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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): MAY 28, 1997
STONE CONTAINER CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-3439 36-2041256
- -------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
150 NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (312) 346-6600
--------------
N/A
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(Former name or former address, if changed since last report.)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STONE CONTAINER CORPORATION
By: /s/ LESLIE T. LEDERER
---------------------
Leslie T. Lederer
Vice President, Secretary
and Counsel
Date: May 28, 1997
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EXHIBIT INDEX
-------------
Exhibits 1(a) and 4(i)(i) of the following exhibits filed herewith are
exhibits to Stone Container Corporation's Registration Statement on Form S-3
(Registration No. 333-20467).
EXHIBIT NO. EXHIBIT
- ---------- -------
1(a) Underwriting Agreement dated May 22, 1997 by and between
Stone Container Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation, acting severally on behalf of itself
and BT Securities Corporation
4(i)(i) First Supplemental Indenture dated as of May 28, 1997
between Stone Container Corporation and The Bank of New
York, as Trustee, relating to the Indenture dated as of
March 15, 1992 between Stone Container Corporation and The
Bank of New York, as Trustee
99.1 Third Amendment of Credit Agreement dated as of May 22, 1997
by and among Stone Container Corporation and the financial
institutions named therein, relating to the Amended and
Restated Credit Agreement dated as of March 22, 1996, as
amended, by and among Stone Container Corporation and the
financial institutions named therein
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- -------------------------------------------------------------------------------
EXHIBIT 1(a)
STONE CONTAINER CORPORATION
-------------------------------
$275,000,000
UNITS
consisting of
(A) SERIES B 10 3/4% SENIOR SUBORDINATED DEBENTURES DUE 2002
and (B) 1 1/2% SUPPLEMENTAL INTEREST CERTIFICATES
-----------------------------------
---------------------
UNDERWRITING AGREEMENT
DATED MAY 22, 1997
---------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT SECURITIES CORPORATION
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- -------------------------------------------------------------------------------
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STONE CONTAINER CORPORATION
$275,000,000 Units
consisting of (A) Series B 10 3/4% Senior Subordinated Debentures due 2002
and (B) 1 1/2% Supplemental Interest Certificates
UNDERWRITING AGREEMENT
----------------------
May 22, 1997
DONALDSON LUFKIN & JENRETTE
SECURITIES CORPORATION
BT SECURITIES CORPORATION
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Stone Container Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell an aggregate amount of $275,000,000 in principal
amount of Units, consisting of (A) Series B 10 3/4% Senior Subordinated
Debentures due 2002 (the "DEBENTURES") and (B) 1 1/2% Supplemental Interest
Certificates (together with the Debentures, the "UNITS" or the "SECURITIES")
to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and BT
Securities Corporation (together with DLJ, the "UNDERWRITERS"). The Units
will be issued pursuant to an Indenture dated as of March 15, 1992 between
the Company and The Bank of New York, as Trustee, (the "BASE INDENTURE"), as
supplemented by the First Supplemental Indenture (the "FIRST SUPPLEMENTAL
INDENTURE"), dated as of the Closing Date (the Base Indenture, as
supplemented by the First Supplemental Indenture, the "INDENTURE").
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Indenture.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION"), in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3
(No. 333-20467) (such registration statement, in the form it became effective
on February 5, 1997 under the Act, including the exhibits thereto and the
documents incorporated or deemed incorporated by reference therein on or
after such effective date, being hereinafter referred to as the "SHELF
REGISTRATION STATEMENT"), and related prospectus, dated February 5, 1997 (the
"BASE SHELF PROSPECTUS"). We understand that the Company wishes to
distribute the Securities to the public in the United States. To that end,
the Company has filed with the Commission pursuant to Rule 424(b)(3) under
the Act a preliminary prospectus supplement subject to
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completion, issued May 13, 1997 (the "PRELIMINARY PROSPECTUS SUPPLEMENT") to
the Base Shelf Prospectus. The Base Shelf Prospectus, including the
documents incorporated by reference therein, as modified and supplemented by
the Preliminary Prospectus Supplement, and as the same may be amended or
supplemented, is hereinafter referred to as the "PRELIMINARY PROSPECTUS." We
understand that the Company will prepare and file with the Commission
pursuant to Rule 424(b) under the Act, a final prospectus supplement (the
"FINAL PROSPECTUS SUPPLEMENT," and together with the Base Shelf Prospectus,
the "FINAL SHELF PROSPECTUS") in respect of the distribution of the
Securities. The Final Shelf Prospectus, including the documents incorporated
by reference therein, in the form first used to confirm sales of the
Securities, is hereinafter referred to as the "PROSPECTUS." The Shelf
Registration Statement, if amended, as amended at the time such amendment
becomes effective, is hereinafter referred to as the "REGISTRATION STATEMENT."
If a global form Security is issued, it shall bear the legend set
forth in Section 207 of the Indenture.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to issue and sell the Securities
to the Underwriters, and each Underwriter agrees, severally and not jointly,
to purchase from the Company the principal amount of Units set forth opposite
the name of such Underwriter in Schedule I hereto, at a purchase price equal
to 97.75% of the principal amount thereof (the "PURCHASE PRICE").
3. TERMS OF PUBLIC OFFERING. The Underwriters have advised the Company
that they propose (i) to make a public offering of the Securities as soon as
is advisable in the Company's judgment and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment
for the Securities shall be made at 9:00 A.M., Central Time, on May 28, 1997
(the "CLOSING DATE") at the offices of Latham & Watkins, Suite 5800, Sears
Tower, 233 South Wacker Drive, Chicago, Illinois 60606 or such other time or
place as the Underwriters and the Company shall designate.
One or more Units in definitive form, registered in such names and issued
in such denominations as the Underwriters may request from the Company not
later than two business days prior to the Closing Date, shall be delivered by
the Company to the Underwriters against payment by the Underwriters of the
Purchase Price thereof to or upon the order of the Company in immediately
available Federal Funds by wire transfer and payable in immediately available
funds to the First National Bank of Chicago, credit of Stone Container
Corporation Account No. 08-00260. The Units in definitive form shall be made
available to the Underwriters for inspection not later than 9:30 A.M.,
Central Time, on the business day immediately preceding the Closing Date.
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5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To (i) not later than May 27, 1997, prepare and file with
the Commission pursuant to Rule 424(b) of the Act the Prospectus and (ii)
as promptly as practicable following the execution and delivery hereof and
on or prior to the Closing Date, prepare and file with the Commission one
or more Current Reports on Form 8-K including this Agreement as an exhibit
thereto.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of the filing of the Prospectus and of any
amendment of or supplement thereto (including any filing under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
incorporated by reference therein), (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the Prospectus or the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (iii) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement or
the use of the Prospectus, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, two signed copies of the
Registration Statement as first filed with the Commission and of each
amendment thereto, and two copies of all exhibits filed therewith and all
documents incorporated by reference therein, and to furnish to you such
number of conformed copies of the Registration Statement and of each
amendment thereto and of all documents incorporated by reference in the
Registration Statement and each amendment thereto, without exhibits, as you
may reasonably request.
(d) During the period that the Underwriters are engaged in a
distribution of the Securities, not to file any amendment to the Registration
Statement or to make or file any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall
reasonably object, except for such amendments or supplements effected through
incorporation by reference of documents filed pursuant to the Exchange Act;
and to prepare and file with the Commission, promptly upon your request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Securities or any other securities relating thereto, by
you, and to use its best efforts to cause the same to become promptly
effective.
