Document:

Exhibit 4.3

 

AMENDMENT
AND RESTATEMENT AGREEMENT

31
January 2007

 

between

SMURFIT KAPPA CORPORATION LIMITED

as the Parent

and

DEUTSCHE
BANK AG, LONDON BRANCH

as Facility Agent

 

in
respect of a

SENIOR CREDIT FACILITY

dated 30 November 2005 as amended
by an amendment letter dated 27 February 2006 

and as further amended by an agreement dated 20 November 2006

 

 

5
Old Broad Street

London  EC2N 1DW

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  INTERPRETATION

  	
   

  	
  1

  
	
  2.

  	
   

  	
  AMENDMENT TO THE SENIOR
  FACILITY AGREEMENT

  	
   

  	
  1

  
	
  3.

  	
   

  	
  EFFECTIVE DATE

  	
   

  	
  1

  
	
  4.

  	
   

  	
  RATIFICATION OF THE
  SENIOR FACILITY AGREEMENT

  	
   

  	
  2

  
	
  5.

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  2

  
	
  6.

  	
   

  	
  EXPENSES AND STAMP DUTY

  	
   

  	
  3

  
	
  7.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  3

  
	
  8.

  	
   

  	
  GOVERNING LAW AND
  JURISDICTION

  	
   

  	
  3

  

 

 

 i

THIS AGREEMENT is dated 31
January  2007 and is made

BETWEEN:

(1)                                 SMURFIT KAPPA CORPORATION LIMITED
(formerly known
as Jefferson Smurfit Group Limited), a company incorporated in Ireland
(registered number 357957) (the “Parent”); and

(2)                                 DEUTSCHE BANK AG, LONDON BRANCH as facility agent (in its capacity the “Facility Agent”).

WHEREAS:

(A)                               This Agreement is supplemental to the
Senior Credit Facility dated 30 November 2005 between the Parent, the Company,
the original borrowers, the original guarantors, the Arrangers, the original
Lenders, the Issuing Bank, the Facility Agent and the Security Agent as amended
by an amendment letter dated 27
February 2006 and as further amended by an agreement dated 20 November 2006 (the
“Senior Facility Agreement”).

(B)                               The parties wish to amend and restate the
Senior Facility Agreement in its entirety on the terms and subject to the
conditions set out in this Agreement.

IT IS AGREED as follows:

1.                                      INTERPRETATION

1.1                               Subject
to the terms of this Agreement, words and expressions defined in the Senior
Facility Agreement shall have the same meanings in this Agreement.

1.2                               In
this Agreement, any reference to a “Clause”, or a “Schedule” is, unless the
context otherwise requires, reference to a clause or a schedule to this
Agreement.

1.3                               In
accordance with the Senior Facility Agreement, the Parent and the Facility
Agent designate this Agreement a Senior Finance Document.

2.                                      AMENDMENT
TO THE SENIOR FACILITY AGREEMENT

With
effect from the Effective Date (as defined below), the Senior Facility
Agreement shall be amended as set out in Schedule 1 to this Agreement (Amended and Restated Senior Facility
Agreement) and all references in the Senior Facility Agreement to “this
Agreement” shall include this Agreement.

3.                                      EFFECTIVE
DATE

The effective
date (the “Effective Date”) of
this Agreement shall be the later of the date of this Agreement and the date on
which the Facility Agent confirms (and shall confirm upon receipt) that it has
been provided with:

(a)                                  a
copy, certified true by a duly authorised officer of the Parent or a solicitor
of Kirkland & Ellis International LLP (London office), of a board
resolution of the Parent approving (i) the execution, delivery and performance
of this Agreement, 

(ii) the
terms and conditions of this Agreement and (iii) authorising a named person or
persons to sign this Agreement;

(b)                                  a
copy, certified true by a duly authorised officer of the Parent or a solicitor
of Kirkland & Ellis International LLP (London office), of the Parent’s
corporate constitutional documents;

(c)                                  a
legal opinion from White & Case LLP, legal advisers as to matters of
English law to the Arrangers and the Facility Agent, addressed to the Finance
Parties;

(d)                                  a legal opinion of McCann FitzGerald, legal
advisers as to matters of Irish law to the Arrangers and the Facility
Agent, addressed to the Finance
Parties;

(e)                                  the
IPO Structure Paper;

(f)                                    fee
letters from the Facility Agent dated 10 January 2007 countersigned by Parent
in respect of fees payable by the Parent in connection with the amendment and
restatement of the Senior Facility Agreement (the “Fee Letters”); and

(g)                                 evidence
that all fees and expenses have been or will be paid on the basis of the Fee
Letters,

each
in form and substance satisfactory to the Facility Agent acting reasonably.

4.                                      RATIFICATION
OF THE SENIOR FACILITY AGREEMENT

4.1                               The
Senior Facility Agreement as amended by this Agreement is ratified and
confirmed.

4.2                               Subject
as amended by this Agreement, the Parent on behalf of the Guarantors, confirms
that the provisions of the guarantee and indemnity contained in clause 19 (Guarantee and Indemnity) of the Senior
Facility Agreement shall remain in full force and effect on and after the
Effective Date and shall apply equally to the obligations of the Borrowers
under Clause 6 (Expenses and Stamp Duty)
of this Agreement as if set out in full in this Agreement save that references
in the Senior Facility Agreement to “this Agreement” shall be construed as
references to this Agreement.

5.                                      REPRESENTATIONS
AND WARRANTIES

5.1                               The
Parent on behalf of the Obligors represents and warrants to the Lenders:

(a)                                  each
of the repeating representations included in clause 20 (Representations) of the Senior Facility Agreement;

(b)                                  the
representation included in clause 20.6 (No Default) of
the Senior Facility Agreement;

(c)                                  the
representation included in clause 20.7 (Authorisations)
of the Senior Facility Agreement,

as
if such clauses were set out in full in this Agreement.

 2
 

5.2                               The
representations referred to in clause 5.1 above shall survive the execution of
this Agreement.

6.                                      EXPENSES
AND STAMP DUTY

6.1                               The
Parent shall from time to time on demand of the Facility Agent, reimburse the
Facility Agent and each of the Arrangers for all costs and expenses (including
legal fees) together with any VAT in connection with the negotiation,
preparation and execution of this Agreement and the transactions contemplated
in this Agreement.

6.2                               The
Parent shall pay all stamp, registration and other taxes to which this
Agreement, or any judgment given in connection with this Agreement, is or at
any time may be subject and shall from time to time on demand of the Facility
Agent indemnify the Facility Agent, the Arrangers and the Lenders against any
liabilities, costs, claims and expenses resulting from any failure to pay or
any delay in paying any such tax.

7.                                      COUNTERPARTS

This
Agreement may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

8.                                      GOVERNING
LAW AND JURISDICTION

8.1                               This
Agreement shall be governed by and construed in accordance with English law.

8.2                               The
provisions of clause 39 (Governing Law)
and clause 40.1 (Jurisdiction)
of the Senior Facility Agreement shall be deemed to be incorporated into this
Agreement as if such clause was set out in full save that references in the
Senior Facility Agreement to “this Agreement” shall be construed as references
to this Agreement.

This Agreement has been
entered into on the date stated at the beginning of this Agreement.

 3
 

SCHEDULE 1

AMENDED AND RESTATED SENIOR FACILITY
AGREEMENT

 

 4

SIGNATORIES

PARENT

	
  The Common Seal of

  	
  )

  
	
  SMURFIT KAPPA

  	
  )

  
	
  CORPORATION LIMITED

  	
  )

  
	
  was affixed hereto in the presence of

  	
  )

  
	
   

  	
  )

  
	
  Director

  	
  ) /s/ Ian J. Curley

  
	
   

  	
  )

  
	
  Director / Secretary

  	
  ) /s/ Michael O’Riordan

  
	
   

  	
  )

  
	
   

  	
   

  
	
  THE FACILITY AGENT

  	
   

  
	
   

  	
   

  
	
  EXECUTED by DEUTSCHE BANK AG,

  	
  )

  
	
  LONDON BRANCH as
  Facility Agent

  	
  )

  
	
  on behalf of and with the requisite consent

  	
  )

  
	
  of the Lenders pursuant to clause 30.1 of

  	
  )

  
	
  the Senior Facility Agreement, acting by its

  	
  )

  
	
  authorised signatories

  	
  )

  
	
   

  	
  ) /s/ [Illegible]

  
	
   

  	
  )

  
	
  acting under the authority

  	
  ) /s/ [Illegible]

  
	
  of that company

  	
  )

  

 

 

SCHEDULE 1

AMENDED AND RESTATED SENIOR
FACILITY AGREEMENT

 

ORIGINALLY DATED 30 NOVEMBER 2005

SENIOR CREDIT FACILITY AGREEMENT

FOR

SMURFIT KAPPA ACQUISITIONS

 

ARRANGED BY

 

DEUTSCHE BANK AG, LONDON BRANCH

CITIGROUP GLOBAL MARKETS LIMITED

CREDIT SUISSE FIRST BOSTON INTERNATIONAL

JP MORGAN PLC

 

WITH

 

DEUTSCHE BANK AG, LONDON BRANCH

as Facility Agent

 

and

 

DEUTSCHE BANK AG, LONDON BRANCH

as Security Agent

 

 

5 Old Broad Street

London EC2N 1DW

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  INTERPRETATION

  	
   

  	
  1

  
	
  2.

  	
   

  	
  FACILITIES

  	
   

  	
  37

  
	
  3.

  	
   

  	
  PURPOSE

  	
   

  	
  41

  
	
  4.

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  42

  
	
  5.

  	
   

  	
  UTILISATION — LOANS

  	
   

  	
  44

  
	
  6.

  	
   

  	
  UTILISATION -
  DOCUMENTARY CREDITS

  	
   

  	
  45

  
	
  7.

  	
   

  	
  DOCUMENTARY CREDITS

  	
   

  	
  46

  
	
  8.

  	
   

  	
  ANCILLARY FACILITIES

  	
   

  	
  52

  
	
  9.

  	
   

  	
  OPTIONAL CURRENCIES

  	
   

  	
  54

  
	
  10.

  	
   

  	
  REPAYMENT

  	
   

  	
  58

  
	
  11.

  	
   

  	
  PREPAYMENT AND
  CANCELLATION

  	
   

  	
  60

  
	
  12.

  	
   

  	
  INTEREST

  	
   

  	
  72

  
	
  13.

  	
   

  	
  TERMS

  	
   

  	
  76

  
	
  14.

  	
   

  	
  MARKET DISRUPTION

  	
   

  	
  78

  
	
  15.

  	
   

  	
  TAXES

  	
   

  	
  79

  
	
  16.

  	
   

  	
  INCREASED COSTS

  	
   

  	
  84

  
	
  17.

  	
   

  	
  MITIGATION AND CONDUCT
  OF BUSINESS

  	
   

  	
  87

  
	
  18.

  	
   

  	
  PAYMENTS

  	
   

  	
  89

  
	
  19.

  	
   

  	
  GUARANTEE AND INDEMNITY

  	
   

  	
  92

  
	
  20.

  	
   

  	
  REPRESENTATIONS

  	
   

  	
  96

  
	
  21.

  	
   

  	
  INFORMATION COVENANTS

  	
   

  	
  104

  
	
  22.

  	
   

  	
  FINANCIAL COVENANTS

  	
   

  	
  111

  
	
  23.

  	
   

  	
  GENERAL COVENANTS

  	
   

  	
  120

  
	
  24.

  	
   

  	
  DEFAULT

  	
   

  	
  155

  
	
  25.

  	
   

  	
  THE ADMINISTRATIVE
  PARTIES

  	
   

  	
  162

  
	
  26.

  	
   

  	
  EVIDENCE AND CALCULATIONS

  	
   

  	
  168

  
	
  27.

  	
   

  	
  FEES

  	
   

  	
  169

  
	
  28.

  	
   

  	
  INDEMNITIES AND BREAK
  COSTS

  	
   

  	
  170

  
	
  29.

  	
   

  	
  EXPENSES

  	
   

  	
  172

  
	
  30.

  	
   

  	
  AMENDMENTS AND WAIVERS

  	
   

  	
  172

  
	
  31.

  	
   

  	
  CHANGES TO THE PARTIES

  	
   

  	
  175

  
	
  32.

  	
   

  	
  DISCLOSURE OF
  INFORMATION

  	
   

  	
  181

  

 

 i
 

 

	
  33.

  	
   

  	
  SET-OFF

  	
   

  	
  182

  
	
  34.

  	
   

  	
  PRO RATA SHARING

  	
   

  	
  182

  
	
  35.

  	
   

  	
  SEVERABILITY

  	
   

  	
  183

  
	
  36.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  183

  
	
  37.

  	
   

  	
  NOTICES

  	
   

  	
  184

  
	
  38.

  	
   

  	
  LANGUAGE

  	
   

  	
  186

  
	
  39.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  186

  
	
  40.

  	
   

  	
  ENFORCEMENT

  	
   

  	
  186

  
	
  SCHEDULE 1 ORIGINAL
  PARTIES

  	
   

  	
  188

  
	
  SCHEDULE 2 CONDITIONS
  PRECEDENT DOCUMENTS

  	
   

  	
  192

  
	
  SCHEDULE 3 FORM OF
  REQUEST

  	
   

  	
  199

  
	
  SCHEDULE 4 CALCULATION
  OF THE MANDATORY COST

  	
   

  	
  200

  
	
  SCHEDULE 5 FORM OF
  TRANSFER CERTIFICATE

  	
   

  	
  203

  
	
  SCHEDULE 6 FORM OF
  COMPLIANCE CERTIFICATE

  	
   

  	
  205

  
	
  SCHEDULE 7 FORM OF
  MARGIN CERTIFICATE

  	
   

  	
  207

  
	
  SCHEDULE 8 ACCESSION
  DEEDS

  	
   

  	
  208

  
	
  SCHEDULE 9 FORMS OF
  DOCUMENTARY CREDIT

  	
   

  	
  211

  
	
  SCHEDULE 10 REMAINING
  DEBT AGREEMENTS

  	
   

  	
  222

  
	
  SCHEDULE 11 MATERIAL
  SUBSIDIARIES

  	
   

  	
  232

  
	
  SCHEDULE 12 GUARANTEE
  LIMITATIONS

  	
   

  	
  233

  
	
  SCHEDULE 13 AGREED
  SECURITY PRINCIPLES

  	
   

  	
  239

  
	
  SCHEDULE 14 EXISTING
  TREASURY TRANSACTIONS

  	
   

  	
  243

  
	
  SCHEDULE 15 ADDITIONAL
  FACILITY ACCESSION AGREEMENT

  	
   

  	
  246

  

 

 

 ii

THIS AGREEMENT dated 30 November
2005, as amended and restated by the Amendment and Restatement Agreement, is
made

BETWEEN:

(1)                                 SMURFIT
KAPPA CORPORATION LIMITED (formerly named Jefferson Smurfit Group Limited),
a company incorporated in Ireland (registered number 357957) (the “Parent”);

(2)                                 SMURFIT
KAPPA ACQUISITIONS (formerly named JSG Acquisitions), a company
incorporated in Ireland (registered number 358039) (the “Company”);

(3)                                 THE
SUBSIDIARIES OF THE PARENT listed in Part I of Schedule 1 (Original Parties) as original borrowers (in this capacity
the “Original Borrowers”);

(4)                                 THE
SUBSIDIARIES OF THE PARENT listed in Part I of Schedule 1 (Original Parties) as original guarantors (in this capacity,
together with the Parent, the “Original Guarantors”);

(5)                                 DEUTSCHE
BANK AG, LONDON BRANCH, CITIGROUP GLOBAL MARKETS LIMITED, CREDIT SUISSE FIRST
BOSTON INTERNATIONAL AND JP MORGAN PLC as arrangers (in this capacity the “Mandated Lead Arrangers”  or the “Arrangers”);

(6)                                 THE
PERSONS listed in Part II of Schedule 1 (Original
Parties) as original lenders (the “Original
Lenders”);

(7)                                 DEUTSCHE
BANK AG, LONDON BRANCH as issuing bank for Documentary Credits (in this
capacity the “Issuing Bank”);

(8)                                 DEUTSCHE
BANK AG, LONDON BRANCH as facility agent (in this capacity the “Facility Agent”); and

(9)                                 DEUTSCHE
BANK AG, LONDON BRANCH as security agent (in this capacity the “Security Agent”).

IT IS AGREED as follows:

1.                                      INTERPRETATION

1.1                                 Definitions

In this Agreement:

“Acceptable Bank”  means a bank or financial institution which has a rating of
A or higher by Standard & Poor’s Rating Services, Fitch or IBCA or A2 or
higher by Moody’s Investor Services Inc. or a comparable rating from an
internationally recognised credit rating agency for its long-term debt
obligations.

“Accession Deed”  means a deed, substantially in the form of Part I of
Schedule 8 (Accession Deeds),
with such amendments as the Facility Agent may approve or reasonably require.

“Accounting Date”
means each 31 March, 30 June, 30 September and 31 December,
save as adjusted to ensure that such dates fall on the same day of the week or
otherwise with the consent of the Facility Agent.

“Accounting Period”
means a period of approximately one year, three months or one month ending, in
the case of each three month and one year period, on an Accounting Date for
which Accounts for delivery to the Facility Agent are required to be prepared.

“Accounting Principles”
means, in respect of the Accounts prepared for Accounting Periods prior to 1
January 2007, accounting principles and practices which are generally accepted
in Ireland and which are the same as those used in the preparation of the
Smurfit Kappa Group Base Financial Statements, and in respect of the Accounts
prepared for Accounting Periods on and from 1 January 2007, IFRS as applied in
the Revised Smurfit Kappa Group Base Financial Statements.

“Accounts” means
each set of financial statements required to be prepared by a member of the
Group and delivered to the Facility Agent pursuant to this Agreement.

“Acquisition” means
the acquisition by the Company of Target Shares pursuant to the Share Purchase
Agreement.

“Acquisition and
Refinancing Costs” means all fees, costs, expenses and Taxes
incurred by (or required to be paid by) any member of the Group in connection
with the Acquisition, the establishment of the Facilities, the refinancing of
the Smurfit Kappa Group and the Target Group’s existing indebtedness and the
Transaction Documents (including related prepayment penalties and make-whole
payments).

“Acquisition Documents”
means:

(a)           the
Share Purchase Agreement; and

(b)           the
Acquisition PIK Note.

“Acquisition PIK Note”
means a non-cash pay promissory note issued by Smurfit Kappa Group Limited or a
direct subsidiary thereof to the Vendors pursuant to Clause 3.4 of the Share
Purchase Agreement.

“Additional Borrower”
means a member of the Group which becomes a Borrower on or after the date of
this Agreement.

“Additional Facility” means an
additional term loan facility referred to in Clause 2.4 (Additional
Facilities) and “Additional Facilities”
means all or any such Additional Facilities.

“Additional Facility Accession Agreement”
means a deed in the form of Schedule 15, with such amendments as the
Facility Agent may approve or reasonably require.

“Additional Facility Availability Period”
in relation to an Additional Facility means the period specified in the
Additional Facility Accession Agreement for that Additional Facility.

 2
 

“Additional Facility Fee Letter” means
any letter entered into from time to time between the Initial Additional
Facility Lenders of the relevant Additional Facility and/ or the arrangers of
the relevant Additional Facility and the Company setting out the fees to be
paid by the Company in respect of an Additional Facility.

“Additional Facility Commitment”
means in relation to:

(a)                                  an
Initial Additional Facility Lender the amount in euros or relevant Optional
Currency set out as the Additional Facility Commitment of a Lender in the
relevant Additional Facility Accession Agreement and the amount of any other
Additional Facility Commitment transferred to it under this Agreement; and

(b)                                 any
other Lender, the amount in euros or relevant Optional Currency (as applicable)
transferred to it in accordance with this Agreement,

to the extent not cancelled, reduced or transferred by
it in accordance with this Agreement.

“Additional Guarantor”
means a member of the Group which becomes a Guarantor on or after the date of
this Agreement.

“Additional Obligor”
means an Additional Borrower or an Additional Guarantor.

“Administrative Party”
means an Arranger, the Issuing Bank, the Facility Agent or the Security Agent.

“Affiliate”
means a Subsidiary or a Holding Company of a person or any other Subsidiary of
that Holding Company.

“Agent” means
the Facility Agent and/or the Security Agent as the context requires.

“Agent’s Spot Rate of
Exchange” means the Facility Agent’s spot rate of exchange for the
purchase of the relevant currency in the London foreign exchange market with
the Base Currency at or about 11.00 a.m. on a particular day.

“Agreed List of Obligors
and Security” means the list of Obligors and Transaction Security
Documents agreed between the Arrangers and the Parent (each acting reasonably)
and initialled by the Company or Kirkland & Ellis International LLP and the
Facility Agent for identification purposes with such amendments thereto as the
Company and the Facility Agent may agree from time to time consistent the
provisions of Clause 23.32 (Security), the
Structure Memorandum, the Agreed Security Principles or otherwise which are not
materially prejudicial to the security package taken as a whole.

“Agreed Security
Principles” means the security principles set out in Schedule 13 (Agreed  Security Principles).

“Amendment and
Restatement Agreement” means the the agreement dated 31 January 2007
between the parties to
this Agreement pursuant to which this Agreement was amended and restated.

 3
 

“Ancillary Commitment”
means, with respect to any Ancillary Lender and an Ancillary Facility, the Base
Currency Equivalent of the maximum amount of Ancillary Outstandings that can at
any one time be outstanding under the Ancillary Facility Documents to which it
is party determined on the first day on which that Ancillary Facility becomes
available.

“Ancillary Facility”
means any facility or financial accommodation (including any overdraft, foreign
exchange, guarantee or bonding facility) established by a Lender under
Clause 8 (Ancillary Facilities)
in place of all or part of its Revolving Credit Commitment.

“Ancillary Facility
Document” means any document evidencing any Ancillary Facility.

“Ancillary Lender”
means a Lender which establishes an Ancillary Facility.

“Ancillary Outstandings”
on any date means the equivalent on such date in the Base Currency of the
principal amount actually or contingently outstanding under an Ancillary
Facility, as calculated under Clause 8 (Ancillary
Facilities) and the Ancillary Facility Document(s) for that
Ancillary Facility.

“Approved Bank”
means Deutsche Bank AG, London Branch and any Acceptable Bank and any other
bank which has been approved by the Facility Agent provided in each case that
such bank has been given and has duly acknowledged all notices (if any) to be
given to it pursuant to the Security Documents.

“Approved IPO”
means the proposed IPO of the shares of the Parent or a Holding Company of the
Parent to occur in the year 2007 and where the IPO Proceeds of such IPO are to
be applied directly or indirectly (by upstreaming and/or downstreaming such
proceeds by loans, repayment of loans and payment of dividends at the
discretion of the Company, including, at the discretion of the Company, the
downstreaming of an amount to the Company by way of share subscription and
immediate upstreaming by way of repayment of part of the Smurfit Kappa Funding
Loan) in all or any of the following permitted purposes: (i) in full or partial
prepayment, redemption, defeasance or purchase of the 2012 Senior Cash Pay
Notes, (ii) in full or partial prepayment of the Acquisition PIK Note, (iii) in
full or partial prepayment of the Holdco PIK Note and (iv) towards payment of
the fees and expenses of such IPO and reduction of indebtedness as set out in
(i) (ii) and (iii).

“A1 Term Loan”
means a Loan under the A1 Term Loan Facility.

“A1
Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “General  Term Loan
Commitments — A1”; and

(b)                                 for
any other Lender, the amount of any A1 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

 4
 

“A1 Term Loan Facility”
has the meaning given to it in Clause 2 (Facilities).

“A2 Term Loan”
means a Loan under the A2 Term Loan Facility.

“A2
Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “Restricted Term Loan Commitments — A2”;
and

(b)                                 for
any other Lender, the amount of any A2 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“A2 Term Loan Facility”
has the meaning given to it in Clause 2 (Facilities).

“Auditors” means
PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or
such other firm of independent public accountants of international standing
which may be appointed by the Parent as its auditors under Subclause 21.6
(Auditors).

“Availability
Period” means the period from and including the date of this
Agreement to and including:

(a)                                  for
the Term Loan Facilities, the date falling 10 Business Days after the Closing
Date (or if less than the full amount of any such Facility is drawn on the
Closing Date, the remaining undrawn amount of each such Facility shall be
available until the date falling 90 days after the Closing Date on the terms
set out in Clause 2.7(e) (Limitations));

(b)                                 for
the Restructuring Loan Facility, the date falling 3 years after the Closing
Date;

(c)           for
the Revolving Credit Facility, the Final Revolving Maturity Date; and

(d)                                 for
any Additional Facility, the relevant Additional Facility Availability Period.

“Barclays L/Cs”
means letters of credit in favour of Barclays Bank plc substantially in the
form set out in Part III of Schedule 9 (Form of Barclays L/C)
to be provided on the Closing Date in connection with certain letters of credit
and guarantees issued by it under the senior facility provided to the Target.

“Base Currency”
means euros.

“Base
Currency Amount”  of a Credit
means:

(a)           if
the Credit is denominated in the Base Currency, its amount; or

(b)                                 if
the Credit is denominated in an Optional Currency, its equivalent in the Base
Currency calculated on the basis of the Agent’s Spot Rate of Exchange one
Business Day before the Rate Fixing Day for that Credit or if so provided 

 5
 

in this Agreement on the basis of the Agent’s Spot
Rate of Exchange on the date of calculation.

“Base Currency Equivalent”
means, in relation to an amount expressed or denominated in any currency, the
equivalent thereof in the Base Currency converted at the Agent’s Spot Rate of
Exchange on the date of the relevant calculation, and in relation to an amount
expressed or denominated in the Base Currency, such amount.

“Base Financial Statements”
means the Smurfit Kappa Group Base Financial Statements and the Target Group
Base Financial Statements.

“Bond Refinancing Debt”  means Financial Indebtedness not exceeding an aggregate
amount equal to the principal amount of the Securities then outstanding,
accrued interest and costs and expenses incurred in connection with the refinancing,
including any prepayment penalties, bank or break fees and advisors’ fees on
the refinancing (less the amount of any proceeds received by any member of the
Group from the closing out of any Treasury Transaction entered into in
connection therewith or, if not closed out on refinancing, less the aggregate
mark to market value of such Treasury Transactions to the extent such aggregate
amount is positive) incurred to refinance the Securities.

“Borrower” means
an Original Borrower or an Additional Borrower.

“Break Costs”
means the amount (if any) by which:

(a)                                  the
interest (excluding, for the avoidance of doubt, the Margin and the Mandatory
Cost) which a Lender should have received for the period from the date of
receipt of all or any part of its participation in a Loan or an overdue amount
to the last day of the applicable Term in respect of that Loan or overdue
amount, had the principal or overdue amount received been paid on the last day
of that Term;

exceeds:

(b)                                 the
amount which that Lender would be able to obtain by placing an amount equal to
the principal amount (including for the avoidance of doubt any component in
respect of interest) of such Loan or overdue amount received or recovered by it
on deposit with a leading bank in the Relevant Interbank Market for a period
starting on the Business Day of receipt (in the case of prepayments of which
the Facility Agent has at least 2 Business Days notice), and on the Business
Day following receipt or recovery (in the case where less than 2 Business Days
notice is given) and ending on the last day of the current Term.

“Brought Forward Amount”
means has the meaning provided in Clause 22.1(iv)(b).

“B1 Term Loan”
means a Loan under the B1 Term Loan Facility.

 6
 

“B1  Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “General  Term Loan
Commitments — B1”; and

(b)                                 for
any other Lender, the amount of any B1 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“B1 Term Loan
Facility” has the meaning given to it in Clause 2 (Facilities).

“B2 Term Loan”
means a Loan under the B2 Term Loan Facility.

“B2
Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “Restricted Term Loan Commitments — B2”;
and

(b)                                 for
any other Lender, the amount of any B2 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“B2 Term Loan
Facility” has the meaning given to it in Clause 2 (Facilities).

“Business Day”
means a day (other than a Saturday or a Sunday) on which banks are open for
general business in London and:

(a)                                  if
on that day a payment in or a purchase of a currency (other than euro) is to be
made, the principal financial centre of the country of that currency; or

(b)                                 if
on that day a payment in or a purchase of euro is to be made, which is also a
TARGET Day.

“Business Plan”
means the business plan referred to in paragraph 16 of Part I in Schedule 2 (Condition Precedent Documents).

“Canadian Dollars”
means the lawful currency for the time being of Canada.

“Capital Expenditure”
means any expenditure which is treated as capital expenditure in accordance
with the Accounting Principles.

“Cash”
means cash in hand or:

(a)           on
deposit (including cash on current accounts) with any Acceptable Bank; or

(b)                                 on
deposit (including cash on current accounts) with any other bank or financial
institution in an aggregate amount not exceeding €25,000,000 (or its
equivalent) provided that (except for an amount not exceeding €10,000,000 (or
its equivalent)) it is on deposit with a bank or financial institution approved
by 

 7
 

the Arrangers on or prior to the date hereof (plus an
amount, in respect of deposits providing cash collateral for a loan as part of
a back to back arrangement, not to exceed €30,000,000 (or its equivalent) at
any time),

provided that it is not subject to any Security
Interest given to support Financial Indebtedness (other than one arising under
the Security Document).

“Cash
Equivalent” means at any time:

(a)                                  certificates
of deposit maturing within one year after the relevant date of calculation,
issued by an Acceptable Bank or overnight deposits with an Acceptable Bank;

(b)                                 any
investment in marketable obligations issued or guaranteed by the government of
the United States of America, the U.K., a Participating Member State, any other
OECD country with a rating of AA or higher by Standard & Poor’s Rating
Services, Fitch or IBCA or Aa 2 by Moody’s Investor Services Inc. or (in an
amount not exceeding US$5,000,000) bonds issued by the government of Colombia
or by an instrumentality or agency of the government of the United States of
America, the U.K., a Participating Member State or such OECD country having an
equivalent credit rating, maturing within one year after the relevant date of
calculation;

(c)                                  open
market commercial paper and money market investments having a maturity of less
than a year:

(i)            for
which a recognised trading market exists;

(ii)                                  issued
in the United States of America, the U.K., a Participating Member State or any
other OECD country with a rating of AA or higher by Standard & Poor’s
Rating Services, Fitch or IBCA or Aa2 by Moody’s Investor Services Inc.;

(iii)                               which
matures within one year after the relevant date of calculation; and

(iv)                              which
has a credit rating of either A-1 by Standard & Poor’s Rating
Services or IBCA or P-1 by Moody’s Investor Services Inc, or, if no
rating is available in respect of the commercial paper or money market
investments, the issuer of which has, in respect of its long-term debt
obligations, an equivalent rating (or in the case of money market investments
is guaranteed by an Acceptable Bank);

(d)           United
Kingdom certificates of tax deposit;

(e)                                  Sterling
bills of exchange eligible for rediscount at the Bank of England and accepted
by an Acceptable Bank; or

(f)                                    any
other debt security approved by the Majority Lenders,

 8
 

in each case, to which any member of the Group is
beneficially entitled at that time and which is not subject to any Security
Interest given to support Financial Indebtedness (other than one arising under
the Security Document).

“Cash Pay Securities”
means (i) the 2012 Senior Cash Pay Notes, (ii) 2015 Senior Subordinated Cash
Pay Notes and (iii) any SEC registered debt securities issued by Smurfit Kappa
Funding plc for which any of the foregoing debt securities are exchanged.

“Cash Pooling Facilities”  means the facilities used for the purposes of the cash
pooling arrangements of the Group consistent with the practice of the Group and
the Target Group as at the date hereof.

“Certain Funds Credits”
means the Credits to be utilised to complete the Acquisition, to refinance the
existing indebtedness of the Target Group and to refinance the existing
indebtedness of the Smurfit Kappa Group and related costs and expenses.

“Certain Funds Period”
means the period commencing on the date of this Agreement and ending on the last
date of the Availability Period for the Term Facilities provided that the
Closing Date shall have occurred on or before 31 December 2005.

“Change of Control”
has the meaning given to it in Clause 11.2 (Mandatory prepayment —
change of control/ownership).

“Chief Executive Officer”  means, Gary McGann as chief executive officer of the
Parent, and in each case includes any replacement therefor (or in the absence
of such officer, any director of the Parent acting as such officer’s deputy in
that capacity).

“Chief Financial Officer”  means Ian Curley as finance director of the Parent or any
replacement therefor (or in the absence of such officer, any director of the
Parent acting as such officer’s deputy in that capacity).

“Chief Operating Officer”
means, Anthony Smurfit as chief operating officer of the Parent, and in each
case means any replacement therefor (or in the absence of such officer, any
director of the Parent acting as such officer’s deputy in that capacity).

“Clean-up period”
means the period beginning on the date of this Agreement and ending on the day
90 days after the Closing Date.

“Closing Date”  means the date on which the Acquisition is completed.

“Commitment”
means a General Term Loan Commitment, a Restricted Term Loan Commitment, a
Restructuring Credit Commitment, a Revolving Credit Commitment and/or an
Additional Facility Commitment of a Lender.

“Commitment Letter”
means the letter dated 9 September 2005 entered into between the Mandated Lead
Arrangers and the Company setting out the basic terms of the Commitment
referred to in this Agreement.

 9
 

“Compliance Certificate”
means a certificate, substantially in the form of Schedule 6 (Form of Compliance Certificate), setting
out, among other things, calculations of the financial covenants and of the
amount of any Excess Cash Flow.

“Consolidated Cash Flow”
has the meaning given to it in Clause 22 (Financial
Covenants).

“Core Assets”
means any assets (including any paperboard, paper or pulp mill or plant) used
in connection with the Core Business.

“Core Business”
means (a) the manufacture, sale and distribution of containerboard and
corrugated containers, and (b) the collection of wastepaper for recycling, and
in each case includes anything incidental or ancillary to such activities.

“Credit”  means a Loan or a Documentary Credit.

“C1 Term Loan”
means a Loan under the C1 Term Loan Facility.

“C1 Term Loan
Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “General  Term Loan Commitments
— C1”; and

(b)                                 for
any other Lender, the amount of any C1 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“C1 Term Loan Facility”
has the meaning given to it in Clause 2 (Facilities).

“C2 Term Loan”
means a Loan under the C2 Term Loan Facility.

“C2
Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “Restricted Term Loan Commitments — C2”;
and

(b)                                 for
any other Lender, the amount of any C2 Term Loan Commitment so designated which
it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“C2 Term Loan Facility”
has the meaning given to it in Clause 2 (Facilities).

“Cure Amount”
means any amount referred to under Clause 24.21 (Right to
Cure Financial Ratios).

“Currency Test Date”
has the meaning given to it in Clause 9.6 (Term Loan, Restructuring
Loan or Additional Facility Loan Revaluation).

“Czech Commercial Code”
means Act No. 513/1991 Coll., as amended.

 

 10

“Danish Kroner”
means the lawful currency for the time being of Denmark.

“Debt Pushdown”
means the pushdown of debt within the Group substantially in the manner
described in the Structure Memorandum or otherwise in a manner (notified in
writing to the Facility Agent) that does not adversely affect the interests of
the Lenders in any material respect.

“Default”
means:

(a)           an
Event of Default; or

(b)                                 an
event which would be (with the expiry of a grace period, the giving of notice
under the Senior Finance Documents or any combination of them) an Event of
Default.

“Documentary Credit”
means a letter of credit, guarantee, bond or other instrument to be issued by
the Issuing Bank pursuant to Clause 6 (Utilisation
- Documentary Credits).

“Documentary Credit Claim”
has the meaning given to it in Clause 7.4 (Claims under a Documentary
Credit).

“Dutch Borrower”
means a Borrower incorporated or established under the laws of the Netherlands.

“Dutch Banking Act”
means the Dutch 1992 Act on the Supervision of the Credit System 1992 (Wet toezicht Kredietwezen 1992).

“Dutch Exemption Regulation”
means the Dutch 1992 Banking Act Exemption Regulation (Vrijstellingsregeling
Wtk 1992).

“Dutch GAAP”
means accounting principles and practices which, as at the date hereof, are
generally accepted in the Netherlands and which are the same as those used in
the preparation of the Target Group Base Financial Statements.

“Environmental Approval”
means any authorisation required by Environmental Law.

“Environmental Claim”
means any claim by any person in connection with a breach, or alleged breach,
of Environmental Law.

“Environmental
Law” means any law or regulation concerning:

(a)           the
protection of health and safety;

(b)           the
environment; or

(c)                                  any
emission or substance which is capable of causing harm to any living organism
or the environment.

 11
 

“Equity
Documents”  means:

(a)           the
Shareholders Agreement; and

(b)           the
constitutional documents of the Parent.

“EURIBOR”
relative to a Loan or overdue amount in euro for its Term means:

(a)           the
applicable Screen Rate; or

(b)                                 if
no Screen Rate is available for that Term of that Loan or overdue amount, the
arithmetic mean (rounded upward to four decimal places) of the rates as
supplied to the Facility Agent at its request quoted by the Reference Banks to
leading banks in the European interbank market,

as of 11.00 a.m. (Brussels time) on the Rate
Fixing Day for the offering of deposits in euro for a period comparable to that
Term.

“euro” or “€” means the single currency of the Participating Member
States.

“Event of Default”
means an event specified as such in this Agreement.

“Excess Cash Flow” has the meaning given
to it in Clause 11.6 (Mandatory
prepayment - Excess Cash Flow).

“Excess Currency Amount”
has the meaning given to it in Clause 9.6 (Term Loan, Restructuring
Loan or Additional Facility Revaluation).

“Existing Kappa Bonds”  means:

(a)                                  €95,000,000
105⁄8% Class A Senior Subordinated Notes due 2009 issued 23 May 2003;

(b)                                 €370,000,000
105⁄8% Senior Subordinated Notes due 2009 issued 23 July 1999;

(c)                                  $100,000,000
105⁄8% Senior Subordinated Notes due 2009 issued 23 July 1999; and

(d)                                 €145,000,000
121⁄2% Senior Subordinated Discount Notes due 2009 issued 23 July 1999.

“Existing Securitisation”
has the meaning provided in the definition of “Non-Recourse”.

“Existing Treasury
Transaction”  means a
Treasury Transaction entered into on or before the date of this Agreement and
existing on the date of this Agreement as identified in Schedule 14 (Existing Treasury Transactions).

“Expert Valuation”
means an evaluation issued by a court-appointed expert valuator in accordance
with Section 196a(3)(5) of the Czech Commercial Code in relation to 

 12
 

(i) the guarantee to be provided hereunder by Kappa
Packaging Czech and (ii) the joint and several obligations of Kappa Packaging
Czech assumed hereunder.

“Facility” means
a Term Loan Facility, a Restructuring Loan Facility, a Revolving Credit
Facility or each Additional Facility (if any) made available under this
Agreement or an Ancillary Facility established pursuant to, this Agreement.

“Facility
Office” means the office(s) notified by a Lender to the Facility
Agent:

(a)           on
or before the date it becomes a Lender; or

(b)           by
not less than five Business Days’ notice,

as the office(s) through which it will perform its
obligations, and to which payments for its account should be made, under this
Agreement.

“Fee Letter”
means the letter dated 9 September 2005 entered into between one or more
Administrative Parties and the Company setting out the amount of certain fees
referred to in this Agreement.

“Final Maturity Date”
means

(a)                                  for
each Term Loan Facility and Restructuring Loan Facility, the ninth anniversary
of the Closing Date, or if later, 31 December 2014; and

(b)                                 for
each Additional Facility, the date specified in the Additional Facility
Accession Agreement,

or, in each case if that day is not a
Business Day, the immediately preceding Business Day.

“Final Revolving Maturity
Date” means the seventh anniversary of the Closing Date.

“Finance Party”
means a Hedging Bank, a Lender or an Administrative Party from time to time
hereunder.

“Financial
Indebtedness” means any indebtedness for or in respect of:

(a)           moneys
borrowed and debit balances at financial institutions;

(b)           any
acceptance credit or bill discounting facility;

(c)           any
bond, note, debenture, loan stock or other similar instrument;

(d)                                 any
preference share by its terms required to be redeemed prior to the Final
Maturity Date;

(e)                                  any
finance or capital lease or hire purchase, conditional sale or other
arrangement required by the Accounting Principles to be capitalised for
accounting purposes;

 13
 

(f)                                    receivables
sold or discounted (otherwise than on a non-recourse basis and other than
receivables sold or discounted by any member of the Group to Smurfit Kappa
Treasury or pursuant to a Permitted Receivables Securitisation);

(g)                                 the
acquisition cost of any asset or service to the extent payable before or after
its acquisition or possession by the party liable where the advance or deferred
payment (as the case may be) (i) is arranged primarily as a method of raising
finance or financing the acquisition or construction of that asset or the
acquisition of that service (other than trade credit on customary commercial
terms), or (ii) involves a period of more than six months before or after (as
the case may be) the date of acquisition or supply;

(h)                                 any
derivative transaction protecting against or benefiting from fluctuations in
any rate or price (and, except for non-payment of an amount, the then
mark to market value of the derivative transaction will be used to calculate
its amount);

(i)                                     any
other transaction (including any forward sale or purchase agreement) which is
required to be accounted for as a borrowing under the Accounting Principles;

(j)                                     any
counter-indemnity obligation in respect of any guarantee, indemnity,
bond, documentary credit or other instrument issued by a bank or financial
institution; or

(k)                                  any
guarantee, indemnity or similar assurance against financial loss of any person
in respect of any item referred to in paragraphs (a) to (j) above and any
agreement to maintain the solvency of any person, whether by investing in,
lending to, or purchasing assets from such person,

provided that Financial Indebtedness shall not include
the Holdco PIK Note and the Acquisition PIK Note.

“Financial Model”
means the base case financial model prepared by or on behalf of the Parent and
agreed with the Facility Agent and referred to in paragraph 14 of Part I of
Schedule 2 (Condition Precedent Documents).

“First Drawdown”
means the making of the first Utilisation.

“First Drawdown Date”
means the date of First Drawdown.

“Funds Flow Statement”
means the statement prepared by the Parent and agreed with the Facility Agent
showing all payments by the Parent and/or by members of the Group in connection
with the Acquisition and the refinancing of certain indebtedness of the Group,
and the flow of funds occurring on and immediately before and after the First
Drawdown and in relation to the refinancings anticipated therein, during the
Certain Funds Period.

 14
 

“General  Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “General  Term Loan
Commitments”; and

(b)                                 for
any other Lender, the amount of any General Term Loan Commitment so designated
which it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“General Term Loan Facility”
means the A1 Term Loan Facility, the B1 Term Loan Facility, and the C1 Term
Loan Facility.

“Group” means
the Parent and its Subsidiaries but excluding the SPV Group (and for the
avoidance of doubt shall prior to the Closing Date mean the Smurfit Kappa Group
and from the Closing Date shall mean the Smurfit Kappa Group (excluding the SPV
Group) and the Target Group).

“Guarantee”
means the guarantee and indemnity contained in Clause 19.1 (Guarantee and Indemnity).

“Guarantor”
means an Original Guarantor and any Additional Guarantor.

“Hedging Bank”
has the meaning given to it in the Priority Agreement.

“Hedging Document”
has the meaning given to it in the Priority Agreement.

“Holdco PIK
Note”  means the €325,000,000 11.5%
senior notes due 2015 issued by Smurfit Kappa Holdings plc on 31 January 2005
and any additional such notes issued as interest thereon.

“Holding Company”
of any person means any company or body corporate in respect of which that
person is a direct or indirect Subsidiary.

“Hong Kong Dollars”
means the lawful currency for the time being of Hong Kong.

“IBOR” means
LIBOR, EURIBOR or STIBOR as appropriate.

“IFRS” means
international accounting standards within the meaning of IAS Regulation 1606/2002
to the extent applicable to the relevant Accounts.

“Information Package”
means the Financial Model and the information memorandum (as amended by
agreement between the Parent and the Arrangers) for use in the syndication of
the Facilities.

“Initial Additional
Facility Lender” means a person which becomes a Lender under an
Additional Facility pursuant to Clause 2.4 (Additional Facilities).

 15
 

“Intellectual Property
Rights” means:

(a)                                  any
know-how, patent, trade mark, service mark, design, business name, domain
name, topographical or similar right;

(b)                                 any
copyright, data base or other intellectual property right; or

(c)                                  any
interest in the above,

in each case whether registered or not and includes
any related application.

“Interest”
means:

(a)                                  interest
and amounts in the nature of interest accrued, but excluding any element of
pension costs allocated as interest or financial expense under the Accounting
Principles;

(b)                                 prepayment
penalties or premiums incurred in repaying or prepaying any Financial Indebtedness
(other than the 2012 Senior Cash Pay Notes, 2025 Bonds and the 2015 Senior
Subordinated Cash Pay Notes);

(c)                                  discount
fees and acceptance fees payable or deducted in respect of any Financial
Indebtedness, including fees in respect of Documentary Credits referred to in
paragraph (c) of Subclause 7.3 (Fees in
respect of Documentary Credits) and all like fees in respect of any
other letters of credit and guarantees;

(d)                                 any
other payments and deductions of the like effect (including, without
limitation, the interest element of finance leases) and any net payment (or, if
appropriate in the context, receipt) under any interest rate hedging agreement
or instrument (including without limitation under the Hedging Documents),
taking into account any premiums payable for the same,

and “Interest”
includes commitment and non-utilisation fees (including, without
limitation, those payable hereunder), but excludes agent’s and front-end,
management, arrangement and participation fees with respect to any Financial
Indebtedness (including, without limitation, those payable hereunder or under
the Fee Letters) and excludes any amortisation of financing costs associated
therewith.

“Investor”  means MDP Global Investors Limited, CVC Capital Partners
Advisory Company Limited and/or Cinven Limited, funds, limited partnerships or
companies managed or advised by them and/or their principals or affiliates
and/or the senior management of the Group (whether at the Group level or at a
Holding Company of the Group).

“IPO” means the
admission to trading of all or part of the share capital of a person on any
recognised stock exchange.

“IPO Proceeds”
has the meaning given to it in Clause 11.3 (IPO).

 16
 

“IPO Structure Paper”
means the structure paper dated 10 January 2007 prepared by William Fry in the
form agreed by the Facility Agent subject to any amendments which are not
materially prejudicial to the Lenders or approved by the Facility Agent.

“Japanese Yen”
means the lawful currency for the time being of Japan.

“Joint Venture”
has the meaning given to it in Subclause 23.27 (Joint Ventures).

“Joint Venture Investment”
has the meaning given to it in Subclause 23.27 (Joint Ventures).

“Kappa Holding B.V.”
means Kappa Holding B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid),
incorporated under the laws of the Netherlands, with its statutory seat at
Eindhoven, the Netherlands and registered at the Chamber of Commerce of
Oost-Brabant under number 33303987.

“Kappa Packaging Czech”
means Kappa Packaging Czech, s.r.o., a limited liability company incorporated
under the laws of the Czech Republic, with its registered seat at Žebrák,
Skandinávská 1000, district Beroun, Post Code 267 53, Business ID No. 25105582.

“Kappa
Packaging S.p.A.” means Kappa Packaging S.p.A., a limited liability
company incorporated under the laws of the Republic of Italy, with registered
address at 147 Via Pesciatina, Capannori (LU), Italy, registration number with
the Companies’ Registry of Lucca and Fiscal Code 09836700154 (REA 135818).

“Kappa
Slovakia” means Kappa Štúrovo, a.s., a joint stock company
incorporated under the laws of the Slovak Republic, with its registered seat at
Továrenská 1, 943 03 Štúrovo, Slovak Republic, ID No.31 410 146, registered in
the Commercial Registry of District Court Nitra in Sec.Sa, Volume No.126/N.

“Latin
America” means any country in the Americas other than the United
States of America and Canada.

“Lender”
means:

(a)           an
Original Lender;

(b)           an
Initial Additional Facility Lender; or

(b)                                 any
person which becomes a New Lender (as defined in Clause 31.2 (Assignments and Transfers by Lenders).

“LIBOR”
relative to a Loan or overdue amount denominated in a currency other than euro
or Swedish Kronor for its Term means:

(a)           the
applicable Screen Rate; or

(b)                                 if
no Screen Rate is available for the relevant currency or the Term of that Loan
or overdue amount, the arithmetic mean (rounded upward to four decimal places)
of the rates, as supplied to the Facility Agent at its request, 

 17
 

quoted by the Reference Banks to leading banks in the
London interbank market,

as of 11.00 a.m. on the Rate Fixing Day for the
offering of deposits in the currency of that Loan or overdue amount for a
period comparable to that Term.

“Loan” means,
unless otherwise stated in this Agreement, the principal amount of each
borrowing under this Agreement or the principal amount outstanding of that
borrowing.

“Loan Note Guarantee”
means a guarantee in the form set out in Part II of Schedule 9 (Form of Loan Note Guarantee) in favour of the holders of
certain floating rate, guaranteed, unsecured loan notes issued by the Company
due 2007.

“LTIBR” means
any interest bearing receivables with a maturity that qualifies as long-term
according to section 8 No. 1 German Trade Tax Act (Gewerbesteuergesetz).

“Major Default”
means the occurrence of any of the following events:

(a)                                  there
is a breach of any of the following representations and warranties by the
Company (except to the extent that they relate to any other member of the
Group):

(i)                     Clause 20.2 (Status);

(ii)                  Clause 20.3 (Powers and authority);

(iii)               Clause 20.4 (Legal validity); or

(iv)              Clause 20.5 (Non-conflict);

(b)                                 there
is a breach of any of the following covenants by the Company (other than breach
of a procuring obligation with respect to a member of the Group):

(i)                     Clause 23.5
(Negative
pledge);

(ii)                  Clause 23.6
(Disposals);

(iii)               Clause 23.7  (Financial Indebtedness);

(iv)              Clause 23.15  (Share capital);

(v)                 Clause 23.16  (Dividends);
or

(vi)              Clause 23.22  (Amendments to documents);

(c)                                  any
of the following Events of Default:

(i)                     Clause 24.2
(Non-Payment);

(ii)                  Clause 24.6
(Insolvency) in respect of the Company;

 18
 

(iii)               Clause 24.7 (Insolvency proceedings) in respect of the Company; or

(iv)              Clause 24.8 (Creditors’ process) in respect of the Company.

“Majority Lenders”
means, at any time, Lenders:

(a)                                  the
aggregate of whose shares in the outstanding Credits and undrawn Commitments
then represents 66 2/3 per cent. or more of the aggregate of all the
outstanding Credits and undrawn Commitments of all the Lenders;

(b)                                 if
there is no Credit then outstanding, whose undrawn Commitments then aggregate
66 2/3 per cent. or more of the Total Commitments; or

(c)                                  if
there is no Credit then outstanding and the Total Commitments have been reduced
to zero, whose Commitments aggregated 66 2/3 per cent. or more of the Total
Commitments immediately before the reduction.

“Mandatory Cost”
means for any Lender the cost of complying with any reserve asset, liquidity,
special deposit or other monetary or regulatory requirements affecting it,
expressed as a percentage rate per annum, including any reserve asset
requirements of the European Central Bank and, for a Lender participating
through a Facility Office in the United Kingdom or a Participating Member
State, those calculated by the Facility Agent in accordance with Schedule 4 (Calculation of the Mandatory Cost).

“Margin” means,
for any amount (including an overdue amount) or Credit outstanding under, or
which in the reasonable opinion of the Facility Agent is otherwise referable
to, a particular Facility, the rate per annum specified below in relation to
that Facility:

(a)                                  the
A1 Term Loan Facility, the A2 Term Loan Facility, the Revolving Credit Facility
and the Restructuring A Loans, 2.25 per cent. per annum, as adjusted under
Subclause 12.3 (Margin Adjustments);

(b)                                 the
euro denominated Loans under the B1 Term Loan Facility, the B2 Term Loan
Facility and the Restructuring B Loans, 2.50 per cent. per annum, as adjusted
under Subclause 12.3 (Margin
Adjustments);

(c)                                  the
US Dollar denominated Loans under the B1 Term Loan Facility and the B2 Term
Loan Facility, 2.375 per cent. per annum, as adjusted under Subclause 12.3
(Margin Adjustments);

(d)                                 the
euro denominated Loans under the C1 Term Loan Facility, the C2 Term Loan
Facility and the Restructuring C Loans, 3.00 per cent. per annum, and after the
occurrence of a Qualifying IPO, as adjusted under Subclause 12.3 (Margin Adjustments);

(e)                                  the
US Dollar denominated Loans under the C1 Term Loan Facility and the C2 Term
Loan Facility, 2.875 per cent. per annum, and after the occurrence of a
Qualifying IPO, as adjusted under Subclause 12.3 (Margin Adjustments);

(f)                                    the
Restructuring Loan Facility, prior to the Restructuring Loan Facility
Conversion Date, 2.25 per cent. per annum and after the Restructuring Loan

 19
 

Facility Conversion Date, the rate described in
paragraphs (a), (b) and (d) of this definition, as applicable; and

(g)                                 any
Additional Facility, the rate set out in the relevant Additional Facility
Accession Agreement, as adjusted in accordance with the terms of such Additional
Facility Accession Agreement.

“Margin Certificate”
is a certificate, substantially in the form of Schedule 7 (Form of Margin Certificate), setting out
the calculations for determining an adjustable Margin pursuant to
Subclause 12.3 (Margin Adjustments)
as at the relevant date.

“Material
Adverse Effect” means an event, effect or matter:

(a)                                  which
has a material adverse effect on the business, assets or financial condition of
the Group taken as a whole; or

(b)                                 which
has a material adverse effect on the ability of the Obligors (taken together)
to perform any of their payment obligations under any of the Senior Finance
Documents, or

(c)                                  which
has a material adverse effect on the ability of the Group (taken as a whole) to
comply with its obligations under Clause 22 (Financial
Covenants); or

(d)                                 which
results in any of the guarantees given by any Guarantor or any of the security
granted pursuant to the Security Documents not being effective or enforceable
in accordance with its terms in each case in a manner or to an extent which is
materially prejudicial to the financial interests of the Lenders under the
Senior Finance Documents.

“Material Group Member”
means an Obligor or a Material Subsidiary.

“Material Intellectual
Property Right” means any Intellectual Property Right without which,
or without the benefit of which, an Obligor or Material Subsidiary could not
carry on its business substantially as it is being carried on as at the Closing
Date or as at any date on which the representation and warranty set out in
Subclause 20.16 (Intellectual Property
Rights) is made.

“Material Subsidiary”
means a Subsidiary of the Company whose unconsolidated EBITDA comprises 5 per
cent. or more of consolidated Group EBITDA or whose turnover represents 5 per
cent. or more of the turnover of the Group or whose gross assets (excluding
intra-Group items and intra-Group investments) represent 5 per cent. or more of
the gross assets of the Group (other than Smurfit Kappa European Packaging or
any other Securitisation SPV, for so long as it is used primarily for the
purpose of receivables securitisations).

For this purpose:

(a)                                  the
gross assets, EBITDA or turnover of a Subsidiary of the Parent will be
determined from its financial statements (unconsolidated if it has
Subsidiaries) upon which the latest Accounts have been based;

 

 20

(b)                                 if
a Subsidiary of the Parent becomes a member of the Group after the date on
which the latest Accounts have been prepared, the gross assets, EBITDA or
turnover of that Subsidiary will be determined from its latest financial
statements;

(c)                                  the
gross assets, EBITDA or turnover of the Group will be determined from the
latest Accounts adjusted (where appropriate) to reflect the gross assets,
EBITDA or turnover of any company or business subsequently acquired or disposed
of.

“Maturity Date”
means, for a Revolving Credit Loan and a Documentary Credit, the last day of
its Term.

“Net Proceeds”
has the meaning given to it in Subclause 11.4 (Mandatory Prepayment — disposals, insurance, warranty and report claims).

“Non-Core Assets”
means any assets owned by a member of the Group other than Core Assets (but
excluding for the avoidance of doubt any shares in a member of the Group which
directly or indirectly owns any Core Assets or carries on a Core Business).

“Non-Core Business”
means any business carried on by a member of the Group other than a Core
Business.

“Non-Recourse”  means, in relation to a Permitted Receivables
Securitisation, no recourse to the Group other than recourse that is customary
for trade receivables financings in the relevant jurisdictions provided that
such recourse shall be limited to recourse of the type provided (but, for the
avoidance of doubt, not the manner in which it is provided) by any Group member
in the receivable securitisation transaction arranged by JP Morgan plc which
was entered into on 8 September 2004, as amended prior to the date hereof (the “Existing Securitisation”) provided further that for the
avoidance of doubt such proviso shall not preclude any changes in the manner in
which recourse is provided by a Group member which are necessary or typical in
any relevant jurisdiction to effect recourse of that type.

“Norwegian Guarantor”
has the meaning given to it in Part X (Limitations on Norwegian Guarantees) of
Schedule 12 (Guarantee Limitations).

“Norwegian Kroner”
means the lawful currency for the time being of Norway.

“Obligor” means
a Borrower or a Guarantor.

“Optional Currency”  means any currency (other than euros) in which a Credit may
be denominated under this Agreement including without limitation US Dollars,
Sterling, Swedish Kronor, Norwegian Kroner, Danish Kroner, Canadian Dollars,
Hong Kong Dollars, Japanese Yen or Swiss Francs.

“Original
Base Currency Amount” of a Credit means:

(a)           if
a Credit is denominated in the Base Currency, its amount; or

 21
 

(b)                                 if
the Credit is denominated in an Optional Currency, its equivalent in the Base
Currency calculated on the basis of the Agent’s Spot Rate of Exchange one
Business Day before the Rate Fixing Day for the first Term for that Credit.

“Original Obligor”
means an Original Borrower or an Original Guarantor.

“Participating Member State”
means a member state of the European Communities that adopts or has adopted the
euro as its lawful currency under the legislation of the European Union for
European Monetary Union.

“Party” means a
party to this Agreement.

“Permitted Acquisition”
means each of the acquisitions in paragraph (b)(ii) to (xi) of
Clause 23.10 (Acquisitions).

“Permitted Equity
Injections” shall bear the meaning given to it in Clause 11.6 (Mandatory prepayment — Excess Cash Flow).

“Permitted Joint Venture
Investments” means Joint Venture Investments permitted by Subclause
23.27(b)  (Joint Ventures).

“Permitted
Post Closing Drawing Purposes”  means any of
the following applications of the Facilities:

(a)                                  the
funding of adjustments to the purchase price for the Acquisition in accordance
with the Share Purchase Agreement;

(b)                                 the
funding of borrowing requirements arising from the differences in respect of
the Target Group between average working capital for the last 12 months and actual
working capital on the Closing Date; and

(c)           the
funding of Acquisition and Refinancing Costs.

“Permitted Receivables
Securitisation” means a receivables financing on a Non-Recourse
(except for recourse expressly permitted hereunder) true sale, revolving basis,
of receivables originated by a member or members of the Group including, for
the avoidance of doubt (i) the Existing Securitisation and (ii) any other
transaction having features equivalent or similar to those above and entered
into to increase, supplement or refinance such transactions.

“Permitted
Reorganisation” means:

(a)                                  an
amalgamation, merger, demerger, reconstruction or other re-organisation
on a solvent basis of a member of the Group (not being a Borrower, the Parent
or Smurfit Kappa Funding ) where:

(i)                                     all
of the business and assets of that member remain within the Group (and, if that
member of the Group was an Obligor immediately prior to such re-organisation
being implemented, all of the business and assets of that member are retained
by one or more other Obligors or the 

 22
 

condition in sub-paragraph (ii)(B) below is
satisfied or the limit in sub-paragraph (ii)(C) below is not exceeded);
and

(ii)                                  if
it or its assets or the shares in it were subject to security in favour of the
Lenders immediately prior to such re-organisation, either (A) the Lenders
will enjoy the same or equivalent security over the same assets and over it and
the shares in it (or in each case over the shares of its successor or if a new
Holding Company is inserted as part of such re-organisation, security
over the shares of such Holding Company provided that no security is granted to
any third party over the shares of the company re-organised or its
successor) after such reorganisation; or (B) that the re-organisation will
not be materially adverse to the Transaction Security (taken as a whole) (and
for the purposes of paragraph (A) and (B) of this sub-paragraph, it shall
not be deemed to be adverse if the re-organisation involves new hardening
periods running as a result of the release and re-grant of Transaction
Security if it is not reasonably likely that a liquidator or similar officer
would be able to avoid the relevant Security Interests as a consequence of such
new hardening periods); or (C) the value determined by the Company acting
reasonably of assets and/or shares released from the Transaction Security in
connection with re-organisations does not exceed €30,000,000 per annum
(after taking into account any grant of Transaction Security over assets and/or
shares in the same year); or

(b)                                 any
other reorganisation of one or more members of the Group approved by the
Facility Agent (acting on the instructions of the Majority Lenders); or

(c)                                  the
Debt Pushdown and any other transaction described in the Structure Memorandum
(in the form delivered to the Facility Agent under Part I of Schedule 2 (Conditions Precedent Documents));

PROVIDED that the requirement for a member of the
Group acquiring any business or assets to be an Obligor referred to in (a)(i)
above and the requirement for the security referred to in (a)(ii) above will
only be required if it is consistent with the Agreed Security Principles, if it
is not unlawful for the relevant person to accede as an Additional Obligor or
to execute such security (or, (i) in the case of a member of the Group which is
not wholly owned or is a Joint Venture, if it would not breach any joint
venture agreement or existing shareholders agreement applicable to it or (ii)
in the case of a member of the Group incorporated in any country located in
Latin America or Albania, Belarus, Bosnia & Herzegovina, Bulgaria, Croatia,
Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia,
Moldova, Romania, Serbia & Montenegro, Russia, Slovakia, Slovenia, Turkey
or the Ukraine, it would not breach any negative pledge contained in a
Remaining Debt Agreement and would not, in the reasonable opinion of the
Parent, result in a loss of access to local credit facilities on reasonable
commercial terms) and if such accession or execution would not result in
personal liability for that person’s directors or other management, and the
relevant person has used all reasonable endeavours lawfully to avoid any such
unlawfulness or personal liability, including agreeing to a limit on the amount
secured (and the Facility Agent may (but shall not be obliged to) agree to such
limit if, in its opinion, to do so might avoid the relevant unlawfulness or
personal liability).

 23
 

“Policy Guidelines”
means the 2005 Dutch Central Bank’s Policy Guidelines (issued in relation to
the Dutch Exemption Regulation) dated 29 December 2004 (Beleidsregel
2005 kernbegrippen markttoetreding en handhaving Wtk 1992), as
amended from time to time.

“Pre-approved Jurisdiction”
means Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy,
Mexico, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the UK
and the United States of America.

“Priority Agreement”
means the priority agreement dated 30 November 2005 as amended and restated
pursuant to an amendment and restatement deed dated 31 January 2007 between,
among others, the Obligors, the Lenders, the counterparties under the Hedging
Documents (each as defined therein) and the Administrative Parties.

“Professional Market Party”
means a professional market party (professionele marktpartij)
under the Dutch Exemption Regulation.

“Pro Rata
Share” means:

(a)                                  for
the purpose of determining a Lender’s share in a Utilisation of a Facility, the
proportion which its Commitment under that Facility bears to all the Commitments
under that Facility immediately prior to the making of that Utilisation; and

(b)           for any other purpose on a particular
date:

(i)                                     the
proportion which a Lender’s share of the Credits (if any) bears to all the
Credits;

(ii)                                  if
there is no Credit outstanding on that date, the proportion which its
Commitments bear to the Total Commitments on that date;

(iii)                               if
the Total Commitments have been cancelled, the proportion which its Commitments
bore to the Total Commitments immediately before being cancelled; or

(iv)                              when
the term is used in relation to a Facility, the above proportions but applied
only to the Credits and Commitments for that Facility (for which purpose the
Facility Agent will determine, in the case of a dispute, whether the term in
any case relates to a particular Facility).

