate of such Lender's Revolving Loan Commitment, Term
Loan Commitment, Term Loan B Commitment, Term Loan C Commitment and
Capital Expenditure Loan Commitment as set forth on the signature page
to the Agreement or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders'
Revolving Loan Commitments, Term Loan Commitments, Term Loan B
Commitments, Term Loan C Commitments and Capital Expenditure Loan
Commitments, which aggregate commitment shall not exceed Fifty Million
Five Hundred Thousand Dollars ($50,500,000) on the Second Effective
Date, as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement."
(l) Clauses (c) and (d) of the definition of "Pro Rata Share" contained
in Annex A to the Credit Agreement are renamed clauses (d) and (e) respectively,
and the following text is inserted as new clause (c) of such definition:
"(c) a Lender's portion of Term Loan C, the percentage obtained by
dividing (i) the portion of Term Loan C held by such Lender, by (ii)
the outstanding amount of Term Loan C,"
(m) The text "Term Loan C," "Term Loan C Commitment" and "Term Loan C
Note" is inserted immediately after each respective reference to "Term Loan B,"
"Term Loan B Commitment" and "Term Loan B Note" contained in the Credit
Agreement, any other Loan Document and each Annex, Exhibit or Schedule or other
attachment to any thereof, except (i) as expressly stated otherwise in this
Amendment and (ii) in Agent's determination, as intended otherwise, and all
textual revisions necessary to maintain proper grammatical structure while
accomplishing the foregoing shall be deemed made.
(n) Appendix A to this Amendment is hereby included as Exhibit D-2 to
the Credit Agreement.
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2. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Second Effective Date") that each of the following
conditions has been satisfied in accordance with its terms, all in a manner
satisfactory to Agent:
(a) Warranties and Representations. All of the warranties and
representations of Borrower contained in the Credit Agreement and in
the other Loan Documents (including, without limitation, this
Amendment) shall be true and correct in all material respects, except
those representations and warranties which expressly relate to an
earlier date.
(b) No Material Adverse Change. No event shall have occurred
(and neither Agent nor Lenders shall have become aware of any facts or
conditions not previously known) or be continuing which Agent shall
determine has, or could be expected to have, a Material Adverse Effect.
(c) No Default or Event of Default. After giving effect to
Section 3 of this Amendment, neither a Default nor an Event of Default
shall have occurred and be continuing or would result herefrom.
(d) No Litigation. No litigation, investigation or proceeding
before any court, governmental agency, or arbitrator shall be pending
or threatened against Borrower, any Subsidiary of Borrower, or any
officer, director, or executive of Borrower or such Subsidiary (A) in
connection with the Credit Agreement or the other Loan Documents or (B)
which, if adversely determined, would, in the sole and absolute opinion
of Agent, have a Material Adverse Effect, and no injunction, writ,
restraining order or other order of any material nature adverse to
Borrower or any of its Subsidiaries shall have been issued or
threatened by any court or governmental agency.
(e) Amendment. Agent shall have received a duly executed
original of this Amendment.
(f) Fourth Amendment to Warrant. Agent shall have received a
duly executed original of a Fourth Amendment to Warrant of even date
herewith between Borrower and GE Capital.
(g) Term Loan C Note. Agent shall have received a duly
executed original of a Term Loan C Note of even date herewith by
Borrower in favor of GE Capital, as a Lender.
(h) Second ARTRA Note. Agent shall have received a duly
executed original of a Second ARTRA Note of even date herewith by ARTRA
in favor of Borrower, duly endorsed by Borrower in favor of Agent as
additional Collateral securing the Obligations.
(i) Officer's Certificate. Agent shall have received a duly
executed original
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certificate dated as of the date hereof by Borrower's chief financial
officer stating, and Borrower hereby represents and warrants, that (1)
since the Closing Date, there has been (i) no Material Adverse Effect
on the business, operations, financial condition, prospects or
projections of Borrower, the industries in which it operates, or any of
its Subsidiaries, (ii) no litigation which has commenced which could be
expected to have any such Material Adverse Effect or challenge any of
the transactions contemplated by the Agreement and the other Loan
Documents, (iii) except as expressly permitted by the Credit Agreement,
as amended hereby, no dividends, distributions, payments, loans,
contributions, fees or other transfers of cash, property or other
assets to any stockholder or Affiliate of Borrower, including, without
limitation, ARTRA or its employees, directors, officers or Affiliates,
(iv) except as expressly permitted by the Credit Agreement, as amended
hereby, no material increase in liabilities, liquidated or contingent,
and no material decrease in assets of Borrower or any of its
Subsidiaries and (v) after giving effect to Section 3 of this
Amendment, no Event of Default which has occurred and is continuing and
(2) consents and acknowledgments have been obtained from all Persons
whose consents and acknowledgments may be required, including, but not
limited to, Borrower's and Parent's stockholders and all requisite
Governmental Authorities, to the terms, and to the execution and
delivery, of this Amendment and the other documents and agreements
executed in connection herewith or pursuant hereto to which Borrower is
a party, and the transactions to be consummated in connection herewith
and therewith.