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(e) From time to time for such period as in the opinion of counsel for
the Company or the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to furnish
to each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer may
reasonably request.
(f) If during the period specified in paragraph (e) of this Section 5
any event shall occur as a result of which, in the opinion of counsel for the
Company or the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with any law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the statements
in the Prospectus, as so amended or supplemented, will not in the light of
the circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with law, and to furnish to each Underwriter and to
such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Section 7 hereof are
specifically applicable and relate to each Prospectus amendment or
supplement referred to in this Section 5(f).
(g) Prior to any public offering of the Securities, to (i) cooperate
with the Underwriters and counsel for the Underwriters in connection with the
qualification of the Securities for offer and sale by the Underwriters and by
dealers under the state securities or Blue Sky laws of such jurisdictions as
the Underwriters may request, (ii) continue such qualification in effect so
long as required for distribution of the Securities and (iii) file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; PROVIDED that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified, or take any action which would subject it
to general service of process in any jurisdiction where it is not now so
subject.
(h) To make generally available to its stockholders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the "effective date" (as defined in Rule 158 under the
Act) of the Registration Statement (but in no event commencing later than 90
days after such date) which shall satisfy the provisions of Section 11(a) of
the Act.
(i) During the period of two years following the date of this
Agreement, to deliver to the Underwriters, promptly upon their becoming
available, (i) copies of all annual reports, quarterly reports and current
reports filed with the
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Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, and (ii) such other documents, reports and
information as shall be furnished by the Company to its stockholders
generally.
(j) To use the net proceeds from the sale of the Securities in
the manner specified in the Prospectus (and any amendments or supplements
thereto) under the caption "USE OF PROCEEDS."
(k) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, except as otherwise agreed to
by the parties hereto, to pay and be responsible for all costs, expenses,
fees and taxes in connection with or incident to:
(1) the preparation, printing, duplicating, filing and
distribution under the Act of the Registration Statement (including
financial statements, if any, and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to
or during the period specified in paragraph (e) of this Section 5;
(2) the preparation, printing, duplicating, filing and
distribution of the Preliminary Prospectus, Prospectus and all
amendments or supplements thereto during the period specified in
paragraph (e) of this Section 5;
(3) the issuance and delivery by the Company of the
Securities;
(4) the printing and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Securities (including
in each case any disbursements of counsel for the Underwriters
relating to such printing and delivery);
(5) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the reasonable fees and disbursements
of counsel to the Underwriters relating to such registration or
qualification and memoranda relating thereto);
(6) furnishing such copies of the Registration Statement,
the Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the
offering or sale of the Securities by the Underwriters or by dealers
to whom Securities may be sold;
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(7) the rating of the Securities by investment rating
agencies;
(8) filings and clearance with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering,
if any;
(9) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Securities
by The Depository Trust Company ("DTC") for "book-entry" transfer; and
(10) the performance by the Company of its other obligations
under this Agreement.
(l) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than a default by the Underwriters) or if for
any reason the Company shall be unable or unwilling to sell the Securities
hereunder, the Company shall, except as otherwise agreed by the parties
hereto, reimburse the Underwriters for the fees and expenses to be paid or
reimbursed to them pursuant to Section 5(k) above, and reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees
and expenses of counsel to the Underwriters) reasonably incurred by the
Underwriters in connection with the transactions contemplated by this
Agreement.
(m) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against holders of the
Securities.
(n) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date and to satisfy all conditions precedent
to the delivery of the Securities.
(o) During the period when the Prospectus is required to be
delivered under the Act or the Exchange Act, to file all documents required
to be filed with the Commission pursuant to Sections 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the
rules and regulations thereunder.
(p) Not to take any action with respect to the Securities in
violation of Regulation M under the Exchange Act.
(q) To comply with all agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Securities by DTC for "book-entry" transfer.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
esents and warrants to each Underwriter that:
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(a) (i) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, at the date of the Prospectus, when any supplement
to or amendment of the Prospectus is filed with the Commission, when any
document filed under the Exchange Act is filed and at the Closing Date, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied and will comply in all material respects with
the applicable provisions of the Act and the Exchange Act and the
respective rules and regulations thereunder and do not and will not contain
an untrue statement of a material fact and do not and will not omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus, in light
of the circumstances under which they were made, not misleading. When the
Preliminary Prospectus was first filed with the Commission pursuant to Rule
424(b)(3) of the Act and when any amendment thereof or supplement thereto
was first filed with the Commission, the Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material
respects with the applicable provisions of the Act and the Exchange Act and
the respective rules and regulations thereunder and did not contain an
untrue statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. No representation and warranty is made in this
paragraph (a), however, with respect to any information contained in or
omitted from the Registration Statement, the Prospectus or the Preliminary
Prospectus or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter expressly for use in connection with the
preparation thereof. At the date of the Prospectus and any amendment or
supplement thereto (if different) and at the Closing Date, the Base
Indenture will have been qualified under and will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder (collectively, the
"TIA"). At the Closing Date, the Indenture will have been qualified under
and will conform in all material respects to the requirements of the TIA.
(b) This Agreement has been duly authorized and validly executed
and delivered by the Company.
(c) Price Waterhouse, LLP are independent accountants with
respect to the Company and its subsidiaries within the meaning of the Act.
(d) The consolidated financial statements, together with related
schedules and notes forming part of or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), present fairly the consolidated financial position, results of
operations and cash flows of the Company and its consolidated subsidiaries
on the basis stated therein at the respective dates or for the respective
periods to which they apply; such statements and related
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schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(e) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware with
requisite corporate power and authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus and to consummate the
transactions contemplated hereby (including, without limitation, all
requisite corporate authority and power to authorize, issue, sell and
deliver the Securities as contemplated by this Agreement. The Company is
duly qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not, individually or in the aggregate,
have a material adverse effect on the Company and its subsidiaries taken as
a whole. The Company possesses all material rights, licenses, permits and
authorizations, governmental or otherwise, necessary for it to own, lease
and operate each of its properties and to conduct its business as described
in the Registration Statement and the Prospectus.
(f) Each of the Company's subsidiaries other than Stone Container
(Canada) Inc. ("STONE CANADA") and Stone-Consolidated Corporation
("STONE-CONSOLIDATED") is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation with
corporate power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus. Each of Stone Canada and Stone-Consolidated is
a corporation validly existing and subsisting under the laws of Canada. Each
of the Company's subsidiaries (other than Stone Canada and
Stone-Consolidated, for which such representation is not relevant) is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in good
standing would not, individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries taken as a whole. Except as
disclosed in or contemplated by the Registration Statement and the
Prospectus, all of the issued and outstanding shares of capital stock of each
of Stone Canada and Stone-Consolidated have been duly authorized and validly
issued and are fully paid and non-assessable and free of preemptive rights
and are owned directly or indirectly by the Company (other than Stone
Consolidated and except for directors' qualifying shares) free and clear of
any pledge, liens, security interest, charge, claim, restriction on
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transfer (except in the case of Stone Canada for the restrictions on
transfers of its capital stock as set forth in its Articles of Amalgamation,
as amended), stockholders' agreement, voting trust or other defect of title
whatsoever or encumbrance of any kind. The Company owns approximately 47% of
the issued and outstanding common shares of Stone-Consolidated.