“Qualifying
IPO” means an IPO in respect of the shares of any member of the
Group or any Holding Company of the Parent, (for the avoidance of doubt, such
an IPO to include the Approved IPO) and following which the Parent delivers to
the Facility Agent a certificate evidencing that the ratio of Consolidated
Total Net Borrowings to Consolidated EBITDA for the most recent four
consecutive quarterly Accounting Periods of the Smurfit Kappa Funding Group for
which financial statements have been delivered hereunder, pro forma for the
application of the relevant IPO Proceeds, is not greater than 4.5:1, provided
that for the purpose of this test the Parent’s abovementioned certification
will be based on the financial statements delivered with 

 24
 

the then-most-recent
compliance certificate hereunder and (in addition to the pro forma adjustments
for the application of the relevant IPO Proceeds) the following adjustments
will be made to the definitions in clause 22.2: Consolidated Total Net Borrowings
will be adjusted to (i) exclude any indebtedness arising under paragraphs (g),
(j) or (k) of the definition of Financial Indebtedness (ii) include cash and
cash equivalents which would otherwise be excluded from the definition of Cash
and Cash Equivalents due to the fact that such cash and cash equivalents were
not held with an Acceptable Bank and (iii) calculate the conversion of all
non-euro amounts in determining Consolidated Total Net Borrowings to euro at
the relevant period end exchange rate. 
Consolidated EBITDA will be adjusted to include (a) such run rate
synergies which have been achieved at the end of the Accounting Date for which
the relevant compliance certificate is delivered as certified by the Chief
Financial Officer or the board of directors of the Parent minus (b) the actual
level of synergies which are already included in the calculation of
Consolidated EBITDA by virtue of the definition thereof in clause 22.2.

“Quarter Date”
means any of 31 March, 30 June, 30 September and 31 December.

“Rate Fixing
Day” means:

(a)           the
first day of a Term for a Loan denominated in Sterling;

(b)                                 the
second Business Day before the first day of a Term for a Loan denominated in
any other currency (other than euro); or

(c)                                  the
second TARGET Day before the first day of a Term for a Loan denominated in
euro,

or such other day as the Facility Agent determines is
generally treated as the rate fixing day in the relevant currency by market
practice in the Relevant Interbank Market.

“Reconciliation Statement”
means a statement delivered to the Facility Agent pursuant to
Subclause 21.2(f)(ii) (Form and Scope
of Financial Statements).

“Reference Banks”
means Deutsche Bank AG, London Branch, Citibank N.A. (or an Affiliate), Credit
Suisse First Boston International, JP Morgan plc and the Royal Bank of Scotland
plc and any other prime bank or financial institution operating in the London
interbank market appointed as such by the Facility Agent under this Agreement
following consultation with the Company.

“Relevant Interbank Market”
means, in relation to euro, the European interbank market and, in relation to
any other currency, the London interbank market.

“Remaining Debt”
at any time, means all Financial Indebtedness of any member of the Group and
the Target Group then outstanding under or in respect of the Remaining Debt
Agreements (other than in respect of the Cash Pooling Facilities).

“Remaining Debt Agreements”
means the credit and/or loan agreements details of which are set out in
Schedule 10 (Remaining Debt Agreements)
as amended and/or refinanced from time to time (including any refinancing by
another member of the 

 25
 

Group provided that the net effect of such refinancing
in another Group member is not materially adverse to the interests of the
Lenders compared to the position if the refinancing had been done through the
same Group member), and provided that no Security Interest or guarantee is
granted by any member of the Group in respect of such amendment or refinancing
unless either an equivalent Security Interest or guarantee had been granted as
at the date of this Agreement by such member of the Group in respect of the
Remaining Debt so amended or refinanced or any such new Security Interest or
guarantee is otherwise permitted by this Agreement.

“Repayment Instalment”
means each instalment for repayment of a Term Loan, identified in this
Agreement by the same designation as such Term Loan, and each instalment for
repayment of an Additional Facility Loan as identified in the relevant
Additional Facility Accession Agreement.

“Repeating Representations”
means at any time the representations which are deemed to be made or repeated
under this Agreement pursuant to Subclause 20.25 (Times for Making Representations).

“Report” means
the synergies report prepared by PricewaterhouseCoopers LLP as referred to in
Part I of Schedule 2 (Conditions Precedent
Documents).

“Request” means
a request for a Credit, substantially in the form of Schedule 3 (Form of Request).

“Required Regulatory
Disposal” means any disposal of assets or a business required by law
or required by any regulatory authority in connection with the Acquisition.

“Reservations”
means the principle that equitable remedies are remedies which may be granted
or refused at the discretion of the court, the limitation of enforcement by
laws relating to bankruptcy, insolvency, liquidation, examination,
reorganisation, court schemes, moratoria, administration and other laws
generally affecting the rights of creditors, the time barring of claims under
applicable limitation laws, the possibility that an undertaking to assume
liability for or to indemnify a person against non-payment of stamp duty
may be void, defences of set-off or counterclaim and similar principles,
rights and defences under the laws of any jurisdiction in which relevant
obligations may have to be performed and qualifications as to matters of law
only set out in the legal opinions addressed to the Finance Parties delivered
pursuant to this Agreement.

“Restricted Borrower”
means Smurfit Deutschland GmbH, a limited liability company incorporated in
Germany (registered number HRB 90813).

“Restricted Target Shares”
means shares in each of the members of the Target Group incorporated in
Germany.

“Restricted  Term Loan Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Lenders) under
the heading “Restricted  Term Loan
Commitments”; and

 26
 

(b)                                 for
any other Lender, the amount of any Restricted Term Loan Commitment so
designated which it acquires,

to the extent not cancelled, transferred or reduced
under this Agreement.

“Restricted Term Loan
Facilities” means the A2 Term Loan Facility, the B2 Term Loan
Facility, and the C2 Term Loan Facility, and “Restricted
Facility” means any one of them.

“Restructuring A Loans”  means  the
Restructuring Loans that are converted into Restructuring A Loans on the
Restructuring Loan Facility Conversion Date in accordance with Clause 2.3
(Restructuring Loan Facility).

“Restructuring B Loans”  means  the
Restructuring Loans that are converted into Restructuring B Loans on the
Restructuring Loan Facility Conversion Date in accordance with Clause 2.3
(Restructuring Loan Facility).

“Restructuring C Loans”  means  the
Restructuring Loans that are converted into Restructuring C Loans on the
Restructuring Loan Facility Conversion Date in accordance with Clause 2.3
(Restructuring Loan Facility).

“Restructuring
Credit Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Original Parties)
under the heading Restructuring Credit Commitments and the amount of any other
Restructuring Credit Commitment, as so designated, it acquires; and

(b)                                 for
any other Lender, the amount of any Restructuring Credit Commitment it
acquires,

to the extent not cancelled, transferred, increased or
reduced under this Agreement.

“Restructuring Loan”
means a Loan under the Restructuring Loan Facility and after the Restructuring
Loan Facility Conversion Date shall include the Restructuring A Loans,
Restructuring B Loans and Restructuring C Loans as the context requires.

“Restructuring Loan
Facility”  means the
restructuring and acquisition facility made available under this Agreement.

“Restructuring Loan
Facility Conversion Date”  means the date
falling at the end of the Availability Period for the Restructuring Loan
Facility.

“Restructuring Loan
Utilisation”  means a
Restructuring Loan drawn under the Restructuring Loan Facility.

“Revised Smurfit Kappa
Group Base Financial Statements” means the draft consolidated
financial statements of the Smurfit Kappa Group for its annual Accounting
Period ended 31st December, 2005 delivered to the Facility Agent prior to the
date of the Amendment and Restatement Agreement.

 27
 

“Revolving Credit
Commitment” means:

(a)                                  for
an Original Lender, the amount set opposite its name in Part II of
Schedule 1 (Original Parties)
under the heading Revolving Credit
Commitments and the amount of any other Revolving Credit Commitment,
as so designated, it acquires; and

(b)                                 for
any other Lender, the amount of any Revolving Credit Commitment it acquires,

to the extent not cancelled, transferred, increased or
reduced under this Agreement.

“Revolving Credit Facility”
means a revolving credit facility made available under this Agreement.

“Revolving Credit Loan”
means a Loan under the Revolving Credit Facility.

“Revolving Credit
Utilisation” means a Revolving Credit Loan or a Documentary Credit
issued under the Revolving Credit Facility.

“Rollover
Credit” means one or more Loans under a Revolving Credit Facility:

(a)                                  to
be made on the same day that a maturing Loan under that Facility is due to be
repaid;

(b)                                 the
aggregate amount of which is equal to or less than the maturing Loan;

(c)           in
the same currency as the maturing Loan; and

(d)                                 to
be made to the same Borrower for the purpose of refinancing the maturing Loan.

“Screen Rate”
means:

(a)                                  for
LIBOR,  the British Bankers Association
Interest Settlement Rate (if any) for the relevant currency and Term displayed
on the appropriate page of the Reuters screen;

(b)                                 for
EURIBOR, the percentage rate per annum determined by the Banking Federation of
the European Union for the relevant Term displayed on the appropriate page of
the Reuters screen; and

(c)                                  for
STIBOR, the percentage rate per annum for the relevant currency and Term
appearing on the “SIOR” page of the Reuters screen for the relevant Term.

If the relevant page is replaced or the service ceases
to be available, the Facility Agent (after consultation with the Company and
the Lenders) may specify another page or service displaying the appropriate
rate.

“SEC” the U.S.
Securities and Exchange Commission of the United States of America.

 28
 

“Securities”
means the Cash Pay Securities and the 2025 Bonds.

“Securities Documents”
means the offering memoranda, indentures, notes, instruments and other
documents pursuant to which the Securities are constituted or evidenced.

“Securities Permitted
Payments” means the following in respect of the Securities:

(a)                                  payment
of dividends and interest (in each case whether paid in kind or in cash);

(b)           default
interest or liquidated damages;

(c)                                  payments
due under any registration rights agreement relating to the Securities;

(d)                                 additional
amounts payable under applicable gross up provisions under the Securities;

(e)                                  the
amount of the US registration costs and legal fees incurred in connection with
the issue of the Securities; and

(f)                                    any
other payments not exceeding €500,000 in aggregate in any twelve month period,

and for the avoidance of doubt does not include any
other payment, including payments of principal, any premium which must be paid
together with principal and any prepayment on, or redemption, defeasance or
purchase of, any of the Securities.

“Securities Repayments”
means repayment or prepayment of all or a part of the 2012 Senior Cash Pay
Notes (including any redemption premium and other fees and costs in connection
with such repayment or prepayment) at any time after a Qualifying IPO, from
whatever sources the Company may select at its sole discretion.

“Securitisation
SPV” has the meaning provided in Clause 23.38 (Permitted
Receivables Securitisations)

“Security
Document” means:

(a)                                  each
document required to be entered into pursuant to Clause 23.32 (Security) or listed in the Agreed List of
Obligors and Security; and

(b)                                 any
other document evidencing or creating security over any asset of any Obligor to
secure any obligation of any Obligor to a Finance Party under the Senior
Finance Documents.

“Security Interest”
means any mortgage, pledge, lien, charge (fixed or floating), assignment,
hypothecation or security interest or any other agreement or arrangement having
a similar effect.

 29
 

“Senior Finance Document”  means:

(a)           this
Agreement;

(b)           the
Fee Letter;

(c)           the
Commitment Letter;

(d)           the
Priority Agreement;

(e)           an
Accession Deed;

(f)            a
Transfer Certificate;

(g)           an
Ancillary Facility Document;

(h)           a
Hedging Document;

(i)            a
Security Document;

(j)            an
Additional Facility Accession Agreement;

(k)           an
Additional Facility Fee Letter; or

(l)                                     any
other document designated as such by the Arrangers and the Company or the
Facility Agent and the Company.

“Senior Subordinated
Guarantee”  means the
senior subordinated guarantee granted by the Company in favour of the trustee
in respect of the 2012 Senior Cash Pay Notes and the holders of the related
debt securities.

“Shareholders Agreement”
means the shareholders’ and corporate governance agreement dated on or about 1
December 2005 and made between, inter alios,
Smurfit Kappa Group Limited, Smurfit Kappa, and the additional investors
identified in the schedule thereto.

“Share Purchase Agreement”
means the share purchase agreement dated 23 November 2005 and made between
Smurfit Kappa Group Limited, the Company, the Vendors and Smurfit Kappa.

“Slovak Commercial Code”
means Act No. 513/1991 Coll., as amended.

“Smurfit Kappa”
means Smurfit Kappa G.P. Limited (in its capacity as general partner of Smurfit
Kappa Feeder L.P., a limited partnership formed under the laws of Jersey,
Channel Islands, with Registered No. 91096 and whose registered office is at 22
Grenville Street, St. Helier, Jersey, Channel Islands).

“Smurfit Kappa European
Packaging” means Smurfit Kappa European Packaging Limited (formerly
named Smurfit European Packaging Limited), a limited liability company
incorporated in Ireland (registered number 347302).

“Smurfit Kappa
Funding” means Smurfit Kappa Funding plc (formerly named JSG Funding
plc), a limited company incorporated in Ireland (registered number 357958).

 

 30

“Smurfit Kappa Funding
Group” means Smurfit Kappa Funding and its Subsidiaries from time to
time.

“Smurfit Kappa Funding Loan”
means the subordinated loans by Smurfit Kappa Funding to the Company of the
proceeds of the Cash Pay Securities.

“Smurfit Kappa Funding
Loan Agreements” means the agreements between:

(a)                                  Smurfit
Kappa Funding and the Company dated 16th September, 2002 and restated on 27th
September, 2002;

(b)           Smurfit
Kappa Funding and the Company dated 14th February, 2003; and

(c)           Smurfit
Kappa Funding and the Company dated 31st January 2005.

“Smurfit Kappa Group”
means the Parent and its Subsidiaries immediately prior to the Closing Date.

“Smurfit Kappa Group Base
Financial Statements” means the audited consolidated financial
statements of the Smurfit Kappa Group for its annual Accounting Period ended
31st December, 2004.

“Smurfit Kappa Group
Limited” means Smurfit Kappa Group Limited (formerly named JSG
Packaging Limited), a limited company incorporated in Ireland (registered
number 380620).

“Smurfit Kappa Treasury”
means Smurfit Kappa Treasury (formerly named Smurfit Capital), an unlimited
company incorporated in Ireland (registered number 177324).

“SPV Assets” has
the meaning given to it in the SPV Facility Agreement.

“SPV B.V.” means
Adavale (Netherlands) B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid)
incorporated under the laws of the Netherlands, with its statutory seat at
Rotterdam, the Netherlands and registered at the Chamber of Commerce of
Amsterdam under number 24336352.

“SPV B.V./Parent Loan
Agreement” means the loan agreement in respect of the €125,000,000
loan by SPV B.V. to the Parent (formerly known as MDCP Acquisitions Plc), dated
September 2002.

“SPV Facility”
means the €125,000,000 loan facility to SPV Offshore.

“SPV Facility Agreement”
means the facility agreement in respect of the loan between SPV Ireland, SPV
Offshore, Deutsche Bank AG London, Merrill Lynch International, and others
dated 12 September 2002.

“SPV Group”
means SPV Ireland and its Subsidiaries.

“SPV Ireland”
means Arlonberg Limited, a limited company incorporated in Ireland (registered
number 314784).

 31
 

“SPV Offshore”
means Madison Global Holdings Limited, a limited company incorporated in the
Cayman Islands with registered number CR-118215.

“Sterling” means
the lawful currency for the time being of the U.K.

“STIBOR”
relative to a Loan or overdue amount denominated in Swedish Kronor for its Term
means:

(a)           the
applicable Screen Rate; or

(b)                                 if
no Screen Rate is available for Swedish Kronor or the Term of that Loan or
overdue amount, the arithmetic mean (rounded upward to four decimal places) of
the rates, as supplied to the Facility Agent at its request, quoted by the
Reference Banks to leading banks in the Stockholm interbank market,

as of 11.00 a.m. on the Rate Fixing Day for the
offering of deposits in Swedish Kronor for a period comparable to that Term.

“Structure Memorandum”
means the memorandum and charts prepared by or on behalf of the Company
referred to as such in Part I of Schedule 2 (Conditions
Precedent Documents).

“Subsidiary”
in relation to a company or corporation, means any company or corporation:

(a)                                  which
is controlled, directly or indirectly, by the first-mentioned company or
corporation;

(b)                                 more
than half the issued share capital of which is beneficially owned, directly or
indirectly, by the first-mentioned company or corporation; or

(c)                                  which
is a Subsidiary of another Subsidiary of the first-mentioned company or
corporation,

and, for these purposes, a company or corporation
shall be treated as being controlled by another if that other company or
corporation is able to direct its affairs generally and/or to control the
composition of a majority of its board of directors or equivalent body.

“Super-majority
Lenders”  means, at any
time, Lenders:

(a)                                  the
aggregate of whose shares in the outstanding Credits and undrawn Commitments
then represents 80 per cent. or more of the aggregate of all the outstanding
Credits and undrawn Commitments of all the Lenders;

(b)                                 if
there is no Credit then outstanding, whose undrawn Commitments then aggregate
80 per cent. or more of the Total Commitments; or

(c)                                  if
there is no Credit then outstanding and the Total Commitments have been reduced
to zero, whose Commitments aggregated 80 per cent. or more of the Total
Commitments immediately before the reduction.

 32
 

“Swedish
Kronor” means the lawful currency for the time being of Sweden.

“Swiss Francs”
means the lawful currency for the time being of Switzerland.

“Syndication Date”
means the earlier of the date on which the Facility Agent notifies the Parent
that syndication of the Facilities has been or is to be completed and the date
6 months after the First Drawdown Date.

“Synergy Disposals”  means disposals of assets including businesses to obtain
synergies in connection with the Acquisition as previously disclosed to the
Lenders in the Report, the Financial Model and the Business Plan or other
assets with broadly similar profiles as determined by the Company and for the
avoidance of doubt includes the disposal of Smith Stone Knight or Smurfit
Townsend Hook Paper Mills in the UK.

“Target” means
Kappa Holding B.V.

“Target Group Base
Financial Statements” means the audited consolidated financial
statements of the Target Group for its annual Accounting Period ended 31st
December, 2004.

“Target Group”
means Target and its Subsidiaries.

“Target Shares”
means the existing allotted or issued and fully paid shares in the Target and
any further shares in the Target which are allotted or issued before the
Closing Date.

“TARGET Day”
means a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system is open for the settlement of
payments in euro.

“Tax” or “Taxes” means any tax, levy, impost, duty or other charge or
withholding of a similar nature (including any related penalty or interest).

“Term”
means each period determined under this Agreement:

(a)                                  by
reference to which interest on a Loan or an overdue amount is calculated; or

(b)                                 for
which the Issuing Bank may be under a liability under a Documentary Credit.

“Term Loan”
means a Loan under the Term Loan Facilities.

“Term Loan Facilities”
means the General Term Loan Facilities and the Restricted Term Loan Facilities.

“Total Additional Facility
Commitments” means the aggregate of the Additional Facility
Commitments of all the Lenders.

“Total Commitments”
means the Commitments of all the Lenders.

 33
 

“Total General Term Loan
Commitments” means the aggregate of the General Term Loan
Commitments of all the Lenders.

“Total Restricted Term Loan
Commitments” means the aggregate of the Restricted Term Loan
Commitments of all the Lenders.

“Total Restructuring Credit
Commitments” means the aggregate of the Restructuring Credit
Commitments of all the Lenders.

“Total Revolving Credit
Commitments” means the aggregate of the Revolving Credit Commitments
of all the Lenders.

“Total Term Loan
Commitments” means the aggregate of the Total General Term Loan
Commitments and the Total Restricted Term Loan Commitments.

“Total  Term Loan Facilities” means the total of all Term Loan
Facilities made available under this Agreement.

“Transaction
Documents” means:

(a)           the
Senior Finance Documents;

(b)           the
Acquisition Documents;

(c)           the
Smurfit Kappa Funding Loan Agreements;

(d)           the
SPV B.V./Parent Loan Agreement;

(e)           the
Securities Documents; and

(f)            the
Equity Documents.

“Transaction Security”  means the Security granted pursuant to the Security
Documents.

“Transfer Certificate”
means a certificate, substantially in the form of Schedule 5 (Form of Transfer Certificate), with such
amendments as the Facility Agent may approve or reasonably require or any other
form agreed between the Facility Agent and the Company.

“Transfer
Date” means, for a Transfer Certificate, the later of:

(a)           the
proposed Transfer Date specified in that Transfer Certificate; and

(b)           the
date on which the Facility Agent executes that Transfer Certificate.

“Treasury Transaction”
means any derivative transaction protecting against or benefiting from
fluctuations in any rate or price.

“Vendors”  means the Partners as defined in the Share Purchase
Agreement.

“U.K.” means the
United Kingdom.

 34
 

“US Dollars” or “US$”
means the current legal tender of the United States of America.

“Utilisation”
means a utilisation under this Agreement of a Facility.

“Utilisation Date”
means each date on which a Facility is utilised by the drawing of a Loan or the
issue of a Documentary Credit.

“2012 Senior Cash Pay Notes”
means the US$750,000,000 and €350,000,000 aggregate principal amount of cash
pay senior unsecured debt securities due 2012 issued by Smurfit Kappa Funding
on 30th September, 2002 and 14th February, 2003.

“2015 Senior Subordinated
Cash Pay Notes” means the US$200,000,000 and €217,500,000 aggregate
principal amount of cash pay senior subordinated unsecured debt securities due
2015 issued by Smurfit Kappa Funding on 31st January 2005.

“2025 Bonds”
means the US$292 million 7.50% guaranteed notes due 2025 of Smurfit Kappa
Treasury Funding Limited.

1.2                                 Construction

(a)                                  In
this Agreement, unless the contrary intention appears, a reference to:

(i)                                     an
“amendment” includes a supplement,
amendment, novation, restatement or re-enactment and “amended” will be construed accordingly;

“assets”
includes present and future properties, revenues and rights of every
description;

an “authorisation”
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration or notarisation;

“disposal” means
a sale, transfer, grant, lease, licence or other disposal, whether voluntary or
involuntary, and “dispose” will
be construed accordingly;

“indebtedness”
includes any obligation (whether incurred as principal or as surety and whether
present or future, actual or contingent) for the payment or repayment of money;

a “person”
includes any individual, company, corporation, unincorporated association or
body (including a partnership, trust, joint venture or consortium), government,
state, agency, organisation or other entity whether or not having separate
legal personality;

a “regulation”
includes any regulation, rule, official directive, official request or
guideline (in each case whether or not having the force of law but, if not
having the force of law, being of a type with which it is customary for persons
to which it applies to comply) of any governmental, inter-governmental or
supranational body, agency, 

 35
 

department or regulatory, self-regulatory or
other authority or organisation;

(ii)                                  a
currency is a reference to the lawful currency for the time being of the
relevant country;

(iii)                               a
Default being “outstanding” means
that it has not been remedied or expressly waived in writing in compliance with
the provisions of this Agreement;

(iv)                              a
provision of law is a reference to that provision as extended, applied, amended
or re-enacted and includes any subordinate legislation;

(v)                                 a
Clause, a Subclause or a Schedule is a reference to a Clause or
Subclause of, or a schedule to, this Agreement;

(vi)                              a
person includes its successors in title, permitted assigns and permitted
transferees;

(vii)                           words imparting
the singular include the plural and vice versa;

(viii)                        a
Transaction Document or another document is a reference to that Transaction
Document or other document as amended; and

(ix)                                a
time of day is a reference to London time.

(b)                                 Unless
the contrary intention appears, a reference to a “month” or “months”
is a reference to a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month or the calendar
month in which it is to end, except that:

(i)                                     if
the numerically corresponding day is not a Business Day, the period will end on
the next Business Day in that month (if there is one) or the preceding Business
Day (if there is not);

(ii)                                  if
there is no numerically corresponding day in that month, that period will end
on the last Business Day in that month; and

(iii)                               notwithstanding
sub-paragraph (i) above, a period which commences on the last Business
Day of a month will end on the last Business Day in the next month or the
calendar month in which it is to end, as appropriate.

(c)                                  Unless
expressly provided to the contrary in a Senior Finance Document, a person who
is not a party to a Senior Finance Document may not enforce any of its terms
under the Contracts (Rights of Third Parties) Act 1999 and notwithstanding any
term of any Senior Finance Document, the consent of any third party is not
required for any variation (including any release or compromise of any
liability) or termination of that Senior Finance Document.

 36
 

(d)                                 Unless
the contrary intention appears:

(i)                                     a
reference to a Party will not include that Party if it has ceased to be a party
under this Agreement;

(ii)                                  an
amount in euro is payable only in the euro unit;

(iii)                               a
word or expression used in any other Senior Finance Document or in any notice
given in connection with any Senior Finance Document has the same meaning in
that Senior Finance Document or notice as in this Agreement;

(iv)                              if
there is an inconsistency between this Agreement and another Senior Finance
Document, this Agreement will prevail unless that other Senior Finance Document
is the Priority Agreement in which case the Priority Agreement will prevail;
and

(v)                                 any
obligation of an Obligor under the Senior Finance Documents which is not a
payment obligation remains in force for so long as any payment obligation of an
Obligor (other than solely an indemnity obligation where no amount is due and
payable under such indemnity obligation) is or may be or is capable of becoming
outstanding under the Senior Finance Documents.

(e)                                  The
index to and headings in this Agreement do not affect its interpretation.

2.                                      FACILITIES

2.1                                 Term
Loan Facilities

Subject to the terms of this Agreement, the Lenders
make available to:

(a)                                  the
Company and other Borrowers agreed to by the Lenders, term loan facilities in
an aggregate amount equal to the Total General Term Loan Commitments as
follows:

(i)                                     a
term loan facility in the maximum aggregate amount of €467,657,129 (“A1 Term Loan Facility”) to be available in
euros;

(ii)                                  a
term loan facility in the maximum aggregate amount of €1,132,580,714 (“B1 Term Loan Facility”) to be available in
euros; and

(iii)                               a
term loan facility in the maximum aggregate amount of €1,132,580,714 (“C1 Term Loan Facility”) to be available in
euros;

(b)                                 the
Restricted Borrower in an aggregate amount equal to the Total Restricted Term
Loan Commitments as follows:

(i)                                     a
term loan facility in the maximum aggregate amount of €32,342,871 (“A2 Term Loan Facility”);

 37
 

(ii)                                  a
term loan facility in the maximum aggregate amount of €78,328,565 (“B2 Term Loan Facility”); and

(iii)                               a
term loan facility in the maximum aggregate amount of €78,328,565 (“C2 Term Loan Facility”).

2.2                                 Revolving
Credit Facilities

Subject to the terms of this Agreement, the Lenders
make available to certain of the Borrowers revolving credit facilities in an
aggregate amount equal to the Total Revolving Credit Commitments.

2.3                                 Restructuring
Loan Facility

(a)                                  Subject
to the terms of this Agreement, the Lenders make available to certain of the
Borrowers the Restructuring Loan Facility in an aggregate amount equal to the
Total Restructuring Credit Commitments.

(b)                                 On
the Restructuring Loan Facility Conversion Date, the Restructuring Loans shall
convert into Restructuring A Loans, Restructuring B Loans and Restructuring C
Loans as follows:

(i)                                     the
proportion of the outstanding Restructuring Loans equal to the proportion that
the aggregate of the A1 Term Loan Commitments and A2 Term Loan Commitments bore
to the Total Term Loan Commitments immediately prior to the First Drawdown Date
shall be converted into Restructuring A Loans.

(ii)                                  the
proportion of the outstanding Restructuring Loans equal to the proportion that
the aggregate of the B1 Term Loan Commitments and B2 Term Loan Commitments bore
to the Total Term Loan Commitments immediately prior to the First Drawdown Date
shall be converted into Restructuring B Loans.

(iii)                               the
proportion of the outstanding Restructuring Loans equal to the proportion that
the aggregate of the C1 Term Loan Commitments and C2 Term Loan Commitments bore
to the Total Term Loan Commitments immediately prior to the First Drawdown Date
shall be converted into Restructuring C Loans.

2.4                                 Additional
Facilities

(a)                                  Following
the occurrence of a Qualifying IPO (and subject to paragraphs (e) and (f)
below), any person may, subject to the terms of this Agreement, become a Lender
by delivering to the Facility Agent an Additional Facility Accession Agreement
in each case duly completed and executed by that person, the Facility Agent,
the Company and, if the Additional Facility is to be granted to an Additional
Borrower, the relevant Additional Borrower. That person shall become a Lender
on the date specified in the Additional Facility Accession Agreement.

 38
 

(b)                                 Upon
the relevant person becoming a Lender, the Total Commitments shall be increased
by the amount set out in the relevant Additional Facility Accession Agreement
as that Lender’s Additional Facility Commitment.

(c)                                  Each
Additional Facility Lender will grant to the relevant Borrower a term loan
facility in the amount specified in the relevant Additional Facility Accession
Agreement in euros or an Optional Currency (as applicable) during the
Additional Facility Availability Period specified in the Additional Facility
Accession Agreement, subject to the terms of this Agreement.

(d)                                 The
execution by the Company of an Additional Facility Accession Agreement
constitutes confirmation by each Guarantor that its obligations under Clause 19
(Guarantee and Indemnity) shall continue
unaffected except that those obligations shall extend to the Total Commitments
as increased by the addition of the relevant Lender’s Commitment and shall be
owed to each Finance Party including the relevant Lender. If and to the extent
agreed by the Company with the Additional Facility Lenders the Additional
Facility shall be secured under the Security Documents on a similar basis as the
Lenders.

(e)                                  An
Additional Facility Accession Agreement may not be delivered or executed where
the aggregate Total Commitments of such proposed Additional Facility Accession
Agreement and all other Additional Facility Accession Agreements would exceed €400,000,000.

(f)                                    No
Additional Facility will be permitted unless (i) the Parent provides a
certificate signed by a director certifying (A) no Default is existing and (B)
on the basis of pro forma calculations taking into account the drawdown of the
Additional Facility in full, the Smurfit Kappa Funding Group will be in
compliance with the financial undertakings in Clause 22 (Financial Covenants) and is expected to be
in compliance with such financial undertakings for the 12 months following the
drawdown under the Additional Facility, (ii) the Final Maturity Date of the
Additional Facility occurs on or later than the latest Final Maturity Date for
the outstanding Facilities and (iii) the pricing is no more onerous than the
opening pricing of the euro denominated loans under the C1 Term Loan Facility
as at the date of the Amendment and Restatement Agreement.

2.5                                 Documentary
Credit

The Revolving Credit Facility may also be
utilised by way of issue of Documentary Credits.

2.6                                 Ancillary
Facilities

Subject to the terms of this Agreement, a Lender may
also make available certain other bi-lateral facilities to the Borrowers
in respect of the Revolving Credit Facility in place of all or part of its
Revolving Credit Commitment.

 

 39

2.7                                 Limitations

(a)                                  Each
General Term Loan Facility shall be utilised pro rata
with the other General Term Loan Facilities and each Restricted Term Loan
Facility shall be utilised pro rata with
the other Restricted Term Loan Facilities.

(b)                                 No
Utilisation of any Facility may be made before the Closing Date.

(c)                                  The
aggregate principal amount of Documentary Credits outstanding under the
Revolving Credit Facility at any time may not exceed €250,000,000.

(d)                                 The
aggregate of (i) all outstanding Credits bearing the same designation may not
exceed the Commitments then in effect bearing that designation; (ii) all
outstanding Revolving Credit Utilisations when aggregated with all Ancillary
Outstandings of the Ancillary Lenders may not exceed the Revolving Credit
Commitments then in effect (ignoring any reduction thereof on account of
Ancillary Commitments); and (iii) the aggregate amount of all Ancillary
Outstandings may not at any time exceed the aggregate Ancillary Commitments.

(e)                                  The
Term Loan Facilities shall be available for a period of 10 Business Days after
the Closing Date (or if any undrawn Term Loan Facilities remains after the
Closing Date, a period of up to 90 days after the Closing Date in connection
with (i) the funding of adjustments in purchase price for the Acquisition (ii)
the funding of borrowing requirements arising from the difference between LTM
average working capital and actual working capital on the Closing Date and/or
(iii) funding the payment of costs and expenses arising in connection with the
Acquisition provided that no more than €1,200 million in aggregate of the Term
Loan Facilities shall be available after the date falling ten Business Days
after the Closing Date).

2.8                                 Nature
of a Finance Party’s rights and obligations

Unless otherwise agreed
by all the Finance Parties:

(a)                                  the
obligations of a Finance Party under the Senior Finance Documents are several;

(b)                                 failure
by a Finance Party to perform its obligations does not affect the obligations
of any other Party (including any other Finance Party) under the Senior Finance
Documents;

(c)                                  no
Finance Party is responsible for the obligations of any other Finance Party
under the Senior Finance Documents;

(d)                                 the
rights of a Finance Party under the Senior Finance Documents are separate and
independent rights;

(e)                                  a
debt arising under the Senior Finance Documents to a Finance Party is a
separate and independent debt; and

 40
 

(f)                                    a
Finance Party may, except as otherwise stated in the Senior Finance Documents,
separately enforce those rights.

3.                                      PURPOSE

3.1                                 Term
Loan Facilities

(a)                                  Each
General Term Loan Facility may be used in or towards financing the following:

(i)                                     part-financing
the acquisition by the Company of Target Shares other than the Restricted
Target Shares;

(ii)                                  refinancing
existing indebtedness of the Smurfit Kappa Group and the Target Group and the
acquisition by Smurfit Deutschland GmbH of loans to Kappa Packaging
(Deutschland) GmbH as contemplated in the Structure Memorandum;

(iii)                               the
payment of the Acquisition and Refinancing Costs; and

(iv)                              to
the extent not otherwise covered herein, the Permitted Post Closing Drawing
Purposes.

(b)                                 Each
Restricted Term Loan Facility may only be used in or towards financing the
acquisition by the Restricted Borrower of Restricted Target Shares.

3.2                                 Revolving
Credit Loans

Each Revolving Credit Loan may be used for the working
capital and general corporate purposes of the Group, including refinancing
working capital and general corporate debt of the Group (and for the avoidance
of doubt including but not limited to financing Capital Expenditure, any
adjustments to the purchase price for the Acquisition in accordance with the
Share Purchase Agreement, and the financing of any dividend payments permitted
under Clause 23.16 (Dividends)).

3.3                                 Restructuring
Facility Loans

Each Restructuring
Facility Loan may only be used for the following purposes:

(a)                                  financing
the restructuring costs of the Group, including redundancies, disposal costs,
merger costs, advisory costs in connection with restructuring and financing
costs in connection with funding such costs; and

(b)                                 financing
Permitted Acquisitions and Permitted Joint Venture Investments and, in each
case, the fees, costs and expenses related thereto.

3.4                                 Additional
Facility Loans

Each Additional Facility Loan may be used in or
towards any of the following purposes:

 41
 

(a)                                  partial
or full repayment, prepayment, redemption, defeasance or purchase of the 2012
Senior Cash Pay Notes and any payments of premium required in relation thereto
and payment of fees and expenses incurred in relation thereto, provided that
prior to any such application of Additional Facility Loans the Parent delivers
to the Facility Agent on or prior to the delivery of the relevant Request a
certificate evidencing that the ratio of Consolidated Total Net Senior
Borrowings to Consolidated EBITDA for the most recent four consecutive
quarterly Accounting Periods of the Smurfit Kappa Funding Group for which
financial statements have been delivered hereunder, pro forma for drawing and
the application of the relevant Additional Facility Loans, is not greater than
3.75:1, and for the purposes of this paragraph (a) “Consolidated Total Net Senior Borrowings” means the
Consolidated Total Net Borrowings less amounts outstanding under the Cash Pay
Securities; and

(b)                                 to
finance the making of Permitted Acquisitions by the Group.

3.5                                 Documentary
Credits

Each Documentary Credit issued under the Revolving
Credit Facility may only be issued for the purposes set out in Clause 3.2
(Revolving Credit Loans).

3.6                                 No
obligation to monitor

No Finance Party is bound to monitor or verify the
utilisation of a Facility and no Finance Party will be responsible for, or for
the consequences of, such utilisation.

3.7                                 Professional
Market Party Representation

(a)                                  Each
Lender that makes an advance to a Dutch Borrower, represents to such Dutch
Borrower, on the date of this Agreement and, if on such date it is a
requirement of Dutch law that each Lender is a Professional Market Party, the
date on which an advance (or any portion thereof) is made to the Dutch
Borrower, that it is a Professional Market Party.

(b)                                 Each
Lender acknowledges that the Dutch Borrower has relied upon such representation
and undertakes, to the extent necessary, to provide its reasonable assistance
to the Dutch Borrower in verifying such Lender’s Professional Market
Party-status.

4.                                      CONDITIONS
PRECEDENT

4.1                                 Conditions
precedent documents

A Request (other than a request for the utilisation of
a Certain Funds Credit, which shall be subject to Clause 4.2 below) may
not be given until the Facility Agent has notified the Company and the Lenders
that it has received all of the documents and evidence set out in Part I
and Part II of Schedule 2 (Conditions
Precedent Documents) in form and substance satisfactory to the
Facility Agent (acting reasonably).  The
Facility Agent must give this notification to the Company and the Lenders
promptly upon receipt of such documents and evidence.

 42
 

4.2                                 Certain
Funds conditions precedent

Notwithstanding Clauses 4.1 (Conditions precedent documents) and 4.3 (Further conditions precedent) during the
Certain Funds Period, the obligations of each Lender to participate in any
Certain Funds Credits are subject to the following conditions precedent in form
and substance satisfactory to the Facility Agent (acting reasonably):

(a)                                  the
documentary conditions precedent requirements set out in Part I only of
Schedule 2 (Conditions Precedent
Documents) except to the extent such conditions precedent are
required to be delivered in respect of any member of the Group (other than the
Company);

(b)                                 no
Major Default has occurred and is continuing or would result from the making of
such Credit;

(c)                                  it
is not illegal or contrary to applicable law or regulation for a Lender to
participate in the Credit and this Agreement, the Priority Agreement or any
document creating security over the shares in Target will not be invalid or
unenforceable in any materially relevant jurisdiction due to any relevant law
or regulation provided that if such illegality or invalidity or
unenforceability subsists the relevant Finance Parties will use reasonable
endeavours to enter into a legally valid and binding agreement achieving a
substantially equivalent position to that prior to such event occurring and the
Certain Funds Period shall be suspended for 20 Business Days whilst each Finance
Party uses all reasonable efforts to achieve such position;

(d)                                 no
event or circumstance has occurred which would entitle the Company to decline
to complete the Acquisition in accordance with the Acquisition Documents (other
than as a result of any conditions relating to the availability of funding for
the Acquisition); and

(e)                                  no
Change of Control has occurred.

During the Certain Funds Period, the Lenders will not
exercise their rights under Clause 24.17 (Acceleration),
exercise any rescission or exercise any right of set-off, in each case to
prevent the utilisation of any Certain Funds Credits.

4.3                                 Further
conditions precedent

The obligations of each Lender to participate in any
Credit (other than a Certain Funds Credit during the Certain Funds Period) are
subject to the further conditions precedent that on both the date of the
Request and the Utilisation Date for that Credit:

(a)                                  the
Repeating Representations are correct in all material respects; and

(b)                                 no
Default is outstanding or would result from the Credit or, in the case of a
Rollover Credit, no Event of Default is outstanding and has been accelerated
pursuant to Clause 24.17 (Acceleration).

 43
 

4.4                                 Maximum
number

Unless the Facility Agent agrees, a Request may not be
given if, as a result of making the Utilisation requested, there would be more
than 15 Loans per General Term Loan Facility (provided that until the date
60 days after the Closing Date, there may be 30 Loans per Term Loan
Facility), 10 Loans per Restricted Facility, 20 Revolving Credit Loans or 20
Documentary Credits or 20 Restructuring Loans outstanding.

5.                                      UTILISATION
— LOANS

5.1                                 Giving
of Requests

(a)                                  A
Borrower may borrow a Loan by giving to the Facility Agent a duly completed
Request.

(b)                                 Unless
the Facility Agent otherwise agrees, the latest time for receipt by the
Facility Agent of a duly completed Request is 11.00 a.m. one Business Day
before the Rate Fixing Day for the proposed borrowing.

(c)                                  Each
Request is irrevocable.

5.2                                 Completion
of Requests

A Request for a Loan will not be duly made unless:

(a)                                  it
identifies the Borrower;

(b)                                 it
identifies the Facility under which the Loan is to be made;

(c)                                  the
Utilisation Date is a Business Day falling within the relevant Availability
Period;

(d)                                 the
amount of the Loan requested is either an amount equal to the entire undrawn
amount available under this Agreement for Loans under the relevant Facility on
the proposed Utilisation Date, or a minimum of €3,000,000  (or in the case of a Term
Loan, when aggregated with any other Term Loans drawn pro rata
to it on the same date, €3,000,000 in aggregate for such Term Loans) or its
equivalent in accordance with Clause 9 (Optional
Currencies) and an integral multiple of 1,000,000 units of that
currency, or is such other amount as the Facility Agent may agree; and

(e)                                  the
proposed currency and Term comply with this Agreement.

5.3                                 Advance
of Loan

(a)                                  The
Facility Agent must promptly notify each Lender of the details of the requested
Loan and the amount of its share in that Loan.

(b)                                 The
amount of each Lender’s share of each Loan will be its Pro Rata Share on the
proposed Utilisation Date.

 44
 

(c)                                  No
Lender is obliged to participate in a Loan if as a result:

(i)                                     its
share in the Credits under a Facility would exceed its Commitment for that
Facility; or

(ii)                                  the
Credits would exceed the Total Commitments.

(d)                                 If
the conditions set out in this Agreement have been met, each Lender must make
its share in the Loan available to the Facility Agent for the relevant Borrower
on the Utilisation Date.

6.                                      UTILISATION
- DOCUMENTARY CREDITS

6.1                                 Giving
of Requests

(a)                                  A
Borrower may request a Documentary Credit to be issued under the Revolving
Credit Facility by giving to the Facility Agent a duly completed Request.

(b)                                 Unless
the Facility Agent otherwise agrees, the latest time for receipt by the
Facility Agent of a duly completed Request is 11.00 a.m. three Business
Days before the proposed Utilisation Date or, in relation to the Loan Note
Guarantee or a Barclays L/C, one Business Day before the proposed Utilisation
Date

(c)                                  Each
Request is irrevocable.

6.2                                 Completion
of Requests

A Request for a Documentary Credit will not be duly
made unless:

(a)                                  it
identifies the Borrower;

(b)                                 it
specifies that it is for a Documentary Credit and identifies the Facility under
which it is drawn;

(c)                                  the
Utilisation Date is a Business Day falling within the relevant Availability
Period;

(d)                                 the
amount of the Documentary Credit requested is either an amount equal to the
maximum undrawn amount available under this Agreement for Documentary Credits
on the proposed Utilisation Date or a minimum of €1,000,000 or its equivalent
in accordance with Clause 9 (Optional
Currencies) or such other amount as the Facility Agent may agree;

(e)                                  the
form of Documentary Credit is attached and has previously been agreed by the
Issuing Bank or is in all material respects in the form set out in Part I of
Schedule 9 (Form of Documentary Credit)
or in relation to the Loan Note Guarantee, the form set out in Part II of
Schedule 9 (Form of Loan Note Guarantee) or in
relation to a Barclays L/C, the form set out in Part III of Schedule 9 (Form of Barclays L/Cs);

 45
 

(f)                                    the
expiry date of the Documentary Credit will fall on or before the Final
Revolving Maturity Date save in relation to the Barclays L/C provided that it
will be cash collateralised by the relevant Borrower on or prior to the Final
Revolving Maturity Date; and

(g)                                 the
delivery instructions for the Documentary Credit are specified.

Only one Documentary Credit may be requested in a
single Request.

6.3                                 Issue
of Documentary Credit

(a)                                  The
Facility Agent must promptly notify the Issuing Bank and each Lender of the
details of the requested Documentary Credit and the amount of such Lender’s
share of that Documentary Credit.

(b)                                 The
amount of each Lender’s share in a Documentary Credit will be its Pro Rata
Share on the proposed Utilisation Date.

(c)                                  The
Issuing Bank is not obliged to issue any Documentary Credit if as a result:

(i)                                     a
Lender’s share in the outstanding Credits under the Revolving Credit Facility,
would exceed its Revolving Credit Commitment; or

(ii)                                  the
outstanding Credits would exceed the Total Commitments; or

(iii)                               in
the case of a Documentary Credit issued under the Revolving Credit Facility
only, the Issuing Bank has not approved the identity of any New Lender (as
defined in Clause 31 (Changes to the
Parties)) which has acquired a Revolving Credit Commitment and such
New Lender has not provided any deposit required by the Issuing Bank under
Subclause 7.5(d) (Indemnities).

(d)                                 If
the conditions set out in this Agreement have been met, the Issuing Bank must issue
the Documentary Credit on the Utilisation Date.

(e)                                  If
the Issuing Bank is not obliged to issue any Documentary Credit only for the
reason stated in subparagraph 6.3(c)(iii) above, such Documentary Credit will,
subject to the other terms of this Agreement, be issued by the Facility Agent
on behalf of the Lenders severally in proportion to their Revolving Credit
Commitment.

7.                                      DOCUMENTARY
CREDITS

7.1                                 General

(a)                                  A
Documentary Credit is “repaid” or “prepaid” if:

(i)                                     a
Borrower provides Cash Cover for that Documentary Credit; or

(ii)                                  the
maximum amount payable under the Documentary Credit is reduced in accordance
with its terms or as a result of its expiry; or

 46
 

(iii)                               the
Documentary Credit is returned by the beneficiary with its written confirmation
that it is released and cancelled; or

(iv)                              the
Issuing Bank is satisfied that it has no further liability under that
Documentary Credit, as a result of its expiry or otherwise.

The amount by which a Documentary Credit is repaid or
prepaid under sub-paragraphs (i) and (ii) above is the amount of the
relevant Cash Cover or reduction.

(b)                                 If
a Documentary Credit or any amount outstanding under a Documentary Credit
becomes immediately payable, the Issuing Bank will notify the Borrower that
requested the issue of that Documentary Credit, and such Borrower must (to the
extent it has not already provided Cash Cover in respect of such amount) repay
or prepay that amount immediately.

(c)                                  “Cash Cover” is provided for a Documentary
Credit if a Borrower pays an amount in the currency of the Documentary Credit
to an interest-bearing account with a Finance Party in London in the name
of the Borrower and the following conditions are met:

(i)                                     the
account is with the Facility Agent or with the Issuing Bank (if, subject as
provided below, in either case the Cash Cover is to be provided for all the
Lenders) or with a Lender if the Cash Cover is to be provided for that Lender
only);

(ii)                                  until
no amount is or may be outstanding under that Documentary Credit, withdrawals
from the account may only be made to pay to a Finance Party amounts due and
payable to that Finance Party in respect of that Documentary Credit or under
this Clause; and

(iii)                               the
Borrower has executed and delivered a security document over that account, in
form and substance satisfactory to the Facility Agent or the relevant Lender
(acting reasonably), creating a first ranking security interest over that
account.

Where Cash Cover is to be provided to all the Lenders
on whose behalf a Documentary Credit is issued by the Facility Agent, a Lender
may require its portion of the Cash Cover to be paid into its account instead
of an account with the Facility Agent or the Issuing Bank.

(d)                                 The
“outstanding” or “principal” amount of a Documentary Credit
at any time is the maximum amount that is or may be payable by the relevant
Borrower in respect of that Documentary Credit at that time (less any Cash
Cover provided by that Borrower in respect of such Documentary Credit which
complies with paragraph (c) above and which remains standing to the credit of
the relevant interest-bearing account).

 

 47

7.2                                 Assignments
and transfers

The consent of the Issuing Bank is required for any
assignment or transfer of any Lender’s rights and obligations with respect to
any Documentary Credit issued by the Issuing Bank under this Agreement.  The Issuing Bank shall not withhold its
consent if the New Lender (as defined in Clause 31 (Changes to the Parties)) has a long term
credit rating of A- or more (when rated by Standard & Poor’s Rating
Services) or A3 or more (when rated by Moody’s Investor Services Inc.) or has provided
a deposit (free of Security Interests or third party claims) with the Issuing
Bank in an amount equal to the maximum potential liability of such New Lender
to the Issuing Bank (assuming that such assignment or transfer has already
occurred) under Subclause 7.5 (Indemnities)
in respect of Documentary Credits outstanding on the relevant Transfer Date.

7.3                                 Fees
in respect of Documentary Credits

(a)                                  The
relevant Borrower must pay to the Issuing Bank for itself a utilisation fee
computed at the rate of 0.125 per cent. per annum on the outstanding face
amount from time to time of each Documentary Credit (less the amount of any
Cash Cover provided in respect of such Documentary Credit) issued by it
hereunder for such Borrower which is counter-indemnified by the other
Lenders (ignoring for this purpose Subclause 7.6 (Lender as the Issuing Bank)) under
Subclause 7.5(b) (Indemnities)
for the period from the date of issue of such Documentary Credit to its
Maturity Date, such fee being payable quarterly in arrears and on the date any
Documentary Credit is repaid or prepaid in full.

(b)                                 Each
Borrower must pay to the Facility Agent for each Lender a Documentary Credit
fee computed at the rate of the Revolving Credit Facility Margin on the
outstanding amount (less the amount of any Cash Cover provided by the Obligors
in respect of such Documentary Credit) of each Documentary Credit requested by
it for the period from the date of issue of that Documentary Credit until its
Maturity Date.  This fee will be
distributed according to each Lender’s Pro Rata Share, adjusted to reflect any
assignment or transfer to or by that Lender.

(c)                                  Documentary
Credit fee is payable quarterly in arrears (or at the end of any shorter period
that ends on the Maturity Date for that Documentary Credit).  Any accrued Documentary Credit fee with
respect to any Documentary Credit is also payable to the Facility Agent upon
repayment or prepayment in full of that Documentary Credit.

7.4                                 Claims
under a Documentary Credit

(a)                                  In
the case of a Documentary Credit issued by the Issuing Bank, each Borrower and
each Lender irrevocably and unconditionally authorises the Issuing Bank, and in
the case of a Documentary Credit issued by the Facility Agent, each Borrower
irrevocably and unconditionally authorises each Lender on whose behalf such
Documentary Credit was issued, to pay any claim made or purported to be made
under a Documentary Credit requested by it and 

 48
 

which appears on its face to be in order and
in accordance with the terms of that Documentary Credit (a “Documentary Credit Claim”).

(b)                                 Each
Borrower must immediately on demand pay to the Facility Agent in the case of a
Documentary Credit issued by the Issuing Bank for the Issuing Bank or, in the
case of a Documentary Credit issued by the Facility Agent, for the account of
each Lender on whose behalf such Documentary Credit was issued by the Facility
Agent, an amount equal to the amount of any Documentary Credit Claim.

(c)                                  In
the case of a Documentary Credit issued by the Issuing Bank, each Borrower and
each Lender acknowledges that the Issuing Bank and, in the case of a
Documentary Credit issued by the Facility Agent on behalf of the Lenders, each
Borrower acknowledges that the Facility Agent and each Lender on whose behalf
such Documentary Credit was issued:

(i)                                     is
not obliged to carry out any investigation or seek any confirmation from any
other person before paying a Documentary Credit Claim; and

(ii)                                  deals
in documents only and will not be concerned with the legality of a claim or any
underlying transaction or any available set-off, counterclaim or other
defence of any person,

and the Issuing Bank, the Facility Agent and each such
Lender may assume that any demand, certificate, statement or document which
appears on its face to be in order is correct and properly made.

(d)                                 The
obligations of a Borrower and, in respect of a Documentary Credit issued by the
Issuing Bank, the obligations of the Facility Agent and each Lender under this
Clause will not be affected by:

(i)                                     the
sufficiency, accuracy or genuineness of any claim or any other document; or

(ii)                                  any
incapacity of, or limitation on the powers of, any person signing a claim or
other document.

(e)                                  A
certificate signed by the Issuing Bank or a Lender on whose behalf a
Documentary Credit was issued by the Facility Agent certifying the amount due
to the Issuing Bank or such Lender shall be prima facie evidence of the matters
so certified.

7.5                                 Indemnities

(a)                                  A
Borrower must promptly on demand indemnify the Issuing Bank, the Facility Agent
and each Lender on whose behalf a Documentary Credit was issued by the Facility
Agent against any loss or liability which the Issuing Bank, the Facility Agent
or such Lender incurs under or in connection with any Documentary Credit
requested by it, except to the extent that the loss or liability is directly
caused by the gross negligence, wilful misconduct or breach of contract of the
Issuing Bank, the Facility Agent or such Lender.  

 49
 

Such Borrower must also pay interest under
Subclause 12.4 (Interest on overdue
amounts) on the amount of any such loss or liability of the Issuing
Bank or any such Lender for the period between payment by the Issuing Bank or
any such Lender and reimbursement by the Borrower (provided that if the Issuing
Bank or any such Lender does not make demand on the relevant Borrower until
after the day of payment by the Issuing Bank or such Lender, the rate of
interest under Subclause 12.4 (Interest on
overdue amounts) in relation to such amount shall be reduced by
1.00% for the period up to the making of such demand).

(b)                                 Each
Lender must promptly on demand indemnify the Issuing Bank against its share of
any loss or liability which the Issuing Bank incurs under or in connection with
any Documentary Credit issued by the Issuing Bank and which has not been paid
for by an Obligor, except to the extent that the loss or liability is directly
caused by the gross negligence, wilful misconduct or breach of contract of the
Issuing Bank.

(c)                                  A
Lender’s share of the liability or loss referred to in sub-paragraph (b)
above will be its Pro Rata Share on the Utilisation Date, adjusted to reflect
any subsequent assignment or transfer under this Agreement.

	
  

  	
   

  	
  (d)

  	
  (i)

  	
  Unless the Issuing Bank has confirmed in writing to
  any Lender (not being an Original Lender) that it would not require such
  Lender to make any deposit with it, the Issuing Bank may require that any
  such Lender (which has a long term credit rating of less than A- (when
  rated by Standard and Poor’s Rating Services) or A3 (when rated by Moody’s
  Investor Services Inc.)) deposits (free of Security Interests or third party
  claims) with the Issuing Bank prior to 10.00 a.m. on the Utilisation Date for
  any Documentary Credit to be issued by the Issuing Bank (or if later within
  3 Business Days of any such request by the Issuing Bank) an amount equal
  to the maximum potential liability of such Lender to the Issuing Bank under
  this Subclause 7.5 in respect of such Documentary Credit.

  

 

(ii)                                  The
Issuing Bank shall be entitled to apply such deposit (by application of funds,
set-off, combination of accounts or otherwise as the Issuing Bank shall
determine) against amounts due to it from such Lender under this Subclause 7.5.

(iii)                               Any
such deposit shall be on terms that the Issuing Bank shall only be required to
repay such deposit to or to the order of such Lender on the expiry (if no
demand has then been made under such Documentary Credit) or repayment in full
of the relevant Documentary Credit or on compliance in full by such Lender with
its obligations to the Issuing Bank under this Subclause 7.5.

(iv)                              Any
such deposit shall be denominated in the same currency as the relevant
Documentary Credit and shall bear interest at a rate, determined by the Issuing
Bank to be 0.125 per cent. per annum below that at which it can redeposit the
funds with lending banks in the relevant interbank market for appropriate
periods (as calculated on the 

 50
 

aggregate amount of the deposit, on the basis of a
year of 360 days for the actual number of days elapsed).  Such interest shall be payable (subject to
deduction of Tax if so required by applicable law) by the Issuing Bank to such
Lender quarterly in arrears (or as otherwise agreed) until repayment of the deposit
or application of the deposit by the Issuing Bank against the obligations of
such Lender to it under this Subclause 7.5.

(e)                                  The
relevant Borrower must promptly on demand reimburse any Lender for any payment
it makes to the Issuing Bank under this Subclause 7.5 (other than pursuant
to paragraph (d) above).  Such Borrower
must also pay interest under Subclause 12.4 (Interest on overdue amounts) on the amount of any such
payment by a Lender for the period between payment by such Lender and the date
of reimbursement by the Borrower (provided that if the Issuing Bank or any such
Lender does not make demand on the relevant Borrower until after the day of
payment by the Issuing Bank or such Lender, the rate of interest under
Subclause 12.4 (Interest on overdue amounts)
in relation to such amount shall be reduced by 1.00% for the period up to the
making of such demand).

(f)                                    The
obligations of each Borrower and each Lender under this Clause are
continuing obligations and will extend to the ultimate balance of all sums
payable by that Borrower or Lender under or in connection with any Documentary
Credit, regardless of any intermediate payment or discharge in whole or in
part.

(g)                                 The
obligations of the Borrowers and any Lender under this Clause will not be
affected by any act, omission or thing which, but for this provision, would
reduce, release or prejudice any of its obligations under this
Clause (whether or not known to it or any other person).  This includes:

(i)                                     any
time or waiver granted to, or composition with, any person;

(ii)                                  any
release of any person under the terms of any composition or arrangement;

(iii)                               the
taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or security over
assets of, any person;

(iv)                              any
non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to realise the full
value of any security;

(v)                                 any
incapacity or lack of power, authority or legal personality of or dissolution
or change in the members or status of any person;

(vi)                              any
amendment (however fundamental) of a Senior Finance Document, any Documentary
Credit or any other document or security; or

 51
 

(vii)                           any
unenforceability, illegality or invalidity of any obligation of any person
under any Senior Finance Document, any Documentary Credit or any other document
or security.

7.6                                 Lender
as the Issuing Bank

A Lender which is also the Issuing Bank shall be
treated as a separate entity in those capacities capable as a Lender of
contracting with itself as the Issuing Bank.

7.7                                 Rights
of contribution

No Obligor will be entitled to any right of
contribution or indemnity from any Finance Party in respect of any payment it
may make under this Clause.

7.8                                 Change
of Issuing Bank

The Issuing Bank may (with the consent of the Facility
Agent) resign on giving 3 months notice to the Company and the Facility
Agent, and the Facility Agent may with the consent of the Lender concerned, and
after consultation with the Company, designate any Lender as a replacement
Issuing Bank for future Documentary Credits. 
Any such resignation shall not extend to or affect Documentary Credits
issued prior to such resignation.

8.                                      ANCILLARY
FACILITIES

8.1                                 Availability

(a)                                  If
the Company and a Lender agree and subject as provided below, that Lender may
provide an Ancillary Facility on a bi-lateral basis to a Borrower in
place of all or part of that Lender’s Revolving Credit Commitment.

(b)                                 An
Ancillary Facility may not be made available unless the Company has notified
the Facility Agent by not less than 5 Business Days’ notice (or such
lesser period as the Facility Agent may agree) and the Facility Agent has
received:

(i)                                     a
notice specifying:

(A)                              the
members of the Group (being Borrowers) which may use the Ancillary Facility;

(B)                                the
start and expiry dates of the Ancillary Facility;

(C)                                the
type of Ancillary Facility being provided;

(D)                               the
Ancillary Lender; and

(E)                                 the
applicable Ancillary Commitment;

(ii)                                  a
copy of the Ancillary Facility Document; and

 52
 

(iii)                               any
other information which the Facility Agent may reasonably require in connection
with the Ancillary Facility.

(c)                                  Subject
to compliance with paragraph (b) above, then:

(i)                                     the
Lender concerned will become an Ancillary Lender; and

(ii)                                  the
Ancillary Facility will be available,

with effect from the date agreed by the Company and
the Ancillary Lender.

(d)                                 The
Facility Agent must promptly notify the other Lenders.

8.2                                 Terms
of Ancillary Facilities

(a)                                  Except
as provided below, the terms of any Ancillary Facility will be those agreed by
the Ancillary Lender and the Company.

(b)                                 However,
those terms:

(i)                                     must
be based upon normal commercial terms at that time;

(ii)                                  must
only allow Borrowers to use the Ancillary Facility;

(iii)                               must
not allow the Ancillary Outstandings to exceed the Ancillary Commitment;

(iv)                              may
not allow the Ancillary Commitment of a Lender to exceed the Revolving Credit
Commitment of that Lender (before reduction on account of the Ancillary
Facility); and

(v)                                 must
ensure that the Ancillary Commitment is reduced to nil, and that all Ancillary
Outstandings are repaid and/or cash-collateralised in full, not later
than the Final Revolving Maturity Date.

(c)                                  In
the event of any conflict between the terms of an Ancillary Finance Document
and any of the other Senior Finance Documents, the terms of the relevant Senior
Finance Document shall prevail.

8.3                                 Revolving
Credit Commitment

For the purposes of:

(a)                                  calculating
commitment fee payable under Clause 27.4 (Revolving/
Restructuring Credit Commitment Fee); and

(b)                                 calculating
the amount of a Lender’s share in a Credit under the Revolving Credit Facility:

(i)                                     the
Revolving Credit Commitment of a Lender will be reduced by the amount of its
Ancillary Commitment in force at that time; and

 53
 

(ii)                                  the
Revolving Credit Commitment of a Lender will be increased by the cancelled
amount of its Ancillary Commitment at the time of cancellation.

8.4                                 Refinancing
of Ancillary Facility

(a)                                  No
Ancillary Lender may demand repayment or prepayment of any amounts or demand
Cash Cover for any liabilities made available or incurred by it under its
Ancillary Facility, unless:

(i)                                     the
relevant Total Revolving Credit Commitments have been cancelled in full, or the
Facility Agent has declared all outstanding Credits under the Revolving Credit
Facilities immediately due and payable; or

(ii)                                  the
Ancillary Outstandings under that Ancillary Facility can be refinanced by a
Revolving Credit Utilisation.

(b)                                 For
the purposes of determining whether or not the Ancillary Outstandings under an
Ancillary Facility can be so refinanced by a Revolving Credit Utilisation:

(i)                                     the
Revolving Credit Commitment of the Ancillary Bank will be increased by the
amount of its Ancillary Outstandings (or if less by the amount of its Ancillary
Commitments) under that Ancillary Facility; and

(ii)                                  the
Revolving Credit Utilisation may (provided that paragraph 8.4(a)(i) above does
not apply) be utilised irrespective of whether a Default is outstanding or any
other applicable condition precedent is not satisfied (but only to the extent
that the proceeds are applied in refinancing those Ancillary Outstandings); and

(iii)                               the
respective shares in such Revolving Credit Utilisation of the Lenders having
Revolving Credit Commitments shall be such that after the making of such
Revolving Credit Utilisation, the shares of such Lenders in all the outstanding
Utilisations of the Revolving Credit Utilisations taken together shall be
proportionate to the Revolving Credit Commitments of the Lenders.

8.5                                 Information

Each Obligor and each Ancillary Lender must, promptly
upon request by the Facility Agent, supply the Facility Agent with any
information relating to the operation of an Ancillary Facility (including the
Ancillary Outstandings) as the Facility Agent may reasonably request.

9.                                      OPTIONAL
CURRENCIES

9.1                                 Denomination

(a)                                  Term
Loans may be denominated in euros or in other Optional Currencies selected by
the Company.

 54
 

(b)                                 Restructuring
Loans may be denominated in euros or in other Optional Currencies selected by
the Company.

(c)                                  Revolving
Credit Loans may be denominated in euros or subject as provided below, an
Optional Currency.

(d)                                 Documentary
Credits may be denominated in euros or in other Optional Currencies selected by
the Company.

(e)                                  Additional
Facility Loans may be denominated in euros or in other Optional Currencies
selected by the Company.

9.2                                 Selection

(a)                                  A
Borrower must select the currency of a Loan in its Request.

(b)                                 The
amount of a Revolving Credit Loan under a Revolving Credit Facility requested
in an Optional Currency must be a minimum amount of the equivalent of
€3,000,000 and an integral multiple of 1,000,000 units of that currency.

(c)                                  Unless
the Facility Agent otherwise agrees, the Revolving Credit Loans may not be
denominated at any one time in more than nine currencies.

9.3                                 Conditions
relating to Optional Currencies

(a)                                  A
Term Loan, a Restructuring Loan or an Additional Facility Loan may only be
denominated in an Optional Currency or a Revolving Credit Utilisation may only
be denominated in an Optional Currency for a Term if:

(i)                                     that
Optional Currency is readily available in the amount required and freely
convertible into the Base Currency in the relevant interbank market on the Rate
Fixing Day and the first day of that Term; and

(ii)                                  that
Optional Currency is US Dollars, Sterling, Swedish Kronor, Norwegian Kroner,
Danish Kroner, Canadian Dollars, Hong Kong Dollars, Japanese Yen, or Swiss
Francs or has been previously approved by the Facility Agent (acting on the
instructions of all the Lenders).

(b)                                 If
the Facility Agent has received a request from the Company for a currency to be
approved as an Optional Currency, the Facility Agent must, within five Business
Days, confirm to the Company:

(i)                                     whether
or not the Lenders have given their approval; and

(ii)                                  if
approval has been given, the minimum amount (and, if required, integral
multiples) for any Credit in that currency.

