Exhibit 10.1
SECOND AMENDMENT OF
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
October 15, 1999 (this "Amendment"), is by and among Jefferson Smurfit
Corporation (U.S.), a Delaware corporation (the "Borrower"), Smurfit-Stone
Container Corporation, a Delaware corporation ("SSCC"), JSCE, Inc., a Delaware
corporation ("JSCE"), the undersigned financial institutions, including The
Chase Manhattan Bank ("Chase") and Bankers Trust Company ("BTCo"), in their
capacities as lenders (collectively, the "Lenders," and each individually, a
"Lender"), BTCo and Chase, as senior managing agents (in such capacity, the
"Senior Managing Agents"), and Chase, as administrative agent and collateral
agent (in such capacities, the "Administrative Agent" and the "Collateral
Agent," respectively).
RECITALS:
A. The Borrower, SSCC, JSCE, the Senior Managing Agents, the Administrative
Agent, the Collateral Agent and the Lenders are parties to that certain Amended
and Restated Credit Agreement dated as of November 18, 1998, as amended by that
certain First Amendment of Amended and Restated Credit Agreement dated as of
June 30, 1999 (the "Credit Agreement").
B. The Borrower, SSCC, JSCE, the Senior Managing Agents, the Administrative
Agent, the Collateral Agent and the Lenders desire to amend the Credit Agreement
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings given them in the Credit Agreement.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is, as
of the Effective Date (as defined below), hereby amended as follows:
(a) Section 1.01 of the Credit Agreement is amended (i) by deleting
the "and" appearing at the end of clause (ii) of the definition of
"Subsidiary" and substituting a comma (",") therefor, and inserting
immediately prior to the period (".") now appearing at the end of such
definition, the following: ", and (iv) any of Xxxxx, Monetization Sub,
Timberlands I (so long as the Timberlands Sale shall be completed prior to
November 30, 0000), Xxxxxxxxxxx II (so long as the Timberlands Sale shall
be completed prior to November 30, 1999) and TNH"; and (ii) by adding
thereto (in alphabetical order) the following defined terms:
"Borrower Preferred Stock" means that certain Series A
non-participating, non-voting preferred stock of the Borrower issued
to JSCE in connection with the 1999 Timberlands Sale having an initial
liquidation value of $1,000 per share, subject to accretion based on
the amount of dividends not paid in cash and the amount of any
make-whole premium in the event the dividend rate has been converted
to a fixed rate, issued on terms reasonably acceptable to the Senior
Managing Agents.
"Xxxxx" means JSC Timber Finance Inc., a Delaware corporation,
together with its successors and permitted assigns.
"JSCE Preferred Stock" means that certain Series A
non-participating, non-voting preferred stock of JSCE issued to SSCC
in connection with the 1999 Timberlands Sale having an initial
liquidation value equal to $1,000 per share, subject to accretion
based on the amount of dividends not paid in cash and the amount of
any make-whole premium in the event the dividend rate has been
converted to a fixed rate, issued on terms reasonably acceptable to
the Senior Managing Agents.
"Monetization Sale" means the sale of the managing membership
interest in Monetization Sub by the Borrower in exchange for
approximately $30,000,000, on terms reasonably acceptable to the
Senior Managing Agents.
"Monetization Sub" means Timber Capital Holdings LLC, a Delaware
limited liability company, together with its successors and permitted
assigns.
"1999 Timberlands Sale" means the sale of certain real property
of the Borrower and its Subsidiaries (or Equity Interests in
Affiliates of the Borrower owing such real property) pursuant to that
certain Purchase and Sale Agreement, dated as of July 28, 1999, by and
between Rayonier Inc. and the Borrower, as modified by that certain
Letter Agreement, dated as of August 26, 1999, as amended on terms
reasonably satisfactory to the Senior Managing Agents, and the
monetization transactions of the Borrower and its Affiliates in
connection therewith, including, without limitation, the Monetization
Sale.
"Newberg Mill Sale" means the sale by SNC of the mill facility
and the related real and personal property (including inventory) of
SNC located in Newberg, Oregon or used exclusively in connection with
the operation of the Newberg, Oregon mill and the conduct of its
business, on terms reasonably acceptable to the Senior Managing
Agents.
"Timberlands I" means a newly formed Delaware limited liability
company, together with its successors and permitted assigns,
established solely for the purpose of consummating the 1999
Timberlands Sale.
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"Timberlands II" means a newly formed Delaware limited liability
company, together with its successors and permitted assigns,
established solely for the purpose of consummating the 1999
Timberlands Sale.
"TNH" means Timber Note Holdings LLC, a Delaware limited
liability company, together with its successors and permitted assigns.
