<PAGE>

                                                                    Exhibit 10.2

================================================================================


                 SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                            Dated as April 27, 2001

                                     among

                     JEFFERSON SMURFIT CORPORATION (U.S.),

                     SMURFIT-STONE CONTAINER CORPORATION,

                                  JSCE, INC.,

                THE LENDERS AND FRONTING BANKS PARTIES HERETO,

                       THE MANAGING AGENTS NAMED HEREIN,

                           THE CHASE MANHATTAN BANK,
               as Administrative Agent and Senior Managing Agent

                                      and

                            BANKERS TRUST COMPANY,
                           as Senior Managing Agent


          __________________________________________________________


                                   JPMORGAN,
                     a division of Chase Securities Inc.,
                          as Bookrunner Lead Arranger

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
                                   ARTICLE I
                                  Definitions
                                  -----------

SECTION 1.01.  Defined Terms.................................................  2
               -------------
SECTION 1.02.  Terms Generally............................................... 33
               ---------------


                                  ARTICLE II
                                  The Credits
                                  -----------
SECTION 2.01.  Commitments................................................... 33
               -----------
SECTION 2.02.  Loans......................................................... 34
               -----
SECTION 2.03.  Notice of Borrowings.......................................... 36
               --------------------
SECTION 2.04.  Repayment of Loans; Evidence of Debt.......................... 36
               ------------------------------------
SECTION 2.05.  Fees.......................................................... 37
               ----
SECTION 2.06.  Interest on Loans............................................. 38
               -----------------
SECTION 2.07.  Default Interest.............................................. 40
               ----------------
SECTION 2.08.  Alternate Rate of Interest.................................... 40
               --------------------------
SECTION 2.09.  Termination and Reduction of Commitments...................... 41
               ----------------------------------------
SECTION 2.10.  Conversion and Continuation of Borrowings..................... 41
               -----------------------------------------
SECTION 2.11.  Repayment of Term Borrowings.................................. 43
               ----------------------------
SECTION 2.12.  Optional Prepayments.......................................... 44
               --------------------
SECTION 2.13.  Mandatory Prepayments......................................... 45
               ---------------------
SECTION 2.14.  Reserve Requirements; Change in Circumstances;
               ----------------------------------------------
               Increased Costs............................................... 48
               ---------------
SECTION 2.15.  Change in Legality............................................ 50
               ------------------
SECTION 2.16.  Indemnity..................................................... 51
               ---------
SECTION 2.17.  Pro Rata Treatment............................................ 52
               ------------------
SECTION 2.18.  Sharing of Setoffs............................................ 52
               ------------------
SECTION 2.19.  Payments...................................................... 53
               --------
SECTION 2.20.  Taxes......................................................... 53
               -----
SECTION 2.21.  Duty to Mitigate; Assignment of Commitments
               -------------------------------------------
               under Certain Circumstances................................... 57
               ---------------------------
SECTION 2.22.  Swingline Loans............................................... 58
               ---------------

                                  ARTICLE III
                               Letters of Credit
                               -----------------

SECTION 3.01.  Issuance of Letters of Credit................................. 59
               -----------------------------
SECTION 3.02.  Participations; Unconditional Obligations..................... 61
               -----------------------------------------
SECTION 3.03.  LC Fee........................................................ 61
               ------
SECTION 3.04.  Agreement to Repay LC Disbursements........................... 62
               -----------------------------------
</TABLE>
<PAGE>

<TABLE>
<S>                                                                          <C>
SECTION 3.05.  Letter of Credit Operations.................................  63
               ---------------------------
SECTION 3.06.  Termination of LC Commitment................................  63
               ----------------------------
SECTION 3.07.  Fronting Bank Fees..........................................  64
               ------------------
SECTION 3.08.  Resignation or Removal of the Fronting Bank.................  64
               -------------------------------------------
SECTION 3.09.  Cash Collateralization......................................  65
               ----------------------
SECTION 3.10.  Additional Fronting Banks...................................  65
               -------------------------

                                  ARTICLE IV
                        Representations and Warranties
                        ------------------------------

SECTION 4.01.  Organization; Powers........................................  66
               --------------------
SECTION 4.02.  Authorization...............................................  66
               -------------
SECTION 4.03.  Enforceability..............................................  66
               --------------
SECTION 4.04.  Governmental Approvals......................................  66
               ----------------------
SECTION 4.05.  Financial Statements........................................  67
               --------------------
SECTION 4.06.  No Material Adverse Change..................................  67
               --------------------------
SECTION 4.07.  Title to Properties; Possession Under Leases................  67
               --------------------------------------------
SECTION 4.08.  Subsidiaries................................................  67
               ------------
SECTION 4.09.  Litigation; Compliance with Laws............................  68
               --------------------------------
SECTION 4.10.  Agreements..................................................  68
               ----------
SECTION 4.11.  Federal Reserve Regulations.................................  68
               ---------------------------
SECTION 4.12.  Investment Company Act; Public Utility
               --------------------------------------
                 Holding Company Act.......................................  69
                 -------------------
SECTION 4.13.  Use of Proceeds.............................................  69
               ---------------
SECTION 4.14.  Tax Returns.................................................  69
               -----------
SECTION 4.15.  No Material Misstatements...................................  69
               -------------------------
SECTION 4.16.  Employee Benefit Plans......................................  69
               ----------------------
SECTION 4.17.  Environmental and Safety Matters............................  70
               --------------------------------
SECTION 4.18.  Solvency....................................................  72
               --------
SECTION 4.19.  Security Documents..........................................  72
               ------------------
SECTION 4.20.  Labor Matters...............................................  73
               -------------
SECTION 4.21.  Location of Real Property...................................  74
               -------------------------
SECTION 4.22.  Patents, Trademarks, etc....................................  74
               ------------------------
SECTION 4.23.  Survival of Warranties......................................  74
               ----------------------

                                   ARTICLE V
                                  Conditions
                                  ----------

SECTION 5.01.  All Credit Events...........................................  75
               -----------------
SECTION 5.02.  Second Restatement Date.....................................  75
               -----------------------

                                  ARTICLE VI
                             Affirmative Covenants
                             ---------------------
</TABLE>
<PAGE>

<TABLE>
<S>                                                                         <C>
SECTION 6.01.  Existence; Businesses and Properties.........................  78
               ------------------------------------
SECTION 6.02.  Insurance....................................................  78
               ---------
SECTION 6.03.  Obligations and Taxes........................................  78
               ---------------------
SECTION 6.04.  Financial Statements, Reports, etc...........................  79
               ----------------------------------
SECTION 6.05.  Litigation and Other Notices.................................  81
               ----------------------------
SECTION 6.06.  ERISA........................................................  81
               -----
SECTION 6.07.  Maintaining Records; Access to Properties and Inspections....  82
               ---------------------------------------------------------
SECTION 6.08.  Use of Proceeds..............................................  82
               ---------------
SECTION 6.09.  Compliance with Law..........................................  82
               -------------------
SECTION 6.10.  Further Assurances...........................................  82
               ------------------
SECTION 6.11.  Material Contracts...........................................  84
               ------------------
SECTION 6.12.  Environmental Matters........................................  85
               ---------------------
SECTION 6.13.  Distribution of Gross Export Revenues........................  85
               -------------------------------------
SECTION 6.14.  Maintenance of Corporate Separateness........................  85
               -------------------------------------

                                  ARTICLE VII
                              Negative Covenants
                              ------------------
SECTION 7.01.  Indebtedness.................................................  86
               ------------
SECTION 7.02.  Liens........................................................  89
               -----
SECTION 7.03.  Sale/Leaseback Transactions..................................  89
               ---------------------------
SECTION 7.04.  Investments, Loans and Advances..............................  89
               -------------------------------
SECTION 7.05.  Mergers, Consolidations, Sales of Assets and Acquisitions....  92
               ---------------------------------------------------------
SECTION 7.06.  Restricted Junior Payments...................................  93
               --------------------------
SECTION 7.07.  Transactions with Stockholders and Affiliates................  95
               ---------------------------------------------
SECTION 7.08.  Business.....................................................  96
               --------
SECTION 7.09.  Limitations on Debt Prepayments..............................  96
               -------------------------------
SECTION 7.10.  Amendment of Certain Documents...............................  97
               ------------------------------
SECTION 7.11.  Limitation on Dispositions of Subsidiary Stock;
               -----------------------------------------------
                Creation of Subsidiaries...................................   97
                -------------------------
SECTION 7.12.  Restrictions on Ability of Subsidiaries to Pay Dividends.....  99
               --------------------------------------------------------
SECTION 7.13.  Capital Expenditures.........................................  99
               --------------------
SECTION 7.14.  Consolidated EBITDA..........................................  99
               -------------------
SECTION 7.15.  Interest Coverage Ratio...................................... 100
               -----------------------
SECTION 7.16.  Disposition of Collateral and other Assets................... 100
               ------------------------------------------
SECTION 7.17.  Disposition of Mortgaged Property............................ 101
               ---------------------------------
SECTION 7.18.  Fiscal Year.................................................. 102
               -----------

                                 ARTICLE VIII
                               Events of Default
                               -----------------
</TABLE>
<PAGE>

<TABLE>
<S>                                                                          <C>
     The Administrative Agent,ARTICLE IX the Collateral Agent, the Senior
      -------------------------------------------------------------------
                     Managing Agents and the Fronting Bank
                         ----------------------------


                                   ARTICLE X
                                 Miscellaneous
                                 -------------
   SECTION  10.01.  Notices.............................................     110
                    -------
   SECTION  10.02.  Survival of Agreement...............................     111
                    ---------------------
   SECTION  10.03.  Binding Effect......................................     111
                    --------------
   SECTION  10.04.  Successors and Assigns..............................     111
                    ----------------------
   SECTION  10.05.  Expenses; Indemnity.................................     115
                    -------------------
   SECTION  10.06.  Right of Setoff.....................................     116
                    ---------------
   SECTION  10.07.  Applicable Law......................................     116
                    --------------
   SECTION  10.08.  Waivers; Amendment..................................     116
                    ------------------
   SECTION  10.09.  Interest Rate Limitation............................     118
                    ------------------------
   SECTION  10.10.  Entire Agreement....................................     118
                    ----------------
   SECTION  10.11.  Waiver of Jury Trial................................     119
                    --------------------
   SECTION  10.12.  Severability........................................     119
                    ------------
   SECTION  10.13.  Counterparts........................................     119
                    ------------
   SECTION  10.14.  Headings............................................     119
                    --------
   SECTION  10.15.  Confidentiality.....................................     119
                    ---------------
   SECTION  10.16.  Jurisdiction; Consent to Service of Process.........     120
                    -------------------------------------------
   SECTION  10.17.  Receivables Program.................................     121
                    -------------------
   SECTION  10.18.  Florida Real Property...............................     121
                    ---------------------
   SECTION  10.19.  Effect of Restatement...............................     121
                    ---------------------
   SECTION  10.20.  Certain Relationships...............................     122
                    ---------------------
</TABLE>


<PAGE>

                                   EXHIBITS
                                   --------

Exhibit A           Administrative Questionnaire
Exhibit B           Form of Assignment and Acceptance
Exhibit C           Form of Mortgage
Exhibit D-1         Form of Opinion of Craig A. Hunt, Esq.
Exhibit D-2         Form of Opinion of Winston & Strawn
Exhibit E           Form of Reaffirmation of Guarantee


                                   SCHEDULES
                                   ---------

Schedule 1.01(a)    Existing Letters of Credit
Schedule 1.01(b)    Material Contracts
Schedule 1.01(c)    Material Subsidiaries
Schedule 1.01(d)    Mills
Schedule 1.01(e)    Mortgaged Property
Schedule 1.01(f)    Receivables Program Documents
Schedule 1.01(g)    Liability Management Transactions
Schedule 1.01(h)    SSCC Series A Preferred Stock
Schedule 2.01       Commitments
Schedule 4.08       Subsidiaries
Schedule 4.09       Litigation
Schedule 4.17       Environmental Matters
Schedule 4.19(b)    UCC Filing Offices
Schedule 4.19(c)    Mortgage Filing Offices
Schedule 4.19(d)    Trademark Filing Offices
Schedule 4.19(e)    UCC Filing Offices (SNC)
Schedule 4.20       Labor Matters
Schedule 4.21(a)    Owned Real Properties
Schedule 4.21(b)    Leased Real Properties
Schedule 4.21(c)    Timberland Properties
Schedule 7.01(a)    Certain Existing Indebtedness
Schedule 7.04       Existing Investments
<PAGE>

                 SECOND AMENDED AND RESTATED CREDIT AGREEMENT


          THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April
27, 2001, is by and among JEFFERSON SMURFIT CORPORATION (U.S.), a Delaware
corporation (the "Borrower"); SMURFIT-STONE CONTAINER CORPORATION (formerly
                  --------
named Jefferson Smurfit Corporation), a Delaware corporation ("SSCC"); JSCE,
                                                               ----
INC., a Delaware corporation ("JSCE"); the Lenders (as defined in Article I);
                               ----
the Managing Agents (as defined in Article I); the Fronting Banks (as defined in
Article I); THE CHASE MANHATTAN BANK, a New York banking corporation ("Chase")
                                                                       -----
and BANKERS TRUST COMPANY, a New York banking corporation ("BTCo"), as senior
                                                            ----
managing agents (in such capacity, each a "Senior Managing Agent") for the
                                           ---------------------
Lenders; and Chase, as administrative agent (in such capacity, the
"Administrative Agent") and collateral agent (in such capacity, the "Collateral
 --------------------                                                ----------
Agent") for the Lenders, and as swingline lender (in such capacity, the
-----
"Swingline Lender").
 ----------------

          The Borrower, SSCC, JSCE, certain financial institutions (the
"Existing Lenders"), the Managing Agents, the Fronting Banks, BTCo and Chase, as
 ----------------
Senior Managing Agents, and Chase, as Administrative Agent, Collateral Agent and
Swingline Lender, previously entered into that certain Credit Agreement dated as
of March 24, 1998 (as amended prior to the Second Restatement Date, the
"Existing Credit Agreement") whereunder (a) the Lenders extended credit or
 -------------------------
agreed to extend credit in the form of (i) Tranche A Term Loans (such term and
each other capitalized term used but not defined in this introductory statement
having the meaning assigned to it in Article I) on the  Closing Date in an
                                     ---------
aggregate principal amount of $400,000,000, (ii) tranche B term loans on the
Closing Date (the "Original Tranche B Term Loans") in an aggregate principal
                   -----------------------------
amount of $350,000,000, (iii) additional tranche B term loans on the First
Restatement Date in an aggregate principal amount of $550,000,000 (the
"Additional Tranche B Term Loans" and, together with the Original Tranche B Term
 -------------------------------
Loans, the "Prior Tranche B Term Loans") and (iv) Revolving Loans at any time
            --------------------------
and from time to time prior to the Revolving Credit Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$550,000,000, (b) the Swingline Lender agreed to extend credit, at any time and
prior to the Revolving Credit Maturity Date, in the form of Swingline Loans, and
(c) the Fronting Bank agreed to issue letters of credit, in an aggregate face
amount at any time outstanding not in excess of $150,000,000.  Prior to the
Second Restatement Date, the Borrower has prepaid in full all outstanding Prior
Tranche B Term Loans.

          The Borrower has requested that certain Lenders (the "Tranche B
                                                                ---------
Lenders") make Tranche B Term Loans to the Borrower in an aggregate principal
-------
amount of $275,000,000, subject to the terms and conditions set forth herein.
The Tranche B Term Loans shall be used by the Borrower solely to provide a
portion of the funds necessary to redeem in full the 10-Year Senior Notes, which
notes have an aggregate principal amount outstanding of $287,000,000, and to pay
fees and expenses incurred in connection therewith.
<PAGE>

                                                                               2

          The Existing Lenders are willing to continue the Tranche A Term Loans
as existing on the Second Restatement Date, and to continue to extend
commitments to make the Revolving Loans and the Swingline Loans, and to continue
to issue or participate, as the case may be, in Letters of Credit, to or for the
benefit of the Borrower, in each case on the terms and conditions hereinafter
set forth. The proceeds of all Revolving Loans and Swingline Loans will be used
by the Borrower solely to provide working capital for the Borrower and its
Subsidiaries and for other general corporate purposes, including the repurchase
or refinancing of other Indebtedness.  Letters of Credit will be used solely to
support obligations of the Borrower and its Subsidiaries incurred in the
ordinary course of their business.

          The Tranche B Lenders are willing to make the Tranche B Term Loans to
the Borrower solely for the purposes set forth above and subject to the terms
and conditions hereinafter set forth.  Pursuant to Amendment No. 5, the Required
Lenders (as defined under the Existing Credit Agreement) have authorized the
Administrative Agent to enter into this Agreement to provide further amendments
to the Existing Credit Agreement required to document the making of the Tranche
B Term Loans.

          This Agreement shall become effective upon the date (the "Second
                                                                    ------
Restatement Date") on which, after it has been executed by the Borrower, SSCC,
----------------
JSCE, the Administrative Agent and the Tranche B Lenders, the Borrower has
satisfied all of the conditions precedent set forth in Section 5.02 (but in the
event such conditions have not been satisfied or waived on or before May 11,
2001, this Agreement shall be of no force or effect and the Existing Credit
Agreement shall continue in full force and effect).

          In accordance with the foregoing, the Borrower, SSCC, JSCE, the
Lenders, the Managing Agents, the Senior Managing Agents, the Fronting Bank, the
Swingline Lender, the Administrative Agent and the Collateral Agent agree as
follows:


                                   ARTICLE I

                                  Definitions
                                  -----------

          SECTION  1.01.  Defined Terms.  As used in this Agreement, the
                          -------------
following terms shall have the meanings specified below:

          "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

          "ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.

          "ABR Revolving Borrowing" shall mean a Borrowing comprised of ABR
Revolving Loans.
<PAGE>

                                                                               3

          "ABR Revolving Loan" shall mean any Revolving Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

          "ABR Spread" shall mean (a) with respect to Tranche A Term Loans and
Revolving Loans, 1.50% per annum, subject to adjustment pursuant to Section
2.06(c), and  (b) with respect to Tranche B Term Loans, 2.25% per annum, subject
to adjustment pursuant to Section 2.06(c).

          "ABR Term Borrowing" shall mean a Borrowing comprised of ABR Term
Loans.

          "ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of
Article II.

          "Accepting Lenders" is defined in Section 2.13(i).

          "Additional Stone Capital Contributions" is defined in Section
7.04(g).

          "Additional Tranche B Term Loans" is defined in the recitals to this
Agreement.

          "Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.  For purposes
hereof, the term "LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow
Jones Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
average of the respective rates per annum at which dollar deposits approximately
equal in principal amount to the Administrative Agent's portion of such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

          "Administrative Agent" is defined in the recitals to this Agreement.
<PAGE>

                                                                               4

          "Administrative Fees" is defined in Section 2.05(b).

          "Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.

          "Affiliate" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified. For purposes of this definition, neither any Lender nor any Affiliate
of a Lender shall be deemed to be an Affiliate of SSCC or any of its
Subsidiaries solely by reason of its ownership of or right to vote any
Indebtedness of SSCC or any of its Subsidiaries.

          "After-Acquired Mortgage Property" is defined in Section 6.05(d).

          "Agreement" shall mean this Second Amended and Restated Credit
Agreement, as amended, restated, supplemented or otherwise modified from time to
time.

          "Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, the term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective on the date such change is publicly
announced as being effective. The term "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves
and (b) the Assessment Rate. The term "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day) or, if such
rate shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 a.m., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Administrative Agent
from three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate
or both for any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (b) or (c), or
both, of the first sentence of this definition, as appropriate, until
<PAGE>

                                                                               5

the circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate, respectively.

          "Amendment No. 5" shall mean Amendment No. 5, Waiver and Agreement
dated as of March 28, 2001, to the Existing Credit Agreement.

          "Applicable Percentage" of any Participating Lender shall mean the
percentage of the aggregate Revolving Credit Commitments represented by such
Participating Lender's Revolving Credit Commitment.

          "Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then-current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.

          "Asset Sale" shall mean the sale, transfer or other disposition by any
Loan Party or any of its Subsidiaries to any Person other than any Loan Party of
(a) any capital stock other than Margin Stock; (b) substantially all the assets
of any geographic or other division or line of business of any Loan Party or any
of its Subsidiaries; or (c) any Real Property or a portion of any Real Property
or any other asset or assets (excluding any assets manufactured, constructed or
otherwise produced or purchased for sale to others in the ordinary course of
business and any Program Receivables) of any Loan Party or any of its
Subsidiaries, provided that (i)  any asset sale or series of related asset sales
described in clause (c) above having a value not in excess of $1,000,000 shall
not be deemed an "Asset Sale" for purposes of this Agreement and (ii) the term
"Asset Sale" shall not include any sale of assets in connection with any
Permitted Equipment Financing or any Permitted Timber Financing.

          "Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee and, to the extent required by Section
10.04(b), accepted by the Borrower, the Administrative Agent, the Swingline
Lender and the Fronting Bank, in the form of Exhibit B or such other form as
shall be approved by the Administrative Agent.

          "Basic Agreements" shall mean the SIBV Agreement, the Financial
Services Agreement, the 1992 Holdings Agreement, the Registration Rights
Agreement, and the 1992 Stock Option Plan.
<PAGE>

                                                                               6

          "Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.

          "Borrower's Portion of Excess Cash Flow" shall mean, at any date of
determination, the cumulative amount of Excess Cash Flow for each full fiscal
year of SSCC commencing on or after January 1, 1998, and ending prior to the
date of determination that (a) was not or is not required to be applied to the
prepayment of Loans or the reduction of Commitments, in each case as described
in Section 2.13(c), and (b) has not been utilized on or prior to the date of
determination (i) to make Consolidated Capital Expenditures pursuant to the
proviso in the first sentence of Section 7.13, (ii) to pay dividends pursuant to
Section 7.06(b) or (iii) to prepay Indebtedness pursuant to Section 2.12(a) or
7.09(a).

          "Borrower" shall mean Jefferson Smurfit Corporation (U.S.), a Delaware
corporation.

          "Borrower Preferred Stock" means that certain Series A non-
participating, non-voting preferred stock of the Borrower issued to JSCE in
connection with the 1999 Timberlands Sale having an initial liquidation value of
$1,000 per share, subject to accretion based on the amount of dividends not paid
in cash and the amount of any make-whole premium in the event the dividend rate
has been converted to a fixed rate.

          "Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.

          "BTCo" shall mean Bankers Trust Company, a New York banking
corporation.

          "Business Day" shall mean any day (other than a Saturday, Sunday or
legal holiday in the State of New York) on which banks are open for business in
New York City; provided, however, that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

          "Capital Lease" is defined in the definition of the term "Capital
Lease Obligations".

          "Capital Lease Obligations" of any Person shall mean the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof (each, a "Capital Lease"), which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
<PAGE>

                                                                               7

          "Cash Proceeds" shall mean, with respect to any Asset Sale, cash
payments received from such Asset Sale, including any cash received by way of
deferred payment pursuant to a note receivable or otherwise (other than the
portion of such deferred payment constituting interest, which shall be deemed
not to constitute Cash Proceeds).

          "CERCLA" is defined in Section 4.17(b).

          A "Change in Control" shall be deemed to have occurred if (a) JSG and
its Affiliates shall cease to own or control shares representing at least 25% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of SSCC; (b) any person or group (within the meaning of Rule 13d-5
of the Securities and Exchange Act of 1934, as in effect on the Closing Date)
other than JSG and its Affiliates shall own, directly or indirectly,
beneficially or of record, shares representing more than 20% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
SSCC; or (c) SSCC shall cease to own, directly or indirectly, beneficially and
of record, 100% of the issued and outstanding capital stock of the Borrower.

          "Change of Law" is defined in Section 2.20(f).

          "Charges" is defined in Section 10.09.

          "Chase" shall mean The Chase Manhattan Bank, a New York banking
corporation.

          "Closing Date" shall mean March 24, 1998.

          "Code" shall mean the Internal Revenue Code of 1986, or any successor
statute thereto, as the same may be amended from time to time.

          "Collateral" shall mean all the "Collateral" as defined in any
Security Document and shall also include the Mortgaged Properties.

          "Collateral Agent" is defined in the recitals to this Agreement.

          "Commitment" shall mean, with respect to each Lender, such Lender's
Revolving Credit Commitment or Tranche B Commitment.

          "Commitment Fee" is defined in Section 2.05(a).

          "Commitment Fee Percentage" shall mean 0.375% per annum, subject to
adjustment in accordance with Section 2.06(c).

          "Common Stock" shall mean the common stock, par value $0.01 per share,
of SSCC.
<PAGE>

                                                                               8

          "Confidential Information Memorandum" shall mean, collectively, (a)
the Confidential Information Memorandum of the Borrower dated February 1998, (b)
the Confidential Information Memorandum of SSCC dated October 1998 and (c)  the
Confidential Information Memorandum of the Borrower dated March 2001.

          "Consolidated Capital Expenditures" shall mean, for any period, the
sum of (a) all amounts that would be included as additions to property, plant
and equipment and other capital expenditures on a consolidated statement of cash
flows for SSCC and its Subsidiaries during such period in accordance with GAAP
and (b) all amounts in respect of additions to Timberland Property during such
period identified as investment activities in accordance with GAAP (in each
case, excluding capitalized interest but including the amount of assets leased
under any Capital Lease).

          "Consolidated Current Assets" shall mean, as at any date of
determination, the total assets (other than cash and cash equivalents) of JSCE
and its Subsidiaries on a consolidated basis that may properly be classified as
current assets in conformity with GAAP.

          "Consolidated Current Liabilities" shall mean, as at any date of
determination, the total liabilities of SSCC and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, provided that the current maturities of long-term
Indebtedness for money borrowed of JSCE and its Subsidiaries, any Indebtedness
permitted under Section 7.01 that is classified as a current liability in
conformity with GAAP and any taxes payable solely as a result of Asset Sales
shall be excluded from the definition of Consolidated Current Liabilities.

          "Consolidated EBITDA" for any period shall mean (a) the sum of (i)
Consolidated Net Income for such period, (ii) all Federal, state, local and
foreign taxes deducted in determining such Consolidated Net Income, (iii)
Consolidated Interest Expense deducted in determining such Consolidated Net
Income, (iv)  depreciation, depletion, amortization of intangibles and other
non-cash charges or non-cash losses deducted in determining such Consolidated
Net Income and (v) charges specifically associated with the Merger to the extent
deducted in determining such Consolidated Net Income less (b) any non-cash
income or non-cash gains included in determining such Consolidated Net Income.

          "Consolidated Interest Expense" shall mean, for any period, the
interest expense (net of interest income on Permitted Investments) of JSCE and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, excluding any fees and expenses payable or amortized
during such period by JSCE and its consolidated Subsidiaries in connection with
the amortization of deferred debt issuance costs.  For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by JSCE and its consolidated Subsidiaries with
respect to Rate Protection Agreements.
<PAGE>

                                                                               9

          "Consolidated Leverage Ratio" is defined in Section 2.06(c).

          "Consolidated Net Income" shall mean, for any period, the net income
(or loss) of JSCE and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, provided
that the net income (or loss) of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded.

          "Control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, and the terms "Controlling" and "Controlled" shall have
meanings correlative thereto.

          "Credit Event" is defined in Article V.

          "Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement entered into
in the ordinary course of business by the Borrower designed to protect the
Borrower or any of its Subsidiaries against fluctuations in currency values.

          "Default" shall mean any event or condition that upon notice, lapse of
time or both would constitute an Event of Default.

          "Default Rate" is defined in Section 2.07.

          "dollars" or "$" shall mean lawful money of the United States.

          "Domestic Subsidiary" shall mean any Subsidiary organized under the
laws of the United States or any political subdivision thereof.

          "8-Year Senior Note Indenture" shall mean the Indenture dated as of
May 1, 1994, among the Borrower, as issuer, JSCE, as guarantor, and The Bank of
New York, as trustee, relating to the 8-Year Senior Notes.

          "8-Year Senior Notes" shall mean the Borrower's 10-3/4% Senior Notes
Due 2002, in an aggregate principal amount outstanding on the Closing Date of
$100,000,000.

          "Environmental Laws" shall mean all current and future Federal, state,
local and foreign laws, rules or regulations, codes, ordinances, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder or other requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances, or wastes into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture,
<PAGE>

                                                                              10

processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances, or wastes, or underground storage tanks and
emissions therefrom.

          "ERISA" shall mean the Employee Retirement Income Security Act of
1974, or any successor statute, as the same may be amended from time to time.

          "ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that (a) is a member of a group of which SSCC, JSCE or the
Borrower is a member and (b) is treated as a single employer under Section 414
of the Code.

          "Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.

          "Eurodollar Loan" shall mean any Eurodollar Term Loan or Eurodollar
Revolving Loan.

          "Eurodollar Revolving Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.

          "Eurodollar Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.

          "Eurodollar Term Borrowing" shall mean a Borrowing comprised of
Eurodollar Term Loans.

          "Eurodollar Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.

          "Event of Default" shall have the meaning assigned to such term in
Article VIII.

          "Excess Cash Flow" shall mean, for any period, the excess of (a) the
sum, without duplication, of (i) Consolidated Net Income during such period,
(ii) the amount of depreciation, depletion, amortization of intangibles,
deferred taxes, accreted and zero coupon bond interest and other non-cash
expenses, losses or other charges that, pursuant to GAAP, were deducted in
determining such Consolidated Net Income, (iii) the proceeds of any Capital
Leases of the Borrower and its Subsidiaries on a consolidated basis, (iv)
reductions, other than reductions attributable solely to Asset Sales, to working
capital for such period (i.e., the decrease in Consolidated Current Assets minus
Consolidated Current Liabilities from the beginning to the end of such period),
(v) Indebtedness of the Borrower and its consolidated Subsidiaries created,
incurred or assumed in respect of the purchase or
<PAGE>

                                                                              11

construction of property and (vi) the net increase, if any, in the aggregate
amount of borrowings by JSF in connection with the Receivables Program during
such period, over (b) the sum, without duplication, of (i) the amount of all
non-cash gains, income or other credits included in determining Consolidated Net
Income, (ii) additions to working capital for such period (i.e., the increase in
Consolidated Current Assets minus Consolidated Current Liabilities from the
beginning to the end of such period), (iii) the Term Loan Repayment Amounts paid
during such period, (iv) optional prepayments of Term Loans described in Section
2.12(b) during such period, (v) scheduled and optional payments or prepayments
of the principal of permitted Indebtedness other than the Loans (except to the
extent financed with the proceeds of additional permitted Indebtedness), but
only to the extent that such payments or prepayments cannot by their terms be
reborrowed or redrawn and do not occur in connection with a refinancing of all
or any portion of such permitted Indebtedness and are otherwise permitted
hereby, (vi) Consolidated Capital Expenditures for such period, (vii) cash
payments made during such period of expenses relating to the Borrower's 1993
operational restructuring (including employee severance, manufacturing facility
consolidation, environmental and litigation expense) that were previously
accrued as a non-cash charge in fiscal 1993, (viii) Restricted Junior Payments
not prohibited hereunder made during such period and (ix) the net decrease, if
any, in the aggregate amount of borrowings by JSF in connection with the
Receivables Program during such period; provided, however, that none of the
following shall be included in a determination of Excess Cash Flow: (x) amounts
expended for any Investments permitted under Section 7.04 and any proceeds from
the subsequent sale or other disposition of any such Investments and (y) the
proceeds of any issuance of debt or equity securities not otherwise prohibited
hereunder.

          "Existing Credit Agreement" is defined in the recitals to this
Agreement.

          "Existing Lenders" is defined in the recitals to this Agreement.

          "Fair Market Value" is defined in Section 6.10(c).

          "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it.

          "Fees" shall mean the Administrative Fees, the Commitment Fees, the LC
Fees, the fees specified in Section 2.05 and the fees specified in Section 3.07.

          "Financial Officer" of any Person shall mean the chief financial
officer, principal accounting officer, treasurer or assistant treasurer or
controller of such Person.
<PAGE>

                                                                              12

          "Financial Services Agreement" shall mean the Financial Advisory
Services Agreement dated September 12, 1989, by and among Morgan Stanley Dean
Witter Inc., SIBV and SSCC, as amended to the Closing Date and as the same may
be further amended or modified in accordance with the terms thereof and hereof.

          "Finco" means JSC Timber Finance Inc., a Delaware corporation,
together with its successors and permitted assigns.

          "First Restatement Date" shall mean November 18, 1998.

          "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.

          "Fronting Bank" shall mean, as the context may require, (a) (i) BTCo,
with respect to Letters of Credit issued by BTCo, (ii) with respect to each
Prior Letter of Credit, the issuer thereof, and (iii) any other Lender that may
become a Fronting Bank pursuant to Section 3.08 or 3.10, with respect to Letters
of Credit issued by such Lender, or (b) collectively, all the foregoing.

          "GAAP" shall mean generally accepted accounting principles in the
United States, applied on a consistent basis.

          "Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.

          "Guarantee" of or by any Person shall mean any obligation, contingent
or otherwise (whether or not denominated as a guarantee), of such Person
guaranteeing any Indebtedness or any other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness (or
other obligation) or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness (or other obligation), (b)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness (or other obligation) of the payment of such
Indebtedness (or other obligation) or (c) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (or other
obligation); provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.

          "Guarantee Agreement" shall mean the Guarantee Agreement dated the
Closing Date, made by the Guarantors in favor of the Collateral Agent for the
benefit of the Secured Parties.

          "Guarantors" shall mean SSCC, JSCE and each Material Subsidiary.
<PAGE>

                                                                              13

          "Hazardous Materials" is defined in Section 4.17(d).

          "Inactive Subsidiary" at any time shall mean any Subsidiary of SSCC
that (a) has assets with a total market value not in excess of $1,000 and (b)
has not conducted any business or other operations during the prior 12-month
period.