(j) Secretary's Certificate. Agent shall have a duly executed
original certificate dated the date hereof by Borrower's corporate
secretary or an assistant secretary stating that (i) since the Closing
Date, there has been no amendment or other modification (nor any
proposal therefor) to Borrower's certificate or articles of
incorporation or bylaws and that each of the foregoing is in full force
and effect, (ii) the resolutions attached thereto are of its Board of
Directors and, as required, stockholders, approving and authorizing the
execution, delivery and performance of this Amendment and the other
documents and agreements executed in connection herewith or pursuant
hereto to which Borrower is a party, and the transactions to be
consummated in connection herewith and therewith and that each of the
foregoing resolutions is in full force and effect without any
modification or amendment, (iii) the officers of Borrower executing
this Amendment and the other documents and agreements executed in
connection herewith or pursuant hereto to which Borrower is a party are
the incumbent officers of the Borrower and, as such, are authorized to
execute each of such documents and (iv) Borrower is in good standing in
its state of incorporation and in good standing and qualified to
conduct business in each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification.
(k) Opinion of Counsel. Agent shall have received a duly
executed opinion of counsel for Borrower and ARTRA with respect to the
transactions contemplated hereby.
(l) Prohibitive Actions. No action has been taken by any
competent authority which restrains, prevents or imposes material
adverse conditions upon the consummation
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of all or any part of such transactions contemplated by this Amendment,
nor has any judgment, order, injunction or other restraint been issued
or filed, nor is any hearing seeking injunctive relief or other
restraint pending or noticed which prohibits or imposing material
adverse conditions upon all or any part of the transactions
contemplated by this Amendment.
(m) Fees, Costs and Expenses; Amendment Fee. Agent shall have
received payment of all fees, costs and expenses, including, without
limitation, attorney's fees and expenses and as otherwise due pursuant
to Section 11.3 of the Credit Agreement, incurred by Agent through the
date hereof, together with a fully earned and non-refundable amendment
fee in the amount of $225,000 as consideration for the execution and
delivery of this Amendment by Agent and Lenders, which amendment fee
Borrower hereby acknowledges as being due and payable by Borrower to
Agent as of the date hereof.
(n) Other Requirements. Agent shall have received all
certificates, orders, authorizations, consents, affidavits, schedules,
instruments, security agreements, financing statements, mortgages,
guarantees, opinions, pledges and other documents or instruments which
are provided for hereunder, or which Agent may at any time request.
3. Additional Amendment Fee. Borrower shall pay to agent in
immediately available funds an additional amendment fee, deemed fully earned and
non-refundable as of the date hereof, in the amount of $100,000 as consideration
for the execution and delivery of this Amendment by Agent and Lenders, which fee
Borrower hereby acknowledges as being due and payable by Borrower to Agent on
the earlier of (a) August 1, 1998 and (b) the Commitment Termination Date;
provided that Borrower shall not be obligated to pay such fee if (i) on or prior
to the date such fee would otherwise be payable pursuant hereto all of the
Commitments are refinanced pursuant to a senior secured credit facility having
an aggregate principal amount of at least $40,000,000 under which GE Capital is
agent or (ii) the Commitment Termination Date does not occur on or prior to
August 1, 1998.
4. Limited Waiver. Agent and Lenders hereby waive the Event of
Default arising solely as a result of Borrower's failure to redeem or otherwise
repurchase any shares of any class of Borrower's preferred stock, to the extent
required to be redeemed or otherwise repurchased in accordance with the
documents relating thereto; provided that this waiver shall cease to be
effective upon the first to occur of (a) July 15, 1998 and (b) the date upon
which any Person demands in writing that Borrower redeem or otherwise repurchase
any shares of any class of Borrower's preferred stock. This waiver is limited to
the specific purposes for which it is granted and, except as set forth above in
this Section 4, shall not be construed as a consent, waiver or other
modification with respect to any term, condition or other provision of any Loan
Document.