(b) Section 2.13(b) of the Credit Agreement is amended to insert
immediately after the first occurrence of the phrase "Asset Sale" therein,
the following:
"(other than the issuance of the Borrower Preferred Stock and the JSCE
Preferred Stock, the transfer by the Borrower of its ownership
interests in Timberlands I and Timberlands II to Monetization Sub, and
the pledge of the JSCE Preferred Stock to secure Indebtedness
permitted under Section 7.01(s))".
and is further amended to insert immediately after the phrase "the
definition of the term 'Asset Sale'" the following:
"to the extent that such Asset Sale generates Net Cash Proceeds which,
when aggregated with the Net Cash Proceeds from other Asset Sales
consummated during the term of this Agreement are greater than
$10,000,000".
(c) Section 2.13(f) of the Credit Agreement is amended to insert the
following immediately prior to the period (".") now appearing at the end
thereof:
"; provided, further, that, subject to paragraph (i) below, the amount
of any such prepayment to be made in connection with each of the 1999
Timberlands Sale, the Monetization Sale and the Newberg Mill Sale
shall first be applied pro rata to the Tranche A Term Loan Repayment
Amounts and the Tranche B Term Loan Repayment Amounts occurring on
March 31, 2000 through September 30, 2001 until paid in full, and
thereafter, subject to paragraph (i) below, pro rata to the remaining
Tranche B Term Loan Repayment Amounts until paid in full, and
thereafter as otherwise provided above in this Section 2.13(f)".
(d) Section 6.10(b) of the Credit Agreement is hereby amended by
deleting the "and" appearing at the end of clause (i) in the first sentence
of Section 6.10(b) and substituting a comma (",") therefor, and inserting
the following immediately prior to the parenthesis (")") now appearing at
the end of the first sentence thereof:
"(iii) the JSCE Preferred Stock and the Borrower Preferred Stock, and
(iv) the ownership interests of any of the Loan Parties in Xxxxx,
Monetization Sub, Timberlands I, Timberlands II and TNH."
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(f) Section 6.10(d) of the Credit Agreement is hereby amended by
re-lettering clauses (x), (y) and (z) thereof as clauses (1), (2) and (3)
and by inserting immediately after clause (3) thereof but before the
parenthesis (")") the following new clause (4): "and (4) the JSCE Preferred
Stock, the Borrower Preferred Stock, the incurrence of Indebtedness under
Sections 7.01(r) and (s), and the ownership of any ownership interests in
Xxxxx, Monetization Sub, Timberlands I (so long as the 1999 Timberlands
Sale shall be completed prior to November 30, 0000), Xxxxxxxxxxx II (so
long as the 1999 Timberlands Sale shall be completed prior to November 30,
1999) and TNH by any Loan Party".
(e) Section 7.01 of the Credit Agreement is hereby amended (i) to
delete the word "and" after clause (p) thereof; (ii) to delete the period
(".") now appearing at the end of clause (q) and substituting the phrase ";
and" therefor; and (iii) to insert the following new clauses (r) and (s) at
the end thereof:
"(r) subordinated Indebtedness of SSCC in a principal amount not to
exceed $100,000,000 and which Indebtedness shall be contributed by
SSCC to JSCE and Xxxxx, by JSCE to the Borrower and by the Borrower to
Xxxxx, and shall be on terms reasonably acceptable to the Senior
Managing Agents; and
(s) senior secured Indebtedness of SSCC in favor of Xxxxx in an
initial principal amount not to exceed $455,000,000, subject to
accretion based on the amount of interest not paid in cash and the
amount of any make-whole premium in the event the interest rate has
been converted to a fixed rate, which Indebtedness shall be issued on
terms reasonably acceptable to the Senior Managing Agents."
(f) Section 7.02(a) of the Credit Agreement is amended (i) to delete
the word "and" after clause (vi) thereof; (ii) to delete the period (".")
now appearing at the end of clause (vii) and substituting the phrase ";
and" therefor; and (iii) to insert the following new clause (viii) at the
end thereof:
"(viii) Liens securing Indebtedness permitted under Section 7.01(s),
on terms reasonably acceptable to the Senior Managing Agents."
