EXHIBIT 2.2
STOCK PURCHASE AGREEMENT
dated as of
May 10, 1998
among
SMURFIT INTERNATIONAL B.V., as Buyer,
JEFFERSON SMURFIT GROUP PLC, as Guarantor,
XXXXXX XXXXXXX LEVERAGED EQUITY FUND II, INC.
and
THE OTHER SHAREHOLDERS OF
JEFFERSON SMURFIT CORPORATION PARTY HERETO,
as Sellers,
and
JEFFERSON SMURFIT CORPORATION
Relating to the purchase and sale
of
20,000,000 Shares of Common Stock
of
Jefferson Smurfit Corporation
TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
Section 1.1. Definitions.............................................1
ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale.......................................2
Section 2.2. Purchase Price..........................................3
Section 2.3. Closing.................................................3
Section 2.4. Time and Place of Closing...............................3
Section 2.5. Additional Purchase Price...............................3
ARTICLE 3
Representations and Warranties of Obligors
Section 3.1. Organization............................................4
Section 3.2. Authority...............................................4
Section 3.3. No Violation............................................4
Section 3.4. Securities Act Representation...........................5
ARTICLE 4
Representations and Warranties of Sellers
Section 4.1. Title to Shares.........................................5
Section 4.2. Organization............................................6
Section 4.3. Authority...............................................6
Section 4.4. No Violation............................................6
Section 4.5. No Solicitation.........................................7
ARTICLE 5
Representations and Warranties of JSC
Section 5.1. Organization............................................7
Section 5.2. Authority...............................................7
Section 5.3. No Violation............................................7
ARTICLE 6
Covenants
Section 6.1. Efforts to Consummate...................................8
Section 6.2. Notices of Certain Events...............................8
Section 6.3. Public Announcements....................................8
Section 6.4. Custody Arrangements....................................9
Section 6.5. Ownership of Shares.....................................9
ARTICLE 7
Conditions to Closing
Section 7.1. Conditions to Obligations of Buyer, JSC and Sellers.....9
Section 7.2. Conditions to Obligation of Sellers....................10
Section 7.3. Conditions to Obligation of Buyer......................10
ARTICLE 8
Survival; Indemnification
Section 8.1. Survival of Representations and Warranties.............10
Section 8.2. Indemnification........................................10
ARTICLE 9
Termination
Section 9.1. Termination............................................13
Section 9.2. Effect of Termination..................................13
ARTICLE 10
Miscellaneous
Section 10.1. The Guaranty, etc......................................13
Section 10.2. Notices................................................14
Section 10.3. Expenses...............................................16
Section 10.4. Entire Agreement.......................................16
Section 10.5. Successors and Assigns.................................16
Section 10.6. Amendments and Waivers.................................17
Section 10.7. Agreement of Sellers...................................17
Section 10.8. Stockholders' Agreement................................17
Section 10.9. Governing Law..........................................17
Section 10.10. WAIVER OF JURY TRIAL, ETC..............................17
Section 10.11. Counterparts...........................................18
Section 10.12. Captions...............................................18
Section 10.13. Specific Performance...................................18
Section 10.14. Representations, Warranties, Covenants and Agreements..18
STOCK PURCHASE AGREEMENT
AGREEMENT dated as of May 10, 1998 among Smurfit International
B.V., a corporation organized under the laws of the Netherlands ("Buyer"),
Jefferson Smurfit Group plc, a corporation organized under the laws of Ireland
("Guarantor"), Xxxxxx Xxxxxxx Leveraged Equity Fund II, Inc., a Delaware
corporation ("MSLEF"), and the other Sellers listed on the signature pages
hereof (collectively, and together with MSLEF, the "Sellers"), and Jefferson
Smurfit Corporation, a Delaware corporation ("JSC").
