Exhibit 10.2
FOURTH AMENDMENT OF
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
July 31, 2000 (this "Amendment"), is by and among Jefferson Smurfit Corporation
(U.S.), a Delaware corporation (the "Borrower"), Smurfit-Stone Container
Corporation, a Delaware corporation ("SSCC"), JSCE, Inc., a Delaware corporation
("JSCE"), the undersigned financial institutions, including The Chase Manhattan
Bank ("Chase") and Bankers Trust Company ("Bankers Trust"), in their capacities
as lenders (collectively, the "Lenders," and each individually, a "Lender"),
Bankers Trust and Chase, as senior managing agents (in such capacity, the
"Senior Managing Agents"), and Chase, as administrative agent and collateral
agent (in such capacities, the "Administrative Agent" and the "Collateral
Agent," respectively).
RECITALS:
A. The Borrower, SSCC, JSCE, the Senior Managing Agents, the
Administrative Agent, the Collateral Agent and the Lenders are parties to that
certain Amended and Restated Credit Agreement dated as of November 18, 1998, as
amended by that certain First Amendment of Amended and Restated Credit
Agreement, that certain Second Amendment of Amended and Restated Credit
Agreement and that certain Third Amendment of Amended and Restated Credit
Agreement, dated as of June 30, 1999, October 15, 1999 and March 22, 2000,
respectively (the "Credit Agreement").
B. The Borrower, SSCC, JSCE, the Senior Managing Agents, the
Administrative Agent, the Collateral Agent and the Lenders desire to amend the
Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Credit
Agreement.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is,
as of the Effective Date (as defined below), hereby amended as follows:
(a) Section 1.01 of the Credit Agreement is amended by (i) deleting
the phrase "27-1/2%" now appearing in the definition of "Change in
Control", and substituting the following therefor: "25%"; (ii) deleting
the "and" appearing at the end of clause (iii) of the definition of
"Subsidiary", and inserting immediately prior to the period (".") now
appearing at the end of such definition, the following: ", and (v) SCC
Merger Co.", and (iii) adding thereto (in alphabetical order) the following
defined terms:
"SCC Merger Co." shall mean SCC Merger Co., a Delaware corporation
that is a wholly-owned Subsidiary of SSCC and formed solely to
consummate the SCC Merger.
"SCC Merger" shall mean the merger of SCC Merger Co. with and into
Stone, with Stone as the survivor thereof.
"SSCC Series A Preferred Stock" shall mean the Series A Cumulative
Convertible Exchangeable Preferred Stock, par value $.01 per share, of
SSCC, having terms and conditions, including as to dividends,
mandatory redemption and liquidation preference, which are no more
adverse to SSCC than those set forth on Schedule 1.1(h) attached
hereto when taken as a whole.
"Stone Series E Preferred Payment" shall mean the cash payment by SSCC
to the holders of the Stone Series E Preferred Stock in respect of
dividend arrearages in an aggregate amount not to exceed $30,500,000.
"Stone Series E Preferred Stock" shall mean the Series E Cumulative
Convertible Exchangeable Preferred Stock, par value $.01 per share, of
Stone.
(b) Section 7.01 of the Credit Agreement is amended (i) to delete the
word "and" after clause (r) thereof; (ii) to delete the period (".") now
appearing at the end of clause (s) and substituting the phrase "; and"
therefor; and (iii) to insert the following new clause (t) at the end
thereof:
"(t) 7% convertible subordinated exchange debentures due 2012 issued
by SSCC in exchange for its SSCC Series A Preferred Stock, on terms
and conditions (other than maturity) substantially similar to the
convertible subordinated exchange debentures issuable by Stone
pursuant to the terms of its Stone Series E Preferred Stock, or on
such other terms and conditions reasonably acceptable to the Senior
Managing Agents."
(c) Section 7.04 of the Credit Agreement is amended (i) to delete the
word "and" after clause (k) thereof; (ii) to delete the period (".") now
appearing at the end of clause (l) and substituting the phrase "; and"
therefor; and (iii) to insert the following new clause (m) at the end
thereof:
"(m) additional Investments (x) constituting intercompany loans and
advances by the Borrower and/or JSCE to JSCE or SSCC, in an amount
sufficient to make the Stone Series E Preferred Payment, cash payments
of dividends in respect of the SSCC Series A Preferred Stock and/or
payments of interest or other mandatory payments under SSCC's 7%
convertible subordinated exchange debentures issued by SSCC in
accordance with Section 7.01(t), provided that such intercompany
Indebtedness is unsecured and shall be evidenced by an Intercompany
Note, and (y) constituting cash payments by SSCC to the holders of the
Stone Series E Preferred Stock in an amount equal to the Stone Series
E Preferred Payment."