 55
 

9.4                                 Revocation
of currency

(a)                                  Notwithstanding
any other term of this Agreement, if before 9.30 a.m. on any Rate Fixing
Day the Facility Agent receives notice from a Lender that:

(i)                                     the
Optional Currency requested is not readily available to it in the relevant
interbank market in the amount and for the period required; or

(ii)                                  participating
in a Loan in the proposed Optional Currency is reasonably likely in the opinion
of that Lender to contravene any law or regulation applicable to it,

the Facility Agent must give notice to the Company to
that effect promptly and in any event before 11.00 a.m. on that day.

(b)                                 In
this event:

(i)                                     that
Lender must participate in the Credit in the Base Currency; and

(ii)                                  the
share of that Lender in the Credit and any other similarly affected Lender(s)
will be treated as a separate Credit denominated in the Base Currency.

(c)                                  Any
part of a Credit treated as a separate Credit under this Subclause
9.4 will not be taken into account for the purposes of any limit on the
number of Credits or currencies outstanding at any one time.

(d)                                 A
Credit will still be treated as a Rollover Credit if it is not denominated in
the same currency as the maturing Revolving Credit Loan by reason only of the
operation of this Subclause 9.4.

9.5                                 Optional
Currency equivalents

The equivalent in the Base Currency of a Credit or
part of a Credit in an Optional Currency for the purposes of calculating:

(a)                                  whether
any limit under this Agreement has been exceeded;

(b)                                 the
amount of a Credit;

(c)                                  the
share of a Lender in a Credit;

(d)                                 the
amount of any repayment of a Credit; or

(e)                                  the
undrawn amount of a Lender’s Commitment,

is its Original Base Currency Amount.

9.6                                 Term
Loan, Restructuring Loan or Additional Facility Loan Revaluation

(a)                                  If
any Term Loan, Restructuring Loan or Additional Facility Loan is denominated in
an Optional Currency the Facility Agent shall at six month intervals from the
First Drawdown Date (each being a “Currency
Test Date”) 

 56
 

calculate the
Base Currency Amount of the outstanding Term Loans, Restructuring Loans or
Additional Facility Loans (for which purpose the Base Currency Amount shall be
calculated using the Agent’s Spot Rate of Exchange on the date of calculation).

(b)                                 If
the outstanding Base Currency Amount of the Loans under the General Term Loan
Facility, the Restricted Term Loan Facility, the Restructuring Loan Facility or
any Additional Facility on any Currency Test Date exceeds by more than 5% the
Total General Term Loan Commitments, Total Restricted Term Loan Commitments,
Total Restructuring Credit Commitments and the aggregate Additional Facility
Commitments for the relevant Additional Facility, respectively, at that time
(the amount of the excess being the “Excess
Currency Amount”)
the Company shall within 5 Business Days of notice from the Facility Agent
deposit in an interest bearing blocked account of the Company held with the
Facility Agent in London an amount so that following such deposit the amount
standing to the credit of the account is equal to the Excess Currency Amount.

(c)                                  No
amount may be withdrawn by the Company from such blocked account unless on any
subsequent Currency Test Date either there is no Excess Currency Amount (in
which case the full amount standing to the credit of such account may be
withdrawn) or if the Excess Currency Amount is less than the amount standing to
the credit of such account an amount may be withdrawn so that the amount
standing to the credit of such account equals the Excess Currency Amount on the
last Currency Test Date.

(d)                                 The
blocked account held with the Facility Agent (and any amount held in it) shall
be charged in favour of the Finance Parties on terms satisfactory to the
Security Agent acting reasonably.

9.7                                 Documentary
Credit Revaluation

If any Documentary Credit is denominated in an
Optional Currency the Facility Agent shall at six month intervals from the
First Drawdown Date (each being a “Currency Test Date”) calculate the Base Currency Amount
of the outstanding Documentary Credits (for which purpose the Base Currency
Amount shall be calculated using the Agent’s Spot Rate of Exchange on the date
of calculation) and the Parent shall within 5 Business Days notice from the
Facility Agent ensure that, following such calculation, the Revolving Credit
Facility is prepaid to the extent necessary so that the Base Currency Amount of
all outstanding Utilisations of the Revolving Credit Facility do not exceed the
Revolving Credit Facility Commitments.

9.8                                 Notification

The Facility Agent must notify the Lenders and the
Company of the relevant Base Currency Amount (and the applicable Agent’s Spot
Rate of Exchange) promptly after they are ascertained.

 

 57

10.                               REPAYMENT

10.1                           Repayment
of Term Loans

(a)                                  Each
Borrower must repay the A1 Term Loans and the A2 Term Loans made to it in full
by instalments on the dates and in the amounts set out below. The amount to be
repaid on each date specified below (each a “repayment
date”) in respect
of the A1 Term Loans and A2 Term Loans shall be the percentage (set out
opposite that repayment date in respect of the A1 Term Loan Facility and the A2
Term Loan Facility ) of each A1 Term Loan and A2 Term Loan outstanding as at the
date falling 90 days after the Closing Date.

	
  Repayment Date

  (months following the

  Closing Date)

  	
   

  	
  Repayment Amount

  (Percentage of A1 Term Loans

  and A2 Term Loans)

  	
   

  
	
  12

  	
   

  	
   

  	
  3

  	
  %

  	
   

  
	
  18

  	
   

  	
   

  	
  3

  	
  %

  	
   

  
	
  24

  	
   

  	
   

  	
  5.40

  	
  %

  	
   

  
	
  30

  	
   

  	
   

  	
  5.40

  	
  %

  	
   

  
	
  36

  	
   

  	
   

  	
  6.40

  	
  %

  	
   

  
	
  42

  	
   

  	
   

  	
  6.40

  	
  %

  	
   

  
	
  48

  	
   

  	
   

  	
  7.40

  	
  %

  	
   

  
	
  54

  	
   

  	
   

  	
  7.40

  	
  %

  	
   

  
	
  60

  	
   

  	
   

  	
  9.50

  	
  %

  	
   

  
	
  66

  	
   

  	
   

  	
  9.50

  	
  %

  	
   

  
	
  72

  	
   

  	
   

  	
  11.60

  	
  %

  	
   

  
	
  78

  	
   

  	
   

  	
  11.60

  	
  %

  	
   

  
	
  84

  	
   

  	
   

  	
  13.40

  	
  %

  	
   

  

 

(b)                                 Each
Borrower must repay the B1 Term Loans and the B2 Term Loans made to it in full
on the eighth anniversary of the Closing Date or, if later, 31 December 2013.

(c)                                  Each
Borrower must repay the C1 Term Loans and the C2 Term Loans made to it in full
on the ninth anniversary of the Closing Date or, if later, 31 December 2014.

(d)                                 Any
amounts repaid under paragraphs (a), (b) and (c) above may not be re-borrowed.

10.2                           Repayment
of Revolving Credit Loans

(a)                                  Each
Borrower must repay each Revolving Credit Loan made to it in full on its
Maturity Date.

(b)                                 Subject
to the other terms of this Agreement, any amounts repaid under
paragraph (a) above may be re-borrowed.

(c)                                  Without
prejudice to any Borrower’s obligation to repay the full amount of each
Revolving Credit Loan on its due date, on the date of any Rollover Credit drawn
by any Borrower, the amount to be repaid and the amount to be drawn

 58
 

down by such
Borrower on such date in the same currency shall be netted off against each
other so that the amount of cash which such Borrower is actually required to
pay or, as the case may be, the amount of cash which the Lenders are actually
required to pay to such Borrower, shall be the net amount.

(d)                                 Any
amount of any Revolving Credit Loan still outstanding on the Final Revolving
Maturity Date shall be repaid on the Final Revolving Maturity Date.

10.3                           Repayment
of Restructuring Loans

(a)                                  Each
Borrower must repay the Restructuring A Loans made to it on each repayment date
(as defined in Clause 10.1 (Repayment of Term Loans))
falling after the Restructuring Loan Facility Conversion Date in an amount
equal to (i) the same percentage by which the A1 Term Loans are repaid on each
such repayment date multiplied by (ii) the Restructuring A Loans outstanding on
such date and any Restructuring A Loans still outstanding on the final such
repayment date shall be repaid on that date.

(b)                                 Each
Borrower must repay the Restructuring B Loans made to it in full on the eighth
anniversary of the Closing Date, or if later, 31 December 2013.

(c)                                  Each
Borrower must repay the Restructuring C Loans made to it in full on the ninth
anniversary of the Closing Date, or if later, 31 December 2014.

(d)                                 Any
amounts repaid under paragraphs (a), (b) and (c) above may not be re-borrowed.

10.4                           Repayment
of the Additional Facility Loans

(a)                                  Each
Borrower must repay the Advances made to it in accordance with the provisions
of the relevant Additional Facility Accession Agreement unless the relevant
Additional Facility Lenders otherwise agree.

10.5                           Repayment
of Documentary Credits

(a)                                  Each
Borrower must repay each Documentary Credit issued on its behalf in full on its
Maturity Date in accordance with Clause 7.1(a) (General).

(b)                                 Subject
to the other terms of this Agreement, any amounts repaid under paragraph (a)
above may be re-utilised.

(c)                                  Any
Documentary Credit still outstanding on the Final Revolving Maturity Date shall
be repaid on that date in accordance with Clause 7.1(a) (General).

10.6                           Accelerated
Repayment for 2012 Senior Cash Pay Notes

If the 2012 Senior Cash Pay Notes are not refinanced
by the Group prior to 1 July 2012:

(a)                                  all
the Credits and any other amounts outstanding under the Senior Finance
Documents shall be immediately due and payable; and/or

 59
 

(b)                                 all
of the Total Commitments shall be immediately cancelled; and/or

(c)                                  full
Cash Cover in respect of any or each Documentary Credit is immediately due and
payable.

11.                               PREPAYMENT
AND CANCELLATION

11.1                           Mandatory
prepayment - illegality

(a)                                  A
Lender must notify the Company promptly if it becomes aware that it is unlawful
in any applicable jurisdiction for that Lender to perform any of its
obligations under a Senior Finance Document or to fund or maintain its share in
any Credit.

(b)                                 After
notification under paragraph (a) above and subject to the Borrower’s right to
replace such Lender pursuant to Clause 17.2(a)(iii) (Replacement
of Lender):

(i)                                     each
Borrower must repay or prepay the share of that Lender in each Credit utilised
by it on the date specified in paragraph (c) below; and

(ii)                                  the
Commitments of that Lender will be immediately cancelled.

(c)                                  The
date for repayment or prepayment of a Lender’s share in a Credit will be:

(i)                                     the
last day of the current Term for that Credit following receipt by the
Company of notice from the Lender under paragraph (a) above; or

(ii)                                  if
later, the latest date allowed by the relevant law.

11.2                           Mandatory
prepayment - change of control/ownership

(a)                                  If:

(i)                                     there
is a Change of Control (as defined below) at any time prior to an IPO; or

(ii)                                  all
or substantially all of the assets or business of the Group are sold,

the Parent must promptly notify the Facility Agent.

(b)                                 After
notification under paragraph 11.2(a)(i) or (ii) above the Facility Agent
must, unless the Majority Lenders otherwise require, by notice to the Company:

(i)                                     cancel
the Total Commitments; and/or

(ii)                                  declare
all outstanding Credits, together with accrued interest and all other amounts
accrued under the Senior Finance Documents, to be immediately due and payable.

Any such notice will take effect in accordance with
its terms.

 60
 

(c)                                  If
there is a Change of Control at any time after an IPO the Parent must notify
the Facility Agent promptly upon becoming aware of such Change of Control and
the Facility Agent may, if so instructed by the Majority Lenders, give the
Company no less than 120 days’ written notice to:

(i)                                     cancel
the Total Commitments; and/or

(ii)                                  declare
all outstanding Credits, together with accrued interest and all other amounts
accrued under the Senior Finance Documents, to be immediately due and payable.

(d)                                 In
paragraph (a) and (c) above and Clause 11.3 below:

“Change of Control”
means:

(i)                                     during
the period prior to an IPO:

(A)                              The
Investors cease to legally and beneficially own (directly or indirectly) at
least 51% of the voting shares of the Parent or to have the right to control a
majority of the votes of the board of directors of the Parent;

(B)                                The
Parent ceases to own all of the shares of Smurfit Kappa Funding or Smurfit
Kappa Funding ceases to own all of the shares of the Company (directly or
indirectly);

(C)                                The
Investors cease to have directly or indirectly the largest economic interest in
the Parent (excluding for this purpose the liability of the Parent under the
Senior Finance Documents and/or the Securities); or

(D)                               Any
person or group of persons acting in concert other than the Investors (either
directly or indirectly through one or more Holding Companies) gains control of
the Parent; and

(ii)                                  after
an IPO, any person or group of persons acting in concert (excluding the
Investors) acquires (either directly or indirectly) 30% or more of the voting
shares of the Parent and such person or group of persons is the largest shareholder.

“control” means the power to direct the
management and policies of the Parent whether through the ownership of voting
shares, by contract or otherwise; and

“acting in
concert” has the
meaning given to it in the City Code on Takeovers and Mergers.

11.3                           IPO

(a)                                  Subject
to paragraph (c) below, where there is an IPO in respect of the shares in the
Parent or any other member of the Group (or any Holding Company of the Parent)
and such IPO does not result in a Change of Control, the Parent 

 61
 

must apply or
procure that the net proceeds (the “IPO
Proceeds”)
are applied in prepayment of the Credits under this Agreement in an amount
equal to the percentage of the IPO Proceeds set out in the table below
corresponding to the ratio of Consolidated Total Net Borrowings on the
immediately preceding Quarter Date to Consolidated EBITDA for the 12 month
period ending on such Quarter Date:

	
  Ratio of Consolidated Total Net Borrowings to Consolidated EBITDA

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to 4:1

  	
   

  	
  75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 4:1 but
  greater than or equal to 3.5:1

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 3.5:1 but
  greater than or equal to 2.5:1

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 2.5:1

  	
   

  	
  0

  	
   

  

 

(provided that this Subclause shall not apply in
respect of a Subsidiary of the Parent or the Target whose shares are listed on
a recognised stock exchange on the date of this Agreement where any such sale
or issue does not dilute or reduce the direct or indirect ownership interest of
the Parent or the Target in such Subsidiary and is otherwise permitted by the
terms of this Agreement).

(b)                                 The
remaining IPO Proceeds shall be retained by the Group and for the avoidance of
doubt may be applied for any purpose which is not prohibited by this Agreement.

(c)                                  Clause
11.3(a) and (b) shall not apply to the IPO Proceeds of the Approved IPO
(including, for the avoidance of doubt any proceeds from an additional issuance
of shares of the Parent or a Holding Company of the Parent occurring any time
up to 40 days after the closing of the Approved IPO), provided that such IPO
Proceeds are applied as set out in the definition of the Approved IPO.

11.4                           Mandatory
prepayment - disposals, insurance, warranty and report claims

(a)                                  In
this Subclause:

(i)                                     “Net Proceeds” of any Recovery Event means
the amount received in Cash or Cash Equivalents (or other instruments which
upon receipt are readily convertible into Cash on reasonable commercial terms)
by a member of the Group in respect thereof subject to the following:

(A)                              including
the amount of any intercompany loan repaid to continuing members of the Group;

(B)                                treating
consideration initially received in a form other than Cash, Cash Equivalents or
such other instruments as being received when and if that consideration is
converted into Cash or becomes readily so convertible on reasonable commercial
terms;

 62
 

(B)                                after
deducting Taxes (and amounts reasonably reserved in respect of Taxes) payable
by members of the Group in connection with that Recovery Event;

(C)                                after
deducting properly incurred costs and expenses (including without limitation
legal fees, agents’ commission, auditors’ fees, out-of-pocket
redundancy costs, out-of-pocket closure costs, out-of-pocket
restructuring costs and out-of-pocket reorganisation costs both
preparatory to and/or in consequence of the relevant Recovery Event) incurred
by members of the Group in connection with that Recovery Event;

(D)                               in
the case of a Recovery Event that is a disposal of a business or asset, after
deducting the amount of any Financial Indebtedness (and any related prepayment
fee or penalty or make-whole payment) repaid on disposal of such business
or asset (other than, for the avoidance of doubt, the repayment of the Credits
under this Agreement)(provided that the Company shall promptly notify the
Facility Agent of any such repayment of Financial Indebtedness and provided
further that on the disposal of any asset charged to the Finance Parties under
any of the Security Documents no Financial Indebtedness shall be repaid or
prepaid, other than (I) Financial Indebtedness secured by a prior ranking
Security Interest over such business or asset provided that such Financial
Indebtedness and such prior ranking Security Interest were permitted under this
Agreement; and (II) amounts outstanding under the Senior Finance Documents);

(E)                                 after
deducting reasonable reserves in respect of indemnities or other contingent
liabilities in respect of the business or asset disposed of provided that if
such reserves are not required to be applied in meeting any such indemnity or
contingent liability such amount shall be deemed to be an amount of Net
Proceeds;

(F)                                 in
the case of a Recovery Event that is the closing out of an Existing Treasury
Transaction, less any amount applied in repayment or prepayment of the related
Securities, Bond Refinancing Debt or Remaining Debt (as applicable).

(ii)                                  “Recovery Event”  means:

(A)                              the
disposal of a business or asset (including the disposal of receivables), other
than (I) where the asset (not being a receivable) is to be (and is) replaced by
another asset for use in the Group’s business within 12 months of the date of
disposal or the Net Proceeds of the disposal are committed or designated by the
Group to be reinvested in replacement assets within 12 months of the date of
the disposal and are so reinvested within six months thereafter, or (II) a
disposal of inventory or stock in the ordinary course of trading, or
(III) Synergy Disposals in 

 63
 

respect of which the Group has elected in writing to
the Facility Agent to apply the Net Proceeds to reinvest in payment of
restructuring costs, or (IV) any disposal permitted by
Clause 23.6(b)(i), (ii), (vi), (vii), (xi), (xii), (xiv), (xv) (but only
to the extent it relates to 23.5(c)(i) (Negative pledge)),
23.6(b)(xvi) and 23.6(b)(xviii) (Disposals)
save as provided in Clause 11.5 (Mandatory prepayment —
Permitted Securitisation), or (V) disposals in accordance with
the Structure Memorandum, the Financial Model and the Business Plan or (VI) the
disposal of securised receivables pursuant to or in connection with a Permitted
Receivables Securitisation;

(B)                                a
claim by a member of the Group under any contract of insurance (other than in
respect of public liability, third party liability or business interruption),
other than where the Net Proceeds are to be (and are) applied within 12 months
of receipt in reinstating or replacing (on a like for like basis) any asset, or
reimbursing such member of the Group for any cost or expense actually incurred
in reinstating or replacing any asset to which the insurance policy under which
the claim is made relates, or applied in defraying the loss or liability, to
which the claim relates or are committed or designated to be so applied within
12 months of receipt and are so applied within 6 months thereafter;

(C)                                if
any amount is deducted from Net Proceeds under paragraph (i)(E) above, a
reduction in the amount of the reserves that are required to be maintained or
an end to the obligation to maintain such reserves;

(D)                               any
amount is received by any member of the Group in repayment or prepayment of any
loan made by it to a member of the SPV Group or otherwise received by a member
of the Group as contemplated in Clause 23.34 (SPV Group);

(E)                                 the
closing out of any Existing Treasury Transaction; and

(F)                                 any
liability claim by the Group in respect of the Acquisition against the Vendor
or in respect of the Report against any professional adviser other than where
the Net Proceeds are applied (or are committed or designated to be applied)
within 12 months of receipt (and if committed or designated are applied within
6 months thereafter) by the relevant Group member:

(i)                                   to
satisfy (or reimburse the member of the Group who has discharged) any
liability, charge or claim upon a member of the Group by a person who is not a
member of the Group; or

 64
 

(ii)                                  to
rectify the deficiency (or to reimburse the member of the Group who has
discharged) leading to such recovery being claimed, including payment of a tax
liability, payment of an environmental liability, payment of litigation costs
and to reimburse any working capital deficiency.

(b)                                 If
(i) the Net Proceeds from a Recovery Event exceeds €2,500,000 (the amount of
such excess, being the “Relevant Net Proceeds”)
and (ii) the aggregate amount of Relevant Net Proceeds from Recovery Events
exceeds €25,000,000 (or its equivalent) during any annual Accounting Period of
Smurfit Kappa Funding, the Company must apply or procure the application of an
amount equal to the aggregate amount of such excess towards prepaying the
Credits in accordance with Subclause 11.12 (Application between Term Loan Facilities and Revolving Credit
Facilities) (regardless of its amount and the aggregate amount of
Relevant Net Proceeds) must be so applied, and unless in each case to do so
would be unlawful (and the Company will notify the Facility Agent promptly with
details of any provision making any such prepayment unlawful) or would incur a
material tax liability for the Group. 
Any such amounts not prepaid due to unlawfulness or material tax costs
shall be retained by the Group and may be applied by it for any purpose not
prohibited hereunder.

(c)                                  The
Company will procure that each member of the Group uses all reasonable
endeavours to avoid any such unlawfulness and tax costs and to facilitate cash
circulation between members of the Group to enable prepayment of the Credits.

11.5                           Mandatory
prepayment — Permitted Securitisation

(a)                                  For
the purposes of this Subclause 11.5, “Net
Securitisation Proceeds” means, without double counting, the
consideration received by any member of the Group in respect of the disposal of
receivables and related rights transferred pursuant to a Permitted Receivables
Securitisation to the extent that such consideration:

(i)                                     is
not funded by collections in respect of receivables purchase by the
Securitisation SPV on a previous date;

(ii)                                  is
not funded by the issue by the Securitisation SPV of additional notes, bonds or
other indebtedness (including commercial paper or other short term instruments)
up to the then current maximum amount of such indebtedness which may be issued
by the Securitisation SPV to fund the acquisition of receivables; and

(iii)                               does
not represent the payment of deferred consideration in respect of receivables
purchased by the Securitisation SPV on an earlier date,

net of all third party costs, fees and expenses
(including any applicable VAT) properly incurred by members of the Group in
arranging and effecting the 

 65
 

Permitted Receivables Securitisation or any subsequent
increase in third party funding therefor.

(b)                                 On
each date on which Net Securitisation Proceeds are received, the Company must
procure the application of an amount equal to such Net Securitisation Proceeds
towards prepaying the Credits in accordance with Subclause 11.12 (Application between Term Loan Facilities and Revolving Credit
Facilities) unless to do so would be unlawful (and the Company will
notify the Facility Agent with details of any provision making any such
prepayment unlawful) or would incur a material tax liability for the
Group.  Any such amounts not prepaid due
to unlawfulness or material tax costs shall be retained by the Group and may be
applied by it for any purpose not prohibited hereunder.

11.6                           Mandatory
prepayment - Excess Cash Flow

(a)                                  In
this Subclause:

“Excess Cash Flow”
means, for any financial year of Smurfit Kappa Funding commencing after 31
December 2005 (the first cash sweep shall be for the financial year ending 31
December 2006), Consolidated Cash Flow less Consolidated Total Debt Service in
excess of €15,000,000 after deducting (without double counting): (a) an amount
equal to any Capital Expenditure limit carried forward from the relevant
financial year in accordance with the proviso in Clause 22.1(iv)(a) (Financial Undertakings), (b) an amount equal to (i) proceeds
of events that would have been Recovery Events except that such proceeds have
been committed or designated to be reinvested as permitted under
Clause 11.4 (Mandatory prepayment — disposals, insurance,
warranty and report claims) but have not been applied in such
reinvestment and (ii) proceeds of Recovery Events that do not need to be
applied in prepayment of the Credits, (c) an amount equal to the equity,
quasi-equity investments or subordinated loans made by the Investors and
following a Qualifying IPO made by any person who is not a member of the Group,
in each case in or to the Parent in the relevant financial year (“Permitted Equity Injections” including for the avoidance of
doubt Cure Amounts), (d) an amount equal to the management fees permitted to be
paid to the Investors pursuant to Clause 23.16 (Dividends)
in the current year, (e) following the occurrence of a Qualifying IPO, an
amount equal to any dividends declared in respect of the relevant financial
year as permitted pursuant to Clause 23.16 (Dividends) and (f) any fees, costs and expenses
incurred by the Group in relation to the amendments to the Finance Documents
pursuant to the Amendment and Restatement Agreement and in relation to the
Approved IPO and the transactions required in connection therewith and which
were included in the determination of Consolidated EBITDA.

(b)                                 Prior
to the occurrence of a Qualifying IPO, if the annual audited consolidated
Accounts of Smurfit Kappa Funding reveal Excess Cash Flow, the Company must
apply or procure the application of an amount equal to 66 2/3% (or, if
Consolidated Total Net Borrowings is less than or equal to 3.5 times but
greater than 3.0 times Consolidated EBITDA for the annual Accounting Period,
then 50% or, if the Consolidated Total Net Borrowings is less than or equal to
3.0 times but greater than 2.5 Consolidated EBITDA for such period, 

 66
 

then 25% or,
if the Consolidated Total Net Borrowings is less than 2.5 times Consolidated
EBITDA, zero) of the amount of Excess Cash Flow in that period (deducting from
the result of such calculation the aggregate amount of voluntary and mandatory
prepayments made by the Group in the relevant year) towards prepaying the
Credits in accordance with Clause 11.12 (Application
between Term Loan Facilities and Revolving Credit Facilities).  The Group shall be entitled to retain or
apply any Excess Cash Flow not required to be prepaid for any purpose not
prohibited by this Agreement.

(c)                                  After
the occurrence of a Qualifying IPO, if the annual audited consolidated Accounts
of Smurfit Kappa Funding reveal Excess Cash Flow, the Company must apply or
procure the application of an amount equal to 50% (or, if Consolidated Total
Net Borrowings is less than or equal to 3.5 times but greater than 3.0 times
Consolidated EBITDA for the annual Accounting Period, then 25% or, if the
Consolidated Total Net Borrowings is less than or equal to 3.0 times, zero%) of
the amount of Excess Cash Flow in that period (deducting from the result of
such calculation the aggregate amount of voluntary and mandatory prepayments
made by the Group in the relevant year) towards prepaying the Credits in
accordance with Clause 11.12 (Application
between Term Loan Facilities and Revolving Credit Facilities).  The Group shall be entitled to retain any
Excess Cash Flow not required to be prepaid for any purpose not prohibited by
this Agreement.

(d)                                 Any
prepayment under this Subclause 11.6 must be made on or before the
last day of the then current Term(s) of the Credits in which the annual
audited consolidated Accounts of Smurfit Kappa Funding establishing that there
has been Excess Cash Flow are delivered to the Facility Agent.

11.7                           Payment
into a blocked account

(a)                                  In
this Clause “blocked account”
means an interest bearing blocked account in the name of the Company with the
Facility Agent held in London and governed by English law and charged to the
Finance Parties.

(b)                                 If
the Company is required to prepay Credits on or before the last day of the
current Term(s) for those Credits and the aggregate amount of such prepayments
exceeds €20,000,000, the Company must promptly ensure that an amount equal to
such excess is deposited in a blocked account. 
The Company may retain amounts that it is required to apply to prepay
Credits up to €20,000,000 until such amounts are applied to make the prepayment
in accordance with the terms hereof.

(c)                                  The
Company irrevocably authorises the Facility Agent to apply any amount deposited
with it under paragraph (b) towards prepayment of the Credits on the
last day of the relevant Term(s) or earlier if the Company so directs.

(d)                                 Amounts
standing to the credit of a blocked account may only be used to prepay Credits
or (at the discretion of the Majority Lenders) any other amounts due and
payable (but unpaid) under the Senior Finance Documents.

 67

11.8                           Voluntary
prepayment

(a)                                  The
Company may, by giving not less than three Business Days’ prior notice to
the Facility Agent, prepay (or procure prepayment of) any Credit at any time in
whole or in part without premium or penalty but subject, if applicable, to
payment of Break Costs.

(b)                                 A
voluntary prepayment of part of a Credit must be in a minimum amount of €1,000,000
and an integral multiple of €500,000.

11.9                           Automatic
cancellation

The undrawn Commitments of each Lender under each
Facility will be automatically cancelled at the close of business in London on
the last day of the Availability Period for that Facility.

11.10                     Voluntary
cancellation

(a)                                  The
Company may, by giving not less than five Business Days’ prior notice
to the Facility Agent, cancel the unutilised amount of the Total Revolving
Credit Commitments in whole or in part.

(b)                                 Partial
cancellation of Total Revolving Credit Commitments pursuant to this
Clause must be in a minimum amount of €1,000,000 and an integral multiple
of €500,000.

(c)                                  Any
cancellation in part of Total Revolving Credit Commitments pursuant to this
Clause will be applied against the relevant Commitment of each Lender pro rata.

11.11                     Involuntary
prepayment and cancellation

(a)                                  Subject
to the Borrower’s right to replace such Lender pursuant to
Clause 17.2(a)(iii) (Replacement of Lender),
if an Obligor is, or will be, required to pay to a Lender any amount under
Subclauses 15.1 (Grossing-up for Taxes),
15.2 (Tax Indemnity) or 16.1 (Increased Costs), the Company may, while
the requirement continues, give notice to the Facility Agent requesting
prepayment and/or cancellation in respect of the Credits and/or Commitments of
that Lender.

(b)                                 After
notification under paragraph (a) above:

(i)                                     each
Borrower must repay or prepay that Lender’s share in each Credit utilised by it
on the date specified in paragraph (c) below; and

(ii)                                  the
Commitments of that Lender will be immediately cancelled.

(c)                                  The
date for repayment or prepayment of a Lender’s share in a Credit will be the
last day of the current Term for that Credit or, if earlier, the date
specified by the Company in its notification.

 68
 

11.12                     Application between Term Loan Facilities and Revolving
Credit Facilities

(a)                                  Subject
to Clause 11.12(b) below, any amount to be applied in permanent prepayment
of Credits pursuant to Clauses 11.4 (Mandatory prepayment -
disposals, insurance, warranty and report claims) and 11.6 (Mandatory prepayment - Excess Cash Flow) shall be applied as follows:

(i)                                     first,
either (at the Company’s discretion) (x) in prepayment of the next 4
consecutive Repayment Instalments of the A1 Term Loans and the A2 Term Loans
and the Restructuring A Loans (if applicable), in such order of maturity as the
Company selects, and then in prepayment of A1 Term Loans, A2 Term Loans, B1
Term Loans, B2 Term Loans, C1 Term Loans, C2 Term Loans, and, if the prepayment
is on or after the Restructuring Loan Facility Conversion Date, Restructuring A
Loans, Restructuring B Loans and Restructuring C Loans pro rata
and against the relevant Repayment Instalments thereof pro rata or (y) in prepayment of the A1
Term Loans and A2 Term Loans, B1 Term Loans and B2 Term Loans and C1 Term Loans
and C2 Term Loans and, if the prepayment is on or after the Restructuring Loan
Facility Conversion Date, Restructuring A Loans, Restructuring B Loans and
Restructuring C Loans pro rata and against the relevant Repayment
Instalments pro rata;

(ii)                                  second,
if the prepayment is prior to the Restructuring Loan Facility Conversion Date
and following repayment in full of the A1 Term Loans and A2 Term Loans, B1 Term
Loans and B2 Term Loans or C1 Term Loans and C2 Term Loans in repayment of the
Restructuring Loans pro rata and
against the relevant Repayment Instalments pro rata;

(iii)                               third,
in prepayment of Revolving Credit Loans; and

(iv)                              fourth,
in prepayment of Documentary Credits issued under the Revolving Credit
Facility.

(b)                                 In
relation to any prepayment to be made out of the Net Proceeds of a Synergies
Disposal or Required Regulatory Disposal pursuant to Clause 11.4 (Mandatory prepayment - disposals, insurance, warranty and report
claims) or a Permitted Receivables Securitisation pursuant to Clause
11.5 (Mandatory prepayment — Permitted Securitisation)
such prepayment shall be applied as follows:

(i)                                     first,
in prepayment of the next four consecutive Repayment Instalments of the A1 Term
Loans, A2 Term Loans and the Restructuring A Loans (if applicable) or if
insufficient such amounts as the Borrower directs;

(ii)                                  second,
50% of the remaining proceeds in prepayment of 50% of the successive Repayment
Instalments of the A1 Term Loans, A2 Term Loans and the Restructuring A Loans
(if applicable) and in order of maturity thereof;

 69
 

(iii)                               third,
in prepayment of A1 Term Loans, A2 Term Loans, B1 Term Loans, B2 Term Loans, C1
Term Loans and C2 Term Loans and, if the prepayment is on or after the
Restructuring Loan Facility Conversion Date, Restructuring A Loans,
Restructuring B Loans and Restructuring C Loans pro rata and
against the relevant Repayment Instalments pro rata;

(iv)                              fourth,
the remaining proceeds in prepayment in accordance with
Clause 11.12(a)(ii), (iii) and (iv) in the order of prepayment set out in
such Clause.

(c)                                  Lenders
having a participation in the B1 Term Loans, B2 Term Loans, C1 Term Loans or C2
Term Loans (and/or, after the Restructuring Loan Facility Conversion Date, the
Restructuring B Loans and/or the Restructuring C Loans) shall be entitled, to
the extent any A1 Term Loans, A2 Term Loans or Restructuring A Loans is
outstanding, to decline to accept the partial prepayment of their participation
in any or all such Loans by giving written notice to the Company and the
Facility Agent promptly upon receiving notification of the proposed prepayment
(and in any event on or before the day 2 Business Days, prior to the date
of such prepayment, or such other time as the Facility Agent may specify) and
the amounts which would otherwise have been prepaid to such Lenders in respect
of such participations in such Loans shall instead be applied in or towards
prepayment of the other Lenders participations in the B1 Term Loans, B2 Term
Loans, C1 Term Loans and C2 Term Loans (and after the Restructuring Loan
Facility Conversion Date, the Restructuring B Loans or Restructuring C Loans) pro rata (subject to such Lenders right to
refuse prepayment) and next in or towards prepayment of the A1 Term Loans, A2
Term Loans and, if the prepayment is on or after the Restructuring Loan
Facility Conversion Date, the Restructuring A Loans pro rata and against the relevant Repayment Instalments
thereof pro rata and thereafter
to the extent of any excess in prepayment of the B1 Term Loans, B2 Term Loans,
C1 Term Loans and C2 Term Loans (and after the Restructuring Loan Facility
Conversion Date, the Restructuring B Loans or Restructuring C Loans) pro rata.

(d)                                 Where
there is a mandatory or involuntary prepayment of a Revolving Credit Loan or a
Documentary Credit issued under the Revolving Credit Facility, the relevant
Revolving Credit Commitments will, at the same time, be reduced by the same
amount.

(e)                                  If
there is no Revolving Credit Loan or (in any case concerning the Revolving
Credit Facility) Documentary Credit to be prepaid, the relevant Revolving
Credit Commitment will be reduced by the amount which would have been required
to be applied in prepayment of the Revolving Credit Loans or Documentary
Credits had they been outstanding at that time.

(f)                                    A1 Term Loans, B1 Term Loans and C1 Term
Loans may only be repaid and prepaid pro rata with any repayment or prepayment
of the A2 Term Loans, B2 Term Loans and C2 Term Loans, respectively, and the A1
Term Loan Facility, B1 Term Loan Facility and C1 Term Loan Facility may only be
cancelled pro rata with any cancellation of the A2 Term Loan Facility, B2 Term
Loan 

 70
 

Facility and C2 Term Loan Facility, respectively, and vice versa, subject to the rights of the Lenders of the B1
Term Loans, C1 Term Loans, B2 Term Loans, or C2 Term Loans to refuse any
prepayment.

11.13                     Application
of Voluntary Prepayments

A prepayment pursuant to Clause 11.8 (Voluntary prepayment) will be applied
against the Credits and the Repayment Installments thereof at the Company’s
sole discretion.  Lenders having a
participation in the B1 Term Loans or B2 Term Loans, C1 Term Loans or C2 Term
Loans and/or the Restructuring B Loans and/or the Restructuring C Loans shall
be entitled, to the extent any A1 Term Loan, A2 Term Loans or Restructuring A
Loans are outstanding, to decline to accept the partial prepayment of their
participation in any or all such Loans by giving written notice to the Company
and the Facility Agent promptly upon receiving notification of the proposed
prepayment (and in any event on or before the day 2 Business Days, prior
to the date of such prepayment, or such other time as the Facility Agent may
specify) and the amounts which would otherwise have been prepaid to such
Lenders in respect of such Loans may instead at the Company’s election be
applied in or towards prepayment of other Lenders participations in the B1 Term
Loans, B2 Term Loans, C1 Term Loans, C2 Term Loans, Restructuring B Loans,
Restructuring C Loans (subject to such Lenders right to refuse prepayment) and
thereafter in or towards prepayment of the A1 Term Loans, A2 Term Loans and the
Restructuring A Loans.

11.14                     Application
between Term Loan Facilities, Revolving Credit Facilities and Additional
Facilities

The application of Mandatory Prepayments between the
Term Loan Facilities, the Revolving Credit Facilities and the Additional
Facilities, and the application of any declined prepayments of the B1 Term
Loans or B2 Term Loans, C1 Term Loans or C2 Term Loans and/or the Restructuring
B Loans and/or the Restructuring C Loans towards prepayment of the Additional
Facilities, and the right of the Lenders of the Additional Facilities to refuse
prepayments and the application of those declined prepayments shall be as
agreed between the relevant Initial Additional Facility Lenders, the Parent and
the Facility Agent at the time of the execution of each Additional Facility
Accession Agreement.

11.15                     Re-borrowing
of Loans

(a)                                  Any
voluntary prepayment of a Revolving Credit Loan may be re-borrowed on the
terms of this Agreement.  Any mandatory
or involuntary prepayment of a Revolving Credit Loan may not be re-borrowed.

(b)                                 No
amount of a Term Loan or a Restructuring Loan prepaid under this Agreement may
subsequently be re-borrowed.

11.16                     Danish
Financial Assistance

Any prepayments required under Clauses 11.3 (IPO), 11.4 (Mandatory prepayment -
disposals, insurance, warranty and report claims) or 11.6 (Mandatory prepayment - Excess Cash Flow) from Obligors
incorporated in Denmark (the “Danish Obligors”)
or to be paid with funds borrowed from Danish Obligors as well as any
application of 

 71
 

such prepayments under Clause 11.12 (Application between Term Facilities and Revolving Credit Facilities)
shall be limited if and to the extent that (i) the prepayment or the borrowing
or the application would constitute unlawful financial assistance within the
meaning of the limitation of the Danish guarantees as set forth in Part IX of
Schedule 12, or (ii) such proceeds received or recovered by the Danish Obligors
cannot be transferred from the relevant Danish Obligor without that Danish
Obligor being in breach of any law.

11.17                     Miscellaneous
provisions

(a)                                  Any
notice of prepayment and/or cancellation under this Agreement is irrevocable
and must specify the relevant date(s) and the affected Credits and
Commitments.  The Facility Agent must
notify the Lenders promptly of receipt of any such notice.

(b)                                 All
prepayments under this Agreement must be made with accrued interest on the
amount prepaid.  No premium or penalty is
payable in respect of any prepayment except for Break Costs (if any) which
shall be paid on the date of prepayment.

(c)                                  The
Majority Lenders may agree a shorter notice period for a voluntary prepayment
or a voluntary cancellation.

(d)                                 No
prepayment or cancellation is allowed except in accordance with the express
terms of this Agreement.

(e)                                  No
amount of the Total Commitments cancelled under this Agreement may subsequently
be reinstated.

(f)                                    The Parent shall notify the Facility Agent
of the occurrence of any event or circumstance which will give rise to an
obligation to make a mandatory prepayment without undue delay after becoming
aware thereof and, as soon as reasonably practicable after becoming aware, of
the date on which such prepayment is to be made.

12.                               INTEREST

12.1                           Calculation
of interest

The rate of interest on each Loan for each Term is the
percentage rate per annum equal to the aggregate of the applicable:

(a)                                  Margin;

(b)                                 EURIBOR
in the case of a Loan denominated in the Base Currency, STIBOR in the case of a
Loan denominated in Swedish Kronor and LIBOR in the case of any Loan
denominated in any other Optional Currency; and

(c)                                  Mandatory
Cost.

 72
 

12.2                           Payment
of interest

Except where it is provided to the contrary in this
Agreement, each Borrower must pay accrued interest on each Loan made to it on
the last day of each Term and also, if the Term is longer than six months,
on the dates falling at six-monthly intervals after the first day of
that Term.

12.3                           Margin
adjustments

(a)                                  The
Parent must supply to the Facility Agent a Margin Certificate within
45 days of the end of each quarterly Accounting Period, beginning with the
first quarterly Accounting Period ending on or after the first anniversary of
the First Drawdown Date.

(b)                                 A
Margin Certificate must be signed by two authorised signatories of the Parent,
one of whom must be the Chief Financial Officer.

(c)                                  Subject
to paragraphs (d), (e) and (f) below, the Margin in respect of any A1 Term
Loan, A2 Term Loan, Revolving Credit Loan and Restructuring A Loan (on or after
the Restructuring Loan Facility Conversion Date), the euro denominated B1 Term
Loan and B2 Term Loan and the Restructuring B Loan and the US Dollar
denominated B1 Term Loan and B2 Term Loan will be adjusted as set out in Column
2, Column 3 and Column 4 respectively, of the table below on the date 5
Business Days after delivery to the Facility Agent of the relevant Margin
Certificate and will be determined by reference to the table below and the
information set out in the relevant Margin Certificate:

	
  Column 1

  

  Ratio of

  Consolidated Total

  Net Borrowings

  to Consolidated

  EBITDA

  	
   

  	
  Column 2

  

  Margin for A1 Term

  Loan, A2 Term Loan,

  Revolving Loan and

  Restructuring A Loan

  (per cent. per annum)

  	
   

  	
  Column 3

  

  Margin for euro

  denominated Loans under

  B1 Term Loan, B2 Term

  Loan and Restructuring

  B Loan (per cent. per annum)

  	
   

  	
  Column 4

  

  Margin for US Dollar

  denominated Loans

  under the B1 Term

  Loan, B2 Term Loan

  (per cent. per annum)

  	
   

  
	
  Greater than 4.00:1.00

  	
   

  	
  2.25

  	
   

  	
  2.50

  	
   

  	
  2.375

  	
   

  
	
  4.00:1.00 or less, but more than

  3.50:1.00

  	
   

  	
  2.00

  	
   

  	
  2.25

  	
   

  	
  2.125

  	
   

  
	
  3.50:1.00 or less, but more than

  3.00:1.00

  	
   

  	
  1.75

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  
	
  3.00:1.00 or less, but more than

  2.50:1.00

  	
   

  	
  1.50

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  
	
  2.50:1.00 or
  less

  	
   

  	
  1.25

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  

 

 73
 

(d)                                 For
so long as:

(i)                                     the
Parent is in default of its obligation under this Agreement to provide a Margin
Certificate; or

(ii)                                  an
Event of Default is outstanding,

the applicable Margin for each Facility will be the
highest applicable rate for that Facility set out in the table in paragraph
(c).

(e)                                  If
the Margin in respect of any Loan has been reduced under Subclause (c)of
this Clause 12.3 but the management Accounts (or audited Accounts) for the
periods ended with the last day of the quarterly Accounting Period ended
before the date of the Margin Certificate in reliance on which the reduction
was made do not confirm the basis for the reduction, the reduction will be
reversed with retrospective effect.  In
this event the Margin will instead be that calculated by reference to the
relevant management Accounts (or audited Accounts).  If, in this event, any amount of interest has
been paid by a Borrower on the basis of the Margin Certificate, that Borrower
must immediately pay to the Facility Agent any shortfall in that amount as
compared to that which would have been paid to the Lenders if the Margin had
been calculated by reference to the relevant management Accounts (or audited
Accounts).

(f)                                    After
the occurrence of a Qualifying IPO, the Margin in respect of any A1 Term Loan,
A2 Term Loan, Revolving Credit Loan and Restructuring A Loan (on or after the
Restructuring Loan Facility Conversion Date), the euro denominated B1 Term Loan
and B2 Term Loan and the Restructuring B Loan and the US Dollar denominated B1
Term Loan and B2 Term Loan and the euro denominated C1 Term Loan, C2 Term Loan
and the Restructuring C Loan (on or after the Restructuring Loan Facility
Conversion Date) and the US Dollar denominated C1 Term Loan and C2 Term Loan
will be adjusted as set out in Column 2, Column 3, Column 4, Column 5 and
Column 6 respectively, of the table below on the date 5 Business Days after
delivery to the Facility Agent of the relevant Margin Certificate and will be
determined by reference to the table below and the information set out in the
relevant Margin Certificate:

 74
 

 

	
  Column 1

  

  

  

  

  

  

  Ratio of

  Consolidated

  Total

  Net

  Borrowings to

  Consolidated

  EBITDA

  	
   

  	
  Column 2

  

  

  

  Margin for

  A1 Term

  Loan, A2

  Term Loan,

  Revolving

  Loan and

  Restructuring

  A Loan

  (per cent.

  per annum)

  	
   

  	
  Column 3

  

  Margin for

  euro

  denominated

  Loans under

  B1 Term

  Loan, B2

  Term Loan

  and

  Restructuring

  B Loan

  (per cent.

  per annum)

  	
   

  	
  Column 4

  

  

  

  

  Margin for

  US Dollar

  denominated

  Loans under

  the B1 Term

  Loan, B2

  Term Loan

  (per cent.

  per annum)

  	
   

  	
  Column 5

  

  Margin for

  euro

  denominated

  Loans under

  the C1 Term

  Loan, the C2

  Term Loan

  and the

  Restructuring

  C Loans

  (per cent.

  per annum)

  	
   

  	
  Column 6

  

  

  

  Margin for

  US Dollar

  denominated

  Loans under

  the C1 Term

  Loan and

  the C2

  Term Loan

  (per cent.

  per annum)

  	
   

  
	
  Greater than

  4.50:1.00

  	
   

  	
  2.25

  	
   

  	
  2.50

  	
   

  	
  2.375

  	
   

  	
  3.00

  	
   

  	
  2.875

  	
   

  
	
  4.50:1.00 or

  less, but more

  than 3.75:1.00

  	
   

  	
  2.00

  	
   

  	
  2.25

  	
   

  	
  2.125

  	
   

  	
  2.75

  	
   

  	
  2.75

  	
   

  
	
  3.75:1.00 or

  less, but more

  than 3.25:1.00

  	
   

  	
  1.75

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.50

  	
   

  	
  2.50

  	
   

  
	
  3.25:1.00 or less,

  but more than

  2.50:1.00

  	
   

  	
  1.50

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.50

  	
   

  	
  2.50

  	
   

  
	
  2.50:1.00 or

  less

  	
   

  	
  1.25

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.50

  	
   

  	
  2.50

  	
   

  

 

12.4                        Interest
on overdue amounts

(a)                                  If
an Obligor fails to pay any amount payable by it under the Senior Finance
Documents, it must immediately on demand by the Facility Agent pay interest on
the overdue amount from its due date up to the date of actual payment, both
before, on and after judgment.

(b)                                 Interest
on an overdue amount is payable at a rate determined by the Facility Agent to
be one per cent. per annum above the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan
having the same designation and in the same currency as the Loan or Facility to
which the overdue amount is in the reasonable opinion of the Facility Agent
referable.  For this purpose, the
Facility Agent (acting reasonably) may:

(i)                                     select
successive Terms of any duration of up to three months; and

 75
 

(ii)                                  determine
the appropriate Rate Fixing Day for that Term.

(c)                                  Notwithstanding
paragraph (b) above, if the overdue amount is a principal amount of a Loan
and becomes due and payable prior to the last day of its current Term,
then:

(i)                                     the
first Term for that overdue amount will be the unexpired portion of that Term;
and

(ii)                                  the
rate of interest on the overdue amount for that first Term will be one per
cent. per annum above the rate then payable on that Loan.

After the expiry of the first Term for that overdue
amount, the rate on the overdue amount will be calculated in accordance with
paragraph (b) above.

(d)                                 Interest
(if unpaid) on an overdue amount will be compounded with that overdue amount at
the end of each of its Terms but will remain immediately due and payable.

12.5                           Notification
of rates of interest

The Facility Agent must promptly notify each relevant
Party of the determination of a rate of interest under this Agreement.

13.                               TERMS

13.1                           Selection
- Term Loans

(a)                                  Each
Term Loan and Restructuring Loan has successive Terms.

(b)                                 A
Borrower must select the first Term for a Term Loan and Restructuring Loan in
the relevant Request and each subsequent Term in an irrevocable notice received
by the Facility Agent not later than 11.00 a.m. one Business Day before the
Rate Fixing Day for that Term.  Each Term
for a Term Loan and Restructuring Loan will start on its Utilisation Date or on
the expiry of its preceding Term.

(c)                                  If
a Borrower fails to select a Term for an outstanding Term Loan and
Restructuring Loan under paragraph (b) above, that Term will, subject to
the other provisions of this Clause, be three months.

(d)                                 Subject
to the following provisions of this Clause, each Term for a Term Loan and a
Restructuring Loan will be one, two, three or six months or any other period
shorter than six months agreed by the Company and the Facility Agent or any
other period agreed by the Company and the Lenders.

(e)                                  Until
the date which is the earlier of six months after the First Drawdown Date and
the Syndication Date, the duration of each Term shall be one month or such
other period (not exceeding six months) as may be agreed between the Company
and the Facility Agent.

 

 76

13.2                           Selection
- Revolving Credit Loans

(a)                                  Each
Revolving Credit Loan has one Term only.

(b)                                 A
Borrower must select the Term for a Revolving Credit Loan in the relevant
Request.

(c)                                  Subject
to the following provisions of this Clause, each Term for a Revolving Credit
Loan will be one, two, three or six months or any other period shorter than six
months agreed by the Company and the Facility Agent or any other period agreed
by the Company and the Lenders.

(d)                                 Until
the date which is the earlier of six months after the First Drawdown Date and
the Syndication Date, the duration of each Term shall be one month or such
other period (not exceeding six months) as may be agreed between the Company
and the Facility Agent.

13.3                           Consolidation
- Term Loans and Restructuring Loans

Unless otherwise agreed between the Company and the
Facility Agent, a Term for a Term Loan and a Restructuring Loan will end on the
same day as the current Term for any other Term Loan and Restructuring
Loan denominated in the same currency as that Term Loan or Restructuring Loan
and borrowed by that Borrower under the same Facility.  On the last day of those Terms, those
Term Loans and Restructuring Loans will be consolidated and treated as one Term
Loan or Restructuring Loan.

13.4                           Coincidence
with Repayment Instalment dates

(a)                                  A
Borrower may select any Term of less than six months for a Term Loan or a
Restructuring Loan (and may re-designate any Term Loan or Restructuring
Loan as two Term Loans or Restructuring Loans) to ensure that the aggregate
amount of the Term Loans and Restructuring Loans under a Facility with a Term
ending on a date for repayment of a Repayment Instalment relating to that
Facility is not less than such Repayment Instalment.

(b)                                 If
a Borrower fails to make a selection in the circumstances envisaged in
paragraph (a) above, the Facility Agent may prior to the Rate Fixing Day
for the relevant Term shorten any Term for a Term Loan or a Restructuring Loan
(and may designate any Term Loan or a Restructuring Loan as two Term Loans or
Restructuring Loans) to achieve the same end.

13.5                           No
overrunning the Final Maturity Date

If a Term for any Term Loan or Restructuring Loan
would otherwise extend beyond the date for the payment of the last Repayment
Instalment for that Term Loan or Restructuring Loan, it will be shortened so
that it ends on such last date.

13.6                           Other
adjustments

The Facility Agent and the Company may enter into such
other arrangements as they may agree for the adjustment of Terms and the
consolidation and/or splitting of 

 77
 

Loans, provided that no Term in excess of six months
may be agreed by the Facility Agent without the prior agreement of all the
Lenders.

13.7                           Notification

The Facility Agent must notify the relevant Borrower
and the Lenders of the duration of each Term promptly after ascertaining its
duration.

14.                               MARKET
DISRUPTION

14.1                           Failure
of a Reference Bank to supply a rate

If IBOR is to be calculated by reference to the
Reference Banks but a Reference Bank does not supply a rate by 12.00 noon
(local time) on a Rate Fixing Day, the applicable IBOR will, subject as
provided below, be calculated on the basis of the rates of the remaining
Reference Banks.

14.2                           Market
disruption

(a)                                  In
this Clause, each of the following events is a “market disruption event”:

(i)                                     IBOR
is to be calculated by reference to the Reference Banks but no, or only one,
Reference Bank supplies a rate by 12.00 noon (local time) on the Rate Fixing
Day; or

(ii)                                  the
Facility Agent receives by close of business on the Rate Fixing Day
notification from Lenders whose shares in the relevant Loan exceed 35 per
cent. of that Loan that the cost to them of obtaining matching deposits in the
relevant interbank market is in excess of IBOR for the relevant Term.

(b)                                 The
Facility Agent must promptly notify the Company and the Lenders of a market
disruption event.

(c)                                  After
notification under paragraph (b) above, the rate of interest on each
Lender’s share in the affected Loan for the relevant Term will be the aggregate
of the applicable:

(i)                                     Margin;

(ii)                                  rate
notified to the Facility Agent by that Lender as soon as practicable, and in
any event before interest is due to be paid in respect of that Term, to be that
which expresses as a percentage rate per annum the cost to that Lender of
funding its share in that Loan from whatever source it may reasonably select;
and

(iii)                               Mandatory
Cost.

14.3                           Alternative
basis of interest or funding

(a)                                  If
a market disruption event occurs and the Facility Agent or the Company so
requires, the Company and the Facility Agent must enter into negotiations for 

 78
 

a period of
not more than 30 days with a view to agreeing an alternative basis for
determining the rate of interest and/or funding for the affected Loan and any
future Loan.

(b)                                 Any
alternative basis agreed will be, with the prior consent of all the Lenders,
binding on all the Parties.

15.                               TAXES

15.1                           Grossing-up
for Taxes

(a)                                  If
at any time an Obligor is required by law to make any deduction or withholding
in respect of Taxes from any payment due under any of the Senior Finance Documents
for the account of any Finance Party (or if the Facility Agent, or as the case
may be, the Security Agent is required to make any such deduction or
withholding from a payment to a Finance Party), the sum due from the Obligor in
respect of such payment shall, subject to Subclause 15.3 (Qualifying Lenders), be increased to the
extent necessary to ensure that, after the making of such deduction or
withholding, each Finance Party receives on the due date for such payment (and
retains, free from any liability in respect of such deduction or withholding) a
net sum equal to the sum which it would have received had no such deduction or
withholding been required to be made.

(b)                                 Such
Obligor shall indemnify each Finance Party against any losses or costs incurred
by any of them by reason of any failure of the Obligor to make any such
deduction or withholding or by reason of any increased payment not being made
on the due date for such payment (provided that such indemnity does not entitle
any Finance Party to receive any amount which has not been demanded within 6
months of the first day on which both (i) the Finance Party has the right
to claim such amount under the indemnity and (ii) the officers of such Finance
Party involved in the administration of its participation in the Facilities are
aware of the circumstances giving rise to the right to claim such amount and
that such circumstances give a right to claim such amount).

(c)                                  If
the Obligor reasonably believes that such Taxes were not correctly or legally
asserted, such Finance Party will use reasonable efforts to co-operate with the
Obligor to obtain a refund of such Taxes so long as such efforts would not, in
the sole determination of such Finance Party, result in any additional costs,
expenses or otherwise be disadvantageous to it.

(d)                                 The
Obligor shall promptly deliver to the Facility Agent any receipts, certificates
or other reasonable proof evidencing the amounts (if any) paid or payable in
respect of any such deduction or withholding.

15.2                           Tax
Indemnity

(a)                                  An
Obligor shall, within 10 Business Days of demand by the Facility Agent, pay to
a Finance Party which is or will be subject to any liability, or required by
law to make any payment, for or on account of Taxes in relation to a sum
received or receivable (or any sum received or receivable in connection with
the Senior Finance Documents), an amount equal to the Tax which that 

 79
 

Finance Party
will or has (directly or indirectly) suffered for or on account of such sum
(excluding in all cases amounts with respect to a Tax assessed on a Finance
Party (a) under the law of the jurisdiction in which that Finance Party is
incorporated and the jurisdiction (or jurisdictions) in which that Finance
Party is treated as resident for Tax purposes or (b) under the law of the
jurisdiction in which that Finance Party’s Facility Office is located, if in
either case that Tax is imposed on or calculated by reference to the net
income, profits or gains received or receivable by that Finance Party, however
any amount deemed to be received or receivable under applicable law but that is
not actually received by the Finance Party either through the receipt of any
payment, credit, refund or other offset of Taxes will not be treated as net
income received or receivable for this purpose) or (c) to the extent
Subclause 15.1(a) (Grossing-up for Taxes)
applies to such Tax (or would so apply but for the application of
Subclause 15.3 (Qualifying Lenders)).

(b)                                 If
the Obligor reasonably believes that such Taxes were not correctly or legally asserted,
such Finance Party will use reasonable efforts to co-operate with the
Obligor to obtain a refund of such Taxes so long as such efforts would not, in
the sole determination of such Finance Party, result in any additional costs,
expenses or otherwise be disadvantageous to it.

(c)                                  Nothing
in this Subclause 15.2 shall entitle any Finance Party to receive any
amount which has not been demanded within 6 months of the first day on which
both (i) the Finance Party has the right to claim such amount under this
Subclause 15.2 and (ii) the officers of such Finance Party involved in the
administration of its participation in the Facilities are aware of the
circumstances giving rise to the right to claim such amount and that such
circumstances give a right to claim such amount under this Agreement.

15.3                           Qualifying
Lenders

If it has not done so already, on the date it becomes
a Lender each Lender agrees to notify the Facility Agent and the Company if it
is not a Qualifying Lender (in relation to an Obligor to which it makes a
Facility available under this Agreement) and thereafter will promptly notify
the Facility Agent and the Company if it ceases to be a Qualifying Lender (in
relation to that Facility).  If any
Lender is not or ceases to be a Qualifying Lender, then (save in circumstances
where such Lender ceases to be a Qualifying Lender by reason of any change in
law, regulation or double taxation treaty or in its application or
interpretation, in each case taking effect after the date of this Agreement or
the date such Lender becomes a party to this Agreement, if later) any Obligor
tax resident in Ireland shall not be liable to pay to that Lender under
Subclauses 15.1 (Grossing-up for Taxes) or 15.2 (Tax Indemnity) any sum in excess of the sum it would have
been obliged to pay if that Lender had been, or had not ceased to be, a
Qualifying Lender.  For the purposes of
this Subclause 15.3, “Qualifying Lender” means, in respect of a payment made
by an Obligor tax resident in Ireland only, a person that is, at the date
hereof (or in the case of a transferee at the date of transfer) either:

	
  

  	
   

  	
  (a)

  	
  (i)

  	
  the holder of a licence for the time being in force
  granted under section 9 of the Irish Central Bank 1971 or an authorised
  credit institution under the terms of EU Council Directive 2000/12/EC of 20
  March 

  

 

 80
 

2000 which has duly established a branch in Ireland or
has made all necessary notifications to its home state competent authorities
required there under in relation to its intention to carry on banking business
in Ireland; and

(ii)                                  recognised
by the Irish Revenue Commissioners as carrying on a bona fide banking business
in the Republic of Ireland for the purposes of section 246(3)(a) of the Irish
Taxes Consolidation Act 1997; and

(iii)                               its
Facilities Office is located in the Republic of Ireland; or

(b)                                 where
interest payable in respect of the Facilities is paid in the ordinary course of
a trade or business carried on by an Obligor:

(i)                                     a
body corporate tax resident in a member state of the European Communities
(other than Ireland) or in a territory with which Ireland has concluded a
double tax treaty that is in effect (residence of a body corporate for these
purposes to be determined in accordance with the laws of the territory of which
the lender claims to be resident); or

(ii)                                  a
U.S. corporation, provided the U.S. corporation is incorporated in the U.S. and
subject to tax in the U.S. on its worldwide income; or

(iii)                               a
U.S. LLC, provided the ultimate recipients of the interest are companies
resident in and under the laws of a country with which Ireland has a double tax
treaty or registered in and under the laws of a member state of the European
Communities (other than Ireland) and the business conducted through the LLC is
so structured for market reasons and not for tax avoidance purposes; and

provided in each case at (i), (ii) and (iii) above,
the Lender is not carrying on a trade or business in Ireland through an agency
or branch with which the interest paid on the Facilities is connected; or

	
  

  	
   

  	
  (c)

  	
  (i)

  	
  resident in a country with which the Republic of
  Ireland has a double taxation treaty that is in effect and such treaty
  provides that any Obligor which is resident in the Republic of Ireland for
  taxation purposes is entitled to make payments of interest on any advances in
  which it has an interest to a person that is a resident of that territory for
  the purposes of that treaty without any deduction or withholding in respect of
  Taxes; and

  

 

(ii)                                  entitled
to the benefits of such treaty for interest payable in respect of the
Facilities; and

(iii)                               prior
to the first interest date on which any interest on any of the Loans in which
it has an interest is payable, has made all requisite filings with the
appropriate authorities in order to obtain relief under such treaty (or would
have done so but for any act or omission by an Obligor); or

 81
 

(d)                                 a
company which is tax resident in Ireland or which carries on a trade in Ireland
through a branch or agency:

(i)                                     which
advances money under this Agreement in the ordinary course of a trade which
includes the lending of money; and

(ii)                                  in
whose hands any interest payable in respect of the Facilities is taken into
account in computing the trading income of the company; and

(iii)                               which
has complied with all of the provisions of Section 246(5)(a) of the Irish Taxes
Consolidation Act, 1997 including making the appropriate notifications
thereunder to the Irish Revenue Authority and the relevant Obligor has not
ceased to be a company to which Section 246(5)(a) applies; or

(e)                                  a
qualifying company within the meaning of Section 110 of the Irish Taxes
Consolidation Act 1997, as amended.

15.4                           Stamp
taxes

The Company must pay and indemnify each Finance Party
against any stamp duty, registration or other similar Tax payable by or on
behalf of any Finance Party in connection with the entry into, performance or
enforcement of any Senior Finance Document, except for any such Tax payable in
connection with the entry into of a Transfer Certificate.

15.5                           Value
added taxes

(a)                                  Any
amount (including costs and expenses) payable under a Senior Finance Document
by an Obligor is exclusive of any value added tax or any other Tax of a similar
nature which might be chargeable in connection with that amount.  If any such Tax is chargeable, the Obligor
must pay to the Finance Party (in addition to and at the same time as paying
that amount) an amount equal to the amount of that Tax.

(b)                                 Where
a Senior Finance Document requires an Obligor to reimburse a Finance Party for
any costs or expenses, that Obligor shall also at the same time pay and
indemnify the Finance Party against all VAT incurred by the Finance Party in
respect of the costs or expenses to the extent that the Finance Party
reasonably determines that it is not entitled to credit or repayment of the
VAT.

(c)                                  The
obligation of any Obligor under paragraph (a) above will be reduced to the
extent that the Finance Party is entitled to repayment or a credit in respect
of the relevant Tax.

15.6                           Tax
Confirmation for German Thin Capitalisation Purposes

(a)                                  For
the purposes of providing evidence to the German tax authorities of the absence
of any detrimental recourse situation in connection with the tax guidelines
issued by the German Federal Ministry of Finance (Bundesfinanzministerium)
on 15 July 2004 (IV A2 — S2742a — 20/04) and on 22 July 2005 (IV B7 — S2742a —
31/05) (together, the “Decree”) in
relation to 

 82
 

section 8 a of
the German Corporation Tax Act (“KStG”,
Körperschaftssteuergesetz), the Security
Agent agrees, subject to compliance by the Obligors with the provisions of
paragraphs b) and f) below, to deliver to the Parent on behalf of each Borrower
being subject to German income tax (each a “German
Borrower”) no later than 40 Business Days after:

(i)                                     the
Closing Date,

(ii)                                  the
date of each accession of a German Borrower to this Agreement as Acceding
Borrower pursuant to Clause 23.33 (Additional Obligors),
and

(iii)                               the
date of any amendment to this Agreement or any Security Document which has a
material adverse impact on the tax position of the Group pursuant to section 8a
of the KStG as referred to above,

a completed
bank certificate (the “Bank Certificate”)
in the form set out in the sample confirmation attached to the letter (Bescheinigung im Sinne der Rdnr. 5 des BMF-Schreibens vom 22. Juli 2005)
(BStBl. I 2005, S. 829) issued by the German Federal Ministry of Finance (Bundesministerium für Finanzen) on 20 October 2005 (the “Sample”). For purposes of enabling the
Security Agent to issue the Bank Certificate, the Parent will provide the
Security Agent with a list of guarantees, security interests and restrictions
as required in the Sample on (x) the Closing Date, (y) the date of accession of
a German Borrower and (z) the date of any amendment to this Agreement or any
Security Document as set out under paragraph (iii) above.