W I T N E S S E T H
WHEREAS, Buyer and Sellers are shareholders of JSC;
WHEREAS, JSC, a wholly owned subsidiary of JSC and Stone
Container Corporation, a Delaware corporation ("Stone"), are parties to an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"), pursuant to which a wholly owned subsidiary of JSC will merge
with and into Stone (the "Merger"), upon the terms and subject to the
conditions set forth therein; and
WHEREAS, in connection with the Merger, Sellers wish to sell to
Buyer, and Buyer wishes to purchase from Sellers, the shares of common stock,
par value $0.01 per share, of JSC (the "Common Stock") listed on Schedule A
hereto (adjusted to give effect to any stock splits, stock dividends,
recapitalizations or similar transactions declared or occurring between the
date hereof and the closing hereunder), upon the terms and subject to the
conditions hereinafter set forth.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) The following terms, as used
herein, have the following meanings:
"Closing Date" means the date of the Closing.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Obligor" means each of Buyer and Guarantor.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
(b) Each of the following terms is defined in the Section
set forth opposite such term:
Term Section
---- -------
Additional Purchase Price 2.05(a)
Buyer Indemnified Parties 8.02(a)
Closing 2.04
Common Stock Recitals
Encumbrances 4.01
Indemnification Claim 8.02(d)
Initial Purchase Price 2.02
Losses 8.02(a)
JSC Indemnified Parties 8.02(a)
Post-Merger Average Market Price 2.05(b)
Seller Indemnified Parties 8.02(b)
Shares 2.01
Stockholders' Agreement 4.01
Volume Weighted Prices 2.05(a)
ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, at the Closing each Seller, severally and not
jointly, agrees to sell to Buyer, and Buyer agrees to purchase from each Seller,
the number of shares of Common Stock set forth opposite such Seller's name on
Schedule A to this Agreement (the "Shares").
Section 2.2. Purchase Price. The purchase price to be paid by
Buyer at the Closing to each Seller for each Share to be sold and purchased
hereunder (the "Initial Purchase Price") shall be an amount equal to $25.00
plus interest thereon from and including the date hereof to but excluding the
date on which payment is made at a rate of 6% per annum. Such interest shall
accrue daily on the basis of a year of 365 days and the actual number of days
for which due, but shall not compound. The Initial Purchase Price shall be
adjusted to give effect to any stock splits, stock dividends, recapitalizations
and similar transactions declared or occurring between the date hereof and the
Closing. The Initial Purchase Price shall be paid as provided in Section 2.03.
Section 2.3. Closing. At the Closing:
(a) Buyer will wire transfer to each Seller, in immediately
available funds to an account designated by such Seller by written notice to
Buyer not later than two business days prior to the Closing, the Initial
Purchase Price payable for the Shares sold by such Seller to Buyer hereunder;
and
(b) Each Seller will deliver or cause to be delivered to Buyer
one or more certificates for the Shares sold by such Seller to Buyer hereunder,
duly endorsed for transfer in blank, with any required stock transfer stamps
attached.
Section 2.4. Time and Place of Closing. The consummation of the
purchase and sale of the Shares hereunder (the "Closing") will take place at the
offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
concurrently with the consummation of the Merger, or at such other time or place
as Buyer and MSLEF may mutually agree (it being understood that the purchase of
the Shares shall not be deemed to have occurred until the Merger has occurred).
Section 2.5. Additional Purchase Price. (a) If the Post-Merger
Average Market Price exceeds $28.00, the purchase price payable hereunder in
respect of each Share shall be increased by an amount equal to 25% of such
excess, not to exceed $0.50 per Share (such additional payment, the "Additional
Purchase Price"). For purposes of the foregoing, the "Post-Merger Average
Market Price" shall mean the arithmetic average of the "Volume Weighted Prices."
"Volume Weighted Prices" shall mean, for each of the ten trading days beginning
on and including the second trading day after the Closing Date, the number
obtained by dividing (x) the sum, for each trade on such trading day, of (i) the
price at which such trade was transacted times (ii) the number of shares in such
trade by (y) the aggregate number of shares traded on such trading day. The
transaction reports of the New York Stock Exchange or The Nasdaq National Market
shall be used to calculate each Volume Weighted Price. The provisions of this
Section 2.05(a) relating to the Additional Purchase Price shall be adjusted to
give effect to any stock splits, stock dividends, recapitalizations and similar
transactions declared or occurring between the date hereof and the payment date.
(b) The Additional Purchase Price, if any, shall be paid by
Buyer to each Seller, by wire transfer of immediately available funds to the
account of such Seller to which the Initial Purchase Price was paid, not later
than two business days after the end of the ten trading day period referred to
in Section 2.05(a).
ARTICLE 3
Representations and Warranties of Obligors
Each Obligor, severally and not jointly, represents and
warrants (with respect to itself only) to each Seller and JSC as of the date
hereof and as of the Closing Date that:
Section 3.1. Organization. Buyer is a corporation duly
organized and validly existing under the laws of the Netherlands. Guarantor
is a corporation duly organized and validly existing under the laws of Ireland.
