EXHIBIT 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") dated as of May 15, 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 text "$3,000,000" contained in subsection 1.2(d) of the Credit
Agreement is replaced with the text "$5,000,000".
(b) The text "on the Effective Date in an aggregate amount not in
excess of $3,000,000" contained in Section 1.7 of the Credit Agreement is
replaced with the text "in an aggregate amount not in excess of $5,000,000".
(c) The text "(including the Warrant)" is inserted immediately after
the text "Loan Documents" contained in clause (i) of subsection 8.1(a) of the
Credit Agreement.
(d) The text "or as described in clause (i) above" is inserted
immediately after the text "Obligations" contained in clause (ii) of subsection
8.1(a) of the Credit Agreement.
(e) The text "Three Million Dollars ($3,000,000)" contained in the
definition of Term Loan B Commitment appearing in Annex A to the Credit
Agreement is hereby replaced with the text "Five Million Dollars ($5,000,000)".
(f) The text "Forty-One Million Dollars ($41,000,000)" contained in the
definition of
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Commitment or Commitments appearing in Annex A to the Credit Agreement is hereby
replaced with the text "Forty-Three Million Dollars ($43,000,000)".
2. Conditions to Effectiveness. This Amendment shall become
effective on the 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. 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) Third Amendment to Warrant. Agent shall have received a
duly executed original of a Third Amendment to Warrant of even date
herewith between Borrower and GE Capital.
(g) First Amended Term Loan B Note. Agent shall have received
a duly executed original of a First Amended Term Loan B Note of even
date herewith by Borrower in favor of GE Capital, as a Lender.
(h) First Amended ARTRA Note. Agent shall have received a duly
executed original of a First Amended 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.
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(i) Subordination Agreement. Agent shall have received a duly
executed original of a Subordination Agreement of even date herewith
among Agent, ARTRA and Borrower addressing Borrower's obligations under
the Tax Sharing Agreement.
(j) Officer's Certificate. Agent shall have received a duly
executed original 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) 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.
(k) 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.
(l) Opinion of Counsel. Agent shall have received a duly
executed opinion of counsel for Borrower and ARTRA with respect to the
transactions contemplated hereby.
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(m) Prohibitive Actions. No action has been taken by any
competent authority which restrains, prevents or imposes material
adverse conditions upon the consummation 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.
(n) 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 $75,000 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.
(o) 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. 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 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.
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4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
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11. 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.
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IN WITNESS WHEREOF, this Second 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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FIRST AMENDED TERM LOAN B NOTE
Chicago, Illinois
$5,000,000.00 May 15, 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, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, 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 FIVE MILLION DOLLARS AND NO CENTS
($5,000,000.00). 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 First Amended Term Loan B 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 is issued in replacement of and substitution for,
and not in payment of, the Term Loan B Note dated May 5, 1997, and Term Loan B,
including interest and all other amounts owing in respect thereof, shall be
deemed to continue and shall be evidenced hereby and paid in accordance with the
terms hereof.
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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FIRST AMENDED INTERCOMPANY DEMAND NOTE
Chicago, Illinois
$5,000,000.00 May 15, 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) FIVE MILLION DOLLARS AND NO
CENTS ($5,000,000.00) and (b) interest thereon until paid at the rate from time
to time payable with respect to Term Loan B 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) May 8, 1998, (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 B.
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.
This First Amended Intercompany Demand Note (this "Note") is
issued in replacement of and substitution for, and not in payment of, the
Intercompany Demand Note dated May 5, 1997, and the Indebtedness evidenced
thereby, including interest and all other amounts owing in respect thereof,
shall be deemed to continue and shall be evidenced hereby and paid in accordance
with the terms hereof.
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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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