(g) Other than Stone Canada and its direct and indirect
subsidiaries, none of the subsidiaries of the Company is a "significant
subsidiary" as defined in Rule 1-02(w)(3) of Regulation S-X promulgated
under the Act.
(h) The Company has at the date indicated short-term debt,
long-term debt, subordinated debt, debt of consolidated subsidiaries
(non-recourse debt) and stockholders' equity as set forth in the Prospectus
Supplement under the caption "CAPITALIZATION."
(i) The Base Indenture constitutes, and when the First
Supplemental Indenture has been duly executed and delivered by the Company
and by the Trustee, the Indenture will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law). The descriptions contained in the Registration
Statement and the Prospectus of the Indenture fairly and accurately
summarize such documents in all material respects.
(j) The Securities have been duly authorized by all necessary
corporate action for issuance and sale pursuant to this Agreement (or will
have been so authorized prior to the issuance of such Securities) and, when
executed, authenticated, issued and delivered in the manner provided for in
the Indenture and sold and paid for as provided in this Agreement, the
Securities will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law). The descriptions contained in the Registration
Statement and the Prospectus of the Securities being offered thereby fairly
and accurately summarize the Securities in all material respects.
(k) Neither the Company nor Stone Canada is in violation of its
charter or by-laws; and except as described in the Registration Statement
or the Prospectus, neither the Company nor Stone Canada is in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any
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contract, indenture, mortgage, loan agreement, note, lease, permit, license,
franchise or other agreement or instrument to which it is a party or by which
it may be bound or to which any of its properties may be subject, except for
such defaults that would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations or prospects of the Company
and its subsidiaries taken as a whole. The execution and delivery of this
Agreement and the First Supplemental Indenture, the issuance, sale and
delivery of the Securities and the consummation of the transactions
contemplated herein and therein by the Company, and compliance by the Company
with the terms of this Agreement and the Indenture do not and will not
conflict with, or result in a breach of, any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
liens, charge or encumbrance upon, any property or assets of the Company or
any subsidiary under (i) any indenture, mortgage, loan agreement, note,
lease, permit, license, franchise or other agreement or instrument to which
the Company or any subsidiary is a party or by which it may be bound or to
which any of its properties may be subject (except for Section 5.2.2(k) of
the Company's 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 and the Second Amendment of Credit Agreement dated as of
December 18, 1996 (the "CREDIT AGREEMENT")), or (ii) any existing applicable
law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their respective properties or
assets (except, in the case of (i) and (ii), for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise), earnings,
operations or prospects of the Company and its subsidiaries taken as a whole).
(l) There is no litigation or governmental or other action,
suit, proceeding or investigation before any court or before or by any
public, regulatory or governmental agency or body pending or threatened
against, or involving the properties or business of the Company or any of
its subsidiaries which is of a character required to be disclosed in the
Registration Statement or the Prospectus which has not been properly
disclosed therein; and there is no contract or document concerning the
Company or any of its subsidiaries of a character required to be described
in the Registration Statement or the Prospectus or to be incorporated by
reference or filed as an exhibit to the Registration Statement which is not
so described, incorporated or filed as required.
(m) No authorization, approval or consent or order of, or filing
with, any court or governmental body or agency is necessary in connection
with the transactions contemplated by this Agreement, except such as may be
required by the NASD or state securities or Blue Sky laws or regulations or
have been obtained and made under the Act and the TIA. Neither the Company
nor any of its affiliates is presently doing business with the government
of Cuba or with any person or affiliate located in Cuba.
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(n) The Company and its subsidiaries each owns, possesses or has
obtained all governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations necessary to own or lease, as
the case may be, and to operate its properties and to carry on its business
as presently conducted (except where the failure to have such licenses,
permits, certificates, consents, orders, approvals and other authorizations
would not, individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), earnings, operations or
prospects of the Company and its subsidiaries taken as a whole) and, except
as disclosed in the Registration Statement or the Prospectus, neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such license, permit,
certificate, consent, order, approval or authorization which, in the
aggregate, are reasonably expected, individually or in the aggregate, to
have a material adverse effect on the condition (financial or otherwise),
earnings, operations or prospects of the Company and its subsidiaries taken
as a whole.
(o) The Company is not now, and after sale of the Securities to
be sold by it hereunder and application of the net proceeds from such sale
as described in the Prospectus under the caption "USE OF PROCEEDS" will not
be, or will not be "controlled" by, an "investment company" within the
meaning of the Investment Company Act of 1940.
(p) Neither the Company nor Stone Canada is a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" or a "holding company", as
such terms are defined in the Public Utilities Holding Company Act of 1935,
as amended, or is a "public utility", as such term is defined in the
Federal Power Act, as amended.
(q) Prior to and at the time of the issuance of the Securities
and after giving effect thereto, (i) the present fair salable value of the
assets of the Company and its subsidiaries, taken as a whole, exceeded and
will exceed the amount that will be required to be paid on, or in respect
of, the debts and other liabilities (including contingent liabilities) of
the Company and its subsidiaries as they become absolute and matured, (ii)
the assets of the Company and its subsidiaries, taken as a whole, do not
constitute and will not constitute unreasonably small capital to carry out
their businesses as conducted or as currently proposed to be conducted, and
(iii) the Company and its subsidiaries do not intend to, or believe that
they will, incur debts or other liabilities beyond their collective ability
to pay such debts and liabilities as they mature.
(r) No holder of any security of the Company has any right that
has not been effectively waived to require registration of shares of Common
Stock or any other security of the Company in connection with the offering
contemplated hereby.
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(s) The conditions for use of the Registration Statement for purposes
of issuing the Units, as set forth in the Act, are currently satisfied, and
the Prospectus complies as to form in all material respects with the
requirements of the Act.
(t) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission under the Exchange Act.
Any certificate signed by any officer of the Company pursuant to this
Agreement and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto),
the Prospectus (including any amendments or supplements thereto), the
Preliminary Prospectus or any other preliminary prospectus or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein (in the case
of the Prospectus, the Preliminary Prospectus and any other preliminary
prospectus, in the light of the circumstances under which they were made)
not misleading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to
the Company by or on behalf of any Underwriter through you expressly for
use therein; provided, however, that the foregoing indemnity agreement with
respect to the Registration Statement, the Preliminary Prospectus and the
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages and liabilities and
judgments purchased Securities, or any person controlling such Underwriter,
if a copy of the Preliminary Prospectus or the Prospectus, as the case may
be, (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person at or prior to the written
confirmation of the sale of the Securities to such person, and if the
Preliminary Prospectus or Prospectus, as the case may be, (as so amended
and supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or judgment.