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(d) Section 7.06(b) of the Credit Agreement is amended by deleting
such Section in its entirety and substituting therefor the following:
"(b) Notwithstanding the provisions of Section 7.06(a), (i) the
Borrower may pay cash dividends (A) on the Borrower Preferred Stock to
JSCE to be used by JSCE to pay cash dividends on the JSCE Preferred
Stock and (B) on its common stock to JSCE to be used by JSCE solely to
pay cash dividends to SSCC in accordance with and for the purpose
specified in clause (ii) below, if and to the extent permitted by
applicable law, if, at the time of such payment and immediately after
giving effect thereto, (x) no Default or Event of Default shall have
occurred and be continuing and (y) the aggregate amount of such
dividends, together with the aggregate amount of all other cash
dividends paid by the Borrower (other than the dividends permitted
under clauses (v), (vi), (vii) and (viii) below) in the fiscal year in
which the dividend is proposed to be paid, shall not exceed the least
of (A) the Borrower's Portion of Excess Cash Flow, (B) 25% of
Consolidated Net Income for the fiscal year preceding the year in
which the dividend is proposed to be paid and (C) $22,200,000, (ii)
JSCE may pay cash dividends (A) on the JSCE Preferred Stock to SSCC
(or its successors or assigns) out of the proceeds referred to in
clause (i)(A) above and (B) to SSCC and SSCC may pay like dividends to
the holders of its Common Stock substantially contemporaneously with
the payment of and out of the proceeds of the dividends referred to in
clause (i)(B) above, (iii) the Borrower and JSCE may pay the
Restatement Date Dividends and SSCC may make the Stone Capital
Contribution, (iv) Borrower may pay cash dividends to JSCE and JSCE
may pay like dividends to SSCC solely for the purpose of making
Additional Stone Capital Contributions in accordance with Section
7.04(g) if, at the time of such payment and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing, (v) the Borrower may pay cash dividends to JSCE to be
used by JSCE solely to pay cash dividends to SSCC to pay the Stone
Series E Preferred Payment substantially contemporaneously therewith,
if and to the extent permitted by applicable law, if, at the time of
such payment and immediately after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing, (vi) JSCE
may pay cash dividends to SSCC and SSCC may pay like dividends to the
holders of the Stone Series E Preferred Stock substantially
contemporaneously with the payment of and out of the proceeds of the
dividends referred to in clause (v) above, (vii) the Borrower may pay
cash dividends to JSCE to be used by JSCE solely to pay cash dividends
to SSCC to pay cash dividends to the holders of the SSCC Series A
Preferred Stock and/or make interest or other mandatory payments under
SSCC's 7% convertible subordinated exchange debentures issued by SSCC
in accordance with Section 7.01(t), in each case, substantially
contemporaneously therewith, if and to the extent permitted by
applicable law, if, at the time of such payment and immediately after
giving effect thereto, (x) no Default or Event of Default shall have
occurred and be continuing and (y) the aggregate amount of such
dividends shall not exceed $10,000,000 in any fiscal year, and (viii)
JSCE may pay cash dividends to SSCC and SSCC may pay like dividends to
the holders of its SSCC Series A Preferred Stock substantially
contemporaneously with the payment of and out of the proceeds of
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the dividends referred to in clause (vii) above. The limitations of
this Section 7.06 shall not prohibit JSCE or SSCC from paying a
dividend in accordance with clauses (i), (ii), (v), (vi), (vii) and
(viii) above within 60 days after declaration thereof if, on the
declaration date, such dividend could have been paid in compliance
with this Section 7.06."
(e) Section 7.06 of the Credit Agreement is amended by adding at the
end thereof a new paragraph (f) to read as follows:
"(f) Notwithstanding the provisions of Section 7.06(a), SSCC may (i)
exchange its SSCC Series A Preferred Stock for its 7% convertible
subordinated exchange debentures due 2012 issued in accordance with
Section 7.01(t) at an exchange rate of $25.00 principal amount of such
debentures for each share of SSCC Series A Preferred Stock and (ii)
convert any shares of its SSCC Series A Preferred Stock into shares of
Common Stock at the conversion price of $34.97 per share of Common
Stock, subject to customary anti-dilution adjustments."
