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Exhibit 10.4
AGREEMENT
AGREEMENT dated as of May 10, 1998 between Smurfit International B.V., a
corporation organized under the laws of the Netherlands ("SIBV"), and Xxxxxx
Xxxxxxx Leveraged Equity Fund II, Inc., a Delaware corporation ("MSLEF").
W I T N E S S E T H
WHEREAS, SIBV and MSLEF are stockholders of Jefferson Smurfit
Corporation ("JSC"); and
WHEREAS, MSLEF and SIBV are parties to a Stock Purchase Agreement dated as
of the date hereof (the "Stock Purchase Agreement") among SIBV, Jefferson
Smurfit Group plc ("JSG"), MSLEF, JSC and certain other JSC stockholders,
pursuant to which SIBV has agreed to purchase from MSLEF and certain other JSC
stockholders, and MSLEF and certain other JSC stockholders have agreed to sell
to SIBV, shares of common stock, par value $0.01 per share, of JSC (the "Common
Stock"), upon the terms and subject to the conditions set forth therein; and
WHEREAS, in connection with the stock purchase pursuant to the Stock
Purchase Agreement, MSLEF has agreed to give SIBV a right of first refusal,
exercisable only under certain circumstances, on the shares of Common Stock that
it beneficially owns after the closing of the Stock Purchase Agreement.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (A) The following terms, as used
herein, have the following meanings:
"Business Day" means any day other than a Saturday, a Sunday, or a bank
holiday in the United States or Ireland.
"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.
"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.
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"Transfer" shall mean sell, assign, transfer, exchange or otherwise
dispose of an interest in shares of Common Stock.
Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Common Stock................................. recitals
Encumbrances................................. 3.01
JSC.......................................... recitals
JSG.......................................... recitals
MSLEF........................................ preamble
Offer........................................ 4.01
Related Group................................ 4.01
SIBV......................................... preamble
Stock Purchase Agreement..................... preamble
Stockholders' Agreement ..................... 3.01
ARTICLE 2
Representations and Warranties of SIBV
SIBV represents and warrants to MSLEF as of the date of effectiveness of
this Agreement pursuant to Section 7.6 that:
Section 2.1. Organization. SIBV is a corporation duly organized
and validly existing under the laws of the Netherlands.
Section 2.2. Authority. SIBV has all corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by SIBV of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of SIBV. No other
action on the part of SIBV or its stockholders is necessary to authorize the
execution and delivery of this Agreement by SIBV or the performance by SIBV of
its obligations hereunder. This Agreement has been duly executed and delivered
by SIBV and constitutes a legal, valid and binding agreement of SIBV,
enforceable against SIBV 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 2.3. No Violation. The execution and delivery of this Agreement by
SIBV, and the performance by SIBV 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 SIBV, (b) require the consent, waiver,
approval, license or authorization or any filing by SIBV with any governmental
authority
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(other than any filings by SIBV that may be required under the 0000 Xxx) or (c)
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 SIBV is subject or by
which SIBV is bound and which would have an adverse effect on the ability of
SIBV to perform its obligations under this Agreement.
Section 2.4. Securities Act Representation. SIBV will not purchase any
shares of Common Stock with a view to a distribution or resale of any of such
Shares in violation of any applicable securities laws. SIBV understands that the
shares of Common Stock constitute restricted securities, are not registered
under the 1933 Act or any state securities laws, and the certificates
representing such shares of Common Stock will bear a legend to that effect. SIBV
agrees that it shall not sell any of such shares of Common Stock in violation of
the 1933 Act. SIBV represents that it is a sophisticated investor and is able to
bear the risk of an investment in JSC.