(b)                                 Each
Obligor undertakes to inform the Security Agent without undue delay if it
becomes aware of any incorrectness or incompleteness of a Bank Certificate
given or to be given from time to time by the Security Agent pursuant to
paragraph a) above.

(c)                                  The
delivery of a Bank Certificate shall not prejudice the rights of the Security
Agent or the Lenders under this Agreement or any other Senior Finance Document.
In the event of any inconsistencies between the terms of a Bank Certificate and
the terms of an individual Security Document, the terms of the relevant
Security Document shall prevail. A Bank Certificate shall under no
circumstances constitute a waiver or release of any Security Interest.

(d)                                 Each
Obligor confirms to the Security Agent and each Lender that:

(i)                                     each
Bank Certificate is given by the Security Agent for the purpose of delivery to
the competent tax authorities of the German Borrowers to assist the German
Borrowers in the administration of their tax affairs and not for any other
purpose,

(ii)                                  the
Security Agent and the Lenders are not responsible for examining the Obligors’
tax position and that the Bank Certificates do not guarantee the achievement of
a specific result or conclusion for tax purposes,

 83
 

(iii)                               each
Bank Certificate is addressed to and is solely for the benefit of the German
Borrowers in relation to this Agreement, and

(iv)                              no
Bank Certificate creates third party rights of any kind.

(e)                                  It
is the common understanding of the Parties that no Party is providing any legal
and/or tax advice to any other Party with respect to this Agreement, in
particular with respect to the application of section 8 a of the German
Corporation Tax Act (Körperschaftssteuergesetz)
and the interpretation of the Decree, and that it is the responsibility of each
Party, in particular each Obligor, to consult its own legal and tax advisers.

(f)                                    Any
costs and expenses incurred by the Security Agent or any Lender in connection
with the provision of a Bank Certificate will be borne by the Obligors. Neither
the Security Agent nor any Lender shall be liable as a result of the delivery
of a Bank Certificate. Each Obligor agrees to indemnify the Security Agent and
each Lender with respect to any potential claims that might be made against the
Security Agent or any Lender with respect to any Bank Certificate by any third
party. No Obligor will raise any claims against the Security Agent or any
Lender based on, or in connection with, a (correct/complete or
incorrect/incomplete) Bank Certificate.

(g)                                 For
the avoidance of doubt:

(i)                                     none
of the Security Agent nor any Lender shall be obliged to disclose to any other
person any confidential information regarding its business or any other
information relating to its tax affairs or tax computations (including, without
limitation, its tax returns or its calculations) as a result of the operation
of this Clause 15.6;

(ii)                                  none
of the Security Agent nor any Lender shall be obliged to deliver any
information or make any statements pursuant to this Clause 15.6 if by doing so
it would contravene the terms of any applicable law or any notice, direction or
requirement of any governmental or regulatory authority (whether or not having
the force of law); and

(iii)                               each
German Borrower may disclose the existence and contents of a Bank Certificate
to its professional advisers, its Affiliates, as required by applicable law or
regulation and to any tax, regulatory or other governmental authority asserting
jurisdiction over it.

(h)                                 Each
Obligor acknowledges that the Security Agent may only deliver a Bank
Certificate if and to the extent any Obligor has released the Security Agent
from its general obligation to maintain confidentiality.

16.                               INCREASED
COSTS

16.1                           Increased
costs

If the result of any change occurring after the date
of this Agreement or if later after the date on which a Finance Party becomes a
party hereto, in or in the interpretation

 84
 

or application of, or the introduction of, any law or
any regulation (whether or not having the force of law, but, if not having such
force, with which banks or financial institutions customarily comply),
including (without limitation) those relating to taxation, capital adequacy,
liquidity, reserve assets, cash ratio deposits and special deposits, is to:

(a)                                  subject
any Finance Party to Taxes or change in the basis of taxation of any Finance
Party with respect to any payment under this Agreement (other than Taxes (a)
under the law of the jurisdiction in which that Finance Party is incorporated
and the jurisdiction (or jurisdictions) in which that Finance Party is treated
as resident for Tax purposes or (b) under the law of the jurisdiction in which
that Finance Party’s Facility Office is located, if in either case that Tax is
imposed on or calculated by reference to the net income, profits or gains
received or receivable by that Finance Party, however any amount deemed to be
received or receivable under applicable Tax law but that is not actually
received by the Finance Party either through the receipt of any payment,
credit, refund or other offset of Taxes, will not be treated as net income
received or receivable for this purpose (such excluded Taxes being “Excluded Taxes”)); and/or

(b)                                 increase
the cost to, or impose an additional cost on, any Finance Party or its holding
company in making or keeping available all or part of such Finance Party’s
Commitments under this Agreement or maintaining or funding all or part of such
Finance Party’s contributions to Credits (in each case, other than to the
extent attributable to Excluded Taxes); and/or

(c)                                  reduce
the amount payable or the effective return to any Finance Party under the
Senior Finance Documents (in each case, other than to the extent attributable
to Excluded Taxes); and/or

(d)                                 reduce
any Finance Party’s or its holding company’s rate of return on its overall
capital by reason of a change in the manner in which it is required to allocate
capital resources to such Finance Party’s obligations under the Senior Finance
Documents (in each case, other than to the extent attributable to Excluded
Taxes); and/or

(e)                                  require
any Finance Party or its holding company to make a payment or forgo a return
calculated by reference to or on any amount received or receivable by such
Finance Party under the Senior Finance Documents (in each case, other than to
the extent attributable to Excluded Taxes); and/or

(f)                                    require
any Finance Party or its holding company to incur or sustain a loss (including
a loss of profits) by reason of being obliged to deduct all or part of such
Finance Party’s Commitments under the Senior Finance Documents or contributions
to Credits from its capital for regulatory purposes,

then and in each such case:

(i)                                     such
Finance Party shall notify the Company through the Facility Agent in writing of
such event promptly upon its becoming aware of the same, including reasonable
detail of the causes giving rise to such

 85
 

increased
costs and the calculation thereof (but not to the extent that such detail would
require disclosure of any matters which such Finance Party or its holding
company regards as confidential); and

(ii)                                  subject
to the Company’s right to replace a Lender pursuant to Clause 17.2(a)(iii)
(Replacement of Lender), the Company
shall pay (or procure that the relevant Obligor pays) within five Business Days
of demand, made at any time whether or not such Finance Party’s participation
in the Credits has been repaid, to the Facility Agent for the account of such
Finance Party the amount which such Finance Party specifies (in a certificate
setting forth the basis of the computation of such amount, but not including
any matters which such Finance Party or its holding company regards as
confidential) is required to compensate such Finance Party and/or its holding
company for such liability to Taxes, increased or additional cost, reduction,
payment, forgone return or loss.

For the purposes of this Subclause 16.1 each
Finance Party may in good faith allocate or spread costs and/or losses among
its assets and liabilities (or any class thereof) on such basis as it considers
appropriate.

For the purposes of this Subclause 16.1 “holding company”
means, in relation to a Finance Party, the company or entity (if any) within
the consolidated supervision of which such Finance Party is included.

16.2                           Exceptions
to increased costs

Nothing in Subclause 16.1 (Increased
costs) shall entitle any Finance Party to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, forgone, return or loss to the extent that
the same:

(a)                                  is
taken into account in calculating the Mandatory Cost; or

(b)                                 is
already the subject of an additional payment under Subclauses 15.1 (Grossing-up for Taxes) or 15.2 (Tax Indemnity) (or would have been subject
to an additional payment but for the application of Subclause 15.3 (Qualifying Lenders)); or

(c)                                  has
not been demanded within six months of the first day on which both (i) the
Finance Party has the right to claim such compensation under
Subclause 16.1 (Increased Costs)
and (ii) the officers of such Finance Party involved in the administration of
its participation in the Facilities are aware of the circumstances giving rise
to the right to such compensation and that such circumstances give a right to
claim such compensation under this Agreement; or

(d)                                 is
attributable to the breach by any such Finance Party or its holding company of
any law or regulation, unless such law or regulation was introduced or changed
or the interpretation or application of such law or regulation changed after
the date of this Agreement.

 

 86

A Finance Party shall at the request of the Parent
take all reasonable steps to mitigate any circumstances which arise and which
result in or would result in any amount being payable under Subclause 16.1
(Increased Costs), and the Obligors shall
indemnify each Finance Party on demand for all costs and expenses reasonably
incurred by that Finance Party as a result of any step taken pursuant to such
request.  A Finance Party need not take
any steps if, in the opinion of that Finance Party, acting reasonably, to do so
may be materially prejudicial to it.

17.                               MITIGATION
AND CONDUCT OF BUSINESS

17.1                           Claw-back
of Tax benefit

(a)                                  If,
following any such deduction or withholding or indemnity payment as is referred
to in Subclauses 15.1 (Grossing-up for
Taxes), 15.2 (Tax Indemnity)
or 16.1 (Increased costs), any Finance Party
(with respect to such deduction or withholding or indemnity payment) shall
receive or be granted a refund or credit against or remission for any Taxes
payable by it, such Finance Party shall, subject to the relevant Obligor having
made any increased payment in accordance with Subclauses 15.1 (Grossing-up for Taxes), 15.2 (Tax
Indemnity) or 16.1 (Increased costs)
and to the extent that such Finance Party can do so without prejudicing the
retention of the amount of such refund or credit or remission and without
prejudice to the right of such Finance Party to obtain any other material
relief or allowance which may be available to it, reimburse the relevant
Obligor with such amount as such Finance Party shall in its absolute discretion
certify to be the amount of such refund or credit or remission as will leave
such Finance Party (after such reimbursement) in no worse position than it
would have been in had there been no such deduction or withholding from the
payment or no indemnity payment by the relevant Obligor as aforesaid.  Such reimbursement shall be made forthwith
upon such Finance Party certifying that the amount of such refund or credit or
remission has been received by it.

(b)                                 No
provision of this Agreement will 
interfere with the right of any Finance Party to arrange its affairs
(tax or otherwise) in whatever manner it thinks fit, oblige any Finance Party
to investigate or claim any credit, relief, remission or repayment available to
it or the extent, order and manner of any claim, or oblige any Finance Party to
disclose any information relating to its affairs (tax or otherwise) or any
computations in respect of Tax.  The
Company will indemnify each Finance Party on demand for any reasonable cost
incurred by it in investigating whether or not a Tax credit is payable.

(c)                                  Any
Finance Party claiming any additional amount by virtue of Subclauses 15.1 (Grossing-up for Taxes), 15.2 (Tax
Indemnity) or 16.1 (Increased Costs)
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to prepare, file and deliver any certificate, document, form or
other instrument reasonably requested by the Parent or to change the
jurisdiction of its Facility Office if the preparation, filing and delivery of
any such certificate, document, form or other instrument or the change in
lending office or Facility Office would avoid the need for or reduce the amount
of any such additional amounts or would avoid the circumstances giving rise to
such claim to additional amounts and would not in each case, in the sole
determination of such Finance 

 87
 

Party, result in any additional costs,
expenses or otherwise be disadvantageous to it. 
The Company will procure that each Obligor co-operates in a timely
fashion with each Finance Party in providing any necessary information to
enable such Finance Party to complete or file any such certificate, document,
form or other instrument.

17.2                           Replacement
of Lender

(a)                                  If
at any time:

(i)                                     any
Lender becomes a Non-Consenting Lender (as defined in paragraph (c)
below); or

(ii)                                  any
Lender becomes a Non-Funding Lender (as defined in paragraph (d) below);
or

(iii)                               an
Obligor becomes obliged to repay any amount in accordance with
Subclause 11.1 (Mandatory prepayment -
Illegality) or to pay additional amounts pursuant to Subclauses 15.1
(Grossing-up for Taxes),
15.2 (Tax Indemnity) or 16.1 (Increased Costs) to any Lender in excess
of amounts payable to the other Lenders generally,

then the Company may, on ten Business Days prior written
notice to the Facility Agent and such Lender, replace such Lender by requiring
such Lender to (and such Lender shall) transfer pursuant to Clause 31 (Changes to the Parties) all (and not part
only) of its rights and obligations under this Agreement and any Commitment
cancelled by operation of Clause 11.1 (Mandatory prepayment —Illegality)
will be deemed reinstated upon such transfer to a Lender or other entity (a “Replacement Lender”)
selected by the Company, and which is acceptable to the Facility Agent (acting
reasonably) and (in the case of any transfer of a Revolving Credit Commitment
or liability under Clause 7.5(b) (Indemnities))
the Issuing Bank, which confirms its willingness to assume and does assume all
the obligations of the transferring Lender (including the assumption of the
transferring Lender’s participations on the same basis as the transferring
Lender) for a purchase price in cash payable at the time of transfer equal to
the outstanding principal amount of such Lender’s participation in the
outstanding Credits and all accrued interest (and any breakage costs) and fees
and other amounts payable hereunder.

(b)                                 The
replacement of a Lender pursuant to this Subclause shall be subject to the
following conditions:

(i)                                     the
Company shall have no right to replace the Facility Agent or Security Agent;

(ii)                                  neither
the Facility Agent nor any Lender shall have any obligation to the Company to
find a Replacement Lender or other such entity;

(iii)                               in
the event of a replacement of a Non-Consenting Lender such replacement
must take place no later than 120 days after the date the Non-Consenting
Lender notified the Company and the Facility Agent

 88
 

of its failure or refusal to agree to any
consent, waiver or amendment to the Senior Finance Documents requested by the
Company; and

(iv)                              in
no event shall the Lender replaced under this Subclause be required to pay
or surrender to such Replacement Lender any of the fees received by such Lender
pursuant to the Senior Finance Documents.

(c)                                  In
the event that:

(i)                                     the
Company or the Facility Agent (at the request of the Company) has requested the
Lenders to consent to a waiver or amendment of any provisions of the Senior
Finance Documents;

(ii)                                  the
waiver or amendment in question requires the consent of all of the Lenders or
the Super-majority Lenders; and

(iii)                               the
Majority Lenders have consented to such waiver or amendment,

then any Lender who does not agree to such waiver or
amendment shall be deemed a “Non-Consenting
Lender”.

(d)                                 A
“Non-Funding Lender” means:

(i)                                     any
Lender which has failed to make or participate in a Credit when required to do
so by this Agreement;

(ii)                                  any
Lender which has given notice to a Borrower or the Facility Agent that it does
not intend to make or participate in any Credit when required to do so in
accordance with the terms of this Agreement or has repudiated its obligations
to do so; or

(iii)                               any
Lender that has failed to comply with Subclause 7.5(d)(i) (Indemnities),

except where the conditions for making or
participating in any Credit have not been satisfied in accordance with this
Agreement.

(e)                                  The
Company’s right to replace a Non-Funding Lender pursuant to this
Subclause supplements rather than replaces the other legal and equitable rights
and remedies available to the Company against such Non-Funding Lender
under this Agreement or otherwise.

18.                               PAYMENTS

18.1                           Place

Unless a Senior Finance Document specifies that
payments under it are to be made in another manner, all payments by a Party
(other than the Facility Agent) under the Senior Finance Documents must be made
to the Facility Agent to its account at such office or bank:

(a)                                  in
the principal financial centre of the country of the relevant currency; or

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(b)                                 in
the case of euro, in the principal financial centre of a Participating Member State
or London,

as it may notify to that Party for this purpose by not
less than five Business Days’ prior notice.

18.2                           Funds

Payments under the Senior Finance Documents to the
Facility Agent must be made for value on the due date at such times and in such
funds as the Facility Agent may specify to the Party concerned as being
customary at the time for the settlement of transactions in the relevant
currency in the place for payment.

18.3                           Distribution

(a)                                  Each
payment received by the Facility Agent under the Senior Finance Documents for
another Party must, except as provided below, be made available by the Facility
Agent to that Party by payment (as soon as practicable after receipt) to its
account with such office or bank:

(i)                                     in
the principal financial centre of the country of the relevant currency; or

(ii)                                  in
the case of euro, in the principal financial centre of a Participating Member
State or London,

as it may notify to the Facility Agent for this
purpose by not less than five Business Days’ prior notice.

(b)                                 The
Facility Agent may apply any amount received by it for an Obligor in or towards
payment (as soon as practicable after receipt) of any amount then due and
payable from that Obligor under the Senior Finance Documents or in or towards
the purchase of any amount of any currency to be so applied.

(c)                                  Where
a sum is paid to the Facility Agent under this Agreement for another Party, the
Facility Agent is not obliged to pay that sum to that Party until it has
established that it has actually received it. 
However, the Facility Agent may assume that the sum has been paid to it,
and, in reliance on that assumption, make available to that Party a
corresponding amount.  If it transpires
that the sum has not been received by the Facility Agent, that Party must immediately
on demand by the Facility Agent refund any corresponding amount made available
to it together with interest on that amount from the date of payment to the
date of receipt by the Facility Agent at a rate calculated by the Facility
Agent to reflect its cost of funds.

18.4                           Currency

(a)                                  Unless
a Senior Finance Document specifies that payments under it are to be made in a
different manner, the currency of each amount payable under the Senior Finance
Documents is determined under this Clause. Interest is payable in the currency
in which the relevant amount in respect of which it is payable is denominated.

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(b)                                 A
repayment or prepayment of any principal amount is payable in the currency in
which that principal amount is denominated on its due date.

(c)                                  Amounts
payable in respect of costs and expenses are payable in the currency in which
they are incurred.

(d)                                 Each
other amount payable under the Senior Finance Documents is payable in the Base
Currency.

18.5                           No set-off
or counterclaim

All payments made by an Obligor under the Senior
Finance Documents must be made without set-off or counterclaim (save to
the extent provided for in Clause 10.2(c) (Repayment of Revolving Credit Loans) in relation to
Revolving Credit Loans).

18.6                           Business
Days

(a)                                  If
a payment under the Senior Finance Documents is due on a day which is not a
Business Day, the due date for that payment will instead be the next Business
Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not).

(b)                                 During
any extension of the due date for payment of any principal under this Agreement
interest is payable on that principal at the rate payable on the original due
date.

18.7                           Partial
payments

(a)                                  If
any Administrative Party receives a payment insufficient to discharge all the
amounts then due and payable by the Obligors under the Senior Finance
Documents, the Administrative Party must apply that payment towards the
obligations of the Obligors under the Senior Finance Documents in the following
order:

(i)                                     first, in or towards payment pro rata of any unpaid fees, costs and expenses of the
Administrative Parties under the Senior Finance Documents;

(ii)                                  second, in or towards payment pro rata of any accrued interest or fee due but unpaid under
the Senior Finance Documents;

(iii)                               third, in or towards payment pro rata of any principal amount due but unpaid under this
Agreement; and

(iv)                              fourth, in or towards payment pro rata of any other sum due but unpaid under the Senior
Finance Documents.

(b)                                 The
Facility Agent must, if so directed by the Majority Lenders, vary the order set
out in sub-paragraphs (a)(ii) to (iv) above.

(c)                                  This
Subclause will override any appropriation made by an Obligor.

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18.8                           Timing
of payments

If a Senior Finance Document does not provide for when
a particular payment is due, that payment will be due within three Business
Days of demand by the relevant Finance Party.

18.9                           Security
Agent Creditor

(a)                                  Each
of the Obligors and each of the Finance Parties agree that the Security Agent
shall be the joint and several creditor (together with the relevant Finance
Party) of each and every payment obligation of any Obligor towards each and any
of the Finance Parties under the Senior Finance Documents, and that accordingly
the Security Agent will have its own independent right to demand performance by
the relevant Obligor of that obligation when due (such obligations owing to the
Security Agent).  However, any discharge
by an Obligor of any such obligation owed to either of the Security Agent or
the relevant Finance Party shall, to the same extent, discharge the obligation
owed by such Obligor to the other party and a Finance Party and the Security
Agent shall not by virtue of this Subclause 18.9 be entitled to pursue the
Obligor simultaneously for the same obligations.

(b)                                 Without
limiting or affecting the Security Agent’s rights against any Obligor (whether
under this paragraph or under any other provision of the Senior Finance
Documents), the Security Agent agrees with each other Finance Party (on a
several and divided basis) that, subject as set out in the next sentence, it
will not exercise its rights as a joint and several creditor with a Finance
Party except with the consent of that Finance Party.  However, nothing in the previous sentence
shall limit to any extent the Security Agent’s right in whatever capacity to
take any action to protect or preserve any rights under any Security Document
or to enforce any Security Interest created thereby as contemplated by this
Agreement and/or the relevant Security Document (or to do any act reasonably
incidental to any of the foregoing).

(c)                                  This
Subclause applies except to the extent the Security Agent specifies that
it shall not apply in relation to a specific Obligor or all Obligors
incorporated in a particular jurisdiction.

(d)                                 For
the purposes of paragraph (a) above in conjunction with any Security Interest
created under the laws of the Netherlands, the Security Agent shall qualify as
a hoofdelijk crediteur.

19.                               GUARANTEE
AND INDEMNITY

19.1                           Guarantee and indemnity

Each Guarantor jointly and severally and irrevocably
and unconditionally:

(a)                                  guarantees
to each Finance Party due and punctual performance by each Borrower of all its
payment obligations under the Senior Finance Documents (other than the payment
obligations of the Restricted Borrower under or in connection with the
Restricted Term Loan Facilities);

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(b)                                 undertakes
with each Finance Party that, whenever a Borrower does not pay any amount when
due under any Senior Finance Document (other than any amount payable by the
Restricted Borrower under or in connection with the Restricted Term Loan
Facilities), it must immediately on demand by the Facility Agent pay that
amount as if it were the principal obligor; and

(c)                                  indemnifies
each Finance Party immediately on demand against any loss or liability suffered
by that Finance Party if any obligation guaranteed by it is or becomes
unenforceable, invalid or illegal; the amount of the loss or liability under
this indemnity will be equal to the amount the Finance Party would otherwise
have been entitled to recover.

19.2                           Continuing
guarantee

This Guarantee is a continuing guarantee and will
extend to the ultimate balance of all sums payable by any Obligor under the
Senior Finance Documents (other than by the Restricted Borrower under or in
connection with the Restricted Term Loan Facilities), regardless of any
intermediate payment or discharge in whole or in part.

19.3                           Reinstatement

(a)                                  If
any discharge (whether in respect of the obligations of any Obligor or any
security for those obligations or otherwise) or arrangement is made in whole or
in part on the faith of any payment, security or other disposition which is
avoided or must be restored on insolvency, liquidation, administration or
otherwise without limitation, the liability of each Guarantor under this Clause
will continue or be reinstated as if the discharge or arrangement had not
occurred.

(b)                                 Each
Finance Party may concede or compromise any claim that any payment, security or
other disposition is liable to avoidance or restoration.

19.4                           Waiver
of defences

The obligations of each Guarantor under this
Clause will not be affected by any act, omission or thing which, but for
this provision, would reduce, release or prejudice any of its obligations under
this Clause (whether or not known to it or any Finance Party).  This includes:

(a)                                  any
time or waiver granted to, or composition with, any person;

(b)                                 any
release of any person under the terms of any composition or arrangement;

(c)                                  the
taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or security over
assets of, any person;

(d)                                 any
non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to realise the full
value of any security;

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(e)                                  any
incapacity or lack of power, authority or legal personality of or dissolution
or change in the members or status of any person;

(f)                                    any
amendment (however fundamental) of a Senior Finance Document or any other
document or security; or

(g)                                 any
unenforceability, illegality, invalidity or non-provability of any
obligation of any person under any Senior Finance Document or any other
document or security.

19.5                           Immediate
recourse

Each Guarantor waives any right it may have of first
requiring any Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other right or security or claim payment from any person
or file any proof or claim in any insolvency, administration, winding-up
or liquidation proceedings relative to any other Obligor or any other person
before claiming from that Guarantor under this Clause.

19.6                           Appropriations

Until all amounts which may be or become payable by
the Obligors under the Senior Finance Documents have been irrevocably paid in
full, each Finance Party (or any trustee or agent on its behalf) may, provided
to do so is reasonable in the circumstances:

(a)                                  without
affecting the liability of any Guarantor under this Clause:

(i)                                     refrain
from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts (unless and until the amounts received by that Finance
Party (or any trustee or agent on its behalf) from the Obligors are sufficient
to discharge in full all amounts which may be or become payable by the Obligors
to that Finance Party under the Senior Finance Documents); or

(ii)                                  apply
and enforce them in such manner and order as it sees fit (whether against those
amounts or otherwise); and

(b)                                 hold
in an interest-bearing suspense account any moneys received from any
Guarantor or on account of that Guarantor’s liability under this Clause.

19.7                           Non-competition

Unless:

(a)                                  all
amounts which may be or become payable by the Obligors under the Senior Finance
Documents have been irrevocably paid in full; or

(b)                                 the
Facility Agent otherwise directs,

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no Guarantor will, after
a claim has been made or by virtue of any payment or performance by it under
this Clause:

(i)                                     exercise
any right of subrogation in respect of or claim to be subrogated to any rights,
security or moneys held, received or receivable by any Finance Party (or any
trustee or agent on its behalf);

(ii)                                  exercise
or claim any right of contribution or indemnity in respect of any payment made
or moneys received on account of that Guarantor’s liability under this Clause;

(iii)                               claim,
prove or vote (or exercise any right to rank) as a creditor of any Obligor or
its estate in competition with any Finance Party (or any trustee or agent on
its behalf); or

(iv)                              take
any action to receive, claim or have the benefit of any payment, distribution
or security from or on account of any Obligor, or exercise any right of set-off
(not being an automatic set-off arising by operation of law which does
not result from any action or election by any Obligor) as against any Obligor
(and such Guarantor waives any right it would otherwise have to receive, claim
or have the benefit of any such payment, distribution or security or exercise
any such right of set-off).

Each Guarantor must hold in trust for and immediately
pay or transfer to the Facility Agent for the Finance Parties any payment or
distribution or benefit of security received by it contrary to this
Clause (or any payment under any set-off arising by operation of
law) or in accordance with any directions given by the Facility Agent under
this Clause.

19.8                           Additional
security

This Guarantee is in addition to and is not in any way
prejudiced by any other security now or subsequently held by any Finance Party.

19.9                           Guarantee
Limitations

(a)                                  If
and to the extent any Guarantee secures debt obligations of a Borrower being
subject to German income tax, the Guarantee shall not be enforced against
assets which qualify as LTIBR to the extent such assets are (i) the subject of
any of the Security Documents, (ii) encumbered in favour of any of the Finance
Parties pursuant to a lien based on general business terms of a Finance Party,
(iii) the subject of a disposal restriction (Verfügungsbeschränkung)
in favour of any Finance Party or (iv) enforced pursuant to a submission to
immediate foreclosure in favour of any of the Finance Parties (Unterwerfung unter die sofortige Zwangsvollstreckung).

(b)                                 The
liability of each Guarantor under this Clause 19 shall also be limited to the
extent of the limitations (if any) set out in Schedule 12 (Guarantee
Limitations) or in the Accession Deed
executed by the relevant Guarantor.

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20.                               REPRESENTATIONS

20.1                           Representations

The representations set out in this Clause are
made by each Obligor or (if so stated) the Parent and the Company to each
Finance Party.

20.2                           Status*1

(a)                                  It
and each of its Subsidiaries which is a Material Group Member is a limited
liability company (except, in the case of the Company, Smurfit Kappa Treasury
and certain other entities in relation to which the status has been disclosed
to the Facility Agent or the Security Agent in the process of granting security
pursuant to the Security Documents, or otherwise, which do not have limited liability),
duly incorporated and validly existing under the laws of its jurisdiction of
incorporation.

(b)                                 It
and each of its Subsidiaries which is a Material Group Member has the power to
own its assets and carry on its business as it is being and will be conducted.

20.3                           Powers
and authority*

It has the power to enter into and perform, and has
taken all necessary action to authorise the entry into and performance of, the
Transaction Documents to which it is or will be a party and the transactions
contemplated by those Transaction Documents.

20.4                           Legal
validity*

(a)                                  Each
Transaction Document to which it is a party is its legally binding, valid and,
subject to the Reservations, enforceable obligation.

(b)                                 Each
Security Document to which it is a party creates the Security Interests which
that Security Document purports to create (subject in the case of
enforceability of such Security Interests to the Reservations).

20.5                           Non-conflict*

The entry into and performance by it of, and the
transactions contemplated by, the Transaction Documents to which it is party do
not conflict with:

(a)                                  any
law or regulation applicable to it, to the extent they are likely to have a
Material Adverse Effect; or

(b)                                 its
or any of its Subsidiaries’ constitutional documents in any material respect;
or

(c)                                  any
agreement or instrument which is binding upon it or any of its Subsidiaries or
any of its or its Subsidiaries’ assets or constitute a default or termination
event (however described) under any such agreement or 

1                      Asterisks
(*) in headings denote repeating nature of representation.

 

 96
 

instrument, in
each case to an extent or in a manner which would have a Material Adverse
Effect.

20.6                           No
Default

(a)                                  No
Default is outstanding or is reasonably likely to result from the execution of,
or the performance of any transaction contemplated by, any Transaction
Document; and

(b)                                 no
other event is outstanding which constitutes (or with the giving of notice,
expiry of any grace period or fulfilment of any other applicable condition will
constitute) a default or termination event (however described) under any
document which is binding on it or any of its Subsidiaries or any of its or its
Subsidiaries’ assets in each case to an extent or in a manner which would have
a Material Adverse Effect.

20.7                           Authorisations

Except for
registration of any Security Document to the extent such registration can only
be completed after entry into of such Security Document, all authorisations
required by it in connection with the entry into, performance, validity and enforceability
of, and the transactions contemplated by, the Transaction Documents have been
(or will at the First Drawdown be) obtained or effected (as appropriate) and
are (or will at the First Drawdown be) in full force and effect.

20.8                           Base
Financial Statements

(a)                                  As
at the date of this Agreement the Target Group Base Financial Statements, to
the best of the knowledge of the Company after due enquiry:

(i)                                     have
been prepared in accordance with Dutch GAAP consistently applied (subject, in
the case of unaudited Target Group Base Financial Statements, to customary year
end adjustments);

(ii)                                  give
a true and fair view of (if audited) or fairly present (if unaudited) the
consolidated financial condition and results of operations of the Target Group
as at and for the Accounting Period ended the date to which they were drawn up;
and

(iii)                               as
at the date to which they were prepared, do not include or consolidate the
results of any company or business which is not part of the Target Group.

(b)                                 As
at the date of this Agreement the Smurfit Kappa Group Base Financial
Statements, to the best of the knowledge of the Company after due enquiry have
been prepared in accordance with the Accounting Principles consistently applied
(subject, in the case of unaudited Smurfit Kappa Group Base Financial
Statements, to customary year end adjustments);

(c)                                  As
at the date of this Agreement to the best of the knowledge of the Company after
due enquiry, there has been no material adverse change in the business, assets
or financial condition of the Smurfit Kappa Group and the Target Group

 97
 

since the
latest date to which any of the Base Financial Statements were drawn up.

20.9                           Documents

(a)                                  The
documents delivered to the Facility Agent by or on behalf of any Obligor
pursuant to Subclause 4.1 (Conditions
precedent documents) were genuine (or, in the case of copy
documents, were true, complete and accurate copies of originals which were
genuine), are in full force and effect (or if a copy, the original is in full
force and effect) and have not been amended, varied or replaced in any respect
which could adversely affect the interests of the Finance Parties under the
Senior Finance Documents.

(b)                                 Documents
delivered to the Facility Agent under this Agreement by or on behalf of any
Obligor after the First Drawdown were, when delivered, genuine (or, in the case
of copy documents, were true, complete and accurate copies of originals which
were genuine) and when delivered were in full force and effect (or, if a copy,
the original was in full force and effect).

20.10                     Financial
statements

(a)                                  Its
latest Accounts supplied under this Agreement (taken together with any
Reconciliation Statement accompanying them):

(i)                                     have
been prepared in accordance with the Accounting Principles, consistently
applied (subject, in the case of unaudited Accounts, to customary year end
adjustments); and

(ii)                                  give
a true and fair view of (if audited) or fairly present (if unaudited) its
consolidated financial condition as at, and consolidated results of operations
for, the Accounting Period ended the date to which they were drawn up, provided
that in the case of any monthly Accounts, such Accounts fairly present its
consolidated results of operations for that Accounting Period (provided further
that in the case of monthly selected balance sheet information such information
has not been prepared on a consolidated basis and so may be subject to
quarterly adjustments).

(b)                                 The
budgets and forecasts supplied to the Facility Agent under this Agreement have
been prepared on the basis of recent historical information and on the basis of
assumptions which were believed by the relevant Obligor to be reasonable as at
the date they were supplied.

(c)                                  The
Company may make written disclosures to the Facility Agent against this
representation for the purpose of its repetition after the First Drawdown Date
and this representation will be deemed to be qualified thereby.

 

 98

20.11                     Information
Package

In the case of the Company, Smurfit Kappa Funding and
the Parent only (and given only as at the date the Information Package (or part
thereof) is delivered to the Arrangers and as at the Syndication Date):

(a)                                  to
the best of each of the Parent’s, the Company’s and Smurfit Kappa Funding’s
knowledge, the material factual information contained in the Information
Package (when taken as a whole) was true and accurate in all material respects
as at its date or (if appropriate) as at the date (if any) at which it is
stated to be given;

(b)                                 to
the best of each of the Parent’s, the Company’s and Smurfit Kappa Funding’s
knowledge, all expressions of opinion or intention made by the Parent, Smurfit
Kappa Funding or the Company contained in the Information Package were made
after careful consideration and were believed by the Parent, Smurfit Kappa
Funding and the Company to be reasonable as at the date at which they are
stated to be given;

(c)                                  the
financial projections made by the Parent, Smurfit Kappa Funding or the Company
contained in the Information Package have been prepared as at the date of the
Information Package on the basis of recent historical information and
assumptions which were believed by the Parent, Smurfit Kappa Funding, the Company
and by the Chief Executive Officer, the Chief Financial Officer and the Chief
Operating Officer to be reasonable at that date;

(d)                                 to
the best of each of the Parent’s, the Company’s and Smurfit Kappa Funding’s
knowledge, the Information Package did not omit as at its date any information
the omission of which would make the Information Package untrue or misleading
in any material respect; and

(e)                                  (as
at the Syndication Date) to the best of each of the Parent’s, the Company’s and
Smurfit Kappa Funding’s knowledge, nothing has occurred since the date of the
Information Package which has not been fairly disclosed in writing to the
Facility Agent and which, if disclosed, would result in the factual information
or financial projections contained in the Information Package being untrue or
misleading in any material respect.

20.12                     Report

In the case of the Company, Smurfit Kappa Funding and
the Parent only, as at the date of this Agreement to the best of its knowledge
after due enquiry:

	
  

  	
   

  	
  (a)

  	
  (i)

  	
  all written factual information (other than any in
  the Report) concerning the Investors, the Original Obligors and the Target
  and its Subsidiaries and the transactions contemplated by this Agreement that
  it or the Investor (or any of such person’s authorised representatives)
  supplied to any of the Arrangers was complete and correct in all material
  respects as at its date and did not omit to state a material fact necessary
  in order to make such information not materially misleading;

  

 

 99
 

(ii)                                  all
written factual information contained or referred in the Report concerning the
Investors, the Original Obligors and the Target and its Subsidiaries and the
transactions contemplated by this Agreement that it or the Investors (or any of
such person’s authorised representatives) supplied to any of the Arrangers was
complete and correct in all material respects as at its date and did not omit
to state a material fact necessary in order to make such information not
materially misleading in the light of the circumstances in which the Report was
made;

(b)                                 all
written factual information relating to the Group or the Target Group or the
transactions contemplated by the Transaction Documents provided to any firm
which prepared a Report was true in all material respects at its date or (if
appropriate) as at the date (if any) at which it is stated to be given;

(c)                                  all
written expressions of opinion or intention given by or on behalf of any member
of the Group or the Target Group and all written forecasts and projections
furnished by any member of the Group or the Target Group to each such firm were
arrived at after careful consideration, and were based on recent historical
information and on assumptions which were believed  by such member of the Group to be reasonable
at the date they were supplied;

(d)                                 the
Report did not omit as at its date any factual information which, if disclosed,
would make the information contained in the Report untrue or misleading in any
material respect in the light of the circumstances in which such Report was
made available;

(e)                                  as
at the date of this Agreement, nothing has occurred since the date any written
factual information was provided to any firm which prepared the Report which
has not been disclosed in writing by the Company to the Arrangers prior to the
date of this Agreement and which, if disclosed would make any of the factual
information in the Report untrue or misleading in any material respect in the
light of circumstances in which any such written factual information was
provided to any firm which prepared the Report; and

(f)                                    the
Parent and the Company have not omitted to disclose to the Arrangers any
factual information which, if disclosed, would make the Report untrue or
misleading in any material respect.

20.13                     Litigation
etc.

(a)                                  No
undisclosed litigation, arbitration or administrative proceedings or
investigations of, or before, any court, arbitral body or agency have been
started which, if adversely determined are likely to have a Material Adverse
Effect.  Any matters disclosed in (i) the
internal memorandum of Jefferson Smurfit Group from Brian Marshall addressed to
Brendan Glynn dated 8 November 2005 entitled “Syndication — Legal Due Diligence”
and the copy memoranda, letters and e-mail correspondence annexed thereto and
provided to the Lenders prior to the date of this Agreement; and/or (ii) the
Forms 20-F relating to the annual report for the financial year ending 31
December 2004, filed with the SEC in relation to (A) the Parent and the Company
and (B) the 

 100
 

Target, shall
be deemed to have been disclosed for the purpose of this Clause 20.13(a).

(b)                                 It
has not (and none of its Subsidiaries have) breached any law or regulation
which breach would have a Material Adverse Effect.

(c)                                  No
labour disputes are current or, to its knowledge, threatened (in writing) which
would have a Material Adverse Effect.

20.14                     Taxes

(a)                                  It
is not (and none of its Subsidiaries are) overdue in the filing of any Tax
returns or filings where failure to do so would result in any material
penalties or fines.

(b)                                 It
is not (and none of its Subsidiaries are) overdue in the payment of any
material amount of Tax unless any such overdue payment is being contested in
good faith, adequate reserves are being maintained for the payment of such
Taxes, the overdue payment can be lawfully withheld and the non-payment
will not have a Material Adverse Effect.

(c)                                  No
claims or investigations by any tax authority are being or are reasonably
likely to be made or conducted against it (or any of its Subsidiaries) (except
for assessments in relation to the ordinary course of the business or claims
being contested in good faith and in respect of which adequate provision has
been made in its Accounts) which are reasonably likely to result in a liability
of or claim against any member of the Group which will have a Material Adverse
Effect.

20.15                     Structure
Memorandum

In the case of the Company and the Parent only and as
at the First Drawdown Date:

(a)                                  the
Group structure chart delivered to the Facility Agent under Part I of Schedule
2 (Conditions Precedent Documents)
shows all members of the Group, and contains descriptions which in all material
respects are true, complete and correct of the corporate ownership structure of
the Group, as it will be immediately after the First Drawdown;

(b)                                 the
Structure  Memorandum sets out (together
with the Funds Flow Statement) every material step to be taken at or before the
First Drawdown for the purpose of achieving the First Drawdown;

(c)                                  the
Structure Memorandum reflects (together with the Funds Flow Statement) all
payments and discharges of indebtedness individually in excess of €1,000,000
(or its equivalent) due to be made at or about the First Drawdown by any party
to the Transaction Documents in connection with the transactions and matters
contemplated thereby; and

(d)                                 the
Structure Memorandum shows in all material respects the steps which members of
the Group are anticipated to undertake and payments which members of the Group
are anticipated to make as part of the Debt Pushdown.

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20.16                     Intellectual
Property Rights

It and each of its Material Subsidiaries:

(a)                                  owns
or has licensed to it all the Material Intellectual Property Rights (if any)
and it does not (nor do any of the Material Subsidiaries), in carrying on its
business, infringe any Material Intellectual Property Rights of any third party
in any respect which has, or would have, a Material Adverse Effect; and

(b)                                 has
taken all formal or procedural actions (including payment of fees) required to
maintain the registered Material Intellectual Property Rights if and to the
extent owned by it where failure to take such action would have a Material
Adverse Effect.

20.17                     Environment

It and each of the Material Subsidiaries has obtained
all requisite Environmental Approvals required for the carrying on of its
business as currently conducted and is in compliance with:

(a)                                  the
terms and conditions of such Environmental Approvals; and

(b)                                 all
other applicable Environmental Laws,

where, in each case, if not obtained or complied with
the failure or its consequences would have a Material Adverse Effect.

20.18                     Holding
Companies

In the case of the Parent, Smurfit Kappa Funding and
the Company only:

(a)                                  the
Parent is the legal and beneficial owner of all of the shares in Smurfit Kappa
Funding.  Smurfit Kappa Funding is the
legal and beneficial owner of all of the shares in the Company.  Following the First Drawdown, the Company
will become the beneficial owner, and will become entitled to become the legal
and beneficial owner, of the Target Group;

(b)                                 the
Equity Documents contain all the material terms of the arrangements between the
Investors and members of the Group as it will be immediately after the First
Drawdown.

20.19                     Assets

(a)                                  It
is the legal and beneficial owner of the shares, assets and the real property
material to the carrying-on of the Core Business and any other material
property which it charges or purports to charge under the Security Documents.

(b)                                 It
and each of its Material Subsidiaries owns or has leased or licensed to it all
material assets necessary to conduct its business (which are not replaceable
within 90 days), save where not owning, leasing or licensing such assets would
not have a Material Adverse Effect.

 102
 

20.20                     Financial
Indebtedness and Security Interests

(a)                                  As
of the First Drawdown and after giving effect to the application in accordance
with the Funds Flow Statement of the proceeds of the Loans drawn on the First
Drawdown Date in the manner shown in the Funds Flow Statement, no member of the
Group has any (actual or contingent) Financial Indebtedness outstanding which
is not permitted by the terms of this Agreement.

(b)                                 As
of the First Drawdown and after giving effect to the application in accordance
with the Funds Flow Statement of the proceeds of the Loans drawn on the First
Drawdown Date in the manner shown in the Funds Flow Statement, no Security
Interest exists over the assets of any member of the Group which is not
permitted by the terms of this Agreement.

20.21                     No
Winding Up

None of the matters listed in Clause 24.7 (Insolvency proceedings) has occurred in relation to it or
any Material Subsidiary.

20.22                     Claims
Pari Passu

Under the laws of its jurisdiction of incorporation,
and, if different, England, in force at the date of this Agreement, the claims
of the Finance Parties against it under the Senior Finance Documents to which
it is a party rank and will rank at least pari
passu with the claims of all its unsecured creditors save those
whose claims are preferred by any bankruptcy, insolvency, liquidation or
similar laws of general application.

20.23                     Acquisition
Documents

(a)                                  All
material terms and conditions of the Acquisition (including those terms and
conditions the absence of disclosure in connection therewith may make the
Information Memorandum incorrect or misleading in any material respect) are set
out in the Acquisition Documents and there have been no amendments, variations
or waivers of any terms of the Acquisitions Documents which are materially
prejudicial to the interests of the Lenders under the Senior Finance Documents
save as approved (by prior written consent) by the Facility Agent.

(b)                                 The
Acquisition has been, or will, on the Closing Date be, carried out in
accordance with the terms and conditions of the Acquisition Documents save to
the extent as would not be materially prejudicial to the Lenders.

20.24                     Professional
Market Party

The Dutch Borrower is in compliance with the Dutch
Banking Act and any regulations issued pursuant thereto (including, but not
limited to, the Policy Guidelines and the Dutch Exemption Regulation).

20.25                     Times
for making representations

(a)                                  The
representations set out in this Clause are made by each Original Obligor
on the date of this Agreement.

 103
 

(b)                                 Unless
a representation is expressed to be given at or as of a specific date only,
each representation (other than those contained in Clauses 20.6 (No default), 20.7 (Authorisations), 20.8 (Base Financial Statements), 20.9 (Documents), 20.10 (Financial Statements), 20.11 (Information Package), 20.12 (Report), 20.13 (Litigation,
etc.), 20.14 (Taxes),
20.15 (Structure Memorandum),
20.16 (Intellectual Property Rights),
20.17 (Environment), 20.18 (Holding Companies), 20.19 (Assets), 20.20 (Financial Indebtedness and Security Interests),
20.21 (No Winding Up), 20.22 (Claims Pari Passu), or 20.23 (Acquisition Documents)) is deemed to be
repeated by:

(i)                                     each
Additional Obligor and the Company on the date that Additional Obligor becomes
an Obligor; and

(ii)                                  each
Obligor on the date of each Request and the first day of each Term.

(c)                                  The
representation contained in Clause 20.10(a) (Financial
Statements) is given in relation to a relevant set of Accounts on
the date of delivery of such Accounts under this Agreement.

(d)                                 When
a representation is repeated, it is applied to the circumstances existing at
the time of repetition save where it is expressed to be made on a certain date.

21.                               INFORMATION
COVENANTS

21.1                           Financial
statements

(a)                                  The
Parent must supply to the Facility Agent in sufficient copies for all the
Lenders:

(i)                                     the
audited consolidated financial statements of Smurfit Kappa Funding for each
annual Accounting Period;

(ii)                                  the
unaudited consolidated financial statements of Smurfit Kappa Funding for each
quarterly Accounting Period;

(iii)                               prior
to the occurrence of a Qualifying IPO only, the unaudited consolidated
financial statements of Smurfit Kappa Funding for each monthly Accounting
Period; and

For the purpose of this Subclause only, Lenders
which are funds and are advised or managed by the same advisor or manager or an
Affiliate of such advisor or manager as other funds which are also Lenders,
shall be treated as a single Lender.

(b)                                 All
Accounts must be supplied as soon as they are available and:

(i)                                     in
the case of Accounts referred to in (a)(i) above, within 120 days (save
that the relevant period shall be 150 days for financial years ending on or
before 30 December 2006);

 104
 

(ii)                                  in
the case of Accounts referred to in (a)(ii) above, within 45 days (save that
the relevant period for the quarterly Accounting Periods prior to 1 October
2006 shall be 60 days); and

(iii)                               in
the case of Accounts referred to in (a)(iii) above, within 30 days (save that
the relevant period for the monthly Accounting Periods, prior to 1 October 2006
shall be 45 days),

of the end of the relevant Accounting Period.

21.2                           Form
and scope of financial statements

(a)                                  The
Parent must ensure that all Accounts supplied under this Agreement (i) give (if
audited) a true and fair view of, or (if unaudited) fairly present, the
financial condition (consolidated in the case of Smurfit Kappa Funding’s
Accounts) of the relevant person as at the date to which those Accounts were
drawn up and the results of operations for the Accounting Period then ended
(except that in the case of the monthly Accounts of Smurfit Kappa Funding, such
Accounts must fairly present its consolidated results of operations for that
Accounting Period, provided that in the case of monthly selected balance sheet
information such information has not been consolidated and so may be subject to
quarterly adjustments), and (ii) comprise at least a balance sheet (or in the
case of monthly Accounts selected balance sheet items), profit and loss account
and cash flow statement for or as at the end of the relevant Accounting Period
(consolidated in the case of Smurfit Kappa Funding’s Accounts).

(b)                                 The
Parent must ensure that all annual audited Accounts are prepared in accordance
with the Accounting Principles, consistently applied.

(c)                                  The
Parent must ensure that all unaudited Accounts are prepared in accordance with
or on a basis consistent in all material respects (subject to year-end
adjustments) with the Accounting Principles, consistently applied, and show at
least the information provided for in the Accounts.

(d)                                 The
Parent must ensure that each set of Accounts for an annual or quarterly
Accounting Period is accompanied by a report of the Chief Financial Officer
explaining the main financial issues arising during that period and any
material changes against the budget for that period as supplied under this
Agreement and comparing the financial performance for such period against the
equivalent period in the previous financial year.

(e)                                  The
Parent must notify the Facility Agent of any material change in the Accounting
Principles used in the Accounts (excluding for the avoidance of doubt the
change to IFRS as set out in the definition of Accounting Principles).

(f)                                    If
requested by the Facility Agent, the Parent must supply to the Facility Agent:

 105
 

(i)                                     a
full description of any change notified under paragraph (e) above; and

(ii)                                  a
reconciliation statement (the Reconciliation Statement) showing sufficient
information, in such detail and format as may be reasonably required by the
Facility Agent, to enable the Finance Parties to make a proper comparison
between the financial position shown by the set of Accounts prepared on the
changed basis and the most recent audited Accounts (or if none, the Base
Financial Statements) delivered to the Facility Agent under this Agreement and
prepared according to the Accounting Principles.

(g)                                 If
requested by the Parent, following any change referred to in paragraph (e)
above, the Facility Agent must enter into discussions for a period of not more
than 30 days with a view to using reasonable endeavours to agree any
amendments required to be made to Clause 22.1 (Financial
Undertakings), Clause 12.3 (Margin Adjustments),
Clause 11.6 (Mandatory Prepayment — Excess Cash Flow)
and Clause 11.3 (IPO) and any other provisions
which the parties consider appropriate to ensure that the change does not
result in a material alteration to the commercial effect of the terms of this
Agreement (including without limitation the headroom for the Financial
Undertakings in Clause 22.1 hereof).  Any
agreement between the Parent and the Facility Agent, with the prior consent of
the Majority Lenders, will be binding on all the Parties and from the time of
such agreement no Reconciliation Statements will need to be delivered in
respect of the relevant changes.

(h)                                 If
no agreement is reached under paragraph (g) above on the required
amendments to this Agreement, the Parent may, at the expiry of the 30 day
period mentioned in paragraph (g) or earlier if the Facility Agent acknowledges
that no agreement will be reached within such period, appoint its auditors or
an independent firm of accountant’s (in each case acting as experts and not
arbitrators) to determine any amendment required to be made to Clause 22.1 (Financial Undertakings), Clause 12.3 (Margin
Adjustments), Clause 11.6 (Mandatory Prepayment —
Excess Cash Flow) and Clause 11.3 (IPO)
and any other provisions which those auditors or accountants consider appropriate
to ensure that the change does not result in a material alteration to the
commercial effect of the terms of this Agreement (including without limitation
the headroom for the Financial Undertakings in Clause 22.1 hereof).  Those amendments shall take effect when so
determined by those auditors or, as the case may be, accountants and from the
time of such determination no Reconciliation Statements will need to be
delivered in respect of the relevant changes. 
The cost and expense of those auditors or accountants shall be for the
account of the Company.

(i)                                     If
and for so long as no agreement or determination is arrived at as referred to
in paragraphs (g) or (h) above on the required amendments to this
Agreement, the Parent must comply with requests by the Facility Agent for
Reconciliation Statements.

 106
 

21.3                           Compliance
Certificate

(a)                                  The
Parent must supply to the Facility Agent a Compliance Certificate with each set
of annual and quarterly Accounts of Smurfit Kappa Funding supplied to the
Facility Agent under this Agreement.

(b)                                 A
Compliance Certificate must be signed by an authorised signatory on behalf of
the Parent (without personal liability) and, in the case of a Compliance
Certificate supplied with Smurfit Kappa Funding’s annual audited consolidated Accounts,
the Auditors (but only so long as the Auditors generally agree to give such
certificates)(provided that the Auditors will not be required to confirm that
no Default is outstanding and may confirm the other matters set out in the
Compliance Certificate in the usual form used by such Auditors provided such
confirmation is addressed to and capable of being relied on by the Finance
Parties).

21.4                           Budget

(a)                                  The
Parent must supply to the Facility Agent promptly following approval by its
board of directors and in any event not later than 45 days after the beginning
of each annual Accounting Period a budget for that Accounting Period.

(b)                                 The
budget must be:

(i)                                     prepared
in the same manner in all material respects, and show in all material respects
the information provided for, in the applicable annual period in the Financial
Model; and

(ii)                                  prepared
on a basis consistent with the Accounting Principles; and

(iii)                               approved
by the board of directors of the Parent.

(c)                                  If
the Parent materially updates or changes the budget referred to above, it shall
promptly deliver to the Facility Agent, in sufficient copies for each of the
Lenders, such updated or changed budget together with a written explanation of
the main changes in such budget.

(d)                                 The
budget shall include a projected balance sheet, projected profit and loss
account, projected cash flow statement and projected cash flow statement and
projected expenditure together with a summary of all material assumptions and
other bases upon which those projections were made for the relevant financial
year.

21.5                           Presentations

Once in every annual Accounting Period, at least two
directors of the Parent (one of whom must be the Chief Financial Officer) must,
if requested to do so by the Facility Agent, give a presentation (on a date and
at a venue agreed with the Facility Agent) to the Finance Parties as to:

(a)                                  the
on-going business and financial performance of the Group; and

 107
 

(b)                                 any
other matter which a Finance Party may reasonably request.

21.6                           Auditors

(a)                                  Smurfit
Kappa Funding must promptly appoint one of the firms named in the definition of
Auditors to audit the consolidated annual financial statements of Smurfit Kappa
Funding .

(b)                                 If
Smurfit Kappa Funding changes its auditors it must promptly notify the Facility
Agent.  Smurfit Kappa Funding may change
its auditors provided that it may only change its auditors to (i) one of
the firms specifically named in the definition of Auditors or (ii) to any other
firm of independent public accountants of international standing unless the
Facility Agent notifies it that the Majority Lenders have objected to such
other firm (and it shall notify the Facility Agent of the identity of such
other firm at least 30 days prior to the proposed appointment).

(c)                                  If
the Facility Agent (i) reasonably believes that an Event of Default has
occurred or is reasonably likely to occur or (ii) has reasonable grounds to
believe that any financial information provided is materially inaccurate and in
either case wishes to discuss the financial position of any member of the Group
with the Auditors, the Facility Agent may notify the Parent, stating the
questions or issues which the Facility Agent wishes to discuss with the
Auditors.  In this event, the Parent must
ensure that the Auditors are authorised (at the expense of the Parent):

(i)                                     to
discuss the financial position of each member of the Group with the Facility
Agent on request from the Facility Agent (provided that representatives of the
Parent shall be given the opportunity to attend any such discussion, and if so
required representatives of the Parent and Smurfit Kappa Funding (as
appropriate) must be present when required by the Facility Agent acting
reasonably); and

(ii)                                  to
disclose to the Facility Agent for the Finance Parties any information which
the Facility Agent may reasonably request.

21.7                           Information
— miscellaneous

The Parent must supply to the Facility Agent (in
sufficient copies for all the Lenders if the Facility Agent so requests):

(a)                                  at
the same time as the same are despatched, copies of all documents required by
law to be despatched by the Parent to its shareholders generally (or any class
of them) and copies of all documents despatched by any Material Group Member to
its creditors generally (or any class of them);

(b)                                 promptly
upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings which are current or pending and which might, if
adversely determined, have a Material Adverse Effect or which would involve
liability or potential or alleged liability in excess of €30,000,000;

 108
 

(c)                                  promptly
on request, a list of the then current Material Subsidiaries;

(d)                                 copies
of any authorisation required under any law or regulation to enable an Obligor
to perform its obligations under, or for the validity or enforceability of, any
Senior Finance Document (except to the extent that disclosure of the
information would breach any law, regulation or stock exchange requirement);

(e)                                  promptly
on any member of the Group making a public filing with the SEC, a copy of any
such public filing;

(f)                                    promptly
on request, an up to date copy of its shareholders’ register; and

(g)                                 promptly
on request, such further information regarding the financial condition, assets
and operations of the Group and/or any member thereof (including any requested
amplification or explanation of any item in the Accounts, budgets or other
material provided by any Obligor under this Agreement) as any Finance Party
through the Facility Agent may reasonably request.

21.8                           Notification
of Default

(a)                                  Unless
the Facility Agent has already been so notified by another Obligor, each
Obligor must notify the Facility Agent of any Default (and the steps, if any,
being or proposed to be taken to remedy it) promptly upon becoming aware of its
occurrence.

(b)                                 Promptly
on request by the Facility Agent (such request not to be made more than once in
any financial year unless the Facility Agent has reasonable grounds for
believing that there is an outstanding Default), the Parent must supply to the
Facility Agent a certificate, signed by two of its authorised signatories on
its behalf, certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps, if any, being or proposed to
be taken to remedy it.

21.9                           Year
end

The Parent must:

(a)                                  procure
that each annual Accounting Period, and each financial year-end of it and
each Material Group Member, falls on 31st December or, in the case of a
Material Group Member other than the Parent and Smurfit Kappa Funding, if not
on 31st December, on such date in the seven days before or after such date as
may be permitted by the Accounting Principles; and

(b)                                 procure
that each quarterly Accounting Period and each financial quarter of it and each
Material Group Member ends on an Accounting Date or, in the case of a Material
Group Member other than the Parent and Smurfit Kappa Funding, if not an
Accounting Date, on such date in the seven days before or after such date as
may be permitted by the Accounting Principles.

 

 109

21.10                     Syndication

The Parent must ensure
that all members of the Group:

(a)                                  provide
all reasonably requested financial and other information in its possession and
all reasonable assistance to the Arrangers in the preparation of an information
memorandum for syndication of the Facilities;

(b)                                 comply
with all reasonable requests from the Arrangers and the Facility Agent (on
behalf of potential lenders) for information and access to the Group’s
operating sites; and

(c)                                  make
available senior management to give presentations to prospective lenders at
reasonable times and venues agreed by the Parent and the Arrangers.

21.11                     Use of
websites

(a)                                  Except
as provided below, the Parent may deliver any information under this Agreement
to a Lender by posting it on to an electronic website if:

(i)                                     the
Facility Agent and the Majority Lenders agree;

(ii)                                  the
Parent and the Facility Agent designate an electronic website for this purpose;

(iii)                               the
Parent notifies the Facility Agent of the address of and password for the
website; and

(iv)                              the
information posted is in a format agreed between the Parent and the Facility
Agent.

The Facility Agent must supply each relevant Lender
with the address of and password for the website.

(b)                                 Notwithstanding
the above, the Parent must supply to the Facility Agent in paper form a copy of
any information posted on the website together with sufficient copies for:

(i)                                     any
Lender not agreeing to receive information via the website; and

(ii)                                  within
five Business Days of request any other Lender, if that Lender so requests.

(c)                                  The
Parent must promptly upon becoming aware of its occurrence, notify the Facility
Agent if:

(i)                                     the
website cannot be accessed;

(ii)                                  the
website or any information on the website is infected by any electronic virus
or similar software;

 110
 

(iii)                               the
password for the website is changed; or

(iv)                              any
information to be supplied under this Agreement is posted on the website or
amended after being posted.

If the circumstances in paragraphs (i) or (ii) above
occur, the Parent must supply any information required under this Agreement in
paper form.

22.                               FINANCIAL
COVENANTS

22.1                           Financial
Undertakings

The Parent will procure
that:

(i)                                     Consolidated EBITDA to Consolidated Total Net Interest
Payable:  Consolidated EBITDA
for any period comprising an annual Accounting Period of the Smurfit Kappa
Funding Group or four (or less, taking into account Clause 22.3 (Initial Periods)) consecutive quarterly
Accounting Periods of the Smurfit Kappa Funding Group (taken together as one
period) ending on any Accounting Date with the first test date on 30 September
2006 falling on or about any of the dates specified in the table below, shall
not be less than W times Consolidated Total Net Interest Payable for such
period, where W has the value indicated in such table opposite such date;

(ii)                                  Consolidated Cash Flow to Consolidated Total Debt
Service:  Consolidated Cash
Flow for any period comprising an annual Accounting Period of the Smurfit Kappa
Funding Group or four consecutive quarterly Accounting Periods of the Smurfit
Kappa Funding Group (taken together as one period) and ending on any Accounting
Date falling on or about any of the dates specified in the table below, shall
not be less than X times Consolidated Total Debt Service for such period, where
X has the value indicated in such table opposite such date;

(iii)                               Consolidated Total Net Borrowings to Consolidated
EBITDA:  Subject to Clause
22.3 (Initial Periods), Consolidated Total Net
Borrowings as at each of the Accounting Dates falling on or about any of the
dates specified in the table below shall not, prior to the occurrence of a
Qualifying IPO, be more than Y times, and after a Qualifying IPO be more than Z
times, Consolidated EBITDA for any period comprising an annual Accounting
Period of the Smurfit Kappa Funding Group or four consecutive quarterly
Accounting Periods of the Smurfit Kappa Funding Group (taken together as one
period) ending on any such Accounting Date, where Y or Z, as applicable, has
the value indicated in such table opposite such date.

 111
 

 

	
  Accounting Date

  	
   

  	
   

  	
   

  	
  W

  	
   

  	
  X

  	
   

  	
  Y

  	
   

  	
  Z

  	
   

  
	
   

  	
   

  	
  (x)

  	
   

  	
  (x)

  	
   

  	
  (x)

  	
   

  	
  (x)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/09/06

  	
   

  	
   

  	
  2.00

  	
   

  	
   

  	
  (no test)

  	
   

  	
   

  	
  6.75

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/06

  	
   

  	
   

  	
  2.10

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  6.50

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/07

  	
   

  	
   

  	
  2.15

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  6.45

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/07

  	
   

  	
   

  	
  2.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  6.25

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/07

  	
   

  	
   

  	
  2.25

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  6.00

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/07

  	
   

  	
   

  	
  2.35

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  5.85

  	
   

  	
   

  	
   

  	
  5.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/08

  	
   

  	
   

  	
  2.40

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  5.75

  	
   

  	
   

  	
   

  	
  4.95

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/08

  	
   

  	
   

  	
  2.45

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  5.45

  	
   

  	
   

  	
   

  	
  4.90

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/08

  	
   

  	
   

  	
  2.50

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  5.25

  	
   

  	
   

  	
   

  	
  4.85

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/08

  	
   

  	
   

  	
  2.55

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.95

  	
   

  	
   

  	
   

  	
  4.75

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/09

  	
   

  	
   

  	
  2.60

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.90

  	
   

  	
   

  	
   

  	
  4.70

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/09

  	
   

  	
   

  	
  2.65

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.75

  	
   

  	
   

  	
   

  	
  4.65

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/09

  	
   

  	
   

  	
  2.75

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.65

  	
   

  	
   

  	
   

  	
  4.60

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/09

  	
   

  	
   

  	
  2.80

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.50

  	
   

  	
   

  	
   

  	
  4.50

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/10

  	
   

  	
   

  	
  2.85

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.40

  	
   

  	
   

  	
   

  	
  4.45

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/10

  	
   

  	
   

  	
  2.90

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.30

  	
   

  	
   

  	
   

  	
  4.40

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/10

  	
   

  	
   

  	
  2.95

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.25

  	
   

  	
   

  	
   

  	
  4.35

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/10

  	
   

  	
   

  	
  3.00

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.20

  	
   

  	
   

  	
   

  	
  4.25

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/11

  	
   

  	
   

  	
  3.05

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.15

  	
   

  	
   

  	
   

  	
  4.20

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/11

  	
   

  	
   

  	
  3.10

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.10

  	
   

  	
   

  	
   

  	
  4.15

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/11

  	
   

  	
   

  	
  3.15

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.05

  	
   

  	
   

  	
   

  	
  4.10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/11

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/12

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.95

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/12

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.90

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/12

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/12

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/13

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  

 

 112
 

 

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/13

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/13

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/12/13

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31/03/14

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/06/14

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/09/14

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30/12/14

  	
   

  	
   

  	
  3.20

  	
   

  	
   

  	
  1.00

  	
   

  	
   

  	
  3.85

  	
   

  	
   

  	
   

  	
  4.00

  	
   

  	
   

  

 

(iv)                              Maximum Capital Expenditure. In respect of
each of the annual Accounting Periods ending on or about the dates set out in
column (1) below (each an “Expenditure Period”) the Group taken as a whole will
not make Capital Expenditure (excluding: (a) Capital Expenditure to the extent
paid out of disposal or insurance proceeds received in respect of a damaged or
destroyed asset; (b) Capital Expenditure to the extent paid out of the Excess
Cash Flow for such period that is not prepaid under Subclause 11.6 (Mandatory Prepayment - Excess Cash Flow)
or from Permitted Equity Injections; (c) to the extent it has been included in
Capital Expenditure, the amount of consideration for the Target Shares and
related costs and expenses to the extent provided for in the Structure
Memorandum and/or Funds Flow Statement and/or the Financial Model; and
(d) Capital Expenditure financed by hire purchase or a finance lease to
the extent permitted under this Agreement) on assets in excess of the amount
set out in column (2) below against the relevant date:

	
  (1)

  	
   

  	
  (2)

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  	
  € million

  	
   

  
	
  31/12/06

  	
   

  	
  440.0

  	
   

  
	
  31/12/07

  	
   

  	
  410.0

  	
   

  
	
  31/12/08

  	
   

  	
  365.0

  	
   

  
	
  31/12/09

  	
   

  	
  345.0

  	
   

  
	
  31/12/10

  	
   

  	
  360.0

  	
   

  
	
  31/12/11

  	
   

  	
  435.0

  	
   

  
	
  31/12/12

  	
   

  	
  435.0

  	
   

  
	
  31/12/13

  	
   

  	
  395.0

  	
   

  
	
  31/12/14

  	
   

  	
  395.0

  	
   

  
						

 

PROVIDED THAT:

(a)                                  up
to fifty per cent. (50%) of any such Capital Expenditure limit not utilised in
any Expenditure Period may be carried forward for one Expenditure Period only
and added (otherwise than for the purposes of the further application of this
proviso) to the Capital Expenditure limit for the next Expenditure Period; and

 113
 

(b)                                 in
any Expenditure Period up to fifty per cent. (50%) of the Capital Expenditure
limit for the next Expenditure Period may be utilised in the current
Expenditure Period (the “Brought Forward Amount”), with the Capital Expenditure for
the next Expenditure Period being reduced by an amount equal to the Brought
Forward Amount.