(g) Section 7.04 of the Credit Agreement is amended (i) to delete the
word "and" after clause (i) thereof; (ii) to delete the period (".") now
appearing at the end of clause (j) and substituting the phrase "; and"
therefor; and (iii) to insert the following new clause (k) at the end
thereof:
"(k) Investments (i) by SSCC in JSCE resulting from (a) the transfer
of up to $50,000,000 of promissory notes of SSCC and (b) the purchase
of up to $455,000,000 of the JSCE Preferred Stock, (ii) by JSCE in the
Borrower resulting from (a) the transfer of up to $50,000,000 of
promissory notes of SSCC and (b) the purchase of up to $455,000,000 of
the Borrower Preferred Stock, (iii) by the
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Borrower and SSCC in Xxxxx resulting from the transfer of up to
$50,000,000 of promissory notes of SSCC from each of SSCC and the
Borrower in exchange for not less than 100% of the ownership interests
in Xxxxx in the aggregate, and the incurrence of Indebtedness of SSCC
under Section 7.01(s), (iv) by the Borrower in each of Timberland I
and Timberland II resulting from the transfer of all of the timberland
subject to the 0000 Xxxxxxxxxxx Sale to each of Timberland I and
Timberland II in exchange for all of the ownership interests in
Timberland I and Timberland II, (v) by the Borrower and SNC in
Monetization Sub resulting from the transfer of all of the ownership
interests in Timberland I and Timberland II to Monetization Sub in
exchange for all of the ownership interest in Monetization Sub, and
(vi) by the Borrower in SNC resulting from the transfer by the
Borrower to SNC of a partial ownership interest in Monetization Sub,
in each case, in connection with the 1999 Timberlands Sale."
(h) Section 7.05 of the Credit Agreement is amended (i) to delete the
word "and" after clause (e) thereof; (ii) to delete the period (".") now
appearing at the end of clause (f) and substituting the phrase "; and"
therefor; and (iii) to insert the following new clause (g) at the end
thereof:
"(g) in connection with the Monetization Sale, the 1999
Timberlands Sale and the Newberg Mill Sale."
(i) Section 7.06(b) of the Credit Agreement is amended (i) by
inserting immediately after the first occurrence of the phrase "cash
dividends" now appearing in clause (i) thereof, the following: "(A) on the
Borrower Preferred Stock to JSCE to be used by JSCE to pay cash dividends
on the JSCE Preferred Stock and (B) on its common stock", (ii) by inserting
immediately after the phrase "cash dividends" now appearing in clause (ii)
thereof, the following: "(A) on the JSCE Preferred Stock to SSCC (or its
successors or assigns) out of the proceeds of the dividends referred to in
clause (i)(A) above and (B)", and (iii) by deleting the phrase "clause (i)"
now appearing in clause (ii) thereof and substituting therefor the phrase
"clause (i)(B)".
(j) Section 7.07 of the Credit Agreement is amended to (i) to delete
the word "and" after clause (f) thereof and substitute a comma (",")
therefor; (ii) to delete the period (".") now appearing at the end of
clause (g) and substituting the phrase "; and" therefor; and (iii) to
insert the following new clause (h) at the end thereof: "(h) the issuance
of the Indebtedness permitted under Sections 7.01(r) and (s) and payments
in respect thereof and the granting of any Liens permitted under Section
7.02(a)(viii)".
(k) Section 7.09(a) of the Credit Agreement is amended (i) by deleting
clause (iii) thereof in its entirety, and substituting the following new
clause (iii) therefor:
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"(iii) repurchasing, redeeming or otherwise extinguishing up to
$400,000,000 in aggregate principal amount (including any accrued and
unpaid interest and any premium thereon) of any Indebtedness"
and (ii) by inserting immediately prior to the period (".") now appearing
at the end thereof, the following:
", provided, further, that at the time of any such repurchase
permitted by clause (iii) above, the aggregate outstanding amount of
the Term Loans is less than or equal to $450,000,000"
(l) Section 7.11(a) of the Credit Agreement is amended to insert
immediately prior to the period (".") now appearing at the end thereof, the
following: ", (iii) the transfer by the Borrower, directly or indirectly,
of all of the ownership interests in Timberlands I and Timberlands II to
Rayonier Inc. or its Affiliate in connection with the 1999 Timberlands
Sale, and (iv) the issuance by the Borrower to JSCE of the Borrower
Preferred Stock and the issuance by JSCE to SSCC of the JSCE Preferred
Stock".
(m) Section 7.15 of the Credit Agreement is amended to delete the
ratios set forth opposite "September 30, 1999", "December 31, 1999" and
"March 31, 2000" and "June 30, 2000", and to substitute therefor the ratios
"1.50 to 1", "1.65 to 1" " 1.65 to 1" and "1.75 to 1", respectively.
(n) Section 7.16 of the Credit Agreement is amended (i) to insert
immediately after the phrase "all or substantially all of the Collateral"
now appearing in clause (a) thereof, the following: ", other than in
connection with the 1999 Timberlands Sale, the Newberg Mill Sale and the
Monetization Sale"; and (ii) to insert at the end of the first
parenthetical appearing in clause (b) thereof, the following: "or in
connection with either the 1999 Timberlands Sale or the Newberg Mill Sale".