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(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon the Registration Statement,
the Prospectus, the Preliminary Prospectus, any other preliminary prospectus
or any amendment or supplement thereto and with respect to which indemnity
may be sought against the Company, such Underwriter shall promptly notify the
Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses. Any Underwriter or
any such controlling person shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named
parties to any such action (including any impleaded parties) include both
such Underwriter or such controlling person and the Company and such
Underwriter or such controlling person shall have been advised by such
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company (in which
case the Company shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in
writing by DLJ, and that all such fees and expenses shall be reimbursed as
they are incurred). The Company shall not be liable for any settlement of
any such action effected without its written consent but if settled with the
written consent of the Company, the Company agrees to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and
any person controlling the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter but only with reference to
information furnished in writing by or on behalf of such Underwriter
expressly for use in the Registration Statement, the Prospectus, the
Preliminary Prospectus or any other preliminary prospectus. In case any
action shall be brought against the Company, any of its directors, officers
or any
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person controlling the Company based on the Registration Statement, the
Prospectus, the Preliminary Prospectus or any other preliminary prospectus
and in respect of which indemnity may be sought against any Underwriter, the
Underwriter shall have the rights and duties given to the Company (except
that if the Company shall have assumed the defense thereof, such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Underwriter), and the Company, its directors,
any such officers and any person controlling the Company shall have the
rights and duties given to the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is held to
be unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities and judgments (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (net of underwriting discounts and commissions
before deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by the Underwriters, bear to
the total price to the public of the Securities in each case as set forth in
the tables on the cover page of the Final Prospectus Supplement. The relative
fault of the Company and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7,
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no Underwriter (or its related indemnified parties) shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective aggregate principal amount of Securities purchased by each of the
Underwriters hereunder and not joint.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Securities under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date
(without giving effect to the exception contained in the parenthetical in
clause (i) of Section 6(k)). The Company shall have performed or complied
with all of its obligations and agreements herein contained and required to
be performed or complied with by it at or prior to the Closing Date.
(b)(i) The Prospectus shall have been printed and copies
distributed to the Underwriters not later than 9:00 a.m., New York
City time, on May 23, 1997, or at such later date and time as the
Underwriters may approve in writing;
(ii) no action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Securities; and no injunction, restraining order or
order of any nature by a federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Securities; and
(iii) at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or the use of the
Prospectus shall have been issued and no proceedings for that purpose
shall have been commenced or shall be pending before or, to the
knowledge of the Company, be contemplated.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading,
nor shall any notice have been given to the Company of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible
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change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Act.
(d)(i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement or the Prospectus,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the earnings or business prospects, whether
or not arising in the ordinary course of business, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Registration
Statement or the Prospectus, (ii) since the date of the latest balance
sheet included or incorporated by reference in the Registration Statement
or the Prospectus, there shall not have been any material adverse change in
the capital stock or in the long-term debt of the Company from that set
forth in the Registration Statement or the Prospectus, (iii) the Company
and its subsidiaries shall have no liability or obligation, direct or
contingent, which is material to the Company and its subsidiaries, taken as
a whole, other than those reflected in the Registration Statement or the
Prospectus or incurred in the ordinary course of business and (iv) on the
Closing Date you shall have received a certificate dated the Closing Date,
signed by a senior officer of the Company, in his capacity as such senior
officer, confirming the matters set forth in paragraphs (a), (b), (c) and
(d) of this Section 8.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, (A) of Leslie T. Lederer, Vice President, Secretary and Counsel of
the Company, to the effect set forth in clauses (i), (vi), (vii), (viii)
and (xiii) of this Section 8(e) and (B) of Sidley & Austin, special counsel
for the Company, to the effect set forth in clauses (ii), (iii), (iv), (v),
(ix), (x), (xi), (xii) and (xiii) of this Section 8(e):
(i) The Company is duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
Stone Canada is a corporation validly existing and subsisting under
the laws of Canada. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which will not, individually or in the aggregate, have a
material adverse effect on the Company and its subsidiaries taken as a
whole. Each of the Company and Stone Canada has all requisite
corporate power and authority to (A) own, lease and license its
respective properties and (B) conduct the business in which it is
engaged, all as described in the Registration Statement and the
Prospectus. All of the issued and outstanding shares of capital stock
of Stone Canada have been duly authorized and validly issued and are
fully paid and nonassessable and free of preemptive rights and (except
for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of any pledge, lien,
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encumbrance, claim, security interest, restriction on transfer (except in
the case of Stone Canada for the restrictions on transfers of its capital
stock as set forth in its Articles of Amalgamation, as amended),
stockholders'agreement, voting trust or other defect of title whatsoever.
(ii) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits of the
Indenture, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws of general applicability relating to or affecting the enforcement
of creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
(iii) This Agreement has been duly authorized, executed
and delivered by the Company.
(iv) Each of the Base Indenture and the First Supplemental
Indenture has been duly authorized, executed and delivered by the
Company. The Base Indenture constitutes, and upon due authorization,
execution and delivery by the Trustee, the First Supplemental
Indenture will constitute, a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws of
general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
(v) The Securities and the Indenture conform in all
material respects to the description thereof contained in the Base
Shelf Prospectus under the caption "DESCRIPTION OF DEBT SECURITIES"
and in the Final Prospectus Supplement under the caption "DESCRIPTION
OF UNITS."
(vi) Neither the Company nor Stone Canada is in violation of
its charter or by-laws and, to the knowledge of such counsel, neither
the Company nor Stone Canada is in default (nor has an event occurred
which with notice, lapse of time or both would constitute a default)
in the performance of any obligation, agreement or condition contained
in any loan agreement, bond, debenture, note or other evidence of
indebtedness of the Company or Stone Canada where such default would
reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole.
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(vii) The execution, delivery and performance by the
Company of this Agreement and the Indenture, and the consummation by
the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance, sale and delivery of the
Securities do not and will not (X) result in a breach of any of the
terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default) or
require any consent under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or Stone Canada pursuant to the terms of, any material
agreement, instrument, franchise, license or permit known to such
counsel to which the Company or Stone Canada is a party or by which
either of such corporations or their respective properties or assets
may be bound, or (Y) violate any provision of the certificate of
incorporation, by-laws or equivalent instruments of the Company or any
of its subsidiaries, or, to the knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body having
jurisdiction over the Company or Stone Canada or any of their
respective properties or assets. To such counsel's knowledge, no
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets is required and has not been obtained for (i) the
valid issuance, sale and delivery of the Securities, (ii) the
execution, delivery and performance of this Agreement, the Indenture
or the Securities, or the consummation of the transactions
contemplated hereby and thereby, or (iii) the enforceability against
the Company of this Agreement, the Indenture or the Securities,
except, in each case, for such as may be required under the Act or
state and foreign securities or Blue Sky laws (as to which such
counsel need express no opinion).
(viii) To such counsel's knowledge, there is no
litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public, regulatory
or governmental agency or body pending or threatened against, or
involving the properties or business of the Company or any of its
subsidiaries which is of a character required to be disclosed in the
Registration Statement or the Prospectus which has not been properly
disclosed therein; and to such counsel's knowledge, there is no
contract or document concerning the Company or any of its subsidiaries
of a character required to be described in the Registration Statement
or the Prospectus or is required to be filed as an exhibit to the
Registration Statement, which is not so described or filed.
(ix) The Company is not, and after sale of the Securities
and application of net proceeds therefrom, as described in the
Prospectus, will not be, an "investment company" or a company
"controlled" by an "investment
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company" within the meaning of the Investment Company Act of 1940, as
amended.
(x) Neither the Company nor Stone Canada is a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utilities
Holding Company Act of 1935, as amended, or is a "public utility", as
such term is defined in the Federal Power Act, as amended.
(xi) The Registration Statement has become effective under
the Act; any required filings of the Preliminary Prospectus and the
Prospectus pursuant to Rule 424(b) have been made in the manner and
within the time period required by Rule 424(b); the Indenture has been
qualified under and conforms in all material respects to the
requirements of the TIA, and to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceedings therefor have been
instituted or are pending or contemplated under the Act.