(f) Section 7.07 of the Credit Agreement is amended to (i) to delete
the phrase "; and" immediately prior to clause (i) thereof and substitute a
comma (",") therefor; and (ii) to insert immediately prior to the period
(".") now appearing at the end of clause (i), the following new clause (j):
", and (j) the payment of the Stone Series E Preferred Payment, the
issuance of the SSCC Series A Preferred Stock and the consummation of the
SCC Merger".
(g) Section 7.10(b) of the Credit Agreement is amended to delete the
phrase "pursuant to the terms of the Merger Agreement" now appearing in the
parenthetical therein, and to substitute the following therefor: "(x)
pursuant to the terms of the Merger Agreement and (y) to authorize the
issuance of, and set forth the designation of preferences, rights and other
terms of, the SSCC Series A Preferred Shares".
(h) The Credit Agreement is further amended by adding a new Schedule
1.01(h) thereto in the form of Schedule 1.01(h) attached to this Amendment.
SECTION 3. Conditions Precedent to Effectiveness of Amendment. This
Amendment shall become effective upon the date (the "Effective Date") when each
of the following conditions precedent has been satisfied:
(a) each of SSCC, JSCE, the Borrower and the requisite number of
Lenders required pursuant to Section 10.08 and 7.06(d) of the Credit
Agreement shall have executed and delivered this Amendment; and
(b) SNC and JSC Newco shall have executed and delivered the
Reaffirmation of Guarantee attached hereto.
SECTION 4. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Lenders, the Senior Managing Agents, the
Administrative Agent and the Collateral Agent as follows:
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(a) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all material
respects at and as of the date hereof as though made on and as of the date
hereof (except to the extent specifically made with regard to a particular
date).
(b) No Default or Event of Default has occurred and is continuing.
(c) The execution, delivery and performance of this Amendment have
been duly authorized by all necessary action on the part of each of the
Loan Parties signatory hereto, and this Amendment has been duly executed
and delivered by each such Loan Party and is a legal, valid and binding
obligation of each such Loan Party enforceable against each such Loan Party
in accordance with its terms, except as the enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law).
(d) The execution, delivery and performance of this Amendment do not
conflict with or result in a breach by any Loan Party signatory hereto of
any term of any material contract, loan agreement, indenture or other
agreement or instrument to which any such Loan Party is a party or is
subject.
SECTION 5. References to and Effect on the Credit Agreement.
(a) On and after the Effective Date each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of
like import, and each reference to the Credit Agreement in the Loan
Documents and all other documents (the "Ancillary Documents") delivered in
connection with the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement, the
Loan Documents and all other Ancillary Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Lenders, the
Senior Managing Agents, the Administrative Agent or the Collateral Agent
under the Credit Agreement, the Loan Documents or the Ancillary Documents.
(d) The Loan Parties signatory hereto acknowledge and agree that this
Amendment constitutes a "Loan Document" for purposes of the Credit
Agreement.
SECTION 6. Execution in Counterparts. This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. This Amendment shall be binding upon the respective parties
hereto on and after the Effective Date upon the execution and delivery of this
Amendment by SSCC, JSCE, the Borrower and the requisite number of Lenders
required pursuant to Section 10.08 and 7.06(d) of the Credit
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Agreement regardless of whether it has been executed and delivered by all of the
Lenders. Delivery of an executed counterpart of a signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, 5-1401 OF THE GENERAL OBLIGATION LAWS OF NEW
YORK, BUT OTHERWISE WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS
THEREOF.
SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
SECTION 9. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
[Signature Pages Follow]
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REAFFIRMATION OF GUARANTEE
The undersigned acknowledges the foregoing Amendment with respect to the
Credit Agreement referred to therein, consents to the amendments set forth
therein and hereby reaffirms its obligations under the Guarantee Agreement (as
defined in the Credit Agreement).
Dated as of July 31, 2000
SMURFIT NEWSPRINT CORPORATION
By:
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Name:
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Title:
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JSC XXXXXXX, INC.
By:
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Name:
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Title:
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SCHEDULE 1.01(h) to Credit Agreement
Smurfit-Stone Container Corporation
Series A Preferred Stock
Summary of Terms
----------------
Issuer: Smurfit-Stone Container Corporation (the "Company").
Type of Security: Cumulative Convertible Exchangeable Preferred Stock
("Preferred Stock").
Number of Shares Issued: Approximately 4.6 million shares of Preferred Stock
plus a sufficient number of shares of Preferred Stock
to permit the payment of dividends in additional
shares of Preferred Stock.
