EXHIBIT 4
SECOND AMENDMENT
OF CREDIT AGREEMENT
THIS SECOND AMENDMENT OF CREDIT AGREEMENT, dated as of December 18,
1996 (this "Amendment"), is by and among Stone Container Corporation, a
Delaware corporation (the "Borrower"), the undersigned financial
institutions, including Bankers Trust Company, in their capacities as
lenders (collectively, the "Lenders," and each individually, a "Lender"),
Bankers Trust Company, as agent (the "Agent") for the Lenders, and the
undersigned financial institutions in their capacities as Co-Agents.
RECITALS:
A. The Borrower, Bank of America National Trust & Savings Association,
The Bank of New York, The Bank of Nova Scotia, Caisse Nationale de Credit
Agricole, The Chase Manhattan Bank, N.A., Dresdner Bank AG-Chicago and Grand
Cayman Branches, The First National Bank of Chicago, The Long-Term Credit Bank
of Japan, Ltd., NationsBank, N.A. (Carolinas), The Sumitomo Bank, Ltd.,
Chicago Branch and Toronto Dominion (Texas), Inc., as co-agents (collectively,
the "Co-Agents," and each individually, a "Co-Agent"), the Agent and the
Lenders are parties to that certain Amended and Restated Credit Agreement
dated as of March 22, 1996, as amended by the First Amendment of Credit
Agreement dated as of June 20, 1996 (the "Credit Agreement").
B. The Borrower has requested the Agent and the Lenders to amend the
Credit Agreement to, among other things, adjust the Interest Coverage Ratio
and the Indebtedness Ratio levels that are required to be maintained by the
Borrower under Section 5.3 of the Credit Agreement.
C. The Borrower, the 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) A new Section 5.1.19 is added to the Credit Agreement as
follows:
"5.1.19 Additional Collateral.
As soon as practicable, but in any event on or prior to January 30,
1997, the Borrower shall execute and deliver, or cause to be
delivered, to the Agent a Mortgage and a Security Agreement (or an
amendment to the existing Security Agreement) with respect to the
Borrower's paper mill located in Jacksonville, Florida and all
fixed assets, inventory and other tangible personal property
located at such facility, together with such surveys, environmental
information and studies, title reports, title insurance (with all
requirements for the insurance thereof having been satisfied),
financing statements, lien searches, opinions of counsel, evidence of
recordation and payment of applicable recording and other taxes as
the Agent may reasonably request, and all in form and substance
reasonably satisfactory to the Agent. The Borrower shall also take
or cause to be taken all actions reasonably requested by the Agent in
order to perfect or protect the Lien of the Mortgage and Security
Agreement with respect to such properties and assets."
(b) Section 5.2.10(a)(ix) of the Credit Agreement is amended in its
entirety to read as follows:
"(ix) so long as no Event of Default or Unmatured Event of Default
shall have occurred and be continuing, the prepayment of any
maturity or maturities of debt securities of the Borrower
(including the payment of principal, stated premium, if any, and
interest thereon) out of Discretionary Funds in an amount not to
exceed the Discretionary Funds Basket; provided, however, that no
prepayment of the Indebtedness created pursuant to or evidenced
by any of the Specified Senior Indentures in accordance with
Article XI of any thereof shall be permitted by this
Section 5.2.10(a)(ix);"
(c) Section 5.3.1 of the Credit Agreement is amended by deleting
such Section in its entirety and replacing it with the following:
"5.3.1 Interest Coverage Ratio.