(xii) The Registration Statement and the Prospectus
(other than the financial statements and schedules and notes thereto,
financial data, statistical data and supporting schedules included
therein or incorporated by reference therein, as to which no opinion
need be expressed) comply as to form in all material respects with the
requirements of the Act; the documents incorporated by reference in
the Prospectus when filed with the Commission under the Exchange Act,
complied in all material respects with the requirements of the
Exchange Act (other than the financial statements and schedules and
notes thereto, financial data, statistical data and supporting
schedules included therein or incorporated by reference therein, as to
which no opinion need be expressed).
(xiii) Such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the independent accountants of the Company, representatives of the
Underwriters and representatives of the Underwriters' counsel at which
the contents of the Registration Statement, the Prospectus and related
matters were discussed and, although such counsel is not passing upon,
and does not assume any responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement,
the Prospectus or any amendment thereof or supplement thereto, has
made no independent check or verification thereof and has relied as to
materiality, to the extent such counsel may properly do so in the
discharge of their professional responsibilities, upon the judgments
of officers and other representatives of the Company, and on the basis
of the foregoing, no facts have come to the attention of such counsel
which would cause such counsel to believe that the Registration
Statement (other than the
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financial statements and schedules and notes thereto, financial data,
statistical data and supporting schedules included therein or
incorporated by reference therein, as aforesaid), as of the
date of this Agreement, contained an untrue statement of a material
fact, or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, that the Prospectus, as of its date and as of the date
of such opinion (except for the financial statements and schedules and
notes thereto, financial data, statistical data and supporting
schedules included therein or incorporated by reference therein, as
aforesaid) included or includes any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Latham & Watkins, counsel for the Underwriters,
in form and substance satisfactory to the Underwriters, and Latham &
Watkins shall have received such papers and information as it reasonably
requests to enable it to pass upon the matters contained in such opinion.
In rendering the opinions described in paragraphs 8(e) and 8(f) above,
such counsel may rely (i) as to matters involving the application of laws other
than the laws of the United States and jurisdictions in which they are admitted,
to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel, familiar with the applicable laws; and (ii)
as to matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company, certificates of public officials and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the existence or good
standing of the Company and its subsidiaries, provided that copies of any such
statements or certificates shall be delivered to Underwriters' counsel.
The opinions of Sidley & Austin and Latham & Watkins described in
paragraph 8(e) and 8(f) above shall be rendered to the Underwriters at the
request of the Company and shall so state therein and may state that such
opinions are limited to matters of federal, New York law and the General
Corporation Law of the State of Delaware.
(g) You shall have received letters on and as of the date hereof
and on and as of the Closing Date (in the latter case confirming an
affirmation of the statements set forth in the former), in form and
substance satisfactory to you, from Price Waterhouse, LLP, independent
public accountants for the Company, with respect to the financial
statements and certain financial information contained and incorporated by
reference in the Registration Statement and the Prospectus.
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(h) Prior to the Closing Date, a Third Amendment of Credit
Agreement by and among the Company and the financial institutions named
therein amending Section 5.2.2(k) of the Credit Agreement to permit the
issuance of the Units shall have become effective, and you shall have
received on the Closing Date an executed copy thereof.
(i) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
(j) Prior to the Closing Date, the Company shall have furnished
to you such further information, certificates and documents as you may
reasonably request.
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement
shall become effective at the time that the Company and the Underwriters execute
this Agreement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries or the earnings,
affairs, or business prospects of the Company and its subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, which would,
in your judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Securities or to enforce
contracts for the sale of the Securities on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the National Association of Securities Dealers Automated Quotation
System National Market or limitation on prices for securities on any such
exchange or National Market System, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company and its subsidiaries taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States and would, in your opinion, make it impracticable or inadvisable to
market the Securities or to enforce contracts for the sale of the Securities.
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10. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Stone
Container Corporation, 150 North Michigan Avenue, Chicago, Illinois 60601,
Attention: Leslie T. Lederer, with a copy to Sidley & Austin, One First
National Plaza, Chicago, Illinois 60603, Attention: Frederick C. Lowinger and
(b) if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, with a copy to Latham & Watkins, Sears Tower, Suite 5800,
233 South Wacker Drive, Chicago, Illinois 60606, Attention: Marc D. Bassewitz,
or in any case to such other address as the person to be notified may have
requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Securities, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
by or on behalf of the Company, the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Securities and payment
for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the several Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
STONE CONTAINER CORPORATION
By:-------------------------
Name:
Title:
Accepted and agreed to as
of the date first written above:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT SECURITIES CORPORATION
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
-------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
Principal Amount
UNDERWRITERS OF Units
- ------------ -----------------
Donaldson, Lufkin & Jenrette
Securities Corporation $165,000,000
BT Securities Corporation $110,000,000
------------
TOTAL $275,000,000
------------
------------
<PAGE>
EXHIBIT 4(i)(i)
STONE CONTAINER CORPORATION,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
First Supplemental Indenture
Dated as of May 28, 1997
Supplemental Indenture to Indenture Dated
As of March 15, 1992
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of May 28, 1997 (this
"Supplemental Indenture") between STONE CONTAINER CORPORATION, a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the "Company"), having its principal office at 150 North Michigan Avenue,
Chicago, Illinois 60601, and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (herein called the "Trustee"), having its Corporate
Trust office at 101 Barclay Street, New York, New York 10286, United States of
America.
RECITALS OF THE COMPANY
The Company entered into an Indenture dated as of March 15, 1992 with
the Trustee (the "Indenture") to provide for the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (herein
generally called the "Securities"), to be issued in one or more series as in the
Indenture provided.
The Company proposes to issue a series of Securities denominated its
Series B 10 3/4% Senior Subordinated Debentures due April 1, 2002 (the
"Series B Debentures").
Sections 901(7), 901(9) and 901(10) of the Indenture provide that
without notice to or the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental to the Indenture to establish the
form or terms of Securities of any series as permitted by Sections 201 and 301
thereof, to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision of the Indenture which may be inconsistent with any
other provision in the Indenture, or to make any other change that does not
materially adversely affect the interests of the Holders of Securities of any
series.
The entry into this Supplemental Indenture by the parties hereto is in
all respects authorized by the provisions of the Indenture.
All things necessary to make this Supplemental Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Series B
Debentures by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Series B Debentures except as
otherwise provided in the Indenture or this Supplemental Indenture, as follows:
SECTION 1. The Indenture is hereby amended, solely with respect to
the Series B Debentures, as follows:
(a) By amending Section 101 to add new definitions thereto, in the appropriate
alphabetical sequence, as follows:
"TWO YEAR TREASURY RATE", "SEVEN YEAR TREASURY RATE" and "TEN
YEAR TREASURY RATE" mean the arithmetic averages (rounded to the
nearest basis point) of the weekly average per annum yield to maturity
values adjusted to constant maturities of two years, seven years and
ten years, respectively, for the four full weeks ending on the seventh
business day prior to the Reset Date (the "Rate Determination Period")
as determined from the yield curves of the most actively traded
marketable United States Treasury fixed
<PAGE>
interest rate securities (x) constructed daily by the United States
Treasury Department (i) as published by the Federal Reserve Board in its
Statistical Release H.15 (519), "Selected Interest Rates," which weekly
average yield to maturity values currently are set forth in such
Statistical Release under the caption "U.S. Government Securities--Treasury
Constant Maturities--2 Years," "U.S. Government Securities--Treasury
Constant Maturities--7 Years" and "U.S. Government Securities--Treasury
Constant Maturities--10 Years," respectively, or (ii) if said
Statistical Release H.15 (519) is not then published, as published by
the Federal Reserve Board in any release comparable to its Statistical
Release H.15 (519) or (iii) if the Federal Reserve Board shall not be
publishing a comparable release, as published in any official
publication or release of any other United States Government
Department or agency, or (y) if the United States Treasury Department
shall not then be constructing such yield curves, then as constructed
by the Federal Reserve Board or any other United States Government
Department or agency and published as set forth in (x) above.