Section 3.2. Authority. Such Obligor has all corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated on its part hereby. The execution, delivery and
performance by such Obligor of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of such Obligor. No other action on the part of
such Obligor or its stockholders is necessary to authorize the execution and
delivery of this Agreement by such Obligor or the performance by such Obligor
of its obligations hereunder. This Agreement has been duly executed and
delivered by such Obligor and constitutes a legal, valid and binding agreement
of such Obligor, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting creditors' rights generally and subject to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
Section 3.3. No Violation. The execution and delivery of this
Agreement by such Obligor, and the performance by such Obligor of its
obligations hereunder and the consummation of the transactions contemplated
hereby will not: (a) violate any provision of law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award applicable to such
Obligor, (b) require the consent, waiver, approval, license or authorization or
any filing by such Obligor with any governmental authority (other than
pursuant to the merger control regulations of the European Union and a
notification form filed under the HSR Act (and the expiration or termination of
the waiting period thereunder) and any filings required under the 0000 Xxx) or
(c) assuming compliance with the matters referred to in clause (b), violate,
result (with or without notice or the passage of time, or both) in a breach of
or give rise to the right to accelerate, terminate or cancel any obligation
under or constitute (with or without notice or the passage of time, or both) a
default under, any of the terms or provisions of any charter or other governing
document, bylaw, agreement, note, indenture, mortgage, contract, order,
judgment, ordinance, regulation or decree to which such Obligor is subject or
by which such Obligor is bound and which would have an adverse effect on the
ability of such Obligor to perform its obligations under this Agreement.
Section 3.4. Securities Act Representation. Buyer is not
purchasing any Shares with a view to a distribution or resale of any of such
Shares in violation of any applicable securities laws. Buyer understands that
the Shares constitute restricted securities, are not registered under the 1933
Act or any state securities law, and the certificates representing the Shares
will bear a legend to that effect. Buyer agrees that it shall not sell any of
such Shares in violation of the 1933 Act. Buyer represents that it is a
sophisticated investor and is able to bear the risk of an investment in JSC.
ARTICLE 4
Representations and Warranties of Sellers
Each Seller, severally and not jointly, represents and warrants
(with respect to itself only) to each Obligor and JSC as of the date hereof
and as of the Closing Date that:
Section 4.1. Title to Shares. Such Seller has good and valid
title to the Shares set forth opposite such Seller's name on Schedule A to this
Agreement, free and clear of any security interests, liens, claims, pledges,
encumbrances or other rights or claims of any other person of any kind or any
preemptive rights (collectively, "Encumbrances"), except as may exist under
the Stockholders' Agreement (the "Stockholders' Agreement") dated as of May 3,
1994 and amended as of January 13, 1997 (which Stockholders' Agreement shall
terminate as hereinafter provided) or the related Registration Rights
Agreement dated as of the same date. At the Closing, Buyer will acquire all
of such Seller's right, title and interest in and to the Shares and will
receive good and valid title to the shares of Common Stock set forth opposite
such Seller's name on Schedule A to this Agreement, free and clear of any and
all Encumbrances.
Section 4.2. Organization. Such Seller is a corporation,
partnership, limited liability company or trust duly incorporated or formed,
validly existing and (other than in the case of a trust) in good standing
under the laws of its jurisdiction of its incorporation or formation.
Section 4.3. Authority. Such Seller has all corporate,
partnership or other power and authority to execute and deliver this
Agreement, and to consummate the transactions contemplated on its part hereby.
The execution, delivery and performance by such Seller of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate, shareholder, partnership or other action
on the part of such Seller. No other action on the part of such Seller or its
stockholders or partners, as the case may be, is necessary to authorize the
execution and delivery of this Agreement by such Seller or the performance by
such Seller of its obligations hereunder. This Agreement has been duly
executed and delivered by such Seller and constitutes a legal, valid and
binding agreement of such Seller, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally and
subject to general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 4.4. No Violation. The execution and delivery of this
Agreement by such Seller, and performance by such Seller of its obligations
hereunder and the consummation of the transactions contemplated hereby will
not: (a) violate any provision of law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to Seller, (b)
require the consent, waiver, approval, license or authorization or any filing
by such Seller with any governmental authority (other than a notification form
filed under the HSR Act (and the expiration or termination of the waiting
period thereunder) and any filings required under the 1934 Act), (c) assuming
compliance with the matters referred to in clause (b), violate, result (with
or without notice or the passage of time, or both) in a breach of or give rise
to the right to accelerate, terminate or cancel any obligation under or
constitute (with or without notice or the passage of time, or both) a default
under, any of the terms or provisions of any charter or other governing
document, bylaw, agreement, note, indenture, mortgage, contract, order,
judgment, ordinance, regulation or decree to which such Seller is subject or
by which such Seller is bound and which would have an adverse effect on the
ability of such Seller to perform its obligations under this Agreement or (d)
result in the creation or imposition of any tax or Encumbrance on the Shares,
except for transfer taxes, if any.