          "Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, other than deposits or advances in the ordinary course of
business, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to assets
purchased by such Person, (d) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (excluding trade accounts
payable and accrued expenses arising in the ordinary course of business), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed by such Person, (f) all Guarantees
by such Person, (g) all Capital Lease Obligations of such Person, (h) all
obligations of such Person in respect of Rate Protection Agreements, Currency
Agreements or other interest or exchange rate hedging arrangements (such
obligations to be equal at any time to the termination value of such Agreements
or other arrangements that would be payable by such Person at such time) and (i)
all obligations of such Person as an account party to reimburse any bank or any
other Person in respect of letters of credit.  The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner, except to the extent such Indebtedness is expressly non-
recourse to such Person.

          "Indemnitee" is defined in Section 10.05(b).

          "Information" is defined in Section 10.15(a).
          "Intercompany Indebtedness" shall mean any Indebtedness of any of
SSCC, JSCE or the Borrower or any of their respective Subsidiaries that is owing
to any Loan Party.

          "Intercompany Note" shall mean a promissory note evidencing
Intercompany Indebtedness pledged to the Collateral Agent pursuant to the Pledge
Agreement and which, unless otherwise provided herein or in any of the
Receivables Program Documents, shall be a senior obligation of the obligor
thereon, payable on demand to the obligee and in form and substance satisfactory
to the Senior Managing Agents.

          "Interest Payment Date" shall mean (a) with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part, (b) with respect to any Swingline Loan, the last day of the Interest
Period applicable to such Swingline Loan and (c) with respect to any Eurodollar
Borrowing with an Interest Period of
<PAGE>

                                                                              14

more than three months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months' duration been
applicable to such Borrowing.

          "Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower thereof may elect, (b) as to any
ABR Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earlier of (i) the next
succeeding March 31, June 30, September 30 or December 31, and (ii) the
Revolving Credit Maturity Date, the Tranche A Maturity Date or the Tranche B
Maturity Date, as applicable, and (c) as to any Swingline Loan, the period
commencing on the date such Swingline Loan is made or on the last day of the
immediately preceding Interest Period applicable to such Swingline Loan, as the
case may be, and ending on the earlier of (i) the next succeeding March 31, June
30, September 30 or December 31, and (ii) the Revolving Credit Maturity Date;
provided, however, that, if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day.  Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.

          "Investment" shall mean, as applied to any Person (the "Investor"),
any direct or indirect purchase or other acquisition by the Investor of, or a
beneficial interest in, stock or other securities of any other Person other than
a wholly owned Domestic Subsidiary of the Investor, including any exchange of
equity securities for Indebtedness, or any direct or indirect loan, advance
(other than advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by the Investor to any other Person other than a wholly owned
Domestic Subsidiary of the Investor, including all Indebtedness and accounts
receivable owing to the Investor from that other Person that did not arise from
sales or services rendered to that other Person in the ordinary course of the
Investor's business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment minus any amounts (a) realized upon the
disposition of assets comprising an Investment or (b) constituting repayments of
Investments that are loans or advances; provided, however, that the term
"Investment" shall not include the purchase in the open market of shares of JSG
in an aggregate amount which, together with the aggregate purchase price of all
MIP Shares and all MIP Options (each as defined in Section 7.06(c)) purchased
pursuant to Section 7.06(c) in any fiscal year, does not exceed $15,000,000 in
such fiscal year of the Borrower, purchased exclusively for subsequent
distribution as additional compensation to employees of the Borrower pursuant to
its management incentive program.
<PAGE>

                                                                              15

          "Investor" is defined in the definition of the term "Investment".

          "JSC" shall mean SSCC.

          "JSC Acquisition" shall mean JSC Acquisition Corporation, a Delaware
corporation and a direct wholly-owned Subsidiary of SSCC.

          "JSC International" shall mean JSC International Sales, Inc., a
corporation formed under the laws of Barbados and a wholly owned Subsidiary of
the Borrower.

          "JSCE" shall mean JSCE, Inc., a Delaware corporation.

          "JSCE Preferred Stock" means that certain Series A non-participating,
non-voting preferred stock of JSCE issued to SSCC in connection with the 1999
Timberlands Sale having an initial liquidation value equal to $1,000 per share,
subject to accretion based on the amount of dividends not paid in cash and the
amount of any make-whole premium in the event the dividend rate has been
converted to a fixed rate.

          "JSF" shall mean Jefferson Smurfit Finance Corporation, a Delaware
corporation and a wholly owned Subsidiary of the Borrower, formed in connection
with the Receivables Program.

          "JSG" shall mean Jefferson Smurfit Group plc, a corporation organized
and existing under the laws of the Republic of Ireland.

          "LC Commitment" shall mean at any time an amount equal to the lesser
of (a) $150,000,000, as the same may be reduced from time to time pursuant to
Section 3.06, and (b) the Revolving Credit Commitment at such time.

          "LC Disbursement" shall mean any payment or disbursement made by the
Fronting Bank under or pursuant to a Letter of Credit.

          "LC Exposure" shall mean, at any time of determination, the sum of (a)
the Trade LC Exposure and (b) the Standby LC Exposure.

          "LC Fee" is defined in Section 3.03.

          "LC Maturity Date" shall mean the 30th Business Day prior to the
Revolving Credit Maturity Date.

          "Lender Affiliate" means (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by
<PAGE>

                                                                              16

a Lender or an Affiliate of such Lender and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

          "Lenders" shall mean the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.  Unless the context clearly indicates
otherwise, the term "Lenders" shall include the Swingline Lender and the Tranche
B Lenders.

          "Letter of Credit Application" shall mean a commercial or standby
letter of credit application, as applicable, in the Fronting Bank's customary
form, as such form may be modified from time to time by the Fronting Bank.

          "Letters of Credit" shall mean Trade Letters of Credit and Standby
Letters of Credit.

          "Liability Management Transactions" means the series of transactions
described on Schedule 1.01(g) hereto.

          "LIBOR Spread" shall mean (a) with respect to Tranche A Term Loans and
Revolving Loans, 2.50% per annum, subject to adjustment pursuant to Section
2.06(c), and (b) with respect to Tranche B Term Loans, 3.25% per annum, subject
to adjustment pursuant to Section 2.06(c).

          "Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, assignment for security (whether collateral or
otherwise), hypothecation, encumbrance, lease, sublease, charge or security
interest in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, Capital Lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

          "Loan Documents" shall mean this Agreement, the Letters of Credit, the
Security Documents and the Guarantee Agreement, and each amendment, restatement,
supplement, modification or waiver of, to or in respect of any such document.

          "Loan Parties" shall mean SSCC, JSCE, the Borrower and each Material
Subsidiary.

          "Loans" shall mean the Revolving Loans and the Term Loans.

          "Managing Agents" shall mean the Lenders whose names appear as
managing agents on the signature pages to this Agreement.
<PAGE>

                                                                              17

          "Mandatory Prepayment Date" is defined in Section 2.13(i).

          "Margin Stock" shall have the meaning given such term under Regulation
U.

          "Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, assets, operations, properties, prospects or condition
(financial or otherwise) of SSCC and its Subsidiaries, taken as a whole, (b)
material impairment of the ability of SSCC or any Material Subsidiary to perform
any of its obligations under any Loan Document to which it is or will be a party
or (c) material impairment of the rights of or benefits available to the
Administrative Agent, the Collateral Agent, the Fronting Bank, the Swingline
Lender or the Lenders under any Loan Document.

          "Material Contracts" shall mean the contracts set forth on Schedule
1.01(b) and any future contracts to which SSCC or the Borrower or any of their
respective Subsidiaries becomes a party providing for payments by or to SSCC or
the Borrower or any of their Subsidiaries in excess of $50,000,000 per year and
the duration of which shall be in excess of twelve months.

          "Material Investments" shall mean all Investments by SSCC or any of
its Subsidiaries having a value in excess of $1,000,000.

          "Material Subsidiary" means each Domestic Subsidiary of SSCC, JSCE,
the Borrower or their successors now existing or hereafter acquired or formed by
SSCC, JSCE, the Borrower or such successors that (a) for the most recent fiscal
year of SSCC, JSCE, the Borrower or such successors, accounted for more than 10%
of the consolidated revenues of SSCC, JSCE, the Borrower or such successors, as
the case may be, (b) as at the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of SSCC, JSCE, the Borrower or such
successors as shown on the consolidated financial statements of SSCC, JSCE, the
Borrower or such successors, as the case may be, for such fiscal year or (c) is
designated as a Material Subsidiary on Schedule 1.01(c) or is otherwise
irrevocably designated as a Material Subsidiary in a writing by a Loan Party to
the Administrative Agent.  Notwithstanding the foregoing, JSF shall not be a
Material Subsidiary for purposes hereof.

          "Maximum Rate" is defined in Section 10.09.

          "Merger" shall mean the merger of JSC Acquisition with and into Stone
pursuant to the terms and conditions of the Merger Agreement.

          "Merger Agreement" shall mean that certain Agreement and Plan of
Merger among Jefferson Smurfit Corporation, JSC Acquisition and Stone dated as
of May 10, 1998, as amended by Amendment No. 1 dated as of October 2, 1998.
<PAGE>

                                                                              18

          "Mills" shall mean the paper product manufacturing facilities
identified on Schedule 1.01(d).

          "MIP Options" is defined in Section 7.06(c).

          "MIP Shares" is defined in Section 7.06(c).

          "Monetization Sale" means the sale of the managing membership interest
in Monetization Sub by the Borrower in exchange for approximately $30,000,000,
on terms reasonably acceptable to the Senior Managing Agents.

          "Monetization Sub" means Timber Capital Holdings LLC, a Delaware
limited liability company, together with its successors and permitted assigns.

          "Mortgaged Properties" shall mean the owned real properties of the
Borrower specified on Schedule 1.01(e).

          "Mortgages" shall mean the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other security
documents delivered pursuant to Section 6.10 or Section 7.11, each substantially
in the form of Exhibit C, as the same may be amended, restated, supplemented,
modified or waived from time to time.

          "Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.

          "Net Cash Proceeds" shall mean (a) with respect to any Asset Sale or
Permitted Timber Financing, the Cash Proceeds, net of (i) costs of sale
(including payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than Loans) required to be
repaid under the terms thereof as a result of such Asset Sale), (ii) taxes paid
or payable in the year such Asset Sale occurs or in the following year as a
result thereof and (iii) amounts provided as a reserve, in accordance with GAAP,
against any liabilities under any indemnification obligations associated with
such Asset Sale (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds); (b) with respect to any issuance of debt securities, the cash
proceeds thereof, net of underwriting commissions or placement fees and expenses
directly incurred in connection therewith and (c) with respect to any Taking or
Destruction (as such terms are defined in the Mortgages), the Net Proceeds or
Net Award (as such terms are defined in the Mortgages).

          "Newberg Mill Sale" means the sale by SNC of the mill facility and the
related real and personal property (including inventory) of SNC located in
Newberg, Oregon
<PAGE>

                                                                              19

or used exclusively in connection with the operation of the Newberg, Oregon mill
and the conduct of its business, on terms reasonably acceptable to the Senior
Managing Agents.

          "1992 Stock Option Plan" shall mean the SSCC 1992 Stock Option Plan,
as amended to the Second Restatement Date and as the same may be further amended
or modified in accordance with the terms thereof and hereof.

          "1993 Senior Note Indenture" shall mean the Indenture dated as of
April 15, 1993, among the Borrower, as issuer, JSCE, as guarantor, and The Bank
of New York, as trustee, relating to the 1993 Senior Notes, as amended by the
Supplemental Indenture dated as of April 8, 1994, and as the same may from time
to time be further amended or modified in accordance with the terms thereof and
hereof.

          "1993 Senior Notes" shall mean the Borrower's 9-3/4% Senior Notes due
2003.

          "1999 Timberlands Sale" means the sale of certain real property of the
Borrower and its Subsidiaries (or Equity Interests in Affiliates of the Borrower
owing such real property) pursuant to that certain Purchase and Sale Agreement,
dated as of July 28, 1999, by and between Rayonier Inc. and the Borrower, as
modified by that certain Letter Agreement, dated as of August 26, 1999, as
amended on terms reasonably satisfactory to the Senior Managing Agents, and the
monetization transactions of the Borrower and its Affiliates in connection
therewith, including, without limitation, the Monetization Sale.

          "Non-U.S. Person" is defined in Section 2.20(f).

          "Obligations" shall mean all obligations of every nature, including
amounts drawn under outstanding Letters of Credit, of Loan Parties from time to
time owed to the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Swingline Lender, the Fronting Bank and the Lenders, or any of them,
under the Loan Documents.

          "Oregon City Mill Sale" means the sale by SNC of the mill facility and
the related real and personal property (including inventory) of SNC located in
Oregon City, Oregon or used exclusively in connection with the operation of the
Oregon City mill and the conduct of its business on terms reasonably acceptable
to the Senior Managing Agents.

          "Other Taxes" is defined in Section 2.20(b).

          "Outstanding Letters of Credit" shall mean at any time the Letters of
Credit outstanding at such time.

          "Outstanding Standby Letters of Credit" shall mean at any time the
Standby Letters of Credit outstanding at such time.
<PAGE>

                                                                              20

          "Outstanding Trade Letters of Credit" shall mean at any time the Trade
Letters of Credit outstanding at such time.

          "Participating Lender" shall mean at any time any Lender with a
Revolving Credit Commitment at such time.

          "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.

          "Perfection Certificate" shall mean the Perfection Certificate,
substantially in the form of Annex 1 to the Security Agreement.

          "Permitted Equipment Financing" shall mean any financing transaction
by the Borrower or any of its Material Subsidiaries secured by equipment, or a
Sale/Leaseback Transaction in which the subject property consists of equipment,
in each case owned or leased by such Person for more than 90 days prior to such
financing transaction or Sale/Leaseback Transaction, so long as such financing
transaction or Sale/Leaseback Transaction (a) (x) in the case of any such
transaction entered into by the Borrower or any of its Material Subsidiaries on
or prior to the second anniversary of the Closing Date, does not have a final
maturity or final payment date in respect thereof on or prior to the seventh
anniversary of the date of such transaction and (y) in the case of any such
transaction entered into by the Borrower or any of its Material Subsidiaries
after the second anniversary of the Closing Date, does not have a final maturity
or final payment date in respect thereof on or prior to the Tranche B Maturity
Date or a weighted average life to stated maturity shorter than the then-
outstanding Term Loans, (b) results in net cash proceeds to the Borrower or one
of its Material Subsidiaries in excess of 60% of the fair market value
(determined, on the basis of an assumed arms-length sale of such property, by a
nationally recognized appraisal or valuation firm experienced in valuing
equipment) at the date of such financing transaction or sale/leaseback of the
equipment that is the subject property of such financing transaction or
Sale/Leaseback Transaction, and (c) contains covenants no more restrictive than
those contained in this Agreement (except that covenants that relate solely to
the subject property may be more restrictive).

          "Permitted Investments" shall mean (a) any evidence of indebtedness,
maturing not more than one year after the acquisition thereof, issued by the
United States of America, or any instrumentality or agency thereof and
guaranteed fully as to principal, interest and premium, if any, by the United
States of America, (b) any certificate of deposit, maturing not more than one
year after the date of purchase, issued by a commercial banking institution that
has long-term debt rated "A" or higher by Moody's Investors Service, Inc. or
Standard & Poor's Ratings Services and which has a combined capital and surplus
and undivided profits of not less than $500,000,000, (c) commercial paper (i)
maturing not more than 270 days after the date of purchase and (ii) issued by
(x) a corporation (other than a Loan Party or any Affiliate of a Loan Party)
with a rating, at the time as of which any determination thereof is to be made,
of "P-1" or higher by Moody's Investors Service, Inc.
<PAGE>

                                                                              21

or "A-1" or higher by Standard & Poor's Ratings Services or (y) either Senior
Managing Agent, (d) demand deposits with any bank or trust company, (e) any
Investments consisting of (i) any contract pursuant to which a Loan Party
obtains the right to cut, harvest or otherwise acquire timber on property owned
by any other Person, whether or not the Loan Party's obligations under such
contract are evidenced by a note or other instrument, or (ii) loans or advances
to customers of a Loan Party, including leases of personal property of such Loan
Party to such customers, provided that the contracts, loans and advances
constituting Permitted Investments pursuant to this clause (e) shall not exceed
$10,000,000 at any time outstanding, (f) any Investment consisting of an
exchange of equity securities of any Loan Party for Indebtedness of any other
Loan Party and (g) Guarantees of a Person or Persons other than a Loan Party
consisting of tax-exempt industrial development or pollution control revenue
bonds (either through Capital Lease Obligations or installment purchase
obligations in respect of facilities to be acquired by a Loan Party and to be
financed by such bonds, and including a direct Guarantee of such bonds) to the
extent any such Indebtedness of a Loan Party or such Person and any Lien arising
in connection therewith are not prohibited by Section 7.01 or 7.02, as
applicable.

          "Permitted Liens" shall mean:

          (a)  the Liens arising under this Agreement or the Security Documents
in favor of the Collateral Agent;

          (b)  with respect to any Person, Liens for taxes not yet due and
payable or which are being contested in good faith by appropriate proceedings
diligently pursued, provided that (i) any proceedings commenced for the
enforcement of such Liens shall have been duly suspended and (ii) full provision
for the payment of all such taxes known to such Person has been made on the
books of such Person if and to the extent required by GAAP;

          (c)  with respect to any Person, mechanics', materialmen's, carriers',
warehousemen's and similar Liens arising by operation of law and in the ordinary
course of business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in the case of any
such contest (i) any proceedings commenced for the enforcement of such Liens
shall have been duly suspended and (ii) full provision for the payment of such
Liens has been made on the books of such Person if and to the extent required by
GAAP;

          (d)  with respect to any Person, Liens arising in connection with
worker's compensation, unemployment insurance, old age pensions and social
security benefits that are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in the case of any
such contest (i) any proceedings commenced for the enforcement of such Liens
shall have been duly suspended and (ii) full provision for the payment of such
Liens has been made on the books of such Person if and to the extent required by
GAAP;
<PAGE>

                                                                              22

          (e)  with respect to any Person, (i) Liens incurred or deposits made
in the ordinary course of business to secure the performance of bids, tenders,
statutory obligations, fee and expense arrangements with trustees and fiscal
agents (exclusive of obligations incurred in connection with the borrowing of
money or the payment of the deferred purchase price of property) and (ii) Liens
securing surety, indemnity, performance, appeal and release bonds, in the case
of either clause (i) or clause (ii), securing such bonds in an amount not to
exceed individually or in the aggregate $25,000,000 at any time outstanding,
provided that full provision for the payment of all such obligations has been
made on the books of such Person if and to the extent required by GAAP;

          (f)  imperfections of title, covenants, restrictions, easements and
other encumbrances on real property that (i) do not arise out of the incurrence
of any Indebtedness for money borrowed and (ii) do not interfere with or impair
in any material respect the utility, operation, value or marketability of the
real property on which such Lien is imposed;

          (g)  Liens upon real and/or tangible personal property acquired by
purchase, construction or otherwise by a Person, each of which Liens was created
solely for the purpose of securing Indebtedness permitted by Section 7.01
representing, or incurred to finance, the cost (including the cost of
construction) of the respective property, provided that (i) no such Lien shall
extend to or cover any property of such Person other than the respective
property so acquired and improvements thereon and (ii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of the fair
value (as determined in good faith by the board of directors of such Person) of
the respective property at the time it was so acquired;

          (h)  any Lien renewing, extending or refunding any Lien permitted by
clause (g) above, provided that the principal amount of Indebtedness secured by
such Lien immediately prior thereto is not increased and such Lien is not
extended to any other property;

          (i)  any Lien specifically permitted to be suffered or incurred under
any applicable Security Document;

          (j)  any Lien consisting of a lease of personal property of such
Person to customers of such Person, if such lease constitutes a Permitted
Investment under clause (e)(ii) of the definition of Permitted Investments; and

          (k)  any Lien consisting of a lease of real property (including
buildings), and subleases thereof, to Persons for the purpose of placing
cellular antenna towers (and/or similar antenna equipment) on such property,
provided that such Liens do not interfere with or impair in any material
respect, the utility, operation, value or marketability of the property on which
such Lien is imposed.
<PAGE>

                                                                              23

          "Permitted Timber Financing" means any financing transaction by the
Borrower or any of its Material Subsidiaries secured by timber or timberland, or
a Sale/Leaseback Transaction in which the subject property consists of timber or
timberland, in each case owned or leased by such Person for more than 90 days
prior to such financing transaction or Sale/Leaseback Transaction, so long as
such financing transaction or Sale/Leaseback Transaction (a) does not have a
final maturity or final payment date in respect thereof on or prior to the
latest of the Tranche A Maturity Date, the Tranche B Maturity Date and the
Revolving Credit Maturity Date, (b) results in net cash proceeds to the Borrower
or one of its Material Subsidiaries in excess of 60% of the fair market value
(determined on the basis of an assumed arms-length sale of such property, by a
nationally recognized appraisal or valuation firm experienced in valuing timber
or timberland) at the date of such financing transaction or sale/leaseback of
the timber or timberland that is the subject property of such financing
transaction or Sale/Leaseback Transaction, (c) has at the time of incurrence a
weighted average life to stated maturity at least one year longer than the
blended weighted average life to stated maturity of the then-outstanding Term
Loans and (d) contains covenants no more restrictive than those contained in
this Agreement (except that covenants that relate solely to the subject property
may be more restrictive).

          "Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.

          "Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code that
is maintained for employees of SSCC, JSCE, the Borrower or any ERISA Affiliate.

          "Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date, among SSCC, JSCE, the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Secured Parties, as the same may be
amended, restated, supplemented, modified or waived from time to time.

          "Prepayment Account" is defined in Section 2.13(i).

          "Prepayment Amount" is defined in Section 2.13(i).

          "Prepayment Lender" is defined in Section 2.13(i).

          "Prepayment Option Notice" is defined in Section 2.13(i).

          "Prior Credit Agreement" shall mean the Credit Agreement dated as of
May 11, 1994, as amended and restated as of May 17, 1996, as further amended as
of September 30, 1996 and June 15, 1997, among Jefferson Smurfit Corporation,
JSCE, the Borrower and the lenders, the managing agents, the senior managing
agents, the fronting banks, the administrative agent, the collateral agent and
the swingline lender named therein.
<PAGE>

                                                                              24

          "Program Receivables" shall mean all trade receivables and related
contract and other rights and property (including all general intangibles,
collections and other proceeds relating thereto, all security therefor and any
goods that have been repossessed in connection with any thereof) sold or
contributed by the Borrower to JSF prior to the commencement of a Liquidation
Period (as defined in the Receivables Program Documents) pursuant to the
Receivables Program Documents (including property of SNC sold to the Borrower
for sale or contribution by the Borrower to JSF pursuant to the Receivables
Program Documents).

          "P.U.I." shall mean Packaging Unlimited, Inc., a corporation organized
under the laws of the State of Delaware and qualified to do business in the
Commonwealth of Puerto Rico.

          "Rate Protection Agreements" shall mean interest rate cap agreements,
interest rate swap agreements and other agreements or arrangements entered into
in the ordinary course of business by the Borrower or its Subsidiaries and
designed to protect the Borrower or its Subsidiaries against fluctuations in
interest rates or to obtain the benefit of floating interest rates.

          "Reaffirmation of Guarantee" shall mean the Reaffirmation of
Guarantee, substantially in the form of Exhibit E, executed by the Guarantors.

          "Real Properties" shall mean each parcel of real property (including
any Timberland Property), including any Mill or converting facility thereon and
any leasehold interest therein, identified on Schedule 4.21(a), together with
all fixtures thereon.

          "Receivables Program" shall mean that certain trade receivables
securitization program conducted pursuant to the Receivables Program Documents.

          "Receivables Program Documents" shall mean the documents listed on
Schedule 1.01(f), and all non-material documentation entered into pursuant to
such documentation, as such documents may be amended, restated, modified or
supplemented from time to time in accordance with the terms hereof and thereof.

          "Register" is defined in Section 10.04(d).

          "Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of May 10, 1998 among Morgan Stanley Leveraged Equity Fund
II, Inc., SIBV, SSCC and the other parties identified on the signature page
thereof, as amended, restated, modified or supplemented from time to time.

          "Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
<PAGE>

                                                                              25

          "Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.

          "Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.

          "Release" is defined in Section 7.17(a).

          "Release Condition" is defined in Section 7.17(a).

          "Release Notice" is defined in Section 7.17(a).

          "Release Transaction" is defined in Section 7.17(a).

          "Reportable Event" shall mean any reportable event as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).

          "Required Lenders" shall mean, at any time, Lenders holding Loans, a
share of the used LC Commitments and unused Commitments representing greater
than 50% of the sum of (a) the aggregate principal amount of the Loans at such
time, (b) the LC Exposure at such time and (c) the aggregate unused Commitments
at such time.

          "Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.

          "Restricted Junior Payment" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of SSCC, JSCE or the Borrower or any of their respective Subsidiaries, now or
hereafter outstanding, except a dividend payable solely in shares of that class
of stock to the holders of that class, (b) any redemption, retirement, sinking
fund or similar payment, purchase, exchange or other acquisition for value,
direct or indirect, of any shares of any class of stock of SSCC, JSCE or the
Borrower or any of their respective Subsidiaries, now or hereafter outstanding,
and (c) whether in cash or additional securities, any payment or prepayment of
principal of, premium, if any, or interest on, redemption, purchase, exchange,
retirement, defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness, provided that the term "Restricted Junior Payment"
shall not include any mandatory payments of principal, premium, if any, or
interest with respect to Subordinated Indebtedness.

          "Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
<PAGE>

                                                                              26

          "Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 10.04.

          "Revolving Credit Maturity Date" shall mean March 31, 2005.

          "Revolving Credit Utilization" shall mean, at any time of
determination, the sum of (a) the aggregate principal amount of Revolving Loans
outstanding at such time, (b) the aggregate principal amount of Swingline Loans
outstanding at such time and (c) the LC Exposure at such time.

          "Revolving Loans" shall mean the revolving loans made by the Lenders
to the Borrower pursuant to Section 2.01(c).  Each Revolving Loan shall be a
Eurodollar Revolving Loan or an ABR Revolving Loan.

          "Sale/Leaseback Transaction" shall mean an arrangement, direct or
indirect, whereby the Borrower or any of its Subsidiaries shall sell or transfer
any property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.

          "Second Restatement Date" is defined in the recitals to this
Agreement.

          "Second Restatement Date Transactions" shall mean the funding of the
Tranche B Term Loans, the redemption of the 10-Year Senior Notes, and all
transactions contemplated by or related to any of the foregoing.

          "Secured Obligations" shall have the meaning assigned to such term in
the Mortgages.

          "Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.

          "Security Agreement" shall mean the Security Agreement dated the
Closing Date, among SSCC, JSCE, the Borrower, the other guarantors and grantors
party thereto and the Collateral Agent for the Secured Parties, as the same may
be amended, restated, supplemented, modified or waived from time to time.

          "Security Documents" shall mean the Mortgages, the Security Agreement,
the SNC Security Agreement, the Trademark Security Agreement, the Pledge
Agreement and
<PAGE>

                                                                              27

each of the security agreements, mortgages and other instruments and documents
executed and delivered pursuant to any of the foregoing or pursuant to Section
6.10 or 7.11.

          "Senior Managing Agent" is defined in the recitals to this Agreement.

          "Senior Note Indentures" shall mean the 8-Year Senior Note Indenture
and the 10-Year Senior Note Indenture.

          "Senior Notes" shall mean the 8-Year Senior Notes and the 10-Year
Senior Notes.

          "SIBV" shall mean Smurfit International B.V., a Netherlands
corporation.

          "SIBV Agreement" shall mean that certain SIBV Agreement dated as of
September 12, 1989, and amended as of October 22, 1989 and as of December 11,
1989, between SSCC and SIBV, and as the same may be further amended or modified
in accordance with the terms thereof and hereof.

          "SNC" shall mean Smurfit Newsprint Corporation, a Delaware corporation
and a direct wholly owned Subsidiary of the Borrower.

          "SNC Security Agreement" shall mean the SNC Security Agreement dated
as of the Closing Date, between SNC and the Collateral Agent for the benefit of
the Secured Parties, as the same may be amended, restated, supplemented,
modified or waived from time to time.

          "SSCC" shall mean Smurfit-Stone Container Corporation (formerly named
Jefferson Smurfit Corporation), a Delaware corporation.

          "SSCC Series A Preferred Stock" shall mean the Series A Cumulative
Convertible Exchangeable Preferred Stock, par value $.01 per share, of SSCC,
having terms and conditions, including as to dividends, mandatory redemption and
liquidation preference, which are no more adverse to SSCC than those set forth
on Schedule 1.1(h) attached hereto when taken as a whole.

          "Standby LC Exposure" shall mean, at any time of determination, the
sum of (a) the aggregate undrawn amount of all Outstanding Standby Letters of
Credit and (b) the aggregate amount that has been drawn under any Standby
Letters of Credit but for which the Fronting Bank or the Lenders, as the case
may be, have not been reimbursed by the Borrower at such time.

          "Standby Letter of Credit" shall mean (a) each irrevocable letter of
credit issued pursuant to Section 3.01(a) under which the Fronting Bank agrees
to make payments for the account of the Borrower, on behalf of the Borrower, in
respect of obligations of the
<PAGE>

                                                                              28

Borrower incurred pursuant to contracts made or performances undertaken or to be
undertaken or like matters relating to contracts to which the Borrower is or
proposes to become a party in the ordinary course of the Borrower's business and
(b) each Prior Letter of Credit.

          "Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum applicable reserve percentages,
including any marginal, special, emergency or supplemental reserves (expressed
as a decimal) established by the Board and any other banking authority to which
the Administrative Agent is subject (a) with respect to the Base CD Rate (as
such term is used in the definition of the term "Alternate Base Rate") for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for Eurocurrency Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include those imposed pursuant to Regulation D of
the Board.  Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D.  Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

          "Stone" shall mean Stone Container Corporation, a Delaware corporation
and a direct wholly owned subsidiary of SSCC.

          "Stone Series E Preferred Payment" shall mean the cash payment by SSCC
to the holders of the Stone Series E Preferred Stock in respect of dividend
arrearages in an aggregate amount not to exceed $30,500,000.

          "Stone Series E Preferred Stock" shall mean the Series E Cumulative
Convertible Exchangeable Preferred Stock, par value $.01 per share, of Stone.

          "Subordinated Indebtedness" shall mean Indebtedness of the Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material terms
in form and substance satisfactory to the Required Lenders.

          "Subsidiary" shall mean, with respect to any Person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership or membership interests are, at the time any
determination is being made, owned, controlled or held by, or otherwise
Controlled by, the parent or one or more Subsidiaries of the parent or by the
parent and one or more Subsidiaries of the parent; provided, however, that the
term
<PAGE>

                                                                              29

"Subsidiary" shall not include (i) any Inactive Subsidiary, (ii) JSC
Acquisition, (iii) Stone and its Subsidiaries (including SCC RMMI and SCC AMMI)
and (iv) any of Finco, Monetization Sub, Timberlands I (so long as the
Timberlands Sale shall be completed prior to November 30, 1999), Timberlands II
(so long as the Timberlands Sale shall be completed prior to November 30, 1999)
and TNH.

          "Substitute Parcel" shall mean those parcels of real property that the
Borrower may, from time to time, acquire in exchange for a parcel of Timberland
Property in accordance with the provisions of Section 7.16(b).

          "Supermajority Lenders" shall mean, at any time, Lenders holding
Loans, a share of the used LC Commitments and unused Commitments representing at
least 66-2/3% of the sum of (a) the aggregate principal amount of the Loans at
such time, (b) the LC Exposure at such time and (c) the aggregate unused
Commitments at such time.

          "Swingline Loans" shall mean the swingline loans made by the Swingline
Lender pursuant to Section 2.22.

          "Tax Sharing Agreement" shall mean the Tax Sharing Agreement dated as
of November 9, 1989, among SSCC, JSCE and the Borrower, as the same may be
amended from time to time pursuant to the terms thereof and hereof.

          "10-Year Senior Note Indenture" shall mean the Indenture dated as of
May 1, 1994, among the Borrower, as issuer, JSCE, as guarantor, and The Bank of
New York, as trustee, relating to the 10-Year Senior Notes.

          "10-Year Senior Notes" shall mean the Borrower's 11-1/4% Senior Notes
Due 2004, in an aggregate principal amount outstanding on the Closing Date of
$300,000,000.

          "Term Borrowing" shall mean a Borrowing comprised of Tranche A Term
Loans or Tranche B Term Loans.

          "Term Loan Repayment Amounts" shall mean, for any period, the
aggregate of all Tranche A Term Loan Repayment Amounts and Tranche B Term Loan
Repayment Amounts payable during such period.

          "Term Loan Repayment Dates" shall mean the Tranche A Term Loan
Repayment Dates and the Tranche B Term Loan Repayment Dates.

          "Term Loans" shall mean Tranche A Term Loans and Tranche B Term Loans.

          "Timber" shall have the meaning assigned to such term in the
Mortgages.
<PAGE>

                                                                              30

          "Timberland Property" shall mean each parcel of realty identified as
such on Schedule 4.21(c).

          "Timberlands I" means the Delaware limited liability company, together
with its successors and permitted assigns, established solely for the purpose of
consummating the 1999 Timberlands Sale.

          "Timberlands II" means the Delaware limited liability company,
together with its successors and permitted assigns, established solely for the
purpose of consummating the 1999 Timberlands Sale.

          "TNH" means Timber Note Holdings LLC, a Delaware limited liability
company, together with its successors and permitted assigns.

          "Trade LC Exposure" shall mean, at any time of determination, the sum
of (a) the aggregate undrawn amount of all Outstanding Trade Letters of Credit
and (b) the aggregate amount that has been drawn under any Trade Letters of
Credit but for which the Fronting Bank or the Lenders, as the case may be, have
not been reimbursed by the Borrower at such time.

          "Trade Letter of Credit" shall mean each commercial documentary letter
of credit issued by the Fronting Bank for the account of the Borrower pursuant
to Section 3.01(a) for the purchase of goods in the ordinary course of business.

          "Trademark Security Agreement" shall mean the Patent, Trademark and
Copyright Security Agreement dated as of the Closing Date, among SSCC, JSCE, the
Borrower, the Subsidiaries party thereto and the Collateral Agent for the
benefit of the Secured Parties, as the same may be amended, restated,
supplemented, modified or waived from time to time.

