EXHIBIT 10.2(b)
SUPPORT AGREEMENT
This Support Agreement is made as of March 30, 2004, between Stone
Container Corporation (the "Parent") and Computershare Trust Company of Canada,
in its capacity as trustee of King Street Funding Trust, a trust established
under the laws of the Province of Ontario, by its Administrator, Scotia Capital
Inc. ("King Street").
RECITALS:
1. The Seller plans to incur certain obligations in its capacity as initial
servicer (in such capacity, the "Servicer") under a Receivables Purchase
Agreement dated as of March 30, 2004 (as it may be amended, restated,
supplemented or otherwise modified, the "Receivables Purchase Agreement").
2. The Servicer is an indirect subsidiary of the Parent, and the Parent and
the Servicer desire to provide certain assurances to King Street with
respect to the ability of the Servicer to faithfully perform its
obligations as Servicer under the Receivables Purchase Agreement.
3. MBI Limited/Limitee, in its capacity as General Partner of Smurfit-MBI,
also plans to incur certain obligations in its capacity as seller (in such
capacity, the "Seller") under the Receivables Purchase Agreement.
4. The Parent is in no way providing any support or assurance with respect to
the Seller's performance of its obligations as Seller under the Receivables
Purchase Agreement.
5. It is a condition precedent to the effectiveness of the Receivables
Purchase Agreement that the Parent provide this Support Agreement for the
benefit of King Street.
NOW THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used and not defined herein shall have the
respective meanings specified in the Receivables Purchase Agreement and the
following terms shall have the following meanings:
"Laws" means applicable laws (including common law), statutes, by-laws,
rules, regulations, orders, ordinances, codes, treaties, directions,
decrees, judgments, awards or requirements, in each case of any
Governmental Authority;
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Parent and its subsidiaries taken as a whole, (b) the ability of the Parent
to perform its obligations under this Support Agreement or the ability of
the Servicer to perform its obligations under the Receivables Purchase
Agreement or any of the other Transaction Documents, or (c) the rights or
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remedies of King Street against the Parent hereunder or against the
Servicer under the Receivables Purchase Agreement or any other Transaction
Document;
"Support Agreement" means this support agreement, as the same may be
amended, supplemented, modified, restated or replaced from time to time;
and
"Support Termination Date" means the date that is the later of (i) the
performance in full of the Servicer Obligations and the payment of any
amounts payable under this Support Agreement, (ii) the Facility Termination
Date, and (iii) the date on which King Street appoints a successor servicer
pursuant to Section 4.1(a) of the Receivables Purchase Agreement.
2. PERFORMANCE OF OBLIGATIONS. The Parent hereby unconditionally and
irrevocably undertakes and agrees with and for the benefit of King Street
to cause the due and punctual performance and observance by the Servicer of
the duties, responsibilities, covenants and obligations of the Servicer
contained in the Receivables Purchase Agreement or any document delivered
in connection therewith in accordance with the terms thereof (all such
duties, responsibilities, covenants and obligations on the part of the
Servicer, to be performed and observed, being collectively called the
"Servicer Obligations"), and agrees to pay any and all expenses (including
reasonable legal fees and expenses) incurred by King Street in enforcing
any of its rights hereunder. In the event that the Servicer shall fail in
any manner whatsoever to perform or observe any of the Servicer Obligations
when the same shall be required to be performed or observed, the Parent
will itself duly and punctually perform and observe, or will cause the due
and punctual performance and observance of, the Servicer Obligations, and
it shall not be a condition to the accrual of the obligation of the Parent
hereunder to perform or observe any of the Servicer Obligations (or to
cause the same to be performed or observed) that King Street shall have
first made any request of or demand upon or give any notice to the Parent
or to the Servicer or have initiated any action or proceeding against the
Parent or the Servicer in respect thereof. King Street may proceed to
enforce the obligations of the Parent under this Section 2 without first
pursuing or exhausting any right or remedy which King Street may have
against the Servicer, any other Person, the Purchased Interest or any other
property. For greater certainty, nothing herein shall create or impose upon
the Parent any obligation whatsoever with respect to the performance or
observance of any of the terms, conditions, covenants, agreements,
undertakings, indemnities or obligations of the Seller contained in the
Receivables Purchase Agreement or any document delivered in connection
therewith.