Section 4.5. No Solicitation. No Seller, nor anyone acting on
its behalf, has taken or will take any action that would subject the sale of
the Shares as contemplated hereby to the registration provisions of the 1933
Act.
ARTICLE 5
Representations and Warranties of JSC
JSC represents and warrants to each Seller and each Obligor as
of the date hereof and as of the Closing Date that:
Section 5.1. Organization. JSC is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
Section 5.2. Authority. JSC has all corporate power and
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated on its part hereby. The execution, delivery and
performance by JSC of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of JSC. No other action on the part of JSC is necessary to
authorize the execution and delivery of this Agreement by JSC or the
performance by JSC of its obligations hereunder. This Agreement has been duly
executed and delivered by JSC and constitutes a legal, valid and binding
agreement of JSC, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting creditors' rights generally and subject to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
Section 5.3. No Violation. The execution and delivery of this
Agreement by JSC, and performance by JSC of its obligations hereunder and the
consummation of the transactions contemplated hereby will not: (a) violate
any provision of law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award applicable to JSC, (b) require the consent,
waiver, approval, license or authorization or any filing by JSC with any
governmental authority (other than a notification form filed under the HSR Act
(and the expiration or termination of the waiting period hereunder) and any
filings required under the 0000 Xxx) or (c) assuming compliance with the
matters referred to in clause (b), violate, result (with or without notice or
the passage of time, or both) in a breach of or give rise to the right to
accelerate, terminate or cancel any obligation under or constitute (with or
without notice or the passage of time, or both) a default under, any of the
terms or provisions of any charter or other governing document, bylaw,
agreement, note, indenture, mortgage, contract, order, judgment, ordinance,
regulation or decree to which JSC is subject or by which JSC is bound and
which would have an adverse effect on the ability of JSC to perform its
obligations under this Agreement.
ARTICLE 6
Covenants
Section 6.1. Efforts to Consummate. Upon the terms and
subject to the conditions of this Agreement, each of Buyer, JSC and each
Seller agrees to use its respective best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement. In case at any time after the Closing Date any further action is
reasonably necessary or desirable to carry out the purposes of this Agreement,
the proper partners, officers or directors of each party to this Agreement
will take all such reasonably necessary action. No party hereto will take any
action for the purpose of delaying, impairing or impeding the receipt of any
required consent, authorization, order or approval or the making of any
required filing.
Section 6.2. Notices of Certain Events. Each party agrees
that it will, upon obtaining knowledge of any of the following, promptly
notify the other parties hereto of: (a) any notice or other communication
from any Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated hereby; (b) any notice or
other communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated hereby; (c) any actions, suits,
claims, investigations or proceedings commenced or, to its knowledge
threatened against, relating to or involving or otherwise affecting Buyer, any
Seller or JSC that relates to this Agreement or the consummation of the
transactions contemplated hereby.
Section 6.3. Public Announcements. Except as required by law
or regulation or the rules of any stock exchange, so long as this Agreement is
in effect, Buyer and each of the Sellers hereto agrees that it will not, and
Buyer and each of the Sellers agrees to cause its respective affiliates
(excluding JSC) not to, issue or cause the publication of any press release or
other announcement with respect to the transactions contemplated by this
Agreement without the consent of the other parties hereto, which consent will
not be unreasonably withheld or delayed.
Section 6.4. Escrow Arrangements. As promptly as practicable
but in no event later than fourteen (14) days after the date hereof, each
Seller will deposit one or more certificates covering the Shares to be sold by
such Seller hereunder, duly endorsed for transfer or accompanied by stock
powers in blank, to the Escrow Agent pursuant to the Escrow Agreement. The
Escrow Agent shall be Bankers Trust Company, or such other party as the Buyer
and MSLEF shall agree, and the Escrow Agreement shall be an escrow agreement
in customary form which satisfies the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended, which is reasonably
satisfactory to Buyer, MSLEF and JSC and which provides that (i) the Escrow
Agent holds the Shares and any dividend or distribution on the Shares for the
benefit of the Sellers (except that any dividends on the Shares shall be paid
promptly to the Sellers); (ii) each Seller retains all rights to vote all
Shares deposited by it in escrow; (iii) the Escrow Agent will deliver the
Shares to Buyer at Closing or to the applicable Seller if this Agreement is
terminated in accordance with its terms; and (iv) the Escrow Agreement may not
be amended, waived or terminated without the written consent of Buyer, MSLEF
and JSC, which, in the case of termination, will not be unreasonably withheld.
