Exhibit 10.1
EXECUTION COPY
INCREMENTAL TERM LOAN ASSUMPTION
AGREEMENT AND AMENDMENT NO. 2 dated as of December 20, 2005 (this
“ Assumption Agreement and Amendment ”), related
to the CREDIT AGREEMENT dated as of November 1, 2004, as amended by
Amendment No. 1 dated as of September 30, 2005 (the “
Credit Agreement ”), among SMURFIT-STONE CONTAINER
CORPORATION, a Delaware corporation (“ SSCC ”),
as a Guarantor, SMURFIT-STONE CONTAINER ENTERPRISES, INC., a
Delaware corporation (“ SSCE ”), SMURFIT-STONE
CONTAINER CANADA INC., a corporation continued under the Companies
Act (Nova Scotia) (“ SSC Canada ” and, together
with SSCE, the “ Borrowers ”), the LENDERS from
time to time party thereto, DEUTSCHE BANK TRUST COMPANY AMERICAS, a
New York banking corporation, as Senior Agent, Administrative
Agent, Collateral Agent, Swingline Lender and Revolving Facility
Facing Agent, DEUTSCHE BANK AG, an authorized foreign bank
permitted to carry on business in Canada and listed on Schedule III
of the Bank Act (Canada), as Canadian Administrative Agent and
Revolving (Canadian) Facility Facing Agent, and JPMORGAN CHASE
BANK, N.A., a national banking association (successor to JPMorgan
Chase Bank, a New York banking corporation), as Senior Agent,
Deposit Account Agent and Deposit Funded Facility Facing
Agent.
A.
SSC Canada has requested that the
Persons set forth on Schedule I hereto (the “ Incremental
Term Lenders ”) make Incremental Term Loans (in the form
of Other Term Loans) in an aggregate principal amount of up to
U.S.$90,000,000 to SSC Canada pursuant to the Credit
Agreement.
B.
The Incremental Term Lenders are
willing to make Incremental Term Loans (in the form of Other Term
Loans) in an aggregate principal amount of up to U.S.$90,000,000 to
SSC Canada on or within one Business Day following the Amendment
No. 2 Effective Date (as defined below), on the terms and subject
to the conditions set forth herein and in the Credit
Agreement.
C.
Additionally, SSCC and the Borrowers
have requested certain amendments to the Credit Agreement as set
forth herein.
D.
The Required Lenders are willing to
agree to such amendments pursuant to the terms and subject to the
conditions set forth herein.
Accordingly, in consideration of the
mutual agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms;
Interpretation; Etc . Capitalized terms used and not defined
herein shall have the meanings assigned to such terms in the Credit
Agreement. The rules of construction set forth in Section 1.02 of
the Credit Agreement shall apply equally to this Assumption
Agreement and Amendment. This Assumption Agreement and Amendment
shall be a “Loan Document” and, to the extent it
relates to the making of Incremental Term Loans, an
“Incremental Term Loan
Assumption Agreement”, in each case for all purposes of the
Credit Agreement and the other Loan Documents.
SECTION 2. Incremental Term
Loans . (a) Each Incremental Term Lender hereby agrees,
severally and not jointly, to make an Incremental Term Loan to SSC
Canada on, or (upon the request of SSC Canada) within one Business
Day of, the Amendment No. 2 Effective Date in a principal amount
equal to the Incremental Term Loan amount set forth next to such
Incremental Term Lender’s name on Schedule I attached hereto.