          "Tranche A Maturity Date" shall mean March 31, 2005.

          "Tranche A Term Borrowing" shall mean a Borrowing comprised of Tranche
A Term Loans.

          "Tranche A Term Loan Repayment Amount" is defined in Section
2.11(a)(i).

          "Tranche A Term Loan Repayment Date" is defined in Section 2.11(a)(i).

          "Tranche A Term Loans" shall mean the term loans made by the Lenders
to the Borrower as described in Section 2.01(a).  Each Tranche A Term Loan shall
be either a Eurodollar Term Loan or an ABR Term Loan.
<PAGE>

                                                                              31

          "Tranche B Commitment" shall mean with respect to each Lender, the
commitment of such Lender to make Tranche B Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Tranche B Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04.

          "Tranche B Lenders" shall mean Lenders having Tranche B Commitments or
outstanding Tranche B Term Loans.

          "Tranche B Maturity Date" shall mean March 31, 2007.

          "Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche
B Term Loans.

          "Tranche B Term Loan Repayment Amount" is defined in Section
2.11(a)(ii).

          "Tranche B Term Loan Repayment Date" is defined in Section
2.11(a)(ii).

          "Tranche B Term Loans" shall mean the term loans made by the Lenders
to the Borrower pursuant to Section 2.01(b).  Each Tranche B Term Loan shall be
either a Eurodollar Term Loan or an ABR Term Loan.

          "Transactions" shall have the meaning assigned to such term in Section
4.02.

          "Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined.  For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.

          "wholly owned Domestic Subsidiary" shall mean any wholly owned
Subsidiary that is a Domestic Subsidiary.

          "wholly owned Subsidiary" of a Person shall mean any Subsidiary of
such Person of which securities (except for directors' qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power or 100% of the general partnership or membership interests
are, at the time any determination is being made, owned, controlled or held by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

          "Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
<PAGE>

                                                                              32

The following terms are defined in Schedule 1.01(g) to the Credit Agreement:

          "JSC AMMI"

          "JSC Newco"

          "JSC Newco Note"

          "JSC RMMI"

          "SCC AMMI"

          "SCC RMMI"

          "SNC Note"

          SECTION  1.02.  Terms Generally.  The definitions in Section 1.01
                          ----------------
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms.  The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed to be references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent with the application
used in the financial statements referred to in Section 4.05; provided, however,
that for purposes of making any determination required by Section 2.06(c),
2.13(c) or Article VII, all accounting terms used herein shall be interpreted
and all accounting determinations hereunder shall be made in accordance with
GAAP as in effect on the Closing Date applied on a basis consistent with the
application used in the financial statements referred to in Section 4.05.


                                  ARTICLE II

                                  The Credits
                                  -----------

          SECTION  2.01.  Commitments.  (a)  Tranche A Term Loans.  The Borrower
                          ------------
and the Lenders acknowledge the making of Tranche A Term Loans in the aggregate
principal amount of $400,000,000 on the Closing Date in accordance with the
terms of the Existing Credit Agreement.  Prior to the Second Restatement Date,
the Borrower has repaid or prepaid $125,000,000 aggregate principal amount of
the Tranche A Term Loans and, accordingly, the Borrower and the Lenders
acknowledge and agree that Tranche A Term
<PAGE>

                                                                              33

Loans in an aggregate principal amount of $275,000,000 shall continue to be
outstanding as of the Second Restatement Date pursuant to the terms and
conditions of this Agreement and the other Loan Documents. Amounts paid or
prepaid in respect of any Tranche A Term Loans may not be reborrowed.

          (b)  Tranche B Term Loans. Each Lender having a  Tranche B Commitment,
severally and not jointly, hereby agrees, on the terms and subject to the
conditions hereafter set forth and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents, to make a Tranche B
Term Loan to the Borrower in an aggregate principal amount equal to the Tranche
B Commitment of such Lender.  The Tranche B Term Loans shall be available in a
single drawing made in an aggregate principal amount of $275,000,000 during the
period commencing on the Second Restatement Date and ending on May 11, 2001.
Amounts paid or prepaid in respect of any Tranche B Term Loans may not be
reborrowed.

          (c)  Revolving Loans.  On the terms and subject to the conditions
hereafter set forth and in reliance upon the representations and warranties set
forth herein and in the other Loan Documents, each Lender agrees severally and
not jointly to make Revolving Loans to the Borrower, at any time and from time
to time on or after the Closing Date and prior the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding not to exceed (after giving effect to all
Revolving Loans repaid, and all reimbursements of LC Disbursements made,
concurrently with the making of any Revolving Loans) an amount equal to the
difference between (i) the Revolving Credit Commitment set forth opposite such
Lender's name on Schedule 2.01, as the same may be reduced from time to time
pursuant to Section 2.09, and (ii) such Lender's Applicable Percentage of the
sum of (A) the aggregate principal amount of Swingline Loans outstanding at such
time and (B) the LC Exposure at such time.  Within the limits set forth in the
preceding sentence, the Borrower may borrow, pay or prepay and reborrow
Revolving Loans on or after the Closing Date and prior to the Revolving Credit
Maturity Date, on the terms and subject to the conditions and limitations set
forth herein.  The Borrower and the Lenders acknowledge the making of Revolving
Loans prior to the Second Restatement Date in accordance with the terms of the
Existing Credit Agreement and agree that such outstanding Revolving Loans shall
continue to be outstanding pursuant to the terms and conditions of this
Agreement and the other Loan Documents.

          SECTION  2.02.  Loans.  (a)  Each Loan shall be made as part of a
                         -------
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective applicable Tranche B Commitments or Revolving Credit
Commitments, as the case may be; provided, however, that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender).  Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $500,000 and, in
the case
<PAGE>

                                                                              34

of a Eurodollar Borrowing, not less than $1,000,000 or (ii) an aggregate
principal amount equal to the remaining available balance of the applicable
Commitments.

          (b)  Each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans, as the Borrower may request pursuant to Section 2.03.  Each
Lender may at its option fulfill its Commitment with respect to any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan, provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.  Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in an aggregate of more than ten separate
Eurodollar Loans of any Lender being outstanding hereunder at any one time.  For
purposes of the foregoing, Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate Loans.

          (c)  Subject to paragraph (e) below, each Lender shall make a Loan in
the amount of its pro rata portion, as determined under Section 2.17, of each
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in New York, New York, not later
than 2:00 p.m., New York City time, and the Administrative Agent shall by 3:00
p.m., New York City time, credit the amounts so received to the general deposit
account of the Borrower or, if a Borrowing shall not occur on such date because
any condition precedent specified herein shall not have been met, return the
amounts so received to the respective Lenders.  Unless the Administrative Agent
shall have received notice from a Lender prior to the date of any Borrowing (or,
in the case of an ABR Revolving Borrowing, prior to 2:00 p.m., New York City
time on the date of such Borrowing) that such Lender will not make available to
the Administrative Agent such Lender's portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
this paragraph (c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have made such portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate.  If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
be deemed to constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.

          (d)  Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Interest Period with respect to a
Revolving Credit Borrowing, Tranche A Term Borrowing or Tranche B Term Borrowing
that would end after
<PAGE>

                                                                              35

the Revolving Credit Maturity Date, the Tranche A Maturity Date or the Tranche B
Maturity Date, respectively.

          (e)  If the Fronting Bank has not received from the Borrower the
payment required by Section 3.04(a) within two hours after the Borrower shall
have received notice from the Fronting Bank that payment of a draft presented
under any Letter of Credit will be made or, if the Borrower shall have received
such notice later than 10:00 a.m., New York City time, on any Business Day, not
later than 10:00 a.m., New York City time, on the immediately following Business
Day, as provided in Section 3.04(a), the Fronting Bank will promptly notify the
Administrative Agent of the LC Disbursement and the Administrative Agent will
promptly notify each Participating Lender of such LC Disbursement and its
Applicable Percentage thereof.  Each Participating Lender will pay to the
Administrative Agent not later than 4:00 p.m., New York City time, on such date
(or, if the Participating Lenders shall have received such notice later than
2:00 p.m., New York City time, on any day, not later than 10:00 a.m., New York
City time, on the immediately following Business Day) an amount equal to such
Participating Lender's Applicable Percentage of such LC Disbursement (it being
understood that such amount shall be deemed to constitute an ABR Revolving Loan
of such Participating Lender), and the Administrative Agent will promptly pay
such amount to the Fronting Bank.  The Administrative Agent will promptly remit
to each Participating Lender its Applicable Percentage of any amounts
subsequently received by the Administrative Agent from the Borrower in respect
of such LC Disbursement.  If any Lender shall not have made its Applicable
Percentage of such LC Disbursement available to the Fronting Bank as provided
above, such Lender agrees to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with this
subsection to but excluding the date an amount equal to such amount is paid to
the Administrative Agent for prompt payment to the Fronting Bank at, for the
first such day, the Federal Funds Effective Rate, and for each day thereafter,
the Alternate Base Rate.

          SECTION  2.03.  Notice of Borrowings.  The Borrower shall give the
                          --------------------
Administrative Agent written or telecopy notice (or telephone notice promptly
confirmed in writing or by telecopy) (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before a
proposed borrowing, (b) in the case of an ABR Term Borrowing, not later than
11:00 a.m., New York City time, one Business Day before a proposed borrowing and
(c) in the case of an ABR Revolving Borrowing, not later than 11:00 a.m., New
York City time, on the day of a proposed borrowing.  Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify the
following information: (i) whether the Borrowing then being requested is to be a
Term Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to
be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing
(which shall be a Business Day) and the amount thereof; (iii) if such Borrowing
is to be a Eurodollar Borrowing, the Interest Period with respect thereto; and
(iv) the number and location of the account to which funds are to be disbursed;
provided, however, that, notwithstanding any contrary specification in any such
notice, each requested Borrowing shall comply with the requirements set forth in
Section 2.02.  If no election as to the Type of Borrowing is specified in any
such notice, then
<PAGE>

                                                                              36

the requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.03, and of each Lender's portion of the
requested Borrowing.

          SECTION  2.04.  Repayment of Loans; Evidence of Debt.  (a)  The
                          -------------------------------------
outstanding principal balance of each Loan or Swingline Loan shall be payable
(i) in the case of a Revolving Loan or Swingline Loan, on the Revolving Credit
Maturity Date, (ii) in the case of a Tranche A Term Loan, as provided in Section
2.11(a)(i) and (iii) in the case of a Tranche B Term Loan, as provided in
Section 2.11(a)(ii).  Each Loan shall bear interest from and including the date
made on the outstanding principal balance thereof as set forth in Section 2.06.

          (b)  Each Lender and the Swingline Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness to
such Lender or the Swingline Lender resulting from each Loan or Swingline Loan,
respectively, from time to time, including the amounts of principal and interest
payable and paid such Lender or the Swingline Lender from time to time under
this Agreement.

          (c)  The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan and Swingline Loan made hereunder, the Type
of each Loan and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender and the Swingline Lender hereunder and (iii) the amount
of any sum received by the Administrative Agent hereunder from the Borrower or
any Guarantor and each Lender's or the Swingline Lender's share thereof.

          (d)  The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.04 shall, to the extent permitted by
applicable laws, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender,
the Swingline Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans and the Swingline Loans in accordance with their terms.

          SECTION  2.05.  Fees.  (a)  The Borrower agrees to pay to each Lender,
                          -----
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 and on each date on which the Commitments of such Lender shall
expire or be terminated as provided herein, a commitment fee (a "Commitment
                                                                 ----------
Fee") equal to the Commitment Fee Percentage on the average daily unused amount
---
of the Commitments of such Lender during the preceding quarter (or other period
ending with the Revolving Credit Maturity Date or the date on which any of such
Commitments of such Lender shall expire or be terminated). The Commitment Fee
due to each Lender commenced to accrue on and including the Closing Date and
shall cease to accrue on, but excluding, the date on which such Commitments of
<PAGE>

                                                                              37

such Lender shall expire or be terminated as provided herein. For purposes of
calculating Commitment Fees, any portion of the Revolving Credit Commitments
unavailable due to outstanding Swingline Loans or due to outstanding or
unreimbursed unsecured letters of credit permitted by Section 7.01(h) shall be
deemed to be unused amounts of the Commitments. All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

          (b)  The Borrower agrees to pay to the Administrative Agent, for its
own account, administration fees (the "Administrative Fees") at the times and in
                                       -------------------
the amounts to be agreed upon between the Borrower and the Administrative Agent.

          (c)  The Borrower agrees to pay to the Fronting Bank, for its own
account, the fees specified in Section 3.07.

          (d) All Fees (other than the fees payable to the Fronting Bank under
Section 3.07) shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders.  Once paid, none of the Fees shall be refundable under any
circumstances (other than corrections of errors in payment).

          SECTION  2.06.  Interest on Loans.  (a)  Subject to the provisions of
                          ------------------
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is determined by
reference to the Prime Rate and over a year of 360 days at all other times) at a
rate per annum equal to the Alternate Base Rate plus the ABR Spread in effect at
such time with respect to such Loans.  Swingline Loans shall bear interest at
the rate applicable to ABR Revolving Loans.  The ABR Spread for all outstanding
ABR Borrowings on the Second Restatement Date shall be the ABR Spread in effect
immediately prior to the Second Restatement Date, after giving effect to
adjustments required pursuant to Section 2.06(c).

          (b)  Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the LIBOR Spread in effect at such time with respect to such Loans.  The
LIBOR Spread for all outstanding Eurodollar Borrowings on the Second Restatement
Date shall be the LIBOR Spread in effect immediately prior to the Second
Restatement Date, after giving effect to adjustments required pursuant to
Section 2.06(c).

          (c)  So long as no Event of Default shall have occurred and be
continuing, on each occasion that, as of the last day of any fiscal quarter, the
ratio (the "Consolidated Leverage Ratio") of (A) the Indebtedness of JSCE and
            ---------------------------
its consolidated Subsidiaries on such date to (B) Consolidated EBITDA for the
period of four consecutive fiscal quarters ending
<PAGE>

                                                                              38

on such date shall fall within one of the Categories set forth on the table
below, the Commitment Fee Percentage, the ABR Spread and the LIBOR Spread shall
be automatically changed, if necessary, to reflect the percentages indicated for
such Category on the table below under the caption, "Commitment Fee Percentage",
"ABR Spread -Revolving and Tranche A Term Loans", "LIBOR Spread - Revolving and
Tranche A Term Loans", "ABR Spread - Tranche B Term Loans" or "LIBOR Spread -
Tranche B Term Loans", as the case may be, with any such change to be effective
(x) in the case of the Commitment Fee Percentage, with respect to the unused
amounts of the Commitments, on and after the date of delivery to the
Administrative Agent of the certificate described in Section 6.04(d) relating to
such fiscal quarter, (y) in the case of the applicable ABR Spread, with respect
to all ABR Loans outstanding, on and after the date of delivery to the
Administrative Agent of such certificate and (z) in the case of the applicable
LIBOR Spread, with respect to all Loans made on and after the date of delivery
to the Administrative Agent of such certificate.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                         ABR               LIBOR
                                         ---               -----
                                  Spread--Revolving   Spread--Revolving          ABR              LIBOR
                                  -----------------   -----------------          ---              -----
  Consolidated     Commitment       and Tranche A        and Tranche A    Spread--Tranche   Spread--Tranche
  ------------     ----------       -------------        ------------     --------------    ---------------
 Leverage Ratio  Fee Percentage       Term Loans          Term Loans        B Term Loans      B Term Loans
---------------  --------------       ----------          ----------        ------------      ------------
-----------------------------------------------------------------------------------------------------------
<S>              <C>              <C>                 <C>                 <C>               <C>
Category 1
----------
Greater than        0.500%               1.50%               2.50%             2.25%             3.25%
or equal to
4.50 to 1.00
-----------------------------------------------------------------------------------------------------------

Category 2
----------
Greater than
or equal to
4.25 to 1.00        0.500%               1.25%               2.25%             1.75%             2.75%
but less than
4.50 to 1.00
-----------------------------------------------------------------------------------------------------------

Category 3
----------
Greater than
or equal to
4.00 to 1.00        0.500%               1.00%               2.00%             1.75%             2.75%
but less than
4.25 to 1.00
-----------------------------------------------------------------------------------------------------------

Category 4
----------
Greater than
or equal to
3.25 to 1.00        0.500%               0.75%               1.75%             1.25%             2.25%
but less than
4.00 to 1.00
-----------------------------------------------------------------------------------------------------------

Category 5
----------
Less than 3.25      0.375%               0.50%               1.50%             1.00%             2.00%
to 1.00

-----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                                              39

The applicable Category in the table above at any time will be the Category with
the lowest percentages for which the Consolidated Leverage Ratio is satisfied at
such time.  In the event that any condition that gives rise to any change in a
Category pursuant to the first sentence of this Section 2.06(c) is no longer
satisfied as of the end of any subsequent fiscal quarter, on and after the date
of delivery to the Administrative Agent of the certificate described in Section
6.04(d) relating to such subsequent fiscal quarter, the Commitment Fee
Percentage, the applicable ABR Spread and the applicable LIBOR Spread shall be
automatically changed to reflect the Category indicated by such certificate,
with any such change to be effective (x) in the case of the Commitment Fee
Percentage, with respect to the unused amounts of the Commitments, on and after
the date of delivery to the Administrative Agent of the certificate described in
Section 6.04(d) relating to such fiscal quarter, (y) in the case of the
applicable ABR Spread, with respect to all ABR Loans outstanding, on and after
the date of delivery to the Administrative Agent of such certificate and (z) in
the case of the applicable LIBOR Spread, with respect to all Loans made on and
after the date of delivery to the Administrative Agent of such certificate.
Notwithstanding the foregoing, at any time during which JSCE has failed to
deliver the certificate described in Section 6.04(d) with respect to a fiscal
quarter in accordance with the provisions thereof, or at any time after the
occurrence and during the continuance of an Event of Default, the Consolidated
Leverage Ratio shall be deemed to be in Category 1 for purposes of determining
the Commitment Fee Percentage, the applicable ABR Spread and the applicable
LIBOR Spread.

          (d)  Interest on each Loan and each Swingline Loan shall be payable on
the Interest Payment Dates applicable to such Loan or Swingline Loan, as the
case may be, except as otherwise provided in this Agreement.  The applicable ABR
Spread or LIBOR Spread for each Interest Period or day within an Interest
Period, as the case may be, shall be determined by the Administrative Agent, and
such determination shall be presumptively correct absent manifest error.

          SECTION  2.07.  Default Interest.  If the Borrower shall default in
                          -----------------
the payment of the principal of or interest on any Loan or Swingline Loan or any
other amount becoming due hereunder or under any Security Document, by
acceleration or otherwise, the Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted amount to but
excluding the date of actual payment (after as well as before judgment or
bankruptcy) at a rate per annum (the "Default Rate") (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to (a) in the
case of any Loan or any Swingline Loan, the rate that would be applicable under
Section 2.06 to such Loan or Swingline Loan, plus 2% per annum, and (b) in the
case of any other amount, the rate that would be applicable under Section 2.06
to a Tranche B Term Loan that is an ABR Loan, plus 2% per annum.

          SECTION  2.08.  Alternate Rate of Interest.  In the event, and on each
                          ---------------------------
occasion, that on the day two Business Days prior to the commencement of any
Interest
<PAGE>

                                                                              40

Period for a Eurodollar Borrowing the Administrative Agent shall have determined
that dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, or that
the rates at which such dollar deposits are being offered will not adequately
and fairly reflect the cost to Lenders having Commitments representing at least
20% of the total Commitments of making or maintaining their Eurodollar Loans
during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrower and the Lenders. In the event of any such determination, any
request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or
2.10 shall, until the Administrative Agent shall have advised the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
be deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.

          SECTION  2.09.  Termination and Reduction of Commitments.  (a)  The
                          -----------------------------------------
Tranche B Commitments shall be automatically terminated at 5:00 p.m., New York
City time, on May 11, 2001.  The Revolving Credit Commitments and the LC
Commitment shall be automatically terminated at 5:00 p.m., New York City time,
on the Revolving Credit Maturity Date and the LC Maturity Date, respectively.

          (b)  Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $5,000,000 and (ii) the Borrower shall not be permitted to
terminate or reduce the Revolving Credit Commitments if, as the result of such
termination or reduction, (A) the LC Commitment would exceed the aggregate
remaining Revolving Credit Commitments or (B) the Revolving Credit Utilization
would exceed the aggregate remaining Revolving Credit Commitments. The LC
Commitment may be voluntarily terminated or reduced by the Borrower, as provided
in Section 3.06.

          (c)  The Revolving Credit Commitments shall be permanently reduced by
the amount of any mandatory prepayments applied to Swingline Loans or Revolving
Credit Borrowings pursuant to Section 2.13(f).

          (d)  Each reduction in the Commitments hereunder shall be made ratably
among the applicable Lenders in accordance with their respective applicable
Commitments.  The Borrower shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to, but excluding, the date of such termination or reduction.
<PAGE>

                                                                              41

          (e)  Nothing in this Section 2.09 shall prejudice any rights that the
Borrower may have against any Lender that fails to lend as required hereunder
prior to the date of termination of any Commitment.

          SECTION  2.10.  Conversion and Continuation of Borrowings.  The
                          ------------------------------------------
Borrower shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 11:00 a.m., New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (ii) not later than 11:00 a.m., New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing for an additional Interest Period and (iii) not later than
11:00 a.m., New York City time, three Business Days prior to conversion, to
convert the Interest Period with respect to any Eurodollar Borrowing to another
permissible Interest Period, subject in each case to the following:

          (a)  each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;

          (b)  if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate principal amount of
such Borrowing converted or continued shall be an integral multiple of
$1,000,000 and not less than $10,000,000;

          (c)  each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new Loan of
such Lender resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal amount;
accrued interest on any Eurodollar Loan (or portion thereof) being converted
shall be paid by the Borrower at the time of the conversion;

          (d)  if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.16;

          (e)  any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;

          (f)  any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of subparagraph (e) above
shall be automatically converted at the end of the Interest Period in effect for
such Borrowing into an ABR Borrowing; and

          (g)  no Interest Period may be selected for any Eurodollar Term
Borrowing comprised of Tranche A Term Loans or Tranche B Term Loans that would
end later than the Tranche A Term Loan Repayment Date or the Tranche B Term Loan
Repayment Date, as the
<PAGE>

                                                                              42

case may be, occurring on or after the first day of such Interest Period if,
after giving effect to such selection, the aggregate outstanding amount of (i)
the Eurodollar Term Borrowings comprised of Tranche A Term Loans or Tranche B
Term Loans, as the case may be, with Interest Periods ending on or prior to such
Tranche A Term Loan Repayment Date or Tranche B Term Loan Repayment Date,
respectively, and (ii) the ABR Term Borrowings comprised of Tranche A Term Loans
or Tranche B Term Loans, as the case may be, would not be at least equal to the
principal amount of Term Borrowings to be paid on such Term Loan Repayment Date.

          Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued and whether such
Borrowing is comprised of Tranche A Term Loans,  Tranche B Term Loans or
Revolving Loans, (ii) whether such Borrowing is to be converted to or continued
as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and (iv)
if such Borrowing is to be converted to or continued as a Eurodollar Borrowing,
the Interest Period with respect thereto.  If no Interest Period is specified in
any such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, the Borrower shall be deemed to have selected an Interest
Period of one month's duration.  The Administrative Agent shall advise the other
Lenders of any notice given pursuant to this Section 2.10 and of each Lender's
portion of any converted or continued Borrowing.  If the Borrower shall not have
given notice in accordance with this Section 2.10 to continue any Borrowing into
a subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing.

          SECTION  2.11.  Repayment of Term Borrowings.  (a) (i)  The Borrower
                          ----------------------------
shall pay to the Administrative Agent, for the account of the Lenders, on the
dates set forth below, or if any such date is not a Business Day, on the next
succeeding Business Day (each such date being a "Tranche A Term Loan Repayment
                                                 -----------------------------
Date"), a principal amount of the Tranche A Term Loans (such amount, as adjusted
----
from time to time pursuant to Sections 2.12 and 2.13(f), being called the
"Tranche A Term Loan Repayment Amount") equal to the amount set forth below for
 ------------------------------------
such date, together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment:

<TABLE>
<CAPTION>

        Date                      Tranche A Term Loans
        -----                     --------------------
<S>                               <C>
March 31, 2002                            $ 25,000,000
September 30, 2002                          25,000,000
March 31, 2003                              25,000,000
September 30, 2003                          25,000,000
</TABLE>
<PAGE>

                                                                              43

<TABLE>
<S>                                        <C>
March 31, 2004                              37,500,000
September 30, 2004                          37,500,000
Tranche A Maturity Date                    100,000,000
</TABLE>

On each Tranche A Term Loan Repayment Date, the Administrative Agent shall apply
the Tranche A Term Loan Repayment Amount paid to the Administrative Agent to pay
the Tranche A Term Loans in accordance with Section 2.19(a).

          (ii)  The Borrower shall pay to the Administrative Agent, for the
account of the Lenders, on the dates set forth below or, if any such date is not
a Business Day, on the next succeeding Business Day (each such date being a
"Tranche B Term Loan Repayment Date"), a principal amount of the Tranche B Term
Loans (such amount, as adjusted from time to time pursuant to Sections 2.12 and
2.13(f), being called the "Tranche B Term Loan Repayment Amount") equal to the
                           ------------------------------------
amount set forth below for such date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
such payment:

<TABLE>
<CAPTION>
                                      Tranche B
         Date                         Term Loans
         -----                        ----------
<S>                                  <C>
September 30, 2002                   $  1,000,000
March 31, 2003                          1,000,000
September 30, 2003                      1,000,000
March 31, 2004                          1,000,000
September 30, 2004                      1,000,000
March 31, 2005                          1,000,000
September 30, 2005                      1,000,000
March 31, 2006                          1,000,000
September 30, 2006                    133,500,000
Tranche B Maturity Date               133,500,000
</TABLE>


On each Tranche B Term Loan Repayment Date, the Administrative Agent shall apply
the Tranche B Term Loan Repayment Amount paid to the Administrative Agent to pay
the Tranche B Term Loans in accordance with Section 2.19(a).

          (b)  To the extent not previously paid, (i) all Tranche A Term Loans
shall be due and payable on the Tranche A Maturity Date and (ii) all Tranche B
Term Loans shall be due and payable on the Tranche B Maturity Date, in each case
together with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of payment.
<PAGE>

                                                                              44

          (c)  All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.

          SECTION  2.12.  Optional Prepayments.  (a)  The Borrower shall have
                          ---------------------
the right at any time and from time to time to prepay any Borrowing, in whole or
in part, upon written or telecopy notice (or telephone notice promptly confirmed
by written or telecopy notice) delivered to the Administrative Agent (i)  by
11:00 a.m., New York City time, at least three Business Days prior to the date
designated for such prepayment, in the case of any prepayment of a Eurodollar
Borrowing, or (ii) by 11:00 a.m., New York City time, on the date designated for
such prepayment in the case of any prepayment of an ABR Borrowing; provided,
however, that each partial payment shall be in an amount that is an integral
multiple of $1,000,000 and, in the case of a Eurodollar Borrowing, not less than
$10,000,000 (or, in each case, the entire amount of the Borrowing being
prepaid).

          (b)  Optional prepayments of Term Loans made by the Borrower pursuant
to paragraph (a) above shall be allocated among the Tranche A Term Loans and the
Tranche B Term Loans (and to the remaining scheduled installments of principal
with respect to any such Term Loans) in a manner determined at the discretion of
the Borrower.

          (c)  Each notice of prepayment shall specify the amount to be prepaid,
the prepayment date, whether the related prepayment relates to a Revolving
Credit Borrowing or a Term Borrowing and the principal amount of each Revolving
Credit Borrowing or Term Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such obligations by the
amount specified therein on the date specified therein.  All prepayments
pursuant to this Section 2.12 shall be subject to Section 2.16, but shall
otherwise be without premium or penalty.

          (d)  No optional prepayment of Term Loans made by the Borrower
pursuant to this Section 2.12 shall reduce the Borrower's obligation to make
mandatory prepayments pursuant to Section 2.13(b), (c), (d) or (e).

          SECTION  2.13.  Mandatory Prepayments.  (a)  On the date of any
                          ---------------------
termination or reduction of the Revolving Credit Commitments pursuant to Section
2.09, the Borrower shall pay or prepay so much of the then-outstanding Swingline
Loans and the then-outstanding Revolving Credit Borrowings as shall be necessary
in order that the aggregate principal amount of the Swingline Loans and
Revolving Loans outstanding at such time will not exceed the aggregate Revolving
Credit Commitments (after giving effect to such termination or reduction and
after giving effect to each deemed reduction to the Revolving Credit Commitments
in connection with the making of a Swingline Loan) less the aggregate LC
Exposure at such time.

          (b)  With respect to (i) any Asset Sale (other than the issuance of
the Borrower Preferred Stock and the JSCE Preferred Stock, the transfer by the
Borrower of its ownership interests in Timberlands I and Timberlands II to
Monetization Sub, and the pledge of the JSCE Preferred Stock to secure
Indebtedness permitted under Section 7.01(s)) that is
<PAGE>

                                                                              45

an Asset Sale at the time of such sale or other disposition and (ii) any Asset
Sale not described in clause (i) that becomes an Asset Sale due to the operation
of the first proviso contained in the definition of the term "Asset Sale" to the
extent that such Asset Sale generates Net Cash Proceeds which, when aggregated
with the Net Cash Proceeds from other Asset Sales consummated during the term of
this Agreement are greater than $10,000,000, the Borrower shall apply not later
than the third Business Day following the determination of the amount of Net
Cash Proceeds received in respect thereof (but in no event later than 60 days
after the initial receipt by any Loan Party or any of their respective
Subsidiaries of such Net Cash Proceeds) an amount equal to 100% of the Net Cash
Proceeds received therefrom to prepay outstanding Loans and Swingline Loans in
accordance with Section 2.13(f).

          (c)  No later than the earlier of (i) 90 days after the end of each
fiscal year of JSCE, and (ii) the date on which the financial statements with
respect to such period are delivered pursuant to Section 6.04(a), the Borrower
shall prepay outstanding Loans and Swingline Loans in accordance with Section
2.13(f) in an aggregate principal amount equal to 50% of Excess Cash Flow for
the fiscal year then ended.

          (d)  In the event that any Loan Party or any Subsidiary of a Loan
Party shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any Subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to Section
7.01 (other than clause (k) thereof)), including pursuant to any Permitted
Equipment Financing or any Permitted Timber Financing, then the Borrower shall
substantially simultaneously with (and in any event not later than the third
Business Day next following) the receipt of such Net Cash Proceeds by such Loan
Party or Subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to
prepay outstanding Loans and Swingline Loans in accordance with Section 2.13(f).

          (e)  In the event that there shall occur any Taking or Destruction (as
such terms are defined in the Mortgages) of any Mortgaged Property and pursuant
to the provisions of the applicable Mortgage amounts payable with respect
thereto are to be applied to the Secured Obligations, the Borrower shall apply
an amount equal to 100% of the Net Cash Proceeds therefrom to prepay the
outstanding Loans and Swingline Loans in accordance with Section 2.13(f).

          (f)  Mandatory prepayments of outstanding obligations under this
Agreement made by the Borrower pursuant to paragraphs (b), (c), (d) and (e)
above first, shall be allocated pro rata among the then-outstanding Tranche A
Term Loans and Tranche B Term Loans and, subject to paragraph (i) below, applied
pro rata against the remaining scheduled installments of principal due in
respect of Tranche A Term Loans and Tranche B Term Loans under Sections
2.11(a)(i) and (ii), respectively, and second, if the Term Loans shall have been
repaid in full, shall be applied to permanently reduce existing Revolving Credit
Commitments; provided, however, that (i) subject to paragraph (i) below, up to
$50,000,000, in the case of prepayments of the Tranche A Term Loans, of any
prepayment required to be made pursuant to Section 2.13(c) may be allocated
between the Tranche A Term Loans on
<PAGE>

                                                                              46

the one hand, and the Tranche B Term Loans, on the other hand (and to the
remaining scheduled installments of principal with respect to any such Term
Loans), in a manner determined at the discretion of the Borrower and (ii)
subject to paragraph (i) below, the amount of any such prepayment required to be
made pursuant to Section 2.13(c) in excess of $50,000,000, together, in the case
of prepayments of the Tranche A Term Loans, with the amount of any prepayments
rejected by Tranche B Lenders pursuant to paragraph (i) below, may be applied by
the Borrower against the remaining scheduled installments of principal with
respect to the Term Loans required to be paid within 24 months of the date of
such prepayment.

          (g)  The Borrower shall deliver to the Administrative Agent, (i) at
the time of each prepayment by the Borrower required under paragraph (b), (c),
(d) or (e) above, a certificate signed by a Financial Officer of the Borrower
setting forth in reasonable detail the calculation of the amount of such
prepayment and (ii) at least three Business Days prior to the time of each
prepayment required under this Section 2.13, a notice of such prepayment.  Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan or Swingline Loan (or
portion thereof) to be prepaid.  All prepayments of Borrowings and Swingline
Loans under this Section 2.13 shall be subject to Section 2.16, but shall
otherwise be without premium or penalty.