Section 6.5. Ownership of Shares. Subject to the assignment
rights of First Plaza Group Trust and Leeway & Co, in Section 10.05, each
Seller shall retain beneficial ownership of not less than the number of shares
of Common Stock set forth opposite such Seller's name on Schedule A hereto
until the Closing (Shares held in the escrow arrangement described in Section
6.04 being included among Shares beneficially owned). The number of Shares
to be retained by each Seller will be adjusted to give effect to any stock
splits, stock dividends, recapitalizations and similar transactions declared
or occurring between the date hereof and the Closing. Leeway & Co. acts as
nominee for State Street Bank and Trust Company and the Trustee for the Long
Term Investment Trust.
ARTICLE 7
Conditions to Closing
Section 7.1. Conditions to Obligations of Buyer, JSC and
Sellers. The respective obligations of Buyer, JSC and the Sellers to consummate
the Closing are subject to the satisfaction or waiver by the Buyer, JSC and
MSLEF of each of the following conditions:
(a) No domestic or foreign governmental authority or other
agency or commission or state court or judicial body of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and has the effect of prohibiting consummation of
the transactions contemplated by this Agreement.
(b) Any applicable waiting period under the HSR Act shall have
expired or been terminated and any necessary approvals under similar laws of the
European Union shall have been obtained.
(c) The Merger shall be consummated in accordance with the terms
of the Merger Agreement, as the same may be amended from time to time,
concurrently with the consummation of the Closing hereunder (it being understood
that the purchase of Shares shall not be deemed to have occurred until the
Merger has occurred).
Section 7.2. Conditions to Obligation of Sellers. The
obligation of each Seller to consummate the Closing is subject to the
satisfaction or waiver by MSLEF of the following further condition:
(a) The representations and warranties of Buyer and JSC
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date as if made at and as of such date.
Section 7.3. Conditions to Obligation of Buyer. The obligation
of Buyer to consummate the Closing is subject to the satisfaction of each of the
following further conditions:
(a) The representations and warranties of each Seller contained
in this Agreement shall be true and correct in all material respects at and as
of the Closing Date as if made at and as of such date.
(b) Sellers shall deliver an aggregate of 20,000,000 shares of
Common Stock at the Closing (adjusted to give effect to any stock splits, stock
dividends, recapitalizations and similar transactions declared or occurring
between the date hereof and the Closing).
ARTICLE 8
Survival; Indemnification
Section 8.1. Survival. The representations, warranties,
covenants and agreements of the parties contained in this Agreement shall
survive the Closing for the applicable statute of limitations period,
notwithstanding any investigation by or on behalf of any party before or after
the Closing, except that the agreements contained in clause (y) of paragraph (c)
of Section 8.02 hereof shall survive the Closing for a period of ten months.
Notwithstanding the preceding sentence, the indemnification obligations set
forth in Section 8.02 hereof shall survive the time at which they would
otherwise terminate pursuant to the preceding sentence, if notice of the events
or other matters giving rise to such right of indemnity shall have been given to
the party against whom such indemnity may be sought hereunder.
Section 8.2. Indemnification. (a) After the Closing Date, each
Seller agrees, severally and not jointly, to indemnify (i) each Obligor and
each officer, director, partner, shareholder or employee of each Obligor, the
officers, directors, partners and employees of each such shareholder or partner,
and the affiliates, advisors and representatives of each Obligor or any such
affiliate (collectively, the "Buyer Indemnified Parties") and (ii) JSC and each
officer, director, partner, shareholder or employee of JSC, the officers,
directors, partners and employees of each such shareholder or partner, and the
affiliates, advisors and representatives of JSC or any such affiliate
(collectively, the "JSC Indemnified Parties") on a reasonable periodic basis
against any and all liabilities, damages, losses, costs or expenses whatsoever,
including reasonable fees of counsel and expenses of investigation
(collectively, "Losses"), suffered or incurred by any Buyer Indemnified Party or
JSC Indemnified Party arising out of or resulting from any breach of any
representation or warranty or non-performance of any covenant or agreement of
such Seller under this Agreement.