5. Releases; Indemnities. In further consideration of Agent's
and Lenders' execution of this Amendment, Borrower, individually and on behalf
of its successors (including, without limitation, any trustee acting on its
behalf and any debtor-in-possession with respect to it), assigns, subsidiaries
and affiliates, hereby forever releases Agent and Lenders and their
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respective successors, assigns, parents, subsidiaries, affiliates, officers,
employees, directors, agents and attorneys (collectively, the "Releasees") from
any and all debts, claims, demands, liabilities, responsibilities, disputes,
actions and causes of action (whether at law or in equity) and obligations of
every nature whatsoever, whether liquidated or unliquidated, whether known or
unknown, matured or unmatured, fixed or contingent (collectively, "Claims") that
Borrower may have against the Releasees which arise from or relate to any
actions which the Releasees may have taken or omitted to take on or prior to the
date hereof with respect to the Obligations, any Collateral, the Credit
Agreement, any Loan Document and any third parties liable in whole or in part
for the Obligations. Borrower hereby agrees to indemnify and hold the Releasees
harmless with respect to any and all liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever incurred by the Releasees, or any of them, whether
direct, indirect or consequential, as a result of or arising from or relating to
any proceeding by, or on behalf of any Person, including, without limitation,
officers, directors, agents, trustees, creditors, partners or shareholders of
Borrower, whether threatened or initiated, asserting any claim for legal or
equitable remedy under any statute, regulation or common law principle arising
from or in connection with the negotiation, preparation, execution, delivery,
performance, administration and enforcement of the Credit Agreement, any other
Loan Document or any other document executed in connection therewith. The
foregoing indemnity shall survive the payment in full of the Obligations and the
termination of the Credit Agreement and the other Loan Documents.
6. Status of Loan Documents; Reference to Credit Agreement.
Except as specifically modified and amended hereby, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed. Upon the effectiveness of this Amendment each reference
in (a) the Credit Agreement to "this Amendment," "hereunder," "hereof," or words
of similar import and (b) any other Loan Document to "the Credit Agreement"
shall, in each case and except as otherwise specifically stated therein, mean
and be a reference to the Credit Agreement, as amended and modified hereby
pursuant to the terms hereof.
7. No Amendments. No amendment or modification of any
provision of this Amendment shall be effective without the written agreement of
Agent and Borrower, and no termination or waiver of any provision of this
Amendment, or consent to any departure by Borrower therefrom, shall in any event
be effective without the written concurrence of Agent. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
8. Benefit of Agreement; Relationship Between Parties. This
Amendment is solely for the benefit of the parties hereto and their respective
successors and assigns, and no other Person shall have any right, benefit or
interest under or because of the existence of this Amendment. The relationship
of Agent and Lenders, on the one hand, and Borrower, on the other hand, has been
and shall continue to be, at all times, that of creditor and debtor and not as
joint venturers or partners. Nothing contained in the Credit Agreement or any
other Loan Document, or any instrument, document or agreement delivered in
connection therewith, shall be deemed or construed to create a fiduciary
relationship between or among the parties hereto.
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9. No Assignment. The terms and provisions of this Amendment
are for the purpose of defining the relative rights and obligations of Borrower,
Agent and Lenders with respect to the transactions contemplated hereby and there
shall be no third party beneficiaries of any of the terms and provisions of this
Amendment. Borrower may not assign, transfer, hypothecate or otherwise convey
its rights, benefits, obligations or duties hereunder without the prior express
written consent of Agent and Requisite Lenders.
10. Section Titles. The Section and subsection titles
contained in this Amendment are included for the sake of convenience only, shall
be without substantive meaning or content of any kind whatsoever, and are not a
part of the agreement among the parties.
11. Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12. Severability. Wherever possible, each provision of this
Amendment shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Amendment.
13. Incorporation by Reference. Sections 10.10 and 10.14 of
the Credit Agreement are hereby incorporated herein by reference in their
entirety with the same effect as if set forth herein in full.
[signature page follows]
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IN WITNESS WHEREOF, this Third Amendment to Credit Agreement
has been duly executed as of the date first written above.
BAGCRAFT CORPORATION OF
AMERICA
By:___________________________
Title:________________________
GENERAL ELECTRIC CAPITAL
CORPORATION
By:___________________________
Title: Duly Authorized Signatory
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Appendix A
EXHIBIT D-2
to
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 30, 1996
FORM OF TERM LOAN C NOTE
Chicago, Illinois
$7,500,000.00 July 17, 1997
FOR VALUE RECEIVED, the undersigned, BAGCRAFT CORPORATION OF
AMERICA, a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the
order of GENERAL ELECTRIC CAPITAL CORPORATION ("Lender"), at the address of
General Electric Capital Corporation, as Agent for Lenders, 000 Xxxx Xxxxx Xxxx,
Xxxxxxxx, XX 00000-0000, or at such other place as Agent may designate from time
to time in writing, in lawful money of the United States of America and in
immediately available funds, the amount of SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS AND NO CENTS ($7,500,000.00). Capitalized terms, unless otherwise
defined herein, shall have the respective meanings assigned to such terms in the
Credit Agreement (as hereinafter defined) and Schedule A thereof.