          (h)  Amounts to be applied pursuant to this Section 2.13 to the
prepayment of Term Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding ABR Term Loans and ABR Revolving Loans.  Any amounts
remaining after each such application shall, at the option of the Borrower, be
applied to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as the
case may be, immediately and/or shall be deposited in the Prepayment Account (as
defined below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Loans to prepay Eurodollar Revolving Loans, in
each case on the last day of their respective Interest Periods (or, at the
direction of the Borrower, on any earlier date) until all outstanding Term Loans
or Revolving Loans, as the case may be, have been prepaid or until all the
allocable cash on deposit with respect to such Loans has been exhausted. For
purposes of this Agreement, the term "Prepayment Account" shall mean an account
established by the Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this paragraph
(h). The Administrative Agent will, at the request of the Borrower, invest
amounts on deposit in the Prepayment Account in Permitted Investments that are
described in clause (a), (b), (c) or (d) of the definition of such term and that
mature prior to the last day of the applicable Interest Periods of the
Eurodollar Term Borrowings or Eurodollar Revolving Borrowings to be prepaid, as
the case may be; provided, however, that (i) the Administrative Agent shall not
be required to make any investment that, in its sole judgment, would require or
cause the Administrative Agent to be in, or would result in any, violation of
any law, statute, rule or regulation and (ii) the Administrative Agent shall
have no obligation to invest amounts on deposit in the Prepayment Account if a
Default or Event of Default shall have
<PAGE>

                                                                              47

occurred and be continuing. The Borrower shall indemnify the Administrative
Agent for any losses relating to the investments so that the amount available to
prepay Eurodollar Borrowings on the last day of the applicable Interest Period
is not less than the amount that would have been available had no investments
been made pursuant thereto. Other than any interest earned on such investments,
the Prepayment Account shall not bear interest. Interest or profits, if any, on
such investments shall be deposited in the Prepayment Account and reinvested and
disbursed as specified above. If the maturity of the Loans has been accelerated
pursuant to Article VIII, the Administrative Agent may, in its sole discretion,
apply all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations. The Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Fronting Bank, the Swingline Lender and the
Lenders, a security interest in the Prepayment Account to secure the
Obligations.

          (i)  Notwithstanding paragraph (f) above, with respect to the amount
of any mandatory prepayment described therein that is allocated to the then-
outstanding Tranche B Term Loans (such amounts, the "Prepayment Amount"), the
                                                     -----------------
Borrower may, not less than 10 nor more than 20 Business Days prior to the date
specified therein for such prepayment (the "Mandatory Prepayment Date"), provide
                                            -------------------------
to each Tranche B Lender a written notice (each, a "Prepayment Option Notice"),
                                                    ------------------------
which shall refer to this Section 2.13(i) and shall (i) set forth the Prepayment
Amount and the portion thereof that the applicable Tranche B Lender (each, a
"Prepayment Lender") will be entitled to receive if it accepts such mandatory
 -----------------
prepayment in accordance with this paragraph (i), (ii) request such Prepayment
Lender to notify the Borrower and the Administrative Agent in writing no later
than the Business Day prior to the Mandatory Prepayment Date of such Prepayment
Lender's acceptance or rejection (in each case, in whole and not in part) of its
share of the Prepayment Amount and (iii) inform such Prepayment Lender that
failure by such Prepayment Lender to accept in writing its share of the
Prepayment Amount on or before the Business Day prior to the Mandatory
Prepayment Date shall be deemed a rejection of such amount. Each Prepayment
Option Notice shall be given by telecopy, confirmed by hand delivery, overnight
courier service or registered or certified mail, in each case addressed as
provided in Section 10.01. On the Mandatory Prepayment Date, the Borrower shall
apply the aggregate amount necessary to prepay that portion of the Prepayment
Amount in respect of which such Prepayment Lenders have accepted prepayment as
described above (such Prepayment Lenders, the "Accepting Lenders") pro rata
                                               -----------------
against the remaining installments of principal due in respect of the Tranche B
Term Loans of the Accepting Lenders under Section 2.11(a)(ii). The remaining
portion of the Prepayment Amount shall be applied (i) in the case of any
Prepayment Amount payable pursuant to Section 2.13(c), in accordance with
Section 2.13(f) and (ii) in all other cases, against the remaining scheduled
installments of principal due in respect of such Tranche A Term Loans under
Section 2.11(a)(i) in the order of maturity.

          SECTION  2.14.  Reserve Requirements; Change in Circumstances;
                          ----------------------------------------------
Increased Costs. (a) Notwithstanding any other provision herein, if after the
---------------
Closing Date any change in applicable law or regulation or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof
<PAGE>

                                                                              48

(whether or not having the force of law) shall change the basis of taxation of
payments to any Lender, the Swingline Lender or the Fronting Bank of the
principal of or interest on any Eurodollar Loan made by such Lender or any
Letter of Credit obligations, Fees or other amounts payable hereunder (other
than changes in respect of income and franchise taxes imposed on such Lender,
the Swingline Lender or the Fronting Bank by the jurisdiction in which such
Lender, the Swingline Lender or the Fronting Bank is organized or has its
principal or lending office or by any political subdivision or taxing authority
thereof or therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender, the Swingline Lender or the
Fronting Bank (except any such reserve requirement that is reflected in the
Adjusted LIBO Rate or in the Alternate Base Rate) or shall impose on such
Lender, the Swingline Lender or the Fronting Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or to reduce the amount
of any sum received or receivable by such Lender, the Swingline Lender or the
Fronting Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender, the Swingline Lender or the Fronting Bank to be
material, then the Borrower will pay to such Lender, the Swingline Lender or the
Fronting Bank following receipt of a certificate of such Lender, the Swingline
Lender or the Fronting Bank to such effect in accordance with Section 2.14(c)
such additional amount or amounts as will compensate such Lender, the Swingline
Lender or the Fronting Bank on an after-tax basis for such additional costs
incurred or reduction suffered. Notwithstanding any other provision in this
paragraph (a), none of any Lender, the Swingline Lender or the Fronting Bank
shall be entitled to demand compensation pursuant to this paragraph (a) if it
shall not be the general practice of such Lender, the Swingline Lender or the
Fronting Bank, as applicable, to demand such compensation in similar
circumstances under comparable provisions of other comparable credit agreements.

          (b)  If any Lender, the Swingline Lender or the Fronting Bank shall
have determined that the adoption after the Closing Date of any law, rule,
regulation, agreement or guideline regarding capital adequacy, or any change in
any of the foregoing or in the interpretation or administration of any of the
foregoing by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or any lending office of such Lender), the Swingline Lender or the
Fronting Bank or any Lender's, the Swingline Lender's or the Fronting Bank's
holding company, if any, with any request or directive regarding capital
adequacy issued under any law, rule, regulation or guideline (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's, the Swingline Lender's or the Fronting Bank's capital or on
the capital of such Lender's, the Swingline Lender's or the Fronting Bank's
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender, the Swingline Loans made by the Swingline Lender or the Letters of
Credit issued by the Fronting Bank pursuant hereto to a level below that which
such Lender, the Swingline Lender or the Fronting Bank or such Lender's, the
Swingline Lender's or the Fronting Bank's
<PAGE>

                                                                              49

holding company, if any, could have achieved but for such applicability,
adoption, change or compliance (taking into consideration such Lender's, the
Swingline Lender's or the Fronting Bank's policies and the policies of such
Lender's, the Swingline Lender's or the Fronting Bank's holding company, if any,
with respect to capital adequacy) by an amount deemed by such Lender, the
Swingline Lender or the Fronting Bank to be material, then from time to time the
Borrower shall pay to such Lender, the Swingline Lender or the Fronting Bank
following receipt of a certificate of such Lender, the Swingline Lender or the
Fronting Bank to such effect in accordance with Section 2.14(c) such additional
amount or amounts as will compensate such Lender, the Swingline Lender or the
Fronting Bank or such Lender's, the Swingline Lender's or the Fronting Bank's
holding company, if any, on an after-tax basis for any such reduction suffered.
Notwithstanding any other provision in this paragraph (b), none of any Lender,
the Swingline Lender or the Fronting Bank shall be entitled to demand
compensation pursuant to this paragraph (b) if it shall not be the general
practice of such Lender, the Swingline Lender or the Fronting Bank, as
applicable, to demand such compensation in similar circumstances under
comparable provisions of other comparable credit agreements.

          (c)  A certificate of each Lender, the Swingline Lender or the
Fronting Bank setting forth such amount or amounts as shall be necessary to
compensate such Lender, the Swingline Lender or the Fronting Bank or its holding
company, if any, as specified in paragraph (a) or (b) above, as the case may be,
and setting forth in reasonable detail an explanation of the basis of requesting
such compensation in accordance with paragraph (a) or (b) above, including
calculations in reasonable detail, shall be delivered to the Borrower and shall
be conclusive absent manifest error.  The Borrower shall pay each Lender, the
Swingline Lender or the Fronting Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.

          (d)  Failure on the part of any Lender, the Swingline Lender or the
Fronting Bank to demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on capital with respect to
any period shall not constitute a waiver of such Lender's, the Swingline
Lender's or the Fronting Bank's right to demand compensation with respect to
such period or any other period, except that none of any Lender, the Swingline
Lender or the Fronting Bank shall be entitled to compensation under this Section
2.14 for any costs incurred or reduction suffered with respect to any date
unless such Lender, the Swingline Lender or the Fronting Bank, as applicable,
shall have notified the Borrower that it will demand compensation for such costs
or reductions under paragraph (c) above, not more than six months after the
later of (i) such date and (ii) the date on which such Lender, the Swingline
Lender or the Fronting Bank, as applicable, shall have become aware of such
costs or reductions.  The protection of this Section 2.14 shall be available to
each Lender, the Swingline Lender or the Fronting Bank regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition that shall have occurred or
been imposed.
<PAGE>

                                                                              50

          SECTION  2.15.  Change in Legality.  (a)  Notwithstanding any other
                          -------------------
provision herein, if after the Closing Date any change in any law or regulation
or in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:

          (i)  declare that Eurodollar Loans will not thereafter be made by such
     Lender hereunder, whereupon any request by the Borrower for a Eurodollar
     Borrowing shall, as to such Lender only, be deemed a request for an ABR
     Loan unless such declaration shall be subsequently withdrawn; and

          (ii) require that all outstanding Eurodollar Loans made by it be
     converted to ABR Loans, in which event all such Eurodollar Loans shall be
     automatically converted to ABR Loans as of the effective date of such
     notice as provided in paragraph (b) below.

In the event any Lender shall exercise its rights under subparagraph (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.

          (b)  For purposes of this Section 2.15, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.

          SECTION  2.16.  Indemnity.  The Borrower shall indemnify each Lender
                          ----------
against any loss or expense that such Lender may sustain or incur with respect
to Eurodollar Loans as a consequence of (a) any failure by the Borrower to
fulfill on the date of any Borrowing hereunder the applicable conditions set
forth in Article V, (b) any failure by the Borrower to borrow or to refinance,
convert or continue any Loan hereunder after irrevocable notice of such
borrowing, refinancing, conversion or continuation has been given pursuant to
Section 2.03 or 2.10, (c) any payment, prepayment or conversion of a Eurodollar
Loan required or permitted by any other provision of this Agreement or
otherwise, or any assignment of a Eurodollar Loan required by Section 2.21(b),
in each case made or deemed made on a date other than the last day of the
Interest Period applicable thereto or (d) any default in payment or prepayment
of the principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, whether at
scheduled maturity, by acceleration, irrevocable notice of prepayment or
otherwise), including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain such Loan or any part
thereof as a Eurodollar Loan.  Such loss or
<PAGE>

                                                                              51



reasonable expense shall be equal to the sum of (a) such Lender's actual costs
and expenses incurred (other than any lost profits) in connection with, or by
reason of, any of the foregoing events and (b) an amount equal to the excess, if
any, as reasonably determined by such Lender of (i) its cost of obtaining the
funds for the Loan being paid, prepaid, converted or not borrowed, converted or
continued (assumed to be the Adjusted LIBO Rate applicable thereto) for the
period from and including the date of such payment, prepayment, conversion or
failure to borrow, convert or continue to but excluding the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the Interest Period for such Loan that would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, converted or continued for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts, including calculations in reasonable
detail, that such Lender is entitled to receive pursuant to this Section 2.16
shall be delivered to the Borrower and shall be conclusive absent manifest
error.

          SECTION  2.17.  Pro Rata Treatment.  Except as required under Section
                          -------------------
2.15 or permitted under Section 2.12(b) or Sections 2.13(f) and (i), each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
payment of the LC Fees, each reduction of the Commitments and each refinancing
of any Borrowing with, conversion of any Borrowing to or continuation of any
Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans).  Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each Lender's percentage
of such Borrowing, computed in accordance with Section 2.01, to the next higher
or lower whole dollar amount.

          SECTION  2.18.  Sharing of Setoffs.  Each Lender agrees that if it
                          -------------------
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against any Loan Party, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loan or Loans or LC
Exposure as a result of which the unpaid principal portion of its Loans or its
LC Exposure shall be proportionately less than the unpaid principal portion of
the Loans of any other Lender or any other Lender's LC Exposure, such Lender
shall be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans of such other Lender or the LC Exposure of such other
Lender, so that the aggregate unpaid principal amount of the Loans, LC Exposure
and participations in Loans and LC Exposure held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans and LC
Exposure then outstanding as the principal amount of such Lender's Loans and
<PAGE>

                                                                              52

LC Exposure prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the principal amount of all Loans and LC Exposure outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. SSCC, JSCE and the Borrower expressly
consent to the foregoing arrangements and agree that any Lender holding a
participation in a Loan or LC Exposure deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Loan Parties to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.

          SECTION  2.19.  Payments.  (a)  Except as provided in Sections 2.05(d)
                          ---------
and 3.04(a) and (b), the Loan Parties shall make each payment (including
principal of or interest on any Loan or Swingline Loan or any Fees or other
amounts) hereunder and under any other Loan Document not later than 12:00 noon,
New York City time, on the date when due in immediately available dollars,
without defense, setoff or counterclaim.  Each such payment (other than (i) the
payments specified in Sections 3.04(a), 3.04(b) and 3.07, which shall be paid
directly to the Fronting Bank, and (ii) principal of and interest on Swingline
Loans, which shall be paid directly to the Swingline Lender) shall be made to
the Administrative Agent at its office at 270 Park Avenue, New York, New York.
Payments made directly to the Fronting Bank shall be made to such account of the
Fronting Bank as the Fronting Bank shall specify by notice to the Borrower.
Payments made directly to the Swingline Lender shall be made to such account of
the Swingline Lender as the Swingline Lender shall specify by notice to the
Borrower.  Any payments received by the Administrative Agent, the Fronting Bank
or the Swingline Lender after the specified time for receipt of such payment on
any day shall be deemed to have been received on the next Business Day.  The
Administrative Agent shall distribute to the applicable Lenders all payments
received by the Administrative Agent for their respective accounts, promptly
following receipt thereof.

          (b)  Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.

          SECTION  2.20.  Taxes.  (a)  Any and all payments by the Loan Parties
                          ------
hereunder shall be made, in accordance with Section 2.19, free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of the Administrative Agent, the
Collateral Agent, the Fronting Bank or the Swingline Lender or any Lender (or
any transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes
<PAGE>

                                                                              53

imposed on the Administrative Agent, the Collateral Agent, the Fronting Bank or
the Swingline Lender or any Lender (or Transferee) by the United States or any
jurisdiction under the laws of which the Administrative Agent, the Collateral
Agent, the Fronting Bank, the Swingline Lender or any such Lender (or
Transferee) is organized or has its principal office or lending office or any
political subdivision or taxing authority thereof or therein (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes are required
to be deducted from or in respect of any sum payable hereunder to any Lender (or
any Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.20) such
Lender (or Transferee), the Administrative Agent, the Collateral Agent, the
Swingline Lender or the Fronting Bank (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been made,
(ii) SSCC, JSCE or the Borrower, as applicable, shall make such deductions and
(iii) SSCC, JSCE or the Borrower, as applicable, shall pay the full amount
deducted to the relevant taxing authority or other Governmental Authority in
accordance with applicable law; provided, however, that no Transferee of any
Lender shall be entitled to receive any greater payment under this paragraph (a)
than such Lender would have been entitled to receive with respect to the rights
assigned, participated or otherwise transferred unless (x) such assignment,
participation or transfer shall have been made at a time when the circumstances
(including a Change of Law) giving rise to such greater payment did not exist or
had not yet occurred or (y) such assignment, participation or transfer shall
have been at the request of the Borrower.

          (b)  The Borrower agrees to pay any current or future stamp,
intangible or documentary taxes or any other excise or property taxes, charges
or similar levies (including, without limitation, mortgage recording taxes and
similar fees) that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, any
Assignment and Acceptance entered into at the request of the Borrower or any
other Loan Document (hereinafter referred to as "Other Taxes").

          (c)  The Borrower will indemnify each Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender and the
Fronting Bank for the full amount of Taxes and Other Taxes (including any Taxes
or Other Taxes on amounts payable under this Section 2.20) paid by such Lender
(or Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority.  Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, as the case may be, makes written demand therefor
(which demand shall identify the nature and amount of Taxes and Other Taxes for
which indemnification is being sought and shall include a copy of the relevant
portion of any written assessment from the relevant taxing
<PAGE>

                                                                              54

authority demanding payment of such Taxes or Other Taxes, unless the Lender (or
Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, as the case may be, determines, in its sole
discretion, that such portion of any such assessment is confidential). If a
Lender (or Transferee), the Administrative Agent, the Swingline Lender or the
Fronting Bank shall become aware that it is entitled to receive a refund in
respect of Taxes or Other Taxes as to which it has been indemnified by the
Borrower pursuant to this Section 2.20, it shall promptly notify the Borrower of
the availability of such refund and shall, within 30 days after receipt of a
request by the Borrower, apply for such refund at the Borrower's expense. If any
Lender (or Transferee), the Administrative Agent, the Swingline Lender or the
Fronting Bank receives a refund in respect of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower pursuant to this Section 2.20, it
shall promptly notify the Borrower of such refund and shall, within 30 days of
receipt, repay such refund (to the extent of amounts that have been paid by the
Borrower under this Section 2.20 with respect to such refund and not previously
reimbursed) to the Borrower, net of all reasonable out-of-pocket expenses of
such Lender, the Administrative Agent, the Swingline Lender or the Fronting Bank
and without interest (other than the interest, if any, included in such refund
net of any Taxes payable with respect to receipt of such refund), provided that
the Borrower, upon the request of such Lender (or Transferee), the
Administrative Agent, the Swingline Lender or the Fronting Bank, agrees to
return such refund (plus penalties, interest or other charges) to such Lender
(or Transferee), the Administrative Agent, the Swingline Lender or the Fronting
Bank in the event such Lender (or Transferee), the Administrative Agent, the
Swingline Lender or the Fronting Bank is required to repay such refund.

          (d)  Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by SSCC, JSCE or the Borrower in respect of any payment to any
Lender (or Transferee), the Administrative Agent, the Collateral Agent, the
Swingline Lender or the Fronting Bank, SSCC, JSCE or the Borrower, as the case
may be, will furnish to the Administrative Agent, at its address referred to in
Section 10.01, the original or a certified copy of a receipt evidencing payment
thereof or other evidence reasonably satisfactory to such Lender (or
Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, as the case may be.

          (e)  Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.20
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.

          (f)  Each of the Administrative Agent, the Fronting Bank, the
Swingline Lender and any Lender (or Transferee) that is not incorporated or
otherwise formed under the laws of the United States of America or a state
thereof (a "Non-U.S. Person") agrees that it shall on the date it becomes a
Lender (or Transferee), the Administrative Agent, a Fronting Bank or Swingline
Lender hereunder, deliver to the Borrower and the Administrative Agent (i) one
duly completed copy of United States Internal Revenue Service Form W-8BEN or W-
<PAGE>

                                                                              55

8ECI, (ii)  in the case of Lenders (or Transferees) claiming exemption from
United States Federal withholding tax pursuant to Sections 871(h) or 881(c) of
the Code, one duly completed copy of a United States Internal Revenue Service
Form W-8BEN and a certificate representing that such Non-U.S. Person is not a
bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(b) of the Code) of the Borrower and is
not a controlled foreign corporation related to the Borrower (within the meaning
of Section 864(d)(4) of the Code) or (iii) any successor applicable form of any
thereof, certifying in each case that such Lender (or Transferee), the
Administrative Agent, the Fronting Bank or the Swingline Lender is entitled to
receive payments hereunder payable to it without deduction or withholding of any
United States Federal income taxes, or subject to a reduced rate thereof.  Each
of the Administrative Agent, the Fronting Bank or the Swingline Lender or any
Lender (or Transferee) that delivers to the Borrower and the Administrative
Agent any such form or certification further undertakes to deliver to the
Borrower and the Administrative Agent further copies of any such form or
certification or other manner of certification reasonably satisfactory to the
Borrower on or before the date that any such form or certification expires or
becomes obsolete or of the occurrence of any event requiring a change in the
most recent form or certification previously delivered by it to the Borrower or
the Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Administrative Agent, certifying
that the Administrative Agent, Fronting Bank, Swingline Lender or such Lender
(or Transferee), as the case may be, is entitled to receive payments hereunder
without deduction or withholding of any United States Federal income taxes, or
subject to a reduced rate thereof.  If at any time there has occurred, on or
prior to the date on which any delivery of any such form or certification would
otherwise be required, any change in law, rule, regulation, treaty, convention
or directive, or any change in the interpretation or application of any thereof
("Change of Law"), that renders all such forms or certification inapplicable or
which would prevent the Administrative Agent, Fronting Bank, Swingline Lender or
such Lender (or Transferee), as the case may be, from duly completing and
delivering any such form or certification with respect to it, the Administrative
Agent, Fronting Bank, Swingline Lender or such Lender (or Transferee), as the
case may be, shall advise the Borrower that under applicable law it shall be
subject to withholding of United States Federal income tax at the full statutory
rate, a reduced rate of withholding or without deduction or withholding.  A Non-
U.S. Person shall be required to furnish any such form or certification only if
it is entitled to claim an exemption from or a reduced rate of withholding.
Each of the Administrative Agent, the Fronting Bank, the Swingline Lender and
any Lender that is a Non-U.S. Person and that is a party hereto as of the Second
Restatement Date hereby represents and warrants that, as of the Second
Restatement Date, payments made to it hereunder are exempt from withholding of
United States Federal income taxes (i) because such payments are effectively
connected with a United States trade or business conducted by such Non-U.S.
Person; (ii) pursuant to the terms of an income tax treaty between the United
States and such Non-U.S. Person's country of residence; or (iii) because such
payments are portfolio interest exempt pursuant to Section 871(h) or 881(c) of
the Code.  Notwithstanding any provision of paragraph (a) above to the contrary,
none of SSCC, JSCE or the Borrower shall have any obligation to pay any Taxes or
Other Taxes or to indemnify any Lender (or
<PAGE>

                                                                              56

Transferee), the Administrative Agent, the Swingline Lender or the Fronting Bank
for such Taxes or Other Taxes pursuant to Section 2.20 to the extent that such
Taxes or Other Taxes result from (i) the failure of any Lender (or Transferee),
the Administrative Agent, the Fronting Bank or the Swingline Bank to comply with
its obligations pursuant to this paragraph (f) or (ii) any representation made
on any such form or certification (or successor applicable form or
certification) by the Lender (or Transferee), the Administrative Agent, the
Fronting Bank, or the Swingline Lender incurring such Taxes or Other Taxes
proving to have been incorrect, false or misleading in any material respect when
so made or deemed to be made.

          SECTION  2.21.  Duty to Mitigate; Assignment of Commitments under
                          -------------------------------------------------
Certain Circumstances.  (a)  Any of the Administrative Agent, the Fronting Bank,
----------------------
the Swingline Lender or any Lender (or Transferee) claiming any additional
amounts payable pursuant to Section 2.14 or Section 2.20 or exercising its
rights under Section 2.15 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document requested by
the Borrower or to change the jurisdiction of its applicable lending office if
the making of such filing or change would avoid the need for or reduce the
amount of any such additional amounts that may thereafter accrue or avoid the
circumstances giving rise to such exercise and would not, in the sole
determination of such Lender (or Transferee), the Administrative Agent, the
Fronting Bank or the Swingline Lender, as the case may be, require it to incur
additional costs or be otherwise disadvantageous to such Lender (or Transferee),
the Administrative Agent, the Fronting Bank or the Swingline Lender.

          (b)  In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.14 or 2.15, or the Borrower shall be required
to make additional payments to any Lender under Section 2.20, the Borrower shall
have the right, but not the obligation, at its own expense (including with
respect to the processing and recordation fee referred to in Section 10.04(b)),
upon notice to such Lender, the Administrative Agent and BTCo, to replace such
Lender with an assignee (in accordance with and subject to the restrictions
contained in Section 10.04(b)) approved by the Administrative Agent (which
approval shall not be unreasonably withheld), and such Lender hereby agrees to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 10.04(b)) all its interests, rights and
obligations under this Agreement to such assignee; provided, however, that no
Lender shall be obligated to make any such assignment unless (i) such assignment
shall not conflict with any law or any rule, regulation or order of any
Governmental Authority, (ii) such assignee shall pay to the affected Lender in
immediately available funds on the date of such assignment the principal of the
Loans made by such Lender hereunder and (iii) the Borrower shall pay to the
affected Lender in immediately available funds on the date of such assignment
the interest accrued to the date of payment on the Loans made by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to it
hereunder.

          (c)  If, in connection with any proposed amendment, modification,
change, waiver, discharge or termination to any of the provisions of this
Agreement as contemplated
<PAGE>

                                                                              57

by clauses (A) through (D), inclusive, of the first proviso to the first
sentence of Section 10.08(b), the consent of the Required Lenders is obtained
but the consent of one or more of such other Lenders whose consent is required
is not obtained, then the Borrower shall have the right, but not the obligation,
at its own expense (including with respect to the processing and recordation fee
referred to in Section 10.04(b)) upon notice to such Lender, the Administrative
Agent and BTCo, so long as all non-consenting Lenders whose individual consent
is required are treated as described below, to replace each such non-consenting
Lender or Lenders (or, at the option of the Borrower if the respective Lender's
consent is required with respect to less than all Loans, to replace only the
respective Loans of the respective non-consenting Lender which gave rise to the
need to obtain such Lender's individual consent) with an assignee (in accordance
with and subject to the restrictions contained in Section 10.04(b)) approved by
the Administrative Agent (which approval shall not be unreasonably withheld) so
long as at the time of such replacement, each such assignee consents to the
proposed amendment, modification, change, waiver, discharge or termination;
provided, however, that no Lender shall be obligated to make any such assignment
unless (i) such assignment shall not conflict with any law or any rule,
regulation or order of any Governmental Authority, (ii) such assignee shall pay
to the non-consenting Lender in immediately available funds on the date of such
assignment the principal of the Loans made by such Lender hereunder and subject
to such assignment and (iii) the Borrower shall pay to the non-consenting Lender
in immediately available funds on the date of such assignment the interest
accrued to the date of payment on the Loans made by such Lender hereunder and
subject to such assignment and all other amounts accrued for such Lender's
account or owed to it hereunder with respect to such Loans.

          SECTION  2.22.  Swingline Loans.  (a)  On the terms and subject to the
                          ----------------
conditions and relying upon the representations and warranties herein set forth,
the Swingline Lender agrees, at any time and from time to time from and
including the Closing Date to but excluding the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitments, in
accordance with the terms hereof, to make Swingline Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed the lesser of
(i) $25,000,000 and (ii) the difference between (x) the aggregate Revolving
Credit Commitments at such time and (y) the sum of (A) the aggregate principal
amount of Revolving Loans outstanding at such time and (B) the LC Exposure at
such time.  Each Swingline Loan shall be in a principal amount that is an
integral multiple of $250,000.  The Swingline Lender shall make each Swingline
Loan available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender by 3:00 p.m. on the date such
Swingline Loan is requested to be made pursuant to paragraph (b) below.  Within
the limits set forth in the first sentence of this paragraph, the Borrower may
borrow, pay or prepay and reborrow Swingline Loans prior to the Revolving Credit
Maturity Date on the terms and subject to the conditions and limitations set
forth herein.

          (b)  The Borrower shall give the Administrative Agent telephonic,
written or telecopy notice (in the case of telephonic notice, such notice shall
be promptly confirmed by telecopy) not later than 11:00 a.m., New York City
time, on the day of a proposed borrowing.
<PAGE>

                                                                              58

Such notice shall be delivered on a Business Day, shall be irrevocable and shall
refer to this Agreement and shall specify the requested date (which shall be a
Business Day) and amount of such Swingline Loan. The Administrative Agent shall
promptly advise the Swingline Lender of any notice received from the Borrower
pursuant to this paragraph (b).

          (c)  The Swingline Lender may by written or telecopy notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to purchase all or any portion of the Swingline
Loans outstanding.  Such notice shall specify the aggregate amount of Swingline
Loans to be purchased and the Administrative Agent shall promptly upon receipt
of such notice give notice to each Lender, specifying in such notice to each
Lender such Lender's pro rata percentage (based on the percentage that such
Lender's Revolving Credit Commitment bears to the aggregate amount of the
Revolving Credit Commitments on the date of such notice) of such Swingline Loan
or Swingline Loans.  Each Lender shall pay to the Administrative Agent, not
later than 2:00 p.m., New York City time, on the date of such notice, such
Lender's pro rata percentage (determined as aforesaid) of the principal amount
of such Swingline Loan or Swingline Loans.  Each such payment shall for all
purposes hereunder be deemed to be an ABR Revolving Loan (it being understood
that (i) each Lender's obligation to make such payment is absolute and
unconditional and shall not be affected by any event or circumstance whatsoever,
including the occurrence of any Default or Event of Default hereunder or the
failure of any condition precedent set forth in Article V to be satisfied, and
(ii) each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever).  The Administrative Agent shall promptly advise the
Borrower of any notice received from the Swingline Lender pursuant to this
paragraph (c).

          (d)  The Borrower may prepay any Swingline Loan in whole or in part at
any time without premium or penalty, provided that the Borrower shall have given
the Administrative Agent written or telecopy notice (or telephone notice
promptly confirmed in writing or by telecopy) of such prepayment not later than
11:00 a.m., New York City time, on the Business Day designated by the Borrower
for such prepayment.


                                  ARTICLE III

                               Letters of Credit
                               -----------------

          SECTION  3.01.  Issuance of Letters of Credit.  (a)  The Fronting Bank
                          ------------------------------
agrees, upon the receipt of an appropriately completed and properly authorized
Letter of Credit Application, in a form and containing terms and conditions that
are reasonably acceptable to the Fronting Bank and consistent with the terms
hereof, and on the terms and subject to the conditions hereinafter set forth, to
issue Letters of Credit for the account of the Borrower, at any time and from
time to time on and after the Closing Date until the earlier of (i) the LC
Maturity Date and (ii) the termination of the LC Commitment in accordance with
the terms hereof; provided, however, that any Letter of Credit shall be issued
only if,
<PAGE>

                                                                              59

and each request by the Borrower for the issuance of any Letter of Credit shall
be deemed a representation and warranty of the Borrower that, immediately
following the issuance of any such Letter of Credit, (x) the LC Exposure at such
time shall not exceed the LC Commitment in effect at such time and (y) the
aggregate principal amount of Revolving Loans and Swingline Loans outstanding at
such time plus the LC Exposure at such time shall not exceed the aggregate
Revolving Credit Commitments in effect at such time. The Borrower, the Fronting
Bank and the Lenders acknowledge the issuance of the Letters of Credit which are
outstanding on the Second Restatement Date in accordance with the terms of the
Existing Credit Agreement and listed on Schedule 1.01(a) and that such Letters
of Credit shall continue to be outstanding pursuant to the terms and conditions
of this Agreement and the other Loan Documents.

          (b)  No Letter of Credit shall be issued with a stated expiration date
later than the earlier of (i) the close of business on the LC Maturity Date and
(ii) the close of business on the date that is (x) 270 days after the date of
issuance of such Letter of Credit, in the case of a Trade Letter of Credit and
(y) 12 months after the date of issuance of such Letter of Credit, in the case
of a Standby Letter of Credit.  Each Letter of Credit shall provide for payments
of drawings in dollars.

          (c)  Each Trade Letter of Credit shall, among other things, provide
for the payment of sight drafts when presented for honor thereunder, or of time
drafts with a maturity date occurring not later than the earlier of (i) 120 days
after the presentation thereof and (ii) the LC Maturity Date, in each case in
accordance with the terms thereof and when accompanied by the required documents
or when such documents are presented to the Fronting Bank.

          (d)  Each Standby Letter of Credit may, in the absolute discretion of
the Fronting Bank, include a provision whereby such Standby Letter of Credit
shall be renewed automatically for additional consecutive periods of 12 months
or less (but not beyond the LC Maturity Date) unless the Fronting Bank notifies
the beneficiary thereof at least 60 days prior to the then-applicable expiry
date that such Standby Letter of Credit will not be renewed.

          (e)  The Borrower may request the extension or renewal of a Standby
Letter of Credit that is not automatically renewed in accordance with the terms
contained therein by giving written notice to the Fronting Bank at least three
Business Days prior to the then-current expiry date of such Standby Letter of
Credit (provided that the Fronting Bank may accommodate requests on shorter
notice in its sole discretion).  If no Default or Event of Default has occurred
and is continuing, the Fronting Bank shall promptly issue such extension or
renewal; provided, however, that the Fronting Bank shall have no obligation to
extend or renew any Standby Letter of Credit (i) for a period in excess of 12
months or (ii) to an expiry date beyond the LC Maturity Date.

          (f)  Each request for the issuance of a Letter of Credit shall be made
by a written or facsimile authenticated Letter of Credit Application from the
Borrower to the
<PAGE>

                                                                              60

Fronting Bank specifying whether such Letter of Credit is to be a Trade Letter
of Credit or a Standby Letter of Credit (and if such Letter of Credit is to be a
Standby Letter of Credit, the date on which such Standby Letter of Credit is to
be issued), the date on which such Letter of Credit is to expire, the amount of
such Letter of Credit, the name and address of the beneficiary of such Letter of
Credit and such other information as may be necessary or desirable to complete
such Letter of Credit. The Fronting Bank will provide the Administrative Agent
on the first Business Day of each week (or on a more frequent basis if
reasonably requested by the Administrative Agent) a statement setting forth the
aggregate face amount of the Outstanding Standby Letters of Credit issued by it
and the aggregate face amount of the Outstanding Trade Letters of Credit for
each day since the end of the period covered by the prior such statement,
together with such other information regarding the Outstanding Letters of Credit
as may be reasonably requested by the Administrative Agent.