(o) Section 7.17(a) of the Credit Agreement is hereby amended by (i)
inserting immediately after the phrase "any Permitted Timber Financing" now
appearing in the first sentence thereof, the following: ", and (iii) in
connection with the 1999 Timberlands Sale and the Newberg Mill Sale", and
(ii) inserting immediately after the phrase "Upon such compliance" now
appearing in the second sentence thereof, the following: "or in connection
with any transaction contemplated by clauses (ii) or (iii) above".
SECTION 3. Consent Under Pledge Agreement and Pledge of Rayonier Note. The
Senior Managing Agents, the Administrative Agent, the Collateral Agent and the
Lenders hereby consent to and agree that SSCC shall not be required to pledge
the JSCE Preferred Stock and JSCE shall not be required to pledge the Borrower
Preferred Stock, in each case, to the Collateral Agent under the Pledge
Agreement, and hereby waive any Default or Event of Default as a result thereof.
The Borrower further agrees that it shall cause any and all notes or other
instruments issued by Rayonier
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Inc. or its affiliates as partial consideration in connection with the 1999
Timberlands Sale (collectively, the "Rayonier Note") to be pledged to the
Collateral Agent as additional Collateral from the date of issuance thereof
until the date of completion of the Monetization Sale, and the Borrower shall
take (and shall cause its affiliates to take) all such action as may be
necessary to grant a first perfected security interest in the Rayonier Note in
favor of the Collateral Agent, including, without limitation, the delivery of
the original Rayonier Note to the Collateral Agent, together with any necessary
instrument of transfer.
SECTION 4. Conditions Precedent to Effectiveness of Amendment. This
Amendment shall become effective upon the date (the "Effective Date") when each
of the following conditions precedent has been satisfied:
(a) each of SSCC, JSCE, the Borrower and the requisite number of
Lenders required pursuant to Section 10.08 of the Credit Agreement shall
have executed and delivered this Amendment; and
(b) SNC shall have executed and delivered the Reaffirmation of
Guarantee attached hereto.
The consummation of the Newberg Mill Sale (as defined in the Credit
Agreement as amended hereby) on or after the Effective Date shall be subject to
the receipt by the Administrative Agent and the Collateral Agent of copies of
the purchase agreement and related documents in connection therewith, and such
additional Loan Documents, certificates, legal opinions and other documents as
required by the Credit Agreement as amended hereby and as the Senior Managing
Agents otherwise may reasonably request.
SECTION 5. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Lenders, the Senior Managing Agents, the
Administrative Agent and the Collateral Agent as follows:
(a) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all material
respects at and as of the date hereof as though made on and as of the date
hereof (except to the extent specifically made with regard to a particular
date).
(b) No Default or Event of Default has occurred and is continuing.
(c) The execution, delivery and performance of this Amendment have
been duly authorized by all necessary action on the part of each of the
Loan Parties signatory hereto, and this Amendment has been duly executed
and delivered by each such Loan Party and is a legal, valid and binding
obligation of each such Loan Party enforceable against each such Loan Party
in accordance with its terms, except as the enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar
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laws affecting creditors' rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity
or at law).
(d) The execution, delivery and performance of this Amendment do not
conflict with or result in a breach by any Loan Party signatory hereto of
any term of any material contract, loan agreement, indenture or other
agreement or instrument to which any such Loan Party is a party or is
subject.
SECTION 6. References to and Effect on the Credit Agreement.
(a) On and after the Effective Date each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of
like import, and each reference to the Credit Agreement in the Loan
Documents and all other documents (the "Ancillary Documents") delivered in
connection with the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement, the
Loan Documents and all other Ancillary Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Lenders, the
Senior Managing Agents, the Administrative Agent or the Collateral Agent
under the Credit Agreement, the Loan Documents or the Ancillary Documents.
(d) The Loan Parties signatory hereto acknowledge and agree that this
Amendment constitutes a "Loan Document" for purposes of the Credit
Agreement.
SECTION 7. Execution in Counterparts. This Amendment maybe 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 SSCC, JSCE, the
Borrower and the requisite number of Lenders required pursuant to Section 10.08
of the Credit Agreement regardless of whether it has been executed and delivered
by all of the Lenders. Delivery of an executed counterpart of a signature page
of this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, 5-1401 OF THE GENERAL OBLIGATION LAWS OF NEW
YORK, BUT OTHERWISE WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS
THEREOF.
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SECTION 9. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
SECTION 10. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
[Signature Pages Follow]
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REAFFIRMATION OF GUARANTEE
The undersigned acknowledges the foregoing Amendment with respect to the
Credit Agreement referred to therein, consents to the amendments set forth
therein and hereby reaffirms its obligations under the Guarantee Agreement (as
defined in the Credit Agreement).
Dated as of October 15, 1999
SMURFIT NEWSPRINT CORPORATION
By:___________________________________
Name: ________________________________
Title: _______________________________
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