All such Incremental Term Loans shall, for all purposes of the
Credit Agreement and the other Loan Documents, constitute
“Other Term Loans” having terms identical to those of
the Tranche C Loans except that:
(i)
the 5-year period in respect of the
calculation of the Threshold Amount pursuant to Section
2.13(j) of the Credit Agreement shall commence on the date of
the making of such Incremental Term Loans (as contemplated by this
Assumption Agreement and Amendment);
(ii)
the Threshold Amount with respect to
such Incremental Term Loans shall refer to 25% of the original
principal amount of such Incremental Term Loans;
(iii)
the amortization schedule with
respect to such Incremental Term Loans referred to in Section
2.11(c) of the Credit Agreement is set forth
below:
|
Date
|
|
Amount
|
|
|
January 2, 2006
|
|
U.S.$225,000
|
|
|
April 1, 2006
|
|
U.S.$225,000
|
|
|
July 1, 2006
|
|
U.S.$225,000
|
|
|
October 1, 2006
|
|
U.S.$225,000
|
|
|
January 2, 2007
|
|
U.S.$225,000
|
|
|
April 1, 2007
|
|
U.S.$225,000
|
|
|
July 1, 2007
|
|
U.S.$225,000
|
|
|
October 1, 2007
|
|
U.S.$225,000
|
|
|
January 2, 2008
|
|
U.S.$225,000
|
|
|
April 1, 2008
|
|
U.S.$225,000
|
|
|
July 1, 2008
|
|
U.S.$225,000
|
|
|
October 1, 2008
|
|
U.S.$225,000
|
|
|
January 2, 2009
|
|
U.S.$225,000
|
|
|
April 1, 2009
|
|
U.S.$225,000
|
|
|
July 1, 2009
|
|
U.S.$225,000
|
|
|
October 1, 2009
|
|
U.S.$225,000
|
|
|
January 2, 2010
|
|
U.S.$225,000
|
|
|
April 1, 2010
|
|
U.S.$225,000
|
|
|
July 1, 2010
|
|
U.S.$225,000
|
|
|
October 1, 2010
|
|
U.S.$225,000
|
|
|
January 2, 2011
|
|
U.S.$225,000
|
|
|
April 1, 2011
|
|
U.S.$21,318,750
|
|
|
July 1, 2011
|
|
U.S.$21,318,750
|
|
2
|
Date
|
|
Amount
|
|
|
October 1, 2011
|
|
U.S.$21,318,750
|
|
|
Term Loan Maturity Date
|
|
U.S.$21,318,750
|
|
(b)
The proceeds of the Incremental Term
Loans are to be used by SSC Canada solely to repay certain
intercompany indebtedness.
(c)
For convenience of reference, the
Incremental Term Loans shall be referred to as “Tranche C-l
Loans”.
SECTION 3. Conditions Precedent
to Incremental Term Loans. The obligation of the Incremental
Term Lenders to make Incremental Term Loans hereunder shall be
subject to the satisfaction of the following conditions
precedent:
(a)
On the Amendment No. 2 Effective
Date, each of the conditions set forth in paragraphs (a), (b) and
(c) of Section 5.01 of the Credit Agreement shall be satisfied and
the Administrative Agent shall have received a certificate to that
effect dated as of the Amendment No. 2 Effective Date and executed
by a Financial Officer of SSCC and each Borrower.
(b)
The Administrative Agent shall have
received (with sufficient copies for each Incremental Term Lender)
such legal opinions, board resolutions and other closing
certificates and documentation as shall be reasonably required by
the Incremental Term Lenders, in each case consistent with those
delivered on the Closing Date under Section 5.02 of the Credit
Agreement.
(c)
The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to
the Amendment No. 2 Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrowers hereunder or
under any other Loan Document.