ARTICLE 3
Representations and Warranties of MSLEF
MSLEF represents and warrants to SIBV as of the date of effectiveness of
this Agreement pursuant to Section 7.6 that:
Section 3.1. Title to Shares. MSLEF has good and valid title to the shares
of Common Stock that it owns, 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 or the related Registration
Rights Agreement dated as of the same date. At the closing of any purchase and
sale hereunder, SIBV will acquire all of MSLEF's right, title and interest in
and to the shares of Common Stock subject to such purchase and sale and will
receive good and valid title to such shares of Common Stock free and clear of
any and all Encumbrances. As of the date hereof, MSLEF beneficially owns the
shares of Common Stock set forth on Schedule I hereto.
Section 3.2. Organization. MSLEF is a corporation duly incorporated or
formed, validly existing and in good standing under the laws of jurisdiction of
its incorporation.
Section 3.3. Authority. MSLEF 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
MSLEF of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
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on the part of MSLEF. No other action on the part of MSLEF or its stockholders
or partners, as the case may be, is necessary to authorize the execution and
delivery of this Agreement by MSLEF orthe performance by MSLEF of its
obligations hereunder. This Agreement has been duly executed and delivered by
MSLEF and constitutes a legal, valid and binding agreement of MSLEF, enforceable
against MSLEF 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 3.4. No Violation. The execution and delivery of this Agreement by
MSLEF, and the performance by MSLEF 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 MSLEF, (b) require the consent, waiver,
approval, license or authorization or any filing by MSLEF with any governmental
authority, (c) 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 MSLEF is
subject or by which MSLEF is bound and which would have an adverse effect on the
ability of MSLEF to perform its obligations under this Agreement or (d) result
in the creation or imposition of any tax or encumbrance on the shares of Common
Stock, except for transfer taxes, if any.
ARTICLE 4
Right of First Refusal
Section 4.1. Right of First Refusal. (a) Except as provided in this
Section 4.1, MSLEF agrees that it will not effect a Transfer to any Person or
member of a group (as such term is defined in Rule l3d-5 promulgated under the
0000 Xxx) (such Person or group, a "Related Group") of any shares of Common
Stock that it beneficially owns if after reasonable inquiry MSLEF believes that
the number of shares of Common Stock being Transferred to such Related Group by
MSLEF would, when taken together with all other shares of Common Stock then
beneficially owned by such Related Group, amount to more than five percent of
the then outstanding shares of Common Stock.
(b) Prior to the acceptance of any offer made by a Related Group (each
such offer, an "Offer") to purchase any of the shares of Common Stock that it
beneficially owns, MSLEF will give SIBV two Business Days' notice of such
proposed Transfer which notice shall state all of the material terms and
conditions of the Offer other than the identity of the Related Group. Delivery
of any such notice to SIBV will constitute an offer by MSLEF to sell the shares
of
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Common Stock subject to the Offer to SIBV on the same terms and subject to
the same conditions as the Offer.
(c) Prior to the expiration of the three Business Day period referred to
in subsection (b), SIBV will notify MSLEF whether it will accept MSLEF's offer
to sell to SIBV the shares of Common Stock subject to the Offer; provided that
SIBV may only exercise its right of first refusal with respect to all shares of
Common Stock subject to the Offer unless such exercise would result in a breach
by SIBV of its obligations under the Standstill Agreement dated as of even date
herewith among JSG, JSC and MSLEF in which event SIBV may exercise its right of
first refusal but only to the fullest extent possible without breaching such
Agreement; provided, further, that MSLEF shall be free to Transfer to the
Related Group without restriction under this Agreement any shares of Common
Stock subject to the Offer that SIBV would have been required to purchase upon
exercise of its right of first refusal pursuant to the preceding proviso but for
the limitation contained in such proviso. Failure of SIBV to so notify MSLEF
during such period shall be deemed a decision not to purchase any of such shares
of Common Stock.
(d) If SIBV fails to exercise its option to purchase shares of Common
Stock subject to the Offer, MSLEF shall be free to sell such shares of Common
Stock (or any portion thereof) to the Related Group without restriction under
this Agreement; provided that such sale is consummated within sixty days
thereafter at a per share price equal to or greater than the price, and upon the
same terms and conditions, as set forth in the notice delivered pursuant to
subsection (b) of this Section 4.1. If such sale is not so consummated within
such sixty-day period, such shares of Common Stock shall again be subject to
SIBV's rights as set forth in this Section 4.1.