This Term Loan C Note (this "Note") is issued pursuant to that
certain Amended and Restated Credit Agreement, dated as of December 30, 1996, by
and between Borrower, GE Capital, as Agent, and the Lenders named therein (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), and is entitled to the benefit and security of the Credit
Agreement, the Security Agreement and all of the other Loan Documents referred
to therein. Reference is hereby made to the Credit Agreement for a statement of
all of the terms and conditions under which the loan evidenced hereby was made
and is to be repaid.
The principal amount of the indebtedness evidenced hereby
shall be payable in the amounts and on the dates specified in the Credit
Agreement, the terms of which are hereby incorporated herein by reference.
Interest thereon shall be paid until such principal amount is paid in full at
such interest rates and at such times as are specified in the Credit Agreement.
If any payment on this Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this
Note may, as provided in the Credit Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.
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Demand, presentment, protest and notice of nonpayment and
protest are hereby waived by Borrower.
THIS NOTE HAS BEEN EXECUTED, DELIVERED AND ACCEPTED AT
CHICAGO, ILLINOIS AND SHALL BE INTERPRETED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS)
AND DECISIONS OF THE STATE OF ILLINOIS.
BAGCRAFT CORPORATION OF AMERICA
By:____________________________
Title:_________________________
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Xxxxxxxx X
FORM OF SECOND INTERCOMPANY DEMAND NOTE
Chicago, Illinois
$7,500,000.00 July 17, 1997
FOR VALUE RECEIVED, ARTRA GROUP INCORPORATED, a Pennsylvania
corporation (the "Payor"), hereby promises to pay to the order of BAGCRAFT
CORPORATION OF AMERICA, a Delaware corporation, or its registered assigns (the
"Payee"), in lawful money of the United States of America in immediately
available funds, at such location in the United States of America as the Payee
shall from time to time designate, the amount of (a) SEVEN MILLION FIVE HUNDRED
THOUSAND DOLLARS AND NO CENTS ($7,500,000.00) and (b) interest thereon until
paid at the rate from time to time payable with respect to Term Loan C under
that certain Credit Agreement dated December 30, 1996 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein without definition are so used as defined in the
Credit Agreement) among the Payee, Agent and the parties signatory thereto as
Lenders.
The principal balance hereof, together with all accrued
interest then due and payable thereon, shall be due and payable in full on the
first to occur of (i) July 15, 2000, (ii) the Commitment Termination Date, (iii)
the acceleration of the Revolving Credit Loan and (iv) demand by Payee
hereunder. Payor may prepay all or any part of the principal or accrued interest
at any time and from time to time, without premium or penalty. All partial
prepayments shall be applied first to accrued and unpaid interest and then to
the unpaid principal amount hereof. Interest due hereunder shall be paid at such
times as are specified in the Credit Agreement for interest payable with respect
to Term Loan C.
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar proceeding of any jurisdiction relating to the Payor, the
unpaid principal amount hereof shall become immediately due and payable without
presentment, demand, protest or notice of any kind in connection herewith.
The Payee is hereby directed to record the loan evidenced
hereby, and all repayments or prepayments thereof, in its books and records,
such books and records constituting prima facie evidence of the accuracy of the
information contained therein.
All payments hereunder shall be made without offset,
counterclaim or deduction of any kind.
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THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT
REGARD TO CONFLICTS OF LAW PROVISIONS THEREOF).
ARTRA GROUP INCORPORATED
By:___________________________
Title:________________________
ACKNOWLEDGMENT
The Payee hereby waives all rights of set-off, defalcation or
similar rights it may otherwise have against the Payor or any amounts at any
time owing by the Payee to the Payor as a result of amounts owing by the Payor
to the Payee under this Note.
This Note and all of the rights of the Payee hereunder have
been pledged to General Electric Capital Corporation, as Agent ("Agent"), as
additional Collateral securing the Obligations pursuant to the terms of that
certain Stock Pledge Agreement dates as of December 17, 1993 (as amended,
restated, supplemented or otherwise modified from time to time) among the Payee
and Agent.
Acknowledged and Agreed:
BAGCRAFT CORPORATION OF AMERICA
By:_________________________________
Title: _____________________________
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