          SECTION  3.02.  Participations; Unconditional Obligations.  (a)  By
                          ------------------------------------------
the issuance of a Letter of Credit and without any further action on the part of
the Fronting Bank or the Participating Lenders in respect thereof, the Fronting
Bank hereby grants to each Participating Lender, and each Participating Lender
hereby agrees to acquire from the Fronting Bank, a participation in such Letter
of Credit equal to such Participating Lender's Applicable Percentage of the face
amount of such Letter of Credit effective upon the issuance of such Letter of
Credit.  In addition, the Fronting Bank hereby grants to each Participating
Lender, and each Participating Lender hereby acquires from the Fronting Bank, a
participation in each Prior Letter of Credit equal to such Participating
Lender's Applicable Percentage of the face amount of such Prior Letter of
Credit, effective on the Closing Date.  In consideration and in furtherance of
the foregoing, each Participating Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, on behalf of the Fronting Bank, in
accordance with Section 2.02(e), such Participating Lender's Applicable
Percentage of each LC Disbursement made by the Fronting Bank; provided, however,
that the Participating Lenders shall not be obligated to make any such payment
to the Fronting Bank with respect to any wrongful payment or disbursement made
under any Letter of Credit as a result of the gross negligence or wilful
misconduct of the Fronting Bank.

          (b)  Each Participating Lender acknowledges and agrees that its
obligation to acquire participations pursuant to paragraph (a) above in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or Event of Default hereunder or the termination of the LC Commitment or
the Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

          SECTION  3.03.  LC Fee.  The Borrower agrees to pay to the
                          --------
Administrative Agent for the account of the Participating Lenders for each
calendar quarter (or shorter period ending with the first date on which the LC
Commitment shall have expired or been terminated and there shall be no
Outstanding Letters of Credit) a fee (the "LC Fee") on the average daily amount
                                           ------
of the aggregate Outstanding Letters of Credit issued for the account of the
Borrower during such quarter or shorter period at a rate per annum equal to the
higher
<PAGE>

                                                                              61


of (i) the weighted average LIBOR Spread applicable to Eurodollar Revolving
Loans during such period minus 1/2 of 1% and (ii) 1%. The LC Fee shall be
computed on the basis of the actual number of days elapsed over a year of 360
days. The Administrative Agent agrees to disburse to each Participating Lender
its pro rata portion of such LC Fee promptly upon receipt. The LC Fee shall be
paid in arrears on each March 31, June 30, September 30 and December 31 and on
the LC Maturity Date (or the first date on which the LC Commitment shall have
expired or been terminated and there shall be no Outstanding Letters of Credit,
if earlier). Once paid, the LC Fee shall not be refundable in any circumstances
(other than corrections of error in payment).

          SECTION  3.04.  Agreement to Repay LC Disbursements.  (a)  If the
                          ------------------------------------
Fronting Bank shall pay any draft presented under a Letter of Credit, the
Borrower shall pay to the Fronting Bank an amount equal to the amount of such
draft not later than two hours after the Borrower shall have received notice
from the Fronting Bank that payment of such draft will be made or, if the
Borrower shall have received such notice later than 10:00 a.m., New York City
time, on any Business Day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day.

          (b)  The Borrower's obligation to repay the Fronting Bank for LC
Disbursements made by the Fronting Bank under the Outstanding Letters of Credit
for the account of the Borrower shall be absolute, unconditional and irrevocable
under any and all circumstances and irrespective of:

          (i)  any lack of validity or enforceability of any Letter of Credit;

          (ii)  the existence of any claim, setoff, defense or other right that
     the Borrower or any other Person may at any time have against the
     beneficiary under any Letter of Credit, the Fronting Bank, the
     Administrative Agent, any Lender or any other Person (other than the
     defense of payment in accordance with the terms of this Agreement or a
     defense based on the gross negligence or wilful misconduct of the Fronting
     Bank) in connection with this Agreement or any other agreement or
     transaction;

          (iii)  any draft or other document presented under a Letter of Credit
     proving to be forged, fraudulent, invalid or insufficient in any respect or
     any statement therein being untrue or inaccurate in any respect, provided
     that payment by the Fronting Bank under such Letter of Credit against
     presentation of such draft or document shall not have constituted gross
     negligence or wilful misconduct of the Fronting Bank;

          (iv)  payment by the Fronting Bank under a Letter of Credit against
     presentation of a draft or other document that does not comply with the
     terms of such Letter of Credit, provided that such payment shall not have
     constituted gross negligence or wilful misconduct of the Fronting Bank; and
<PAGE>

                                                                              62

          (v)  any other circumstance or event whatsoever, whether or not
     similar to any of the foregoing, provided that such circumstance or event
     shall not have been the result of gross negligence or wilful misconduct of
     the Fronting Bank.

It is understood that in making any payment under a Letter of Credit (i) the
Fronting Bank's exclusive reliance on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including reliance
on the amount of any draft presented under such Letter of Credit, whether or not
the amount due to the beneficiary equals the amount of such draft and whether or
not any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever,
and (ii) any noncompliance in any immaterial respect of the documents presented
under a Letter of Credit with the terms thereof shall, in each case, not be
deemed wilful misconduct or gross negligence of the Fronting Bank.

          SECTION  3.05.  Letter of Credit Operations.  The Fronting Bank shall,
                          ----------------------------
within a reasonable time after its receipt thereof, examine all documents
purporting to represent a demand for payment under an Outstanding Letter of
Credit to ascertain that the same appear on their face to be in conformity with
the terms and conditions of such Outstanding Letter of Credit.  The Fronting
Bank shall as promptly as possible give electronic or facsimile notification or
telephonic notification, promptly confirmed by electronic or facsimile notice,
to the Borrower of such demand for payment and of the determination by the
Fronting Bank as to whether such demand for payment was in conformity with such
terms and conditions, and shall as promptly as possible give prior telephonic
notification to the Borrower of the determination by the Fronting Bank as to
whether such demand for payment was in accordance with the terms and conditions
of such Outstanding Letter of Credit and whether the Fronting Bank has made or
will make an LC Disbursement thereunder, provided that the failure to give such
notice shall not relieve the Borrower of its obligation to reimburse the
Fronting Bank with respect to any such LC Disbursement.

          SECTION  3.06.  Termination of LC Commitment.  The Borrower may
                          -----------------------------
permanently terminate, or from time to time in part permanently reduce, the LC
Commitment, in each case upon at least three Business Days' prior written or
facsimile notice to the Administrative Agent and the Fronting Bank, provided
that, after giving effect to such termination or reduction, the LC Commitment
shall not be less than the LC Exposure at such time or greater than the
available Revolving Credit Commitments at such time.

          SECTION  3.07.  Fronting Bank Fees.  (a)  The Borrower shall pay to
                          -------------------
the Fronting Bank, for its own account, such commissions, issuance fees,
transfer fees and other fees and charges in connection with the issuance or
administration of each Letter of Credit as the Borrower and the Fronting Bank
shall agree upon.
<PAGE>

                                                                              63

          (b)  The Borrower shall pay to the Fronting Bank, for its own account,
a fronting fee on the average daily aggregate maximum amount available to be
drawn (assuming compliance with all conditions to drawing) under all Outstanding
Letters of Credit issued by the Fronting Bank, at a rate per annum agreed upon
by the Borrower and the Fronting Bank, payable in arrears on each March 31, June
30, September 30 and December 31, and on the LC Maturity Date.  Such fronting
and origination fees shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.

          SECTION  3.08.  Resignation or Removal of the Fronting Bank.  (a)  The
                          --------------------------------------------
Fronting Bank may resign at any time by giving 180 days' prior written notice to
the Administrative Agent, the Lenders and the Borrower, and may be removed at
any time by the Borrower by notice to the Fronting Bank, the Administrative
Agent and the Lenders.  Upon any such resignation or removal, the Borrower shall
(within 180 days after such notice of resignation or removal) either (i) appoint
a Lender (with the consent of such Lender) as successor or (ii) terminate the
unutilized LC Commitment; provided, however, that if the Borrower elects to
terminate the unutilized LC Commitment, the Borrower may at any time thereafter
that the Revolving Credit Commitments are in effect reinstate the LC Commitment,
by notice to the Administrative Agent and the Lenders, in connection with the
appointment of a Lender as successor Fronting Bank.  Subject to paragraph (b)
below, upon the acceptance of any appointment as the Fronting Bank hereunder by
a successor Fronting Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Fronting Bank and
the retiring Fronting Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder.  At the time such removal or resignation
shall become effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(c).  The acceptance of any appointment as the Fronting
Bank hereunder by a successor Lender shall be evidenced by an agreement entered
into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Fronting Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term "Fronting
Bank" shall be deemed to refer to such successor or to any previous Fronting
Bank, or to such successor and all previous Fronting Banks, as the context shall
require.

          (b)  After the resignation or removal of the Fronting Bank hereunder,
the retiring Fronting Bank shall remain a party hereto and shall continue to
have all the rights and obligations of the Fronting Bank under this Agreement
and the other Loan Documents with respect to Letters of Credit issued by it
prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.

          SECTION  3.09.  Cash Collateralization.  If any Event of Default shall
                          -----------------------
occur and be continuing, the Borrower shall, on the Business Day it receives
notice from the Administrative Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Participating Lenders holding
participations in Outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all Outstanding Letters of Credit) thereof and
the amount to be deposited, deposit in an account with the Collateral
<PAGE>

                                                                              64

Agent, for the benefit of the Participating Lenders, an amount in cash equal to
the LC Exposure as of such date. Such deposit shall be held by the Collateral
Agent as collateral for the payment and performance of the Obligations. The
Collateral Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits in Permitted Investments, which investments
shall be made at the option and sole discretion of the Collateral Agent, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall (a)
automatically be applied by the Administrative Agent to reimburse the Fronting
Bank for LC Disbursements for which it has not been reimbursed, (b) be held for
the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time and (c) if the maturity of the Loans has been accelerated
(but subject to the consent of Participating Lenders holding participations in
Outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all Outstanding Letters of Credit), be applied to satisfy the
Obligations. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

          SECTION  3.10.  Additional Fronting Banks.  The Borrower may, at any
                          --------------------------
time and from time to time with the consent of the Senior Managing Agents (which
consent shall not be unreasonably withheld) and such Lender, designate one or
more additional Lenders to act as a fronting bank under the terms of this
Agreement.  Any Lender designated as a fronting bank pursuant to this Section
3.10 shall be deemed to be the "Fronting Bank" (in addition to being a Lender)
in respect of Letters of Credit issued or to be issued by such Lender, and, with
respect to such Letters of Credit, such term shall thereafter apply to the
Fronting Bank and such Lender.


                                  ARTICLE IV

                              Representations and Warranties
                              ------------------------------

Each of SSCC, JSCE and the Borrower represents and warrants to each of the
Lenders, the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank and the Swingline Lender that:

          SECTION  4.01.  Organization; Powers.  Each of the Loan Parties (a) is
                          ---------------------
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted, (c) is qualified to do business in every jurisdiction where such
qualification is required by the nature of its business, the character and
location of its property, business or customers, or the ownership or leasing of
its properties, except for such jurisdictions in which the failure so to
qualify, in the aggregate,
<PAGE>

                                                                              65

could not reasonably be expected to result in a Material Adverse Effect, and (d)
has the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party and, in the
case of the Borrower, to borrow hereunder.

          SECTION  4.02.  Authorization.  The execution, delivery and
                          --------------
performance by each of the Loan Parties of each of the Loan Documents to which
it is a party, the Borrowings hereunder, the issuance of the Letters of Credit,
the use of the proceeds of the Loans, the Swingline Loans and the Letters of
Credit, the creation of the security interests contemplated by the Security
Documents, the Second Restatement Date Transactions and the other transactions
contemplated by the Loan Documents (all the foregoing, collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate and, if
required, stockholder action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, other than any law, statute, rule or
regulation the violation of which could not reasonably be expected to result in
a Material Adverse Effect, or of the certificate of incorporation or other
constitutive documents or by-laws of any Loan Party or any of their respective
Subsidiaries, (B) any order of any Governmental Authority or (C) any provision
of any indenture or other material agreement or other material instrument to
which any Loan Party or any of their respective Subsidiaries is a party or by
which any of them or any of their property is or may be bound, (ii) constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or (iii) result in the creation or
imposition of any Lien (other than any Lien created hereunder or under the
Security Documents) upon or with respect to any property or assets now owned or
hereafter acquired by any Loan Party or any of their respective Subsidiaries.

          SECTION  4.03.  Enforceability.  This Agreement has been duly executed
                          ---------------
and delivered by the Borrower, SSCC and JSCE and constitutes, and each other
Loan Document when executed and delivered by SSCC, JSCE and the Borrower and
each Loan Party signatory thereto will constitute, a legal, valid and binding
obligation of SSCC, JSCE, the Borrower and the Loan Parties, as applicable,
enforceable against each of them in accordance with its terms (a) except as the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) subject to general principles of
equity.

          SECTION  4.04.  Governmental Approvals.  No action, consent or
                          -----------------------
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) recordation of modifications to the Mortgages and (b) such actions,
consents, approvals, registrations and filings as have been made or obtained and
are in full force and effect.

          SECTION  4.05.  Financial Statements.  Each of SSCC, JSCE and the
                          ---------------------
Borrower has delivered to the Lenders the audited financial statements of such
Person for the fiscal year ended December 31, 2000, together with such Person's
annual report on Form 10-K, if any, filed with the Securities and Exchange
Commission.  All financial statements
<PAGE>

                                                                              66

set forth or referred to in the materials specified in the preceding sentence
were prepared in conformity with GAAP. All such financial statements fairly
present the consolidated financial position of such Person and its Subsidiaries
as at the date thereof and the consolidated results of operations and changes in
financial position of such Person and its Subsidiaries for each of the periods
covered thereby. Except as disclosed in such financial statements, none of SSCC,
JSCE or the Borrower or any of their respective Subsidiaries had, at the date of
such financial statements or on the Second Restatement Date, as the case may be,
any material contingent obligation, material contingent liability or material
liability for taxes, long-term lease or unusual forward or long-term commitment
or obligations to retired employees for medical or other employee benefits that
is not reflected in the foregoing financial statements or the notes thereto.

          SECTION  4.06.  No Material Adverse Change.  There has been no
                          ---------------------------
material adverse change in the business, assets, operations, properties,
prospects or condition (financial or otherwise) of SSCC and its consolidated
Subsidiaries, taken as a whole, since December 31, 2000.

          SECTION  4.07.  Title to Properties; Possession Under Leases. (a)
                          ---------------------------------------------
Each of SSCC, JSCE and the Borrower and their respective Subsidiaries has good
and marketable title to, or valid leasehold interests in, all its material
properties and assets, except for minor defects in title that do not interfere
in any material respect with its ability to conduct its business as currently
conducted. All such title to, or leasehold interest in, material properties and
assets are free and clear of Liens, other than Liens expressly permitted by
Section 7.02 (none of which is superior to the Liens created hereunder or under
the Security Documents) and Liens with respect to which the Collateral Agent has
received on or prior to the Closing Date duly executed releases and termination
statements in connection therewith.

          (b)  Each of SSCC, JSCE and the Borrower and their respective
Subsidiaries has complied with all obligations under all material leases to
which it is a party and enjoys peaceful and undisturbed possession under all
such material leases necessary in any material respect for the operation of
their respective properties and assets.

          SECTION  4.08.  Subsidiaries.  Schedule 4.08 sets forth as of the
                          -------------
Second Restatement Date a list of all the Subsidiaries of SSCC, JSCE and the
Borrower, their jurisdiction of organization and the percentage ownership
interest of each of them and any other Subsidiary therein.  The capital stock of
each of the Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and, except as set forth on Schedule 4.08, is owned free and clear
of all Liens other than nonconsensual Permitted Liens arising other than as a
result of a voluntary act of SSCC, JSCE or the Borrower.  No authorized but
unissued treasury shares of capital stock of the Borrower or any such Subsidiary
are subject to any option, warrant, right to call or commitment of any kind or
character except as set forth on Schedule 4.08.
<PAGE>

                                                                              67

          SECTION  4.09.  Litigation; Compliance with Laws.  (a)  Except as set
                          ---------------------------------
forth in Schedule 4.09, there are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of SSCC, JSCE or the Borrower, threatened against or affecting SSCC,
JSCE or the Borrower or any of their respective Subsidiaries or any business or
property of any such Person that (i) involve any Loan Document or the
Transactions or (ii) could reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect.

          (b)  Neither SSCC, JSCE, the Borrower and their respective
Subsidiaries nor any of their respective properties or assets is (i) in
violation of, nor will the continued operation of their properties and assets as
currently conducted violate, any law, rule, regulation, statute (including any
zoning, building, environmental and safety law, ordinance, code or approval or
any building permits) or any restrictions of record or agreements affecting the
Mortgaged Properties, where such violations could reasonably be expected to have
a material adverse effect on the value, use or operation of any such Mortgaged
Property or (ii) in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such defaults, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.  The issuance of the Letters of Credit will not violate any
applicable law or regulation or violate or be prohibited by any judgment, writ,
injunction, decree or order of any Governmental Authority.

          SECTION  4.10.  Agreements.  None of SSCC, JSCE or the Borrower or any
                          -----------
of their respective Subsidiaries is in default under any provision of any
indenture or other agreement or instrument evidencing Indebtedness, or any other
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could reasonably be
expected to result in a Material Adverse Effect.

          SECTION  4.11.  Federal Reserve Regulations.  (a)  None of SSCC, JSCE
                          ----------------------------
or the Borrower or any of their respective Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.

          (b)  No part of the proceeds of any Letter of Credit or any Loan or
Swingline Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) to purchase or carry Margin Stock
or to extend credit to others for the purpose of purchasing or carrying Margin
Stock or to refund indebtedness originally incurred for such purpose or (ii) for
any purpose that entails a violation of, or is inconsistent with, the provisions
of the Regulations of the Board, including Regulation T, U or X.

          SECTION  4.12.  Investment Company Act; Public Utility Holding Company
                          ------------------------------------------------------
Act.  None of SSCC, JSCE or the Borrower or any of their respective Subsidiaries
----
(a) is an "investment company" as defined in, or is subject to regulation under,
the Investment Company Act of 1940 or (b) is a "holding company" as defined in,
or is subject to regulation under, the Public Utility Holding Company Act of
1935.
<PAGE>

                                                                              68

          SECTION  4.13.  Use of Proceeds.  The Borrower will use the proceeds
                          ----------------
of the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.

          SECTION  4.14.  Tax Returns.  Each of SSCC, JSCE and the Borrower and
                          ------------
their respective Subsidiaries has filed or caused to be filed all Federal, state
and local income and other material tax returns required to have been filed by
it or with respect to it and has paid or caused to be paid all taxes shown to be
due and payable on such returns or on any assessments received by it or with
respect to it, except taxes that are being contested in good faith by
appropriate proceedings and for which it has set aside on its books adequate
reserves in accordance with GAAP.

          SECTION  4.15.  No Material Misstatements.  The information provided
                          --------------------------
by or on behalf of the Loan Parties and contained in the Confidential
Information Memorandum (including all attachments and exhibits thereto), as
supplemented, and as supplemented further by information heretofore provided in
writing by or on behalf of the Loan Parties to the Lenders and any other
materials, documents and information that the Loan Parties or any of their
respective Affiliates may have furnished to the Lenders, was as of the date of
such Confidential Information Memorandum, the dates otherwise specified therein
or the dates upon which such information was provided, accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, taken as a whole, not misleading,
provided that to the extent any such information therein was based upon or
constitutes a forecast or projection, SSCC, JSCE and the Borrower represent only
that they acted in good faith and utilized reasonable assumptions, due and
careful consideration and the information actually known to Responsible Officers
at the time in the preparation of such information.

          SECTION  4.16.  Employee Benefit Plans.  Each of SSCC, JSCE and the
                          -----------------------
Borrower and their respective ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder.  No Reportable Event has
occurred in respect of any Plan of SSCC, JSCE or the Borrower or any ERISA
Affiliate. The present value of all benefit liabilities of all underfunded Plans
(based on those assumptions used to fund each such Plan) did not, as of the last
annual valuation dates applicable thereto, exceed the value of the assets of the
Plans by an amount that could reasonably be expected to result in a Material
Adverse Effect.  No Plan of SSCC, JSCE or the Borrower or any ERISA Affiliate is
reasonably likely to have an unfunded benefit liability that could result in a
Material Adverse Effect.  None of SSCC, JSCE or the Borrower or any ERISA
Affiliate has incurred any Withdrawal Liability that could result in a Material
Adverse Effect.  None of SSCC, JSCE or the Borrower or any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated within the meaning of Title IV of ERISA and no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated where
<PAGE>

                                                                              69

such reorganization or termination has resulted or could reasonably be expected
to result, through increases in the contributions required to be made to such
Plan or otherwise, in a Material Adverse Effect.

          SECTION  4.17.  Environmental and Safety Matters.  Except as set forth
                          ---------------------------------
on Schedule 4.17:

          (a)  Each of SSCC, JSCE and the Borrower and each of their respective
Subsidiaries has obtained all permits, licenses and other authorizations that
are required and material with respect to the operation of the business of SSCC
and its Subsidiaries, taken as a whole, under any Environmental Law, and each
such permit, license and authorization is in full force and effect.

          (b)  Each of SSCC, JSCE and the Borrower and each of their respective
Subsidiaries is in compliance with all material terms and conditions of the
permits, licenses and authorizations specified in Section 4.17(a), and is also
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any Environmental Law applicable to it and its business, assets, operations and
properties, including those arising under the Resource Conservation and Recovery
Act of 1976, as amended, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("CERCLA"), the Federal Water Pollution Control Act,
the Federal Clean Air Act, and the Toxic Substances Control Act and any
analogous or comparable state laws, except for such instances of noncompliance
that could not reasonably be expected to result in a Material Adverse Effect.

          (c)  There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the knowledge of
SSCC, JSCE or the Borrower or any of their respective Subsidiaries, after
inquiry, threatened against SSCC, JSCE or the Borrower or any of their
respective Subsidiaries under any Environmental Law that could reasonably be
expected to result in a Material Adverse Effect.

          (d)  None of SSCC, JSCE, the Borrower or any of their respective
Subsidiaries has received notice that it has been identified as a potentially
responsible party under CERCLA or any comparable state law, nor has SSCC, JSCE,
the Borrower or any of their respective Subsidiaries received any notification
that any hazardous substances or any pollutant or contaminant, as defined in
CERCLA and its implementing regulations, or any toxic substance, hazardous
waste, hazardous constituents, hazardous materials, asbestos or asbestos
containing material, polychlorinated biphenyls, petroleum, including crude oil
and any fractions thereof, or other wastes, chemicals, substances or materials
regulated by any Environmental Laws (collectively, "Hazardous Materials") that
it or any of their respective predecessors in interest has used, generated,
stored, tested, handled, transported or disposed of, has been found at any site
at which any Governmental Authority or private party is
<PAGE>

                                                                              70

conducting a remedial investigation or other action pursuant to any
Environmental Law, except in each case for any such notices received after the
Second Restatement Date that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

          (e)  There have been no releases or threatened releases (in each case
as defined in CERCLA) of Hazardous Materials by SSCC, JSCE, the Borrower or any
of their respective Subsidiaries on, upon, into or from any of the Real
Properties, which releases or threatened releases could reasonably be expected
to result in a Material Adverse Effect.  To the best knowledge of SSCC, JSCE,
the Borrower and each of their respective Subsidiaries, there have been no such
releases or threatened releases on, upon, under or into any real property in the
vicinity of any of the Real Properties that, through soil, surface water or
groundwater migration or contamination, may be located on, in or under such Real
Properties and which could reasonably be expected to result in a Material
Adverse Effect.

          (f)  To the best knowledge of SSCC, JSCE, the Borrower or any of their
respective Subsidiaries, there is no asbestos in, on, or at any Real Properties
or any facility or equipment of SSCC, JSCE, the Borrower, or any of their
respective Subsidiaries, except to the extent that the presence of such material
could not reasonably be expected to result in a Material Adverse Effect.

          (g)  To the best knowledge of SSCC, JSCE, the Borrower and each of
their respective Subsidiaries after due inquiry, none of the Real Properties of
SSCC, JSCE, the Borrower or any of their respective Subsidiaries is (i) listed
or proposed for listing on the National Priorities List under CERCLA or (ii)
listed in the Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA, or on any comparable
list maintained by any Governmental Authority.

          (h)  There are no past or current events, conditions, circumstances,
activities, practices, incidents, actions or plans that could reasonably be
anticipated to interfere with or prevent compliance with any Environmental Law,
or which may give rise to liability under any Environmental Law, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing or notice
of violation, study or investigation, based on or related to the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport, shipping or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Material that could
reasonably be expected to result in a Material Adverse Effect.

          SECTION  4.18.  Solvency.  After giving effect to the Second
                          ---------
Restatement Date Transactions, (a) the fair salable value of the assets of SSCC,
JSCE and the Borrower and their respective Subsidiaries, on a consolidated
basis, will exceed the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent liabilities)
of SSCC, JSCE and the Borrower and their respective Subsidiaries, on a
consolidated basis, as they mature, (b) the assets of SSCC, JSCE and the
Borrower and
<PAGE>

                                                                              71


their respective Subsidiaries, on a consolidated basis, will not constitute
unreasonably small capital to carry out their businesses as conducted or as
proposed to be conducted, including the capital needs of SSCC, JSCE and the
Borrower and their respective Subsidiaries, on a consolidated basis (taking into
account the particular capital requirements of the businesses conducted by such
entities and the projected capital requirements and capital availability of such
businesses) and (c) none of SSCC, JSCE or the Borrower intend to, nor do they
intend to permit any of their respective Subsidiaries to, and do not believe
that any of them or any such Subsidiary will, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be received by each of them or any such Subsidiary and the amounts to be
payable on or in respect of its obligations).

          SECTION  4.19.  Security Documents.  (a)  The Pledge Agreement creates
                          -------------------
in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and proceeds thereof and constitutes a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the Loan Parties party thereto, as applicable, in such Collateral
and the proceeds thereof, in each case prior and superior in right to any other
Person.

          (b)  The Security Agreement creates in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the Security Agreement) and
proceeds thereof, and assuming that financing statements in appropriate form
have been filed in the offices specified on Schedule 4.19(b), the Lien created
under the Security Agreement constitutes a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof (except insofar as the perfection of a Lien
on, and security interest in, such Collateral is obtained as described in
paragraph (d) below), in each case prior and superior in right to any other
Person.

          (c)  The Mortgages create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on
all of the Borrower's right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are filed
in the offices specified on Schedule 4.19(c), the Mortgages will constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Borrower in such Mortgaged Properties and the proceeds thereof, in each
case prior and superior in right to any other Person.

          (d)  The Trademark Security Agreement creates in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Trademark
Security Agreement) and the proceeds thereof, and assuming the recordation of
such Trademark Security Agreement with the United States Patent and Trademark
Office and the United States Copyright Office, together with financing
statements in appropriate form filed in the offices specified on Schedule
4.19(d), the Liens created under the Trademark Security Agreement constitute a
fully
<PAGE>

                                                                              72

perfected Lien on, and security interest in, all right title and interest of the
Loan Parties in the Collateral and the proceeds thereof in which a security
interest may be perfected by filing in the United States and its territories and
possessions, in each case prior and superior in right to any other Person (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary to
perfect a Lien on registered trademarks, trademark applications and copyrights
acquired by the Loan Parties after the Closing Date).

          (e)  The SNC Security Agreement creates in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the SNC Security
Agreement) and proceeds thereof, and assuming that financing statements in
appropriate form have been filed in the offices specified on Schedule 4.19(e),
the Lien created under the SNC Security Agreement constitutes a fully perfected
Lien on, and security interest in, all right, title and interest of SNC in such
Collateral, in each case prior and superior in right to any other Person.

          SECTION  4.20.  Labor Matters.  As of the Second Restatement Date,
                          --------------
there are no strikes, lockouts or slowdowns against SSCC, JSCE or the Borrower
or any of their respective Subsidiaries pending or, to the knowledge of SSCC,
JSCE or the Borrower, threatened, except as set forth on Schedule 4.20.  The
hours worked by and payment made to employees of SSCC, JSCE or the Borrower have
not been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, where such
violations could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.  The consummation of the Transactions will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which SSCC, JSCE or the
Borrower or any of their respective Subsidiaries is a party or by which SSCC,
JSCE or the Borrower or any of their respective Subsidiaries is bound on the
Second Restatement Date.

          SECTION  4.21.  Location of Real Property.  (a)  Schedule 4.21(a) sets
                          --------------------------
forth completely and correctly as of the Second Restatement Date all material
real property owned by SSCC, JSCE or the Borrower or any of their respective
Subsidiaries, the addresses thereof and the county or counties in which such
properties are situated.  All the real property set forth on Schedule 4.21(a) is
owned in fee by SSCC, JSCE or the Borrower or their respective Subsidiaries.

          (b)  Schedule 4.21(b) sets forth completely and correctly as of the
Second Restatement Date all material real property leased by SSCC, JSCE or the
Borrower or any of their respective Subsidiaries, the addresses thereof and the
county or counties in which such properties are situated.  SSCC, JSCE or the
Borrower or one of their respective Subsidiaries has a valid lease in all the
Real Property set forth on Schedule 4.21(b).

          (c)  Schedule 4.21(c) sets forth completely and correctly as of the
Second Restatement Date all material Timberland Property, if any, owned by SSCC,
JSCE or the
<PAGE>

                                                                              73

Borrower or any of their respective Subsidiaries, the county or counties in
which such Timberland Property is situated and the approximate acreage of such
Timberland Property in such county or counties. All the Timberland Property set
forth on Schedule 4.21(c) is owned in fee by SSCC, JSCE or the Borrower or their
respective Subsidiaries.

          SECTION  4.22.  Patents, Trademarks, etc.  Each of SSCC, JSCE and the
                          -------------------------
Borrower and each of their respective Subsidiaries owns, or is licensed to use,
all patents, trademarks, trade names, copyrights, technology, know-how and
processes, service marks and rights with respect to the foregoing that are (a)
used in or necessary for the conduct of their respective businesses as currently
conducted and (b) material to the business, assets, operations, properties,
prospects or condition (financial or otherwise) of such Person and its
Subsidiaries taken as a whole.  The use of such patents, trademarks, trade
names, copyrights, technology, know-how, processes and rights with respect to
the foregoing by such Person and its Subsidiaries does not infringe on the
rights of any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of any such Person and its
respective Subsidiaries that is material to such Person and its Subsidiaries,
taken as a whole.  To the best knowledge of each of SSCC, JSCE and the Borrower,
its rights and the rights of its Subsidiaries to sell, franchise or license
under such brand names then being used may be transferred in connection with any
sale of assets or stock of the related business by such Person or any of its
Subsidiaries with only such exceptions as would not be material to the Borrower
and its Subsidiaries, in each case, taken as a whole.

          SECTION  4.23.  Survival of Warranties.  All representations and
                          -----------------------
warranties contained in the Existing Credit Agreement, this Agreement and the
other Loan Documents shall survive the execution and delivery of this Agreement
and such other Loan Documents as the case may be, and the termination hereof and
thereof.


                                   ARTICLE V

                                  Conditions
                                  ----------

          SECTION  5.01.  All Credit Events.  The obligation of each Lender to
                          ------------------
make Loans hereunder, the obligation of the Swingline Lender to make Swingline
Loans hereunder and the obligation of the Fronting Bank to issue, amend, extend
or renew any Letter of Credit hereunder (each, a "Credit Event") is subject to
the satisfaction of the following conditions on the date of each Credit Event
(other than any Revolving Loan made pursuant to Section 2.02(e)):

          (a)  The Administrative Agent and, where applicable, the Fronting Bank
or the Swingline Lender shall have received a notice of such Credit Event as
required by Section 2.03, Section 3.01(f) and Section 2.22(b), respectively.
<PAGE>

                                                                              74

          (b)  The representations and warranties set forth in Article IV hereof
and in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date.

          (c)  At the time of and immediately after such Credit Event, no
Default or Event of Default shall have occurred and be continuing.  Each Credit
Event shall be deemed to constitute a representation and warranty by SSCC, JSCE
and the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 5.01.

          SECTION  5.02.  Second Restatement Date.  The amendments to the
                          ------------------------
Existing Credit Agreement embodied in this Agreement shall not be effective (in
which case the Existing Credit Agreement shall remain in full force and effect)
and the Tranche B Term Loans shall not be required to be funded unless and until
the following conditions precedent have been satisfied:

          (a)  The Lenders shall have received a favorable written opinion of
each of (i) Craig A. Hunt, Vice President, Secretary and General Counsel of
SSCC, JSCE, SNC and the Borrower, substantially in the form of Exhibit D-1 and
(ii) Winston & Strawn, counsel for SSCC, JSCE, SNC and the Borrower,
substantially in the form of Exhibit D-2, in each case (A) dated the Second
Restatement Date, (B) addressed to the Senior Managing Agents, the
Administrative Agent, the Managing Agents, the Fronting Bank, the Lenders, the
Swingline Lender and the Collateral Agent and (C) covering such other matters
relating to the Loan Documents and the Transactions as the Administrative Agent
shall reasonably request.  SSCC, JSCE and the Borrower hereby instruct such
counsel to deliver such opinions.

          (b)  All legal matters incident to this Agreement, the Transactions
and the Borrowings hereunder shall be reasonably satisfactory to the Tranche B
Lenders and to Cravath, Swaine & Moore, counsel for the Administrative Agent.

          (c)  The Lenders shall have received (i) a copy of the certificate of
incorporation, including all amendments thereto, of SSCC, JSCE and the Borrower,
certified as of a recent date by the Secretary of State of the state of its
organization, and a certificate as to the good standing of SSCC, JSCE and the
Borrower as of a recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of  SSCC, JSCE and the Borrower dated
the Second Restatement Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Loan Party, as in effect on the Second
Restatement Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a true
and complete copy of resolutions duly adopted by such Loan Party, authorizing
the execution, delivery and performance of the Loan Documents to which such Loan
Party is or will be a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect as of the Second Restatement Date, (C)
that the
<PAGE>

                                                                              75

certificate of incorporation of such Loan Party has not been amended since the
date shown on the certificate of good standing furnished pursuant to clause (i)
above and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in connection
herewith on behalf of such Loan Party; (iii) a certificate of another officer as
to the incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such other
documents as the Administrative Agent or its counsel may reasonably request.