3. OBLIGATION ABSOLUTE. The Parent undertakes that the Servicer Obligations
will be performed strictly in accordance with the terms of the Receivables
Purchase Agreement or any other document delivered in connection therewith,
regardless of any Law now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of King Street with respect
thereto. The obligations of the Parent under this Support Agreement are
independent of the Servicer Obligations, and a separate action or actions
may be brought and prosecuted against the Parent to enforce this Support
Agreement, irrespective of whether any action is brought against the
Servicer or whether the Servicer is joined in
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any such action or actions. The liability of the Parent under this Support
Agreement shall be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Servicer Obligations, or any other
amendment or waiver of or any consent to departure from the
Receivables Purchase Agreement or any other agreement or instrument
relating thereto;
(b) any change, restructuring or termination of the corporate structure or
existence of the Parent, the Servicer or any of their Affiliates; or
(c) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Parent or the Servicer,
all whether or not the Parent shall have had notice or knowledge of any act
or omission referred to in the foregoing clauses (a) through (c),
inclusive, of this Section 3.
4. WAIVER. The Parent hereby waives promptness, diligence, notice of
acceptance or any other notice with respect to any of the Servicer
Obligations and this Support Agreement and any requirement that King Street
exhaust any right or take any action against the Servicer or any other
person or entity.
5. SUBROGATION. Until the Support Termination Date, the Parent hereby
postpones all rights of subrogation against the Servicer and its property
and all rights of indemnification, contribution and reimbursement from the
Servicer and its property, in each case in connection with this Support
Agreement and any payments made hereunder, and regardless of whether such
rights arise by operation of law, pursuant to contract or otherwise.
6. REPRESENTATIONS AND WARRANTIES OF THE PARENT. By executing and delivering
this Support Agreement, the Parent hereby represents and warrants to King
Street, and acknowledges that King Street is relying on such
representations and warranties in entering into the Receivables Purchase
Agreement, as follows:
(a) the Parent is a corporation validly organized and existing and in good
standing under the laws of its jurisdiction of incorporation, has full
corporate power and authority to own its properties and assets and is
duly qualified to do business and is in good standing in each
jurisdiction where the failure to so qualify and maintain such good
standing could reasonably be expected to have a Material Adverse
Effect;
(b) the Parent has full corporate power and authority to execute and
deliver this Support Agreement and to do all acts and things required
or contemplated hereunder;
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(c) the Parent has taken all necessary action to authorize the execution
and delivery of this Support Agreement and the performance by the
Parent of its obligations hereunder and of the transactions
contemplated hereby;
(d) the execution and delivery by the Parent of this Support Agreement and
the performance by the Parent of its obligations hereunder and of the
transactions contemplated hereby do not, and will not with respect to
clauses (i) and (iii), contravene, breach, constitute a default under,
violate or conflict with:
(i) the Parent's constating documents or by-laws or any resolution
passed by its board of directors or its shareholders;
(ii) any Law applicable to the Parent which could reasonably be
expected to have a Material Adverse Effect;
(iii) any indenture, loan or credit agreement, lease, mortgage,
security agreement, bond, note, contract or other agreement or
instrument to which the Parent is a party or by which it or its
property is bound, other than any such contravention, breach,
default, violation or conflict which could not reasonably be
expected to have a Material Adverse Effect; or
(iv) any order, writ, judgment, award, injunction or decree binding
on the Parent or affecting its properties, other than any such
contravention, breach, default, violation or conflict which
could not reasonably be expected to have a Material Adverse
Effect;
and do not and will not result in or require the creation of any
Adverse Claim upon or with respect to any of the Parent's assets;
(e) other than the filing of this Support Agreement as required by any
applicable securities law, no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority is
necessary in connection with the execution and delivery by the Parent
of this Support Agreement, or the performance by the Parent of its
obligations hereunder or of the transactions contemplated hereby or to
give legal effect to the same other than such as have been obtained;
(f) this Support Agreement has been duly executed and delivered by the
Parent;
(g) this Support Agreement is a legal, valid and binding obligation of the
Parent enforceable against the Parent in accordance with its terms by
King Street, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity;
(h) all factual information furnished by or on behalf of the Parent to