Any amount carried forward from one Expenditure Period
to the next shall be deemed to be spent before all of the other capital
expenditure permitted to be spent in such Expenditure Period has been spent.

22.2                           Definitions

(a)                                  Subject
to Clause 22.3 (Initial Periods),
in this Agreement the following terms have the meanings set out below:

(i)                                     “Consolidated
Cash Flow” for the
Smurfit Kappa Funding Group for any period means Consolidated EBITDA for the
Smurfit Kappa Funding Group for such period:

plus the amount of any tax
rebate or credit in respect of any advance corporation tax, mainstream
corporation tax or withholding tax or their equivalents in any relevant
jurisdiction actually received in cash by any member of the Smurfit Kappa
Funding Group during such period;

plus (to the extent not
otherwise included) the amount (net of tax) of any dividends or other profit
distributions received in cash by any member of the Smurfit Kappa Funding Group
(which is not a Joint Venture) from any associated company (not being a member
of the Group) during such period;

minus all Capital Expenditure
actually paid (excluding: (a) Capital Expenditure to the extent paid out of
disposal proceeds or out of insurance proceeds received in respect of a damaged
or destroyed asset; (b) capital Expenditure to the extent paid out of the
retained Excess Cash Flow for any previous period or from Permitted Equity
Injections; (c) to the extent it has been included in Capital Expenditure, the
amount of consideration for the Target Shares and related costs and expenses to
the extent provided for in the Structure Memorandum and/or Funds Flow Statement
and/or the Financial Model; and (d) Capital Expenditure financed by hire
purchase or a finance lease to the extent permitted under this Agreement) by
members of the Smurfit Kappa Funding Group during such period;

minus all advance corporation
tax, mainstream corporation tax, capital gains tax and withholding tax actually
paid during such period and minus the amount of any withholding tax withheld
from any amount paid to any member of the Smurfit Kappa Funding Group which has
been taken into account in calculating Consolidated EBITDA for the Smurfit
Kappa Funding Group for such period;

 114
 

minus any increase or plus any decrease in Consolidated Net Working Investment for
the Smurfit Kappa Funding Group between the Accounting Dates at the beginning
and end of such period;

minus all non-cash credits
and plus all non-cash debits and
other non-cash charges included in establishing Consolidated EBITDA for
the Smurfit Kappa Funding Group for such period (to the extent not included in
calculating Consolidated Net Working Investment for the Smurfit Kappa Funding
Group as at the Accounting Date on which such period ends);

plus any positive and minus any negative extraordinary or exceptional items
received or which are paid by any member of the Smurfit Kappa Funding Group in
cash during such period to the extent not already taken into account in
calculating Consolidated EBITDA for the Smurfit Kappa Funding Group for such
period excluding any restructuring costs funded by a Utilisation under the
Restructuring Facility or funded by Synergy Disposals;

plus any proceeds of disposals
during such period (without double counting) to the extent such proceeds are
not reinvested or committed to be reinvested as permitted under Clause
11.4(a)(ii)(A) (Mandatory Prepayment —
disposals, insurance, warranty and report claims) or prepaid or
required to be prepaid as required under Clause 11 (Prepayment and Cancellation) and in relation to Required
Regulatory Disposals, the relevant amounts will be included regardless of
whether they are applied in reinvestment, committed to be reinvested, prepaid
or required to be prepaid;

minus the amount of dividends or
other distributions paid by any member of the Smurfit Kappa Funding Group to
any shareholder of or, as the case may be, partner in such member of the
Smurfit Kappa Funding Group who is not a member of the Smurfit Kappa Funding
Group;

plus the proceeds of any claim
against Vendors under the Share Purchase Agreement but after deduction of all
taxes applicable on and all reasonable costs, fees and expenses incurred in
connection with such claim and to the extent such proceeds are not reinvested
as permitted under Clause 11.4(a)(ii)(F) (Mandatory
Prepayment — disposals, insurance, warranty and report claims) or
pre-paid as permitted or required under Clause 11 (Prepayment and cancellation);

plus the amount of any Cure Amount as permitted
pursuant to Clause 24.21 (Right to Cure
Financial Ratios) (save to the extent already included in
Consolidated EBITDA) during the relevant period and, for the avoidance of
doubt, excludes any addition of the amount of any Permitted Equity Injections
except as permitted pursuant to Clause 24.21 (Right
to Cure Financial Ratios);

 115
 

plus the proceeds of any permitted subscription for
equity in any member of the Group (to the extent paid in cash) by any person
who is not a member of the Group excluding any IPO Proceeds;

plus the cash proceeds of permitted subordinated
loans to members of the Group by any person who is not a member of the Group.

(ii)                                  “Consolidated
EBITDA” for the
Smurfit Kappa Funding Group for any period means the total operating profit of
the Smurfit Kappa Funding Group for such period:

before deducting any
depreciation, depletion or amortisation whatsoever (including for the avoidance
of doubt amortisation of any goodwill arising from the Acquisition at the First
Drawdown and before deducting the amortisation
of any Acquisition and Refinancing Costs);

before taking into account all
extraordinary items and all exceptional items (in each case whether positive or
negative) (including the restructuring costs and any fees, costs and expenses
incurred by any member of the Group during relevant period in relation to the
amendments to the Finance Documents pursuant to the Amendment and Restatement
Agreement and in relation to the Approved IPO and the transactions required in
connection therewith);

before deducting advance
corporation tax, mainstream corporation tax, capital gain tax and their
equivalents in any relevant jurisdiction and any withholding by one member of
the Smurfit Kappa Funding Group in respect of a payment to another member of
the Smurfit Kappa Funding Group (without double counting);

before taking into account Consolidated
Total Net Interest Payable (including any gross-up payments in respect of
withholding taxes for any Interest included in Consolidated Total Net Interest
Payable) and any prepayment penalties and premiums;

after adding back (to the extent
otherwise deducted) any loss against book value incurred by the Smurfit Kappa
Funding Group on the sale, lease or other disposal of any asset (other than the
sale of trading stock), or on the revaluation thereof, during such period;

after deducting (to the extent
otherwise included) any gain over book value arising in favour of the Smurfit
Kappa Funding Group on the sale, lease or other disposal of any asset (other
than the sale of trading stock) during such period and any gain arising on any
revaluation of any asset during such period;

after deducting the amount of
profit of any entity in which any member of the Smurfit Kappa Funding Group has
an ownership interest (but which is not itself a member of the Smurfit Kappa
Funding Group) to the extent that the amount of such profit included in 

 116
 

the Accounts of the Smurfit Kappa Funding Group
exceeds the amount (net of any applicable withholding tax) received in cash by
members of the Smurfit Kappa Funding Group through dividends or distributions
by such entity;

after adding net losses with
respect to investment in any person other than a Subsidiary during the period
to the extent the amount by which such net losses included in the Accounts of
Smurfit Kappa Funding Group exceed the amount of Cash or Cash Equivalents
contributed to such person on account of such net losses during the period;

after adding (to the extent not
already included) the proceeds from any business interruption insurance policy;

after adding back (to the extent
otherwise deducted) the management fees paid in compliance with this Agreement
and any Arranger’s fee paid to the Arrangers under the Fee Letter during such
period;

after adding back (to the extent
otherwise deducted) any increase in pension fund provisions during such period,
and after deducting (to the extent otherwise included) any decrease in pension
fund provisions during such period, to the extent, in each case, that such
pension fund provisions arise solely from adjustments to the method of
calculating pension liabilities (including relevant investment assumptions)
which the Smurfit Kappa Funding Group is required by law to use;

after adding any Cure Amount (as
defined in Clause 24.21 (Right to Cure Financial Ratios)) contributed
in the Relevant Period to the Group pursuant to an exercise of the Cure Right
pursuant to Clause 24.21 (Right to Cure Financial Ratios) and, for
the avoidance of doubt, excludes any addition of the amount of any Permitted
Equity Injections except as permitted pursuant to Clause 24.21 (Right to Cure Financial Ratios);

before deducting accounting charges related to share-based
payments or any other employee incentive schemes, entered into as part of
equity based remuneration of employees of the Smurfit Kappa Funding Group; and

before taking into account any gains or losses for change in fair value
arising in respect of biological assets,

together with any other
adjustments requested by the Company and approved by the Facility Agent to be
made to the total operating profit of the Smurfit Kappa Funding Group provided
that such adjustment  would be consistent
with the treatment in Consolidated EBITDA as calculated immediately prior to
the adoption of IFRS as the Accounting Principles applicable to the Smurfit
Kappa Funding Group accounts.

 117
 

(iii)                               “Consolidated
Net Working Investment”
as at any Accounting Date (for which purpose the Closing Date shall be deemed
to be an Accounting Date) means in respect of the Smurfit Kappa Funding Group
Consolidated Current Commercial Assets for the Smurfit Kappa Funding Group
minus Consolidated Current Commercial Liabilities for the Smurfit Kappa Funding
Group, all as at such Accounting Date. 
For this purpose:

(A)                              “Consolidated Current Commercial Assets” in
respect of the Smurfit Kappa Funding Group as at any Accounting Date means all
of the current assets (other than Cash, Cash Equivalents, any credit receivable
for advance corporation tax, mainstream corporation tax, withholding tax
suffered (or their equivalents in any other jurisdiction), Interest receivable
and repayments of Financial Indebtedness) of the Smurfit Kappa Funding Group as
at such Accounting Date;

(B)                                “Consolidated Current Commercial Liabilities” in respect of the Smurfit Kappa
Funding Group as at any Accounting Date means all of the current liabilities
(excluding Financial Indebtedness within paragraphs (a), (b), (c), (d), (e),
(f), (h), (i), (j) or (k) (unless consisting of a liability in relation to
items falling within paragraph (g) without double counting of that definition)
and any accrued or unpaid Interest and any liabilities in respect of advance
corporation tax, mainstream corporation tax, withholding tax, and dividends,
redemptions and other distributions payable to shareholders of Smurfit Kappa
Funding (whether or not declared)) as at such Accounting Date.

(iv)                              “Consolidated
Total Debt Service”
for the Smurfit Kappa Funding Group for any period means Consolidated Total Net
Interest Payable for the Smurfit Kappa Funding Group for such period (but
excluding any net payment made to the providers of interest rate hedging in
place prior to the date of this Agreement pursuant to the close-out of
interest rate hedging agreements in place prior to the date of this Agreement);

plus all scheduled Financial
Indebtedness of members of the Smurfit Kappa Funding Group which fell due for
repayment whether or not paid during or deferred for payment after such period
and/or was repaid during such period, but excluding any principal amount which
fell due under any overdraft or revolving credit facility (including without
limitation, the Revolving Credit Facility and any Ancillary Facility) and which
was available for simultaneous redrawing according to the terms of such
facility, and excluding any principal amount of Remaining Debt repaid to the
extent refinanced from a drawing under another Remaining Debt Agreement.

(v)                                 “Consolidated
Total Borrowings”
in respect of the Smurfit Kappa Funding Group at any time means the aggregate
at that time of the Financial Indebtedness (including, for the avoidance of
doubt, any 

 118
 

indebtedness under any bond, note or other
similar instrument issued under any Permitted Receivables Securitisation, but
excluding: (i) Financial Indebtedness calculated on a mark-to-market basis
under any interest rate hedging agreement or instrument, including without
limitation under the Hedging Documents, (ii) (to the extent they are not
required to be accounted for as borrowings under the Accounting Principles)
performance bonds and guarantees provided in the ordinary course of business,
but not provided in respect of Financial Indebtedness of a person and (iii) (to
the extent they are not required to be accounted for as borrowings under the
Accounting Principles) guarantees provided to pension scheme trustees,
administrators and like entities) of the members of the Smurfit Kappa Funding
Group from sources external to the Smurfit Kappa Funding Group less (for the
period from the Closing Date to 30 September 2006) the amount of any costs
incurred by the Smurfit Kappa Funding Group in connection with any
restructuring during the period after the Closing Date to 30 September 2006.

(vi)                              “Consolidated Total Net Borrowings” in
respect of the Smurfit Kappa Funding Group at any time means Consolidated Total
Borrowings less the aggregate amount at that time of all Cash and Cash
Equivalents held by any member of the Smurfit Kappa Funding Group (including
any cash or cash equivalents which would constitute Cash or Cash Equivalents
but for the fact that they are subject to a Security Interest).

(vii)                           “Consolidated Total Net Interest Payable”
for the Smurfit Kappa Funding Group for any period means the Interest accrued
during such period as an obligation of any member or members of the Smurfit
Kappa Funding Group (whether or not paid or capitalised during or deferred for
payment after such period), less (i) any Interest income received and/or
receivable by the Smurfit Kappa Funding Group during such period and
(ii) any Interest obligations to any other member of the Group.

(viii)                        “Smurfit Kappa Funding Group” means Smurfit
Kappa Funding and its Subsidiaries.

	
  

  	
   

  	
  (b)

  	
  (i)

  	
  All the terms defined in paragraph (a) above are to
  be determined on a consolidated basis and (except as expressly included or
  excluded in the relevant definition) in accordance with the Accounting
  Principles and as determined from the consolidated Accounts of the Smurfit
  Kappa Funding Group for the relevant periods delivered pursuant to
  Clause 21.1 (Financial statements).  All non-euro amounts shall be
  converted to euro at the rate used to calculate Consolidated EBITDA in the
  relevant Accounts in accordance with the Accounting Principles

  

 

(ii)                                  For
the purposes of paragraph (a) above no item shall be deducted or credited more
than once in any calculation.

 119

22.3                           Initial
periods

For the purposes of calculating the Consolidated Total
Net Interest Payable, the Consolidated Total Net Interest Payable in respect of
the period from 1 January 2006 to 30 September 2006 shall be deemed annualised
by multiplying the Consolidated Total Net Interest Payable for the 9 month
period to 30 September 2006 by 4/3.  For
the purpose of calculating Consolidated EBITDA as at 30 September 2006, the
Consolidated EBITDA of the combined Group (as calculated on the basis of the
last twelve months’ actual results shall be used).

23.                               GENERAL
COVENANTS

23.1                           General

Each Obligor agrees to be bound by the covenants set
out in this Clause relating to it and, where the covenant is expressed to
apply to each member of the Group, each Obligor must ensure that each of its
Subsidiaries (other than members of the SPV Group unless otherwise specified in
this Clause) also performs that covenant.

23.2                           Authorisations

(a)                                  Each
Obligor must promptly obtain, maintain and comply with the terms of any authorisation
required under any law or regulation to enable it to perform its obligations
under, or for the validity or enforceability of, any Transaction Document.

(b)                                 Each
member of the Group must obtain, maintain and comply with the terms of any
authorisation required under any law or regulation to enable it to carry on its
business where failure to do so would have a Material Adverse Effect.

23.3                           Compliance
with laws

Each member of the Group must comply in all respects
with all laws to which it is subject where failure to do so would have a
Material Adverse Effect.

23.4                           Pari
Passu ranking

Each Obligor must ensure that its payment obligations
under the Senior Finance Documents will at all times rank at least pari passu
with all its other present and future unsecured unsubordinated payment
obligations, except for obligations mandatorily preferred by law applying to
companies generally in its jurisdiction of incorporation or in any jurisdiction
in which it carries on its business.

23.5                           Negative
pledge

(a)                                  Except
as provided below, no member of the Group may create or allow to exist any
Security Interest on any of its assets.

(b)                                 Paragraph (a)
does not apply to:

(i)                                     any
Security Interest created or evidenced by the Security Documents;

 120
 

(ii)                                  any
Security Interest over the assets of members of the Target Group in existence
on the Closing Date, provided such Security Interest is released and discharged
within 60 days of the Closing Date;

(iii)                               any
Security Interest in existence at the Closing Date securing any Remaining Debt
listed in Schedule 10 (Remaining Debt
Agreements), but only to the extent that the principal amount
secured by that Security Interest has not been increased or its maturity date
extended in contemplation of, or since, the Closing Date, and replacement
security over the same assets securing any permitted amendments or refinancings
of Remaining Debt;

(iv)                              any
Security Interest comprising a netting or set-off arrangement (and if
customary in the relevant jurisdiction, any other Security Interest over cash
balances granted in favour of the bank providing clearing arrangements) entered
into by a member of the Group in the ordinary course of its banking
arrangements for the purpose of netting debit and credit balances, provided
that this does not permit credit balances of Obligors to be netted with debit
balances of members of the Group which are not Obligors or for credit balances
of Obligors to be charged to secure any liabilities of members of the Group
which are not Obligors to the extent that loans by Obligors to such members of
the Group which are not Obligors (or guarantees by Obligors in respect of their
obligations) would not be permitted under Clause 23.14 (Loans out) (or Clause 23.12 (Third party guarantees));

(v)                                 any
netting of payments under permitted Treasury Transactions;

(vi)                              any
lien arising by operation of law or by agreement to substantially the same
effect and in the ordinary course of business and not as a result of any
default or omission by any member of the Group;

(vii)                           any
Security Interest over and existing at the time of acquisition on an asset of
any person, acquired by a member of the Group after the First Drawdown Date but
only to the extent that the principal amount secured by that Security Interest
has not been incurred or increased or its maturity date extended in
contemplation of, or since, the acquisition;

(viii)                        any
Security Interest over goods and documents of title thereto arising under
documentary credit transactions entered into in the ordinary course of trade
and on terms customary in that trade;

(ix)                                a
retention of title arrangement over goods acquired in the ordinary course of
trade where the purchase of the asset is not in breach of  paragraph (c)(iii) below;

(x)                                   any
Security Interest under finance leases, hire purchase agreements, conditional
sale agreements or other agreements for the acquisition of assets on deferred
payment terms to the extent such Security Interest relates only to the asset
leased or acquired and provided that the 

 121
 

Financial
Indebtedness secured thereby is permitted under the terms of this Agreement;

(xi)                                any
Security Interest created with the prior written consent of the Facility Agent
(acting on the instructions of the Majority Lenders);

(xii)                             any
Security Interest granted in favour of the bondholders of the 2025 Bonds to the
extent such Security Interests are required by the terms of the indenture for
such bonds by reason of the granting of the Security Interests under the
Security Documents and provided such Security Interests are also charged in favour
of the Finance Parties under the Security Documents and are subject to the
terms of the Priority Agreement;

(xiii)                          any
Security Interest securing the Bond Refinancing Debt but only to the extent it
is over assets also charged in favour of the Finance Parties under the Security
Documents and subject to such Security Interests being subject to the Priority
Agreement;

(xiv)                         any
Security Interest granted pursuant to or in connection with a Permitted
Receivables Securitisation;

(xv)                            any
Security Interest in property situated in any country in Latin America or
Albania, Belarus, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic,
Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Romania,
Serbia & Montenegro, Russia, Slovakia, Slovenia, Turkey or the Ukraine, in
which the Group has operations from time to time as permitted by this Agreement
(not being over any asset subject to any Security Interest under the Security
Documents and not being over any asset of the Obligors or any of the Principal
Properties) securing Remaining Debt owed by a member of the Group in such
jurisdiction the aggregate amount of which does not exceed €75,000,000 (or its
equivalent) at any time;

(xvi)                         rights
over cash deposits granted in favour of a landlord for the purposes of securing
performance of rent and service charge obligations under licences, subleases or
leases of real property not prohibited by this Agreement in respect of the
Group;

(xvii)                      statutory
liens imposed by the taxing authorities of any applicable jurisdiction in
respect of any taxes, assessments or levies which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
to such contested taxes are maintained on the books of the appropriate members of
the Group in conformity with the Accounting Principles;

(xviii)                   Security
Interests securing intra-Group loans if claims under such Security
Interests and intra-Group loans are the subject of Transaction Security;

(xix)                           Cash
Cover relating to a Bank Guarantee or Ancillary Facility;

 122
 

(xx)                              Security
Interests over the properties at Alcalá de Henares, Madrid, Canovelles,
Barcelona and Quart de Poblet, Valencia in connection with certain litigation
in Spain to which certain members of the Smurfit Kappa Group are party;

(xxi)                           any
Security Interest granted by Kappa Van Dam B.V. to a developer over real estate
owned by it in Helmond, The Netherlands to secure development costs of a new
site in Helmond; and

(xxii)                        in
addition to the foregoing, any Security Interest securing indebtedness the
amount of which (when aggregated with the amount of any other indebtedness
which has the benefit of a Security Interest not permitted under the preceding
sub-paragraphs) does not exceed €80,000,000 (or its equivalent) at any
time;

(c)                                  No
member of the Group may:

(i)                                     sell,
transfer or otherwise dispose of any of its assets on terms where it is or may
be or may be required to be leased to or re-acquired or acquired by a
member of the Group or any of its related entities unless (1) the disposal (not
being of real property over which the Finance Parties have a mortgage or charge
under the Security Documents registered at the relevant land registry or titles
office) and lease of the asset occurs within 180 days of the date of
acquisition of the asset and provided that the disposal, lease, acquisition and
any related Financial Indebtedness is otherwise permitted under this Agreement
or (2) the disposal is in connection with a Permitted Receivables
Securitisation;

(ii)                                  sell,
transfer or otherwise dispose of any of its receivables (unless the sale,
transfer or other disposal (A) is to an Obligor and is in accordance with past
practice of the Group (and shall include, for the avoidance of doubt, the extension
of current invoice discounting practices to new Group members) or (B) is by a
member of the Group which is not an Obligor to another member of the Group
which is not an Obligor or (C) is by an Obligor and is a disposal
permitted pursuant to Clause 23.6 (Disposals)
or (D) is pursuant to or in connection with a Permitted Receivables
Securitisation (and for the avoidance of doubt the Net Securitisation Proceeds
of which shall be subject to the application of Subclause 11.5 (Mandatory prepayment — Permitted Securitisation))
or (E) is the discounting of bills and notes in the ordinary course of business
where the resulting Financial Indebtedness is permitted by Clause 23.7 (Financial Indebtedness) or (F) is the
factoring of trade receivables in an aggregate amount not exceeding €30,000,000
at any time outstanding; or

(iii)                               purchase
any asset on retention of title terms (other than hire purchase arrangements
otherwise permitted by this Agreement),

in circumstances where the transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing the
acquisition of an asset.

 123
 

23.6                           Disposals

(a)                                  Except
as provided in paragraph (b) below, no member of the Group may, either in a
single transaction or in a series of transactions and whether related or not
and whether voluntarily or involuntarily, dispose of all or any part of its
assets.

(b)                                 Paragraph
(a) does not apply to any disposal:

(i)                                     of
trading stock or cash made in the ordinary course of the trading activities of
the disposing entity or for payments made under the Senior Finance Documents or
the Securities;

(ii)                                  of
assets (other than shares or securities and interests in real property) on arm’s
length terms in exchange for (or where and to the extent the proceeds of sale
are used to acquire) other assets comparable or superior as to type, value,
quality and title or otherwise used in the business of the Group, provided that
a fixed asset disposed of may only be exchanged or replaced by another fixed
asset;

(iii)                               of
surplus, obsolete or redundant vehicles, plant and equipment, on arm’s length
terms;

(iv)                              of
Non-Core Assets and Non-Core Businesses (or all of the shares in a
company which only owns Non-Core Assets and/or which only carries on a
Non-Core Business) on arm’s length terms and provided that the aggregate
value of Non-Core Assets and Non-Core Businesses (or shares in any
such company) which have been disposed of from the date of this Agreement may
not exceed €250,000,000 (or its equivalent) when aggregated with the value of
the assets or businesses disposed of under Synergy Disposals after the date
hereof;

(v)                                 that
is a Synergy Disposal provided that the aggregate value of Synergy Disposals
from the date of this Agreement may not exceed €250,000,000 (or its equivalent)
when aggregated with the value of the Non-Core Assets or Non-Core Businesses
disposed of after the date hereof;

(vi)                              of
assets (1) to an Obligor, or (2) by a non-Obligor to any member of the
Group or (3) by an Obligor to a non-Obligor where, in the case of (3)
only, one of the following conditions is met: (A) where an equivalent Security
Interest as was originally in place over the asset being sold, transferred or
disposed of is given over the asset by the new owner and if necessary and
reasonably practicable (as determined by the Company or the new owner, acting
reasonably) such new owner grants a guarantee in favour of the Lenders with
sole recourse to the relevant asset or (B) the new owner of the asset gives a
Security Interest in favour of an Obligor which is on-assigned to the
benefit of the Lenders and either (x) the Security Agent and the Company agree
(each acting reasonably) that the grant of a direct Security Interest in favour
of the Lenders is impractical or (y) the Company elects not to 

 124
 

grant a direct
Security Interest over the asset and the aggregate consideration receivable for
such disposals in respect of which the Company has made such elections does not
exceed €50,000,000 or its equivalent in any annual Accounting Period of the
Parent; provided further that where the asset to be sold is subject to
Transaction Security, it will be transferred subject to the existing Security
Interest if the transfer is within the same jurisdiction unless the Company
reasonably decides that it would be impractical to leave it in place in which
case it will be released; or (C) the disposal is in accordance with the
Structure Memorandum or Synergies Report, Business Plan or a Permitted
Reorganisation or (D) the disposal is on commercially reasonable terms (as
determined by the Company or the disposing Obligor, acting reasonably) and the
aggregate consideration receivable for such disposals does not exceed, in the
first 2 years from the Closing Date, €150,000,000 and thereafter €25,000,000 or
its equivalent in any annual Accounting Period of the Parent and provided
further that such baskets in this sub-paragraph (E) shall be increased by
the aggregate amount of disposals made by non-Obligors to Obligors after
the date hereof;

(vii)                           of
Cash Equivalents for cash or in exchange for other Cash Equivalents;

(viii)                        being
the leasing or sub-leasing of vacant property on arm’s length terms;

(ix)                                with
the prior written consent of the Facility Agent (acting on the instructions of
Majority Lenders);

(x)                                   by
the licence of Intellectual Property Rights;

(xi)                                to
other members of the Group specifically provided for in the Structure
Memorandum;

(xii)                             of
cash where such disposal does not breach the other terms of the Senior Finance
Documents;

(xiii)                          of
assets to Joint Ventures to the extent permitted by Subclause 23.27 (Joint Ventures);

(xiv)                         of
assets on arm’s length terms and for cash otherwise permitted by
Subclause 23.5(c) (Negative pledge);

(xv)                            consisting
of set-off or netting arrangements under permitted Treasury Transactions;

(xvi)                         to
another member of the Group as part of a Permitted Reorganisation;

(xvii)                      of
shares in entities which are not a direct or indirect wholly-owned
Subsidiary of the Group (and are not Obligors or Material Subsidiaries)
pursuant to co-sales, take-along or pre-emption arrangements
existing 

 125
 

prior to the
date of this Agreement where any member of the Group can be required by a third
party to dispose of such shares;

(xviii)                   pursuant
to or in connection with a Permitted Receivables Securitisation;

(xix)                           that
are Required Regulatory Disposals;

(xx)                              provided
for in the Business Plan;

(xxi)                           of
fixed assets where the proceeds of the disposal are used within 12 months
of that disposal (or committed to be used within 12 months and are so used
within 18 months of that disposal) for either (A) the purchase of replacement
fixed assets useful to the business or (B) the making of acquisitions permitted
pursuant to Clause 23.10 (Acquisitions);

(xxii)                        on
arm’s length terms where the consideration receivable (when aggregated with the
consideration for any other disposal not allowed under the preceding
paragraphs) does not exceed €25,000,000 or its equivalent in any annual
Accounting Period of the Parent; or

(xxiii)                     pursuant
to the transactions described in the definition of Approved IPO and in the IPO
Structure Paper or, in the case of the Parent, of shares to a Holding Company.

(c)                                  No
member of the Group may enter into any put or call option or similar
arrangement under which a person that is not a member of the Group has a
present or contingent right to require a member of the Group to dispose of or
to acquire all or any part of such person’s shares or assets, where the
disposal or acquisition would breach the terms of any of the Senior Finance
Documents (other than (a) put or call option or similar arrangements existing
prior to the date hereof, including arrangements to acquire minority interests
in Cajas de Carton Sultana S.A de C.V., Industria Cartonera Dominicana,
Fustelpak S.p.A., Carton de Venezuela C.A., Carton de Colombia, S.A.
and Celulosa y Papel de Colombia, S.A., and (b) put and call arrangements
facilitating the acquisition of minority interests in a member of the Group by
a member of a Group).  If such
arrangements are entered into as part of an arrangement having the commercial
effect of a borrowing, the effective borrowing concerned and the exercise or
performance of any such option must not breach any provision of this Agreement.

(d)                                 The
Parent shall not, without prior written consent of the Majority Lenders,
dispose of any of its shares in SPV Ireland and shall procure that SPV Ireland
does not dispose of any of its shares in SPV Offshore or SPV B.V.

23.7                           Financial
Indebtedness

(a)                                  Except
as provided in paragraph (b) below, no member of the Group may incur or permit
to be outstanding any Financial Indebtedness or enter into any off-balance
sheet financing arrangement.

 

 126

(b)                                 Paragraph
(a) does not apply to:

(i)                                     Financial
Indebtedness incurred under the Senior Finance Documents, the Securities and
any Bond Refinancing Debt;

(ii)                                  any
Financial Indebtedness of any person (the “acquired
person”) acquired
by a member of the Group after the First Drawdown Date which is incurred under
arrangements in existence at the date of acquisition, but not incurred or
increased or its maturity date extended in contemplation of, or since, that
acquisition provided that notwithstanding anything else contained in this
Agreement no member of the Group (excluding the acquired person and its
Subsidiaries as at the date of acquisition) shall guarantee, indemnify or
otherwise become liable for such Financial Indebtedness, provide Cash Cover in
respect of or grant any Security Interest as security for such Financial
Indebtedness;

(iii)                               any
Financial Indebtedness under finance or capital leases of vehicles, plant,
equipment or computers and any Financial Indebtedness under conditional sale
agreements or other agreements for the acquisition of assets on deferred
payment terms, provided that the aggregate capital value of all such assets so
leased or acquired under outstanding leases or outstanding conditional sale
agreements or agreements for the acquisition of assets by members of the Group
does not exceed €150,000,000;

(iv)                              any
Financial Indebtedness arising under any Treasury Transaction permitted
pursuant to Subclause 23.13 (Treasury
Transactions);

(v)                                 any
Financial Indebtedness arising under any loan permitted under
Subclause 23.14 (Loans out)
and Subclause 23.16 (Dividends);

(vi)                              any
Financial Indebtedness arising under the loan of €125,000,000 by SPV B.V. made
under the SPV B.V./Parent Loan Agreement;

(vii)                           any
Financial Indebtedness arising under guarantees permitted under
Subclause 23.12 (Third party guarantees);

(viii)                        any
Financial Indebtedness to the extent covered by a Documentary Credit or a
letter of credit or guarantee issued under an Ancillary Facility;

(ix)                                any
Financial Indebtedness consisting of the Remaining Debt in an aggregate
principal amount at any time outstanding not exceeding €190,000,000;

(x)                                   any
Financial Indebtedness under the Cash Pooling Facilities in an aggregate
principal amount at any time not exceeding €60,000,000;

 127
 

(xi)                                any
Financial Indebtedness consisting of letters of credit and bank guarantees to
support rental obligations, performance bonds or similar obligations;

(xii)                             any
Financial Indebtedness required by the Structure Memorandum;

(xiii)                          any
Financial Indebtedness incurred or outstanding pursuant to or in connection
with a Permitted Receivables Securitisation;

(xiv)                         any
Financial Indebtedness incurred by members of the Group to another member of
the Group to the extent the payment of dividends or other payments are
contemplated under Clause 23.16(a) (Dividends)
(without double-counting); or

(xv)                            in
addition to the aforementioned, Financial Indebtedness of members of the Group
which in aggregate does not exceed €50,000,000 or its equivalent at any time.

23.8                           Change
of business

The Parent must ensure that no substantial change is
made to the general nature of the business of the Group taken as a whole from
that carried on at the date of this Agreement.

23.9                           Mergers

No member of the Group may enter into any
amalgamation, demerger, merger or reconstruction other than a Permitted
Reorganisation, an acquisition by way of merger provided that the acquisition
is permitted under Subclause 23.10 (Acquisitions)
and other than any amalgamation, demerger, merger, reorganisation or
reconstruction contemplated by the Structure Memorandum or the IPO Structure
Paper.

23.10                     Acquisitions

(a)                                  Except
as provided below, no member of the Group may acquire or subscribe for shares
in or securities of any company or acquire any business.

(b)                                 Paragraph
(a) does not apply to:

(i)                                     the
Acquisition;

(ii)                                  acquisitions
of members of the Group and incorporations of companies referred to in the
Structure Memorandum or as part of a Permitted Reorganisation;

(iii)                               the
incorporation of wholly owned Subsidiaries;

(iv)                              the
acquisition of Cash Equivalents for treasury management purposes;

(v)                                 the
subscription for shares in a member of the Group which immediately prior to the
subscription was its direct Subsidiary, provided that if the shares of such
Subsidiary are charged under any 

 128
 

Security
Document the relevant shares are upon acquisition charged under the Security
Documents;

(vi)                              the
acquisition of minority interests on arm’s length terms in members of the Group
provided that the aggregate consideration for all such acquisitions does not
exceed €25,000,000 in any annual Accounting Period of the Parent;

(vii)                           the
acquisition of shares in any Joint Venture to the extent permitted by
Subclause 23.27 (Joint Ventures);

(viii)                        the
acquisition of securities (not being the Cash Pay Securities) issued by a
member of the Group evidencing Financial Indebtedness of such member of the
Group to the extent such acquisition does not breach any of the other terms of
the Senior Finance Documents;

(ix)                                the
acquisition of shares in a trade debtor which is insolvent in exchange for the
release of a trade debt where such exchange is required by law or court order
and not as a result of an election or agreement by a member of the Group;

(x)                                   acquisitions
with the prior written consent of the Facility Agent (acting on the instructions
of the Majority Lenders);

(xi)                                any
acquisition by a member of the Group of all or part of the issued share capital
or other ownership interest or of the business or assets (being assets that
constitute a business or an operating unit or division of a business) (the “Proposed Target”) of any Person which prior
to such acquisition was not owned by a member of the Group where the Proposed
Target is carrying on a similar or complementary business to the business of
the Group, and the making of investments in such entities as part of such
acquisition (comprising the making of loans and contributions (in cash or in
kind) and granting of guarantees)) and where:

(A)                              prior
to the occurrence of a Qualifying IPO, the acquisition has been financed
entirely from drawings under the Restructuring Loan Facility  and the aggregate consideration for the
acquisition (including Financial Indebtedness repaid or which remains
outstanding at the date of the acquisition), taken together with other
acquisitions financed entirely from drawings under the Restructuring Loan
Facility, does not exceed €100,000,000 or its equivalent in any annual
Accounting Period of the Parent and in the case of such acquisition the Parent
has delivered to the Facility Agent:

(1)                                  certified
true copies of financial, tax and legal due diligence undertaken in connection
with the acquisition; and

 129
 

(2)                                  a
certificate confirming that, on the basis of pro forma calculations for such
acquisition, the Group would have been in compliance with the financial
undertakings in Clause 22 (Financial
Covenants) during the 12 month period preceding the acquisition
and is expected to be in compliance with such financial undertakings for the 12
months following the acquisition, in each case taking into account reasonably
expected synergies and cost savings; or

(B)                                prior
to the occurrence of a Qualifying IPO, the acquisition has been funded from
sources other than entirely from the Restructuring Loan Facility and the
aggregate consideration for the acquisition (including Financial Indebtedness
repaid or which remains outstanding at the date of the acquisition), taken
together with other acquisitions not financed using drawings under the
Restructuring Loan Facility, does not exceed €100,000,000 or its equivalent in
any annual Accounting Period of the Parent and in the case of such acquisition:

(1)                                  unless
the consideration (including Financial Indebtedness repaid or which remains
outstanding at the date of the acquisition) is less than €10,000,000, the
Company delivers a certificate signed by a director that:

(I)                                    for
the most recent complete 12 month period preceding the acquisition the
Proposed Target had positive earnings before interest, tax, depreciation and
amortisation (calculated on the same basis as Consolidated EBITDA) after taking
account of reasonably expected synergies,

(II)                                on
a pro forma basis for the acquisition the Group would have been in compliance
with the financial undertakings in Clause 22 (Financial  Covenants)
at the last Quarter Date taking into account cost savings and synergies
reasonably anticipated as a result of the acquisition,

(III)                            the
ratio of Consolidated Total Net Borrowings to Consolidated EBITDA after giving
effect to the acquisition (taking into account reasonably anticipated synergies
and cost savings as a result of the acquisition) would not exceed the lower of:
(x) the ratio level with which the Group was required to comply pursuant to
Clause 22.1(iii) (Financial Undertakings)
on the Accounting Date immediately preceding the acquisition and (y) the ratio
of Consolidated Total Net Borrowings to Consolidated EBITDA on the Closing Date
(calculated using the Consolidated 

 130
 

EBITDA for the Group and the Target Group in the
preceding 12 month period) in each case calculated as if the relevant
acquisition had been completed on the first day of the 12 month period
ending on each of the periods referred to in (x) and (y),

(2)                                  if
the consideration for the acquisition (including Financial Indebtedness repaid
or which remains outstanding at the date of the acquisition) exceeds €20,000,000,
the Parent delivers a certificate signed by a director confirming that on the
basis of pro forma calculations taking into account the acquisition and
reasonably expected synergies and costs savings the ratio of Consolidated Total
Net Borrowings to Consolidated EBITDA of the Group is expected to be in
compliance with Clause 22.1(iii) (Financial Undertakings)
for the next 12 months; and

(3)                                  no
Event of Default has occurred and is outstanding on the date of the acquisition
and no Default would occur as a result of the acquisition; or

(C)                                after
the occurrence of a Qualifying IPO, the aggregate consideration for the
acquisition (including Financial Indebtedness repaid or which remains
outstanding at the date of the acquisition), taken together with other
acquisitions financed in any annual Accounting Period of the Parent does not
exceed €500,000,000 (such basket to be increased by the amounts of any retained
Excess Cash Flow, any Capital Expenditure permitted to be carried forward
pursuant to Clause 22.1 (Financial Undertakings),
any disposal proceeds not required to be applied in prepayment of the
Facilities in accordance with Clause 11.4 (Mandatory prepayment —
disposals, insurance, warranty and report claims) and cash proceeds
of any permitted subordinated borrowings or new issues of equity), giving
credit (as a deemed offset to the purchase price) of an amount equal to the
reduction (if any) in Capital Expenditure spending as a result of making such
acquisition (it being acknowledged that a reduction in Capital Expenditure
which is identified for this purpose and applied in such acquisitions will not
thereafter be capable of being applied towards Capital Expenditure), and in the
case of such acquisition (unless the consideration (including the Financial
Indebtedness repaid or which remains outstanding at the date of the
acquisition) is less than €10,000,000), the Parent has delivered to the
Facility Agent:

(1)                                  certified
true copies of financial, tax and legal due diligence undertaken in connection
with the acquisition; and

 131
 

(2)                                  a
certificate confirming that, on the basis of pro forma calculations for such
acquisition, the Group would have been in compliance with the financial
undertakings in Clause 22 (Financial
Covenants) during the 12 month period preceding the acquisition
and is expected to be in compliance with such financial undertakings for the 12
months following the acquisition, in each case taking into account reasonably
expected synergies and cost savings; and

provided that in each case (aa) the Proposed Target
does not have material contingent liabilities which have not been taken into account
in the purchase price for the acquisition or in respect of which the Group has
not received indemnities or insurance in either case on and subject to
commercially reasonable terms and conditions and (bb) no more than, prior to
the occurrence of a Qualifying IPO, €200,000,000, and post the occurrence of a
Qualifying IPO, €350,000,000 may be outstanding at any time from the Revolving
Facility on account of drawings made to fund acquisitions (other than the
Acquisition).

23.11                     Environmental
matters

(a)                                  Each
member of the Group must ensure that:

(i)                                     it
is, and has been, in compliance with all Environmental Law and Environmental
Approvals applicable to it;

(ii)                                  it
obtains all requisite Environmental Approvals; and

(iii)                               it
implements (or if already in place, maintains) procedures to monitor compliance
with and to prevent liability under any Environmental Law,

in each case where failure to do so would have a
Material Adverse Effect.

(b)                                 Each
Obligor must promptly upon becoming aware notify the Facility Agent of:

(i)                                     any
Environmental Claim current, or to its knowledge, pending or threatened in
writing; or

(ii)                                  any
circumstances reasonably likely to result in an Environmental Claim,

which, if substantiated, would have a Material Adverse
Effect.

23.12                     Third
party guarantees

(a)                                  In
this Subclause, a guarantee
includes any guarantee or an indemnity or other assurance against loss as well
as any agreement to maintain the solvency of any person.

 132
 

(b)                                 No
member of the Group may incur or allow to be outstanding any guarantee by such
member of the Group or any of its Subsidiaries (excluding any member of the SPV
Group) in respect of the liabilities or obligations of any person.

(c)                                  Paragraph (b)
does not apply to:

(i)                                     any
guarantee arising under the Senior Finance Documents;

(ii)                                  any
guarantee comprising a netting or set-off arrangement entered into by a
member of the Group in the ordinary course of its banking arrangements for the
purposes of netting debit and credit balances of that member of the Group or of
other members of the Group, provided that such arrangement does not permit
credit balances of Obligors to be netted with debit balances of members of the
Group which are not Obligors to the extent that loans by Obligors to such
members of the Group which are not Obligors (or guarantees by Obligors in
respect of their obligations) would not be permitted under Clause 23.14 (Loans  out)
(and, for the avoidance of doubt, the amount of any such guarantees for such
netting or set-off arrangements by an Obligor for the benefit of a non-Obligor
will be aggregated with the amount of any relevant loans for the purpose of
determining compliance with permitted loan baskets in Clause 23.14 (Loans out));

(iii)                               the
Senior Subordinated Guarantee and any guarantee provided by the Company in
favour of Smurfit Kappa Funding with respect to any Financial Indebtedness
incurred by Smurfit Kappa Funding to refinance the 2012 Senior Cash Pay Notes;

(iv)                              guarantees
in existence on the First Drawdown Date (or any replacement or renewals thereof
or any guarantee given by the same members of the Group in respect of any
permitted refinancing of the obligations guaranteed by such existing guarantee
provided that any limit on the amount guaranteed is not subsequently
increased);

(v)                                 customary
indemnities to purchasers under sale agreements for any disposal that is
permitted under Subclause 23.6 (Disposals);

(vi)                              the
endorsement of negotiable instruments in the ordinary course of trade;

(vii)                           guarantees,
indemnities and performance bonds guaranteeing performance by a member of the
Group under any contract (not being a contract incurring Financial
Indebtedness) entered into in the ordinary course of business or lease of
premises entered into in the ordinary course of business;

(viii)                        guarantees
in respect of the Financial Indebtedness of members of the Group which are
Obligors where such Financial Indebtedness is permitted by the terms of this
Agreement (but, without prejudice to 

 133
 

(iii) above,
not being given in respect of any obligation or liability of the Parent or Smurfit
Kappa Funding);

(ix)                                guarantees
of Joint Ventures to the extent permitted by Subclause 23.27 (Joint Ventures);

(x)                                   guarantees
in respect of third party loans to directors, officers, managers and
consultants employed by members of the Group or pursuant to any employee or
management incentive or stock option plan referred to in Subclause Error! Reference source not found. (Share
capital) in an aggregate amount (when aggregated with any loans
under Subclause 23.14(b)(viii)(A) (Loans
out)) not exceeding €15,000,000;

(xi)                                guarantees
in favour of the holders of the 2025 Bonds to the extent required by the
indenture under which they were issued;

(xii)                             guarantees
given in respect of the Bond Refinancing Debt and customary underwriting
guarantees and undertakings relating to any Refinancing Bonds;

(xiii)                          guarantees
given by a member of a Group in respect of the obligations of another member of
such Group and would, if it were a loan by that member of the Group to the
other member of that Group, be permitted under Clause 23.14 (Loans out) (and, for the avoidance of
doubt, the amount of any such guarantees will be aggregated with the amount of
any relevant loans for the purpose of determining compliance with permitted
loan baskets in Clause 23.14 (Loans out));

(xiv)                         guarantees
given to a landlord of a member of the Group in relation to lease agreements
entered into in the ordinary course of business including:

(A)                              a
guarantee or performance bond given by a member of a Group for the obligations
of another member of such Group under such agreements; or

(B)                                a
guarantee given by a member of a Group in respect of a guarantee, indemnity,
bond, standby or documentary letter of credit or other instrument issued by a
bank or financial institution (on normal commercial terms) to support the
obligations of a member of such Group under such agreements;

(xv)                            guarantees
given with the consent of the Facility Agent (acting on the instructions of the
Majority Lenders);

(xvi)                         guarantees
required pursuant to the transactions described in the Structure Memorandum;

 134
 

(xvii)                      the
agreements made by the Company in the registration rights or purchase
agreements relating to the Securities or Bond Refinancing Debt;

(xviii)                   any
guarantees granted pursuant to or in connection with a Permitted Receivables
Securitisation;

(xix)                           guarantees
provided by the Company in relation to its subsidiaries incorporated in Ireland
and the Netherlands, in each case solely for the pupose of satisfying, and to
the extent required to satisfy, the requirements of Irish and Dutch law which
exempt companies from preparing and filing their own audited accounts if such
parent company guarantees are filed;

(xx)                              customary
indemnities granted in favour of the underwriters on any IPO; and

(xxi)                           guarantees
(not being given in respect of any obligation or liability of the Parent or
Smurfit Kappa Funding or given in respect of the Smurfit Kappa Funding Loan
Agreements) not otherwise permitted by any of the other paragraphs where the
aggregate liability actual or contingent of members of the Group does not
exceed €40,000,000 at any time.

23.13                     Treasury
transactions

(a)                                  Within
120 days of the Closing Date, the Company must have entered into interest rate
hedging agreements hedging at least 50% of the Term Loan Facilities for at
least 2 years provided that the Company may maintain its existing hedging
provided that the existing hedge providers accede to the Priority Agreement
(within such 120 day period).  The
Lenders hereby consent to such accession. 
The Company may not terminate such agreements within such 2 year period
without the prior approval of the Majority Lenders (save as permitted by the
Priority Agreement).  The Company may
amend and/or extend such hedging agreements or enter into additional hedging
arrangements on terms satisfactory to the Facility Agent acting reasonably, provided that following the occurrence of a Qualifying IPO
the satisfaction of the Facility Agent with the terms shall not be required and
provided that the Company may, within
120 days after the Closing Date, amend the terms of the hedging existing on the
Closing Date in the Target Group, without the consent of the Facility Agent, to
the extent such amendments are required to conform such hedging agreements with
the terms of the hedging agreements to which the Company and other members of
the Smurfit Kappa Group are party or other changes as are not materially
prejudicial to the interests of the Lenders (as a whole) under the Senior
Finance Documents or the Hedging Documents.

(b)                                 No
member of the Group may enter into any Treasury Transactions after the date of
this Agreement, other than:

(i)                                     Treasury
Transactions existing at the Closing Date as amended and/or extended (but not
increased) from time to time;

 135
 

(ii)                                  interest
rate or currency hedging transactions to hedge actual or projected interest
rate exposures or currency exposures of the Group in respect of the Facilities
and other permitted Financial Indebtedness of the Group and, if secured by the
Security Documents, these transactions shall be documented by the Hedging
Documents;

(iii)                               spot
foreign exchange contracts entered into in the ordinary course of business;

(iv)                              any
Treasury Transaction entered into for the hedging of actual or projected real
exposures arising in the ordinary course of trading activities of a member of
the Group for a period, prior to the occurrence of a Qualifying IPO, of not
more than 24 months and, after the occurrence of a Qualifying IPO, of not more
than 48 months and not for speculative purposes and, if secured by the Security
Documents, documented by the Hedging Documents; and

(v)                                 Treasury
Transactions entered into pursuant to this Clause 23.13(a).

23.14                     Loans
out

(a)                                  Except
as provided below, no member of the Group may be the creditor in respect of any
Financial Indebtedness.

(b)                                 Paragraph
(a) does not apply to:

(i)                                     trade
credit extended by any member of the Group to its customers or suppliers on
normal commercial terms and in the ordinary course of its trading activities
(including where any such trade credit is extended into a term loan or note
under any law or court order on the insolvency of any trade debtor and not as a
result of an election or agreement by any member of the Group);

(ii)                                  loans
outstanding prior to the Closing Date as amended and/or refinanced from time to
time provided that the aggregate principal amount outstanding of all such loans
does not increase from the amount outstanding at the Closing Date;

(iii)                               loans
made by one member of the Group to another member of the Group provided that if
the lender is an Obligor, (A) the borrower must also be an Obligor, or (B) the
borrower must be a Group member whose shares have been pledged to the Security
Agent pursuant to the Transaction Security and the aggregate amount outstanding
at any time of such loans does not exceed €100,000,000, or (C) the loan must be
made via a Group treasury vehicle being an Obligor incorporated in the
Netherlands or Ireland and who has entered into an assignment of its loan
receivables to the Security Agent pursuant to the Transaction Security and the
aggregate amount outstanding at any time of such loans does not exceed
€250,000,000, or (D) the borrower must have given security for such loan to an
Obligor who has entered into an assignment of its loan receivable to the
Security Agent pursuant to the 

 136
 

Transaction
Security and (x) the aggregate amount outstanding at any time of such loans
does not exceed €250,000,000 in which case consent of the Facility Agent is not
required or (y) unless the Facility Agent, acting reasonably, agrees that it
would be impractical for the borrower to give security directly to the Security
Agent in respect of such loans and when the Facility Agent so agrees the basket
in (x) it will not be depleted by the relevant amount.

(iv)                              loans
made by one member of the Group to another member of the Group (not being the
Parent or Smurfit Kappa Funding) identified in the Structure Memorandum or the
Funds Flow Memorandum including in respect of the Debt Pushdown;

(v)                                 loans
from the Company to the Parent and/or Smurfit Kappa Funding to enable the
Parent and/or Smurfit Kappa Funding and/or its Holding Companies to pay capital
duty in accordance with the Funds Flow Memorandum;

(vi)                              loans
made by Smurfit Kappa Funding to the Company under the Smurfit Kappa Funding
Loan Agreements, including any refinancing thereof;

(vii)                           loans
to SPV Ireland or SPV Offshore in respect of the sale of SPV Assets or other
loans (in an aggregate amount not exceeding €10,000,000) to a member of the SPV
Group;

(viii)                        loans
to directors, officers, managers and consultants employed by members of the
Group and to employees of members of the Group (A) pursuant to any employee or
management incentive or stock option plan referred to in Subclause Error! Reference source not found. (Share capital) in an aggregate amount
(when aggregated with any guarantees under Subclause 23.12(c)(x) (Third party guarantees)) not exceeding
€15,000,000 (and loans by the Company to the Parent and/or Smurfit Kappa
Funding to fund such loans if made by the Parent and/or Smurfit Kappa Funding);
and (B) otherwise in an aggregate amount not exceeding €2,000,000 or its
equivalent, in each case outstanding at any time;

(ix)                                loans
between members of the Group and between members of the Target Group
outstanding on the Closing Date;

(x)                                   (if
the loan is permitted by the Priority Agreement) loans to Smurfit Kappa Funding
in an aggregate amount in any twelve month period not exceeding (when
aggregated with the amount of any dividends paid by the Company to Smurfit
Kappa Funding and any interest or other amount paid in cash by the Company to
Smurfit Kappa Funding under the Smurfit Kappa Funding Loan Agreements in that
twelve month period and any management or advisory fee or any other amount paid
by the Company or any of its Subsidiaries to Smurfit Kappa Funding or the
Parent in that twelve month period) the amount of the Securities Permitted Payments
and/or Securities Repayments (plus the amount of 

 137
 

such other
management or advisory fees and other fees and expenses of the Parent or
Smurfit Kappa Funding agreed to by the Facility Agent) for such period, to
enable Smurfit Kappa Funding to make Securities Permitted Payments and/or
Securities Repayments and/or to enable the Parent or Smurfit Kappa Funding to
pay such agreed upfront fees and expenses and to pay agreed management fees and
other reasonable expenses of Parent and Smurfit Kappa Funding in an amount
agreed to by the Facility Agent, in each case where such loans are subject to
the terms of the Priority Agreement;

(xi)                                Financial
Indebtedness (not being amounts lent to Smurfit Kappa Funding or the Parent)
not otherwise allowed under this Subclause not exceeding €10,000,000 or
its equivalent at any time outstanding;

(xii)                             loans
to Joint Ventures to the extent permitted by Subclause 23.27 (Joint Ventures);

(xiii)                          loans
which are made as part of Cash Pooling Facilities;

(xiv)                         loans
on arm’s length terms in respect of outstanding purchase price made to
purchasers in connection with disposals of assets or business permitted under
Subclause 23.6 (Disposals)
to the extent that such outstanding purchase price is otherwise permitted under
this Agreement and where the aggregate of all such loans outstanding at any
time does not exceed €75,000,000 (or its equivalent);

(xv)                            loans
or other Financial Indebtedness made or outstanding pursuant to or in
connection with any Permitted Receivables Securitisation;

(xvi)                         the
transactions and other matters described in the definition of Approved IPO and
in the IPO Structure Paper; and

(xvii)                      loans
made to other members of the Group and to Holding Companies of the Group to the
extent the payment of dividends or other payments are contemplated under Clause
23.16(a) (Dividends) (without double-counting).

23.15                     Share
capital

(a)                                  Except
as provided in paragraph (b) below, no member of the Group may:

(i)                                     redeem,
purchase, defease, retire or repay any of its share capital or resolve to do
so;

(ii)                                  issue
any shares which by their terms are redeemable prior to the Final Maturity
Date; or

(iii)                               issue
any share capital to any person other than its Holding Company.

 

 138

(b)                                 Paragraph (a)
does not apply to:

(i)                                     any
transaction expressly provided for by the Acquisition Documents or allowed
under the Senior Finance Documents (provided that this sub-paragraph
(b)(i) does not permit the Parent, Smurfit Kappa Funding or the Company to take
any of the actions referred to in sub-paragraphs (a)(i) to (iii) above);
or

(ii)                                  the
issue of warrants or shares by the Parent for cash where such issue does not
effect (or in the case of warrants, may not result in) a Change of Control or
the issue, redemption, repurchase, defeasance or retirement of shares by the
Parent under any management or employee incentive or option scheme approved by
the Facility Agent; or

(iii)                               the
issue of shares for cash by a member of the Group whose shares are at the date
of this Agreement listed on any recognised stock exchange to a person who is
not a member of the Group where such issue of shares does not reduce the
proportion of the total or each class of shares in such Subsidiary held by any
other member of the Group; or

(iv)                              the
issue of shares by a member of the Group to another member of the Group which
is its immediate Holding Company or (except in the case of Smurfit Kappa
Funding, the Company and Target) the issue of shares by a member of the Group
to another member of the Group (not being the Parent, Smurfit Kappa Funding or
the Company), provided that if any of the shares of the issuing company are
charged or pledged under the Security Documents such new shares become the
subject of a charge in favour of the Finance Parties on substantially the same
terms as any other shares in such member of the Group which are charged to the
Finance Parties by way of security under the Security Documents and that prior
to the issue of such shares the Parent notifies the Facility Agent of such
issue; or

(v)                                 the
redemption, repurchase, defeasance or retirement of shares by a member of the
Group (not being the Parent, Smurfit Kappa Funding or the Company) held by
another member of the Group, provided that no such repurchase, redemption,
defeasance or retirement is permitted if such shares are charged under the
Security Documents unless the member of the Group which is repurchasing,
redeeming defeating or retiring such shares is an Obligor and such repurchase,
redemption, defeasance or retirement would not have a material adverse effect
on the security package taken as a whole; or

(vi)                              the
Debt Pushdown; or

(vii)                           the
issuance of shares to minority shareholders in a member of the Group provided
that a proportionate number of shares are issued to its direct Holding Company;
or

(viii)                        the
transactions and other matters described in the IPO Structure Paper; or

 139
 

(ix)                                the
redemption, repurchase, defeasance or retirement of shares by a member of the
Group held by another member of the Group or a Holding Company thereof to the
extent the payment of dividends or other payments are contemplated under Clause
23.16(a) (Dividends) (without double-counting),
and the relevant member of the Group may resolve to redeem, repurchase, defease
or retire its shares prior to the time the related dividends are permitted
under Clause 23.16 (Dividends)
provided that such resolution is made subject to the occurrence of the event
which would permit the relevant dividends to be made under Clause 23.16 (Dividends).

23.16                     Dividends

(a)                                  Except:

(i)                                     to
enable Smurfit Kappa Funding or the Parent to make Securities Permitted
Payments or Securities Repayments; or

(ii)                                  to
enable the Parent or Smurfit Kappa Funding or their Holding Companies  to pay agreed upfront fees and expenses as
reflected in the Financial Model; or

(iii)                               to
enable the Parent or Smurfit Kappa Funding to pay costs and expenses incurred
by the Investors in respect of their investment in the Group in an aggregate
amount not to exceed €3,000,000 in any twelve month period; or

(iv)                              to
enable the Parent or its Holding Companies to repurchase the shares, stock or
options of any director, manager, consultant or employee no longer employed by
the Group under any management or employee incentive or stock option scheme in
an aggregate amount for all such purchases in any annual Accounting Period not
exceeding €5,000,000, provided that to the extent not utilised in an annual
Accounting Period such amount may be carried forward for up to 4 annual
Accounting Periods; or

(v)                                 to
enable the Parent or its Holding Companies to pay fees to other parties
(including the Investors) for transaction-specific corporate advisory
services provided on an arm’s length terms subject to a cap of €3,000,000 for
each transaction; or

(vi)                              to
pay or allow the Parent, Smurfit Kappa Funding or their Holding Companies to
pay any director’s or management fees to or to the order of its shareholders
(or any of their affiliates who is not a member of the Group) incurred in
relation to the directorship or management of the Parent or any of its Holding
Companies in an aggregate amount not exceeding €3,000,000 in any twelve-month
period commencing on 1 January 2006 and rolling over during the currency of
this Agreement (with such limit for each 12 month period following the first
anniversary of the Closing Date to be indexed each anniversary by 

 140
 

reference to
the U.K. Retail Price Index using the RPI Inflator statistic for the month in
which the Closing Date fell as base year); or

(vii)                           to
enable the Parent to pay its and its Holding Companies, reasonable ongoing
operating costs and expenses including taxes, auditors’ fees, legal fees,
listing fees and costs of complying with statutory obligations; or

(viii)                        prior
to the completion of a Qualifying IPO, if following the payment of the relevant
dividend the ratio of Consolidated Total Net Borrowings to EBITDA would be
3.0:1 or lower calculated on a pro forma basis, in respect of 50% of Excess
Cash Flow (being amounts not required to be prepaid in accordance with
Clause 11.6 (Mandatory prepayment — Excess Cash Flow));
or

(ix)                                to
enable the payment of reasonable fees, costs and expenses incurred in
connection with an IPO or a secondary public offering; or

(x)                                   in
connection with the transactions and other matters described in the IPO
Structure Paper; or

(xi)                                in
connection with the transactions described in the definition of Approved IPO;
or

(xii)                             after
the occurrence of a Qualifying IPO, where the ratio of Consolidated Total Net
Borrowings to Consolidated EBITDA as calculated in respect of the most recently
preceding Accounting Date for which a compliance certificate has been delivered
in accordance with this Agreement (calculated for four consecutive quarterly
Accounting Periods of the Smurfit Kappa Funding Group) falls within one of the
ranges in the first column of the table below, dividends (including for the
avoidance of doubt interim dividends) may be declared to persons outside the
Group up to a maximum aggregate amount for the relevant financial year as
specified in the second column of the table opposite the relevant range
(provided that each such calculation of the ratio of Consolidated Total Net
Borrowings to Consolidated EBITDA is pro forma for the payment of such
dividends),

	
  Ratio of Consolidated Total Net Borrowings to Consolidated EBITDA

  	
   

  	
  Aggregate amount of

  permitted dividends

  per financial year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 4.5:1
  but greater than or equal to 3.75:1

  	
   

  	
  €100,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 3.75:1
  but greater than or equal to 3:1

  	
   

  	
  €150,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 3:1

  	
   

  	
  Unlimited

  	
   

  

 

 141
 

neither the Company nor Smurfit Kappa Funding nor the
Parent may:

(A)                              declare,
make or pay, or pay interest on any unpaid amount of, any dividend, charge, fee
or other distribution (whether in cash or in kind) on or in respect of its
share capital (or any class of its share capital);

(B)                                repay
or distribute any share premium account;

(C)                                pay,
and the Company will procure that none of its Subsidiaries will pay, any
management, advisory, consultancy or other fee to or to the order of Smurfit
Kappa Funding or the Parent; or

(D)                               lend
or otherwise pay or transfer cash to, and the Company will procure that none of
its direct or indirect Subsidiaries will lend or otherwise pay or transfer cash
or Cash Equivalents to, Smurfit Kappa Funding or Parent; or

(E)                                 repay,
prepay, purchase or defease or pay any interest on the Smurfit Kappa Funding
Loan other than from Bond Refinancing Debt.

The Company will not, and the Company will procure
that none of its Subsidiaries will pay, any management advisory, consultancy or
other fee to or to the order of any of the shareholders of the Parent (or any
affiliate of any shareholder which is not a member of the Group).

No payment otherwise permitted by paragraphs (a)(ix),
(x) and (xii) may be made if there is an outstanding Event of Default (unless
otherwise permitted under Subclause 7.2(b)(ii) of the Priority Agreement).

If a Qualifying IPO has occurred then (notwithstanding
anything to the contrary in the Finance Documents) to the extent the entity
which is the subject of the Qualifying IPO declares dividends at at time when
the upstreaming of funds (whether by dividend, loan, loan repayment, redemption
of capital or otherwise) from members of the Group to pay such dividend is
permitted under Clauses 23.7 (Financial Indebtedness),
23.14 (Loans Out), 23.15 (Share
capital) and/or this Clause 23.16 (Dividends),
then such upstreaming of funds shall be permitted subsequently to fund such
payment of dividends.

23.17                     Intellectual
property rights

(a)                                  Except
as provided below, each member of the Group must to the extent that failure to
do so is likely to have a Material Adverse Effect:

(i)                                     make
any registration and pay any fee or other amount which is necessary to keep the
Material Intellectual Property Rights in force if and to the extent such
Material Intellectually Property Rights are owned, leased or licensed by that
member of the Group;

 142
 

(ii)                                  record
its interest in those Material Intellectual Property Rights;

(iii)                               where
it is the owner, lessee or licensor of the Material Intellectual Property
Rights, take such steps as are necessary and commercially reasonable (including
the institution of legal proceedings) to prevent third parties infringing those
Material Intellectual Property Rights;

(iv)                              not
use or permit any Material Intellectual Property Right to be used in a way, or
take or omit to take any action which may, adversely affect the existence or
value of such Material Intellectual Property Right; and

(v)                                 not
enter into licence arrangements in respect of those rights.