However, if the Two Year Treasury Rate, the Seven Year Treasury Rate
or the Ten Year Treasury Rate cannot be determined as provided above,
then such treasury rate shall be the arithmetic average (rounded to
the nearest basis point) of the per annum yields to maturity for each
Business Day during the Rate Determination Period of all of the issues
of actively trading issues of non-interest bearing United States
Treasury fixed interest rate securities with a maturity of not less
than 21 months nor more than 27 months, not less than 81 months nor
more than 87 months, or not less than 117 months nor more than 123
months, respectively, from such Business Day (1) as published in THE
WALL STREET JOURNAL or (2) if THE WALL STREET JOURNAL shall cease
publication, based on average asked priced (or yields) as quoted by
each of three United States Government Securities dealers of
recognized national standing selected by the Company.
(b) By amending Section 101 to delete the definitions in the Indenture of
"Initial Interest Rate" and "interest" and add the following definitions of
those terms:
"INITIAL INTEREST RATE", when used with respect to the Series B
Debentures, means the initial rate of interest to be borne by such
Series B Debentures as provided in the first paragraph of the face of
the Series B Debentures, including any portion thereof attributable to
the supplemental interest certificate attached thereto.
"INTEREST", when used with respect to the Series B Debentures, means
interest payable pursuant to the first paragraph of the face of the Series
B Debentures, including any portion thereof attributable to the
supplemental interest certificate attached thereto.
(c) By deleting current paragraph (a) of Section 1101 and adding as new
paragraph (a) of Section 1101 the following:
(a) In the event that the Company's Net Worth is below five
hundred million dollars ($500,000,000) (the "MINIMUM NET WORTH") as at
the end of any two consecutive fiscal quarters (the last day of the
second such fiscal quarter, the "FAILURE DATE"), then (i) the interest
rate on the Series B Debentures shall be reset as of the first day of
the second fiscal quarter following the Failure Date (the "RESET
DATE") to a rate per annum (the "RESET RATE") equal to the greater of
(x) the Initial Interest Rate or (y) the sum of (A) 500 basis points
and (B) the highest of the Two Year Treasury Rate, the Seven Year
Treasury Rate or the Ten Year Treasury Rate, (ii) on the first
Interest Payment Date following the Reset Date, the interest rate on
the Series B Debentures, as reset on the Reset Date, shall
2
<PAGE>
increase by 50 basis points, and (iii) the interest rate on the Series B
Debentures shall further increase by an additional 50 basis points on
each succeeding Interest Payment Date. Notwithstanding anything in
the foregoing, in no event shall the interest rate on the Series B
Debentures at any time exceed the Initial Interest Rate by more than
200 basis points.
(d) By adding as the first sentence of Section 1202 the following:
The Company may redeem the Series B Debentures, in whole or in part
pursuant to the second paragraph of the reverse of the Series B
Debentures.
(e) By amending the table of contents in the Indenture to reflect the additions
described in subsections (a) through (d) of this Section 1.
SECTION 2. The Series B Debentures shall be substantially in the form of
EXHIBIT A hereto, which form is hereby incorporated in and made a part of this
Supplemental Indenture. The Series B Debentures shall be in an aggregate
principal amount of $275,000,000 (except for Series B Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Series B Debentures pursuant to Sections 304, 305, 306, 906 or 1207 of
the Indenture). The Series B Debentures may have notations, legends or
endorsements required by law, stock exchange rule, or agreements to which the
Company is subject. Each Series B Debenture shall be dated the date of its
authentication. The Series B Debentures shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Series B Debentures shall
constitute, and are hereby expressly made, a part of this Supplemental
Indenture, and the Company and the Trustee, by their execution and delivery of
this Supplemental Indenture, expressly agree to such terms and provisions and to
be bound thereby.
The Series B Debentures will be issued in permanent global form,
substantially in the form of EXHIBIT A hereto. Such global Series B Debentures
shall be registered in the name of the U.S. Depositary for such global Series B
Debentures or the nominee of such U.S. Depositary and shall be delivered by the
Trustee to such U.S. Depositary or pursuant to such U.S. Depositary's
instructions. So long as the U.S. Depositary or its nominee is the registered
owner of such global Series B Debentures it will be deemed the sole owner and
holder of such global Series B Debentures for all purposes under the Indenture,
hereunder and under such global Series B Debentures. Neither the Company nor
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made by the U.S. Depositary on account of any
beneficial interest in such global Series B Debentures. Such global Series B
Debentures shall represent such of the outstanding Series B Debentures as shall
be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Series B Debentures from time to time endorsed
thereon and that the aggregate principal amount of outstanding Series B
Debentures represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions and repurchases. Any
endorsement of a global Series B Debenture to reflect the amount of any increase
or decrease in the principal amount of outstanding Series B Debentures
represented thereby shall be made by the Trustee in accordance with instructions
given by the Holder thereof as required by Section 305 of the Indenture. The
Depository Trust Company shall be the initial U.S. Depositary with respect to
the Series B Debentures.
A global Series B Debenture is exchangeable for certificated Series B
Debentures of the same series and bearing interest at the same rate pursuant to
the same formula, having the same date of issuance, redemption provisions,
repayment provisions, stated maturity and other terms and of differing
authorized
3
<PAGE>
denominations aggregating a like amount if (x) The Depository Trust
Company notifies the Company that it is unwilling or unable to continue as the
U.S. Depositary for such global Series B Debenture or if at any time The
Depository Trust Company ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or (y) the Company in its sole
discretion determines that such global Series B Debenture shall be exchangeable
for certificated Series B Debentures. Such certificated Series B Debentures
shall be registered in the names of the owners of the beneficial interests in
such global Series B Debenture as provided by The Depository Trust Company's
relevant participants (as identified by The Depository Trust Company).
The provisions of this Section 2 supersede the provisions of Section 205 of
the Indenture (other than the second paragraph thereof), which provisions shall
not apply to the Series B Debentures.
SECTION 3. The Series B Debentures shall be subject to the defeasance
provisions of Sections 1402 and 1403 of the Indenture. The Series B Debentures
shall not be entitled to any sinking fund, and Article Thirteen of the Indenture
shall not apply to the Series B Debentures.
SECTION 4. Except as specifically supplemented and amended by this
Supplemental Indenture, the terms and provisions of the Indenture shall remain
in full force and effect. The Indenture, as supplemented and amended by this
Supplemental Indenture and all other indentures supplemental thereto, is in all
respects ratified and confirmed, and the Indenture, this Supplemental Indenture
and all indentures supplemental thereto shall be read, taken and construed as
one and the same instrument.
SECTION 5. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Supplemental
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control.
SECTION 6. All covenants and agreements in this Supplemental Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.
SECTION 7. In case any provision in this Supplemental Indenture or in the
Securities of any series shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions (or of the
other series of Securities) shall not in any way be affected or impaired
thereby.
SECTION 8. Nothing in this Supplemental Indenture, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of the Series B Debentures any benefit or any legal
or equitable right, remedy or claim under this Supplemental Indenture.