King Street or the Administrator for purposes of, or in connection
with, this Support Agreement or
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the Receivables Purchase Agreement or any transaction contemplated
hereby is and all other factual information hereafter furnished by or
on behalf of the Parent to King Street or the Administrator will be,
true and accurate in all material respects on the date as of which
such information is dated or certified and (in the case of any such
information furnished prior to the date hereof) as of the date hereof
and is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information
not misleading;
(i) there are no actions, suits or proceedings existing or pending or, to
the knowledge of the Parent, threatened against or affecting the
Parent or any of its property, at law, in equity or before any
arbitration tribunal or Governmental Authority or alternative dispute
resolution mechanism which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect, and the Parent is not
in default with respect to any Law, which default could reasonably be
expected to have a Material Adverse Effect;
(j) the unaudited consolidated financial statements of the Parent and its
Subsidiaries for the fiscal quarter ended December 31, 2003 provided
to King Street fairly present in all material respects the financial
position of the Parent and its Subsidiaries taken as a whole as at the
date of such financial statements and the results of its operations
for the fiscal period ended on such date, and, on the date hereof,
there has been no material adverse change in the financial position of
the Parent and its Subsidiaries taken as a whole since such date;
(k) no default has occurred and is outstanding under any agreement,
instrument, indenture or trust deed to which the Parent is a party,
which default could reasonably be expected to have a Material Adverse
Effect;
(l) no part of the Purchased Interest is subject to any Adverse Claim
granted or created by the Parent; and
(m) on the date of this Support Agreement, the Parent is the direct or
indirect beneficial owner of all of the issued and outstanding shares
in the capital of the general partner and each of the limited partners
of Smurfit-MBI.
The representations and warranties set forth above shall survive the
initial purchase of Receivables by King Street pursuant to the Receivables
Purchase Agreement and shall remain in full force and effect for the
benefit of King Street.
7. COVENANTS. The Parent covenants and agrees that, until the Support
Termination Date, unless King Street shall otherwise consent in writing:
(a) PRESERVATION OF CORPORATE EXISTENCE. (i) It will preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each relevant jurisdiction,
except to the extent that the failure so to preserve and
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maintain such rights, franchises, privileges and qualification would
not materially adversely affect the interests of King Street
hereunder, or the ability of the Parent to perform its obligations
hereunder, and (ii) it shall not, other than the proposed amalgamation
of the Parent and Jefferson Smurfit Corporation (U.S.), Inc. or unless
otherwise disclosed in writing to King Street on or before the date of
this Support Agreement, liquidate or dissolve, consolidate or
amalgamate with any person or sell, transfer or convey all or
substantially all of its assets;
(b) REPORTING REQUIREMENTS. It will furnish to King Street and the Rating
Agency promptly after same becomes publicly available, copies of all
periodic and other reports, proxy statements, financial statements and
other materials (other than (i) the exhibits to registration
statements and (ii) any registration statements on Form S-8 or its
equivalent) filed by the Parent with the U.S. Securities and Exchange
Commission;
(c) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Without limiting its
obligations hereunder, it will ensure that the Servicer at all times
complies with the Credit and Collection Policy;
(d) COMPLIANCE WITH LAWS. It will comply with all Laws applicable to all
or any of it, its business, its properties and the Purchased Interest,
other than any non-compliance that could not reasonably be expected to
have a Material Adverse Effect;
(e) RETAIN CONTROL. It will continue to, either directly or indirectly,
retain effective control of the Servicer; and
(f) BANKRUPTCY PROCEEDINGS. In the event that the Parent seeks protection
under the Bankruptcy Code of the United States of America, it shall
(i) ensure that no claim shall be made by the Parent or any of its
Affiliates that any assets forming part of the Purchased Interest are
assets of the Parent or the Seller, or that the Purchased Interest or
any part thereof should be subject to such insolvency proceedings, and
(ii) provide any assistance required or requested by King Street with
respect to any action brought by King Street or the Administrator on
its behalf to release all or any part of the Purchased Interest and
the transactions contemplated by the Receivables Purchase Agreement
from any stay of proceedings instituted in connection with such
insolvency proceedings.
8. AUTHORIZATION BY PARENT. King Street may continue to purchase Receivables,
and the Related Security and Collections related thereto, from time to time
without notice to or authorization from the Parent regardless of the
Servicer's financial or other condition at the time of any such purchase.