          (d)  The Lenders shall have received a certificate, dated the Second
Restatement Date and signed by a Responsible Officer of each of the Loan
Parties, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 5.01.

          (e)  The Senior Managing Agents and the Administrative Agent shall
have received all Fees and any other fees or amounts due and payable on or prior
to the Second Restatement Date.

          (f)  The Reaffirmation of Guarantee shall have been duly executed by
the Guarantors and delivered to the Collateral Agent, and shall be in full force
and effect.

          (g)  All of the other Loan Documents shall be in full force and
effect.

          (h)  Each of the modifications to the Mortgages in form and substance
satisfactory to the Collateral Agent, relating to the Mortgaged Properties shall
have been duly executed by the parties thereto and delivered to the Collateral
Agent, together with assurances satisfactory to the Collateral Agent for the
recordations of the modifications to the Mortgages in the real estate records of
all appropriate jurisdictions, and the payment of such documentary, intangible
or similar taxes with respect to the Mortgaged Properties as may be necessary to
maintain the Collateral Agent's perfected security interest (including existing
priority) in the Mortgaged Properties with respect to the Obligations under this
Agreement (including, without limitation, the Tranche B Term Loans provided for
hereunder) and as may be necessary to secure the Tranche B Term Loans, and as
the Administrative Agent may otherwise reasonably request.  Notwithstanding
anything herein to the contrary, the conditions set forth above in this clause
(h) may be satisfied after the Second Restatement Date at the discretion of the
Administrative Agent.

          (i)  After giving effect to the Second Restatement Date Transactions,
no Loan Party or any Subsidiary of any Loan Party shall have any Indebtedness
other than (A) Indebtedness under the Loan Documents and (B) other Indebtedness
permitted under Section 7.01.

          (j)  There shall be no litigation or administrative proceedings or
other legal or regulatory developments, actual or threatened, that, in the
judgment of the Lenders, could reasonably to be expected to have a material
adverse effect on the business, assets, liabilities,
<PAGE>

                                                                              76

operations, properties, prospects or condition (financial or otherwise) of or
relating to (i) the Loan Parties and their respective Subsidiaries, taken as a
whole, (ii) the ability of the Loan Parties or any of their respective
Subsidiaries to perform their obligations under the Loan Documents, (iii) the
ability of the parties to consummate the Second Restatement Date Transactions or
(iv) the validity or enforceability of any of the Loan Documents or the rights,
remedies and benefits available to the Senior Managing Agents, the
Administrative Agent, the Managing Agents, the Fronting Bank, the Swingline
Lender, the Collateral Agent and the Lenders under the Loan Documents, or which
would be materially inconsistent with the assumptions underlying the projections
contained in the Confidential Information Memorandum of the Borrower dated as of
March 2001, and no injunction or other restraining order shall have been issued
or a hearing therefor be pending or noticed with respect to SSCC or any of its
subsidiaries concerning the Transactions, the Loan Documents or the transactions
contemplated hereby or thereby.

In the event that all of the foregoing conditions precedent have not been
satisfied or waived on or before May 11, 2001, this Agreement shall be of no
force and effect and the Existing Credit Agreement shall continue in full force
and effect.


                                  ARTICLE VI

                              Affirmative Covenants
                              ---------------------

          Each of SSCC, JSCE and the Borrower covenants and agrees with each
Lender, the Administrative Agent, each Senior Managing Agent and Managing Agent,
the Fronting Bank and the Swingline Lender that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or Swingline Loan or any LC Disbursement, Fees or any other
expenses or amounts payable under any Loan Document shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will, and will cause
each of its Subsidiaries to:

          SECTION  6.01.  Existence; Businesses and Properties.  (a)  Do or
                          -------------------------------------
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise permitted under Section
7.05.

          (b)  Do or cause to be done all things necessary to preserve, renew
and keep in full force and effect the rights, licenses, permits, trademarks,
trade names, privileges and franchises necessary or desirable in the normal
conduct of its business, except for any trademarks, trade names or franchises
that are not material to the business of the Borrower and its Subsidiaries taken
as a whole; maintain and operate such business in substantially the manner in
which it is currently conducted and operated; and at all times keep all property
useful and necessary in its business in good, working order and condition to the
extent required by sound business practices.
<PAGE>

                                                                              77

          SECTION  6.02.  Insurance.  Keep its insurable properties adequately
                          ----------
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies of
established repute in the same general area engaged in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it or the use of
any products sold by it; and maintain such other insurance as may be required by
law and, with respect to the Mortgaged Properties, as is required by the
Mortgages.

          SECTION  6.03.  Obligations and Taxes.  Pay and discharge promptly
                          ----------------------
when due all taxes, assessments and governmental charges or levies imposed upon
it or upon or in respect of its property or assets, as well as all claims for
labor, materials and supplies or otherwise that, if unpaid, might give rise to a
Lien upon such properties or any part thereof; provided, however, that such
payment and discharge shall not be required with respect to any such obligation,
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books, in accordance with GAAP, adequate reserves with respect
thereto and such contest operates to suspend enforcement of a Lien and, in the
case of a Mortgaged Property or other material property or asset, there is no
material risk of forfeiture of such property.

          SECTION  6.04.  Financial Statements, Reports, etc.  Furnish to the
                          -----------------------------------
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender and each Lender:

          (a)  in the case of JSCE, within 90 days after the end of each fiscal
year, its consolidated balance sheets and related statements of operations,
stockholders' equity and cash flows, showing the financial condition of such
Person and its consolidated Subsidiaries as of the close of such fiscal year and
the results of its operations and the operations of such Subsidiaries during
such year, all audited by Ernst & Young LLP or other independent auditors of
recognized national standing acceptable to the Required Lenders and accompanied
by an opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of such Person on a
consolidated basis in accordance with GAAP;

          (b)  in the case of JSCE, within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, (i) its consolidated balance
sheets and related statements of operations, stockholders' equity and cash
flows, showing the financial condition of such Person and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such fiscal quarter
and the then-elapsed portion of the fiscal year and (ii) a narrative discussion
of the results of operations of JSCE in a form reasonably satisfactory to the
Senior Managing Agents (it being understood that, in the case of clause (i)
above, such information shall be in reasonable detail
<PAGE>

                                                                              78

and certified by a Financial Officer of JSCE, as fairly presenting the financial
condition and results of operations of JSCE on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments);

          (c)  in the case of JSCE, within 30 days after the end of each month
(other than the last month of any fiscal quarter), its consolidated balance
sheets and related statements of operations, stockholders' equity and cash
flows, showing the financial condition of such Person and its consolidated
Subsidiaries as of the close of such month and the results of its operations and
the operations of such Subsidiaries during such month and the then-elapsed
portion of the fiscal year;

          (d)  concurrently with any delivery of financial statements of JSCE
under paragraph (a) or (b) above, a certificate of a Financial Officer of such
Person (i) certifying that, after due investigation and reasonable inquiry, no
Default or Event of Default has occurred or, if such a Default or Event of
Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and (ii)
setting forth computations in reasonable detail satisfactory to the Senior
Managing Agents of the ratios contemplated by Section 2.06(c) and demonstrating
compliance with the covenants contained in Sections 7.01, 7.02, 7.03, 7.04,
7.06, 7.13, 7.14 and 7.15;

          (e)  concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm opining on such
statements (which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) certifying (i) whether in connection
with its audit examination any Default or Event of Default has come to its
attention and, if such event has come to its attention, the nature and extent
thereof and (ii) that based on its audit examination, nothing has come to its
attention that leads it to believe that the information contained in the
certificate delivered therewith pursuant to paragraph (d) above is not correct;

          (f)  promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials (other than (i)
the exhibits to registration statements and (ii) any registration statements on
Form S-8 or its equivalent) filed by SSCC, JSCE, the Borrower or SNC or any of
their respective Subsidiaries with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of or all the functions of such
Commission, or with any national securities exchange, or distributed to any such
Person's shareholders (other than SSCC, JSCE, or the Borrower), as the case may
be;

          (g)  as soon as available, and in any event no later than 60 days
after each fiscal year, a consolidated annual plan, prepared in accordance with
JSCE's normal accounting procedures applied on a consistent basis, for the next
fiscal year of JSCE;

          (h)  upon the earlier of (i) 90 days after the end of each fiscal year
of JSCE and (ii) the date on which the financial statements of JSCE are
delivered pursuant to
<PAGE>

                                                                              79

paragraph (a) above, a certificate of a Financial Officer of JSCE setting forth,
in detail satisfactory to the Senior Managing Agents, the amount of Excess Cash
Flow, if any, for such fiscal year;

          promptly from time to time, such other information regarding the
operations, business affairs and financial condition of SSCC, JSCE, the Borrower
or SNC, or compliance with the terms of any Loan Document, as the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Swingline Lender or any Lender may reasonably request; and

          (j)  a copy of all notices (other than notices regarding any scheduled
or mandatory repayments), certificates, financial statements and reports, as and
when delivered by or on behalf of the Borrower to the holders of any
Subordinated Indebtedness, Senior Notes or 1993 Senior Notes.

          SECTION  6.05.  Litigation and Other Notices.  Furnish to the
                          -----------------------------
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender, the Collateral Agent and each Lender prompt
written notice of the following:

          (a)  any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with respect
thereto;

          (b)  the filing or commencement of, or any notice to any Loan Party or
any Subsidiary thereof of the intention of any Person to file or commence, any
action, suit or proceeding (whether at law or in equity or by or before any
Governmental Authority or any arbitrator, against any Loan Party or any
Subsidiary thereof) that, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;

          (c)  any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect; and

          (d)  any transaction, event or development that results in any Loan
Party or any Subsidiary thereof owning a parcel (or adjoining parcels) of real
property or Timberland Property that (i) is not a Mortgaged Property and (ii)
has a fair market value, as reasonably determined in good faith by the board of
directors of such Loan Party (such property being referred to herein as "After-
Acquired Mortgage Property"), in excess of $500,000.

          SECTION  6.06.  ERISA.  (a)  Comply in all material respects with the
                          ------
applicable provisions of ERISA and (b) furnish to the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the Swingline
Lender and each Lender (i) as soon as possible after, and in any event within 30
days after any Responsible Officer of SSCC, JSCE or the Borrower or any ERISA
Affiliate either knows or has reason to know that any Reportable Event has
occurred that alone or together with any other
<PAGE>

                                                                              80

Reportable Event could reasonably be expected to result in liability of SSCC,
JSCE or the Borrower or any of their respective Subsidiaries to the PBGC in an
aggregate amount exceeding $5,000,000, a copy of the notice of such event
required to be given to the PBGC or, if notice is not so required, a statement
of a Financial Officer of SSCC, JSCE or the Borrower, as the case may be,
setting forth in reasonable detail the nature of such event and the action
proposed to be taken with respect thereto, (ii) promptly after receipt thereof,
a copy of any notice SSCC, JSCE or the Borrower or any ERISA Affiliate may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code) or to appoint a trustee to administer any Plan or Plans, (iii)
within 10 days after the due date for filing with the PBGC pursuant to Section
412(n) of the Code of a notice of failure to make a required installment or
other payment with respect to a Plan, a copy of such notice and a statement of a
Financial Officer of SSCC, JSCE or the Borrower, as the case may be, setting
forth in reasonable detail the nature of such failure and the action proposed to
be taken with respect thereto and (iv) promptly and in any event within 30 days
after receipt thereof by SSCC, JSCE or the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by SSCC,
JSCE or the Borrower or any ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability or (B) a determination that a Multiemployer Plan is, or is
expected to be, terminated or in reorganization, in each case within the meaning
of Title IV of ERISA.

          SECTION  6.07.  Maintaining Records; Access to Properties and
                          ---------------------------------------------
Inspections.  Maintain all financial records in accordance with GAAP and permit
------------
any representatives designated by the Administrative Agent, the Senior Managing
Agents, the Managing Agents, the Fronting Bank, the Swingline Lender, the
Collateral Agent or any Lender to visit and inspect the properties and financial
records of the Loan Parties and any Subsidiary thereof at reasonable times and
upon reasonable notice and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender, the Collateral Agent or any
Lender to discuss at such reasonable times and at such reasonable intervals as
may be reasonably requested the affairs, finances and condition of any Loan
Party or any Subsidiary thereof or any properties of any Loan Party or any
Subsidiary thereof with the officers thereof and independent accountants
therefor.

          SECTION  6.08.  Use of Proceeds.  Use the proceeds of the Loans and
                          ----------------
the Letters of Credit solely for the purposes set forth in the introductory
statement to this Agreement.

          SECTION  6.09.  Compliance with Law.  Comply with the requirements of
                          --------------------
all applicable laws, rules, regulations, court orders and decrees, and orders of
any Governmental Authority, that are applicable to it or to any of its
properties, except where noncompliance could not reasonably be expected to
result in a Material Adverse Effect.
<PAGE>

                                                                              81


          SECTION  6.10.  Further Assurances.  (a)  Execute any and all further
                          -------------------
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust), that may be required under applicable
law or which the Required Lenders, the Administrative Agent, either Senior
Managing Agent or the Collateral Agent may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and in order to
grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security Documents.

          (b)  In addition, from time to time, the Loan Parties, at their cost
and expense, will promptly secure the Obligations by pledging or creating, or
causing to be pledged or created, perfected security interests with respect to
such of their assets and properties as the Administrative Agent, either Senior
Managing Agent or the Required Lenders shall designate (it being understood that
it is the intent of the parties that the Obligations shall be secured by, among
other things, substantially all the assets of the Loan Parties and their
respective Subsidiaries (including real and other properties acquired after the
Closing Date, but excluding (i) Program Receivables, (ii) the real properties
and fixtures owned on the Closing Date by SNC, (iii) the JSCE Preferred Stock
and the Borrower Preferred Stock, and (iv) the ownership interests of any of the
Loan Parties in Finco, Monetization Sub, Timberlands I, Timberlands II and
TNH)).  Such security interests and Liens will be created under the Security
Documents or such other security agreements, mortgages, deeds of trust and other
instruments and documents as are satisfactory to the Required Lenders, and SSCC,
JSCE or the Borrower shall deliver or cause to be delivered to the Lenders all
such instruments and documents (including legal opinions, title insurance
policies, surveys and lien searches) as the Administrative Agent, either Senior
Managing Agent or the Required Lenders shall reasonably request to evidence
compliance with this Section 6.10.  SSCC, JSCE or the Borrower agree to provide
such evidence as the Administrative Agent, either Senior Managing Agent or the
Required Lenders shall reasonably request as to the perfection and priority
status of each such security interest and Lien.

          (c)  Notwithstanding the provisions of paragraph (b) above, (i) no
After-Acquired Mortgage Property with a fair market value (as determined by the
Collateral Agent in its reasonable judgment, it being understood that the
purchase price shall be indicative thereof) (the "Fair Market Value") of less
than $1,000,000 shall be subject to the provisions of paragraph (b) above and
(ii) each item of After-Acquired Mortgage Property with a fair market value of
at least $1,000,000 but less than $10,000,000 shall not be subject to the
provisions of paragraph (b) above unless and until the aggregate Fair Market
Value of all items of After-Acquired Mortgage Property described in this clause
(ii) acquired after the Closing Date and not pledged to the Collateral Agent
pursuant to the next sentence equals or exceeds $50,000,000.  On each occasion
that the Fair Market Value of all items of After-Acquired Mortgage Property
described in clause (ii) of the immediately preceding sentence shall equal or
exceed $50,000,000, all such property (and not merely the portion of the
property in excess of $50,000,000) shall be pledged to the Collateral Agent for
the benefit
<PAGE>

                                                                              82

of the Secured Parties pursuant to paragraph (b) above and, after such pledge,
the provisions of such clause (ii) shall apply to subsequently acquired After-
Acquired Mortgage Property described in such clause.

          (d)  Except with respect to the Material Subsidiaries contemplated by
Section 7.11(d), cause (i) each Material Subsidiary organized under the laws of
the United States or any political subdivision thereof created or acquired by it
from time to time and (ii) each Subsidiary or Inactive Subsidiary prior to
becoming such a Material Subsidiary, to undertake the obligation of and to
become a Guarantor pursuant to the Guarantee Agreement and a party to the
applicable Security Documents to which it is not then a party pursuant to one or
more instruments or agreements satisfactory in form and substance to the
Collateral Agent.  In addition, SSCC, JSCE or the Borrower, shall, or shall
cause its Subsidiaries to, pledge the capital stock of any such Subsidiary to
the Collateral Agent for the benefit of the Secured Parties pursuant to a Pledge
Agreement (or supplement to a Pledge Agreement) satisfactory in form and
substance to the Collateral Agent. Furthermore, in the event that any Loan Party
makes a Material Investment (other than Investments made by SSCC in the form of,
or made in connection with, (1) any issued and outstanding capital stock of
Stone owned by SSCC, (2) any Additional Stone Capital Contributions and (3) the
JSCE Preferred Stock, the Borrower Preferred Stock, the incurrence of
Indebtedness under Sections 7.01(r) and (s), and the ownership of any ownership
interests in Finco, Monetization Sub, Timberlands I, Timberlands II and TNH by
any Loan Party, the Investor shall promptly pledge such Investment to the
Collateral Agent pursuant to a Pledge Agreement (or supplement to a Pledge
Agreement) satisfactory in form and substance to the Collateral Agent.
Notwithstanding the foregoing, no Person shall be obligated to pledge more than
65% of the capital stock of any Subsidiary that is organized outside the United
States or a political subdivision thereof.

          (e)  In the event that any survey of Mortgaged Property discloses any
matter (including any encroachment or violation of an existing easement or
restrictive covenant) the effect of which is to detract materially from the
value of the property subject thereto or to interfere in any material respect
with the ordinary conduct of the business of any Loan Party or any of their
respective Subsidiaries, such Loan Party shall, upon request by the
Administrative Agent, use reasonable efforts (or cause its Subsidiary that is
the user or owner of the Mortgaged Property in question to use reasonable
efforts) to cause such matter to be corrected or otherwise resolved to the
reasonable satisfaction of the Administrative Agent.

          (f)  Within 60 days following the Second Restatement Date, (i) each of
the amendments to the existing Mortgages not executed and delivered on the
Second Restatement Date (other than the Mortgaged Properties referred to in
Section 6.10(g), which shall be subject to the terms set forth in Section
6.10(g)), shall have been duly executed by the parties thereto and delivered to
the Collateral Agent, in form and substance reasonably satisfactory to the
Administrative Agent, and shall be in full force and effect, (ii) each of such
Mortgaged Properties shall not be subject to any Lien other than those permitted
under Section 7.02, (iii)  each of such Security Documents shall have been filed
and recorded in
<PAGE>

                                                                              83

the recording office where such documents were originally required to be filed
hereunder and, in connection therewith, the Collateral Agent shall have received
evidence satisfactory to it of each such filing and recordation.

          (g)  If, on the first anniversary of the Second Restatement Date, JSCE
has failed to consummate the sale of the properties and/or facilities located at
(i) 1915 Wigmore Street, Jacksonville, FL, (ii) 10 Cut Street, Alton, IL, (iii)
401 West Mill Street, Circleville, OH, and (iv) 99 Harris Street, Fulton, NY,
then the Borrower shall comply with (f) above for each such property or facility
not sold.

          SECTION  6.11.  Material Contracts.  Maintain in full force and effect
                          -------------------
(including exercising any available renewal option), and without amendment or
modification, each Material Contract, unless the failure so to maintain any such
Material Contract (or any amendment or modification thereto) could not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.

          SECTION  6.12.  Environmental Matters.  (a)  Promptly give notice to
                          ----------------------
the Senior Managing Agents upon becoming aware of (i) any violation of any
Environmental Law, (ii) any claim, inquiry, proceeding, investigation or other
action, including a request for information or a notice of potential
environmental liability, by or from any Governmental Authority or any third
party claimant or (iii) the discovery of the release of any Hazardous Material
at, on, under or from any of the Real Properties or any facility or equipment
thereat in excess of reportable or allowable standards or levels under any
Environmental Law, or in a manner or amount that could reasonably be expected to
result in liability under any Environmental Law, in each case that could
reasonably be expected to result in a Material Adverse Effect.

          (b)  Upon discovery of the presence on any of the Real Properties of
any Hazardous Material that is in violation of, or that could reasonably be
expected to result in liability under, any Environmental Law, in each case that
could result in a Material Adverse Effect, take all necessary steps to initiate
and expeditiously complete all remedial, corrective and other action to
eliminate any such adverse effect, and keep the Senior Managing Agents informed
of such actions and the results thereof.

          SECTION  6.13.  Distribution of Gross Export Revenues.  In the case of
                          --------------------------------------
the Borrower, cause JSC International to distribute the gross export revenues
received by JSC International from the Borrower (a) to the Borrower in an amount
equal to the portion of gross export revenues that is not tax-exempt under
Section 922 et seq. of the Code as a repayment of the Borrower's advance to JSC
International to the extent thereof, and as a dividend to the extent that such
non-tax-exempt gross export revenues exceed the Borrower's advance to JSC
International, and (b) to the Borrower, as a dividend, in an amount equal to the
portion of gross export revenues that is tax-exempt under the Code, in each case
on the same Business Day that such gross export revenues are received by JSC
International, and in no event later than the next Business Day.
<PAGE>

                                                                              84

          SECTION  6.14.  Maintenance of Corporate Separateness.  Satisfy, and
                          --------------------------------------
cause each of its Subsidiaries to satisfy, customary corporate formalities,
including the maintenance of corporate records.  No Loan Party nor any
Subsidiary of the Loan Parties shall make any payment to a creditor of SSCC or
any of its subsidiaries (other than the Loan Parties and the Loan Parties'
Subsidiaries) in respect of any liability of SSCC or any of its subsidiaries
(other than the Loan Parties and the Loan Parties' Subsidiaries), and no bank
account of SSCC or any of its subsidiaries (other than the Loan Parties and the
Loan Parties' Subsidiaries) shall be commingled with any bank account of SSCC,
JSCE or the Borrower or any Subsidiary of the Loan Parties.  Any financial
statements distributed to any creditors of SSCC or any of its subsidiaries
shall, to the extent permitted under GAAP, clearly establish the corporate
separateness of SSCC and it subsidiaries (other than the Loan Parties and the
Loan Parties' Subsidiaries) from SSCC, JSCE or the Borrower and each of its
Subsidiaries.  No Loan Party nor any Subsidiary of the Loan Parties shall take
any action, or conduct its affairs in a manner, which is reasonably likely to
result in the corporate existence of SSCC or its subsidiaries (other than the
Loan Parties and the Loan Parties' Subsidiaries), on the one hand, and of SSCC,
JSCE or the Borrower or any Subsidiary of the Loan Parties, on the other hand,
being ignored, or in the assets and liabilities of SSCC, JSCE or the Borrower or
any Subsidiary of SSCC, JSCE or the Borrower being substantively consolidated
with those of SSCC or any of its subsidiaries (other than the Loan Parties and
the Loan Parties' Subsidiaries) in a bankruptcy, reorganization or other
insolvency proceeding.

                                  ARTICLE VII

                              Negative Covenants
                              ------------------

          Each of SSCC, JSCE and the Borrower covenants and agrees with each
Lender, the Administrative Agent, each Senior Managing Agent and Managing Agent,
the Fronting Bank and the Swingline Lender that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or Swingline Loan or any LC Disbursement, Fees or any other
expenses or amounts payable under any Loan Document shall be unpaid, unless the
Required Lenders or, as specified in Section 7.06(d), the Supermajority Lenders
shall otherwise consent in writing, it will not, and will not cause or permit
any of its Subsidiaries to:

          SECTION  7.01.  Indebtedness.  Create, incur, assume or permit to
                          -------------
exist any Indebtedness, except, without duplication:

          (a)  the Indebtedness existing on the Closing Date and set forth on
Schedule 7.01(a) and Indebtedness of JSF incurred pursuant to the Receivables
Program Documents;

          (b)  in the case of the Borrower, Indebtedness created hereunder and
under the Loan Documents;
<PAGE>

                                                                              85

          (c)  in the case of each Guarantor, its Guarantee of the Obligations
pursuant to the Guarantee Agreement;

          (d)  Indebtedness of JSCE or any of its Subsidiaries the net proceeds
of which are used substantially concurrently to refinance Indebtedness described
in paragraph (a) above so long as (i) such refinancing Indebtedness is in an
aggregate principal amount not greater than the aggregate principal amount of
the Indebtedness being refinanced plus the amount of any premiums required to be
paid thereon, (ii) such Indebtedness has a later final maturity than the Tranche
B Maturity Date and a longer weighted average life than the Term Loans and (iii)
each of the covenants, events of default and other provisions thereof (including
any Guarantees thereof) shall be no more adverse to the Lenders than those
contained in the Indebtedness being refinanced unless each of such provisions is
approved in writing by the Required Lenders;

          (e)  in the case of the Borrower and its Material Subsidiaries,
Capital Lease Obligations in an amount not to exceed $300,000,000 when added to
the amount of (i) all other Capital Lease Obligations then existing (other than
Capital Lease Obligations described in paragraph (a) above), (ii) all
outstanding Indebtedness (other than Indebtedness incurred under this Agreement)
created, incurred or assumed in respect of the purchase or construction price of
property and (iii) all outstanding bonds described in paragraph (i) below;

          (f)  Indebtedness of the Borrower and the Subsidiaries created,
incurred or assumed in respect of the purchase or construction of property of
the Borrower and the Subsidiaries and any refinancings thereof, provided that
(i) the amount of such Indebtedness, when added to the amount of (x) all other
Indebtedness (other than Indebtedness incurred under this Agreement) of the
Borrower then existing that was created, incurred or assumed in respect of the
purchase or construction of property, (y) all then-existing Capital Lease
Obligations (other than Capital Lease Obligations described in paragraph (a)
above) and (z) all outstanding bonds described in paragraph (i) below, does not
exceed $300,000,000; (ii) such Indebtedness to be created, incurred or assumed
in respect of the purchase or construction price of property shall be so
created, incurred or assumed substantially contemporaneously with such purchase
or construction (and in any event not later than 90 days after the earlier to
occur of either the placement in service of, or the final payment on, such
property); and (iii) such Indebtedness is not secured by any Lien other than a
Lien permitted by Section 7.02(a)(vi);

          (g)  Indebtedness of the Borrower evidencing obligations to make
payments in respect of rights to cut, harvest or otherwise acquire timber on
property owned by any other Person, provided that the aggregate amount of such
Indebtedness shall not exceed $10,000,000 at any time outstanding;
<PAGE>

                                                                              86

          (h)  Indebtedness of the Borrower and its Material Subsidiaries in
respect of letters of credit that are not secured by any of the Collateral not
exceeding in the aggregate $25,000,000 at any time;

          (i)  Indebtedness of the Borrower consisting of industrial development
bonds and pollution control bonds, provided that the amount of any such bonds
shall not at any time exceed $300,000,000 when added to the amount of (i) all
other outstanding industrial development bonds and pollution control bonds, (ii)
all then-existing Capital Lease Obligations (other than Capital Lease
Obligations described in paragraph (a) above) and (iii) all outstanding
Indebtedness created, incurred or assumed in respect of the purchase or
construction price of property;

          (j)  Rate Protection Agreements and Currency Agreements;

          (k)  Indebtedness incurred in connection with (i) Permitted Equipment
Financings in an aggregate principal amount of up to $100,000,000 or (ii)
Permitted Timber Financings;

          (l)  Guarantees by JSCE of Indebtedness of the Borrower permitted
under this Section 7.01;

          (m)  Guarantees of obligations or Indebtedness not otherwise provided
for above, to the extent that such Indebtedness is incurred in the ordinary
course of business and does not exceed $25,000,000 in the aggregate at any time
outstanding;

          (n) intercompany loans and advances permitted by Section 7.04;

          (o) Indebtedness of the Borrower to JSF arising because any sale or
purported sale of Program Receivables to JSF is required to be recharacterized
as a loan;

          (p) the assumption by JSC Newco of the liabilities of the Borrower
related to the Brewton, Alabama mill and the assumption by JSC RMMI and JSC AMMI
of post-retirement medical liabilities and active medical liabilities,
respectively, of the Borrower, in each case pursuant to the Liability Management
Transactions;

          (q) Guarantees by the Borrower with respect to bonds issued to support
the Borrower's workers' compensation and other obligations (other than
Indebtedness) incurred in the ordinary course of business;

          (r) subordinated Indebtedness of SSCC in a principal amount not to
exceed $100,000,000 and which Indebtedness shall be contributed by SSCC to JSCE
and Finco, by JSCE to the Borrower and by the Borrower to Finco, and shall be on
terms reasonably acceptable to the Senior Managing Agents;
<PAGE>

                                                                              87

          (s) senior secured Indebtedness of SSCC in favor of Finco in an
initial principal amount not to exceed $445,000,000, subject to accretion based
on the amount of interest not paid in cash and the amount of any make-whole
premium in the event the interest rate has been converted to a fixed rate, which
Indebtedness shall be issued on terms reasonably acceptable to the Senior
Managing Agents; and

          (t) 7% convertible subordinated exchange debentures due 2012 issued by
SSCC in exchange for its SSCC Series A Preferred Stock, on terms and conditions
(other than maturity) substantially similar to the convertible subordinated
exchange debentures issuable by Stone pursuant to the terms of its Stone Series
E Preferred Stock, or on such other terms and conditions reasonably acceptable
to the Senior Managing Agents.

          SECTION  7.02.  Liens.  (a)  Create, incur, assume or permit to exist
                          ------
any Lien on any property or assets (including stock or other securities of any
Person) now owned or hereafter acquired by it or on any income or revenues or
rights in respect of any thereof, except:

          (i)  any Lien created under the Loan Documents;

          (ii)  Liens securing any Permitted Equipment Financing and any
     Permitted Timber Financing;

          (iii)  the Liens granted pursuant to the Receivables Program
     Documents;

          (iv)  Liens securing Indebtedness of P.U.I. not in excess of
     $15,000,000 at any time outstanding;

          (v)  Liens securing Capital Lease Obligations pursuant to Capital
     Leases existing on the Closing Date;

          (vi)  Permitted Liens;

          (vii) Liens securing Capital Lease Obligations permitted by Section
     7.01(e); provided, however, that any such Lien shall only cover the
     property subject to the applicable Capital Lease Obligation; and

          (viii) Liens securing Indebtedness permitted under Section 7.01(s), on
     terms reasonably acceptable to the Senior Managing Agents.

          (b)  Enter into any agreement prohibiting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired, except (i) with respect to specific property encumbered to secure
payment of particular Indebtedness permitted hereunder and Margin Stock and (ii)
the Senior Note Indentures and the 1993 Senior Note Indenture.
<PAGE>

                                                                              88

          SECTION  7.03.  Sale/Leaseback Transactions.  Enter into any
                          ----------------------------
Sale/Leaseback Transaction other than (a) Permitted Equipment Financings in an
aggregate principal amount of up to $100,000,000 or (b) any Permitted Timber
Financing.