SECTION 4. Amendments to Credit
Agreement . Effective as of the Amendment No. 2 Effective
Date:
(a) The definition of the term
“ Applicable Rate ” set forth in Section 1.01 of
the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
““ Applicable
Rate ” shall mean (except as otherwise provided in the
Incremental Term Loan Assumption Agreement with respect to any
Other Term Loan), for any day, (a) with respect to any ABR Term
Loan or any Eurodollar Term Loan, as the case may be, the
applicable spread set forth directly below under the caption (x)
“ABR Term Spreads” or (y) “Eurodollar Term
Spreads”, as the case may be, based upon the Consolidated
Senior Secured Leverage Ratio as of the relevant date of
determination:
3
|
Consolidated Senior
Secured Leverage
Ratio
|
|
ABR Term
Spreads
|
|
Eurodollar
Term Spreads
|
|
|
Greater than 3.0 to 1.0
|
|
1.25
|
%
|
2.25
|
%
|
|
Less than or equal to 3.0 to
1.0
|
|
1.00
|
%
|
2.00
|
%
|
and (b) with respect to (i) any ABR
Revolving Loan, ABR Revolving (Canadian) Loan or Canadian Prime
Rate Loan, (ii) any Eurodollar Revolving Loan, Eurodollar Revolving
(Canadian) Loan or B/A Loan or (iii) the Commitment Fees in respect
of unused Revolving Credit Commitments and unused Revolving
(Canadian) Credit Commitments, as the case may be, the applicable
percentage set forth below under the caption (x) “ABR
Revolving / Canadian Prime Rate Spreads”, (y)
“Eurodollar Revolving / B/A Spreads” and (z)
“Commitment Fees”, as the case may be, based upon the
Consolidated Leverage Ratio as of the relevant date of
determination:
|
Consolidated Leverage
Ratio
|
|
ABR
Revolving /
Canadian
Prime Rate
Spreads
|
|
Eurodollar
Revolving /
B/A Spreads
|
|
Commitment
Fees
|
|
|
Greater than 4.0 to 1.0
|
|
1.25
|
%
|
2.25
|
%
|
0.500
|
%
|
|
Greater than 3.0 to 1.0 but less
than or equal to 4.0 to 1.0
|
|
1.00
|
%
|
2.00
|
%
|
0.500
|
%
|
|
Greater than 2.0 to 1.0 but less
than or equal to 3.0 to 1.0
|
|
0.75
|
%
|
1.75
|
%
|
0.500
|
%
|
|
Less than or equal to 2.0 to
1.0
|
|
0.50
|
%
|
1.50
|
%
|
0.375
|
%
|
Each change in the Applicable Rate
resulting from a change in the Consolidated Leverage Ratio or the
Consolidated Senior Secured Leverage Ratio, as the case may be,
shall be effective with respect to all Loans, Commitments and
Letters of Credit on the date of delivery to the Administrative
Agent of the financial statements and certificates required by
Section 6.04(a) or (b) and (c) , respectively,
based upon the Consolidated Leverage Ratio or the Consolidated
Senior Secured Leverage Ratio, as the case may be, as of the end of
the most recent fiscal quarter included in such financial
statements so delivered, and shall remain in effect until the date
immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change.
Notwithstanding the foregoing, (a) (i) until the delivery of the
financial statements and certificates required by Section
6.04(a) and (c) , respectively, for the fiscal year
ending December 31, 2005 and (ii) at any time after the occurrence
and during the continuance of an Event of Default, (A) the
Consolidated Leverage Ratio shall be deemed to be greater than 4.0
to 1.0 and (B) the Consolidated Senior Secured Leverage Ratio shall
be deemed to be greater than 3.0 to 1.0, in each case for purposes
of determining the Applicable Rate, (b) the Applicable Rate with
respect to any Eurodollar Term Loan or ABR Term Loan shall
automatically be increased by the Yield Differential, if any, upon
the making of any Other Term Loans, as provided in Section
2.23(d) , (c) if
4
at any time the Credit Facilities
are rated lower than BB- by S&P and lower than Ba3 by
Moody’s (or are unrated by either S&P or Moody’s),
then the Applicable Rate (other than for purposes of determining
the Commitment Fees) shall be increased in all cases by 0.25%, and
(d) in addition to any increase to the Applicable Rate pursuant to
clause (c) above, if at any time the Consolidated Senior Secured
Leverage Ratio is greater than 3.0 to 1.0, then the Applicable Rate
in respect of Revolving Loans, Revolving (Canadian) Loans and B/A
Loans (other than for purposes of determining the Commitment Fees)
shall be increased in all cases by 0.25%. For purposes of clause
(c) above, if the ratings established by S&P and Moody’s
shall be changed (other than as a result of a change in the rating
system of S&P or Moody’s), such change shall be effective
as of the date on which it is first publicly announced by S&P
or Moody’s, as the case may be. Each increase in the
Applicable Rate pursuant to clause (c) above shall apply during the
period commencing on the effective date of such change and ending
on the d