The Parent acknowledges to King Street that it has adequate means to obtain
from the Servicer on a continuing basis all information concerning the
financial condition of the Servicer and the collectibility of the Purchased
Receivables, and agrees with King Street that King Street shall not have
any obligation to
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disclose or discuss with the Parent any information which King Street has
respecting the financial condition of Servicer or the collectibility of any
Purchased Receivables.
9. TAXES. Any payments to be made by the Parent hereunder shall be made free
and clear of any deduction, withholding or other Taxes. If the Parent is
required by law to make any deduction or withholding on account of Taxes or
otherwise from any such payment, the sum due from it in respect of such
payment shall be increased to the extent necessary to ensure that after the
making of such deduction or withholding, King Street receives a net sum
equal to the sum which it would otherwise have received had no deduction or
withholding been made, taking into account any credits or setoffs available
to King Street in respect of such deduction or withholding.
10. CONTINUING SUPPORT AGREEMENT; ASSIGNMENTS UNDER RECEIVABLES PURCHASE
AGREEMENT. This Support Agreement is a continuing Support Agreement and
shall (i) remain in full force and effect until the Support Termination
Date, (ii) be binding upon the Parent, its successors and assigns, and
(iii) enure to the benefit of, and be enforceable by, King Street and its
successors, transferees and assigns. King Street (and any assignee of King
Street) may at any time assign any and all of its rights hereunder to any
other person or entity without the consent of the Parent or the Servicer in
accordance with the provisions of the Receivables Purchase Agreement,
whereupon (i) each reference herein to King Street shall mean and be a
reference to such assignee and (ii) such assignee may enforce this Support
Agreement to the fullest extent as if it were a named party hereto.
11. AMENDMENTS, WAIVERS, ETC.. No amendment or waiver of any provision of this
Support Agreement, consent to any departure by any party therefrom or
approval or direction to be given by any party hereunder shall be effective
in whole or in part unless the amendment, waiver, consent, approval or
direction shall be (a) in writing and signed by the Parent and King Street
and (b) if material, approved by the Rating Agency, and then such waiver,
consent, approval or direction shall be effective only in the specific
instance and for the specific purpose for which it was given.
12. NO WAIVER; REMEDIES. No failure on the part of any party to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by Law.
13. TIME OF THE ESSENCE. Time shall be of the essence of this Support Agreement
and of every provision hereof.
14. SEVERABILITY. Any provision hereof that is prohibited or unenforceable in
whole or in part in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
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15. FURTHER ASSURANCES. Each of the parties, upon the request of the other
party, shall do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary or desirable to effect complete
consummation of the objects and intent of and the transactions contemplated
by this Support Agreement.
16. GOVERNING LAW. This Support Agreement is a contract made under and shall be
governed by and construed in accordance with the laws of the Province of
Ontario and the federal laws of Canada applicable in the Province of
Ontario.
17. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
(a) Each of the parties hereby irrevocably submits to the jurisdiction of
any court sitting in Toronto in any action or proceeding arising out
of or relating to this Support Agreement, and each of the parties
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such Toronto court. Each of
the parties hereby irrevocably waives, to the extent permitted by law,
the defence of an inconvenient forum to the maintenance of such action
or proceeding. Each of the parties agrees that a final judgment in any
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by Law.
(b) Nothing in this Section 17 shall affect (i) the right to serve legal
process in any other manner permitted by Law, or (ii) the right of any
party to bring any action or proceeding in the courts of other
jurisdictions.
(c) To the extent that any party has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or
its property, it hereby irrevocably waives, to the extent permitted by
law, such immunity in respect of its obligations hereunder.
18. EXECUTION IN COUNTERPARTS. This Support Agreement may be executed in
counterparts, each of which shall be deemed to be an original and which
together shall constitute one and the same Support Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Support Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
STONE CONTAINER CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx,
Title: Assistant Treasurer and Director of Pension
Investments
COMPUTERSHARE TRUST COMPANY OF
CANADA, IN ITS CAPACITY AS TRUSTEE OF KING
STREET FUNDING TRUST, BY ITS
ADMINISTRATOR, SCOTIA CAPITAL INC.
By: /s/ D. Xxxxxxx Xxxxxxxx
------------------------
Name: D. Xxxxxxx Xxxxxxxx
Title: Director