(a) As of the end of each Fiscal Quarter, calculated for the
most recently completed four Fiscal Quarters (but if four
Fiscal Quarters have not been completed since the Closing Date,
then for the number of Fiscal Quarters that have been completed
since the Closing Date), except as otherwise provided in
Section 5.3.1(b) below, maintain an Interest Coverage Ratio
for such period ending on a date set forth below of not less
than the ratio set forth opposite such date:
Date Ratio
December 31, 1994 1.00 to 1
March 31, 1995 1.15 to 1
June 30, 1995 1.25 to 1
September 30, 1995 1.35 to 1
December 31, 1995 1.50 to 1
March 31, 1996 1.65 to 1
June 30, 1996 1.75 to 1
September 30, 1996 1.85 to 1
December 31, 1996 1.00 to 1
March 31, 1997 0.65 to 1
June 30, 1997 0.65 to 1
September 30, 1997 0.75 to 1
December 31, 1997 1.00 to 1
March 31, 1998 1.00 to 1
June 30, 1998 1.25 to 1
September 30, 1998 1.50 to 1
December 31, 1998 1.75 to 1
March 31, 1999
and thereafter 2.00 to 1
(b) In the event that the Borrower fails to maintain an
Interest Coverage Ratio as provided in Section 5.3.1(a) as of
the end of any Fiscal Quarter ending on September 30, 1997,
December 31, 1997, June 30, 1998, September 30, 1998,
December 31, 1998 or March 31,1999 (each such date, a
"Step-Up-Date"), the Borrower shall be allowed to satisfy
the Interest Coverage Ratio requirements under this
Section 5.3.1 on any two (2) Step-Up-Dates by maintaining an
Interest Coverage Ratio calculated for the period of one
Fiscal Quarter (it being understood and agreed that all
calculations under the definition of "Interest Coverage
Ratio" would, for purposes of this Section 5.3.1(b), be made
on a one-quarter basis rather than on a four-quarter basis)
ending on such Step-Up-Date, of not less than the ratio
set forth below opposite such Step-Up-Date:
Step-Up-Date Ratio
September 30, 1997 1.00 to 1
December 31, 1997 1.25 to 1
June 30, 1998 1.50 to 1
September 30, 1998 1.75 to 1
December 31, 1998 2.00 to 1
March 31, 1999 2.25 to 1"
(d) Section 5.3.2 of the Credit Agreement is amended by deleting
such Section in its entirety and replacing it with the following:
"5.3.2 Indebtedness Ratio. Have an Indebtedness Ratio of not
more than the following amounts as of the end of each Fiscal
Quarter ending on a date set forth below:
Date Ratio
December 31, 1994 through
March 31, 1998 .85 to 1
June 30, 1998 through
September 30, 1998 .83 to 1
December 31, 1998 .80 to 1
March 31, 1999 .78 to 1
June 30, 1999 and
thereafter .75 to 1"
(e) Schedule 4.6 of the Credit Agreement is amended in its entirety
to read as Schedule 4.6 hereto.
(f) The Definitional Appendix of the Credit Agreement is amended by
adding the following proviso at the conclusion of the definition of
"Discretionary Funds Basket":
"; provided, however, that from and after the effective date of the
Second Amendment of Credit Agreement dated as of December 18, 1996
to and including the date the Borrower delivers to the Agent a
certificate pursuant to Section 5.1.1(b) evidencing, as of the end of
the Fiscal Quarter for which such certificate is delivered, an
Interest Coverage Ratio (calculated for the period specified in
Section 5.3.1(a)) of at least 1.25:1, the aggregate amount of the
Discretionary Funds Basket available to be used for Investments
pursuant to Section 5.2.7(l), Acquisitions pursuant to Section
5.2.9(e)(ii) and Capital Expenditures pursuant to
Section 5.2.11(iii) shall be deemed to be (a)$50,000,000 less
(b) the amount of the Discretionary Funds Basket used for such
Investments, Acquisitions and Capital Expenditures on or after such
effective date."
(g) The Definitional Appendix of the Credit Agreement is further
amended by adding the following definition in appropriate
alphabetical order:
""Specified Senior Indentures" means each of (a) the Senior
Indentures, (b)the First Mortgage Note Indenture, (c) the Senior
Subordinated Note Indenture, (d) the Rating Adjustable Senior Note
Indenture dated July 24, 1996 for notes due 2016 (obligation of
the Borrower) and (e) the Senior Note Indenture dated
August 16, 1996 for notes due 2006 (primary obligation of Stone
Container Finance Company of Canada, guaranteed by the Borrower)."
SECTION 3. Conditions Precedent to Effectiveness of Amendment. This
Amendment shall become effective upon the date (the "Effective Date")
when (a) each of the Borrower, the Agent and the Required Lenders shall
have executed and delivered this Amendment and (b) the Agent shall
have received from the Borrower such certificates and opinions with
respect hereto as the Agent may reasonably require.
SECTION 4. Representations and Warranties of the Borrower.
The Borrower represents and warrants to the Lenders, the Co-Agents and
the Agent as follows:
(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 Event of Default or Unmatured Event of Default has occurred
and is continuing.
(c) The execution, delivery and performance of this Amendment has
been duly authorized by all necessary action on the part of, and
duly executed and delivered by, the Borrower and this Amendment
is a legal, valid and binding obligation of the Borrower
enforceable against the Borrower 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 the Borrower of any term
of any material contract, loan agreement, indenture or other
agreement or instrument to which the Borrower 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 Co-Agents or the Agent under the Credit
Agreement, the Loan Documents or the Ancillary Documents.