(b) After the Closing Date, each Obligor agrees to indemnify (i)
each Seller and each officer, director, partner, shareholder, trustee or
employee of any Seller, the officers, directors, partners and employees of each
such trustee, shareholder or partner, and the affiliates, advisors and
representatives of any Seller or any of such affiliate (the "Seller Indemnified
Parties") and (ii) each JSC Indemnified Party on a reasonable periodic basis
against any and all Losses suffered or incurred by any Seller Indemnified Party
or JSC Indemnified Party arising out of or resulting from any breach of any
representation or warranty or non-performance of any covenant or agreement of
such Obligor under this Agreement.
(c) JSC agrees to indemnify (i) each Seller Indemnified Party
and (ii) each Buyer Indemnified Party on a reasonable periodic basis against any
and all Losses suffered or incurred by any Seller Indemnified Party or Buyer
Indemnified Party arising out of or resulting from (x) any breach of any
representation or warranty or non-performance of any covenant or agreement of
JSC under this Agreement or (y) any claim, action, suit, proceeding or
investigation based on or arising out of this Agreement, the Merger Agreement or
the transactions contemplated hereby or thereby regardless of whether any such
claim, action, suit, proceeding or investigation is asserted or commenced prior
to or after the date hereof, provided that the indemnification provided for in
this clause (y) shall not be available to the extent that (A) a Loss is
determined by a court of competent jurisdiction to have resulted from the bad
faith or willful misconduct of a Seller Indemnified Party (in the case of
indemnification of a Seller Indemnified Party) or a Buyer Indemnified Party (in
the case of indemnification of a Buyer Indemnified Party); (B) a Seller
Indemnified Party or Buyer Indemnified Party has indemnification obligations in
respect of such Loss in accordance with Section 8.02(a) or 8.02(b); (C) a Loss
relates to a claim between the parties to any of the Transaction Agreements (as
defined in the Merger Agreement) or the Asset Purchase Agreement (as defined in
the Merger Agreement) relating to the subject matter of such Agreement; (D) a
Loss relates to a claim by JSC (in its own right and not derivatively) against
anyone to enforce its rights under an agreement to which it is party; or (E) a
Loss relates to a direct claim (and not a third-party or derivative claim)
between JSG and its affiliates (other than JSC and its subsidiaries), on the one
hand, and MSLEF and its affiliates (other than JSC and its subsidiaries), on the
other hand.
(d) If any third party asserts a claim against any indemnified
party for which indemnification would be available under Section 8.02 hereof (an
"Indemnification Claim"), the indemnified party will promptly give notice of
such Indemnification Claim, describing such Indemnification Claim with
reasonable specificity, to the indemnifying party; provided that the failure to
give such notice will not affect the right of the indemnified party to
indemnification hereunder except to the extent that such failure prejudices the
ability of the indemnifying party to defend any Indemnification Claim or take
any other remedial action. The indemnifying party shall be entitled to assume
the defense of such Indemnification Claim, including the employment of counsel
(who may be the indemnifying party's counsel) reasonably satisfactory to the
indemnified party; provided that if the indemnified party reasonably determines
in good faith that its interest with respect to such Indemnification Claim
cannot appropriately be represented by the indemnifying party, such indemnified
party shall have the right to assume control of the defense of such
Indemnification Claim and retain counsel, including local counsel, separate from
indemnifying party's counsel. In addition, in the event that such indemnifying
party, within a reasonable time after notice of any such Indemnification Claim,
fails to defend any indemnified party, such indemnified party will (upon further
notice to such indemnifying party) have the right to undertake its defense of
such Indemnification Claim for the account of such indemnifying party and to
have its expenses reimbursed promptly with respect to such Indemnification
Claim. Regardless of which party is controlling the defense of any
Indemnification Claim, both the indemnifying party and the indemnified party
shall act in good faith and no settlement of such Indemnification Claim may be
agreed to without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld. The controlling party shall deliver, or
cause to be delivered, to all applicable indemnified parties copies of all
correspondence, pleadings, motions, briefs, appeals or other written statement
relating to or submitted in connection with the defense of any such
Indemnification Claim, and timely notices of any hearing or other court
proceeding relating to such Indemnification Claim. No indemnifying party shall,
without the written consent of the applicable indemnified party, effect a
settlement or compromise of, or consent to the entry of any judgment with
respect to, any Indemnified Claim (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment includes an unconditional release of all applicable
indemnified parties for all liability arising out of or relating to such
Indemnified Claim and involves the payment by the indemnifying party of only
monetary damages. Notwithstanding the foregoing, in any matter no indemnifying
party shall be liable under this Agreement for the fees and expenses of more
than one counsel for the JSC Indemnified Parties, the Buyer Indemnified Parties
or the Seller Indemnified Parties, as the case may be, in addition to one local
counsel.