(b)                                 Paragraphs (a)(iv)
and (a)(v) do not apply to:

(i)                                     licence
arrangements entered into between members of the Group for so long as they
remain members of the Group; or

(ii)                                  licence
arrangements entered into on normal commercial terms and in the ordinary course
of its business.

23.18                     Insurance

(a)                                  Each
member of the Group must insure its assets and business to such an extent and
against such risks as companies engaged in a similar business in its
jurisdiction normally insure.

(b)                                 Without
prejudice to paragraph (a) above, any insurance taken out by any Obligor
or any Material Subsidiary must substantially cover the replacement (subject to
a reasonable deductible) value of the relevant asset.  This means substantially the total cost of
entirely rebuilding, reinstating or replacing the asset if it is destroyed
(subject to such reasonable deductible).

(c)                                  All
insurance of the Group must be with reputable independent insurance companies
or underwriters.

(d)                                 Without
prejudice to paragraph (a) above, the Group must maintain insurance
against business interruption, loss of profits, product liability, accidental
pollution and public liability at levels no lower than those (if any) in place
prior to the First Drawdown provided such insurance continues to be available
on reasonable commercial terms.

(e)                                  Each
member of the Group must promptly pay any premium and do anything necessary to
keep in force the insurances required to be maintained by it under this
Subclause.

(f)                                    Each
Obligor must:

(i)                                     promptly
supply to the Facility Agent on request copies of any insurance policy required
to be maintained by it or any Material Group Member which is its Subsidiary
under this Subclause; and

 143
 

(ii)                                  ensure
that the interest of “other parties” is noted on each such policy (other than
third party liability policies).

23.19                     Holding
Companies

The Parent and Smurfit Kappa Funding and the Company
must not carry on any trade and must not own any assets or incur any Financial
Indebtedness, other than:

(a)                                  the
ownership of shares of (A) in the case of the Parent, Smurfit Kappa Funding and
SPV Ireland and (B) in the case of Smurfit Kappa Funding, the Company and (C)
in the case of the Company, its Subsidiaries, provided such shares are secured
by the Security Documents;

(b)                                 opening
bank accounts (provided that such bank accounts are charged under the Security
Documents and the bank or financial institution concerned has acknowledged such
charge) and holding cash;

(c)                                  in
acting as a holding company including the provision of administrative services
(including corporate governance of the Group, treasury services, and entering
into hedging agreements) to other members of the Group and in the case of the
Parent to members of the SPV Group of a type customarily provided by a Holding
Company to its Subsidiaries;

(d)                                 incurring
(and to the extent otherwise permitted under the Senior Finance Documents,
repaying) Financial Indebtedness under (i) the Senior Finance Documents or (ii)
(except in the case of the Company and the Parent) the Securities or Bond
Refinancing Debt, provided that the same is permitted by the Senior Finance Documents
or (iii) in the case of the Company, the Smurfit Kappa Funding Loan Agreements
in each case including any refinancing thereof in connection with Bond
Refinancing Debt and the Senior Subordinated Guarantee and any subsequent
guarantee in connection with a refinancing of the 2012 Cash Pay Notes or (iv)
in the case of the Company, Loans from Group members to it for purpose of
upstreaming cash to pay principal and interest under the Facilities or (v)
guarantees existing on the Closing Date and in replacement or renewal thereof;

(e)                                  in
the case of Smurfit Kappa Funding lending cash under the Smurfit Kappa Funding
Loan Agreements and in the case of the Company lending cash to other members of
the Group, as otherwise permitted under this Agreement; or

(f)                                    incurring and repaying Financial Indebtedness
as described in the definition of Approved IPO.

23.20                     Inter-company
debt

No member of the Group which is the creditor in
respect of any Financial Indebtedness of any other member of the Group may take
any action to cause that Financial Indebtedness to become due or to be paid (i)
in breach of the terms of the Priority Agreement or (ii) if not already
prohibited by paragraph (i), unless the other member of the Group has
sufficient readily available cash to pay the sum which is due or demanded or
the amount due is capitalised.

 144
 

23.21                     Arm’s-length
terms

No member of the Group may enter into any material
transaction after the date hereof with any person on terms which are less
advantageous to the relevant member of the Group than arm’s-length terms,
save for:

(a)                                  intercompany
loans permitted pursuant to this Agreement;

(b)                                 payments
directly or indirectly to Investors permitted pursuant to Clause 23.16 (Dividends);

(c)                                  other
transactions between members of the Group which are permitted by other terms of
this Agreement provided that the terms for such transactions do not result in
an effective transfer of value from an Obligor to a member of the Group which
is not an Obligor; and

(d)                                 Permitted
Receivables Securitisations.

23.22                     Amendments
to documents

(a)                                  No
member of the Group may:

(i)                                     prior
to the occurrence of a Qualifying IPO, enter into any agreement with any
shareholders in the Parent (other than as set out in the Shareholders
Agreement) or any of their Affiliates which is not a member of the Group; or

(ii)                                  prior
to the occurrence of a Qualifying IPO, amend or waive any term of the Equity
Documents; or

(iii)                               amend
or waive any term of the Acquisition Documents or any of the other documents
delivered to the Facility Agent pursuant to Clause 4.1 (Conditions precedent documents),

without the prior written consent of the Facility
Agent if to do so is reasonably likely to affect materially and adversely the
interests of any of the Finance Parties under the Senior Finance Documents and
the Parent must promptly supply to the Facility Agent a copy of any material
amendment or waiver of the Acquisition Documents and, prior to the occurrence
of a Qualifying IPO only, the Equity Documents in each case or any amendment or
waiver of the Acquisition Documents and, prior to the occurrence of a
Qualifying IPO only, the Equity Documents which is reasonably likely to
adversely affect the interests of any of the Finance Parties.

23.23                     Bank
Accounts

No Obligor may open or maintain any account with any
branch of any bank or other financial institution providing similar services
other than an account maintained with an Approved Bank or a Finance Party or an
Affiliate of a Finance Party where (if cash security is being taken by the
Finance Parties in that jurisdiction) the account is charged under the Security
Documents and the bank or financial institution concerned 

 145
 

has acknowledged such charge other than a bank account
maintained solely for the purpose of a Permitted Receivables Securitisation.

23.24                     Access

(a)                                  Upon
reasonable notice being given by the Facility Agent, each member of the Group
must allow any one or more representatives of the Facility Agent and/or
accountants or other professional advisers appointed by the Facility Agent (at the
Company’s expense) to have access during normal business hours to the premises,
assets, books and records of that member of the Group.

(b)                                 The
Facility Agent may not give notice under paragraph (a) above more than
once every financial year unless it believes in good faith that an Event of
Default is outstanding or may have occurred or is likely to occur.

23.25                     Pension
schemes

(a)                                  Each
member of the Group must:

(i)                                     be
in compliance with any laws or contract relating to any of its pension schemes
where failure to so comply would have a Material Adverse Effect; and

(ii)                                  maintain
and fund its pension schemes to at least the extent required by local law and
practice save where failure to do so would not have a Material Adverse Effect.

(b)                                 The
Company must supply the Facility Agent with a copy of any report in respect of
any pension scheme operated by a member of the Group which the Facility Agent
may reasonably request.

23.26                     Taxes

(a)                                  Each
member of the Group must pay all material Taxes due and payable by it prior to
the accrual of any fine or penalty for late payment, unless (and only to the
extent that):

(i)                                     payment
of those Taxes is being contested in good faith; and

(ii)                                  adequate
reserves are being maintained for those Taxes; and

(iii)                               failure
to pay those Taxes would not have a Material Adverse Effect.

(b)                                 (i)            None of the Parent, Smurfit Kappa
Funding, the Company or any Borrower may change its residence for Tax purposes;

(ii)                                  No
other Material Group Member may change its residence for Tax purposes if it would
have a Material Adverse Effect.

 146
 

23.27                     Joint
Ventures

(a)                                  Subject
to paragraph (b) below, no member of the Group may after the date of this
Agreement enter into, invest in, acquire any share or interest in, transfer any
asset to, lend to, or guarantee or give any indemnity (other than an indemnity
of a type referred to in Subclause 23.12(c)(v) (Third party guarantees) in respect of the sale of any such
Joint Venture) in respect of the obligations of, any joint venture entity,
partnership or similar person (a “Joint
Venture”) or enter
into any agreement or obligation where it would have any obligation to do any
of the foregoing or to maintain the solvency of or provide working capital to
any Joint Venture or trade with or sell to or acquire assets or services from
any Joint Venture otherwise than on arm’s length-terms.

(b)                                 Members
of the Group may enter into, invest in, acquire any shares or interest in,
transfer any asset to, lend to, or guarantee or give an indemnity in respect of
the obligations of, a Joint Venture (including any existing Joint Venture)
which carries on a business of the same type as the business of the Group or a
business which is complementary provided that the aggregate amount invested in
or paid to acquire any shares or interest in, or value of assets transferred
to, or lent to or the actual or contingent liability under any guarantee or
indemnity (other than an indemnity of a type referred to in
Subclause 23.12(c)(v) (Third party
guarantees) in respect of the sale of any such Joint Venture) of the
obligations of, any Joint Venture (each a “Joint
Venture Investment”)
does not exceed €40,000,000 (plus the aggregate Net Proceeds received in cash
by members of the Group from the disposal of Joint Venture Investments) in
aggregate over the life of the Facilities.

23.28                     Limitation on restrictions affecting movement of cash Intra-Group

(a)                                  No
member of the Group may agree to any restriction on its ability to move cash to
another member of the Group, whether by way of dividend or other distribution,
inter-company loan, redemption of shares or otherwise.

(b)                                 Paragraph (a)
above does not apply to any restriction contained in a Senior Finance Document,
the Securities, the Remaining Debt Agreements (provided that no amendments or
refinancing of any Remaining Debt may include a more onerous restriction than
any restriction in force on the date of this Agreement in the Remaining Debt
Agreement being amended or refinanced), the 2025 Bonds, the Bond Refinancing
Debt (provided that the restrictions are no more onerous on any member of the
Group than those in this Agreement) or pursuant to or in connection with a
Permitted Receivables Securitisation.

23.29                     Acquisition
Documents

The Company shall promptly pay (or shall procure that
there is promptly paid) all amounts payable by the Company under the
Acquisition Documents as and when the same become due.

 

 147

23.30                     Refinancing
Debt

(a)                                  Promptly
following the Closing Date, the Company shall take all such steps as shall be
necessary to ensure that all liabilities of all members of the Group in respect
of the Existing Kappa Bonds (and any Security Interest in relation to such
debt) are unconditionally and irrevocably repaid and discharged by no later
than the date falling 90 days after the Closing Date.

(b)                                 Prior
to drawing any Term Loan the proceeds of which are to repay (or enable any
member of the Group to repay) the Existing Kappa Bonds or the senior facilities
outstanding from the Group and the Target Group on the Closing Date, the
Company shall supply to the Facility Agent evidence satisfactory to the Lenders
that all existing Financial Indebtedness of, and all existing security granted
by the Group (other than Remaining Debt and other Financial Indebtedness
permitted to remain outstanding under this Agreement) will be repaid and
discharged within 90 days after the Closing Date from the proceeds of such
drawing of the Facilities.

(c)                                  The
Company shall procure that, as soon as reasonably practicable after the Closing
Date, the Debt Pushdown is completed in all material respects in the manner set
out in the Structure Memorandum (or otherwise in a manner which does not
adversely affect the interests of the Lenders in any material respect) or
otherwise in a manner approved by the Majority Lenders acting reasonably.

23.31                     Guarantees

(a)                                  The
Company shall procure that each of the Target and those of its Subsidiaries identified
in the Agreed List of Obligors and Security will become Additional Guarantors
hereunder in accordance with the provisions of Clause 23.33 (Additional Obligors) at the time provided
for in that Schedule provided that in the case of:

(i)                                     companies
incorporated in Ireland, Northern Ireland or England and Wales, the Accession
Deed will provide that the guarantee granted on or before the First Drawdown
Date shall be limited to liabilities in respect of Refinancing Credits and
immediately following compliance with the procedures referred to in paragraph
(b) below (as applicable), each such Additional Guarantor shall accede as an
Additional Guarantor with no such limitation; and

(ii)                                  Kappa
Packaging Czech immediately after the relevant Expert Valuation has been
obtained.

(b)                                 The
Company shall, as soon as reasonably practicable after the Closing Date procure
that the Additional Guarantors incorporated in (i) England & Wales, comply
with Sections 155-158 of the Companies Act 1985, (ii) Ireland, comply
with Section 60 of the Companies Act 1963; and (iii) Northern Ireland, comply
with Section 161 of the Companies (Northern Ireland) Order 1986 in each case in
respect of the guarantees and security contemplated to be provided by them
under this Agreement, except where failure to do so would not have a Material
Adverse Effect.

 148
 

(c)                                  Where,
at any time after the Closing Date, it is determined (by reference to Accounts
delivered hereunder) that any member of the Group is a Material Subsidiary or a
member of the Group wishes to become an Additional Borrower, promptly (and in
any event within 30 Business Days of the delivery of such Accounts) or at the
time it becomes an Additional Borrower, subject to the Agreed Security
Principles, the Company shall procure that such Material Subsidiary or
Additional Borrower becomes an Additional Guarantor in accordance with
Clause 23.33 (Additional Obligors)
(to the extent it has not already done so).

(d)                                 In
the event that any guideline is issued by the German Federal Ministry of Finance
or a change in law occurs, in each case after the date hereof, regarding the
interpretation or application of Section 8a of the German Corporation Tax Act (Körperschaftsteuergesetz, “KStG”),
clarifying that the relief, in particular the possibility to provide a
counterproof regarding the absence of a back-to-back financing,  provided by the tax guidelines issued by the
German Federal Ministry of Finance (Bundesfinanzministerium)
on 15 July 2004 (IV A2 - S2742s - 20/04) and 22 July 2005 (IV B7 — S2742a — 31/05)
in relation to Section 8a of the KStG also applies to loans which qualify under
Section 8a paragraph VI of the KStG, the Company shall promptly take such
action as the Facility Agent may reasonably require to extend the guarantees
granted under this Agreement to include the obligations and liabilities of the
Restricted Borrower under the Restricted Term Loan Facilities.

(e)                                  Subject
to the Agreed Security Principles the Company will ensure that members of the
Group which on an unconsolidated basis account for 75% of the Group’s
Consolidated EBITDA and 75% of the Group’s turnover and 75% of the Group’s
gross assets (excluding intercompany items and intercompany investments) either
(i) give a guarantee and security over its material assets and undertaking
to the Security Agent or to an Obligor who has secured its interest under such
guarantee and security to the Security Agent or (ii) have their shares
pledged (or their direct or indirect holding company incorporated in the same
jurisdiction has its shares pledged) in favour of the Security Agent or in
favour of an Obligor who has secured such guarantee and security interest in
favour of the Security Agent provided that
no Securitisation SPV will be required to provide a guarantee or security.  If any company shall become a member of the
Group after the Closing Date and it is a Material Subsidiary, subject to the
Agreed Security Principles it will have its shares pledged and it will grant
security over its material assets and undertaking.

(f)                                    The
Company need only perform its obligations under paragraph (c) or (d) above if
it is not unlawful for the relevant person to become a Guarantor (or (i) in the
case of a member of the Group which is not wholly owned or is a Joint Venture,
if it would not breach any joint venture or any existing shareholders agreement
applicable to it or, (ii) in the case of a member of the Group incorporated in
any country in Latin America or Albania, Belarus, Bosnia & Herzegovina,
Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia,
Lithuania, Macedonia, Moldova, Romania, Serbia & Montenegro, Russia,
Slovakia, Slovenia, Turkey or the Ukraine, it also would not breach any
negative pledge contained in a Remaining Debt Agreement or in the 

 149
 

reasonable
opinion of the Parent result in a loss of access to local credit lines on
reasonable commercial terms) and that person becoming a Guarantor would not
result in personal liability for that person’s directors or other
management.  Each Obligor must use, and
must procure that the relevant person uses, all reasonable endeavours lawfully
to avoid any such unlawfulness (including, without limitation) by complying
with paragraph (b) above) or personal liability.  This includes agreeing to a limit on the
amount secured or guaranteed.  The
Facility Agent may (but shall not be obliged to) agree to such a limit if to do
so might avoid the relevant unlawfulness or personal liability.

(g)                                 The
Company shall, as soon as reasonably practicable after the Closing Date,
procure that Kappa Packaging Czech will file an application with the relevant
court to appoint an expert valuator who shall promptly prepare the Expert
Valuation.

23.32                     Security

(a)                                  The
Parent shall procure that, subject to the Agreed Security Principles:

(i)                                     the
Security Documents identified in the Agreed List of Obligors and Security are
executed and delivered to the Security Agent on or before the time provided for
in that Schedule;

(ii)                                  the
Security Documents identified in the Agreed List of Obligors and Security are
executed and delivered to the Security Agent as soon as it is not unlawful for
the relevant person to execute such Security Document (or (i) in the case of a
member of the Group which is not wholly owned or is a Joint Venture, if it
would not breach any joint venture or any existing shareholders agreement
applicable to it or, (ii) in the case of a member of the Group incorporated in
any country in Latin America or Albania, Belarus, Bosnia & Herzegovina,
Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia,
Lithuania, Macedonia, Moldova, Romania, Serbia & Montenegro, Russia,
Slovakia, Slovenia, Turkey or the Ukraine, it also would not breach any
negative pledge contained in a Remaining Debt Agreement or in the reasonable
opinion of the Parent result in a loss of access to local credit lines on
reasonable commercial terms) and if such execution would not result in personal
liability for that person’s directors or other management.  Each Obligor must, and must procure that the
relevant person uses, all reasonable endeavours lawfully to avoid any such
unlawfulness or personal liability.  This
includes agreeing to a limit on the amount secured.  The Facility Agent may (but shall not be
obliged to) agree to such a limit if to do so might avoid the relevant unlawfulness
or personal liability;

(iii)                               any
grantor of a Security Document referred to in (i) above will provide any
notices required and execute such other documentation as is required to perfect
the security granted under the Security Documents;

 150
 

(iv)                              any
member of the Group (other than any grantor of a Security Document referred in
(i) above) which becomes at any time a Material Subsidiary after the Closing
Date and/or which is required pursuant to the terms of Clause 23.31 (Guarantees) to accede hereto as an
Additional Guarantor shall execute Security Documents over all or substantially
all of it assets in substantially similar terms, and to similar effect, as the
Security Documents executed by other Obligors incorporated in the same
jurisdiction (or if none as required by the Security Agent acting reasonably)
provided that the Obligors listed in the Agreed List of Obligors and Security
shall only be required to provide the Security specified therein;

(v)                                 any
Obligor which has executed a Security Document pursuant hereto and which
acquires a material asset (or makes a material loan to another member of the
Group) which would not be immediately and effectively charged by the then
existing Security Documents and is of a type which is charged by the then existing
Security Documents, executes and delivers to the Security Agent such further or
additional Security Documents in relation to such assets as the Majority
Lenders may reasonably require and in form and substance reasonably
satisfactory to them.

(b)                                 Subject
to the Agreed Security Principles, each Obligor shall execute and deliver to
the Security Agent such further or additional Security Documents in such form
as the Majority Lenders (acting reasonably) shall require creating an effective
first ranking fixed Security  Interest
over the shares in any entity which becomes a Material Subsidiary after the
First Drawdown.

(c)                                  The
Parent and each Obligor need only perform its obligations under paragraphs
(a)(iv) and (b) above if it is not unlawful for the relevant person to execute
such Security Documents (or (i) in the case of a member of the Group which is
not wholly owned or is a Joint Venture, if it would not breach any joint
venture agreement or any existing shareholders agreement applicable to it or,
(ii) in the case of a member of the Group incorporated in any country in Latin
America or Albania, Belarus, Bosnia & Herzegovina, Bulgaria, Croatia, Czech
Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Moldova,
Romania, Serbia & Montenegro, Russia, Slovakia, Slovenia, Turkey or the
Ukraine, it would also not breach any negative pledge contained in a Remaining
Debt Agreement and would not in the reasonable opinion of the Parent result in
a loss of access to local credit lines on reasonable commercial terms) and if
such performance would not result in personal liability for that person’s
directors or other management.  Each
Obligor must, and must procure that the relevant person uses, all reasonable
endeavours lawfully to avoid any such unlawfulness or personal liability.  This includes agreeing to a limit on the
amount secured.  The Facility Agent may
(but shall not be obliged to) agree to such a limit if to do so might avoid the
relevant unlawfulness or personal liability.

(d)                                 The
Parent shall, and shall procure that each other relevant member of the Group
which is its Subsidiary shall, at its own expense, execute and do all such
assurances, acts and things as the Security Agent may reasonably require:

 151
 

(i)                                     for
perfecting or protecting the security intended to be afforded by the Security
Documents; and/or

(ii)                                  if
the Security Documents have become enforceable, for facilitating the
realisation of all or any part of the assets which are subject to the Security
Documents and the exercise of all powers, authorities and discretions vested in
the Security Agent or in any receiver of all or any part of those assets,

and in particular shall execute all transfers,
conveyances, assignments and releases of that property whether to the Security
Agent or to its nominees and give all notices, orders and discretions which the
Security Agent may reasonably think expedient.

(e)                                  If
at any time any Obligor is the creditor in respect of any loans made pursuant
to (and to the extent permitted by) Subclause 23.14 (Loans out), such Obligor shall procure
that security is granted to the Lenders over such loans on terms acceptable to
the Security Agent (acting on the instructions of the Majority Lenders (acting
reasonably)).

(f)                                    On
each date that a Security Document is entered into after the First Drawdown,
each Obligor shall procure that the documents listed in Part III of Schedule 2
(Conditions Precedent Documents)
in respect of the Obligor entering into such Security Document are delivered to
the Security Agent.

(g)                                 The
Company shall procure that the articles of association of the Target are
amended as soon as reasonably practical and, in any event, within 90 days of
the Closing Date in such a way as to permit a first priority ranking perfected
pledge to be granted by the direct Holding Company thereof in favour of the
Security Agent over the shares in the capital of the Target.

23.33                     Additional
Obligors

(a)                                  The
Company shall procure that any person required under Subclause 23.31 (Guarantees) to become an Additional
Guarantor, or a person who wishes to become an Additional Guarantor or an
Additional Borrower, must:

(i)                                     execute
and deliver to the Facility Agent an Accession Deed (duly executed by the
Company on behalf of all existing Borrowers and Guarantors);

(ii)                                  deliver
to the Facility Agent each of the documents and evidence listed in Part III of
Schedule 2 (Conditions Precedent Documents);

(iii)                               deliver
to the Facility Agent such other reports, opinions and documents (if any) as
the Facility Agent may reasonably require in respect of the Additional
Guarantor or Additional Borrower, each in form and substance satisfactory to
the Facility Agent;

(iv)                              accede
to the Priority Agreement as an Obligor in the manner required pursuant to the
Priority Agreement; and

 152
 

(v)                                 comply
with the other requirements of this Subclause 23.33.

(b)                                 The
relevant Subsidiary will become an Additional Obligor on the date of the
Accession Deed executed by it.

(c)                                  Subject
to the other provisions of this Agreement, the Company must comply with its
obligations under paragraph (a):

(i)                                     within
fourteen days of the relevant person becoming a Material Subsidiary; or

(ii)                                  if
the relevant person is an Additional Borrower, before the Additional Borrower
may use any Facility.

(d)                                 The
prior consent of all the Lenders (not to be unreasonably withheld) is required
if an Additional Obligor is to be an Additional Borrower (except in respect of
an Additional Borrower which is a limited liability company and which is a
wholly-owned Subsidiary (directly or indirectly) of the Company and is
incorporated and tax resident in a Pre-approved Jurisdiction, to the
extent the Additional Borrower will be a Borrower under the Revolving Credit
Facility or the Restructuring Loan Facility. 
It shall not be unreasonable for a Lender to withhold or delay its
consent if the Additional Borrower is domiciled in a jurisdiction which would
cause the Lender to breach any law or regulation or any internal rule or policy
of such Lender.

(e)                                  The
Lenders may impose such limitations on the ability of an Additional Borrower to
borrow under any Facility as they deem reasonably necessary.

(f)                                    In
the case of an Additional Borrower, until the Facility Agent notifies the other
Finance Parties and the Company that those documents and evidence are in form
and substance satisfactory to it (acting reasonably), that Additional Borrower
may not use any Facility.  The Facility
Agent must give this notification as soon as reasonably practicable after
receipt of such documents and evidence in form and substance satisfactory to it
(acting reasonably).

(g)                                 Delivery
of an Accession Deed, executed by the relevant Subsidiary and the Company, to
the Facility Agent constitutes confirmation by that Subsidiary and the Company
that the Repeating Representations relating to representations and warranties
made by the Company or to be made by that Subsidiary are then correct in all
material respects, as if made with reference to the facts and circumstances
then existing.

(h)                                 The
Company shall, and shall procure that each relevant member of the Group that is
its Subsidiary shall, promptly give the Facility Agent all assistance it
reasonably requires in relation to the security and guarantees to be granted
pursuant to this Agreement including, without limitation, promptly answering
all reasonable questions and requisitions of the Facility Agent and its
advisors in relation to the assets of the Target Group.

 

 153

23.34                     SPV Group

The Parent shall procure that members of the SPV Group
shall, on the disposal of any SPV Asset to any third party apply an amount
equal to the net proceeds received by it on any such disposal in repayment or
prepayment of any loan made by a member of the Group to a member of the SPV
Group, or, at the option of the Parent, lend such proceeds to the Parent, and
the Parent shall contribute such proceeds to the Company.

23.35                     Securities

The Parent will procure that on or before issuing any
securities in respect of the Bond Refinancing Debt, the trustee appointed under
any indenture or equivalent document under which any such securities are issued
will become a party to the Priority Agreement by executing and delivering a
deed of accession to the Security Agent as contemplated in the Priority
Agreement in form and substance satisfactory to the Security Agent to the
extent that there is a requirement under the Bond Refinancing Debt to provide
ratable security.

23.36                     Financial
Assistance

The Parent will ensure that all payments and provision
of guarantees, security and other assistance by and between members of the
Group have been and will be made in compliance with applicable local laws and
regulations concerning financial assistance by a company for the acquisition of
or subscription for its own shares or the shares of its parent or any other
company or concerning the protection of shareholders’ capital except where
failure to do so would not have a Material Adverse Effect.

23.37                     Financial
Statements

The Parent will ensure that its audited consolidated
financial statements to be provided in compliance with Clause 21.1 (Financial statements) will be prepared in
compliance with the Accounting Principles in all material respects.

23.38                     Permitted
Receivables Securitisations

(a)                                  Notwithstanding
any provision of this Agreement to the contrary, in connection with a Permitted
Receivable Securitisation, any Group member may without limitation, do any of
the following:

(i)                                     establish
or procure the establishment of any type of company, fund or other entity for
the purposes of such securitisation whether or not a member of the Group (each
such entity a “Securitisation SPV”);

(ii)                                  transfer
receivables to the Securitisation SPV either directly or indirectly;

(iii)                               create,
in respect of the bank accounts into which the collections in respect of the
transferred receivables are paid, trusts, pledges, charges or other account
protection arrangements, whether contractual or proprietary in nature; and/or
direct customers (including in respect of receivables which are not, or are not
eligible to be, purchased by the 

 154
 

Securitisation SPV), to one or more
collection accounts (whether or not in the name of a Group member or the
Securitisation SPV); or

(iv)                              provide
Financial Indebtedness in any form directly or indirectly to the Securitisation
SPV in connection with such securitisation,

and all the representations, warranties, covenants and
other terms of each Finance Document (including the security package, which
will permit the automatic release if possible or otherwise authorise the
release of receivables from security to enable a Permitted Receivables
Securitisation) will be construed in such a way to permit any Permitted
Receivables Securitisation (and as necessary security over receivables will be
deemed to be released to enable such Permitted Receivables
Securitisation).  For the avoidance of
doubt Smurfit Kappa European Packaging (and any entity which replaces it) shall
not be required to give security to the Lenders.

(b)                                 The
parties acknowledge that (i) certain Group members entered into the Existing
Securitisation and that such transaction is a Permitted Receivables
Securitisation; and (ii) Smurfit Kappa European Packaging is a Securitisation
SPV and will not be nor will it be required to be an Additional Obligor for so
long as it is a Securitisation SPV.

24.                               DEFAULT

24.1                           Events
of Default

Each of the events set out in this Clause is an
Event of Default.

24.2                           Non-payment

An Obligor does not pay on the due date any amount payable
by it under the Senior Finance Documents in the manner required under the
Senior Finance Documents, unless the non-payment:

(a)                                  is
caused by technical or administrative error in the transmission of funds by
banks and such non-payment is remedied within 3 days of the due date; or

(b)                                 is
in respect of fees and expenses (but not principal or interest due under the
Senior Finance Documents) and such non-payment is remedied within 3 days
of the due date.

24.3                           Breach
of other obligations

(a)                                  An
Obligor does not comply with any term of Clauses 23.4 (Pari Passu ranking), 23.5 (Negative pledge), 23.6 (Disposals), 23.9 (Mergers), 23.10 (Acquisitions), 23.14 (Loans out), 23.15 (Share  capital)
or 23.16 (Dividends).

(b)                                 There
is a breach of Clause 22 (Financial
Covenants) and this is not
remedied by means of Clause 24.21 (Right
to Cure Financial Ratios) within 15 Business Days of the delivery of
financial statements evidencing breach.

 155
 

(c)                                  An
Obligor does not comply with any other term of the Senior Finance Documents not
already referred to in this Clause, unless the non-compliance:

(i)                                     is
capable of remedy; and

(ii)                                  is
remedied within 20 Business Days of the earlier of the Facility Agent giving
notice and any Obligor becoming aware of the non-compliance.

24.4                           Misrepresentation

A representation or warranty made or repeated by an
Obligor in any Senior Finance Document or in any document delivered by or on
behalf of any Obligor under any Senior Finance Document is incorrect in any
material respect when made or deemed to be repeated, unless the circumstances
giving rise to the misrepresentation:

(a)                                  are
capable of remedy; and

(b)                                 are
remedied within 20 Business Days of the earlier of the Facility Agent giving
notice and any Obligor becoming aware of the misrepresentation.

24.5                           Cross-default

Any of the following occurs in respect of a member of
the Group:

(a)                                  any
of its Financial Indebtedness (or any amount payable in respect thereof) is not
paid when due (after the expiry of any originally applicable grace period); or

(b)                                 any
of its Financial Indebtedness:

(i)                                     becomes
prematurely due and payable; or

(ii)                                  is
placed on demand; or

(iii)                               is
capable of being declared by a creditor to be prematurely due and payable or
being placed on demand,

in each case, as a result of an event of default
(howsoever described);

unless (I) the aggregate principal amount of Financial
Indebtedness of members of the Group falling within paragraphs (a) - (b)
above is less than €45,000,000 or its equivalent or (II) in the case of
Financial Indebtedness under the 2025 Bonds, the relevant event has occurred by
reason of the Acquisition or the original acquisition of the Smurfit Kappa
Group by the Company, and the 2025 Bonds are repaid in full within one month of
the first occasion on which any of the events in paragraph (a) and (b) above
occur and prior to such repayment in full no material action is taken by or on
behalf of any of the bondholders to enforce any security, demand under any
guarantee or taken any steps referred to in Subclauses 24.7 (Insolvency proceedings) or 24.8 (Creditor’s  process) against any member of the Group (provided that
during such one month period there shall be no Default in respect of the events
referred to in paragraphs (a) to (b) above in respect of the 2025 Bonds if the
conditions referred to 

 156
 

above are complied with) or (III) if the Financial
Indebtedness is owed by one member of the Group to another member of the Group,
no Event of Default shall occur unless the creditor takes any step to
accelerate such Financial Indebtedness or otherwise enforces its rights in
respect of such Financial Indebtedness, and the default giving rise to such is
not remedied or waived within 20 Business Days after the date of such
acceleration or enforcement action (V) the Financial Indebtedness was incurred
and/or is outstanding pursuant to or in connection with a Permitted Receivables
Securitisation.

24.6                           Insolvency

Any of the following occurs in respect of the Company
or a Material Group Member:

(a)                                  it
is, or is deemed for the purposes of any applicable law to be, unable to pay
its debts as they fall due or insolvent; or

(b)                                 it
admits its inability to pay its debts as they fall due; or

(c)                                  it
suspends making payments on its debts generally (or any class of them) or
announces an intention to do so; or

(d)                                 by
reason of actual or anticipated financial difficulties, it reschedules or
restructures any of its indebtedness; or

(e)                                  a
moratorium is declared in respect of any of its indebtedness.

24.7                           Insolvency
proceedings

(a)                                  Except
as provided below in paragraph (b), any of the following occurs in respect of
the Company or a Material Group Member:

(i)                                     any
formal or legal step is taken with a view to a composition, assignment or similar
arrangement with any of its creditors; or

(ii)                                  a
meeting of its shareholders, directors or other officers is convened for the
purpose of considering any resolution for, to petition for or to file documents
with a court for, its winding-up, administration, examination or
dissolution or for the seeking of relief under any applicable bankruptcy,
insolvency or similar law or any such resolution is passed; or

(iii)                               any
person presents a petition, or files documents with a court, for its winding-up,
administration, examination or dissolution or seeking relief under any
applicable bankruptcy, insolvency or similar law; or

(iv)                              an
order for its winding-up, administration, examination or dissolution is
made or other relief is granted under any applicable bankruptcy, insolvency or
similar law; or

(v)                                 any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, examiner, administrative receiver, administrator or 

 157
 

similar
officer is appointed in respect of it or any of its assets with an aggregate
value in excess of €25,000,000; or

(vi)                              its
directors, shareholders or other officers request the appointment of, or give
notice of their intention to appoint, a liquidator, trustee in bankruptcy,
judicial custodian, compulsory manager, receiver, examiner, administrative
receiver, administrator or similar officer in respect of it or any of its
assets; or

(vii)                           any
other analogous step or procedure is taken in any jurisdiction.

(b)           Paragraph (a) does not apply to:

(i)                                     any
step or procedure which is part of a Permitted Reorganisation; or

(ii)                                  a
petition for winding-up presented by a creditor which is being contested
in good faith and with due diligence and is discharged, withdrawn or struck out
within 20 Business Days.

24.8                           Creditors’
process

Any attachment, sequestration, distress, execution or
analogous event affects assets of the Company or a Material Group Member,
having an aggregate value of €25,000,000 (or its equivalent), and is not
discharged within twenty-one days from the entry or making thereof.

24.9                           Cessation
of business

The Group taken as a whole ceases to carry on all or a
substantial part of its business except:

(a)                                  as
part of a Permitted Reorganisation; or

(b)                                 as
a result of any disposal allowed under this Agreement.

24.10                     Senior
Finance Documents

(a)                                  It
is or becomes unlawful for any Obligor to perform any of its obligations under
the Senior Finance Documents, which obligation is materially prejudicial to the
Lenders.

(b)                                 Any
Senior Finance Document is not effective or is alleged by an Obligor to be
ineffective for any reason in any respect materially prejudicial to the
Lenders.

(c)                                  A
Security Document does not create the security it purports to create in any
respect which is materially prejudicial to the Lenders.

(d)                                 An
Obligor repudiates a Senior Finance Document or evidences an intention to
repudiate a Senior Finance Document.

 158
 

(e)                                  Any
event of default (however defined) occurs under any of the Securities entitling
any holders of the Securities to make demand for repayment of any Financial
Indebtedness on any member of the Group.

24.11                     Ownership
of the Obligors

An Obligor (other than the Parent) is not or ceases to
be a direct or indirect Subsidiary of the Parent (other than pursuant to a
Permitted Reorganisation or as a result of a disposal which is permitted under
the terms this Agreement).

24.12                     Priority
Agreement

(a)                                  (i)            Any party to the Priority Agreement
(other than a Finance Party) does not comply with the terms of the Priority
Agreement in any respect which is materially prejudicial to the Lenders’
interests under the Finance Documents; or

(ii)                                  a
representation or warranty given by that party in the Priority Agreement is
incorrect in any material respect,

and, if the non-compliance or circumstances
giving rise to the misrepresentation are capable of remedy, it is not remedied
within 20 Business Days of the earlier of the Facility Agent giving notice to
that party of or that party becoming aware of the non-compliance or
misrepresentation; or

(b)                                 the
subordination created or purported to be created by the Priority Agreement is
not effective or is alleged by a party to it (other than a Finance Party) to be
ineffective in any way which is materially prejudicial to the Lenders’
interests under the Finance Documents; or

(c)                                  any
party to the Priority Agreement (other than a Finance Party) repudiates the
Priority Agreement or clearly evidences an intention to repudiate it.

24.13                     Litigation

There shall occur any litigation, arbitration
administrative, regulatory or other proceedings or enquiry (including without
limitation, any such by any monopoly, anti-trust or competition authority
or commission, or any equivalent body in the European Commission or any
division of any thereof or authority deriving power from any thereof)
concerning or arising in consequence of any of the Transaction Documents and
the same has in the reasonable opinion of the Majority Lenders a Material
Adverse Effect (provided that without prejudice to any other event or
circumstances which has a Material Adverse Effect the mere acceleration or non-payment
of the 2025 Bonds following any such litigation or proceedings shall not
constitute a Material Adverse Effect if such bonds are repaid in full within
one month of the date of acceleration or non-payment).

24.14                     Audit
qualification

The Auditors qualify their report on any audited
consolidated financial statements of the Parent in terms or as to issues which
have a Material Adverse Effect.

 159
 

24.15                     Expropriation

The authority or ability of the Company or any
Material Group Member, to conduct its business is wholly or substantially
curtailed by any seizure, expropriation, nationalisation, intervention,
restriction or other action by or on behalf of any governmental, regulatory or
other authority or other person (each an expropriation)
and such expropriation has a Material Adverse Effect.

24.16                     Material
adverse effect

Any event or series of events (whether related or not)
occurs which has a Material Adverse Effect.

24.17                     Acceleration

Subject to Subclauses 24.19 (Clean-Up Period) and 24.20 (Cancellation during Certain Funds Period),
if an Event of Default is outstanding, the Facility Agent may, and must if so
instructed by the Majority Lenders, by notice to the Company:

(a)                                  declare
that an Event of Default has occurred; and/or

(b)                                 cancel
some or all of the Total Commitments; and/or

(c)                                  declare
that all or part of any amounts outstanding under the Senior Finance Documents
are:

(i)                                     immediately
due and payable; and/or

(ii)                                  payable
on demand by the Facility Agent acting on the instructions of the Majority
Lenders, and/or

(d)                                 declare
that full Cash Cover in respect of any or each Documentary Credit is
immediately due and payable.

Any notice given under this Subclause will take
effect in accordance with its terms.

24.18                     Acceleration
for Certain Funds Credits

If there is a Major Default During the Certain Funds
Period then the Facility Agent may, and must if so instructed by the Majority
Lenders, by notice to the Company:

(a)                                  declare
that a Major Default has occurred; and/or

(b)                                 cancel
some or all of the Total Commitments; and/or

(c)                                  declare
that all or part of any Certain Funds Credit outstanding under the Senior
Finance Documents are:

(i)                                     immediately
due and payable; and/or

(ii)                                  payable
on demand by the Facility Agent acting on the instructions of the Majority
Lenders.

 160
 

Any notice given under this provision will take effect
in accordance with its terms.

24.19                     Clean-Up
Period

If during the Clean up Period (or such longer period,
in any particular instance, as the Facility Agent acting on the instruction of
the Majority Lenders may agree) any event or circumstance which (but for this
Subclause 24.19) would constitute a Default (the Potential
Event of Default) shall exist, then the following shall apply:

(a)                                  the
Company or the Target shall notify the Facility Agent in writing of that fact
promptly after becoming aware thereof, giving a reasonable description of:

(i)                                     the
Potential Event of Default and its causes; and

(ii)                                  the
remedial action in relation to that Potential Event of Default which the Company
and/or the Target propose to take;

(b)                                 that
Potential Event of Default shall not constitute a Default, and the Facility
Agent shall not with respect to that Potential Event of Default be entitled to
take any of the actions set out in Subclause 24.17 (Acceleration) (but, for the avoidance of
doubt, not so as to restrict the Facility Agent’s rights to take such action
with respect to any other Event of Default which is not a Potential Event of
Default), until (assuming that the Potential Event of Default is then
continuing) the date that the Clean-up Period has expired, unless in each
case there is a Material Adverse Effect,

provided that this Subclause shall not apply with
respect to any Potential Event of Default under any of Subclauses 24.2 (Non-payment), 24.6 (Insolvency), 24.7 (Insolvency  proceedings), 24.8 (Creditors’ process), 24.10 (Senior Finance Documents) or 24.15 (Expropriation).

24.20                     Cancellation
during Certain Funds Period

During the Certain Funds Period, the Finance Parties
shall not save as provided in Subclause 24.18 (Acceleration for Certain Funds Credits):

(a)                                  have
the right to cancel, rescind or terminate the Facilities during the Certain
Funds Period if the effect of such cancellation, rescission or termination
would prevent or limit the making of any of the Certain Funds Credits during
the Certain Funds Period; or

(b)                                 make
or enforce any claims they may have under this Agreement if the effect of such
claim or enforcement would prevent or limit the making or utilisation of the
Certain Funds Credits during the Certain Funds Period; or

(c)                                  otherwise
exercise during the Certain Funds Period any right of set-off or similar
right or remedy which it may have in relation to any of the Certain Funds
Credits; or

(d)                                 cancel
or declare any Certain Funds Credit immediately due and payable or payable on
demand.

 161
 

24.21                     Right
to Cure Financial Ratios

The Company shall have the right (a “Cure Right”) to receive contributions of equity or quasi-equity
to cure any actual or prospective breach of financial ratios by:

(a)                                  contribution
of up to €20 million of equity cash injection to be made within 15 Business
Days of delivery of related compliance certificate and to be added to
Consolidated Cash Flow and Consolidated EBITDA for the sole purpose of
measuring the Financial Ratios (and not for any other purpose) and the
Consolidated Total Net Borrowings figure will be notionally reduced and the
Consolidated Total Net Interest Payable also adjusted accordingly to reflect
the notional lower Consolidated Total Net Borrowings position for the duration
of the relevant period provided that only a single cure amount may be taken
into account during any relevant period of 12 months; and

(b)                                 contributions
of equity cash injections at any time to be added to Consolidated Cash Flow
(but not Consolidated EBITDA) for the purpose of the ratio of Consolidated Cash
Flow to Consolidated Total Debt Service and applied in repayment of debt in
reduction of Consolidated Total Net Borrowings (for all covenants) provided
that any such cure may be exercised only once in any relevant period of
12 months,

each such
contribution, a “Cure Amount”.

25.                               THE
ADMINISTRATIVE PARTIES

25.1                           Appointment
and duties of the Agents

(a)                                  Each
Finance Party (other than such Agent) irrevocably appoints each Agent to act as
its agent (and, in the case of the Security Agent, its agent and its trustee)
under and in respect of the Senior Finance Documents.

(b)                                 Each
Finance Party irrevocably authorises each Agent to:

(i)                                     perform
the duties and to exercise the rights, powers and discretions that are
specifically given to it under the Senior Finance Documents, together with any
other incidental rights, powers and discretions; and

(ii)                                  execute
each Senior Finance Document and any Documentary Credit expressed to be executed
by such Agent on its behalf.

(c)                                  Each
Finance Party (other than the relevant Administrative Party) confirms that each
of the Arrangers and the Facility Agent has authority to accept on its behalf
the terms of any reliance letter or engagement letters relating to the Reports
or any reports or letters provided by accountants or Auditors in connection
with the Senior Finance Documents or the transactions contemplated therein and
to bind it in respect of such Reports, reports or letters and to sign such letters
on its behalf and to the extent already entered into ratifies such actions and
each Finance Party further confirms that it accepts the terms and
qualifications set out in such letters.

 162
 

(d)                                 Each
Agent has only those duties which are expressly specified in the Senior Finance
Documents.  Those duties are solely of a
mechanical and administrative nature.

(e)                                  Each
Agent shall be released from the restrictions of self-dealing set out in
section 181 of the German Civil Code (Bürgerliches Gesetzbuch)
or restrictions having a similar effect under any applicable law.

25.2                           Role
of the Arrangers

Except as specifically provided in the Senior Finance
Documents, no Arranger has any obligations of any kind to any other Party in
connection with any Senior Finance Document.

25.3                           No
fiduciary duties

Except as specifically provided in a Senior Finance
Document and except in the case of the Security Agent, in relation to the
Security Documents and monies recovered pursuant thereto:

(a)                                  nothing
in the Senior Finance Documents makes an Administrative Party a trustee or
fiduciary for any other Party or any other person; and

(b)                                 no
Administrative Party need hold in trust any moneys paid to or recovered by it
for a Party pursuant to the Senior Finance Documents or be liable to account
for interest on those moneys.

25.4                           Individual
position of an Administrative Party

(a)                                  If
it is also a Lender, each Administrative Party has the same rights and powers
under the Senior Finance Documents as any other Lender and may exercise those
rights and powers as though it were not an Administrative Party.

(b)                                 Each
Administrative Party may:

(i)                                     carry
on any business with any Obligor or its related entities (including acting as
an agent or a trustee for any other financing); and

(ii)                                  retain
any profits or remuneration it receives under the Senior Finance Documents or
in relation to any other business it carries on with any Obligor or its related
entities.

25.5                           Reliance

Each Agent may:

(a)                                  rely
on any notice or document believed by it to be genuine and correct and to have
been signed by, or with the authority of, the proper person;

 163
 

(b)                                 rely
on any statement made by any person regarding any matters which may reasonably
be assumed to be within his knowledge or within his power to verify;

(c)                                  engage,
pay for and rely on professional advisers selected by it (including those
representing a Party other than that Agent); and

(d)                                 act
under the Senior Finance Documents through its personnel and agents.

25.6                           Majority
Lenders’ instructions

(a)                                  Each
Agent is fully protected if it acts on the instructions of the Majority Lenders
in the exercise of any right, power or discretion or any matter not expressly
provided for in the Senior Finance Documents. 
Any such instructions given by the Majority Lenders will be binding on
all the Lenders.  In the absence of
instructions, each Agent may act or refrain from acting as it considers to be
in the best interests of all the Lenders. 
Without prejudice to the foregoing, the Agent shall have the authority
to agree the Agreed List of Obligors and Security and to make amendments
thereto as set out in the definition of that term.

(b)                                 Neither
Agent is authorised to act on behalf of a Lender (without first obtaining that
Lender’s consent) in any legal or arbitration proceedings in connection with
any Senior Finance Document.

(c)                                  An
Agent may require the receipt of security satisfactory to it, whether by way of
payment in advance or otherwise, against any liability or loss which it may
incur in complying with the instructions of the Majority Lenders.

25.7                           Responsibility

(a)                                  No
Administrative Party is responsible to any other Finance Party for the
adequacy, accuracy or completeness of:

(i)                                     any
Senior Finance Document or any other document; or

(ii)                                  any
statement or information (whether written or oral) made in or supplied in
connection with any Senior Finance Document.

(b)                                 Without
affecting the responsibility of any Obligor for information supplied by it or
on its behalf in connection with any Senior Finance Document, each Lender
confirms that it:

(i)                                     has
made, and will continue to make, its own independent appraisal of all risks
arising under or in connection with the Senior Finance Documents (including the
financial condition and affairs of each Obligor and its related entities and
the nature and extent of any recourse against any Party or its assets); and

(ii)                                  has
not relied exclusively on any information provided to it by any Administrative
Party in connection with any Senior Finance Document.

 

 164

25.8                           Exclusion of liability

(a)                                  Neither
Agent is liable or responsible to any other Finance Party for any action taken
or not taken by it in connection with any Senior Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

(b)                                 No
Party may take any proceedings against any officer, employee or agent of an
Agent in respect of any claim it might have against that Agent or in respect of
any act or omission of any kind by that officer, employee or agent in
connection with any Senior Finance Document. 
Any officer, employee or agent of an Agent may rely on this Subclause.

25.9                           Default

(a)                                  Neither
Agent is obliged to monitor or enquire whether a Default has occurred.  Neither Agent is deemed to have knowledge of
the occurrence of a Default unless it has received notice from a Party
describing such Default and specifying that the event or circumstance concerned
is a Default.

(b)                                 If
an Agent:

(i)                                     receives
notice from a Party referring to this Agreement, describing a Default and
stating that the event is a Default; or

(ii)                                  is
aware of the non-payment of any principal or interest or any fee payable
to a Lender under any Senior Finance Document,

it must promptly notify the Lenders.

25.10                     Information

(a)                                  Each
Agent must promptly forward to the person concerned the original or a copy of
any document which is delivered to that Agent by a Party for that person.

(b)                                 Except
where a Senior Finance Document specifically provides otherwise, neither Agent
is obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

(c)                                  Except
as provided above, neither Agent has any duty:

(i)                                     either
initially or on a continuing basis to provide any Lender with any credit or
other information concerning the risks arising under or in connection with the
Senior Finance Documents (including any information relating to the financial
condition or affairs of any Obligor or its related entities or the nature or
extent of recourse against any Party or its assets) whether coming into its
possession before, on or after the date of this Agreement; or

(ii)                                  unless
specifically requested to do so by a Lender in accordance with a Senior Finance
Document, to request any certificate or other document from any Obligor.

 165
 

(d)                                 In
acting as an Agent, the agency division of each Agent is treated as a separate
entity from its other divisions and departments.  Any information acquired by an Agent which,
in its opinion, is acquired by it otherwise than in its capacity as an Agent
may be treated as confidential by that Agent and will not be treated as
information possessed by that Agent in its capacity as such.

(e)                                  No
Agent is obliged to disclose to any person any confidential information
supplied to it by a member of the Group solely for the purpose of evaluating
whether any waiver or amendment is required to any term of the Senior Finance
Documents.

(f)                                    Each
Obligor irrevocably authorises each Agent to disclose to the other Finance
Parties any information which, in such Agent’s opinion, is received by it in
its capacity as an Agent.

25.11                     Indemnities

(a)                                  Without
limiting the liability of any Obligor under the Senior Finance Documents, each
Lender must indemnify each Agent for that Lender’s Pro Rata Share of any loss
or liability incurred by that Agent in acting as an Agent, except to the extent
that the loss or liability is caused by that Agent’s gross negligence or wilful
misconduct.

(b)                                 Each
Agent may deduct from any amount received by it for a Lender any amount due to
that Agent from that Lender under a Senior Finance Document but unpaid.

25.12                     Compliance

Each Agent may refrain from doing anything (including
disclosing any information) which might, in its opinion, constitute a breach of
any law or regulation or be otherwise actionable at the suit of any person, and
may do anything which, in its opinion, is necessary to comply with any law or
regulation.

25.13                     Resignation

(a)                                  Each
Agent may resign and appoint any of its Affiliates as successor Agent to it by
giving notice to the Lenders and the Company.

(b)                                 Alternatively,
each Agent may resign by giving notice to the Lenders and the Company, in which
case the Majority Lenders may appoint a successor Agent to it.

(c)                                  If
no successor Agent has been appointed under paragraph (b) above within
30 days after notice of resignation was given, the relevant Agent may
(after consultation with the Company) appoint a successor Agent to it.

(d)                                 The
person(s) appointing a successor Agent must, if practicable, consult with the
Company prior to the appointment.  Any successor
Agent must have an office in the U.K.

 166
 

(e)                                  The
resignation of an Agent and the appointment of any successor Agent will both
become effective only when:

(i)                                     the
successor Agent notifies all the Parties that it accepts its appointment; and

(ii)                                  on
giving the notification, the successor Agent will succeed to the position of
the retiring Agent and the Facility Agent or Security Agent (as applicable)
will mean the successor Agent; and

(iii)                               in
the case of  the Security Agent, the
Facility Agent confirms that it is satisfied that the Security Documents (and
any related documentation) have been transferred to or into (and where required
registered in) the name of the proposed successor Security Agent.

(f)                                    The
retiring Agent must, at its own cost, make available to the successor Agent
such documents and records and provide such assistance as the successor Agent
may reasonably request for the purposes of performing its functions as Agent
under the Senior Finance Documents.

(g)                                 Upon
its resignation becoming effective, this Clause will continue to benefit a
retiring Agent in respect of any action taken or not taken by it in connection
with the Senior Finance Documents while it was an Agent, and, subject to
paragraph (f) above, it will have no further obligations under any Senior
Finance Document.

(h)                                 The
Majority Lenders may, by notice to any Agent, require it to resign under
paragraph (b) above.

(i)                                     The
Obligors will (at their own cost) take such action and execute such documents
as is required by the Security Agent (acting reasonably) so that the Security
Documents provide for effective and perfected security in favour of any
successor Security Agent.

25.14                     Relationship
with Lenders

(a)                                  Each
Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and as acting through its Facility Office(s) until it has received
not less than five Business Days’ prior notice from that Lender to the
contrary.

(b)                                 Each
Agent may at any time, and must if requested to do so by the Majority Lenders,
convene a meeting of the Lenders.

(c)                                  Each
Agent must keep a register of all the Parties and supply any other Party with a
copy of the register on request.  The
register will include each Lender’s Facility Office(s) and contact details for
the purposes of this Agreement.

25.15                     Notice
period

Where this Agreement specifies a minimum period of
notice to be given to the Facility Agent, the Facility Agent may, at its
discretion, accept a shorter notice period.

 167
 

25.16                     Security
Agent

(a)                                  The
Security Agent shall hold the security constituted by the Security Documents on
trust or to the extent required by any applicable local law as agent for the
Finance Parties or in its own name in accordance with the Senior Finance
Documents and subject to the terms of the Priority Agreement.

(b)                                 The
Security Agent shall not be liable for any failure, omission, or defect in
registering, protecting or perfecting the security constituted by any Security
Document or any security created thereby.

(c)                                  The
Security Agent has no obligation to enquire into or check the title which any
Obligor may have to any property over which security is intended to be created
by any Security Documents or to insure any such property.

(d)                                 Save
where the Security Agent holds a legal mortgage (or equivalent security) over,
or over an interest in, real property or shares, the Security Agent is not
under any obligation to hold any title deeds, Security Documents or any other
documents in connection with the property charged by any Security Document or
any other such security in its own possession or to take any steps to protect
or preserve the same.  The Security Agent
may permit the relevant Obligor, any bank providing safe custody services or
any professional adviser of the Security Agent to retain all such title deeds,
Security Documents and other documents in its possession.

(e)                                  All
amounts received by the Security Agent under the Senior Finance Documents may
be:

(i)                                     invested
in any investment for the time being authorised by English law for the
investment by trustees of trust money or in any other investments which may be
selected by the Security Agent with the consent of the Majority Lenders; or

(ii)                                  placed
on deposit at such bank or institution (including any Agent or Lender) and upon
such terms as the Security Agent may think fit. 
Any and all such monies and all interest thereon shall be paid over to
the Facility Agent forthwith upon demand by the Facility Agent.

(f)                                    Each
Finance Party confirms its approval of the Security Documents and authorises
and directs the Security Agent (by itself or by such person(s) as it may
nominate) to execute and enforce the same as trustee (or agent or in its own
name) or as otherwise provided (and whether or not expressly in the Lenders’
names) on its behalf.

26.                               EVIDENCE
AND CALCULATIONS

26.1                           Accounts

Accounts maintained by a Finance Party in connection
with this Agreement are prima facie evidence of the matters to which they
relate for the purpose of any litigation or arbitration proceedings.

 168
 

26.2                           Certificates and determinations

Any certification or determination by a Finance Party
(showing reasonable detail, if applicable) of a rate or amount under the Senior
Finance Documents will be, in the absence of manifest error, conclusive
evidence of the matters to which it relates.

26.3                           Calculations

Any interest or fee accruing under this Agreement
accrues from day to day and is calculated on the basis of the actual number of
days elapsed and a year of 360 days (or in the case of any amount denominated
in Sterling 365 days or otherwise depending on what the Facility Agent
determines to be market practice).

27.                               FEES

27.1                           Agents’
fee

The Company must pay to each Agent for its own account
an agency fee in the manner agreed in the Fee Letter between that Agent and the
Company.

27.2                           Arrangement fee

The Company must pay to the Arrangers for their own
account an arrangement fee in the manner agreed in the Fee Letter between the
Arrangers and the Company.

27.3                           Term
Loan Commitment fee

(a)                                  The
Company must pay a commitment fee computed at the rate of 0.25 % per annum
from and including the 30th day after the Signing Date for a period of 30 days
and thereafter at the rate of 0.50% per annum on the undrawn, uncancelled
amount of each Lender’s Total Term Loan Commitments.

(b)                                 Accrued
commitment fee is payable on the First Drawdown Date and thereafter quarterly
in arrears.  Accrued commitment fee is
also payable to the Facility Agent for a Lender on the date its Total Term Loan
Commitments are cancelled in full.

(c)                                  Commitment
fee accrued and paid under this Agreement in respect of the Total Term Loan
Commitments is in place of any commitment fee accrued under the Commitment
Letter in respect of a corresponding amount of Term Loan Commitments and the
Company shall not be required to pay commitment fee for the same period under
both this Agreement and the Commitment Letter.

27.4                           Revolving/Restructuring
Credit commitment fee

(a)                                  The
Company must pay a commitment fee computed at the rate of 0.75% per annum on
the undrawn, uncancelled amount of each Lender’s Revolving Credit Commitments
and Restructuring Credit Commitments from the Closing Date.

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(b)                                 Accrued
commitment fee is payable on the First Drawdown Date and thereafter quarterly
in arrears.  Accrued commitment fee is
also payable to the Facility Agent for a Lender on the date its Revolving
Credit Commitments or Restructuring Credit Commitments (as the case may be) are
cancelled in full.

27.5                           Additional
Facility fees

(a)                                  The
Company shall pay to the Facility Agent for distribution to each Initial
Additional Facility Lender any commitment fee required pursuant to the terms of
the relevant Additional Facility Accession Agreement (to be computed and
payable as set out in such Additional Facility Accession Agreement).

(b)                                 The
Company must pay to each relevant Initial Additional Facility Lender and/or the
arranger(s) of the relevant Additional Facility for their own account any other
fees as may be set out in an Additional Facility Fee Letter.

28.                               INDEMNITIES
AND BREAK COSTS

28.1                           Currency
indemnity

(a)                                  The
Company shall, as an independent obligation, indemnify each Finance Party
against any loss or liability which that Finance Party incurs as a consequence
of:

(i)                                     that
Finance Party receiving an amount in respect of an Obligor’s liability under
the Senior Finance Documents; or

(ii)                                  that
liability being converted into a claim, proof, judgment or order,

in a currency other than the currency in which the
amount is expressed to be payable under the relevant Senior Finance Document.

(b)                                 Unless
otherwise required by law, each Obligor waives any right it may have in any
jurisdiction to pay any amount under the Senior Finance Documents in a currency
other than that in which it is expressed to be payable.

28.2                           Acquisition
indemnity

The Company agrees to indemnify each Finance Party
against any loss or liability incurred by that Finance Party in connection with
or arising out of the Acquisition or the funding of the Acquisition (including
but not limited to all costs reasonably incurred in connection with any
litigation, arbitration or administrative proceedings or regulatory enquiry
concerning the Acquisition), unless such loss or liability is caused by the
gross negligence, wilful misconduct or breach of contract of that Finance
Party.

28.3                           Environmental
indemnity

Each Obligor agrees to indemnify each Finance Party,
each receiver appointed under any Security Document and their respective
officers, employees, agents and delegates (together the Indemnified
Parties) against any loss or liability suffered or incurred by that
Indemnified Party (except to the extent caused by such Indemnified Party’s (or
its 

 170
 

officers, employees, agents or delegates) own
negligence, wilful default or breach of contract which:

(a)                                  arises
by virtue of any actual or alleged breach of any Environmental Law (whether by
any Obligor, an Indemnified Party or any other person); or

(b)                                 arises
in connection with an Environmental Claim,

which relates to the Group, any assets of the Group or
the operation of all or part of the business of the Group (or in each case any
member of the Group) and which would not have arisen if the Senior Finance
Documents or any of them had not been executed by that Finance Party.

28.4                           Other
indemnities

(a)                                  The
Company must indemnify each Finance Party against any loss or liability which
that Finance Party incurs as a consequence of:

(i)                                     the
occurrence of any Event of Default;

(ii)                                  any
failure by an Obligor to pay any amount due under a Senior Finance Document on
its due date, including any resulting from any distribution or redistribution
of any amount among the Lenders under this Agreement;

(iii)                               (other
than by reason of negligence or default by that Finance Party) a Credit not
being made after a Request has been delivered for that Credit; or

(iv)                              a
Credit (or part of a Credit) not being prepaid in accordance with a notice of
prepayment or any Loan or overdue amount being repaid or prepaid other than on
the last day of the current Term for such Loan or overdue amount.

The Obligor’s liability in each case includes any loss
or expense on account of funds borrowed, contracted for or utilised to fund any
amount payable under any Senior Finance Document, any amount repaid or prepaid
or any Credit.

(b)                                 The
Company must indemnify the Facility Agent against any loss or liability
incurred by the Facility Agent as a result of:

(i)                                     investigating
any event which the Facility Agent reasonably believes to be a Default; or

(ii)                                  acting
or relying on any notice which the Facility Agent reasonably believes to be
genuine, correct and appropriately authorised.

28.5                           Break
Costs

(a)                                  Each
Borrower must pay to each Lender its Break Costs in relation to Loans or
overdue amounts repaid or prepaid to it otherwise than on the last day of a
Term applicable thereto.

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(b)                                 Each
Lender must supply to the Facility Agent for the relevant Borrower details of
the amount of any Break Costs claimed by it under this Subclause.

29.                               EXPENSES

29.1                           Initial
costs

The Company must pay to each Administrative Party the
amount of all costs and expenses (including legal fees) reasonably incurred by
it in connection with the negotiation, preparation, printing and execution of
the Senior Finance Documents and other documents contemplated thereby and
syndication of the Facilities, subject to the limits agreed between the Company
and such Administrative Parties in the Fee Letter.

29.2                           Subsequent
costs

The Company must pay to the Facility Agent the amount
of all costs and expenses (including legal fees) reasonably incurred by it in
connection with:

(a)                                  the
negotiation, preparation, printing and execution of any Senior Finance Document
(other than a Transfer Certificate) executed after the Closing Date and which
were not included in the limits agreed in the Fee Letter;

(b)                                 any
amendment, waiver or consent made or granted in connection with the Senior
Finance Documents; and

(c)                                  any
other matter not of an ordinary administrative nature arising out of or in
connection with any Senior Finance Document.

29.3                           Enforcement
costs

The Company must pay to each Finance Party the amount
of all third party costs and expenses (including legal fees) incurred by it in
connection with the enforcement of, or the preservation of any rights under,
any Senior Finance Document.

30.                               AMENDMENTS
AND WAIVERS

30.1                           Procedure

(a)                                  Except
as provided in this Clause or as otherwise provided in the Agreement, any term
of the Senior Finance Documents may be amended or waived with the agreement of
the Parent and the Majority Lenders.  The
Facility Agent may effect, on behalf of any Finance Party, an amendment or
waiver allowed under this Clause.  Each
Obligor agrees to any such amendment or waiver agreed to by the Parent.

(b)                                 Each
Finance Party irrevocably agrees to any technical and mechanical amendments to
the Finance Documents which are necessary for the effective operation of any Additional
Facility provided that all such amendments taken as a whole are no more onerous
that the provisions applicable to any C1 Term Loan and provided further that
such amendments would not adversely affect the interests of any Finance Party.
Each Obligor agrees to any such amendment agreed to by the Parent.  For the avoidance of doubt the Facility 

 172
 

Agent and the
Security Agent shall be entitled without the consent of any Lender to amend or
release and retake any Security Document if to do so is necessary or advisable
in connection with ensuring that the Additional Facility Loans are secured by
the Security Documents.

(c)                                  The
Facility Agent must promptly notify the other Parties of any amendment or
waiver effected by it under paragraph (a) or (b) above.  Any such amendment or waiver is binding on
all the Parties.

30.2                           Exceptions

(a)                                  An
amendment or waiver which relates to:

(i)                                     the definition of Majority Lenders
and Super Majority Lenders in Clause 1.1 (Definitions);

(ii)                                  the
ranking or subordination provided for in the Priority Agreement (other than by
way of increases of senior commitments envisaged therein);

(iii)                               Clause 34
(Pro Rata Sharing);

(iv)                              a
term of a Senior Finance Document which expressly requires the consent of each
Lender;

(v)                                 a
change of Borrowers, save as expressly provided for in this Agreement; or

(vi)                              this
Clause,

may only be made with the consent of all the Lenders.