SECTION 9. This Supplemental Indenture and each Series B Debenture shall
be deemed to be a contract made under the laws of the State of New York and this
Supplemental Indenture and each Series B Debenture shall be governed by and
construed in accordance with the laws (other than the choice of law provisions)
of the State of New York.
SECTION 10. All terms used in this Supplemental Indenture and not
otherwise defined herein that are defined in the Indenture shall have the
meanings set forth therein.
SECTION 11. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
4
<PAGE>
SECTION 12. The recitals contained herein and in the Series B Debentures,
except the certificate of authentication of the Trustee thereon, shall be taken
as statements of the Company, and the Trustee assumes no responsibility for
their accuracy or completeness. The Trustee make no representations as to the
validity or sufficiency of the Indenture, this Supplemental Indenture or of the
Series B Debentures and shall not be accountable for the use or application by
the Company of the Series B Debentures or the proceeds thereof.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed all as of the day and year first written above.
STONE CONTAINER CORPORATION
By:__________________________
Name:________________________
Title:_______________________
THE BANK OF NEW YORK
By:__________________________
Name:________________________
Title:_______________________
6
<PAGE>
EXHIBIT A
FORM OF SERIES B DEBENTURES
(FACE OF SERIES B DEBENTURE)
THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A COMMON DEPOSITARY OR
A U.S. DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE COMMON DEPOSITARY OR A U.S. DEPOSITARY OR BY A NOMINEEE OF THE
COMMON DEPOSITARY OR A NOMINEE OF THE U.S. DEPOSITARY AS THE CASE MAY BE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS
DEFINED HEREIN) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
STONE CONTAINER CORPORATION
SERIES B 10 3/4% SENIOR SUBORDINATED DEBENTURE DUE APRIL 1, 2002
CUSIP NUMBER 861589 AT 6
No. __________ $ __________
STONE CONTAINER CORPORATION, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _____________________, or registered
assigns, the principal sum of ________________________ Dollars on April 1, 2002,
and to pay interest thereon from the date hereof or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on April 1 and October 1 in each year, commencing October 1, 1997,
at the rate of 10 3/4% per annum plus additional interest hereon as provided in
the Supplemental Interest Certificate attached hereto at the rate per annum
specified therein, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
i
<PAGE>
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, the City of New York, in dollars; PROVIDED,
HOWEVER, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
ii
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
STONE CONTAINER CORPORATION
By______________________________________
[CORPORATE SEAL]
Attest:__________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: May __, 1997
This is one of the Securities of the
series designated therein referred
to in the within-mentioned Indenture
THE BANK OF NEW YORK, as Trustee
By: ____________________________________
iii
<PAGE>
(REVERSE OF SERIES B DEBENTURE)
STONE CONTAINER CORPORATION
10 3/4% SERIES B SENIOR SUBORDINATED DEBENTURE DUE APRIL 1, 2002
This Security, including the attached Supplemental Interest
Certificate, is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of March 15, 1992, as supplemented by a First
Supplemental Indenture dated as of May __, 1997 (herein called the "Indenture"),
between the Company and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $275,000,000.
The Securities of this series are subject to redemption upon not less
than 30 nor more than 45 days' notice by first class mail, at any time on or
after the date hereof, as a whole or in part, at the election of the Company, at
the following Redemption Prices (expressed as percentages of the principal
amount):
If redeemed during the 12-month period beginning April 1 of the years
indicated,
Redemption
YEAR Price
---- ----------
1997 ................ 105.3750%
1998 ................ 102.6875%
1999 and thereafter.. 100.0000%
together in the case of any such redemption with accrued and unpaid interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
This Security is a general unsecured obligation of the Company and
will (i) be subordinate in right of payment to all existing and future Senior
Indebtedness of the Company and (ii) be senior in right of payment to all
existing and future Junior Subordinated Indebtedness of the Company, as
described in the Indenture.
iv
<PAGE>
In the event that the Company's Net Worth is below $500 million at the
end of any two consecutive fiscal quarters (the last day of the second such
fiscal quarter, the "Failure Date"), then (i) the interest rate on the
Securities of this series shall be reset as of the first day of the second
following fiscal quarter (the "Reset Date") to a rate per annum (the "Reset
Rate") equal to the greater of (x) 12 1/4% (the aggregate of 10 3/4%
plus 1 1/2% represented by the Supplemental Interest Certificate attached
hereto) or (y) the sum of 500 basis points and the highest of the Two Year
Treasury Rate, the Seven Year Treasury Rate or the Ten Year Treasury Rate,
(ii) on the first interest payment date following the Reset Date, the interest
rate on the Securities of this series shall increase by 50 basis points and
(iii) the interest rate on the Securities of this series shall further increase
by an additional 50 basis points on each succeeding interest payment date.
Notwithstanding clauses (i), (ii) and (iii) above, in no event shall the
interest rate on the Securities of this series at any time exceed 14 1/4%.
If the Company's Net Worth equals or exceeds $500 million as of the last day of
any fiscal quarter subsequent to the Failure Date, then the interest rate on
the Securities of this series shall return to 12 1/4% as of the first day of the
second following fiscal quarter.
The Indenture also provides that upon the occurrence of a Change in
Control, subject to the satisfaction of certain substantial conditions precedent
set forth in the Indenture, each Holder shall have the right-to require the
Company to purchase such Holder's Securities at a price equal to 101% of the
aggregate principal amount of such Securities plus accrued and unpaid interest,
if any, to the date of such purchase.
This Security is subject to defeasance as described in the Indenture.
The Indenture may be modified by the Company and the Trustee without
consent of any Holder with respect to certain matters as described in the
Indenture. In addition, the Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall bind such Holder and all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of authorized denominations and for the same Stated Maturity and
aggregate principal amount, will be issued to the designated transferee or
transferees.
v
<PAGE>
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture imposes certain limitations on the ability of the
Company to, among other things, make payments in respect of its capital stock,
merge or consolidate with any other Person or sell, assign, transfer or lease
all or substantially all of its properties or assets. All such covenants and
limitations are subject to a number of important qualifications and exceptions.
The Company must report periodically to the Trustee on compliance with the
covenants in the Indenture.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under this
Security or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder, by accepting a Security,
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures ("CUSIP"), the Company has caused CUSIP
numbers to be printed on the Securities of this series as a convenience to the
Holders of the Securities of this series. No representation is made as to the
correctness or accuracy of such numbers as printed on the Securities of this
series and reliance may be placed only on the other identification numbers
printed hereon.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
vi
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated:____________________ Your Signature _____________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranty:____________________________________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Security
Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
vii
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Security
purchased by the Company pursuant to Section 1011 ("Change in Control Offer") of
the Indenture, check the applicable box:
/ / in whole / / in part
amount to be purchased: $__________
Dated:____________________ Your Signature _____________________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guaranty:___________________________________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Security
Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
Social Security Number or Taxpayer Identification
Number: _________________________________________
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STONE CONTAINER CORPORATION
SUPPLEMENTAL INTEREST CERTIFICATE
(RELATING TO SERIES B 10 3/4% SENIOR SUBORDINATED DEBENTURE DUE APRIL 1, 2002)
No. __________
STONE CONTAINER CORPORATION, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay interest on the principal amount evidenced by
the attached Series B 10-3/4% Senior Subordinated Debenture due April 1, 2002
(the "Series B Debenture") from the date hereof or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on April 1 and October 1 in each year, commencing October 1, 1997, at the rate
of 1 1/2% per annum in addition to the 10 3/4% interest rate borne by such
Series B Debenture, until the principal of such Series B Debenture is paid or
made available for payment. The interest so payable will be paid in accordance
with the terms of such Series B Debenture and the related Indenture dated as of
March 15, 1992, as supplemented by a First Supplemental Indenture dated as of
May ___, 1997, between the Company and The Bank of New York, as Trustee.