(e) An indemnifying party shall also be liable for and pay
promptly the fees and expenses (including the fees and expenses of counsel)
incurred by an indemnified party in enforcing its indemnification rights
hereunder.
ARTICLE 9
Termination
Section 9.1. Termination. This Agreement may be terminated at
any time prior to the Closing by mutual written agreement of JSC, Buyer and
MSLEF by written notice to the other parties hereto. This Agreement shall
automatically terminate if the Merger Agreement is terminated.
Section 9.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.01, all further obligations of the parties
hereto under this Agreement shall terminate without further liability or
obligation of any party to any other party, including liability for damages,
except that (x) the agreements contained in Section 8.02 shall survive the
termination hereof with respect to any right of indemnity thereunder if notice
of the events or other matters giving rise to such right of indemnity shall
have been given to the party against whom such indemnity may be sought no
later than 18 months following termination, (y) this Section 9.02 shall
survive the termination hereof and (z) no such termination shall relieve any
party hereto from liability for breach of this Agreement.
ARTICLE 10
Miscellaneous
Section 10.1. The Guaranty, etc. (a) The Guarantor hereby
agrees to cause Buyer to perform in full all of its obligations (including,
without limitation, its obligation to pay the amounts specified in Sections 2.02
and 2.05 and its obligation to pay any amounts due pursuant to Section 8.02)
pursuant to this Agreement (as the same may hereafter be amended). The
Guarantor hereby further unconditionally guarantees the full and punctual
payment of all amounts payable by Buyer under this Agreement. Upon failure by
the Buyer to pay punctually any such amount, Guarantor shall forthwith on demand
pay the amount not so paid.
(b) The obligations of the Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by any change
in the corporate existence, structure or ownership of the Buyer, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Buyer or its assets or any resulting release, discharge or amendment of any
obligation of the Buyer contained in this Agreement.
(c) The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any person or entity
against the Buyer or any other person or entity.
Section 10.2. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to Guarantor, to
Jefferson Smurfit Group plc
Xxxxx Xxxx, Xxxxxxxxxx
Xxxxxx 0, Xxxxxxx
Attention: Xxxxxxx Xxxxxxxxx
Fax: 000-0-000-0000
if to Buyer, to:
Smurfit International X.X.
Xxxxxxxxxxxxxx 0000
Xxxxxxxxx 1077ZZ, The Netherlands
Attention: Rokin Corporate Services, B.V.
Fax: 00-00-000-0000
in either case, with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Xxxxxxx Xxx
Xxxxxxxxxx Xxxxx,
Xxxxxx Xxxxx,
Xxxxxx 0, Xxxxxxx
Attention: Houghton Fry, Esq.
Fax: 000-0-000-0000
if to Sellers, to:
Xxxxxx Xxxxxxx Leveraged Equity Fund II, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Capital Partners
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
and
Leeway & Co.
c/o State Street and Trust Company
0 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
X.X. Xxxxxx Investment Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Eduard Beit
Fax: (000) 000-0000
Art Xxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
and
General Motors Investment
Management Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: S. Xxxxxxxx Xxxxxx,
Portfolio Manager
with a copy to:
Mellon Bank, N.A.
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx,
Account Manager
Fax: (000) 000-0000
Xxxxxx X. Xxxxxxx, Esq.
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
If to JSC, to:
Jefferson Smurfit Corporation
Jefferson Smurfit Centre
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Vice President and
Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Section 10.3. Expenses. Except as provided in the Merger
Agreement, all costs and expenses incurred in connection with the Agreement
and the transactions contemplated hereby will be paid by the party incurring
such cost or expense; provided that Buyer and all Sellers (as a group) will
share equally any transfer taxes payable in the United States in connection
with the purchase and sale of the Shares hereunder and that JSC shall pay at
the Closing the fees of legal counsel and financial advisor to Buyer and
Guarantor in connection with the transactions contemplated hereby and pursuant
to the Merger Agreement as and to the extent further provided in a letter of
even date herewith.
Section 10.4. Entire Agreement. This Agreement (including any
Schedules and Exhibits hereto) constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all
prior agreements and understandings, both oral and written, between the
parties with respect to the subject matter of this Agreement.