          SECTION  7.04.  Investments, Loans and Advances.  Have outstanding or
                          --------------------------------
make any loan or advance to or have or make any Investment in any other Person
or suffer to exist any such loan or advance or Investment, except as set forth
on Schedule 7.04 and except:

          (a)  Permitted Investments;

          (b)  loans, advances or other Investments made by the Borrower or any
Subsidiary of the Borrower to or in any Domestic Subsidiary of the Borrower and,
in the case of loans and advances, evidenced by an Intercompany Note, or made by
any Subsidiary of the Borrower to the Borrower, in each case in the ordinary
course of business and in an aggregate amount not to exceed $25,000,000 at any
time;

          (c)  any loans or advances made by the Borrower or any Subsidiary of
the Borrower to, or Investments made by the Borrower or any Subsidiary of the
Borrower in, any Foreign Subsidiary and Guarantees provided by the Borrower of
obligations of such Foreign Subsidiary, in the case of this clause (c) in an
aggregate amount not to exceed $25,000,000 at any time;

          (d)  loans or advances evidenced by an Intercompany Note and made by
any Loan Party to any other Loan Party (other than SSCC);

          (e)  (i) loans or advances evidenced by the SNC Note and JSC Newco
Note pursuant to the Liability Management Transactions, provided that such notes
are unsecured and otherwise in form and substance satisfactory to the Senior
Managing Agents, and it being agreed that the SNC Note and JSC Newco Note will
not be required to be pledged to the Collateral Agent as Collateral; (ii) loans
or advances made by the Borrower to JSC RMMI and JSC AMMI on a revolving credit
basis pursuant to the Liability Management Transactions, provided that such
loans are unsecured and incurred pursuant to a revolving credit agreement, notes
and other documentation in form and substance satisfactory to the Senior
Managing Agents and that such notes are delivered to the Collateral Agent and
pledged by the Borrower to the Collateral Agent for the benefit of the Secured
Parties pursuant to the Pledge Agreement; (iii) the Investment by the Borrower
in the Class C Voting Preferred Stock of JSC RMMI and JSC AMMI and the
contribution of the SNC Note and the JSC Newco Note to JSC RMMI and JSC AMMI,
respectively, pursuant to the Liability Management Transactions; (iv) the
Investment by SSCC in the Class B Non-Voting Preferred Stock of JSC RMMI and JSC
AMMI pursuant to the Liability Management Transactions; (v) the Investment by
JSCE in the Class A Common Stock of JSC RMMI and JSC AMMI pursuant to the
Liability
<PAGE>

                                                                              89

Management Transactions; and (vi) additional capital contributions to JSC RMMI
and JSC AMMI pursuant to the stockholders' agreements contemplated by the
Liability Management Transactions, provided that such stockholders' agreements
are in form and substance satisfactory to the Senior Managing Agents;

          (f)  Investments consisting of non-cash consideration received in
connection with a sale of assets permitted under Sections 7.05 and 7.16;

          (g)  the Restatement Date Dividends, the SSCC Loan and the Stone
Capital Contribution (each as defined in the Existing Credit Agreement), all as
consummated on the Restatement Date pursuant to the terms and conditions of the
Transaction Documents (as defined in the Existing Credit Agreement), additional
Investments made by SSCC in Stone after the First Restatement Date in an
aggregate amount not exceeding $100,000,000 ("Additional Stone Capital
Contributions"), and so long as no Default or Event of Default shall have
occurred and be continuing at the time thereof or immediately after giving
effect thereto, loans or advances made by the Borrower to JSCE and/or SSCC and
by JSCE to SSCC for the sole purpose of making Additional Stone Capital
Contributions, all on terms and conditions, and pursuant to documentation in
form and substance, satisfactory to the Senior Managing Agents;

          (h)  Investments by SSCC in JSCE and Investments by JSCE in the
Borrower;

          (i)  Investments by SSCC utilizing proceeds received by SSCC of cash
capital contributions made by JSG or any of its Affiliates (other than JSCE or
any of its Subsidiaries) in SSCC;

          (j) Investments (other than Investments in Stone and its subsidiaries)
not described in clauses (a) through (i) above and not exceeding in the
aggregate $50,000,000, provided that the aggregate amount of Investments
permitted to be made by SSCC under this clause (j) shall not exceed $15,000,000;

          (k) Investments (i) by SSCC in JSCE resulting from (a) the transfer of
up to $50,000,000 of promissory notes of SSCC and (b) the purchase of up to
$455,000,000 of the JSCE Preferred Stock, (ii) by JSCE in the Borrower resulting
from (a) the transfer of up to $50,000,000 of promissory notes of SSCC and (b)
the purchase of up to $455,000,000 of the Borrower Preferred Stock, (iii) by the
Borrower and SSCC in Finco resulting from the transfer of up to $50,000,000 of
promissory notes of SSCC from each of SSCC and the Borrower in exchange for not
less than 100% of the ownership interests in Finco in the aggregate, and the
incurrence of Indebtedness of SSCC under Section 7.01(s), (iv) by the Borrower
in each of Timberland I and Timberland II resulting from the transfer of all of
the timberland subject to the 1999 Timberlands Sale to each of Timberland I and
Timberland II in exchange for all of the ownership interests in Timberland I and
Timberland II, (v) by the Borrower and SNC in Monetization Sub
<PAGE>

                                                                              90

resulting from the transfer of all of the ownership interests in Timberland I
and Timberland II to Monetization Sub in exchange for all of the ownership
interest in Monetization Sub, and (vi) by the Borrower in SNC resulting from the
transfer by the Borrower to SNC of a partial ownership interest in Monetization
Sub, in each case, in connection with the 1999 Timberlands Sale;

          (l) SSCC may contribute approximately twenty-five million (25,000,000)
shares of the common stock of SSCC to Stone in connection with the acquisition
of St. Laurent Paperboard, Inc., a Canadian federal corporation; and

          (m) additional Investments (x) constituting intercompany loans and
advances by the Borrower and/or JSCE to JSCE or SSCC, in an amount sufficient to
make the Stone Series E Preferred Payment, cash payments of dividends in respect
of the SSCC Series A Preferred Stock and/or payments of interest or other
mandatory payments under SSCC's 7% convertible subordinated exchange debentures
issued by SSCC in accordance with Section 7.01(t), provided that such
intercompany Indebtedness is unsecured and shall be evidenced by an Intercompany
Note, and (y) constituting cash payments by SSCC to the holders of the Stone
Series E Preferred Stock in an amount equal to the Stone Series E Preferred
Payment.

          SECTION  7.05.  Mergers, Consolidations, Sales of Assets and
                          --------------------------------------------
Acquisitions.  Merge into or consolidate with any other Person, or permit any
-------------
other Person to merge into or consolidate with it, or sell, transfer, assign,
lease, sublease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all its assets, or purchase, lease or
otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person except:

          (a)  if at the time thereof and immediately after giving effect
thereto no Default or Event of Default shall have occurred and be continuing,
(i) any wholly owned Domestic Subsidiary of SSCC may merge into or consolidate
with the Borrower in a transaction in which the Borrower is the surviving
corporation and (ii) any wholly owned Domestic Subsidiary of the Borrower may
merge into or consolidate with any other wholly owned Domestic Subsidiary of the
Borrower in a transaction in which the surviving entity is a wholly owned
Domestic Subsidiary of the Borrower, provided that, in each case, (x) no Person
other than the Borrower or a wholly owned Domestic Subsidiary of the Borrower
receives any consideration and (y) in the event that any Loan Party is a party
to such merger or consolidation and is not the surviving entity, the surviving
entity shall, simultaneously with such merger or consolidation, assume all the
obligations of such Loan Party hereunder and under the other Loan Documents;

          (b)  purchases of inventory, equipment and real property in the
ordinary course of business;
<PAGE>

                                                                              91


          (c)  acquisitions constituting Consolidated Capital Expenditures
permitted by Section 7.13;

          (d)  acquisitions constituting Investments permitted by Section 7.04;

          (e) the Borrower may contribute the properties and assets (other than
the real property and any IRB-secured property) of the Brewton, Alabama mill,
and may lease the real property and IRB-secured property of the Brewton, Alabama
mill on a long-term basis and for nominal consideration, to JSC Newco pursuant
to the Liability Management Transactions (it being agreed that such contribution
and lease may be made or consummated notwithstanding the provisions of any
Security Agreement or any Mortgage), provided that (A) the Borrower shall
designate JSC Newco as a Material Subsidiary, and the Borrower and JSC Newco
shall comply with the applicable provisions of Section 6.10 (except that no
leasehold mortgage shall be required with respect to such lease), and (B) such
lease is in form and substance satisfactory to the Senior Managing Agents;

          (f) in connection with the Monetization Sale, the 1999 Timberlands
Sale and the Newberg Mill Sale; and

          (g) in connection with the Oregon City Mill Sale.

          SECTION  7.06.  Restricted Junior Payments.  (a)  Declare or make,
                          ---------------------------
directly or indirectly, any Restricted Junior Payment or set aside any amount
for any such purpose.

          (b)  Notwithstanding the provisions of Section 7.06(a), (i) the
Borrower may pay cash dividends (A) on the Borrower Preferred Stock to JSCE to
be used by JSCE to pay cash dividends on the JSCE Preferred Stock and (B) on its
common stock to JSCE to be used by JSCE solely to pay cash dividends to SSCC in
accordance with and for the purpose specified in clause (ii) below, if and to
the extent permitted by applicable law, if, at the time of such payment and
immediately after giving effect thereto, (x) no Default or Event of Default
shall have occurred and be continuing and (y) the aggregate amount of such
dividends, together with the aggregate amount of all other cash dividends paid
by the Borrower (other than the dividends permitted under clauses (v), (vi),
(vii) and (viii) below) in the fiscal year in which the dividend is proposed to
be paid, shall not exceed the least of (A) the Borrower's Portion of Excess Cash
Flow, (B) 25% of Consolidated Net Income for the fiscal year preceding the year
in which the dividend is proposed to be paid and (C) $22,200,000, (ii) JSCE may
pay cash dividends (A) on the JSCE Preferred Stock to SSCC (or its successors or
assigns) out of the proceeds referred to in clause (i)(A) above and (B) to SSCC
and SSCC may pay like dividends to the holders of its Common Stock substantially
contemporaneously with the payment of and out of the proceeds of the dividends
referred to in clause (i)(B) above, (iii) Borrower may pay cash dividends to
JSCE and JSCE may pay like dividends to SSCC solely for the purpose of making
<PAGE>

                                                                              92

Additional Stone Capital Contributions in accordance with Section 7.04(g) if, at
the time of such payment and immediately after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing, (iv) the Borrower may
pay cash dividends to JSCE to be used by JSCE solely to pay cash dividends to
SSCC to pay the Stone Series E Preferred Payment substantially contemporaneously
therewith, if and to the extend permitted by applicable law, if, at the time of
such payment and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing, (v) JSCE may pay cash dividends
to SSCC and SSCC may pay like dividends to the holders of the Stone Series E
Preferred Stock substantially contemporaneously with the payment of and out of
the proceeds of the dividends referred to in clause (iv) above, (vi) the
Borrower may pay cash dividends to JSCE to be used by JSCE solely to pay cash
dividends to SSCC to pay cash dividends to the holders of the SSCC Series A
Preferred Stock and/or make interest or other mandatory payments under SSCC's 7%
convertible subordinated exchange debentures issued by SSCC in accordance with
Section 7.01(t), in each case, substantially contemporaneously therewith, if and
to the extent permitted by applicable law, if, at the time of such payment and
immediately after giving effect thereto, (x) no Default or Event of Default
shall have occurred and be continuing and (y) the aggregate amount of such
dividends shall not exceed $10,000,000 in any fiscal year, and (viii) JSCE may
pay cash dividends to SSCC and SSCC may pay like dividends to the holders of its
SSCC Series A Preferred Stock substantially contemporaneously with the payment
of and out of the proceeds of the dividends referred to in clause (vii) above.
The limitations of this Section 7.06 shall not prohibit JSCE or SSCC from paying
a dividend in accordance with clauses (i), (ii), (iv), (v), (vi), and (vii)
above within 60 days after declaration thereof if, on the declaration date, such
dividend could have been paid in compliance with this Section 7.06.

          (c)  Notwithstanding the provisions of Section 7.06(a), the Borrower
may purchase in the open market shares of Common Stock ("MIP Shares") or options
to purchase shares of Common Stock ("MIP Options"), provided that (i) the sum of
(x) the aggregate purchase price of all MIP Shares (whether purchased directly
in the open market or upon the exercise of MIP Options) and (y) the aggregate
purchase price of all MIP Options, together with the aggregate purchase price of
all shares of JSG purchased and excluded from the term "Investments", in each
case in such fiscal year shall not exceed $15,000,000, (ii) MIP Shares,
including those purchased upon the exercise of MIP Options, shall be purchased
exclusively for subsequent distribution as additional compensation to employees
of the Borrower pursuant to its management incentive program, (iii) the Borrower
shall not knowingly purchase any MIP Shares from any Affiliate (acting as
principal in such transaction) of the Borrower and (iv) at the time of any such
purchase and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.

          (d) In addition to the requirements of Section 10.08(b), which shall
be unaffected hereby, no waiver, amendment or modification to (i) the definition
of the term "Additional Stone Capital Contributions" or the term "Supermajority
Lenders," (ii)
<PAGE>

                                                                              93

Section 7.06(b)(iv), (iii) this Section 7.06(d) or (iv) any other provision of
this Agreement which would permit Restricted Junior Payments or Investments to
be made (directly or indirectly) by any Person, the proceeds of which are paid,
in whole or in part, to Stone or any of Stone's subsidiaries in excess of those
permitted under the terms of this Agreement as in effect on the First
Restatement Date, shall be effective except pursuant to an agreement or
agreements in writing entered into by SSCC, JSCE, the Borrower and the
Supermajority Lenders.

          (e) Notwithstanding the provisions of Section 7.06(a), pursuant to the
Liability Management Transactions, (i) SNC and JSC Newco may issue the SNC Note
and JSC Newco Note, respectively, as dividends to the Borrower; (ii) the
Borrower may acquire the Class C Voting Preferred Stock of JSC RMMI and JSC
AMMI; and (iii) SSCC may acquire the Class B Non-Voting Preferred Stock of JSC
RMMI and JSC AMMI.

          (f) Notwithstanding the provisions of Section 7.06(a), SSCC may (i)
exchange its SSCC Series A Preferred Stock for its 7% convertible subordinated
exchange debentures due 2012 issued in accordance with Section 7.01(t) at an
exchange rate of $25.00 principal amount of such debentures for each share of
SSCC Series A Preferred Stock and (ii) convert any shares of its SSCC Series A
Preferred Stock into shares of Common Stock at the conversion price of $34.97
per share of Common Stock, subject to customary anti-dilution adjustments.

          SECTION  7.07.  Transactions with Stockholders and Affiliates.  Except
                          ----------------------------------------------
to the extent specifically permitted by the terms of this Agreement, directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity securities of such
Person or with any Affiliate of such Person or of any such holder, on terms that
are less favorable to such Person than those that could be obtained at the time
from Persons who are not such a holder or Affiliate, provided that the foregoing
restriction shall not apply to (a) any transaction between such Person and any
of its Material Subsidiaries or between any of its Material Subsidiaries, (b)
customary fees paid to members of the Board of Directors of such Person and its
Subsidiaries, (c) customary compensation (including salaries and bonuses) paid
to officers and employees of such Person, (d) payments made pursuant to the Tax
Sharing Agreement, (e) management and financial services provided by the
Borrower to its Subsidiaries and other entities in which the Borrower has
Investments to the extent that such services are provided by the Borrower in the
ordinary course of its business and senior management of the Borrower has
determined that the providing of such services is in the best interests of the
Borrower, (f) the transactions contemplated by the Receivables Program
Documents, and the 1992 Stock Option Plan, (g) the Restatement Date Transactions
(as defined in the Existing Credit Agreement), (h) the issuance of the
Indebtedness permitted under Sections 7.01(r) and (s) and payments in respect
thereof and the granting of any Liens permitted under Section 7.02(a)(viii), (i)
the contribution by SSCC of approximately
<PAGE>

                                                                              94

twenty-five million (25,000,000) shares of the common stock of SSCC to Stone in
connection with the acquisition of St. Laurent Paperboard, Inc., a Canadian
federal corporation, and (j) the payment of the Stone Series E Preferred Payment
and the issuance of the SSCC Series A Preferred Stock.

          SECTION  7.08.  Business.  (a)  Engage at any time in any business or
                          ---------
business activity other than the business currently conducted by it and its
Subsidiaries and business activities reasonably related thereto.  Without
limiting the foregoing, neither SSCC nor JSCE shall engage in any business or
conduct any activity other than holding, directly or indirectly, the capital
stock of its Subsidiaries, and activities reasonably related thereto.

          (b)  In the case of JSC International, engage in any business or
business activity, have any liabilities or hold any assets except that JSC
International may (i) maintain a bank account with a banking institution
reasonably acceptable to the Administrative Agent, (ii) engage in activities
consistent with its being a "Foreign Sales Corporation" as such term is defined
in Section 922 of the Code, and the regulations promulgated thereunder and (iii)
receive advances from the Borrower equal to the gross export revenues of the
Borrower.

          SECTION  7.09.  Limitations on Debt Prepayments.  (a)  Optionally
                          --------------------------------
prepay, repurchase or redeem or otherwise defease or segregate funds with
respect to any Indebtedness for borrowed money (other than Indebtedness under
the Loan Documents) of SSCC, JSCE, the Borrower or any of their respective
Subsidiaries; provided, however, that the foregoing shall not prevent the
Borrower from (i) making any payment pursuant to Section 2.12 or 2.13, (ii)
refinancing all or any portion of the 10-Year Senior Notes with the proceeds of
Tranche B Term Loans and available cash or otherwise on terms permitted by
Section 7.01(d), or (iii) repurchasing, redeeming or otherwise extinguishing up
to $400,000,000 in aggregate principal amount (including any accrued and unpaid
interest and any premium thereon) of any Indebtedness, provided, further, that
at the time of any such repurchase permitted by clause (iii) above, the
aggregate outstanding amount of the Term Loans is less than or equal to
$450,000,000.

          (b)  Permit any amendment, waiver or modification to the terms of the
Senior Note Indentures, the 1993 Senior Note Indenture, the Senior Notes or the
1993 Senior Notes or any agreement of the Borrower entered into in connection
with the foregoing if the effect of such amendment or modification is to impose
additional or increased scheduled or mandatory repayment, retirement, repurchase
or redemption obligations in respect of such Indebtedness or to require any
scheduled or mandatory payment to be made in respect of such Indebtedness prior
to the date that such payment would otherwise be due.

          SECTION  7.10.  Amendment of Certain Documents.  (a)  Amend, modify,
                          -------------------------------
cancel or grant any waiver with respect to any indenture, note or any other
<PAGE>

                                                                              95

instrument evidencing Indebtedness for money borrowed or preferred or preference
stock or pursuant to which any Indebtedness for money borrowed or such stock was
issued or issue any securities in exchange for any Indebtedness for money
borrowed or any preferred or preference stock; provided, however, that such
Person may amend, modify or grant a waiver with respect to any such indenture,
note or other instrument if such amendment, modification or waiver does not have
the effect of (i) increasing the amounts due in respect of any such indenture,
note or other instrument or any interest rate thereunder, (ii) subjecting any
property of such Person or any property of any Subsidiary of such Person to any
Lien to which it was not so subject immediately prior to any such amendment,
modification or waiver, (iii) shortening the maturity or average life of any
such Indebtedness for borrowed money or (iv) creating or changing any covenant
or similar restriction or event of default having application to such Person to
make any such covenant or similar restriction more restrictive on such Person.

          (b)  Cause or suffer to exist any amendment or modification to or
supplement of the certificate of incorporation or by-laws (other than the
amendment to SSCC's certificate of incorporation and by-laws (x) pursuant to the
terms of the Merger Agreement and (y) to authorize the issuance of, and set
forth the designation of preferences, rights and other terms of, the SSCC Series
A Preferred Shares) of such Person, any Loan Document, any Transaction Document
(as defined in the Existing Credit Agreement) or any Basic Agreement, without
the prior written consent of the Required Lenders, unless such amendment,
modification or supplement is not adverse to the interests of the Lenders
hereunder or under the other Loan Documents.

          (c)  Permit, cause or suffer to exist any direct or indirect
amendment, modification or supplement to any of the Receivables Program
Documents unless such amendment, modification or supplement is in form and
substance satisfactory to the Senior Managing Agents, provided that (i) any
proposed amendment, modification or supplement to the Receivables Program
Documents shall first be submitted by the Borrower to the Senior Managing Agents
in writing and no such amendment, modification or supplement that, in the
opinion of the Senior Managing Agents, has an adverse effect on the Lenders
shall be effected unless the prior written consent of the Required Lenders shall
have been obtained and (ii) no consent of the Senior Managing Agents or the
Required Lenders shall be required for any waiver by the Receivables Program
lenders of their rights under the Receivables Program Documents that is not
detrimental in any respect to the Borrower or JSF and that is not more
restrictive, in any respect, on the Borrower or JSF than the Receivables Program
Documents without giving effect to such waiver.

          SECTION  7.11.  Limitation on Dispositions of Subsidiary Stock;
                          -----------------------------------------------
Creation of Subsidiaries. (a)  Directly or indirectly sell, assign, pledge or
-------------------------
otherwise encumber or dispose of, or permit any of its Subsidiaries to issue to
any other Person, any shares of capital stock or other equity securities of (or
warrants, rights or options to acquire shares or other equity securities of) any
of its Subsidiaries, except (i) to the extent permitted by
<PAGE>

                                                                              96

the Security Documents, (ii) to qualify directors if and to the extent required
by applicable law, (iii) the transfer by the Borrower, directly or indirectly,
of all of the ownership interests in Timberlands I and Timberlands II to
Rayonier Inc. or its Affiliate in connection with the 1999 Timberlands Sale, and
(iv) the issuance by the Borrower to JSCE of the Borrower Preferred Stock and
the issuance by JSCE to SSCC of the JSCE Preferred Stock.

          (b)  Subject to paragraphs (c), (d) and (e) below, have or create any
Subsidiary not identified on Schedule 4.08; provided, however, that JSCE or the
Borrower may create one or more new Subsidiaries organized under the laws of the
United States or any political subdivision thereof if (i) each such Subsidiary
is a wholly owned Subsidiary and is designated by JSCE or the Borrower as a
Material Subsidiary and (ii) JSCE, the Borrower and each such Subsidiary
complies with the applicable provisions of Section 6.10.

          (c)  Notwithstanding paragraph (b) above, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, JSCE or the Borrower may create or cause to be
created one or more Foreign Subsidiaries provided that (i) each such Subsidiary
is a wholly owned Subsidiary and (ii) JSCE, the Borrower and each such
Subsidiary complies with the applicable provisions of Section 6.10 (it being
understood that (x) no Foreign Subsidiary shall be required to become a party to
the Guarantee Agreement or to any Security Document and (y) JSCE or the
Borrower, as the case may be, shall not be required to pledge more than 65% of
the capital stock of any Foreign Subsidiary pursuant to the Pledge Agreement).

          (d) Notwithstanding paragraph (b) above, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, SSCC may create or cause to be created a wholly
owned Subsidiary to be incorporated in the State of Indiana and/or a wholly
owned Subsidiary to be incorporated in the State of Alabama, in each case to own
and operate certain assets of the Loan Parties located in such states, so long
as, upon the incorporation of any such Subsidiary, (i) SSCC shall designate or
shall cause to be designated each such Subsidiary as a Material Subsidiary and
shall cause each such Subsidiary to become a grantor party to the applicable
Security Documents with respect to all its assets, (ii) SSCC shall pledge or
cause to be pledged to the Collateral Agent for the benefit of the Secured
Parties all the capital stock of each such Subsidiary pursuant to the Pledge
Agreement and (iii) SSCC shall cause to be delivered to the Senior Managing
Agents and the Collateral Agent such documents and opinions of counsel in
connection with the foregoing as may be reasonably requested by the Senior
Managing Agents or the Collateral Agent or their counsel.

          (e) Notwithstanding paragraphs (a) and (b) above, pursuant to the
Liability Management Transactions, (i) JSCE may acquire JSC RMMI and JSC AMMI as
Subsidiaries, provided that JSCE shall pledge its Class A Common Stock in such
Subsidiaries to the Collateral Agent for the benefit of the Secured Parties
pursuant to the
<PAGE>

                                                                              97

Pledge Agreement, but such Subsidiaries shall not be deemed to be Material
Subsidiaries or required to comply with Section 6.10; (ii) SSCC may acquire JSC
RMMI and JSC AMMI as Subsidiaries, provided that SSCC shall pledge its Class B
Non-Voting Preferred Stock in such Subsidiaries to the Collateral Agent for the
benefit of the Secured Parties pursuant to the Pledge Agreement; and (iii) JSCE
may acquire the Class C Voting Preferred Stock of JSC RMMI and JSC AMMI and may
sell such stock to any other Person for cash at fair value.

          SECTION  7.12.  Restrictions on Ability of Subsidiaries to Pay
                          ----------------------------------------------
Dividends.  Permit their respective Subsidiaries to, directly or indirectly,
----------
voluntarily create or otherwise voluntarily cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary of
such Person to (a) pay dividends or make any other distributions on its capital
stock or any other interest or (b) make or repay loans or advances to such
Person except, in each case, for encumbrances or restrictions under this
Agreement, the 1993 Senior Note Indenture, the Senior Note Indentures and, with
respect to JSF, the Receivables Program Documents.

          SECTION  7.13.  Capital Expenditures.  Incur Consolidated Capital
                          ---------------------
Expenditures, provided that the Borrower and its Subsidiaries may incur
Consolidated Capital Expenditures in any fiscal year in an aggregate amount not
in excess of $200,000,000; provided, however, that such amount in respect of any
fiscal year may be increased by an amount equal to the Borrower's Portion of
Excess Cash Flow.  In addition, the amount of Consolidated Capital Expenditures
in any fiscal year may be further increased by an amount equal to the excess of
(a) $200,000,000 over (b) the amount of Consolidated Capital Expenditures
actually made in the immediately preceding fiscal year; provided, however, that
amounts so available under this sentence in any fiscal year or years that are
not so expended, up to a maximum of $75,000,000 on a cumulative basis, shall be
available for any subsequent fiscal year and the amount of Consolidated Capital
Expenditures made in any fiscal year shall first be applied against the
$200,000,000 amount permitted for such year and thereafter applied to the amount
available from prior years.  The parties agree that, for purposes of the
preceding sentence, the Borrower shall be deemed on the Closing Date to have
$75,000,000 in unused Consolidated Capital Expenditures from prior years
available for use on and after the Closing Date.

          SECTION  7.14.  Consolidated EBITDA.  Permit Consolidated EBITDA for
                          --------------------
any period of four consecutive fiscal quarters to be less than $400,000,000.

          SECTION  7.15.  Interest Coverage Ratio.  Permit the ratio of (a)
                          ------------------------
Consolidated EBITDA to (b) Consolidated Interest Expense for any period of four
consecutive fiscal quarters to be less than 2.5 to 1.

          SECTION  7.16.  Disposition of Collateral and other Assets.  (a)
                          -------------------------------------------
Sell, lease, assign, transfer or otherwise dispose of any asset or assets
constituting all or
<PAGE>

                                                                              98

substantially all the Collateral, other than in connection with the 1999
Timberlands Sale, the Newberg Mill Sale and the Monetization Sale.

          (b)  Sell, lease, assign, transfer or otherwise dispose of any portion
of a discrete parcel of Timberland Property (other than pursuant to any
Permitted Equipment Financing or any Permitted Timber Financing or to any
Material Subsidiary or in connection with either the 1999 Timberlands Sale or
the Newberg Mill Sale), unless (i) the fair market value of such parcel of
Timberland Property is less than $10,000,000 and (ii) the aggregate fair market
value of all Timberland Property previously disposed of pursuant to this Section
7.16(b) is less than $50,000,000; provided, however, that the Borrower may
exchange any portion of a discrete parcel of Timberland Property for a
Substitute Parcel if (A) the fair market value of the Substitute Parcel is at
least as great as the fair market value of the parcel of Timberland Property so
exchanged, (B) the release of such exchanged Timberland Property complies in all
respects with the provisions of Section 7.17 and (C) the Borrower complies in
all respects with the applicable provisions of Section 6.10 with respect to the
Substitute Parcel.

          (c)  Permit any third parties the privilege of entry upon the
Mortgaged Property for cutting and removal of Timber, except under contracts
pursuant to which such third parties are granted the privilege of cutting or
removing Timber for sale, consumption or processing at commercially reasonable
rates, provided that (i) as to any single contract, the gross proceeds to be
paid in any calendar year shall not exceed $10,000,000, (ii) as to the aggregate
of all such contracts from time to time in effect, such gross proceeds shall not
exceed $50,000,000 in any calendar year, and (iii) the Borrower may exchange
Timber for other timber ("Substitute Timber") if (x) the fair market value of
the Substitute Timber is at least as great as the fair market value of the
Timber so exchanged, (y) the release of such Timber complies in all respects
with the provisions of Section 7.17 and (z) the Borrower complies in all
respects with the applicable provisions of Section 6.10 with respect to the
Substitute Timber.

          (d)  Except for the sale of Program Receivables as permitted by the
Receivables Program Documents, sell, lease, assign, transfer or otherwise
dispose of any asset or assets (other than to a Material Subsidiary), in a
single transaction or a series of related transactions, having a fair market
value in excess of $5,000,000 unless (i) at least 80% of the consideration
received by SSCC and its Subsidiaries in connection therewith shall be in cash
or cash equivalents and readily marketable securities, (ii) any non-cash
consideration shall consist of debt obligations of the purchaser and (iii) if
any consideration to be received consists of a note or other debt obligation,
such note or other debt obligation shall, either (x) (A) be senior and secured
by a first priority security interest in the asset so sold and (B) shall be
pledged to the Collateral Agent for the benefit of the Lenders to secure the
Obligations pursuant to a written instrument satisfactory to the Collateral
Agent or (y) in the case of any portion of any such consideration consisting of
readily marketable securities, be sold within 30 days of receipt thereof.
<PAGE>

                                                                              99

          SECTION  7.17.  Disposition of Mortgaged Property.  (a)  Sell, lease,
                          ----------------------------------
assign, transfer or otherwise dispose of (other than to a Material Subsidiary)
any interest in any Mortgaged Property, including any interest in any Timberland
Property (each, a "Release Transaction"), except (i) in compliance with this
Section 7.17, Section 7.05 and Section 7.16, (ii) in connection with any
Permitted Equipment Financing or any Permitted Timber Financing, and (iii) in
connection with the 1999 Timberlands Sale and the Newberg Mill Sale.  Upon such
compliance or in connection with any transaction contemplated by clauses (ii) or
(iii) above, the Borrower shall be entitled to receive from the Collateral Agent
an instrument, in form and substance satisfactory to the Collateral Agent (each,
a "Release"), releasing (or, at the option of the Borrower assigning) the Lien
of any applicable Mortgaged Property.  The Borrower shall exercise its rights
under this Section 7.17 by delivery to the Collateral Agent of a notice (each, a
"Release Notice"), which shall refer to this Section 7.17, describe with
particularity the items of property proposed to be covered by the Release and be
accompanied by a counterpart of the release fully executed and acknowledged by
all parties thereto other than the Collateral Agent and be in form for execution
by the Collateral Agent, and a certificate of a Responsible Officer of the
Borrower certifying as to the satisfaction of the Release Conditions.  The
Collateral Agent shall execute, acknowledge (if applicable) and deliver to the
Borrower such counterpart within a reasonable time after receipt by the
Collateral Agent of a Release Notice and the satisfaction of the Release
Conditions.  The obligation of the Collateral Agent to deliver any Release, and
the Borrower's rights to consummate any sale, lease, assignment, transfer or
other disposition of any interest in Mortgaged Property, shall be subject to the
following conditions (collectively, the "Release Conditions"):

          (i)  no Default or Event of Default shall have occurred and be
     continuing;

          (ii)  if such Release relates to only a portion of a discrete parcel
     of Mortgaged Property, following such sale, transfer or other disposition
     and release of the Lien of any applicable Mortgage with respect thereto,
     the affected Mortgaged Property shall have sufficient utility services and
     sufficient access to public roads, rail spurs, harbors, canals, terminal
     and other transportation structures for the continued use of such Mortgaged
     Property in substantially the manner carried on by the Borrower prior to
     such Release;

          (iii)  if such Release relates to only a portion of a discrete parcel
     of Mortgaged Property, following such sale, transfer or other disposition,
     the affected Mortgaged Property shall comply in all material respects with
     applicable laws, rules, regulations and ordinances relating to
     environmental protection, zoning, land use and building and work place
     safety;

          (iv)  if such Release relates to only a portion of a discrete parcel
     of Mortgaged Property, following such sale, transfer or other disposition,
     the value of the affected Mortgaged Property following such Release
     (exclusive of the value
<PAGE>

                                                                             100

     of the released Mortgaged Property) plus the value of the proceeds received
     for such released Mortgaged Property shall not be less than the value of
     such Mortgaged Property prior to such Release;

          (v)  if such Release relates to only a portion of a discrete parcel of
     Mortgaged Property (other than Timberland Property), the title insurance
     company that issued the title insurance relating to the affected Mortgaged
     Property shall have committed to issue an endorsement to such title
     insurance policy confirming that after such Release the Lien of the
     applicable Mortgage continues unimpaired as a first priority Lien upon the
     remaining Mortgaged Property, subject only to Liens permitted by the terms
     of the applicable Mortgage to be prior thereto; and

          (vi)  except with respect to Timberland Property, the Borrower shall
     have delivered to the Collateral Agent a survey showing the property
     proposed to be released.

          (b)  In connection with any Release Transaction, the Borrower shall
(i) execute, deliver and cause to be recorded, and obtain and deliver, such
instruments as the Collateral Agent may reasonably request, including amendments
to the Security Documents and this Agreement, and (ii) deliver to the Collateral
Agent such evidence of the satisfaction of the Release Conditions as the
Collateral Agent may reasonably require.  Without limiting the provisions of
Section 10.05, the Borrower shall reimburse the Collateral Agent, the
Administrative Agent and the Lenders upon demand for all costs or expenses,
including attorneys' fees and disbursements, incurred by each of them in
connection with any action contemplated by this Section 7.17.

          SECTION  7.18.  Fiscal Year.  Cause its fiscal year to end on a date
                          ------------
other than December 31.