Dividends: The holders of Preferred Stock shall be entitled to
receive, as and if declared by the Board of Directors
out of funds legally available therefor, cumulative
dividends on the shares of Preferred Stock at the
rate per annum equal to 7% of the Liquidation
Preference (as defined herein) per share, payable in
equal quarterly installments on February 15, May 15,
August 15 and November 15 in each year.
Dividends on the Preferred Stock shall be payable in
cash except to the extent that (a) the aggregate
amount of such dividends would exceed (i) 10% of the
Company's Net Income for the most recently ended four
full fiscal quarters for which internal financial
statements are available less (ii) the aggregate
amount of any cash dividends paid on the Preferred
Stock during such four-quarter period, (b) payment of
cash dividends on the Preferred Stock would conflict
with, violate, or result in a breach of, any of the
credit agreements, indentures or debt instruments of
the Company or any of its subsidiaries, or (c) the
Board of Directors has made a good faith
determination that the Company does not have legally
available funds to pay a cash dividend on the
Preferred Stock.
To the extent not paid in cash, dividends shall be
paid in additional shares of Preferred Stock having
an aggregate Liquidation Preference equal to the
unpaid dividend obligation. If any dividend, or
portion thereof, is not timely paid in cash or
additional shares of Preferred Stock, then the amount
of such unpaid dividends shall automatically accrete
to the Liquidation Preference.
Optional Redemption: The Preferred Stock is redeemable at the option of
the Company, in whole or from time to time in part,
at any time, at the following redemption prices per
share:
If redeemed during the
twelve-month period
beginning February 15 Price
--------------------- -----
2000 $25.350
2001 $25.175
2002 $25.000
Mandatory Redemption: The Company shall redeem all outstanding shares of
Preferred Stock on February 15, 2012 (the "Mandatory
Redemption Date"), at a price per share equal to the
Liquidation Preference plus an amount equal to all
accrued but unpaid dividends thereon, whether or not
declared, to the Mandatory Redemption Date (the
"Redemption Price"). The Redemption Price shall be
payable at the option of the Company in (a) cash or
(b) that number of shares of the Company's common
stock (the "Common Stock") with an aggregate Fair
Market Value (as defined herein) equal to the
Redemption Price.
As used herein, "Fair Market Value" shall mean the
average of the closing prices of the Common Stock as
reported on the Nasdaq National Market ("Nasdaq")
during the 30 consecutive trading days preceding the
trading day immediately prior to the Mandatory
Redemption Date or, if no sale occurred on a trading
day, then the mean between the highest bid and lowest
asked prices as of the close of business on such
trading day, as reported on Nasdaq.
Voting Rights: The holders of shares of Preferred Stock shall not be
entitled to vote on any matter on which the holders
of any voting securities of the Company shall be
entitled to vote, except as otherwise required by law
and except that the form of the indenture relating to
the Debentures (as defined herein) may not be amended
or supplemented without the affirmative vote or
consent of the holders of two-thirds (2/3) of the
outstanding shares of Preferred Stock, except for
those changes that would not adversely affect the
legal rights of the holders.
Liquidation Preference: In the event of any liquidation or winding up of the
Company, the holders of Preferred Stock shall be
entitled to receive in preference to the holders of
Common Stock (or any other capital stock of the
Company ranking junior to the Preferred Stock) an
amount per share equal to the Liquidation
Preference, plus an amount equal to all dividends
accrued and unpaid on each such share up to the
distribution date.
As used herein, "Liquidation Preference" shall mean
an amount equal to $25.00 plus any amounts that shall
accrete to such amount as a result of the nonpayment
of any dividend.
Conversion: Holders of shares of Preferred Stock shall have
right, exercisable at any time and from time to time,
except in the case of shares of Preferred Stock
called for redemption or to be exchanged for
Debentures, to convert all or any such shares of
Preferred Stock into shares of Common Stock at the
conversion price of $34.97 per share of Common Stock,
subject to customary anti-dilution adjustments.
Exchange: At the Company's option, all, but not less than all,
of the Preferred Stock may be exchanged on any
dividend payment date for the Company's 7%
Convertible Subordinated Exchange Debentures due 2012
("Debentures") at an exchange rate of $25.00
principal amount of Debentures for each share of
Preferred Stock. With the exception of the maturity
date, the Debentures will have essentially the same
terms as the debentures of Stone into which the
Series E Preferred Stock is currently exchangeable.
Preemptive Rights: None.