Section 10.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto, except that Buyer
may transfer or assign, in whole or from time to time in part, to any one or
more of its direct or indirect subsidiaries, the right to purchase all or a
portion of the Shares and First Plaza Group Trust and Leeway & Co. shall have
the right to assign this Agreement to one or more successor trustees, plans or
nominees for, or successors by reorganization of, a qualified pension plan
trust holding the Shares set forth in Schedule A hereto, but no such transfer
or assignment will relieve Buyer, First Plaza Group Trust or Leeway & Co. of
its obligations hereunder.
Section 10.6. Amendments and Waivers. (a) Subject to Section
10.07, any provision of this Agreement may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by Buyer, Guarantor, JSC and MSLEF, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 10.7. Agreement of Sellers. The Sellers (including
MSLEF) agree to be bound by any amendments, termination, waivers or other
determinations made hereunder by MSLEF; provided that no such determination
shall discriminate among the Sellers.
Section 10.8. Stockholders' Agreement. The Stockholders'
Agreement and the related Registration Rights Agreement shall terminate as of
the Closing. Between the date hereof and the Closing, or the termination of
this Agreement if earlier, the MS Holders (as defined in the Stockholders'
Agreement) collective ownership of Common Stock shall be deemed to remain in
Tier I (as defined therein) for purposes of the Stockholders' Agreement and
JSC's By-laws, irrespective of sales or transfers by the MS Holders during
such time. Notwithstanding the foregoing, in the event of termination of this
Agreement, the provisions of the Stockholders' Agreement (and the related
Registration Rights Agreement) shall thereafter remain in full force and
effect, including the provisions thereof that affect the rights of MS Holders
as a result of sales or transfers by the MS Holders (whether prior to or after
such termination).
Section 10.9. Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New York, without
regard to the conflicts of law rules of the State of New York.
Section 10.10. WAIVER OF JURY TRIAL, ETC. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES AGREE, SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT, TO SUBMIT
TO THE EXCLUSIVE JURISDICTION OF, AND TO WAIVE ANY OBJECTION AS TO VENUE IN,
THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK. SERVICE OF PROCESS IN ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE EFFECTIVE IF DELIVERED OR SENT IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 10.02 HEREOF.
Section 10.11. Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto.
Section 10.12. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 10.13. Specific Performance. The parties hereto
acknowledge that, in view of the uniqueness of the parties hereto and the
transactions contemplated hereby, the parties hereto would not have an
adequate remedy at law for money damages in the event that this Agreement were
not performed in accordance with its terms, and therefore agree that the
parties shall be entitled to specific enforcement of the terms hereof in
addition to any other remedy to which the parties hereto may be entitled at
law or in equity.
Section 10.14. Representations, Warranties, Covenants and
Agreements. References in representations, warranties, covenants and
agreements in this Agreement to the "transactions contemplated by this
Agreement" (and similar references) shall not be deemed to include the Merger.
The parties agree that they are making no representations and warranties
except as expressly set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SMURFIT INTERNATIONAL B.V.
By: /s/ Houghton Fry
-------------------------------------
Name: Houghton Fry
Title: Attorney-in-Fact
JEFFERSON SMURFIT GROUP PLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Finance Director
JEFFERSON SMURFIT CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Chief
Financial Officer
SELLERS: THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: XXXXXX XXXXXXX LEVERAGED
EQUITY FUND, INC., its General
Partner
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice Chairman
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice Chairman
SIBV/MS EQUITY INVESTORS, L.P.
By: Xxxxxx Xxxxxxx Equity Investors Inc.
(general partner)
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice Chairman
FIRST PLAZA GROUP TRUST
By: Mellon Bank, N.A., solely in its
capacity as trustee for First Plaza
Group Trust (as directed by General
Motors Investment Management
Corporation) and not in its individual
capacity
By: /s/ Xxxxxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxxxxx X. Xxxx
Title: Authorized Signatory
LEEWAY & CO.
By: State Street Bank and Trust Company,
a partner
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Assistant Secretary
SCHEDULE A
Number of
Shares to be
Sellers sold by Seller
------- --------------
Xxxxxx Xxxxxxx Leveraged
Equity Fund II, Inc.................... 525,960
The Xxxxxx Xxxxxxx Leveraged
Equity Fund II, L.P.................... 15,340,643
SIBV/MS Equity Investors, L.P.......... 113,296
First Plaza Group Trust................ 2,512,563
Leeway & Co............................ 1,507,538
Total............................ 20,000,000
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