                                 ARTICLE VIII

                              Events of Default
                              -----------------

          In case of the happening of any of the following events ("Events of
Default"):

          (a)  any representation or warranty made or deemed made in any Loan
Document, or any representation, warranty, statement or information contained in
any report, certificate, financial statement or other instrument furnished
pursuant to any Loan Document, shall prove to have been false or misleading in
any material respect when so made, deemed made or furnished;
<PAGE>

                                                                             101


          (b)  default shall be made in the payment of any principal of any Loan
or Swingline Loan or LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;

          (c)  default shall be made in the payment of any interest on any Loan
or Swingline Loan or any Fee or any other amount (other than an amount referred
to in paragraph (b) above) due under any Loan Document, when and as the same
shall become due and payable, and such default shall continue unremedied for a
period of three Business Days;

          (d)  default shall be made in the due observance or performance by
SSCC, JSCE or the Borrower of any covenant, condition or agreement contained in
Section 6.01, 6.05(a), 6.08 or in Article VII;

          (e)  default shall be made in the due observance or performance by any
Loan Party or any of their respective Subsidiaries of any covenant, condition or
agreement contained in any Loan Document (other than those defaults specified in
paragraph (b), (c) or (d) above) and such default shall continue unremedied for
a period of 30 days after written notice thereof from the Administrative Agent
or any Lender to the Borrower;

          (f)  any Loan Party or any of their respective Subsidiaries shall (i)
fail to pay any principal or interest, regardless of amount, due in respect of
any Indebtedness in a principal amount in excess of $5,000,000, when and as the
same shall become due and payable (after giving effect to any applicable grace
period), or (ii) fail to observe or perform any other term, covenant, condition
or agreement contained in any agreement or instrument evidencing or governing
any such Indebtedness (after giving effect to any applicable grace period), if
the effect of any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its or their
behalf to cause, such Indebtedness to become due prior to its stated maturity;

          (g)  an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of SSCC, JSCE or the Borrower or any of their respective Material
Subsidiaries, or of a substantial part of the property or assets of SSCC, JSCE
or the Borrower or any such Material Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for SSCC, JSCE or the Borrower or any such Material Subsidiary
or for a substantial part of the property or assets of SSCC, JSCE or the
Borrower or any such Material Subsidiary or (iii) the winding-up or liquidation
of SSCC, JSCE or the Borrower or any such Material Subsidiary; and such
proceeding or
<PAGE>

                                                                             102

petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

          (h)  SSCC, JSCE or the Borrower or any of their respective Material
Subsidiaries shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or the filing
of any petition described in paragraph (g) above, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for SSCC, JSCE or the Borrower or any such Material Subsidiary
or for a substantial part of the property or assets of SSCC, JSCE or the
Borrower or any such Material Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;

          (i)  one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 in any one case or $15,000,000 in the aggregate
in all such cases (in each case to the extent not adequately covered by
insurance as to which the insurance company has acknowledged coverage pursuant
to a writing reasonably satisfactory to the Collateral Agent) shall be rendered
against SSCC, JSCE or the Borrower or any of their respective Subsidiaries or
any combination thereof and the same shall remain undischarged for a period of
10 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to levy upon assets or
properties of SSCC, JSCE or the Borrower or any Subsidiary to enforce any such
judgment;

          (j)  a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section 412(n)(l)
of the Code), shall have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of SSCC, JSCE or the
Borrower or any of their respective Subsidiaries to the PBGC or to a Plan in an
aggregate amount exceeding $25,000,000 and, within 30 days after the reporting
of any such Reportable Event to the Administrative Agent pursuant to Section
6.06(b)(i)(A) or after the receipt by the Administrative Agent of the statement
required pursuant to Section 6.06(b)(iii), the Administrative Agent shall have
notified the Borrower in writing that (i) the Required Lenders have reasonably
determined that, on the basis of such Reportable Event or Reportable Events or
the failure to make a required payment, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for the appointment by the
appropriate United States District Court of a trustee to administer such Plan or
Plans or (C) for the imposition of a lien in favor of a Plan and (ii) as a
result thereof an Event of Default exists hereunder; or a trustee shall be
appointed by a United
<PAGE>

                                                                             103

States District Court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;

          (k)  (i)  SSCC, JSCE or the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) SSCC, JSCE or the Borrower
or such ERISA Affiliate does not have reasonable grounds for contesting such
Withdrawal Liability or is not in fact contesting such Withdrawal Liability in a
timely and appropriate manner and (iii) the amount of the Withdrawal Liability
specified in such notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal Liabilities
(determined as of the date or dates of such notification), exceeds $25,000,000;

          (l)  SSCC, JSCE or the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the aggregate
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or have been or are being terminated have
been or will be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an amount
exceeding $25,000,000;

          (m)  there shall have occurred a Change in Control;

          (n)  any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by SSCC, JSCE or the Borrower
or any Guarantor not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in Collateral with a fair market value or book value
(whichever is greater) in excess, individually or in the aggregate, of
$35,000,000, except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Pledge Agreement or
otherwise take any action within its control (including the filing of Uniform
Commercial Code continuation statements);

          (o)  any Loan Document shall not be for any reason, or shall be
asserted by the Loan Party or any Guarantor party thereto (except as otherwise
expressly provided in this Agreement or such Loan Document) not to be, in full
force and effect and enforceable in all material respects in accordance with its
terms;

          (p)  the Obligations and the Guarantees thereof pursuant to the
Guarantee Agreement shall cease to constitute, or shall be asserted by any Loan
Party (except as otherwise expressly provided in this Agreement or such Loan
Document) not to constitute, senior indebtedness under the subordination
provisions of any Subordinated Indebtedness, or any such subordination
provisions shall be invalidated or otherwise
<PAGE>

                                                                             104

cease to be a legal, valid and binding obligation of the parties thereto,
enforceable in accordance with its terms; or

          (q)  there shall be present on, at, or under any of the Mortgaged
Properties any Hazardous Materials that could reasonably be expected to result
in any liability or obligation under any Environmental Laws, including costs of
remediation, fines, penalties, natural resource damages or other damages, in an
aggregate amount in excess of $50,000,000;

then, and in every such event (other than an event with respect to the Borrower
or any Guarantor described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may
and, at the request of the Required Lenders, shall, by notice to the Borrower,
take any of or all the following actions, at the same or different times: (i)
terminate forthwith the Commitments and the LC Commitment, (ii) declare the
Loans and the Swingline Loans then outstanding to be forthwith due and payable
in whole or in part, whereupon the principal of the Loans and the Swingline
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Loan Parties
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by SSCC, JSCE and the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding and (iii) exercise any remedies available under any Loan
Document or otherwise; and in any event with respect to the Borrower or a
Guarantor described in paragraph (g) or (h) above, the Commitments and the LC
Commitment shall automatically terminate and the principal of the Loans and the
Swingline Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Loan Parties accrued
hereunder and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by SSCC, JSCE and the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.


                                  ARTICLE IX

                The Administrative Agent, the Collateral Agent,
               ------------------------------------------------
               the Senior Managing Agents and the Fronting Bank
               ------------------------------------------------

          In order to expedite the transactions contemplated by this Agreement,
(a) The Chase Manhattan Bank is hereby appointed to act as Administrative Agent
and Collateral Agent for the Fronting Bank, the Swingline Lender and the Lenders
and (b) Bankers Trust Company and The Chase Manhattan Bank are hereby appointed
to act as Senior Managing Agents on behalf of the Managing Agents and the
Lenders (the Administrative Agent, the Collateral Agent, the Senior Managing
Agents and the
<PAGE>

                                                                             105

Managing Agents for purposes of this Article are collectively referred to as the
"Agents"). Each of the Lenders, the Fronting Bank and the Swingline Lender
hereby irrevocably authorizes each Agent to take such actions on their behalf
and to exercise such powers as are specifically delegated to such Agent by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, the Fronting Bank and the
Swingline Lender, without hereby limiting any implied authority, (a) to receive
all Loan Documents on the Closing Date, (b) to receive on behalf of the Lenders,
the Fronting Bank and the Swingline Lender all payments of principal of and
interest on the Loans and the Swingline Loans, all payments in respect of LC
Disbursements and all other amounts due to the Lenders, the Fronting Bank and
the Swingline Lender hereunder, and promptly to distribute to each Lender, the
Fronting Bank and the Swingline Lender its proper share of each payment so
received, (c) to give notice on behalf of each of the Lenders to the Borrower of
any Event of Default specified in this Agreement of which the Administrative
Agent has actual knowledge acquired in connection with its agency hereunder and
(d) to distribute to each Lender, the Fronting Bank and the Swingline Lender
copies of all notices, financial statements and other materials delivered by the
Loan Parties pursuant to this Agreement as received by the Administrative Agent
(including notices of an occurrence of any Event of Default). The Administrative
Agent and the Collateral Agent are hereby expressly authorized to execute any
and all documents (including releases) with respect to the Collateral and the
Program Receivables and the rights of the Secured Parties with respect thereto,
in each case as contemplated by and in accordance with the terms and provisions
of this Agreement and the Security Documents.

          None of the Agents or the Fronting Bank or any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its, his or her own gross negligence
or wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Loan Parties or any Guarantor of any of the
terms, conditions, covenants or agreements contained in any Loan Document.  The
Agents shall not be responsible to the Lenders or the Fronting Bank or the
Swingline Lender for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement, any other Loan Document or any other
instruments or agreements.  The Administrative Agent and the Collateral Agent
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders (and the
Fronting Bank, with respect to Letters of Credit) and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders, the Fronting Bank and the
Swingline Lender.  The Administrative Agent and the Collateral Agent shall, in
the absence of knowledge to the contrary, be entitled to rely on any instrument
or document believed by them in good faith to be genuine and correct and to have
been signed or sent by the proper Person or Persons.  None of the Agents or the
Fronting Bank or any of their
<PAGE>

                                                                             106

respective directors, officers, employees or agents shall have any
responsibility to the Loan Parties on account of the failure of or delay in
performance or breach by any Lender (or, in the case of the Agents, by the
Fronting Bank or the Swingline Lender) of any of its obligations hereunder or to
any Lender (or, in the case of the Agents, the Fronting Bank or the Swingline
Lender) on account of the failure of or delay in performance or breach by any
other Lender (or, in the case of the Agents, the Fronting Bank or the Swingline
Lender) or the Loan Parties or any Guarantor of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. Each Agent and the Fronting Bank may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by any of them with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by any of them in accordance with the advice of such counsel.

          The Lenders, the Fronting Bank and the Swingline Lender hereby
acknowledge that none of the Agents or the Fronting Bank shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.

          Subject to the appointment and acceptance of a successor Agent as
provided below, any Agent may resign at any time by notifying the Lenders, the
Fronting Bank, the Swingline Lender and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right to appoint a Lender as
the successor.  If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Fronting Bank, appoint a successor Agent, which
shall be a bank with an office in New York, New York, having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank.  Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder.  After any Agent's
resignation hereunder, the provisions of this Article and Section 10.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.

          With respect to the Loans made by it hereunder, each Agent and the
Fronting Bank, in its individual capacity and not as Agent or Fronting Bank, as
the case may be, shall have the same rights and powers as any other Lender and
may exercise the same as though it were not an Agent or the Fronting Bank, as
the case may be, and each Agent and its Affiliates and the Fronting Bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Loan Parties or any of their respective Subsidiaries
or other Affiliates as if it were not an Agent or the Fronting Bank, as the case
may be.
<PAGE>

                                                                             107

          Each Lender agrees (a) to reimburse each Agent and the Fronting Bank,
on demand, in the amount of such Lender's pro rata share (based on the aggregate
amount of its outstanding Term Loans, Revolving Loans and Commitments hereunder)
of any expenses incurred for the benefit of the Lenders by such Agent or the
Fronting Bank, including fees, disbursements and other charges of counsel and
compensation of agents paid for services rendered on behalf of the Lenders, that
shall not have been reimbursed by the Loan Parties and (b) to indemnify and hold
harmless each Agent and the Fronting Bank and any of their respective directors,
officers, employees or agents, on demand, in the amount of such pro rata share,
from and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as an Agent or the Fronting Bank, as the case may be,
or any of them in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same shall not have
been reimbursed by the Loan Parties, provided that (i) no Lender shall be liable
to any Agent or the Fronting Bank for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of such Agent or the Fronting Bank, as the case may be, or any of
their respective directors, officers, employees or agents and (ii) each Lender
that does not have a Revolving Credit Commitment (other than through the
termination thereof) shall be under no obligation to reimburse or indemnify the
Fronting Bank under clauses (a) and (b) above.

          Each Lender acknowledges that it has, independently and without
reliance upon the Agents, any other Lender, the Fronting Bank or the Swingline
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.  Each
Lender also acknowledges that it will, independently and without reliance upon
the Agents, any other Lender, the Fronting Bank or the Swingline Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.

          None of the Managing Agents shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders in such capacity.  Without limiting the foregoing,
none of the Managing Agents shall have or be deemed to have any fiduciary
relationship with any Lender.  Each Lender acknowledges that it has not relied,
and will not rely, upon any of the Managing Agents in deciding to enter into
this Agreement or in taking or not taking action hereunder or under any other
Loan Document.
<PAGE>

                                                                             108

                                   ARTICLE X

                                 Miscellaneous
                                 -------------

          SECTION  10.01.  Notices.  Except as otherwise expressly permitted
                           --------
herein, notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed or sent by
telecopy, as follows:

          (a)  If to either SSCC or JSCE, to it in care of Jefferson Smurfit
Corporation (U.S.), Jefferson Smurfit Centre, 8182 Maryland Avenue, St. Louis,
MO 63105, Attention of Treasurer (Telecopy No. (314) 746-1281); with a copy to
Jefferson Smurfit Group plc, Beech Hill, Clonskeagh, Dublin 4, Ireland,
Attention of Treasurer (Telecopy No. (011-353) 1269-4481);

          (b)  If to the Borrower, to it at Jefferson Smurfit Centre, 8182
Maryland Avenue, St. Louis, MO 63105, Attention of Treasurer (Telecopy No. (314)
746-1281);

          (c)  If to BTCo, as Senior Managing Agent, to it at 233 South Wacker
Drive (84th Floor), Chicago, IL 60606, Attention of Loretta Summers and Albert
Chung (Telecopy No. (312) 993-8218);

          (d)  If to Chase, as Administrative Agent, Collateral Agent, Swingline
Lender or Senior Managing Agent, to it at 227 West Monroe Street (27th Floor),
Chicago, IL 60606, Attention of Bob Krasnow (Telecopy No. (312) 541-6222); with
a copy to The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
Manhattan Plaza, 8th Floor, New York, New York 10081, Attention of Janet Belden
(Telecopy No. (212) 552-5658);

          (e)  If to the Fronting Bank, at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto; and

          (f)  If to a Lender, at its address (or telecopy number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 10.01.  The Administrative Agent shall deliver to the Borrower a copy of
each Administrative Questionnaire received by it.
<PAGE>

                                                                             109

          SECTION  10.02.  Survival of Agreement.  All covenants, agreements,
                           ----------------------
representations and warranties made by any Loan Party herein and by the Loan
Parties and the Guarantors in the certificates or other instruments prepared or
delivered in connection with or pursuant to the Existing Credit Agreement, this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lenders, the Fronting Bank and the Swingline Lender and shall
survive the making by the Lenders of the Loans, the making by the Swingline
Lender of the Swingline Loans and the issuance of Letters of Credit by the
Fronting Bank, regardless of any investigation made by the Lenders, the Fronting
Bank or the Swingline Lender or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or Swingline Loan or any Fee or any other amount payable under this Agreement or
any other Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments and the LC Commitment have not been
terminated.

          SECTION  10.03.  Binding Effect.  This Agreement shall become
                           ----------------
effective when it shall have been executed by the Administrative Agent (on
behalf of itself and the Required Lenders) and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of SSCC, JSCE, the Borrower and each Tranche B Lender, and thereafter
shall be binding upon and inure to the benefit of SSCC, JSCE and the Borrower,
the Administrative Agent, the Senior Managing Agents, the Fronting Bank, the
Swingline Lender and each Managing Agent and Lender and their respective
successors and assigns, except that none of SSCC, JSCE or the Borrower shall
have the right to assign its rights hereunder or any interest herein without the
prior consent of all the Lenders (and any attempted assignment by any such
Person shall be void).

          SECTION  10.04.  Successors and Assigns.  (a)  Subject to Section
                           -----------------------
10.03, whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of SSCC, JSCE and the
Borrower, the Senior Managing Agents, the Administrative Agent, the Fronting
Bank, the Swingline Lender, the Managing Agents or the Lenders that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

          (b)  Each Lender may assign to one or more assignees (treating any
fund that invests in bank loans and any other fund that invests in bank loans
and is managed by the same investment advisor of such fund or by an Affiliate of
such investment advisor as a single assignee), including an Affiliate thereof,
all or a portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitments and LC Commitment, the
outstanding Letters of Credit and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or a Lender
Affiliate, each of the Administrative Agent and the Borrower (and, in the case
of an assignment of a Lender's Revolving Credit Commitment, the Swingline Lender
and the
<PAGE>

                                                                             110

Fronting Bank) must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld), provided that the consent of the
Borrower shall not be required if a Default or an Event of Default under
paragraph (b), (c), (g) or (h) of Article VIII has occurred and is continuing on
the date of the Assignment and Acceptance, (ii) except in the case of an
assignment to a Lender or a Lender Affiliate or an Affiliate, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 (or an
amount equal to the remaining balance of such Lender's Commitment), (iii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and a processing and recordation fee of
$3,500 and (iv) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 10.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof and in no event
shall precede the date of such recording, (i) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto, but shall continue to be entitled to the benefits of Sections 2.14,
2.16, 2.20 and 10.05, as well as to any Fees accrued for its account and not yet
paid).

          (c)  By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and LC Commitment, and the outstanding balances of its Term Loans
and Revolving Loans, in each case without giving effect to assignments thereof
that have not become effective, are as set forth in such Assignment and
Acceptance; (ii) except as set forth in clause (i) above, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto, or the financial
condition of the Loan Parties or the performance or observance by the Loan
Parties of any of their obligations under this Agreement or under any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies
<PAGE>

                                                                             111

of any amendments or consents entered into prior to the date of such Assignment
and Acceptance and copies of the most recent financial statements delivered
pursuant to Section 6.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent, the Senior Managing Agents, the Managing Agents and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent, the
Senior Managing Agent, the Managing Agents and the Collateral Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations that by the terms of this Agreement are required to be
performed by it as a Lender.

          (d)  The Administrative Agent, acting for this purpose as agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments and
LC Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the Register shall be conclusive in the absence of manifest error and SSCC, JSCE
and the Borrower, the Administrative Agent, the Fronting Bank, the Swingline
Lender and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by SSCC, JSCE, the Borrower, the Fronting Bank, the
Swingline Lender and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

          (e)  Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and the written consent (to the extent required under
paragraph (b) above), of the Administrative Agent, the Borrower and/or the
Swingline Lender and the Fronting Bank to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register.  No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (e).

          (f)  Each Lender may, without the consent of SSCC, JSCE, the Borrower,
the Administrative Agent, the Fronting Bank or the Swingline Lender, sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under
<PAGE>

                                                                             112

this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.14, 2.16, 2.20 and
10.05 to the same extent as if they were Lenders, provided that, except as
expressly provided in Section 2.20(a), the Borrower shall not be required to
reimburse the participating lenders or other entities pursuant to Section 2.14,
2.16, 2.20 or 10.05 in an amount in excess of the amount that would have been
payable thereunder to such Lender had such Lender not sold such participation,
and (iv) SSCC, JSCE, the Borrower, the Administrative Agent, the Senior Managing
Agents, the Managing Agents, the Fronting Bank, the Swingline Lender and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the Loan
Parties under the Loan Documents and to approve any amendment, modification or
waiver of any provision of this Agreement (provided that the participating bank
or other entity may be provided with the right to approve amendments,
modifications or waivers affecting it with respect to (w) any decrease in the
Fees payable hereunder with respect to Loans in which the participating bank or
other entity has purchased a participation, (x) any change in the amount of
principal of, or decrease in the rate at which interest is payable on, the Loans
in which the participating bank or other entity has purchased a participation,
(y) any extension of the final scheduled maturity of any Loan in which the
participating bank or other entity has purchased a participation or (z) any
release of all or substantially all the Collateral).

          (g)  Notwithstanding the limitations set forth in paragraph (b) above,
(i) any Lender may at any time assign all or any portion of its rights under
this Agreement to a Federal Reserve Bank without the prior written consent of
the Borrower, the Administrative Agent, the Fronting Bank or the Swingline
Lender and (ii) any Lender which is a fund may pledge all or any portion of its
rights under this Agreement to its trustee in support of its obligations to its
trustee without the prior written consent of the Borrower, the Fronting Banks or
the Swingline Lender, provided that no such assignment pursuant to clause (i) or
(ii) shall release a Lender from any of its obligations hereunder or substitute
any such Bank or trustee for such Lender as a party hereto.  In order to
facilitate such an assignment to a Federal Reserve Bank or trustee , the
Borrower shall, at the request of the assigning Lender, duly execute and deliver
to the assigning Lender a promissory note or notes evidencing the Loans made to
the Borrower by the assigning Lender hereunder.

          (h)  Except as provided in Section 3.10 and Section 2.22,
respectively, neither the Fronting Bank nor the Swingline Lender may assign or
delegate any of its respective rights and duties hereunder without the prior
written consent of the Borrower and the Senior Managing Agents.
<PAGE>

                                                                             113

          SECTION  10.05.  Expenses; Indemnity.  (a)  The Borrower agrees to pay
                           --------------------
all out-of-pocket expenses incurred by the Administrative Agent, the Senior
Managing Agents, the Fronting Bank, the Swingline Lender and the Collateral
Agent in connection with the preparation of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the Swingline
Lender, the Collateral Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or the Letters of Credit issued
hereunder, including the reasonable fees, disbursements and other charges of
Cravath, Swaine & Moore, counsel for the Administrative Agent, the Collateral
Agent and the Senior Managing Agents, and, in connection with any such
enforcement or protection, the reasonable fees, disbursements and other charges
of any other counsel (including allocated costs of internal counsel) for the
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender, the Collateral Agent or any Lender.  The
Borrower further agrees to indemnify the Administrative Agent, the Senior
Managing Agents, the Managing Agents, the Fronting Bank, the Swingline Lender,
the Collateral Agent and the Lenders from, and hold them harmless against, any
documentary taxes, assessments or similar charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any of
the other Loan Documents.

          (b)  The Borrower agrees to indemnify the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Collateral Agent, the Fronting
Bank, the Swingline Lender and each Lender and each of their respective
directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, disbursements and other charges, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a result of (i)
the execution or delivery of this Agreement, any other Loan Document, any
Transaction Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions
(including the Restatement Date Transactions (as defined in the Existing Credit
Agreement) and the Second Restatement Date Transactions) and the other
transactions contemplated hereby or thereby, (ii) the use of the Letters of
Credit or the proceeds of the Loans and the Swingline Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
<PAGE>

                                                                             114

          (c)  The provisions of this Section 10.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans or the Swingline Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Collateral Agent, the Swingline Lender or any Lender.  All amounts due under
this Section 10.05 shall be payable on written demand therefor.

          SECTION  10.06.  Right of Setoff.  If an Event of Default shall have
                           ----------------
occurred and be continuing, each Lender is hereby authorized, in addition to any
other right or remedy that any Lender may have by operation of law or otherwise,
at any time and from time to time, without notice to the Borrower (any such
notice being expressly waived by the Borrower), to exercise its banker's lien or
right of setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of any Loan Party
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement and other Loan Documents held by such Lender, irrespective
of whether such Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be unmatured.

          SECTION  10.07.  Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN
                           ---------------
DOCUMENTS (OTHER THAN THE MORTGAGES) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION  10.08.  Waivers; Amendment.  (a)  No failure or delay on the
                           -------------------
part of the Administrative Agent, either Senior Managing Agent, the Managing
Agents, the Fronting Bank, the  Swingline Lender, the Collateral Agent or any
Lender in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of the Administrative Agent, the Senior
Managing Agents, the Managing Agents, the Fronting Bank, the Swingline Lender,
the Collateral Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have.  No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Loan Parties therefrom
shall in any event be effective unless the same shall be permitted by paragraphs
(b) or (c) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  No notice or demand on
the Loan Parties in any case shall entitle the Loan Parties to any other or
further notice or demand in similar or other circumstances.
<PAGE>

                                                                             115

          (b)  Neither this Agreement or any of the other Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by JSC, JSCE, the Borrower and the Required Lenders, (ii) in the
case of the Guarantee Agreement, pursuant to an agreement or agreements in
writing entered into by the Guarantors and the Collateral Agent and consented to
by the Required Lenders, (iii) in the case of any of the Security Documents,
pursuant to an agreement or agreements in writing entered into by the parties
thereto and consented to by the Required Lenders or (iv) in the case of a Letter
of Credit, pursuant to an agreement or agreements entered into by the Borrower
and the Fronting Bank; provided, however, that no such agreement shall (A)
change the principal amount of any Loan, extend the final scheduled maturity of
any Loan, extend the scheduled date for payment of interest on any Loan, forgive
any such payment or any part thereof or reduce the rate of interest on any Loan,
in each case without the prior written consent of each Lender affected thereby,
(B) increase the amount or extend the termination date of the Commitment or the
LC Commitment or reduce or extend the date for payment of the Fees of any
Lender, in each case without the prior written consent of such Lender, (C) amend
or modify the pro rata requirements of Section 2.17, the provisions of Section
10.03, the provisions of this Section 10.08(b) or the definition of the term
"Required Lenders" without the prior written consent of each Lender, (D) release
all or substantially all the Collateral, except as expressly permitted by the
Security Documents or this Agreement, without the prior written consent of each
Lender, (E) reduce any Tranche A Term Loan Repayment Amount or extend any
Tranche A Term Loan Repayment Date (other than the Tranche A Maturity Date), in
each case without the prior written consent of Lenders holding Tranche A Term
Loans representing at least 75% of the aggregate outstanding principal amount of
the Tranche A Term Loans, (F) reduce any Tranche B Term Loan Repayment Amount or
extend any Tranche B Term Loan Repayment Date (other than the Tranche B Maturity
Date), in each case without the prior written consent of Lenders holding at
least 75% of the aggregate outstanding principal amount of the Tranche B Term
Loans, (G) change the allocation of prepayments to be made pursuant to Section
2.12(b) or 2.13(d) or (i) without the prior written consent of (1) Lenders
holding more than 50% of the aggregate outstanding principal amount of the
Tranche A Term Loans and (2) Lenders holding more than 50% of the aggregate
outstanding principal amount of the Tranche B Term Loans, (H) change the
application of prepayments of Tranche A Term Loans pursuant to Section 2.12(b)
or 2.13(d) or (i) without the prior written consent of Lenders holding Tranche A
Term Loans representing more than 50% of the aggregate outstanding principal
amount of the Tranche A Term Loans or (I) change the application of prepayments
of Tranche B Term Loans pursuant to Section 2.12(b) or 2.13(d) or (i) without
the prior written consent of Lenders holding more than 50% of the aggregate
outstanding principal amount of the Tranche B Term Loans; and provided further,
that (I) no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the Fronting Bank or
the Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the Collateral Agent, the Fronting Bank or the Swingline
Lender, respectively, (II) any agreement described in clause (E), (F), (G), (H)
or (I) above that is
<PAGE>

                                                                             116

consented to by the requisite Lenders as provided therein shall be effective as
to the matters described in such clauses even if it shall not have been
consented to by the Required Lenders and (III) no such agreement shall release
any Guarantor from its obligations under the Guarantee Agreement, without the
prior written consent of Lenders holding Loans, a share of the used LC
Commitments and unused Commitments representing at least 75% of the sum of (x)
the aggregate principal amount of the Loans, (y) the LC Exposure and (z) the
aggregate unused Commitments.

          SECTION  10.09.  Interest Rate Limitation.  Notwithstanding anything
                           -------------------------
herein to the contrary, if at any time the applicable interest rate, together
with all fees and charges that are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender or the Swingline Lender, shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
taken, received or reserved by such Lender or the Swingline Lender in accordance
with applicable law, the rate of interest payable to such Lender or the
Swingline Lender hereunder, together with all Charges payable to such Lender or
the Swingline Lender, shall be limited to the Maximum Rate.

          SECTION  10.10.  Entire Agreement.  This Agreement, the other Loan
                           -----------------
Documents and any separate letter agreements with respect to fees payable to the
Administrative Agent or the Senior Managing Agents constitute the entire
contract between the parties relative to the subject matter hereof.  Any
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents.  Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.

          SECTION  10.11.  Waiver of Jury Trial.  Each party hereto hereby
                           --------------------
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents.  Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.11.

          SECTION  10.12.  Severability.  In the event any one or more of the
                           -------------
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby.  The parties shall
endeavor in good-faith negotiations to replace the
<PAGE>

                                                                             117

invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

          SECTION  10.13.  Counterparts.  This Agreement may be executed in two
                           -------------
or more counterparts or counterpart signature pages, each of which shall
constitute an original but all of which when taken together shall constitute but
one contract, and shall become effective as provided in Section 10.03.

          SECTION  10.14.  Headings.  Article and Section headings and the Table
                           ---------
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

          SECTION  10.15.  Confidentiality.  (a)  Each Lender agrees not to
                           ----------------
disclose to any Person the Information (as defined below) in accordance with
such Lender's customary procedures for non-disclosure of confidential
information of third parties of this nature and in accordance with safe and
sound lending practices without the prior written consent of the Borrower, which
consent shall not be unreasonably withheld, except that any Lender shall be
permitted to disclose Information (i) to its and its Affiliates' officers,
directors, employees, agents and representatives (including its auditors and
counsel) or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees in writing to be bound by the provisions of this Section
10.15); (ii) to the extent (A) required by applicable laws and regulations or by
any subpoena or similar legal process or (B) requested or required by any
regulatory authority or The National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio; (iii) to
the extent such Information (A) becomes publicly available other than as a
result of a breach of this Agreement, (B) becomes available to such Lender on a
non-confidential basis from a source other than a Loan Party or its Affiliates
or (C) was available to such Lender on a non-confidential basis prior to its
disclosure to such Lender by a Loan Party or its Affiliates; (iv) to any actual
or prospective assignee of, or prospective purchaser of a participation in, the
rights of such Lender hereunder, in each case subject to paragraph (c) below; or
(v) in connection with any suit, action or proceeding relating to the
enforcement of rights hereunder or under any other Loan Document or in
connection with the transactions contemplated hereby. As used in this Section
10.15, as to any Lender, the term "Information" shall mean the Confidential
Information Memorandum and any other materials, documents and information that
SSCC, JSCE or the Borrower, or any of their Affiliates may have furnished or may
hereafter furnish to any Lender in connection with this Agreement.
<PAGE>

                                                                             118

          (b)  Each Lender agrees that it will use the Information only for
purposes related to the transactions contemplated hereby and by the other Loan
Documents, provided that (i) if the conditions referred to in any of subclauses
(A) through (C) of clause (iii) of paragraph (a) above are met, such Lender may
otherwise use the Information and (ii) if such Lender or any of its Affiliates
is otherwise a creditor of a Loan Party, such Lender or any such Affiliate may
use the Information in connection with its other credits to such Loan Party.

          (c)  Each Lender agrees that it will not disclose any of the
Information to any actual or prospective assignee of such Lender or participant
in any rights of such Lender under this Agreement unless such actual or
prospective assignee or participant first executes and delivers to such Lender
or the Borrower a confidentiality letter containing substantially the
undertakings set forth in this Section 10.15.

          SECTION  10.16.  Jurisdiction; Consent to Service of Process.  (a)
                           --------------------------------------------
Each of SSCC, JSCE and the Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court.  Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement
shall affect any right that any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Loan Party or its properties in the courts of any jurisdiction.

          (b)  Each of SSCC, JSCE and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

          (c)  Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
<PAGE>

                                                                             119

          SECTION  10.17.  Receivables Program.  The Lenders hereby acknowledge
                           --------------------
and agree that the transfer of Program Receivables by SNC to the Borrower, and
the transfer of Program Receivables by the Borrower to JSF pursuant to the
Receivables Program, constitute true and valid sales for consideration (or, in
the case of Program Receivables contributed by the Borrower to JSF,
contributions for consideration), and not a borrowing by the Borrower or SNC
from JSF secured by such Program Receivables.

          SECTION  10.18.  Florida Real Property.  The parties hereto hereby
                           ----------------------
acknowledge that the Revolving Loans are secured by real and personal property
located both inside and outside the State of Florida and hereby agree that for
purposes of calculating intangible taxes due under Section 199.133, Florida
Statutes, the first amounts advanced under the Revolving Facility shall be
deemed to be the portion allocable to the Collateral consisting of Real Property
located in the State of Florida, and such portion allocable to such Collateral
shall also be deemed to be the last to be repaid under the terms hereof.
Nothing herein shall limit the Secured Parties' right to recover or realize from
the Collateral located in the State of Florida amounts in excess of that
allocated to the Revolving Loans or to apply amounts so recovered or realized
against the Secured Obligations in such order as the Collateral Agent in its
sole discretion shall determine.

          SECTION  10.19.  Effect of Restatement.  This Agreement shall, except
                           ----------------------
as otherwise expressly set forth herein, supersede the Existing Credit Agreement
from and after the Second Restatement Date with respect to the transactions
hereunder and with respect to the Loans and Letters of Credit outstanding under
the Existing Credit Agreement as of Second Restatement Date.  The parties hereto
acknowledge and agree, however, that (i) this Agreement and all other Loan
Documents executed and delivered herewith do not constitute a novation, payment
and reborrowing or termination of the Obligations under the Existing Credit
Agreement and the other Loan Documents as in effect prior to the Second
Restatement Date, (ii) such Obligations are in all respects continuing with only
the terms being modified as provided in this Agreement and the other Loan
Documents, (iii) the liens and security interests in favor of the Collateral
Agent for the benefit of the Secured Parties securing payment of such
Obligations are in all respects continuing and in full force and effect with
respect to all Obligations and (iv) all references in the other Loan Documents
to this Agreement shall be deemed to refer without further amendment to this
Agreement.

          SECTION  10.20.  Certain Relationships.  Nothing contained in this
                           ----------------------
Agreement and no action taken by the Senior Managing Agents, the Administrative
Agent or any Lender pursuant hereto shall be deemed to constitute the Senior
Managing Agents, the Administrative Agent or the Lenders a partnership, an
association, a joint venture or other entity.  Neither the Administrative Agent,
any Managing Agent nor any Lender has any fiduciary relationship with or any
fiduciary duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between the
Administrative Agent, Managing Agents and the Lenders, on the
<PAGE>

                                                                             120

one hand and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor.

          SECTION 10.21.  Additional Term Facilities.  (a)  Pursuant to
                          ---------------------------
Amendment No. 5, the Required Lenders have authorized the Administrative Agent
on their behalf to enter into this Agreement solely to the extent necessary to
reflect the making of the Tranche B Term Loans (or the commitment to make the
same) on the terms described in Amendment No. 5.

          (b)  It is the intent of the Lenders that the Tranche B Term Loans
(when and if made) shall constitute Loans and Obligations, and that the Tranche
B Lenders shall constitute Lenders and Secured Parties, hereunder and under the
other Loan Documents.  Accordingly, the Tranche B Term Loans shall rank pari
                                                                        ----
passu in right of payment to, and shall be secured equally and ratably with, the
-----
other Loans and Obligations outstanding under this Agreement and the other Loan
Documents.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers, all as of the date and year
first above written.


                                        SMURFIT-STONE CONTAINER
                                        CORPORATION (formerly named
                                        JEFFERSON SMURFIT CORPORATION)


                                        By /s/ C. A. Hinrichs
                                        Name: C. A. Hinrichs
                                        Title: Vice President & Treasurer


                                        JEFFERSON SMURFIT CORPORATION (U.S.)


                                        By /s/ C. A. Hinrichs
                                        Name: C. A. Hinrichs
                                        Title: Vice President & Treasurer


                                        JSCE, INC.

                                        By  /s/ C. A. Hinrichs
                                        Name: C. A. Hinrichs
                                        Title: Vice President & Treasurer
<PAGE>

                                        BANKERS TRUST COMPANY,
                                        individually and as Fronting Bank
                                        and Senior Managing Agent

                                         By /s/ Robert R. Telesca
                                         Name: Robert R. Telesca
                                         Title:  Assistant Vice President

                                         __________________________________
                                         Name:
                                         Title:
<PAGE>

                                      THE CHASE MANHATTAN BANK,
                                      individually and as Administrative Agent,
                                      Collateral Agent and Senior Managing
                                      Agent


                                      By /s/ Robert A. Krasnow
                                      Name: Robert A. Krasnow
                                      Title:  Vice President