(d) The Borrower acknowledges and agrees that this Amendment
constitutes a "Loan Document" for purposes of the Credit
Agreement, including, without limitation, Section 7.1(d) 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 upon the execution and
delivery of this Amendment by the Borrower, the Agent and the Required
Lenders 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, 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.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of
the date above first written.
STONE CONTAINER CORPORATION
By:
Name:
Title:
BANKERS TRUST COMPANY, in its
individual capacity and as Agent
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, in its
individual capacity and as a Co-Agent
By:
Name:
Title:
BANK OF BOSTON
By:
Name:
Title:
THE BANK OF NEW YORK, in its
individual capacity and as a Co-Agent
By:
Name:
Title:
THE BANK OF NOVA SCOTIA, in its
individual capacity and as a Co-Agent
By:
Name:
Title:
CAISSE NATIONALE DE CREDIT
AGRICOLE, in its individual capacity and
as a Co-Agent
By:
Name:
Title:
AERIES FINANCE LTD.
By:
Name:
Title:
CERES FINANCE LTD.
By:
Name:
Title:
STRATA FUNDING LTD.
By:
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
in its individual capacity and as a Co-Agent,
and as successor to both Chemical Bank and
The Chase Manhattan Bank, N.A.
By:
Name:
Title:
XXXXXX XXXXXXX SENIOR
FUNDING, INC.
By:
Name:
Title:
CHL HIGH YIELD LOAN PORTFOLIO, a
Unit of The Chase Manhattan Bank, N.A.
By:
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By:
Name:
Title:
DRESDNER BANK AG (New York and
Grand Cayman Branches), in its individual
capacity and as a Co-Agent
By:
Name:
Title:
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By:
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, in its individual capacity and as
a Co-Agent
By:
Name:
Title:
KEYPORT LIFE INSURANCE
COMPANY
By: Chancellor Senior Secured
Management, Inc., as Portfolio
Advisor
By:
Name:
Title:
XXXXXX COMMERCIAL PAPER INC.
By:
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. in its individual capacity and
as a Co-Agent
By:
Name:
Title:
XXXXXX BANK LTD., formerly known as
Union Bank of Finland, Ltd., Grand Cayman
Branch
By:
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO,
INC.
By:
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO,
INC., as successor in interest to Senior High
Income Portfolio II, Inc.
By:
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By:
Name:
Title:
RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS B.V.
By: Chancellor Senior Secured
Management, Inc., as Portfolio
Advisor
By:
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO,
INC., as successor in interest to Senior
Strategic Income Fund, Inc.
By:
Name:
Title:
NATIONSBANK, N.A. (CAROLINAS), in
its individual capacity and as a Co-Agent
By:
Name:
Title:
PROSPECT STREET SENIOR
PORTFOLIO, L.P.
By: Prospect Street Senior Loan Corp., as
Managing General Partner
By:
Name:
Title:
STICHTING RESTRUCTURED
OBLIGATIONS BACKED BY SENIOR
ASSETS 2 (ROSA2)
By: Chancellor Senior Secured
Management, Inc., as Portfolio
Advisor
By:
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:
Name:
Title:
THE SUMITOMO BANK, LTD.,
CHICAGO BRANCH, in its individual
capacity and as a Co-Agent
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC., in
its individual capacity and as a Co-Agent
By:
Name:
Title:
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
By:
Name:
Title:
MEDICAL LIABILITY MUTUAL
INSURANCE COMPANY
By:
Name:
Title:
FIRST ALABAMA BANK
By:
Name:
Title:
CAPTIVA FINANCE LTD.
By:
Name:
Title:
THE YASUDA TRUST & BANKING CO.,
LTD. CHICAGO BRANCH
By:
Name:
Title:
INDOSUEZ CAPITAL FUNDING II,
LIMITED
By: Indosuez Capital Luxembourg, as
Collateral Manager
By:
Name:
Title:
ING CAPITAL ADVISORS, INC.
By:
Name:
Title:
PROTECTIVE LIFE INSURANCE CO.
By:
Name:
Title:
XXXXXXX XXXXX PRIME RATE
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
LP, as Investment Advisor
By:
Name:
Title:
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By:
Name:
Title:
CARILION HOLDING, LTD.
By:
Name:
Title:
OAK HILL SECURITIES FUND, L.P.
By:
Name:
Title:
SANWA BUSINESS CREDIT
CORPORATION
By:
Name:
Title:
Document Number: 0148884.01
12-23-96/:19a