(b)                                 An
amendment or waiver which relates to:

(i)                                     an
extension of the date of payment of any amount to a Lender under the Senior
Finance Documents other than under Subclauses 11.4 (Mandatory
prepayment — disposals, insurance, warranty and report claims) or
11.6 (Mandatory prepayment - Excess Cash Flow);

(ii)                                  a
reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fee or other amount payable to a Lender under the Senior
Finance Documents, other than under Subclauses 11.4 (Mandatory
prepayment — disposals, insurance, warranty and report claims) or
11.6 (Mandatory prepayment - Excess Cash Flow)
or 12.3 (Margin adjustments);

(iii)                               an
increase in, or a redenomination of an extension of, a Commitment or the Total
Commitments;

(iv)                              the
right of a Lender to assign or transfer its rights or obligations under the
Senior Finance Documents;

 173
 

may only be made with the consent of each Lender which
is directly affected by such amendment or waiver.

(c)                                  An
amendment or waiver which relates to:

(i)                                     unless
provided for in this Agreement (including without limitation any disposal under
Subclause 23.6(b)(xi) (Disposals)
or any Permitted Reorganisation, which require Majority Lender consent) or the
Priority Agreement, a release of security over any shares or over any other
assets worth €5,000,000 or its equivalent or more granted under the Security
Documents;

(ii)                                  a
release of an Obligor other than a Borrower, save as expressly provided for in
this Agreement;

may only be made with the consent of the Super
Majority Lenders.

(d)                                 An
amendment or waiver which relates to the rights or obligations of an
Administrative Party may only be made with the consent of that Administrative
Party.

(e)                                  An
amendment or waiver which relates to the rights or obligations of the Issuing
Bank or any Ancillary Lender, in their respective capacities as such, may not
be effected without the prior consent of the Issuing Bank or, as the case may
be, that Ancillary Lender.

(f)                                    Lenders
not responding to waiver or amendment requests within 10 Business Days (or such
longer period as the Facility Agent may reasonably determine is appropriate
after consultation in good faith with the Company and is notified to the
Lenders) will be excluded from the voting calculation.

30.3                           Change
of currency

If a change in any currency of a country occurs
(including where there is more than one currency or currency unit recognised at
the same time as the lawful currency of a country), the Senior Finance
Documents will be amended to the extent the Facility Agent (acting reasonably
and after consultation with the Company) determines is necessary to reflect the
change.

30.4                           Waivers
and remedies cumulative

The rights of each Finance Party under the Senior
Finance Documents:

(a)                                  may
be exercised as often as necessary;

(b)                                 are
cumulative and not exclusive of its rights under the general law; and

(c)                                  may
be waived only in writing and specifically.

Delay in exercising or non-exercise of any right
is not a waiver of that right.

 

 174

31.                               CHANGES
TO THE PARTIES

31.1                           Assignments
and transfers by Obligors

No Obligor may assign or transfer any of its rights
and obligations under the Senior Finance Documents without the prior consent of
all the Lenders.

31.2                           Assignments
and transfers by Lenders

(a)                                  A
Lender (the “Existing Lender”) may, subject to the following
provisions of this Subclause, at any time assign or transfer (including by way
of novation) any of its rights and obligations under this Agreement to any
other person (the “New Lender”).

(b)                                 Unless
the Company and the Facility Agent otherwise agree, a transfer of part of a
Commitment or the rights and obligations under this Agreement by an Existing
Lender must (a) be in a minimum amount of €5,000,000 or, in respect of any
Lender which participates in the B1 Term Loan Facility, B2 Term Loan Facility,
C1 Term Loan Facility or C2 Term Loan Facility only, €2,500,000) and (b) of an
amount such that if the Existing Lender retains any Commitment it is of a
minimum amount of €2,500,000 PROVIDED THAT for the purpose of paragraph (a)
above:

(i)                                     if
an Existing Lender is a Fund, it may transfer to another Fund that is either an
Existing Lender or a Related Fund of a Fund that is an Existing Lender in any
amount;

(ii)                                  in
the case of concurrent transfers by an Existing Lender to two or more Related
Funds, all such concurrent transfers shall be aggregated; and

(iii)                               if
on the same date two or more Existing Lenders are transferring part of their
Commitments or the rights and obligations under this Agreement to the same
transferee the minimum amount so transferred by any Existing Lender to such
transferee may be less than €5,000,000 (or €2,500,000 in the case of transfers
of B1 Term Loan Commitments, B2 Term Loan Commitments, C1 Term Loan Commitments
or C2 Term Loan Commitments) so long as the aggregate amount transferred to
such transferee on such date is €5,000,000 (or €2,500,000 in the case of
transfers of B1 Term Loan Commitments, B2 Term Loan Commitments, C1 Term Loan
Commitments or C2 Term Loan Commitments) or more,

and, in each
case, any threshold in this Clause 31.2 shall apply to the aggregate of the (i)
A1 Term Loan Commitments and A2 Term Loan Commitments; or (ii) B1 Term Loan
Commitments and B2 Term Loan Commitments; or (iii) C1 Term Loan Commitments and
C2 Term Loan Commitments, (as applicable) so transferred or retained.

(c)                                  Except
during the Syndication Period an Existing Lender must consult with the Company
prior to making an assignment or transfer to a New Lender.  The 

 175
 

consultation
with the Company in relation to an assignment, transfer, sub participation or
sub contract shall not be required:

(i)                                     if
such assignment, transfer, sub participation, or sub contract is to an Existing
Lender or affiliate of such a Lender;

(ii)                                  if
such assignment, transfer, sub participation, or sub contract is to a fund
within the same investor group as a fund which is an Existing Lender; or

(iii)                               if
an Event of Default is continuing.

(d)                                 A
transfer of rights and obligations will be effective only if either:

(i)                                     the
rights and obligations are novated in accordance with the following provisions
of this Clause; or

(ii)                                  the
New Lender confirms to the Facility Agent and the Company in form and substance
satisfactory to the Facility Agent that it is bound by the terms of this
Agreement and the Priority Agreement as a Lender.  On the transfer becoming effective in this
manner the Existing Lender will be released from its rights and obligations
under this Agreement to the extent that they are transferred to the New Lender.

(e)                                  Unless
the Facility Agent otherwise agrees, the New Lender must pay to the Facility
Agent for its own account, on or before the date any assignment or transfer
occurs, a fee of €1,500.

(f)                                    Any
reference in this Agreement to a Lender includes a New Lender but excludes a
Lender if no amount is or may be owed to or by it under this Agreement.

(g)                                 A
Lender may sub-participate or sub-contract its obligations under
this Agreement provided that if voting rights are given to any sub-participant
or sub-contractor the relevant Lender must first consult with the Company
(subject to paragraph (c)).

(h)                                 If
any Lender assigns or transfers any of its rights and/or obligations under this
Agreement, a copy of the written instrument by which such rights are assigned
or transferred will be notified by the New Lender to any Obligor incorporated
in the Republic of France by bailiff (huissier) in accordance with the
provisions of Article 1690 of the French Civil Code.

(i)                                     Without
prejudice to Subclause 31.6 (Costs resulting from
change of Lender or Facility Office) or any other provision of this
Agreement relating to assignment or transfer by any Lender of its rights and
obligations under this Agreement any Lender which is a fund may, without the
consent of the Company or the Facility Agent pledge all or any portion of its
Loans to a trustee for the benefit of investors in such fund and in support of
its obligations to such investors or trustee. 
No such pledge or assignment shall release the relevant Lender from the
obligations hereunder.

 176
 

(j)                                     For
the purposes of and pursuant to Article 1263 of the Italian Civil Code, it is
hereby expressly agreed that, in the event of any assignment or transfer of
rights or obligations made by an Existing Lender under this Clause 31.2 (Assignment and transfers by Lenders), all Security Interests
created or evidenced by the Security Documents shall be preserved for the
benefit of the New Lender and each other Lender in accordance with the terms of
the Security Documents.

31.3                           Representation
by Dutch Borrowers and New Lenders

If at the time of any such assignment or transfer it
is a requirement of Dutch law that the New Lender is a Professional Market
Party:

(a)                                  the
Dutch Borrower represents on the date of such assignment to each Finance Party
that it has verified (solely by virtue of the Dutch Borrower receiving an
unqualified written confirmation to that effect, as referred to below, from the
relevant New Lender (through the Administrative Agent)) the status of the New
Lender as a Professional Market Party under the Dutch Exemption Regulation; and

(b)                                 on
the date that a New Lender becomes party to this Agreement as a Lender to the
Dutch Borrower, that New Lender represents and warrants to the Dutch Borrower
(by delivery of an unqualified written confirmation to that effect) that on
such date (i) it is a Professional Market Party and (ii) it is aware that it
therefore does not benefit from the (creditor) protection for non-Professional
Market Parties under the Dutch Banking Act.

31.4                           Procedure
for transfer by way of novations

(a)                                  A
novation is effected if:

(i)                                     the
Existing Lender and the New Lender deliver to the Facility Agent a duly
completed Transfer Certificate; and

(ii)                                  the
Facility Agent executes it.

The Facility Agent must execute as soon as reasonably
practicable a Transfer Certificate delivered to it and which appears on its
face to be in order.

(b)                                 Each
Party (other than the Existing Lender and the New Lender) irrevocably
authorises the Facility Agent to execute any duly completed Transfer Certificate
on its behalf.

(c)                                  On
the Transfer Date:

(i)                                     the
New Lender will assume the rights and obligations of the Existing Lender
expressed to be the subject of the novation in the Transfer Certificate in
substitution for the Existing Lender; and

(ii)                                  the
Existing Lender will be released from those obligations and cease to have those
rights; and

 177
 

(iii)                               the
New Lender will become a party to this Agreement as a Lender and to the
Priority Agreement as a Senior Creditor (as defined in the Priority Agreement).

(d)                                 The
rights and obligations of the Existing Lender in respect of any Documentary
Credit outstanding on the Transfer Date will not be novated or released, unless
the Issuing Bank consents pursuant to Subclause 7.2 (Assignments and transfers).

(e)                                  The
Facility Agent shall provide the Parent with a copy of each Transfer
Certificate.

(f)                                    The
novation shall in no event affect the obligations of the Company or any Obligor
under this Agreement and therefore the substitution of a New Lender in the
rights and obligations of an Existing Lender will not extinguish such
obligations.  For the purposes of
Articles 1278 et seq of the French Civil Code
and Article 1528 of the Spanish Civil Code the Obligors and the Finance Parties
agree that upon any novation under this Clause 31, the security and
guarantees created by the Senior Finance Documents shall be preserved for the
benefit of the New Lender.

31.5                           Limitation
of responsibility of Existing Lender

(a)                                  Unless
expressly agreed to the contrary, an Existing Lender is not responsible to a
New Lender for the legality, validity, adequacy, accuracy, completeness or
performance of:

(i)                                     any
Finance Document or any other document; or

(ii)                                  any
statement or information (whether written or oral) made in or supplied in
connection with any Finance Document,

and any representations or warranties implied by law
are excluded.

(b)                                 Each
New Lender confirms to the Existing Lender and the other Finance Parties that
it:

(i)                                     has
made, and will continue to make, its own independent appraisal of all risks
arising under or in connection with the Senior Finance Documents (including the
financial condition and affairs of each Obligor and its related entities and
the nature and extent of any recourse against any Party or its assets) in
connection with its participation in this Agreement; and

(ii)                                  has
not relied exclusively on any information supplied to it by the Existing Lender
in connection with any Senior Finance Document.

(c)                                  Nothing
in any Senior Finance Document requires an Existing Lender to:

(i)                                     accept
a re-transfer from a New Lender of any of the rights and obligations
assigned or transferred under this Clause; or

 178
 

(ii)                                  support
any losses incurred by the New Lender by reason of the non-performance by
any Obligor of its obligations under any Senior Finance Document or otherwise.

31.6                           Costs
resulting from change of Lender or Facility Office

If:

(a)                                  a
Lender assigns or transfers any of its rights and obligations under the Senior
Finance Documents or changes its Facility Office; and

(b)                                 as
a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to make a payment under Clauses 15.1
(Grossing-up for Taxes),
15.2 (Tax Indemnity) or 16.1 (Increased Costs),

then, unless the assignment, transfer or change is
made to mitigate any circumstances giving rise to such payment or a right to be
prepaid and/or cancelled by reason of illegality, the Obligor need only pay
that amount to the same extent that it would have been obliged to if no
assignment, transfer or change had occurred.

31.7                           Release
of Security

(a)                                  If
a disposal to a person or persons outside the Group of assets or shares owned
by an Obligor over which security has been created by the Security Documents
is:

(i)                                     permitted
by the terms of Clause 23.6 (Disposals)
or Clause 23.38 (Permitted Receivables Securitisations)
and will not result directly or indirectly in any breach of the terms of this
Agreement; or

(ii)                                  is
being effected at the request of the Majority Lenders in circumstances where any
of the security created by the Security Documents has become enforceable; or

(iii)                               such
disposal is being effected by enforcement of the Security Documents,

the Security Agent shall (and is authorised by the
Finance Parties to) on the completion of the disposal release (at the expense
of the relevant Obligor) from the Security Documents, the assets which are
subject to that disposal and (where the disposal is such that an Obligor ceases
to be a member of the Group) the assets of that entity.  The Security Agent shall (at the reasonable
request and at the expense of the Company) provide confirmation of the release
of any asset from the Security under the Security Documents or (where relevant)
confirmation of non-crystallisation of a floating charge, such confirmation
to be in such form as the Security Agent may determine.

(b)                                 Notwithstanding
any other provisions in this Agreement, the release of any security over assets
or shares created by a Security Document governed by Swedish law or Danish law
will (unless the proceeds of the disposal of the asset secured or charged are
applied in prepayment of amounts outstanding under this Agreement) always be
subject to the prior written consent of the 

 179
 

Security
Agent, such consent to be granted at the Security Agent’s sole discretion.  In exercising such discretion the Security
Agent shall in good faith have regard to Clause 23.6 (Disposals) but shall not be under any
obligation to give any consent.

31.8                           Changes
to the Reference Banks

If a Reference Bank which is a Lender (or, if a
Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases
to be a Lender, the Facility Agent must (in consultation with the Company)
appoint another Lender or Affiliate of a Lender to replace that Reference Bank.

31.9                           Affiliates
of Lenders

(a)                                  Each
Lender may fulfil its obligations in respect of any Credit through an Affiliate
if:

(i)                                     the
relevant Affiliate is specified in this Agreement as a Lender or becomes a
Lender by means of a Transfer Certificate in accordance with this Agreement;
and

(ii)                                  the
Credit in which that Affiliate will participate are specified in this Agreement
or in a notice given by that Lender to the Facility Agent and the Company.

In this event, the Lender and the Affiliate will
participate in that Credit in the manner provided for in sub-paragraph
(ii) above.

(b)                                 If
paragraph (a) applies, the Lender and its Affiliate will be treated as having a
single Commitment and a single vote, but, for all other purposes, will be
treated as separate Lenders.

31.10                     New
Issuing Banks

(a)                                  If
a Lender or an Affiliate of a Lender wishes to become an Issuing Bank then it
may, with the consent of the Company and the Facility Agent, deliver an Issuing
Bank Accession Deed to the Facility Agent in a form approved by the Facility
Agent.

(b)                                 The
relevant Lender or Affiliate of a Lender will become an Issuing Bank when the
Facility Agent notifies the other Finance Parties and the Company that such
Issuing Bank Accession Deed is in form and substance satisfactory to it and
executes such Issuing Bank Accession Deed. 
The Facility Agent must give this notification as soon as reasonably
practicable.

31.11                     Maintenance
of Register

The Company hereby designates the Facility Agent to
serve as the Company’s agent, solely for purposes of this Subclause 31.11
to maintain a register (the “Register”)
on which it will record the Commitments from time to time of each of the
Lenders, the Loans made by each of the Lenders and each repayment in respect of
the principal amount of the Loans of each Lender.  Failure to make any such recordation, or any 

 180
 

error in such recordation shall not affect the Company’s
or any Obligor’s obligations in respect of such Loans.  Notwithstanding any other provision in this
Clause 31, with respect to any Lender, the transfer of the Commitments of
such Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Facility Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. 
Notwithstanding any other provision in this Clause 31, the registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Facility Agent on the Register only upon the delivery to and
acceptance by the Facility Agent of properly executed and delivered transfer
documents pursuant to this Clause 31 and no assignment or transfer shall
be effective until so recorded.  The
Facility Agent will promptly update the Register upon receipt by it of such
documents.

32.                               DISCLOSURE
OF INFORMATION

(a)                                  Each
Finance Party must keep confidential any information supplied to it by or on
behalf of any Obligor in connection with the Senior Finance Documents.  However, a Finance Party is entitled to
disclose information:

(i)                                     which
is publicly available, other than as a result of a breach by that Finance Party
of this Clause;

(ii)                                  in
connection with any legal or arbitration proceedings;

(iii)                               if
required to do so under any law or regulation;

(iv)                              to
a governmental, banking, taxation or other regulatory authority if required;

(v)                                 to
its professional advisers on a confidential basis;

(vi)                              to
the extent allowed under paragraph (b) below;

(vii)                           to
any one or more of Fitch Ratings Limited, Moody’s Investors Service, Inc. or
Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies,
Inc., for the purpose of rating the Facilities or the relevant Lender, provided
that such Lender takes reasonable steps to procure that each such rating agency
maintains the confidentiality of that information; or

(viii)                        with
the agreement of the relevant Obligor.

(b)                                 A
Finance Party may disclose to an Affiliate or any person with whom it may
enter, or has entered into, any kind of transfer, participation or other
agreement in relation to this Agreement (a “participant”):

(i)                                     a
copy of any Senior Finance Document; and

(ii)                                  any
information which that Finance Party has acquired under or in connection with
any Senior Finance Document.

 181
 

However, before a participant may receive any
confidential information, it must agree in writing with the relevant Finance
Party (and for the benefit of the Company) to keep that information
confidential on the terms of paragraph (a) above.

(c)                                  This
Clause supersedes any previous confidentiality undertaking given by a
Finance Party in connection with this Agreement prior to it becoming a Party.

33.                               SET-OFF

After the occurrence and during the continuance of an
Event of Default, a Finance Party may set off any matured obligation owed to it
by an Obligor under the Senior Finance Documents (to the extent beneficially
owned by that Finance Party) against any obligation (whether or not matured)
owed by that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation.  If the obligations are in different currencies,
the Finance Party may convert either obligation at a market rate of exchange in
its usual course of business for the purpose of the set-off.  A Finance Party may also at any time after
the occurrence and during the continuance of an Event of Default combine or
consolidate accounts held with it by any Obligor.

34.                               PRO
RATA SHARING

34.1                           Redistribution

If any amount owing by an Obligor under any of the
Senior Finance Documents to a Lender (the “recovering Lender”) is discharged by payment, set-off
or any other manner other than through the Facility Agent under this Agreement
(a “recovery”), then:

(a)                                  the
recovering Lender must, within three Business Days, supply details of the
recovery to the Facility Agent;

(b)                                 the
Facility Agent must calculate whether the recovery is in excess of the amount
which the recovering Lender would have received if the recovery had been
received by the Facility Agent under this Agreement; and

(c)                                  the
recovering Lender must pay to the Facility Agent an amount equal to the excess
(the redistribution) within five
days of demand by the Facility Agent.

34.2                           Effect
of redistribution

(a)                                  The
Facility Agent must treat a redistribution as if it were a payment by the
relevant Obligor under this Agreement and distribute it among the Lenders,
other than the recovering Lender, accordingly.

(b)                                 When
the Facility Agent makes a distribution under paragraph (a) above, the
recovering Lender will be subrogated to the rights of the Finance Parties which
have shared in that redistribution.

(c)                                  If
and to the extent that the recovering Lender is not able to rely on any rights
of subrogation under paragraph (b) above, the relevant Obligor will owe
the 

 182
 

recovering
Lender a debt which is equal to the redistribution, immediately payable and of
the type originally discharged.

(d)                                 If:

(i)                                     a
recovering Lender must subsequently return a recovery, or an amount measured by
reference to a recovery, to an Obligor; and

(ii)                                  the
recovering Lender has paid a redistribution in relation to that recovery,

each Finance Party must reimburse the recovering Lender
all or the appropriate portion of the redistribution paid to that Finance
Party, together with interest for the period while it held the re-distribution.  In this event, the subrogation in
paragraph (b) above will operate in reverse to the extent of the
reimbursement.

34.3                           Exceptions

Notwithstanding any other term of this Clause, a
recovering Lender need not pay a redistribution to the extent that:

(a)                                  it
would not, after the payment, have a valid claim against the relevant Obligor
in the amount of the redistribution; or

(b)                                 it
would be sharing with another Finance Party any amount which the recovering
Lender has received or recovered as a result of legal or arbitration
proceedings, where:

(i)                                     the
recovering Lender notified the Facility Agent of those proceedings; and

(ii)                                  the
other Finance Party had an opportunity to participate in those proceedings but
did not do so or did not take separate legal or arbitration proceedings as soon
as reasonably practicable after receiving notice of them.

35.                               SEVERABILITY

If a term of a Senior Finance Document is or becomes
illegal, invalid or unenforceable in any jurisdiction, that shall not affect:

(a)                                  the
legality, validity or enforceability in that jurisdiction of any other term of
the Senior Finance Documents; or

(b)                                 the
legality, validity or enforceability in other jurisdictions of that or any
other term of the Senior Finance Documents.

36.                               COUNTERPARTS

Each Senior Finance Document may be executed in any
number of counterparts.  This has the
same effect as if the signatures on the counterparts were on a single copy of
the Senior Finance Document.

 

 183

37.                               NOTICES

37.1                           In
writing

(a)                                  Any
communication in connection with a Senior Finance Document must be in writing
and, unless otherwise stated, may be given:

(i)                                     in
person, by post, telex, fax or any other electronic communication approved by
the Facility Agent; or

(ii)                                  if
between the Facility Agent and a Lender and the Facility Agent and the Lender
agree, by e-mail or other electronic communication.

(b)                                 For
the purpose of the Senior Finance Documents, an electronic communication will
be treated as being in writing.

(c)                                  Unless
it is agreed to the contrary, any consent or agreement required under a Senior
Finance Document must be given in writing.

37.2                           Contact
details

(a)                                  Except
as provided below, the contact details of each Party for all communications in
connection with the Senior Finance Documents are those notified by that Party
for this purpose to the Facility Agent on or before the date it becomes a
Party.

(b)                                 The
contact details of the Parent, Smurfit Kappa Funding and the Company for this
purpose are:

Address:                                                               Three
First National Plaza

70 West Madison

Suite 3800

Chicago, Illinois 60602

Fax number: 1 312 895 1001

E-mail:                                             smencoff@mdcp.com,
tsouleles@mdcp.com

Attention:         Sam Mencoff/Tom
Souleles

With a copy to:                             Ian Curley and Paul Regan

Smurfit Kappa Corporation Limited

Beech Hill, Clonskeagh, Dublin 4

Fax:  353 1 2600 709

Tel:  353 1 2600 900

(c)                                  The
contact details of the Facility Agent for this purpose are:

Address:                                                               Winchester
House

1 Great Winchester Street

London EC2N 2DB

Fax number: +44 (0)20 7547 6419

E-mail:                                             Christopher.Benham@db.com
/ Maria.de-Lellis@db.com

Attention:         Christopher
Benham / Maria de-Lellis

 184
 

(d)                                 Any
Party may change its contact details by giving five Business Days’ notice to
the Facility Agent or (in the case of the Facility Agent) to the other Parties.

(e)                                  Where
a Party nominates a particular department or officer to receive a
communication, a communication will not be effective if it fails to specify
that department or officer.

37.3                           Effectiveness

(a)                                  Except
as provided below, any communication in connection with a Senior Finance
Document will be deemed to be given as follows:

(i)                                     if
delivered in person, at the time of delivery;

(ii)                                  if
posted, five days after being deposited in the post, postage prepaid, in a
correctly addressed envelope;

(iii)                               if
by telex, when despatched, but only if, at the time of transmission, the
correct answerback appears at the start and at the end of the sender’s copy of
the notice;

(iv)                              if
by fax, when received in legible form;

(v)                                 if
by e-mail or any other electronic communication, when received in legible
form; and

(vi)                              if
by posting to an electronic website, at the time of posting or if the relevant
recipient did not at such time have access to such website, the time at which
such recipient is given access.

(b)                                 A
communication given under paragraph (a) above but received on a non-working
day or after business hours in the place of receipt will only be deemed to be
given on the next working day in that place.

(c)                                  A
communication to the Facility Agent will only be effective on actual receipt by
it.

37.4                           Obligors

(a)                                  All
communications under the Senior Finance Documents to or from an Obligor must be
sent through the Facility Agent.

(b)                                 All
communications under the Senior Finance Documents to or from an Obligor (other
than the Company) must be sent through the Company.

(c)                                  Each
Obligor (other than the Company) irrevocably appoints the Company to act as its
agent:

(i)                                     to
give and receive all communications under the Senior Finance Documents;

 185
 

(ii)                                  to
supply all information concerning itself to any Finance Party; and

(iii)                               to
agree and sign all documents under or in connection with the Senior Finance
Documents without further reference to the other Obligors.

(d)                                 Any
communication given to the Company in connection with a Senior Finance Document
will be deemed to have been given also to the other Obligors.

(e)                                  The
Facility Agent and the other Finance Parties may assume that any communication
made by the Company is made with the consent of each other Obligor.

37.5                           Personal
Liability

If an individual signs a certificate on behalf of any
Party and the certificate proves to be incorrect, the individual will incur no
personal liability as a result.

38.                               LANGUAGE

(a)                                  Any
notice given in connection with a Senior Finance Document must be in English.

(b)                                 Any
other document required to be provided in connection with a Senior Finance
Document must be:

(i)                                     in
English; or

(ii)                                  (unless
the Facility Agent otherwise agrees) accompanied by a certified English
translation.  In this case, the English
translation prevails unless the document is a statutory or other official
document.

39.                               GOVERNING
LAW

This Agreement is governed by English law.

40.                               ENFORCEMENT

40.1                           Jurisdiction

(a)                                  Subject
to paragraph (c) below, the English courts have exclusive jurisdiction to
settle any dispute arising out of or in connection with any Senior Finance
Document and each Party submits to the exclusive jurisdiction of the English
courts.

(b)                                 The
English courts are appropriate and convenient courts to settle any such dispute
and each Obligor waives objection to those courts on the grounds of
inconvenient forum or otherwise in relation to proceedings in connection with
any Senior Finance Document.

(c)                                  This
Clause is for the benefit of the Finance Parties only.  To the extent allowed by law, a Finance Party
may take:

 186
 

(i)                                     proceedings
in any other court; and

(ii)                                  concurrent
proceedings in any number of jurisdictions.

40.2                           Service
of process

(a)                                  Each
Obligor not incorporated in England and Wales irrevocably appoints Smurfit UK
Limited (whose address is Darlington Road, West Aukland, County Durham DL4 9PE)
as its agent under this Agreement, the Priority Agreement, each Accession Deed,
any Fee Letter, any Security Document governed by English law and any other
Senior Finance Document from time to time requested by the Facility Agent for
service of process in any proceedings before the English courts.

(b)                                 If
any person appointed as process agent is unable for any reason to act as agent
for service of process, the Company (on behalf of all the Obligors) must
promptly appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint
another agent for this purpose.

(c)                                  Each
Obligor agrees that failure by a process agent to notify it of any process will
not invalidate the relevant proceedings.

(d)                                 This
Clause does not affect any other method of service allowed by law.

40.3                           Waiver
of immunity

Each Obligor irrevocably and unconditionally:

(a)                                  agrees
not to claim any immunity from proceedings brought by a Finance Party against
it in relation to a Senior Finance Document and to ensure that no such claim is
made on its behalf;

(b)                                 consents
generally to the giving of any relief or the issue of any process in connection
with those proceedings; and

(c)                                  waives
all rights of immunity in respect of it or its assets.

40.4                           Waiver
of trial by jury

EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTION WITH ANY SENIOR FINANCE
DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY SENIOR FINANCE DOCUMENT.  THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY COURT.

This
Agreement has been entered into on the date stated at the beginning of this
Agreement.

 

 187Exhibit 4.5

DEED OF
AMENDMENT AND RESTATEMENT

31
January 2007

between

SMURFIT KAPPA CORPORATION LIMITED

as the Parent

and

DEUTSCHE BANK AG, LONDON BRANCH

as Senior Agent

in
respect of a

PRIORITY
AGREEMENT DATED 30 NOVEMBER 2005 AS AMENDED
BY

AN AMENDMENT DEED DATED 20 NOVEMBER 2006

relating, inter
alia, to a Senior Credit Facility

dated 30 November 2005 as amended by an amendment letter dated 27 February 2006 and as

further amended by an agreement 20 November 2006

5
Old Broad Street

London  EC2N 1DW

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  INTERPRETATION

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  AMENDMENTS TO PRIORITY
  AGREEMENT

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  EFFECTIVE DATE

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  RATIFICATION OF
  PRIORITY AGREEMENT

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  EXPENSES AND STAMP DUTY

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  GOVERNING LAW AND JURISDICTION

  	
   

  	
  3

  	
   

  

 

 

THIS DEED  is dated 31 January 2007 and is made

BETWEEN:

(1)                                 SMURFIT KAPPA CORPORATION LIMITED
(formerly known
as Jefferson Smurfit Group Limited), a company incorporated in Ireland
(registered number 357957) (the “Parent”); and

(2)                                 DEUTSCHE BANK AG, LONDON BRANCH as senior agent (in its capacity the “Senior Agent”).

WHEREAS:

(A)                               This Deed is supplemental to the Priority
Agreement dated 30 November 2005 between the Parent, the original lenders, the
original borrowers, the original guarantors, the Hedging Banks, the Senior
Agent, the Security Agent and others as amended by an amendment deed dated 20
November 2006 (the “Priority Agreement”).

(B)                               The parties wish to amend the Priority
Agreement in its entirety on the terms and subject to the conditions set out in
this Deed.

IT IS AGREED as follows:

1.                                      INTERPRETATION

1.1                               Subject
to the terms of this Deed, words and expressions defined in the Priority
Agreement shall have the same meanings in this Deed.

1.2                               In
this Deed, any reference to a “Clause”, or a “Schedule” is, unless the context
otherwise requires, reference to a clause or a schedule to this Deed.

1.3                               In
accordance with the Senior Facility Agreement, the Parent and the Senior Agent
designate this Deed a Senior Finance Document.

2.                                      AMENDMENTS
TO PRIORITY AGREEMENT

With
effect from the Effective Date (as defined below), the Priority Agreement shall
be amended as set out in Schedule 1 (Amended and Restated Deed)
to this Deed and all references in the Priority Agreement to “this Deed” shall
include this Deed.

3.                                      EFFECTIVE
DATE

The effective
date (the “Effective Date”) of
this Deed shall be the later of the date of this Deed and the date on which the
Senior Agent confirms (and shall confirm upon receipt) that it has been
provided with:

(a)                                  a
copy, certified true by a duly authorised officer of the Parent or a solicitor
of Kirkland & Ellis International LLP (London office), of a board
resolution of the Parent approving (i) the execution, delivery and performance
of this Deed, (ii) the terms and conditions of this Deed and (iii)
authorising a named person or persons to sign this Deed;

(b)                                  a
copy, certified true by a duly authorised officer of the Parent or a solicitor
of Kirkland & Ellis International LLP (London office), of the Parent’s
corporate constitutional documents;

(c)                                  a
legal opinion from White & Case LLP, legal advisers as to matters of
English law to the Arrangers and the Senior Agent, addressed to the Finance
Parties; and

(d)                                  a legal opinion of McCann FitzGerald, legal
advisers as to matters of Irish law to the Arrangers and the Senior
Agent, addressed to the Finance
Parties;

(e)                                  fee
letters from the Senior Agent dated 10 January 2007 countersigned by Parent in
respect of fees payable by the Parent in connection with the Senior Facility
Agreement (the “Fee Letters”); and

(f)                                    evidence
that all fees and expenses have been or will be paid on the basis of the Fee
Letters,

and
that each of the documents referred to in this Clause 3 (Effective Date) is in form and substance satisfactory to the
Senior Agent acting reasonably.

4.                                      RATIFICATION
OF PRIORITY AGREEMENT

4.1                               The
Priority Agreement as amended by this Deed is ratified and confirmed.

4.2                               Subject
as amended by this Deed, the Parent on behalf of the Guarantors confirms that
the provisions of the guarantee and indemnity contained in clause 5.6 (Hedging  Guarantee)
of the Priority Agreement shall remain in full force and effect on and after
the Effective Date and clause 19 (Guarantee
and Indemnity) of the Senior Facility Agreement shall apply equally
to the obligations of the Borrowers under Clause 6 (Expenses and Stamp Duty) of this Deed as
if set out in full in this Deed save that references in the Priority Agreement
to “this Deed” shall be construed as references to this Deed.

4.3                               The provisions of the Priority Agreement
shall, save as amended by this Deed, continue in full force and effect among
all of the parties thereto who were parties thereto immediately prior to the
effectiveness of this Deed

5.                                      REPRESENTATIONS
AND WARRANTIES

The
Parent on behalf of each of the Obligors represents and warrants to the Secured
Parties (as defined in the Priority Agreement) on the terms set out in
clause 6 (Warranties of the Junior Creditor)
of the Priority Agreement as if such clause was set out in full in this
Deed.  Such representations shall survive
the execution of this Deed.

6.                                      EXPENSES
AND STAMP DUTY

6.1                               The
Parent shall from time to time on demand of the Senior Agent, reimburse the
Senior Agent and each of the Arrangers for all costs and expenses (including
legal fees) together with any VAT in connection with the negotiation,
preparation and execution of this Deed and the transactions contemplated in
this Deed.

 2
 

6.2                               The
Parent shall pay all stamp, registration and other taxes to which this Deed, or
any judgment given in connection with this Deed, is or at any time may be
subject and shall from time to time on demand of the Senior Agent indemnify the
Senior Agent, the Arrangers and the Lenders against any liabilities, costs,
claims and expenses resulting from any failure to pay or any delay in paying
any such tax.

7.                                      COUNTERPARTS

This
Deed may be executed in any number of counterparts and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.

8.                                      GOVERNING
LAW AND JURISDICTION

8.1                               This
Deed shall be governed by and construed in accordance with English law.

8.2                               The
provisions of clause 28 (Governing Law)
and clause 29 (Jurisdiction)
of the Priority Agreement shall be deemed to be incorporated into this Deed as
if such clause was set out in full save that references in the Priority
Agreement to “this Deed” shall be construed as references to this Deed.

THIS DEED has been executed and delivered as a Deed on the date
stated at the beginning of this Deed.

 3

 

SCHEDULE 
1

AMENDED AND RESTATED DEED

 

 

 

 4

SIGNATORIES

	
  PARENT

  
	
   

  
	
  The Common Seal of

  	
  )

  	
   

  
	
  SMURFIT KAPPA

  	
  )

  	
   

  
	
  CORPORATION LIMITED

  	
  )

  	
   

  
	
  was affixed hereto in the presence of

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Director

  	
  )

  	
  /s/ Ian J. Curley

  
	
   

  	
  )

  	
   

  
	
  Director / Secretary

  	
  )

  	
   /s/ Michael
  O’Riordon

  
	
   

  	
  )

  	
   

  
	
   

  
	
   

  
	
   

  
	
  THE SENIOR AGENT

  
	
   

  
	
  EXECUTED AS A DEED by

  	
  )

  	
   

  
	
  DEUTSCHE BANK AG, LONDON BRANCH

  	
  )

  	
   

  
	
  as Senior Agent on behalf of the Finance Parties

  	
  )

  	
   

  
	
  and with the requisite consent pursuant

  	
  )

  	
   

  
	
  to clause 30.1 of the Senior Facility
  Agreement,

  	
  )

  	
   

  
	
  acting by its authorised signatories

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  /s/ [Illegible]

  
	
   

  	
  )

  	
   

  
	
  acting under the authority)

  	
  )

  	
  /s/ [Illegible]

  
	
  of that company)

  	
  )

  	
   

  
	
   

  
	
   

  

 

 

SCHEDULE 1

AMENDED AND RESTATED DEED

 

ORIGINALLY DATED 30 NOVEMBER 2005

PRIORITY
AGREEMENT

 

between

SMURFIT
KAPPA CORPORATION LIMITED

as the Parent

 

CERTAIN
SUBSIDIARIES OF THE PARENT

as Obligors

 

THE
SENIOR CREDITORS, THE HEDGING BANKS AND JUNIOR CREDITOR

 

and

 

DEUTSCHE
BANK AG, LONDON BRANCH

as Senior Agent
and Security Agent

 

 

relating, inter alia, to
a Senior Facility Agreement

dated 30 November 2005

 

 

5 Old Broad Street

London EC2N 1DW

 
  

 

TABLE OF
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  1.

  	
   

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  RANKING

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  UNDERTAKINGS

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  AMENDMENTS

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  HEDGING DEBT

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  WARRANTIES OF JUNIOR
  CREDITOR

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  PERMITTED PAYMENTS

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  TURNOVER

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  SUBORDINATION ON
  INSOLVENCY

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  ENFORCEMENT

  	
   

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  PROCEEDS OF ENFORCEMENT

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  ENFORCEMENT OF SECURITY

  	
   

  	
  26

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  LOSS SHARING

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  CONSENTS AND LIMITS

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  INFORMATION

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  SUBROGATION

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  PROTECTION OF
  SUBORDINATION

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  PRESERVATION OF DEBT

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  POWER OF ATTORNEY

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  EXPENSES

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  CHANGES TO THE PARTIES

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  STATUS OF OBLIGORS

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  NOTICES

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  WAIVERS, REMEDIES
  CUMULATIVE

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  THE SECURITY AGENT AND
  SENIOR AGENT

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  TERMINATION

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  SEVERABILITY

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  JURISDICTION

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1 THE OBLIGORS

  	
   

  	
  50

  	
   

  
	
  SCHEDULE 2 SENIOR
  CREDITORS

  	
   

  	
  51

  	
   

  
	
  SCHEDULE 3
  [INTENTIONALLY OMITTED]

  	
   

  	
  52

  	
   

  

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4 HEDGING
  BANKS AND HEDGING DOCUMENTS

  	
   

  	
  53

  	
   

  
	
  SCHEDULE 5 FORM OF DEED
  OF ACCESSION

  	
   

  	
  55

  	
   

  
	
  SCHEDULE 6 CALCULATION
  OF HEDGING DEBT

  	
   

  	
  56

  	
   

  
	
  SCHEDULE 7 SECURITY AGENT

  	
   

  	
  57

  	
   

  

 

 ii

THIS PRIORITY AGREEMENT  dated 30 November 2005 as amended and restated by the
Amendment and Restatement Deed is made

BETWEEN:

(1)                                 SMURFIT KAPPA CORPORATION LIMITED a company incorporated under the laws of
Ireland (No. 357957) with its registered office at Beech Hill, Clonskeagh,
Dublin 4, Ireland (the “Parent”);

(2)           THE COMPANIES named in Schedule 1 as Obligors;

(3)                                 THE BANKS AND FINANCIAL
INSTITUTIONS
named in Schedule 2 as Senior Creditors;

(4)                                 DEUTSCHE BANK TRUST COMPANY
AMERICAS as Bond
Trustee;

(5)           AVADALE (NETHERLANDS) B.V. as Junior Creditor;

(6)                                 THE BANKS AND FINANCIAL
INSTITUTIONS (if
any) named in Schedule 4  as Hedging
Banks; and

(7)                                 DEUTSCHE BANK AG, LONDON BRANCH as Senior Agent and Security Agent.

IT IS AGREED as follows:

1.                                      DEFINITIONS
AND INTERPRETATION

1.1                               Definitions

In this Deed:

“2025 Bonds”
means the 7.5% Guaranteed Debentures due 2025 of Smurfit Capital Funding plc
issued pursuant to the 2025 Indenture.

“2025  Indenture” means the indenture, dated
15 November 1995, by and among Smurfit Kappa Treasury Funding Limited
(as issuer), Smurfit Kappa Packaging Limited (formerly known as Jefferson
Smurfit Group Limited) (as guarantor), Smurfit International B.V. (as
guarantor), Smurfit Kappa Treasury (formerly named Packaging International
Finance) (as guarantor) and JPMorgan Chase Bank, N.A. (formerly known as
Chemical Bank) (as trustee), as amended from time to time.

“2025 Obligations”
means the unpaid principal of, and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the 2025 Bonds, when and as due, whether at
maturity, by acceleration, upon one or more dates set for redemption, prepayment
or otherwise, and all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable

 1
 

in such proceeding), of Smurfit Kappa Treasury Funding
Limited, the Company or any of their respective affiliates under the 2025
Indenture or the 2025 Bonds.

“Additional Debt”  in relation to any
obligation or liability means:

(i)                                     any refinancing, novation, deferral or
extension of any of those liabilities;

(ii)                                  any further advance made under any
agreement supplemental to any relevant Finance Document plus all related
interest, fees and costs;

(iii)                               any claim for damages or restitution in
the event of rescission of any such liabilities or otherwise in connection with
any relevant Finance Document;

(iv)                              any claim against any Obligor flowing
from any recovery by an Obligor or any other person of a payment or discharge
in respect of those liabilities on the grounds of preference or otherwise; and

(v)                                 any amounts (such as post-insolvency
interest) which would otherwise be included in any such liability but for any
discharge, non-provability, unenforceability or non-allowability of
the same in any Insolvency or other proceedings.

“Amend”  means
amend, novate, vary, waive, supplement or the giving of any waiver, release or
consent having the same commercial effect (and “Amendment” and “Amended”
shall be construed accordingly).

“Amendment and Restatement
Deed” means the deed dated 31 January 2007 between the parties to
this Deed pursuant to which this Deed was amended and restated.

“Appointment Date”  means
the date upon which an examiner is appointed to all or any of the Obligors.

“Austrian Security”
has the meaning provided in Clause 25.5(b) (Special Appointment of
Security Agent Germany and Austria).

“Bond Trustee”
means Deutsche Bank Trust Company Americas and any other entity acting as
trustee under any issue of Cash Pay Securities and which has acceded to this
Deed pursuant to Clause 21.5 (Bond Trustee).

“Cash Pay Securities” has the meaning given to it in the
Senior Facility Agreement.

“Collateral”
means all assets or property of the Obligors, now owned or hereafter acquired,
upon which a Security Interest is purported to be created by any Combined
Security Document.

“Collateral Account”
has the meaning assigned to such term in Clause 11.2 (The
Collateral Account).

“Combined Security
Documents” means the Security Documents, the Hedging Security
Documents and the Note Security Documents.

 2
 

“Company” means Smurfit Kappa Acquisitions.

“Debt”
means any or all of the Senior Debt, the Hedging Debt, the Note Debt, the
Smurfit Kappa Funding Debt, the Junior Debt, the Senior Subordinated Guarantee
Debt and the Intercompany Debt, as the context requires.

“Deed of Accession”
means a deed of accession substantially in the form of Schedule 5 (Form of Accession Deed).

“Distribution Date”
means each date fixed by the Security Agent in its sole discretion for a
distribution pursuant to the applicable provisions of this Deed of any funds
held in the Collateral Account.

“Enforcement Date”
means the date on which an Enforcement Event first occurs.

“Enforcement Event”
means the Senior Agent first exercising any of its rights under
Clauses 24.17(b), (c)(i) or (d) (Acceleration)
or 24.18(b) or (c)(i) (Acceleration for
Certain Funds Credits) of the Senior Facility Agreement or, having
exercised its rights under Clauses 24.17(c)(ii) or 24.18(c)(ii) thereof, first
making demand with respect to some or all of the Credits.

“Enforcement
Instructing Group” means, at any time, Senior Creditors and Hedging
Banks the aggregate of whose shares in (a) the amount of Senior Secured Debt
(other than the Hedging Debt), and (b) the amount of Hedging Debt at that time
exceeds 50.0% of the aggregate of (i) the Senior Secured Debt (other than
the Hedging Debt), and (ii) the Hedging Debt, at that time.  The amount of Hedging Debt shall be
calculated in accordance with Schedule 6 (Calculation
of Hedging Debt).

“Exchange Rate”
means, at any date of determination thereof with respect to any currency, the
spot rate of exchange for the conversion of such currency into euro determined
by reference to such rate publishing service as is customarily utilized by the
Security Agent for such purpose; provided that, to the extent that “Exchange Rate” is used in this Deed to refer to an actual
exchange by the Security Agent of one currency for another, “Exchange Rate” shall be deemed to refer to the rate at which
such exchange actually occurs so long as such exchange is effected under
customary market conditions. Any such determination of the Exchange Rate by the
Security Agent shall be conclusive absent manifest error.

“Finance Documents”
means each or any of the Senior Finance Documents, the Hedging Documents, the
Note Documents, the Senior Subordinated Guarantee, the Junior Loan Agreement
and the Intercompany Documents.

“German Security”
has the meaning provided in Clause 25.5(b) (Special Appointment of
Security Agent Germany and Austria).

“Hedging Bank”
means each bank or financial institution named in Schedule 4 (Hedging Banks and Hedging Documents) and any other bank or
financial institution which becomes a party to this Deed as a Hedging Bank
under Clause 5.1 (Accession of Hedging
Banks) in each case in its capacity as provider of hedging
facilities to any of the Obligors.

 3
 

“Hedging Debt”
means all present and future liabilities (actual or contingent) payable or
owing by any Obligor to any Hedging Bank under or in connection with the
Hedging Documents, whether or not matured and whether or not liquidated,
together with any Additional Debt relating thereto.

“Hedging Document”
means each ISDA master agreement, confirmation or other document evidencing any
hedging facility provided by a Hedging Bank to an Obligor, which facility is
specified in Schedule 4 (Hedging Banks and Hedging
Documents) or where the counterparty has become a Hedging Bank in
accordance with Clause 5.1 (Accession
of Hedging Banks) and the Hedging Security Documents (collectively,
the “Hedging Documents”).

“Hedging Security
Documents” means any security granted by any member of the Group in
favour of a Hedging Bank as security for the Hedging Debt.

“Insolvency”
means the winding-up, bankruptcy, liquidation, dissolution,
administration, examination, receivership, administrative receivership or re-organisation
of any Obligor, any moratorium or judicial composition in respect of any
Obligor or any analogous proceedings affecting any Obligor in any jurisdiction
outside England and Wales.

“Instructing Group”
means, at any time, Senior Creditors and Hedging Banks the aggregate of whose
shares in (a) the amount of Senior Debt (other than Hedging Debt) and (b) the
amount of Hedging Debt, at that time equals or exceeds 662⁄3% of the
aggregate of (i) the Senior Debt (other than the Hedging Debt) and (ii) the
Hedging Debt, at that time.  The amount
of Hedging Debt shall be calculated in accordance with Schedule 6 (Calculation of Hedging Debt).

“Intercompany
Creditor” means any Obligor to whom any Intercompany Debt may from
time to time be payable or owing (whether or not matured).

“Intercompany Debt”
means all present and future Financial Indebtedness (actual or contingent)
payable or owing by any Obligor to any other Obligor whether or not matured and
whether or not liquidated, together in each case with any Additional Debt
relating thereto and including, without limitation, all that Financial
Indebtedness incurred by one Obligor from another Obligor specified in the
Funds Flow Statement or the Structure Memorandum and all Financial Indebtedness
owed by the Company under or in connection with any Smurfit Kappa Funding Loan
Agreement, but excluding any trading liabilities arising in the ordinary course
of trading.

“Intercompany
Documents” means any Smurfit Kappa Funding Loan Agreement, and all
other agreements and instruments evidencing any Financial Indebtedness from
time to time made available by one Obligor to another Obligor.

“Junior Creditor”
means Avadale (Netherlands) B.V. a private company with limited liability (besloten venootschap met beperkte aansprakelijkheid)
incorporated under the laws of the Netherlands, with its statutory seat at
Rotterdam, the Netherlands and registered at the Chamber of Commerce of
Amsterdam under number 24336352.

 4
 

“Junior Debt”
means all present and future liabilities (actual or contingent) payable or
owing by any Obligor to the Junior Creditor under or in connection with any
Junior Loan Agreement, whether or not matured and whether or not liquidated,
together with any Additional Debt relating thereto.

“Junior Loan
Agreement” means the loan agreement dated September 2002 between the
Parent as borrower and the Junior Creditor as lender.

“Majority Senior
Creditors” means the Majority Lenders as defined in the Senior
Facility Agreement provided that if, at the relevant time, any Lender (or
Affiliate of it) is also a Hedging Bank then, for the purposes of calculating
voting rights under this Deed, the Total Commitments under the Senior Facility
Agreement will be notionally increased by an aggregate amount calculated in
accordance with Schedule 6 (Calculation of Hedging
Debt) with respect to each such Lender’s (or its Affiliate’s)
interest in the Hedging Debt and each Lender which is a Hedging Bank (or whose
Affiliate is a Hedging Bank) will be deemed to have the aggregate amount of its
Commitments increased by the amount calculated in accordance with
Schedule 6 (Calculation of Hedging Debt) with
respect to the outstanding Hedging Debt owed to it.

“New Obligor”
has the meaning given to it in Clause 21.3 (New Obligors).

“Note Creditor”
means any noteholder under the 2025 Bonds and the Note Trustee.

“Note Debt”
means all present and future 2025 Obligations (actual and contingent), whether
or not matured and whether or not liquidated, together with any Additional Debt
relating thereto.

“Note Documents”
means the 2025 Bonds, the 2025 Indenture and the Note Security Documents.

“Note Security
Documents” means any security documents granting security in favour
of the Note Creditors or the Security Agent for the benefit of the Note
Creditors in respect of the 2025 Obligations, a schedule of which shall be kept
by the Company and provided to the Security Agent upon request from time to
time.

“Note Trustee”
means JPMorgan Chase Bank, N.A., as trustee under the 2025 Indenture or any
successor trustee thereunder.

“Notice”
means any notice, request, instruction, demand or other communication.

“Obligor”
means the Parent, each other member of the Group specified in Schedule 1 (The Obligors) and each New Obligor.

“Party”
means an Obligor, a Senior Creditor, the Security Agent, the Senior Agent, the
Junior Creditor, a Hedging Bank or the Bond Trustee, as the context requires.

“Recovery”
means all amounts received or recovered by any of the Senior Creditors or the
Hedging Banks on or after the occurrence of an Enforcement Event in payment or
on account of any Senior Debt or Hedging Debt but after deducting (a) the
reasonable costs and expenses incurred by such Senior Creditor or Hedging Bank
in effecting such receipt or recovery, and (b) any sums required by law or
court order to

 5
 

be paid to third parties on account of claims
preferred by law over the claims of the Secured Parties.

“Restricted Debt”
means all present and future liabilities (actual or contingent) payable or
owing by any Restricted Borrower to any Senior Creditor under or in connection
with the Restricted Term Loan Facilities, whether or not matured and whether or
not liquidated together with any Additional Debt relating thereto.

“Secured Creditor”
means a Senior Secured Creditor or a Hedging Bank or a Note Creditor, as the
context requires (together the “Secured Creditors”).

“Secured Instruments”
means at any time the Senior Finance Documents, the Hedging Documents and the
Note Documents.

“Secured Obligations”
means the Senior Secured Debt, the Hedging Debt and the Note Debt.

“Secured Party”
means each of the Senior Creditors, the Hedging Banks and the Note Creditors.

“Securities
Creditors” means the holders or owners of the Cash Pay Securities.

“Security Agent”
means Deutsche Bank AG, London Branch in its capacity as agent and trustee for
the Senior Secured Creditors and the Hedging Banks of the security conferred
under the Security Documents and in its capacity as collateral agent for the
Note Creditors, and any sub-agent, sub-trustee or custodian
appointed by it.

“Security Documents”
has the meaning given to it in the Senior Facility Agreement.

“Senior Agent”
means Deutsche Bank AG, London Branch in its capacity as facility agent for the
Senior Creditors under the Senior Facility Agreement.

“Senior Creditor” means each of:

(a)                                  the banks and financial institutions
named in Schedule 2 (Senior Creditors)
in their capacity as Lenders and/or Ancillary Lender and/or Issuing Bank under
the Senior Facility Agreement;

(b)           the
Arrangers, the Senior Agent and the Security Agent;

(c)                                  any other person designated as a Senior
Creditor by the Senior Agent and the Company and who has acceded to this Deed;
and

(d)           any
successor, transferee, replacement or assignee of any of the above.

“Senior Debt”
means all present and future liabilities (actual or contingent) payable or
owing by any Obligor to any Senior Creditor under or in connection with the
Senior Finance Documents, whether or not matured and whether or not liquidated,
together with any Additional Debt relating thereto.

“Senior Discharge
Date” means the date on which the Senior Agent is satisfied that all
of the Senior Debt and the Hedging Debt has been irrevocably paid and
discharged

 6
 

and all Commitments of the Senior Creditors and all
obligations of the Hedging Banks under the Hedging Documents have been
terminated.

“Senior Facility
Agreement” means the senior facility agreement dated 30 November
2005 as amended and restated pursuant to an amendment agreement on or about the
date of the Amendment and Restatement Deed between the Parent, certain of the
other Obligors, the Senior Creditors, the Security Agent and the Senior Agent
providing for €3,196,818,558 term loan facilities, a €600,000,000 revolving
loan facility and additional facilities of up to €400,000,000 (and includes any
refinancings or replacement in whole or part of the said senior facility
agreement after the date hereof).

“Senior Finance
Document” has the meaning given to it in the Senior Facility
Agreement, but excluding the Hedging Documents.

“Senior Secured Creditor”
means a Senior Creditor other than a Lender under or in connection with the
Restricted Term Loan Facilities.

“Senior Secured Debt”
means the Senior Debt other than the Restricted Debt.

“Senior Subordinated
Guarantee” has the meaning given to it in the Senior Facility
Agreement.

“Senior Subordinated
Guarantee Debt” means all present and future liabilities (actual or
contingent) payable or owing by the Company under or in connection with the
Senior Subordinated Guarantee whether or not matured and whether or not
liquidated, together with any Additional Debt relating thereto.

“Smurfit Kappa
Funding Debt Non-Payment Event” means the non-payment of
any amount when due under the Smurfit Kappa Funding Debt (but in the case of
any amount not constituting principal, interest or fees, being an amount in
excess of €500,000).

“Smurfit Kappa
Funding  Debt” means all
present and future liabilities (actual or contingent) payable or owing by any
Obligor under or in connection with the Cash Pay Securities whether or not
liquidated and together with any Additional Debt relating thereto.

“Spanish Security Documents”
means each Security Document which is stated to be governed by Spanish law.

“Subordinated
Creditors” means the Junior Creditor and the Intercompany Creditors.

“Subordinated Debt”
means the Junior Debt and the Intercompany Debt.

“Trustee Security
Documents” means each of the Security Documents other than the
Hedging Security Documents.

“Turnover Receipt”
has the meaning given to it in Clause 8 (Turnover).

 7
 

1.2                               Interpretation

(a)                                  References
to any of the Security Agent, the Senior Agent, the Senior Creditors, the
Hedging Banks, the Securities Creditors, the Bond Trustee, the Note Creditors,
the Note Trustee, the Junior Creditor or the Obligors in whatever capacity
includes their respective permitted successors, assigns, replacements,
transferees and substitutes from time to time.

(b)                                 Headings
and the index are for convenience of reference only and shall be ignored in the
interpretation of this Deed.

(c)                                  References
to the Senior Facility Agreement, a Senior Finance Document, a Junior Loan
Agreement, a Hedging Document, a Note Document, the Senior Subordinated
Guarantee, the Cash Pay Securities or an Intercompany Document or any other
document or agreement is to that document or agreement as novated,
supplemented, amended, varied or restated from time to time.

(d)                                 In
this Deed, unless the context otherwise requires:

(i)                             references to Clauses and
Schedules are to be construed as references to the Clauses of, and Schedules
to, this Deed;

(ii)                          references to a “payment” includes a prepayment or a
repayment and references to “pay”
include repay and prepay;

(iii)                       references
to “give any financial support”
(or similar phrases) in connection with any Debt include, without limitation,
the taking of any participation in or in respect of such Debt, the giving of
any guarantee, indemnity or other assurance against loss in respect of such
Debt, or the making of any deposit or payment in respect of or on account of
such Debt;

(iv)                      words
importing the singular shall include the plural, and vice versa; and

(v)                         references
to persons shall include any firm, body corporate, company, corporation,
government, state or agency of a state or any association or partnership
(whether or not having separate legal personality) of two or more of the
foregoing.

(e)                                  Terms
defined in or whose interpretation is provided for in the Senior Facility
Agreement shall have the same meaning when used in this Deed (whether before or
after the Senior Discharge Date) unless separately defined or interpreted in
this Deed.

(f)                                    In
determining whether or not an amount of Senior Debt, Hedging Debt or Note Debt
has been irrevocably paid and discharged, the Senior Agent will disregard
contingent liabilities (such as the risk of clawback flowing from a preference)
except to the extent that the Senior Agent believes that there is a

 8
 

reasonable likelihood that those contingent
liabilities will become actual liabilities.

(g)                                 It
is intended by the Parties that this Deed take effect as a Deed notwithstanding
that a party only executes it under hand.

(h)                                 If
there is any conflict between the terms of this Deed and any other Finance
Document, the terms of this Deed shall prevail.

2.                                      RANKING

2.1                               Ranking
of Debt

Unless expressly provided
to the contrary in this Deed, the Debt shall rank in right and priority of
payment in the following order:

First                                                                     the Senior Debt, the Hedging Debt and the
Note Debt (pari passu, without any preference
between themselves);

Second                   the
Intercompany Debt; and

Third                      the Junior Debt.

For the avoidance of doubt, any claims against the
Company under the Senior Subordinated Guarantee rank prior to the claims (if
any) against the Company in respect of Junior Debt.

2.2                               Priority
of Security

(a)                                  During
the continuance of this Deed, the Security Documents, the Hedging Security
Documents and the Note Security Documents shall in all respects rank pari passu without preference for one over the other as if
each has been created on the same date and at the same time enjoyed equal
priority.

(b)                                 The
order of priority set out at paragraph (a) of this Clause 2.2 shall
apply notwithstanding:

(i)                             the order of registration,
notice or execution of any of the Combined Security Documents;

(ii)                          the creation in favour of any
Secured Party of any further additional security over the undertaking,
properties or assets of the Obligors (or any of them) or any asset which is
subject to a floating charge in any Combined Security Document becoming subject
to a security which is a fixed charge or a crystallised floating charge;

(iii)                       any fluctuation in the amounts
from time to time owing to any of the Secured Parties; or

(iv)                      any contrary provision of the
Senior Finance Documents, the Hedging Documents or the Note Documents.

 9
 

3.                                      UNDERTAKINGS

3.1                               General
Undertakings

Except as the Majority Senior Creditors have
previously agreed in writing, or to the extent permitted by Clauses 7 (Permitted Payments) or 9.2 (Procedure) or 10 (Enforcement):

(a)                                  no
Obligor will (and each Obligor will procure that none of its Subsidiaries will)
pay, or make any distribution in respect of or on account of, or purchase,
defease, redeem or acquire, any of the Subordinated Debt in cash or in kind;

(b)                                 no
Subordinated Creditor will demand or receive payment of, or any distribution in
respect of or on account of any Subordinated Debt in cash or kind or apply any
money or property in or towards the discharge of any Subordinated Debt;

(c)                                  no
Subordinated Creditor or Obligor will discharge any Subordinated Debt by set-off,
any right of combination of accounts or otherwise (save to the extent such set-off
occurs automatically by operation of law and not as a result of any action or
election by such Subordinated Creditor or Obligor and any amount so set-off
is subject to Clause 8 (Turnover));

(d)                                 no
Obligor will (and each Obligor will procure that none of its Subsidiaries will)
create or permit to subsist any Security Interest over any of its assets for
any of the Subordinated Debt, and no Subordinated Creditor will allow to exist
or receive any Security Interest, for any of the Subordinated Debt (save in
either case to the extent that such Security Interest secures Intercompany Debt
(other than any Intercompany Debt owed to the Parent or Smurfit Kappa Funding)
and the benefit of any such Security Interest has been charged or assigned to
the Secured Creditors (or the Secured Parties if the relevant Obligor is the
Restricted Borrower) under the Security Documents);

(e)                                  no
Obligor will (and each Obligor will procure that none of its Subsidiaries will)
give any financial support to any person for, in respect of or in connection
with the Subordinated Debt (save to the extent that such financial support is
in respect of Intercompany Debt (other than any Intercompany Debt owed to the
Parent or Smurfit Kappa Funding) and the benefit of any such financial support
has been assigned or charged to the Secured Creditors (or the Secured Parties
if the relevant Obligor is the Restricted Borrower) under the Security
Documents);

(f)                                    no
Obligor or Subordinated Creditor will allow any of the Subordinated Debt to be
evidenced by a negotiable instrument or subordinate any of the Subordinated
Debt to any other indebtedness save as provided for in this Deed;

(g)                                 no
Obligor will initiate or support or take any steps with a view to any
insolvency, liquidation, reorganisation, administration, examination or
dissolution proceedings involving an Obligor (whether by petition, convening

 10
 

a meeting, voting for a resolution or
otherwise) otherwise than as part of a Permitted Reorganisation; and

(h)                                 no
Obligor or Subordinated Creditor will take or omit to take any action whereby
the ranking and/or subordination of the Subordinated Debt provided for in this
Deed may be impaired.

3.2                               Limitation
on Sale of Smurfit Kappa Funding Loan Agreements

Smurfit Kappa Funding will not sell or otherwise
dispose of or encumber any Smurfit Kappa Funding Loan Agreement or enter into
any agreement that would have the same effect other than the encumbrances
created by the Finance Documents.

4.                                      AMENDMENTS

4.1                               Amendments
to Securities Permitted Payments definition

The Obligors and the Lenders agree not to amend the
definition of “Securities Permitted Payments” in the Senior Facility Agreement
(save to correct ambiguity or manifest error) without the written consent of
Smurfit Kappa Funding and the Bond Trustee if any amount is outstanding under
the Cash Pay Securities.

4.2                               Changes
to Hedging Documents

Unless the Majority
Senior Creditors (acting reasonably) have agreed to the Amendment in writing,
no Obligor or Hedging Bank will Amend the terms of any Hedging Document:

(a)                                  save
for procedural or administrative changes which do not increase the amount or
change the currency payable by any Obligor under the original terms of any
Hedging Document or alter the due date for any payment (except as provided in
accordance with the original terms of the Hedging Documents); or

(b)                                 to
result in any Obligor becoming liable to make an additional payment (or
increase an existing payment) under any of the Hedging Documents or to impose
an additional material obligation on any Obligor, which liability or obligation
does not arise from the original terms of the Hedging Documents; or

(c)                                  save
for any Amendment, termination or extension thereto as permitted by Clause
23.13(b)(i) (Treasury transactions) of the
Senior Facility Agreement.

4.3                               Changes
to Junior Loan Agreement

Unless the Majority Senior Creditors have agreed to
the Amendment in writing, no Obligor or Junior Creditor will Amend the terms of
the Junior Loan Agreement in a manner or to an extent such that the interests
of any of the Secured Parties or the ranking and/or subordination arrangements
provided for in this Deed are reasonably likely to be materially and adversely
affected.

 11

 

4.4                               Changes
to Intercompany Documents

(a)                                  The
written consent of the Bond Trustee to the extent that any amount is
outstanding under the Cash Pay Securities, is required if the Company or
Smurfit Kappa Funding wish to Amend any Smurfit Kappa Funding Loan Agreement,
except to cure ambiguity or manifest error.

(b)                                 In
addition to the requirements in paragraph (a) above, unless the Majority
Senior Creditors have agreed to the Amendment in writing, no Obligor will Amend
the terms of:

(i)                             any
Smurfit Kappa Funding Loan Agreement (except for Amendments which do not or
could not reasonably be expected to adversely affect the interests of the
Senior Creditors or Hedging Banks in any material respect); or

(ii)                          any
other Intercompany Document in a manner or to an extent such that the interests
of any of the Senior Creditors or the ranking and/or subordination arrangements
provided for in this Deed are reasonably likely to be materially and adversely
affected.

4.5                               Amendments

(a)                                  Except
in so far that Clauses 4.1 to 4.4 apply, this Deed may be amended by the
Obligors and the Security Agent without the consent of the other parties, to
cure defects, resolve ambiguities or reflect changes, in each case, of a minor,
technical or administrative nature.