This Supplemental Interest Certificate is not separable from the
Series B Debenture to which it is attached and may not be separately
transferred.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal this ______ day of May, 1997.
STONE CONTAINER CORPORATION
By ______________________________________________
[CORPORATE SEAL]
Attest:__________________________________________
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EXHIBIT 99.1
THIRD AMENDMENT
OF CREDIT AGREEMENT
THIS THIRD AMENDMENT OF CREDIT AGREEMENT, dated as of May 22, 1997 (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:
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 and the Second Amendment of Credit
Agreement dated as of December 18, 1996 (the "CREDIT AGREEMENT").
The Borrower has requested the Agent and the Lenders to amend
SECTION 5.2.2(K) of the Credit Agreement.
The Borrower, the Agent and the Lenders desire to amend SECTION 5.2.2(K) of
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. AMENDMENT TO THE CREDIT AGREEMENT. SECTION 5.2.2(K) of
the Credit Agreement is, as of the Effective Date (as defined below), hereby
amended by deleting "$100 million" appearing in such Section and substituting
therefor "$150 million".
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. This
Amendment shall become effective upon the date (the "EFFECTIVE DATE") when each
of the Borrower, the Agent and the Required Lenders shall have executed and
delivered this Amendment.
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
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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, except as expressly provided herein, 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.
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<PAGE>
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.
SECTION 9. 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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<PAGE>
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 BANKERS TRUST COMPANY, in its
individual capacity and as Agent
By: By:
Name: Name:
Title: Title:
BANK OF AMERICA NATIONAL TRUST BANK OF BOSTON
AND SAVINGS ASSOCIATION, in its
individual capacity and as a Co-Agent
By: By:
Name: Name:
Title Title:
THE BANK OF NEW YORK, in its THE BANK OF NOVA SCOTIA, in its
individual capacity and as a Co-Agent individual capacity and as a Co-Agent
By: By:
Name: Name:
Title: Title:
CAISSE NATIONALE DE CREDIT AERIES FINANCE LTD.
AGRICOLE, in its individual
capacity and as a Co-Agent
By: By:
Name: Name:
Title: Title:
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<PAGE>
CERES FINANCE LTD. STRATA FUNDING LTD.
By: By:
Name: Name:
Title: Title:
THE CHASE MANHATTAN BANK, N.A., in MORGAN STANLEY SENIOR FUNDING,
its individual capacity and as a INC.
Co-Agent, and as successor to both
Chemical Bank and The Chase
Manhattan Bank, N.A.
By: By:
Name: Name:
Title: Title:
OCTAGON CREDIT INVESTORS LOAN COMPAGNIE FINANCIERE DE CIC ET DE
PORTFOLIO (formerly known as CHL L'UNION EUROPEENNE
High Yield Loan Portfolio), a Unit
of The Chase Manhattan Bank, N.A.
By: By:
Name: Name:
Title: Title:
DRESDNER BANK AG (New York and Grand THE EQUITABLE LIFE ASSURANCE SOCIETY
Cayman Branches), in its individual OF THE UNITED STATES
capacity and as a Co-Agent
By: By:
Name: Name:
Title: Title:
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<PAGE>
THE FIRST NATIONAL BANK OF KEYPORT LIFE INSURANCE COMPANY
CHICAGO, in its individual capacity
and as a Co-Agent By: Chancellor Senior Secured
Management, Inc., as Portfolio Advisor
By: By:
Name: Name:
Title: Title:
LEHMAN COMMERCIAL PAPER INC. THE LONG-TERM CREDIT BANK OF JAPAN,
LTD. in its individual capacity and as
a Co-Agent
By: By:
Name: Name:
Title: Title:
MERITA BANK LTD., formerly known as SENIOR HIGH INCOME PORTFOLIO, INC.
Union Bank of Finland, Ltd., Grand
Cayman Branch
By: By:
Name: Name:
Title: Title:
SENIOR HIGH INCOME PORTFOLIO, INC., CANADIAN IMPERIAL BANK OF COMMERCE
as successor in interest to Senior
High Income Portolio II, Inc.
By: By:
Name: Name:
Title: Title:
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<PAGE>
RESTRUCTURED OBLIGATIONS BACKED SENIOR HIGH INCOME PORTFOLIO, INC.,
BY SENIOR ASSETS B.V. as successor in interest to Senior
Strategic Income Fund, Inc.
By: Chancellor Senior Secured
Management, Inc., as Portfolio Advisor
By: By:
Name: Name:
Title: Title:
NATIONSBANK, N.A. (CAROLINAS), in its CITIBANK, N.A.
individual capacity and as a Co-Agent
By: By:
Name: Name:
Title: Title:
STICHTING RESTRUCTURED OBLIGATIONS SENIOR DEBT PORTFOLIO
BACKED BY SENIOR ASSETS 2 (ROSA2)
By: Chancellor Senior Secured By: Boston Management and Research,
Management, Inc., as Portfolio as Investment Advisor
Advisor
By: By:
Name: Name:
Title: Title:
THE SUMITOMO BANK, LTD., CHICAGO TORONTO DOMINION (TEXAS), INC., in its
BRANCH, in its individual capacity individual capacity and as a Co-Agent
and as a Co-Agent
By: By:
Name: Name:
Title: Title:
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<PAGE>
VAN KAMPEN MERRITT PRIME RATE MEDICAL LIABILITY MUTUAL INSURANCE
INCOME TRUST COMPANY
By: By:
Name: Name:
Title: Title:
FIRST ALABAMA BANK CAPTIVA FINANCE LTD.
By: By:
Name: Name:
Title: Title:
THE YASUDA TRUST & BANKING CO., INDOSUEZ CAPITAL FUNDING II,
LTD. CHICAGO BRANCH LIMITED
By: Indosuez Capital Luxembourg, as
Collateral Manager
By: By:
Name: Name:
Title: Title:
METROPOLITAN LIFE INSURANCE PROTECTIVE LIFE INSURANCE
COMPANY CO.
By: By:
Name: Name:
Title: Title:
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<PAGE>
MERRILL LYNCH PRIME RATE MERRILL LYNCH SENIOR FLOATING
PORTFOLIO RATE FUND, INC.
By: Merrill Lynch Asset Management,
LP, as Investment Advisor
By: By:
Name: Name:
Title: Title:
CARILION HOLDING, LTD. OAK HILL SECURITIES FUND, L.P.
By: By:
Name: Name:
Title: Title:
ML CBO IV (CAYMAN) LTD. SANWA BUSINESS CREDIT CORPORATION
By: Protective Asset Management,
L.L.C., as Collateral Manager
By: By:
Name: Name:
Title: Title:
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<PAGE>
GOLDMAN, SACHS CREDIT PARTNERS L.P. FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: By:
Name: Name:
Title: Title:
ING BARING (US) CAPITAL CORP DLJ CAPITAL FUNDING, INC.
By: By:
Name: Name:
Title: Title:
10