(e) The election by SIBV to purchase shares of Common Stock subject to
the Offer shall result in the creation of a binding, irrevocable agreement on
the part of SIBV to purchase such shares and on the part of MSLEF to sell such
shares to SIBV, and the parties hereto shall consummate such purchase and sale
within three business days of the date on which SIBV notifies MSLEF of its
intent to exercise its right of first refusal, although no party shall be
required to consummate the transaction if such consummation would violate
applicable law. If the closing of such purchase and sale does not occur before
the expiration of the three Business Day period referred to in this subsection,
MSLEF shall be free to sell the shares of Common Stock (or any portion thereof)
subject to the Offer to the Related Group or any one or more parties, within the
succeeding 60 days, without restriction under this Agreement at any price and
upon any terms and conditions. If such sale is not so consummated within such
sixty-day period, such shares of Common Stock shall again be subject to SIBV's
rights as set forth in this Section 4.1.
(f) The provisions of this Section 4.1 shall be inapplicable (i) to sales
of shares of Common Stock by MSLEF in underwritten public offerings effected
pursuant to the Registration Rights Agreement dated of even date herewith among
JSC, SIBV, MSLEF and certain other JSC stockholders, (ii) to any sales of shares
of Common Stock effected by MSLEF in the open
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market pursuant to Rule 144 under the 1933 Act or (iii) to any distribution of
shares by The Xxxxxx Xxxxxxx Leveraged Equity Fund II, L.P. to its limited
partners.
ARTICLE 5
Survival
Section 5.1. Survival. The representations, warranties, covenants
and agreements of the parties contained in this Agreement shall survive
for the applicable statute of limitations period, notwithstanding any
investigation by or on behalf of any party before or after.
ARTICLE 6
Termination
Section 6.1. Termination. This Agreement may be terminated at any
time by mutual written agreement of SIBV and MSLEF. This Agreement shall
automatically terminate if the Stock Purchase Agreement is terminated.
Section 6.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 6.1, 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 no such
termination shall relieve any party hereto from liability for breach of this
Agreement.
ARTICLE 7
Miscellaneous
Section 7.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to SIBV, to:
Smurfit International X.X.
Xxxxxxxxxxxxxx 0000
Xxxxxxxxx 1077ZZ, The Netherlands
Attention: Rokin Corporate Services, B.V.
Fax: 00-00-000-0000
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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 MSLEF, 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
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 7.2. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby will be paid by the
party incurring such cost or expense; provided that SIBV and MSLEF will share
equally any transfer taxes payable in the United States in connection with any
purchase and sale of the shares of Common Stock hereunder.
Section 7.3. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior
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agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
Section 7.4. 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 SIBV 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
of Common Stock beneficially owned by MSLEF, on the terms and subject to the
conditions specified herein, but no such transfer or assignment will relieve
SIBV of its obligations hereunder.
Section 7.5. Amendments and Waivers. (a) 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 SIBV and MSLEF, or in the case of
a waiver, by the party against whose rights the waiver is to be effective. 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 7.6. Effectiveness. Other than Section 6.1 and this Section 7.6,
which are effective on the date hereof, the provisions of this Agreement will
become effective only upon the closing of the stock purchase contemplated by the
Stock Purchase Agreement.
Section 7.7. 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 7.8. 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 7.1 HEREOF.
Section 7.9. 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. Subject to Section
7.6, this Agreement shall become
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effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
Section 7.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
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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.
XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
SMURFIT INTERNATIONAL B.V.
By: /s/ Houghton Fry
---------------------------
Name: Houghton Fry
Title: Attorney-in-Fact
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SCHEDULE I
MSLEF's Beneficial Ownership of Shares of Common
Stock
31,574,540