(b)                                 To
the extent that an amendment only affects the rights and obligations of one or
more parties or class of parties to this Deed, and could not reasonably be
expected to be adverse to the interests of other parties or a class of parties,
only the parties affected by such amendment need to agree to the
amendments.  The parties agree to make
such amendments to this Deed as are reasonably requested by an incoming Notes
Trustee to enter into this Deed, provided that such amendments do not adversely
affect the rights and obligations of the Senior Finance Parties under this Deed
in any material respect.

5.                                      HEDGING
DEBT

5.1                               Accession
of Hedging Banks

No person providing hedging facilities to any Obligor
will be entitled to share in any of the security constituted by the Combined
Security Documents in respect of any of the liabilities or debt arising under
such hedging facilities or benefit from the undertakings of the Parties to this
Deed unless and until:

(a)                                  such
person and such facilities are specified in Schedule 4 (Hedging Banks and Hedging Documents); or

(b)                                 such
person has agreed to become a Hedging Bank by executing and delivering to the
Security Agent a duly completed Deed of Accession.  Upon delivery of such a Deed of Accession to
the Security Agent such person will

 12
 

acquire all
its rights and assume all its obligations as a Hedging Bank under this Deed in
relation to such hedging facilities.

5.2                               Undertakings
relating to Hedging Debt

Unless the Majority Senior Creditors have previously
agreed in writing:

(a)                                  no
Hedging Bank will demand (except to terminate or close out any hedging
transaction as permitted under paragraph (b) below) or receive, and no
Obligor will pay or make any distribution in respect of, or on account of, any
of the Hedging Debt in cash or in kind, or apply any money or property in or
towards the payment or discharge of any Hedging Debt except:

(i)                             for
scheduled payments arising under Hedging Documents; and/or

(ii)                          for
the proceeds of enforcement of the Combined Security Documents received and
applied in the order permitted by Clause 11 (Proceeds of Enforcement);

(b)                                 no
Hedging Bank will exercise any right to terminate or close out any hedging
transaction under the Hedging Documents prior to its stated maturity unless
either:

(i)                             an
Obligor has not paid when due an amount of Hedging Debt and such default
continues for more than twenty Business Days after the Hedging Bank has given
Notice of such default (and of the Hedging Bank’s intention to terminate) to
the Senior Agent; or

(ii)                          an
Enforcement Event has occurred; or

(iii)                       any
liquidation, winding-up, dissolution or bankruptcy proceedings have been
formally commenced against the Obligor which is the counterparty under such
hedging transaction and have not been discharged within twenty Business Days
from the date of commencement,

provided that this shall not prevent the partial close-out
of any hedging transaction where no payment (after netting-off any
payments from the Hedging Bank in respect of such close out) is required to be
made by any member of the Group and the requirements of sub-clause 23.13(a)
(Treasury transactions) of the
Senior Facility Agreement are complied with;

(c)                                  none
of the Hedging Debt may be discharged by set-off, any right of
combination of accounts or otherwise except to the extent such Hedging Debt is
permitted to be paid under paragraph (a) or the proviso to
paragraph (b) above; and

(d)                                 no
Obligor will (and each Obligor will procure that none of its Subsidiaries will)
create or permit to subsist any Security Interest over any of its assets, or
give any financial support to any person, in each case for, in respect of or in
connection with, any of the Hedging Debt other than under the original terms

 13
 

of the Hedging Documents or the Combined
Security Documents and in accordance with the priority and ranking specified in
this Deed.

5.3                               Two
Way Payments

Each Obligor and each
Hedging Bank agrees that:

(a)                                  the
Hedging Documents will provide for “two way payments” or, in connection with
the 1992 standard ISDA Agreements, payments under the “Second Method” in the
event of a termination of a hedging transaction whether upon a Termination
Event or an Event of Default (each as defined in the relevant Hedging
Documents);

(b)                                 on
or following the occurrence of an Enforcement Event if a net amount falls due from
that Hedging Bank to any Obligor, that amount shall be paid by such Hedging
Bank to the Security Agent and applied as set out in Clause 11.1 (Order of Application); and

(c)                                  promptly
on the occurrence of an Enforcement Event each Hedging Bank will exercise any
rights it may have to terminate the hedging transactions under the Hedging
Documents.

5.4                               Hedging
Documents

Each Hedging Bank will provide to the Senior Agent
copies of all agreements and documents constituting or evidencing any hedging
facilities provided to any Obligor.

5.5                               ISDA
Form

(a)                                  All
Hedging Documents (other than the Hedging Security Documents) will be based on
1992 or 2002 standard ISDA Agreements unless otherwise agreed by the Senior
Agent.

(b)                                 If
this proves not to be the case, such amendments shall be made to the Hedging
Documents by the relevant Hedging Bank and Obligors as the Senior Agent (acting
reasonably) considers are necessary, in order that this Deed may have the same
effect in relation to the hedging transactions evidenced by such Hedging
Documents as it would have had such Hedging Documents been based on 1992 or
2002 standard ISDA Agreements.

5.6                               Hedging
Guarantee

Each Obligor confirms that the Hedging Banks are
entitled to rely on the guarantee in Clause 19 (Guarantee and Indemnity) of the Senior Facility Agreement
granted by such Obligor (subject to any limitations therein or in any Accession
Deed by which such Obligor became party to the Senior Facility Agreement).

 14
 

6.                                      WARRANTIES
OF JUNIOR CREDITOR

The Junior Creditor warrants
to each Secured Party that:

(a)                                  it
is duly incorporated (if a corporate person) or duly established (in any other
case) and validly existing under the laws of the place of its incorporation or
formation;

(b)                                 this
Deed is within its powers and has been duly authorised and executed by it;

(c)                                  the
Finance Documents to which it is a party copied to the Senior Agent at or
before the First Drawdown Date (as Amended as permitted by Clause 4 (Amendments)) contain all the terms and
conditions of the Subordinated Debt owed to it;

(d)                                 it
is the sole beneficial owner of the Subordinated Debt owed to it; and

(e)                                  subject
to the Reservations, this Deed constitutes its legal, valid and binding
obligations, enforceable against it in accordance with its terms and does not
conflict with any law or regulation binding on it or with its constitutional
documents.

7.                                      PERMITTED
PAYMENTS

7.1                               Intercompany
Debt Payments

Subject to Clause 8 (Turnover), any Obligor shall be entitled to pay in cash or
by payment in kind any Intercompany Debt owed by it to another Obligor
(including interest under any Smurfit Kappa Funding Loan Agreement by
capitalising an amount of interest or issuing further debt instruments under
and in the manner and at the times provided for in any Smurfit Kappa Funding
Loan Agreement) provided that:

(a)                                  (unless
the Senior Agent acting on the instructions of the Majority Senior Creditors
otherwise consents in writing) no payment of Intercompany Debt (other than
under any Smurfit Kappa Funding Loan Agreement or any other Intercompany Debt
owed to Smurfit Kappa Funding or the Parent) may be made if the Senior Agent
has given any notice or taken any action under Clauses 24.17 (Acceleration) or 24.18 (Acceleration for Certain Funds Credits) of
the Senior Facility Agreement (or any equivalent provision in any amendment or
refinancing of the Senior Facility Agreement); and

(b)                                 no
payment of principal, interest, fees or other amounts constituting Intercompany
Debt owed to Smurfit Kappa Funding or the Parent (including under any Smurfit
Kappa Funding Loan Agreement) shall be made, except for the payment of
(A) interest (whether in cash or kind); (B) amounts equal to any
additional amounts payable under applicable gross-up provisions of the
Cash Pay Securities; (C) amounts equal to default interest or liquidated
damages payments under the Cash Pay Securities; (D) an amount equal to the
amount of payments due under any registration right agreement relating to the
Cash Pay Securities; (E) an amount equal to the amount of the US registration
costs and legal fees incurred in connection with the issue of the Cash Pay

 15
 

Securities;
(F) an amount equal to any other payments, but not exceeding €500,000 in
any twelve month period, in each case referred to in (A), (B), (C), (D) or (E)
above under and to the extent provided for in any Smurfit Kappa Funding Loan
Agreement to the extent necessary to enable Smurfit Kappa Funding to make
Securities Permitted Payments; (G) any amount to the extent necessary to enable
Smurfit Kappa Funding to make Securities Repayments; (H) any amount to the
extent necessary in connection with the application of the IPO Proceeds of the
Approved IPO in accordance with Clause 11.3(c) (IPO)
of the Senior Facility Agreement; and (I) repayment of principal on the
Payment Date under (and as defined in) any Smurfit Kappa Funding Loan Agreement
provided that, except with the
prior consent in writing of the Senior Agent (acting on the instructions of the
Majority Senior Creditors), the Company may not on any date make any such
payments under (A) to (I) inclusive above if:

(i)                             any of the Senior Debt (or
in the case of non-payment of any amounts not constituting principal,
interest or fees, Senior Debt in excess of €50,000 (when aggregated with all
other amounts unpaid)) due on or prior to such date is unpaid on such date; or

(ii)                          following the occurrence of
an Event of Default (other than of the type specified in paragraph (i)
above), the Senior Agent (acting on the instructions of the Majority Senior
Creditors) serves a written notice (a “Block
Notice”) on Smurfit Kappa Funding and the Company specifying such
Event of Default, until the earliest date on which:

(A)                              paragraph (i)
does not apply; and

(B)                                one
of the following applies;

(I)                                    179
days have elapsed since the service of such Block Notice, or if earlier, where
a Standstill Period (as defined in Clause 10 (Enforcement)) is in effect at any time during that 179 day
period, the date on which that Standstill Period expires; or

(II)                                the
Senior Agent (acting on the instructions of the Majority Senior Creditors) has
confirmed in writing to Smurfit Kappa Funding and the Company that the relevant
Event of Default has been cured or waived by the Majority Senior Creditors in
writing or has ceased to exist; or

(III)                            the
Senior Agent (acting on the instructions of the Majority Senior Creditors) by
notice in writing to the Smurfit Kappa Funding and the Company cancels the
Block Notice; or

(IV)                            the
Senior Discharge Date occurs.

 16
 

Unless otherwise agreed
by the Bond Trustee:

(a)                                  no more than one Block Notice may be
served with respect to the same particular event or circumstances whether in
relation to the same Event of Default or not, but without prejudice to the
ability of the Senior Agent to issue a Block Notice in respect of any other
particular event or set of circumstances;

(b)                                 a Block Notice may not be issued less
than 360 days after the service of a prior Block Notice and then only to the
extent that all scheduled payments with respect to the Smurfit Kappa Funding
Loan that have come due have been paid in full in accordance with the terms of
the relevant Smurfit Kappa Funding Loan Agreement;

(c)                                  no Event of Default that existed at the
date a Block Notice was given may be the basis of a subsequent Block Notice,
unless such Event of Default has been cured or complied with for at least 180
consecutive days since the date of issue of the prior Block Notice (it being
acknowledged that any subsequent action or breach of any financial covenant for
a period ending after the date of delivery of such initial Block Notice that
would give rise to an Event of Default under any provision under which an Event
of Default previously existed or was continuing shall constitute a new Event of
Default for this purpose).

7.2                               Dividends,
loans and other payments

Any dividends, loans and other payments permitted to
be made under Clauses 23.14 (Loans out),
23.15 (Share capital) and 23.16 (Dividends) of the Senior Facility Agreement may be made,
including for the avoidance of doubt, by way of payments in respect of
Intercompany Debt.

8.                                      TURNOVER

(a)                                  If
any Hedging Bank or any Subordinated Creditor receives or recovers a payment or
distribution in cash or in kind (including by way of set-off or
combination of accounts):

(i)                             of,
or on account of, any of the Hedging Debt which is prohibited by
Clause 5.2 (Undertakings relating to
Hedging Debt);

(ii)                          of,
or on account of, any of the Subordinated Debt which is not permitted by
Clause 7 (Permitted Payments);
or

(iii)                       from
(or on behalf of) any Obligor or any other member of the Group on account of
the purchase, defeasance, redemption or acquisition of any Subordinated Debt
otherwise than to the extent permitted by Clause 7 (Permitted Payments),

(each such payment or
distribution being a “Turnover Receipt”)
the receiving or recovering Hedging Bank or Subordinated Creditor (as the case
may be) will promptly notify the Security Agent, will pending payment to the
Security Agent hold such Turnover Receipt on trust for the Security Agent and
the Secured Parties and will on demand pay to the Security Agent for
application

 17
 

as provided in
Clause 11 (Proceeds of Enforcement)
an amount determined by the Security Agent to be equal to the lesser of:

(A)                              the
outstanding balance of the Senior Debt, the Hedging Debt and Note Debt; and

(B)                                the
amount of such Turnover Receipt,

less the third party costs and expenses (if any)
reasonably incurred by the Hedging Bank or Subordinated Creditor concerned in
receiving or recovering such Turnover Receipt.

(b)                                 Each
Obligor shall indemnify each Hedging Bank and Subordinated Creditor upon demand
(to the extent of its liability for the Hedging Debt or Subordinated Debt) for
the amount of any Turnover Receipt paid by it to the Security Agent and such
third party costs and expenses incurred by it, and the Hedging Debt or the
Subordinated Debt (as appropriate) will not be deemed to have been reduced or
discharged in any way or to any extent by the receipt or recovery of the
relevant Turnover Receipt.  Any claim or
right of indemnity under this paragraph shall constitute Hedging Debt (if owned
to a Hedging Bank) or otherwise Subordinated Debt.

(c)                                  If
the Bond Trustee receives or recovers a payment or distribution in cash or in
kind (including by way of set-off or combination of accounts):

(i)                             under
or on account of the Senior Subordinated Guarantee; or

(ii)                          from
(or on behalf of) any Obligor or other member of the Group (other than Smurfit
Kappa Funding or the Parent) on account of the Senior Subordinated Guarantee
Debt or the purchase, redemption or acquisition of any Smurfit Kappa Funding
Debt,

(each such payment or distribution being a “Guarantee Turnover Receipt”) the receiving or recovering
Bond Trustee will promptly notify the Security Agent, will pending payment to
the Security Agent hold such Guarantee Turnover Receipt on trust for the
Security Agent and the Secured Parties and will on demand pay to the Security
Agent for application as provided in Clause 11 (Proceeds of Enforcement) an amount equal to the lesser of:

(A)                              the
outstanding balances of the Senior Debt, the Hedging Debt and the Note Debt;
and

(B)                                the
amount of the Guarantee Turnover Receipt,

less the third party costs and expenses (if any)
reasonably incurred by the Bond Trustee in receiving or recovering the
Guarantee Turnover Receipt.

 18
 

9.                                      SUBORDINATION
ON INSOLVENCY

9.1                               Insolvency

(a)                                  If
any of the following occur in respect of an Obligor (unless it is pursuant to a
Permitted Re-organisation of such Obligor):

(i)                             any
step is taken with a view to a composition, assignment or similar arrangement
with any of its creditors;

(ii)                          a
meeting is convened for the purpose of considering any resolution for (or to
petition for) its winding-up, administration, examination or dissolution
or any such resolution is passed;

(iii)                       any
person presents a petition for its winding-up, administration,
examination or dissolution, unless it is being contested in good faith and with
due diligence and is discharged or struck out within twenty Business Days;

(iv)                      an
order for its winding-up, administration, examination or dissolution is
made;

(v)                         any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, examiner, administrator or similar officer
is appointed in respect of it;

(vi)                      its
directors or other officers request the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, examiner, receiver,
administrative receiver, administrator or similar officer; or

(vii)                   any
other analogous step or procedure is taken in any jurisdiction,

the Subordinated Debt will be subordinate in right of payment
to the Senior Debt, the Hedging Debt and the Note Debt, and the Secured Parties
shall be entitled to receive payment in full of all of the Senior Debt, Hedging
Debt and Note Debt before the Subordinated Creditors shall be entitled to any
payment of the Subordinated Debt.

In particular, in relation to any Obligor incorporated
under the laws of Spain, without prejudice to the above, each of the
Subordinated Creditors expressly accepts and acknowledges that any of its
claims against such Obligor in respect of the Subordinated Debt shall be deemed
as subordinated claims in accordance with article 92.2 of the Spanish
Insolvency Act (Ley 22/2003 Concursal).

(b)                                 If
any of the following occur in respect of the Company:

(i)                             any
step is taken with a view to a composition, assignment or similar arrangement
with any of its creditors;

 19
 

(ii)                          a
meeting is convened for the purpose of considering any resolution for (or to
petition for) its winding-up, administration, examination or dissolution
or any such resolution is passed;

(iii)                       any
person presents a petition for its winding-up, administration,
examination or dissolution, unless it is being contested in good faith and with
due diligence and is discharged or struck out within twenty Business Days;

(iv)                      an
order for its winding-up, administration, examination or dissolution is
made;

(v)                         any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, examiner, administrator or similar officer
is appointed in respect of it;

(vi)                      its
directors or other officers request the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, examiner, receiver,
administrative receiver, administrator or similar officer; or

(vii)                   any
other analogous step or procedure is taken in any jurisdiction,

the Senior Subordinated Guarantee Debt will be
subordinate in right of payment to the Senior Debt, the Hedging Debt and the
Note Debt, and the Secured Parties shall be entitled to receive payment in full
of all of the Senior Debt, Hedging Debt and Note Debt before the Bond Trustee
shall be entitled to any payment of the Senior Subordinated Guarantee Debt.

9.2                               Procedure

If any of the events referred to in Clause 9.1
above occurs and this clause applies:

(a)                                  the
Security Agent may, and is irrevocably authorised on behalf of the Subordinated
Creditors and the Bond Trustee (on behalf of the Securities Creditors), as the
case may be to:

(i)                             demand, claim, enforce and
prove for the Subordinated Debt or the Senior Subordinated Guarantee Debt;

(ii)                          file claims and proofs, give
receipts and take any proceedings in respect of the Subordinated Debt or the
Senior Subordinated Guarantee Debt which the Security Agent reasonably
considers to be necessary or desirable to recover any Subordinated Debt or
Senior Subordinated Guarantee Debt;

(iii)                       do anything which the Security
Agent reasonably considers to be necessary or desirable to recover the
Subordinated Debt or Senior Subordinated Guarantee Debt; and

 20
 

(iv)                      receive all distributions on the
Subordinated Debt or the Senior Subordinated Guarantee Debt for application
against the Senior Debt, the Hedging Debt and the Note Debt;

(b)                                 if
and to the extent that the Security Agent is not entitled to do anything
mentioned in paragraph (a) above, each Subordinated Creditor or the Bond
Trustee must do so promptly as and when requested by the Security Agent from
time to time;

(c)                                  each
Subordinated Creditor or the Bond Trustee must:

(i)                             hold
all payments and distributions in cash or in kind subsequently received or
receivable by such Subordinated Creditor or the Bond Trustee in respect of the
Subordinated Debt or the Senior Subordinated Guarantee Debt from an Obligor or
from any other source on trust for the Senior Creditors, the Hedging Banks an
the Note Creditors; and

(ii)                          pay
and transfer them to the Security Agent for application against the Senior
Debt, Hedging Debt and the Note Debt;

(d)                                 the
trustee in bankruptcy, liquidator, assignee or other person distributing the
assets of an Obligor or their proceeds is directed to pay all payments and
distributions on the Subordinated Debt or Senior Subordinated Guarantee Debt
direct to the Security Agent; and

(e)                                  the
Subordinated Creditors or Bond Trustee must give any notice and do anything
which the Security Agent may reasonably require to give effect to this sub-clause.

9.3                               Distributions

(a)                                  Each
Subordinated Creditor or Bond Trustee will, upon demand by the Security Agent,
pay an amount equal to the amount of all payments or distributions of or in respect
of any Subordinated Debt or Senior Subordinated Guarantee Debt in cash or in
kind received by or on behalf of it from any Obligor (or any liquidator,
administrator, receiver or similar official of such Obligor or its assets) on
or after the occurrence of any of the events or circumstances referred to in
Clause 9.1 to the Security Agent for application in accordance with
Clause 11 (Proceeds of Enforcement).  Pending such application the Security Agent
will hold such payment on trust for the beneficiaries entitled thereto
(according to the ranking of entitlements set out in Clause 11 (Proceeds of Enforcement)).

(b)                                 The
trustee in bankruptcy, liquidator, administrator, receiver or other person
distributing the assets of an Obligor or their proceeds shall be directed to
pay distributions on the Subordinated Debt or Senior Subordinated Guarantee
Debt, direct to the Security Agent until the Senior Debt, the Hedging Debt and
the Note Debt have been paid in full.

 21
 

(c)                                  The
Subordinated Creditors and the Bond Trustee will give all such notices and do
all such things as the Security Agent may reasonably request to give effect to
this Clause 9.3.

10.                               ENFORCEMENT

(a)                                  Except
as the Majority Senior Creditors have previously agreed in writing, and subject
to paragraph (b), the Subordinated Creditors must not:

(i)                             accelerate
or make demand for any of the Subordinated Debt or declare any of the
Subordinated Debt prematurely payable (provided that the Intercompany Creditors
may request payment of any amount of Intercompany Debt (not being under any
Smurfit Kappa Funding Loan Agreement) then due but not otherwise accelerate or
make demand or take any other enforcement action in respect of any Intercompany
Debt);

(ii)                          enforce
the Subordinated Debt by attachment, set-off, execution or otherwise
(save to the extent such set-off occurs automatically by operation of law
and not as a result of any action or election by such Subordinated Creditor or
Obligor and any amount so set-off is subject to Clause 8 (Turnover));

(iii)                       initiate
or support or take any steps with a view to:

(A)                              any
insolvency, liquidation, reorganisation, administration, examination or
dissolution proceedings; or

(B)                                any
voluntary arrangement or assignment for the benefit of creditors; or

(C)                                any
similar proceedings,

involving an Obligor, whether by petition, convening a
meeting, voting for a resolution or otherwise (provided that this shall not
prevent an Obligor from taking any of these actions as part of a Permitted Re-organisation);
or

(iv)                      sue,
or bring or support any legal proceedings, or otherwise exercise any remedy for
the recovery of the Subordinated Debt.

(b)                                 Smurfit
Kappa Funding may take any of the actions (“Enforcement
Action”) prohibited in paragraph (a) above in relation to
Intercompany Debt under any Smurfit Kappa Funding Loan Agreement:

(i)                             if
any Senior Debt has been declared to be due and payable or due and payable on
demand (and demand has been made) under Clause 24.17 (Acceleration)
or Clause 24.18 (Acceleration for Certain Funds Credits) of the
Senior Facility Agreement; or

(ii)                          if
any of the events referred to in Clause 9.1(a)(iv) or (v) (or any
analogous steps or procedures in any applicable jurisdiction having

 22
 

valid
jurisdiction over the Company) occur in relation to the Company; or

(iii)                       if
Smurfit Kappa Funding or the Bond Trustee has given notice in writing (an “Enforcement Notice”) to the Senior Agent
specifying that a Smurfit Kappa Funding Debt Non-Payment Event has
occurred and 179 days has elapsed from the date the Senior Agent received such
Enforcement Notice (the “Standstill Period”)
and at the end of the Standstill Period the Smurfit Kappa Funding Debt Non-Payment
Event is continuing unremedied and unwaived (provided that Enforcement Action
shall only be permitted under this sub-paragraph (iii) in an amount
up to the amount of Smurfit Kappa Funding Debt that is the subject of such
Smurfit Kappa Funding Debt Non-Payment Event and only to the extent it
remains unremedied or unwaived),

provided that in each case any amounts received as a
result of action permitted to be taken under this clause shall be subject to
Clause 8 (Turnover).

(c)                                  Without
prejudice to paragraph (b) above, if payment of the principal amount of
the Cash Pay Securities is accelerated, no payment of the principal amount
outstanding under any Smurfit Kappa Funding Loan Agreement may be made until
five Business Days after Smurfit Kappa Funding or the Bond Trustee, as the case
may be, has given notice to the Senior Agent. 
Thereafter the Company may if otherwise permitted by the terms of this
Deed (and subject to Clause 8 (Turnover))
make such principal payments at the times referred to in any Smurfit Kappa
Funding Loan Agreement.

(d)                                 Except
as the Majority Senior Creditors have previously agreed in writing the Bond
Trustee (on behalf of itself and any of the Securities Creditors) must not:

(i)                             enforce
the Senior Subordinated Guarantee Debt by attachment, set-off, execution
or otherwise;

(ii)                          in
respect of or in relation to any claim or liability arising under or in connection
with the Senior Subordinated Guarantee, initiate or support or take any steps
with a view to:

(A)                              any
insolvency, liquidation, reorganisation, administration, examination or
dissolution proceedings involving the Company; or

(B)                                any
voluntary arrangement or assignment for the benefits of creditors involving the
Company; or

(C)                                any
similar proceedings in any jurisdiction involving the Company, whether by
petition, convening a meeting, voting for a resolution or otherwise; or

(iii)                       sue,
bring or support any legal proceedings, or otherwise exercise any remedy
against the Company for the recovery of the Senior Subordinated Guarantee Debt,

 23
 

unless any amount is then due and payable under the
Senior Subordinated Guarantee.

11.                               PROCEEDS
OF ENFORCEMENT

11.1                        Order of
Application

(a)                                  Subject
to the rights of any creditor with prior security or preferential claims, the
proceeds of enforcement of the security conferred by the Combined Security
Documents shall be paid to the Security Agent. 
Those proceeds and all other amounts paid to the Security Agent under
this Deed shall, subject to the provisions of Clauses 11.4 (Control of Collateral Account) and 11.5 (Application of Moneys Distributable to the Note Trustee), be
applied in the following order:

First                                                                     in payment of all costs, expenses and
liabilities (and all interest thereon as provided in the Senior Finance
Documents) reasonably incurred by or on behalf of the Security Agent and any
receiver, attorney or agent in connection with carrying out its duties and
exercising its powers and discretions under the Combined Security Documents or
this Deed and the remuneration of the Security Agent and every receiver under
the Combined Security Documents and all amounts payable under Clause 25.9(a) (Indemnity to Security Agent);

Second                                                         in payment of all costs and expenses
reasonably incurred by or on behalf of any Secured Party in connection with
such enforcement;

Third                                                                 in payment to the Senior Agent for
application towards the unpaid balance of the Senior Secured Debt and the Hedging
Debt and in payment to the Note Trustee for application towards the unpaid
balance of the 2025 Obligations, equally, rateably and pari passu between themselves provided
that only the proceeds of enforcement of the Security Documents relating to the
Restricted Debt will be applied towards the unpaid balance of the Restricted
Debt; and provided further that all payments made to the Note Trustee to the
extent reasonably possible shall be made in U.S. Dollars with any non-U.S.
Dollars amounts being converted to U.S. Dollars by the Security Agent, at the
Exchange Rate, with the cost of such conversion being netted against payments
made to the Note Trustee;

Fourth                                                           the payment of the surplus (if any) to
the Obligor concerned or other person entitled thereto.

(b)                                 No
such proceeds or amounts shall be applied in payment of any amounts specified
in any of the sub-paragraphs in paragraph (a) above until all
amounts specified in any earlier sub-paragraph have been paid in full.

 24
 

(c)                                  An
acknowledgement of receipt signed by the relevant person to whom payments are
to be made under paragraph (a) above shall be a good discharge of the Security
Agent.

(d)                                 The
term “unpaid” as used in paragraph (a) above refers, with respect to the
relevant Obligor or Obligors, to all amounts of the relevant Senior Debt,
Hedging Debt and 2025 Obligations (other than contingent indemnification and
other contingent obligations as to which the applicable grantor has not
received a notice of claim) outstanding as of a Distribution Date (provided
that for the purpose of this provision, the amount of the Senior Debt then
outstanding shall include the undrawn face amount of, and any unreimbursed
drawings under, any Documentary Credit), to the extent that prior distributions
have not been made in respect thereof.

(e)                                  The
Security Agent shall make all payments and distributions under this
Clause 11.1: (i) on account of Senior Debt and Hedging Debt to the
Senior Agent, for redistribution to the Senior Secured Creditors as provided
for in the Senior Facility Agreement, and the Hedging Banks as provided in the
Hedging Documents and, in each case, this Deed; and (ii) on account of the
2025 Obligations (subject to Clause 11.4 (Application
of Moneys Distributable to the Note Trustee)) to the Note Trustee, pursuant
to directions of the Note Trustee, for redistribution to the holders of the
applicable 2025 Obligations.

11.2                        The
Collateral Account

At such time as the Security Agent deems appropriate,
there shall be established and, at all times thereafter until this Deed shall
have terminated, there shall be maintained with the Security Agent in London an
interest bearing account which shall be entitled the “Smurfit Kappa Collateral
Account” (the “Collateral Account”).  All moneys which are received by the Security
Agent or any agent or nominee of the Security Agent on an enforcement of any
security conferred by the Combined Security Documents, whether in connection
with the exercise of the remedies provided in this Deed or any Combined
Security Document, shall be deposited in the Collateral Account and held by the
Security Agent as trustee and agent for the Secured Parties and applied in
accordance with the terms of this Deed. 
All interest and income received thereon shall be held in the Collateral
Account.  The Security Agent shall
maintain such sub-accounts and records with respect to the Collateral
Account as will permit the segregation and allocation of proceeds of Collateral
in accordance with this Clause 11 (Proceeds
of Enforcement).  In the event
that an amount is received by the Security Agent or any agent or nominee of the
Security Agent on an enforcement of any security conferred by the Combined
Security Documents and such amount is denominated in any currency other than
euro, the Security Agent shall convert such amount into an amount of euro on or
prior to the Distribution Date for such amount based upon the relevant Exchange
Rate in effect on the date of such conversion.

11.3                        Control of
Collateral Account

All right, title and interest in and to the Collateral
Account shall vest in the Security Agent, and funds on deposit in the
Collateral Account shall be held by the Security Agent as trustee and agent for
the Secured Parties.  The Collateral
Account shall be subject to the exclusive operation and control of the Security
Agent.

 25

 

11.4                        Application
of Moneys Distributable to the Note Trustee

If at any time any moneys collected or received by the
Security Agent pursuant to this Deed are distributable pursuant to
Clause 11.1 (Order of Application)
to the Note Trustee, and if the Note Trustee shall notify the Security Agent in
writing that no provision is made under the 2025 Indenture for the application
by such Note Trustee of such moneys (whether because the obligations issued
under the 2025 Indenture have not become due and payable or otherwise) and the
2025 Indenture does not effectively provide for the receipt and the holding by
the Note Trustee of such moneys pending the application thereof, then the
Security Agent, after receipt of such notification, may, at the option of the
Note Trustee, pay such moneys over to the applicable Obligor, or hold such
amounts in the Collateral Account, and (unless paid to the applicable Obligor)
shall hold all such amounts so distributable and all investments thereof (which
investments shall be made at the direction of the Note Trustee) and the net
proceeds thereof in trust solely for the Note Trustee (in its capacity as
trustee) and for no other purpose until such time as the Note Trustee shall
request in writing the delivery thereof by the Security Agent for application
pursuant to the 2025 Indenture.  If no
instruction is received from the Note Trustee, the Security Agent may (but
shall not be obligated to) pay such money to the applicable Obligor.  Notwithstanding the foregoing, if, at any
time, all the Senior Debt, the Hedging Debt and the 2025 Obligations in respect
of which any moneys (and proceeds thereof) are held in trust by the Security
Agent pursuant to this Clause 11.4 cease to be outstanding for any reason,
then such moneys will be applied by the Security Agent in accordance with
Clause 11.1(a) (Order of Application).  The Security Agent shall not be responsible
for any diminution in funds resulting from investments made at the direction of
the Note Trustee or from holding such moneys uninvested.

11.5                        Security
Agent’s Calculations

For the purposes of making the allocations required by
Clause 11.1 (Order of Application) with
respect to any amount that is denominated in any currency other than euros, or
in the case of payments to be paid to the Note Trustee in accordance with
paragraph THIRD of Clause 11.1, U.S. Dollars, the Security Agent
shall, on or prior to the applicable Distribution Date, convert such amount
into an amount of euros, or in the case of payments to be paid to the Note
Trustee in accordance with paragraph THIRD of Clause 11.1,
U.S. Dollars, based upon the relevant Exchange Rate as of a recent date
specified by the Security Agent in its reasonable discretion.

11.6                        Good
Discharge

An acknowledgment of receipt signed by the relevant
person to whom payments are to be made under Clause 11.1 (Order of
Application) shall be good discharge of the Security Agent.

12.                               ENFORCEMENT
OF SECURITY

12.1                        Enforcement
Instructions

(a)                                  Subject
to Clause 12.2(b) (Enforcement of Hedging
Security Documents) the Security Agent may refrain from enforcing
the security conferred by the

 26
 

Security Documents and
Note Security Documents unless and until instructed by an Enforcement
Instructing Group.

(b)                                 Subject
to such security having become enforceable, an Enforcement Instructing Group
may give or refrain from giving instructions to the Security Agent to enforce
or refrain from enforcing the security conferred by the Security Documents and
the Note Security Documents as they see fit.

(c)                                  None
of the Secured Parties shall have any independent right to enforce any of the
Security Documents or Note Security Documents or to instruct or require the
Security Agent to enforce any of the Security Documents or Note Security
Documents or give any notice, withdraw any consent or take any other action
under any of the Security Documents or Note Security Documents or crystallize
any floating charge, except as part of an Enforcement Instructing Group (or in
the case of the Hedging Banks save as provided for in Clause 12.2 (Enforcement of Hedging Security Documents)
below).

(d)                                 Any
instructions given to the Security Agent by an Enforcement Instructing Group
(and which are within the powers of an Enforcement Instructing Group) will
override any conflicting instructions given by any other party.  The Security Agent will be fully protected in
complying with the instructions of an Enforcement Instructing Group.

(e)                                  Any
such instructions by an Enforcement Instructing Group (and which are within the
powers of an Enforcement Instructing Group) shall be binding on all the Secured
Parties.

(f)                                    For
the purpose of calculating an Enforcement Instructing Group or determining
whether or not an instruction has been given under this Deed by an Enforcement
Instructing Group the Security Agent may rely:

(i)                                     On
a certificate from the Senior Agent as to the share in the Senior Secured Debt
of any Senior Creditors voting in favour of any particular instruction or
request and as to the amount of the outstanding Senior Secured Debt; and

(ii)                                  On
a certificate from a Hedging Bank as to the amount of outstanding Hedging Debt
(calculated in accordance with Schedule 6 (Calculation of Hedging
Debt)) held by such Hedging Bank and whether such Hedging Bank is
voting in favour of any particular instruction or request.

The Security Agent shall not incur any liability in
relying on any such certificate or certificates.

(g)                                 The
Security Agent shall enforce the security conferred by the Security Documents
and the Note Security Documents in such manner (if then enforceable) as an
Enforcement Instructing Group shall instruct or, in the absence of such
instructions, as it sees fit.

 27
 

(h)                                 No
Secured Party shall be responsible to any Obligor for the Security Agent’s
failure to enforce any security over the Collateral (except to the extent
arising from such person’s gross negligence or wilful default) and the Security
Agent may cease any such enforcement at any time.

12.2                        Enforcement
of Hedging Security Documents

(a)                                  Each
Hedging Bank hereby unconditionally agrees with each of the other Secured
Parties that notwithstanding the terms of the Hedging Documents, it shall not,
save as provided for in sub-paragraph (b) of this Clause 12.2,
be entitled to take any steps for the purpose of appointing a receiver under
any of the Hedging Security Documents or otherwise take possession of any of
the properties or assets charged by the Hedging Security Documents or issue any
legal proceedings to enforce them or any of them without the prior written
consent of the Security Agent acting on the instructions of the Majority Senior
Creditors.

(b)                                 Each
of the Secured Parties hereby agrees that on the Appointment Date and at any
time while the appointment of an examiner to any Obligor continues the Hedging
Banks may give or refrain from giving instructions to the Security Agent to
enforce or refrain from enforcing the security constituted by the Hedging
Security Documents provided that all proceeds of any enforcement of the
security constituted by the Hedging Security Documents shall be paid to the Security
Agent and held by it for distribution in accordance with Clause 11.1 (Order of Application).

(c)                                  With
effect from the Appointment Date, each Hedging Bank shall comply with any
directions of the Security Agent (acting on the instructions of an Enforcement
Instructing Group) involving voting for or against or accepting or rejecting:

(i)                                     any
scheme of arrangement in relation to an Obligor; or

(ii)                                  any
rescheduling, refinancing, reorganisation or stand-still agreement in
respect of any Obligor.

12.3                        Sales by
Security Agent

If:

(a)                                  on
an enforcement of any of the Combined Security Documents, the Security Agent
(or any receiver) sells or otherwise disposes of any asset; or

(b)                                 an
Obligor sells or otherwise disposes of an asset at the request of an Enforcement
Instructing Group after an Event of Default has occurred which is continuing,

in each case in
accordance with the terms of this Deed, the Security Agent may execute on
behalf of each Secured Party and each Obligor without the need for any further
referral to or authority from such Secured Party or Obligor,

 28
 

(i)                                     any
release of the security created by the Combined Security Documents over that
asset; and

(ii)                                  if
such asset comprises shares in the capital of any Obligor (or any Holding
Company of it), a release of such Obligor from all present and future
liabilities (both actual and contingent and including, without limitation, any
liability to any other Obligor under the Senior Finance Documents or the
Hedging Documents by way of contribution or indemnity) in its capacity as an
Obligor under the Senior Finance Documents or the Hedging Documents and a
release of any Security Interest granted by such Obligor over any of its assets
under the Combined Security Documents,

PROVIDED THAT the
net cash proceeds of sale or disposal are applied in payment of Debt in the
order set out in Clause 11 (Proceeds of Enforcement).

Each Secured Party
will execute such releases as the Security Agent may reasonably require to give
effect to this Clause 12.3.  No such
release will affect the obligations and liabilities of any other Obligor under
the Finance Documents.

12.4                        Release of
Senior Subordinated Guarantee

If:

(a)                                  pursuant
to an enforcement of any of the Combined Security Documents, the Security Agent
(or any receiver or equivalent appointed on behalf of the Secured Parties)
sells or otherwise disposes of the shares of the Company; or

(b)                                 the
shares of the Company are sold or disposed of at the request of the Security
Agent on the instructions or with the consent of an Enforcement Instructing
Group after an event of default under (and as defined in) any of the Senior
Finance Documents, Hedging Documents or Note Documents has occurred,

the Bond Trustee
shall, at the written request of the Security Agent, promptly without the need
for any further referral to or authority from the Securities Creditors,
unconditionally release the Senior Subordinated Guarantee (and the Company’s
obligations thereunder) and the Bond Trustee undertakes to execute such
releases or other documents as may be necessary to give effect to the above
mentioned release, provided that any such release of the obligations and
liabilities of the Company under the Senior Subordinated Guarantee will not
result in a release of the obligations and liabilities of Smurfit Kappa Funding
to the Securities Creditors.

12.5                        Release of
Security

(a)                                  If:
(i) on an enforcement of any of the Security Documents or Note Security
Documents, the Security Agent (or any receiver) sells or otherwise disposes of
any asset or shares; or (ii) an Obligor sells or otherwise disposes of an
asset or shares at the request of an Enforcement Instructing Group after an
event of default under (and as defined in) any of the Senior Finance Documents,
Hedging Documents or Note Documents has occurred which is continuing,

 29
 

then the Security Agent
may execute on behalf of each Secured Party and each Obligor, without the need
for any further referral to or authority from such Secured Party or Obligor,
any release of the security created by the Security Documents or Note Security
Documents over that asset or shares, provided that the net proceeds of the sale
or disposal are applied in payment of Obligations in the order set out in
Clause 11.1 (Order of Application).

(b)                                 If
a disposal to a person or persons outside the Group of assets or shares owned
by any Obligor over which security has been created by the Security Documents
is permitted by the terms of Clause 23.6 (Disposals) or
Clause 23.38 (Permitted Receivables Securitisations)
of the Senior Facility Agreement and will not result directly in any breach of
the terms of the Senior Facility Agreement (including, for the avoidance of
doubt, Clause 31.7(b) of the Senior Facility Agreement), the Security Agent
shall, on the completion of the disposal, release (at the expense of the
relevant Obligor) from the Security Documents and Note Security Documents the
assets or shares which are subject to that disposal and (where the disposal is
such that an Obligor ceases to be a member of the Group) the assets of or shares
owned by that entity.

(c)                                  The
Security Agent shall (at the reasonable request and at the expense of the
Company) following a release of security under Clause 12.5(a) or (b) above
provide confirmation of the release of any asset or shares from the security
under the Security Documents and Note Security Documents or (where relevant)
confirmation of non-crystallization of a floating charge, such
confirmation to be in such form as the Security Agent may determine.  Each Secured Party will execute such releases
as the Security Agent may reasonably require to give effect to this
Clause 12.5, any such release given by the Note Trustee to be without
recourse or warranty.  No such release
will affect the obligations and liabilities of any other Obligor under the Senior
Finance Documents, Hedging Documents or Note Documents.

12.6                        Right to
Initiate Judicial Proceedings

The Security Agent (a) shall have the right and
power to institute and maintain such actions, suits and proceedings (each a “suit”) as it may deem appropriate to
protect and enforce the rights vested in it by this Deed and each Security
Document and each Note Security Document and (b) may, either after entry,
or without entry, proceed by suit or suits at law or in equity to enforce such
rights and to foreclose upon the Collateral and to sell all or, from time to
time, any of the Collateral under the judgment or decree of a court of
competent jurisdiction.  The Security
Agent shall not be required to institute or maintain any such suits or enforce
such rights or foreclose upon and sell the Collateral unless it has been fully
indemnified to its satisfaction (acting reasonably) by the Secured Parties.

12.7                        Exercise
of Powers

All of the powers, remedies and rights of the Security
Agent as set forth in this Deed may be exercised by the Security Agent in
respect of any Security Document or any Note Security Document as though set
forth in full therein and all of the powers, remedies and rights of the
Security Agent as set forth in any Security Document or

 30
 

any Note Security Document may be exercised from time
to time as herein and therein provided.

12.8                        Remedies
Not Exclusive

(a)                                  No
remedy conferred upon or reserved to the Security Agent herein or in the
Security Documents and Note Security Documents is intended to be exclusive of
any other remedy or remedies, but every such remedy shall be cumulative and
shall be in addition to every other remedy conferred herein or in any Security
Document or any Note Security Document or now or hereafter existing at law or
in equity or by statute.

(b)                                 No
delay or omission by the Security Agent to exercise any right, remedy or power
hereunder or under any Security Document or any Note Security Document shall
impair any such right, remedy or power or shall be construed to be a waiver
thereof, and every right, power and remedy given by this Deed or any Security
Document or any Note Security Document to the Security Agent may be exercised
from time to time and as often as may be deemed expedient by the Security
Agent.

(c)                                  All
rights of action and of asserting claims upon or under this Deed and the
Security Documents and Note Security Documents may be enforced by the Security
Agent without the possession of any instrument evidencing any Senior Debt,
Hedging Debt or 2025 Obligations or the production thereof at any trial or
other proceeding relative thereto, and any suit or proceeding instituted by the
Security Agent shall be, subject to the applicable provisions of Schedule 7 (Security Agent), brought in its name as Security Agent and
any recovery of judgment shall be held as by the Security Agent as trustee and
agent for the Secured Parties.

12.9                        Limitation
on Security Agent’s Duty in Respect of Collateral

Beyond its duties to account to the Secured Parties
and the Obligors for moneys and other property received by it hereunder or on
an enforcement of the security under any Security Document or Note Security
Document, the Security Agent shall not have any duty to the Obligors or to the
Secured Parties under this Deed or as to any Collateral in its possession or
control or in the possession or control of any of its agents or nominees, or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto.  The
Security Agent’s duties under this Deed, the Security Documents and/or the Note
Security Documents are of a mechanical and administrative nature.

12.10                 Limitation by Law

All rights, remedies and powers provided in this Deed
or any Security Document or Note Security Document may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
law, and all the provisions hereof are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Deed invalid, unenforceable
in whole or in part or not entitled to be recorded, registered or filed under
the provisions of any applicable law.

 31
 

12.11                 Rights of Secured
Parties in Respect of Obligations

Notwithstanding any other provision of this Deed or
any Security Document or Note Security Document the right of each Secured Party
to receive payment of the Senior Debt, Hedging Debt or 2025 Obligations held by
or owed to such Secured Party when due (whether at the stated maturity thereof,
by acceleration or otherwise), as expressed in the instruments evidencing or
agreements governing such obligations, or to institute suit for the enforcement
of such payment on or after such due date, shall not be impaired or affected
without the consent of such Secured Party given in the manner prescribed by the
instruments evidencing or agreements governing such obligations.

12.12                 Equal and
Rateable Security

This Deed, the Security Documents and the Note
Security Documents (a) are intended to secure the 2025 Obligations equally
and rateably with the Senior Secured Debt and Hedging Debt and otherwise comply
with Section 1009 of the 2025 Indenture and the Senior Facility Agreement and
(b) shall be construed and enforced as provided in this Deed to give
effect to such intention.  The Security
Agent (as agent hereunder and on behalf of the Senior Secured Parties)
(i) consents, subject to the terms of this Deed, to the execution and
enforcement of the Note Security Documents, including any Note Security
Documents entered into after the date hereof for purposes of complying with
Section 1009 of the 2025 Indenture, and any amendments to such Note Security
Documents necessary for such purposes, and (ii) agrees to take no action
which will impair the right of the holders of the Notes to be secured as
required by Section 1009 of the 2025 Indenture (provided that for the avoidance
of doubt this shall not prevent or restrict the taking of any action to enforce
any of the Collateral or any Security Document or Note Security Documents in
accordance with this Deed).  The failure
of any Note Creditor to take any action required of it hereunder shall not
constitute a waiver of its rights under Section 1009 of the 2025
Indenture.

12.13                 Termination

(a)                                  Upon
the Senior Discharge Date occurring and irrespective of whether any 2025
Obligations remain outstanding, the Security Agent shall (at the cost and
expense of the Obligors) release the Security Interests created by the Security
Documents and the Note Security Documents and all right, title and interest of
the Security Agent in and to the Collateral shall revert to the Obligors, their
successors and assigns.

(b)                                 Upon
the release of the Collateral in accordance with paragraph (a) above, the
Security Agent will promptly, at the Company’s written request and expense,
(i) execute and deliver to the Company such documents as the Company shall
reasonably request to evidence the termination of such Security Interest or the
release of the Collateral and (ii) deliver or cause to be delivered to the
Obligors all property of the Obligors then held by the Security Agent or any
agent thereof.

(c)                                  The
Company shall give the Note Trustee prompt notice of the occurrence of the
Senior Discharge Date.

 32
 

12.14                 Inspection by
Regulatory Agencies

The Security Agent shall make available, and shall
cause each custodian and agent acting on its behalf in connection with this
Deed to make available, all Collateral in such Person’s possession at all times
for inspection by any regulatory agency having jurisdiction over the Security
Agent or an Obligor to the extent required by such regulatory agency in its
discretion.

13.                               LOSS
SHARING

13.1                        Equalisation
Payments

If any Senior
Creditor or Hedging Bank (a “Recovering Creditor”)
makes a Recovery other than by reason of a payment from the Security Agent
dealt with under Clause 11 (Proceeds of
Enforcement), then:

(a)                                  such
Recovering Creditor will notify the Security Agent with details of such
Recovery within three Business Days of receipt or recovery;

(b)                                 the
Security Agent will determine in good faith whether such Recovery is in excess
of the amount (the amount of the excess being the “Recovery
Excess”) which such Recovering Creditor would have received had such
Recovery been effected by the Security Agent pursuant to the Combined Security
Documents and applied as provided in Clause 11 (Proceeds of
Enforcement), and shall notify such Recovering Creditor accordingly;

(c)                                  such
Recovering Creditor will pay an amount equal to the Recovery Excess (together
with any interest accrued (at a rate determined by the Security Agent acting
reasonably) on such amount from the date of receipt or recovery by it) to the
Security Agent, retaining the balance in pro tanto satisfaction of the amount
due to it;

(d)                                 the
Security Agent shall treat the Recovery Excess (plus such accrued interest) as
if it were the proceeds of enforcement of the Combined Security Documents and
shall deal with it in accordance with Clause 11 (Proceeds of
Enforcement); and

(e)                                  at
the option of the Recovering Creditor (i) the liability of the relevant
Obligor to such Recovering Creditor shall be increased (or treated as not
having been reduced) by an amount equal to the Recovery Excess, or
(ii) such Obligor shall fully indemnify such Recovering Creditor for the
amount of the Recovery Excess.

13.2                        Loss
Sharing

If for any reason
any of the Senior Debt or Hedging Debt remains undischarged and any resulting
losses are not being borne by the Senior Creditors or the Hedging Banks pro
rata to the amount which their respective Senior Debt and Hedging Debt and bore
to the total Debt on the Enforcement Date, the Senior Creditors and the Hedging
Banks shall make such payments between themselves as the Senior Agent shall
require to ensure that after taking into account such payments such losses are
borne by

 33
 

the Senior
Creditors and the Hedging Banks equally, rateably and pari passu
between themselves.

14.                               CONSENTS
AND LIMITS

14.1                        Waivers

If any waiver,
release or consent is granted by the Majority Lenders under the Senior Finance
Documents prior to the Senior Discharge Date, a corresponding waiver, release
or consent will be deemed to have been given by the Hedging Banks and the
Subordinated Creditors (on the same terms and conditions, mutatis mutandis) under
the Hedging Documents, Junior Loan Agreements or Intercompany Documents, as the
case may be, if the transaction or circumstance to which that waiver, release
or consent relates would otherwise breach or be a default or event of default
under any such agreement or document, provided that no
such waiver, release or consent may extend the due date for or reduce the
amount of or change the currency of any payment due to any Hedging Bank or
Subordinated Creditor or change the terms by reference to which any payment is
to be calculated or made under the relevant Finance Documents.

14.2                        Non-Objection

No Subordinated
Creditor shall have any claim or remedy against any of the Senior Creditors by
reason of any transaction entered into between any of the Senior Creditors and
any member of the Group or any requirement or condition imposed by or on behalf
of the Senior Creditors on any member of the Group, which breaches or is or
causes a default or an event of default under any of the Junior Loan Agreements
or the Intercompany Documents, as the case may be.

14.3                        Limit on
Hedging Debt

An obligation or
liability under any hedging facilities owed by any Obligor to a Hedging Bank
which is not one of the transactions or agreements specified in Schedule 4
(Hedging Banks and Hedging Documents) or
permitted by Clause 5.1 (Accession of Hedging Banks)
will not constitute Hedging Debt.

15.                               INFORMATION

15.1                        Amounts of
Debt

Each of the Senior Agent, the Hedging Banks, the
Company and the Junior Creditor will on written request by any of the others
from time to time notify the others in writing of details of the amount of the
outstanding Senior Debt, Hedging Debt, the Note Debt, the Intercompany Debt or
Junior Debt, as the case may be, so far as known to it.

15.2                        Other
Information

Each Obligor authorises each of the Senior Creditors,
the Hedging Banks and the Junior Creditor to disclose to each other and to
shareholders or other investors in any Obligor all information relating to that
Obligor, its Subsidiaries or related entities, and coming into the possession
of any of them in connection with the Finance Documents.

 34

16.                               SUBROGATION

The Junior
Creditor, the Securities Creditors and the Obligors will not under any
circumstances be subrogated to or be entitled to exercise any of the rights of
the Senior Creditors, Hedging Banks or Note Creditors or exercise or enforce any
security arising under any of the Combined Security Documents.

17.                               PROTECTION
OF SUBORDINATION

17.1                        Continuing
Subordination

The subordination
and priority provisions in this Deed constitute a continuing subordination and
priority and benefit to the ultimate balance of the Senior Debt, the Hedging
Debt and the Note Debt respectively regardless of any intermediate payment or
discharge of the Senior Debt, the Hedging Debt or the Note Debt in whole or in
part.

17.2                        Waiver of
Defences

The
subordination in this Deed and the obligations of the Bond Trustee, each
Subordinated Creditor and each Obligor under this Deed will not be affected by
any act, omission, matter or thing which, but for this provision, would reduce,
release or prejudice the subordination or any of those obligations in whole or
in part, including without limitation:

(a)                                  any
time, indulgence or waiver granted to, or composition with, any Obligor or any
other person or the release of any other Obligor or any other person under the
terms of any composition or arrangement with any creditor of any member of the
Group;

(b)                                 the
taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights or remedies against, or
security over assets of, any Obligor or other person under the Senior Finance
Documents, the Hedging Documents or the Note Documents or otherwise or any non-presentment
or non-observance of any formality or other requirement in respect of any
instruments or any failure to realise the full value of any security;

(c)                                  any
variation (however fundamental) or replacement of any Senior Finance Document,
Hedging Document or Note Document or other document;

(d)                                 any
unenforceability, illegality, invalidity or frustration of any obligation of an
Obligor or security  under the Senior
Finance Documents, the Hedging Documents, the Note Documents or any other
document or security or the failure by any member of the Group to enter into or
be bound by any Senior Finance Document or Hedging Document; or

(e)                                  any postponement,
discharge, reduction, non-provability or other similar circumstance
affecting any obligation of any Obligor under any Senior Finance Document,
Hedging Document or Note Document resulting from any

 35
 

insolvency,
liquidation or dissolution proceedings or from any law, regulation or order.

17.3                        Appropriations

Each
Senior Creditor and Hedging Bank (or any trustee or agent on their behalf) may,
provided to do so is reasonable in the circumstances, (subject to any provision
of this Deed or any applicable Senior Finance Documents to the contrary):

(a)                                  apply
any cash or property received under this Deed or from an Obligor or any other
person against the Debt owed to it, in such order as it sees fit;

(b)                                 (if
it so decides) apply any cash or property received from an Obligor or from any
other person (other than money or property received under the Senior Finance
Documents or under this Deed) against any liability other than the Debt owed to
it; and

(c)                                  (unless
such cash or property in the aggregate is sufficient to bring about the Senior
Discharge Date if otherwise applied in accordance with the provisions of this
Deed) hold in a suspense account (bearing interest at a market rate usual for
accounts of that type) any cash or the net proceeds of any distribution
received from the Subordinated Creditors or the Obligors or on account of the
liability of any Subordinated Creditor or Obligor (as appropriate) under this
Deed.

18.                               PRESERVATION
OF DEBT

In spite of any
term of this Deed postponing, subordinating or preventing the payment of any of
the Subordinated Debt, as between the Obligors and the Subordinated Creditors,
the Subordinated Debt shall remain owing or payable (and interest or default
interest shall continue to accrue) in accordance with the terms of the Junior
Loan Agreements or the Intercompany Documents (as the case may be).  No delay in exercising rights and remedies
under the Junior Loan Agreement or the Intercompany Documents by reason of any
term of this Deed postponing, restricting or preventing such exercise shall
operate as a permanent waiver of any of those rights and remedies.

19.                               POWER
OF ATTORNEY

19.1                        Appointment
by the Subordinated Creditors

By way of security
for the obligations of each Subordinated Creditor under this Deed, each
Subordinated Creditor irrevocably appoints the Senior Agent as its attorney to
do anything which the Subordinated Creditor (a) has authorised the Senior
Agent to do under this Deed and (b) is required and legally able to do by
this Deed but has failed to do for a period of ten Business Days after
receiving notice from the Senior Agent requiring it to do so unless such
Subordinated Creditor is disputing in good faith and by appropriate proceedings
that it is required to do the thing concerned.

19.2                        Appointment
by the Obligors

By way of security for the performance of its
obligations under this Deed, each of the Obligors irrevocably appoints each of
the Security Agent, any receiver appointed

 36
 

pursuant to any
Combined Security Document and their respective delegates and sub delegates to
be its attorney acting severally (or jointly with any other such attorney) and
on its behalf and in its name or otherwise to do any and every thing which:

(a)                                  such
Obligor is obliged to do under the terms of this Deed in connection with the
maintenance and perfection of the Security constituted under the Combined
Security Documents but has failed to do for a period of 10 Business Days after
notice from the Security Agent requiring it to do so; or

(b)                                 during
the continuance of an Enforcement Event, such attorney considers necessary or
desirable in order to enable the Security Agent or such attorney to exercise
the rights conferred on it by this Deed or by law.

19.3                        Ratification
of Acts

Without prejudice
to the generality of Clauses 19.1 (Appointment by the
Subordinated Creditors) and 19.2 (Appointment
by the Obligors), each of the Secured Parties and the Obligors
hereby undertakes with the Security Agent and/or the Senior Agent that promptly
upon request, each Secured Party or Obligor will ratify and confirm all
transactions entered into and other actions by the Security Agent and/or the
Senior Agent (or any of their substitutes or delegates) in the proper exercise
of the power of attorney granted to it hereunder.

20.                               EXPENSES

20.1                        Enforcement
Costs

Each Obligor and
each Subordinated Creditor will within five Business Days of demand pay to
each Senior Creditor, Hedging Bank or Note Creditor the amount of all costs and
expenses properly incurred by it in connection with the enforcement against
that Obligor or Subordinated Creditor (as the case may be) of such person’s
rights against it under this Deed.

20.2                        Legal
Expenses and Taxes

The costs and
expenses referred to above include, without limitation, the fees and expenses
of legal advisers and any value added tax or similar tax, and are payable in
the currency in which they are incurred.

21.                               CHANGES
TO THE PARTIES

21.1                        Successors
and Assigns

This Deed is
binding on the successors and assigns of the parties hereto.

21.2                        Obligors

No Obligor may
assign or transfer any of its rights (if any) or obligations under this Deed.

 37
 

 

21.3                        New
Obligors

(a)                                  If
any member of the Group (a “New Obligor”) borrows, guarantees or otherwise
becomes liable for any Debt or grants or incurs or otherwise becomes a creditor
in respect of any Financial Indebtedness to or from any other member of the
Group in an aggregate amount in excess of €20,000,000 (or its equivalent), the
Parent will use all reasonable endeavours to procure that (unless such New
Obligor has become party hereto by some other means to the satisfaction of the
Senior Agent acting reasonably) such New Obligor becomes a party to this Deed
as an Obligor by the execution and delivery to the Security Agent of a duly
completed Deed of Accession (together with such board resolutions and other
corporate documentation as the Security Agent may reasonably require).

(b)                                 If
any member of the Group becomes party to a Security Document or Note Security
Document, the Company will procure that such member becomes a party to this
Deed as an Obligor by the execution and delivery to the Security Agent of a
duly executed Deed of Accession (together with such board resolutions and other
corporate documentation as required by the terms of the Senior Facility
Agreement or as the Security Agent may otherwise reasonably require).

21.4                        New
Creditors

No
Senior Creditor, Hedging Bank or Junior Creditor may:

(a)                                  assign,
transfer or dispose of any of the Debt owing to it or its proceeds or any
interest in that Debt or its proceeds to or in favour of any person; or

(b)                                 assign,
transfer, novate or dispose of any of its rights or obligations under any of
the Finance Documents to any person,

and no person
shall become an Initial Additional Facility Lender, unless in each case that
person agrees with the Parties that it is bound by all the terms of this Deed
as a Senior Creditor, Hedging Bank or Junior Creditor, as the case may be, by
executing and delivering to the Security Agent a duly completed Deed of
Accession or, in the case of a Senior Creditor, by the execution and delivery
to the Security Agent of a Transfer Certificate or, in the case of an Initial
Additional Facility Lender, by the execution and delivery to the Security Agent
of an Additional Facility Accession Agreement.

21.5                        Bond
Trustee

(a)                                  The
Parent and Smurfit Kappa Funding will each procure that, if the Bond Trustee
ceases to act as trustee for any reason in relation to any Cash Pay Securities,
any successor or other person which is appointed or acts as trustee in relation
to those Cash Pay Securities (a “Replacement Bond Trustee”)
will become party to this Deed as the Bond Trustee by executing and delivering
to the Security Agent a Deed of Accession in form and substance satisfactory to
the Security Agent acting reasonably.

 38
 

(b)                                 The
Bond Trustee (on behalf of the Securities Creditors) by its execution of this
Deed, and any Replacement Bond Trustee (on behalf of the Securities Creditors)
by its execution of a Deed of Accession to this Deed, acknowledges and agrees
as follows:

(i)                             that
to the extent and in the manner set out in any of the indentures (as
supplemented and amended from time to time) (the “Indentures”) under which the Cash Pay Securities are issued,
the payment of all Senior Subordinated Guarantee Debt is expressly made
subordinate to and subject in right of payment to the prior payment in full in
cash of all Senior Debt and Hedging Debt;

(ii)                          that
the Senior Debt and Hedging Debt each qualify as “Senior Debt” for the purposes
of and as such term is defined in the Indentures;

(iii)                       that
the Senior Creditors and the Hedging Banks are entitled to rely on and enforce
(A) the subordination provisions contained in the Indentures and
(B) the provisions in the Indentures restricting the circumstances in
which a demand may be made under the Senior Subordinated Guarantee; and

(iv)                      that
it accepts any Transfer Certificate, Accession Deed or Deed of Accession and
the accession by the relevant parties to such agreements to this Deed in the
capacity described therein.  For the avoidance
of doubt, the Bond Trustee or a Replacement Bond Trustee (as the case may be)
hereby waives any right to approve, or of objection to, the accession or
identity of such persons and confirms that it hereby waives any obligation on
the part of a party to procure the Bond Trustee’s or the Replacement Bond
Trustee’s (as the case may be) counter-signature or acceptance of any
such Transfer Certificate, Accession Deed or Deed of Accession.

21.6                        Variation
of Forms of Deed of Accession

The Security Agent
and the Parent may agree changes to the form of Deed of Accession.

21.7                        Transfer
Certificates and Accession Deeds

Each
of the other Parties appoints:

(a)                                  the
Senior Agent as its agent to sign on its behalf any Transfer Certificate or
Accession Deed entered into under the Senior Facility Agreement; and

(b)                                 the
Security Agent as its agent to sign on its behalf any Deed of Accession,

in order that each
such Transfer Certificate, Accession Deed or Deed of Accession may be
supplemental to this Deed and be binding on and enure to the benefit of all the
Parties.

 39
 

21.8                        Validity

If any person
intended to be bound by this Deed does not become party to it or is not bound
by it for any reason that shall not affect the rights and obligations of the
other persons party to this Deed.

22.                               STATUS
OF OBLIGORS

None of the
Obligors has any rights under this Deed against any of the Senior Creditors,
the Hedging Banks or the Note Creditors and none of the undertakings given by
the Senior Creditors, the Hedging Banks or the Note Creditors are given (or
shall be deemed to have been given) to, or for the benefit of, the Obligors
(save that after the application of any proceeds in the manner provided in the
First to Third sub-paragraphs of Clause 11.1 (Order of Application) the Obligor concerned
or other person entitled thereto shall be entitled to any surplus proceeds).

23.                               NOTICES

Every
Notice under this Deed shall be in writing delivered personally, by first class
prepaid post or facsimile and shall be sent to the address or facsimile number
(if any is specified) of the Party, and for the attention of the individual:

(a)                                  applying
for the purposes of the Senior Facility Agreement in the case of Obligors or
Senior Creditors; or

(b)                                 in
the case of the Hedging Banks, as set out in Schedule 4, or as notified by the
Security Agent from time to time; or

(c)                                  in
the case of the Bond Trustee, set out in the relevant 2025 Indenture; or

(d)                                 in
the case of the Junior Creditor, as notified by the Security Agent from time to
time; or

(e)                                  specified
in the relevant Deed of Accession if not a Party at the date hereof,

or such other
address or facsimile number as is notified in writing by it to the Security
Agent.

Clause 37 (Notices) of the Senior Facility Agreement
shall apply to all Notices given under this Deed.

24.                               WAIVERS,
REMEDIES CUMULATIVE

The
rights of each Party under this Deed:

(a)                                  are
cumulative and not exclusive of its rights under the general law;

(b)                                 may
be waived only in writing and specifically; and

(c)                                  may
be exercised as often as necessary.

Delay in
exercising or non-exercise of any such right is not a waiver of that
right.

 40
 

25.                               THE
SECURITY AGENT AND SENIOR AGENT

25.1                        Appointment
by Hedging Banks

(a)                                  Each
Hedging Bank irrevocably appoints the Security Agent to act as its agent under
this Deed and with respect to the Combined Security Documents on the terms set
out in this Clause 25 and in Schedule 7 (Security Agent),
and irrevocably authorises the Security Agent on its behalf to:

(i)                             enter
into any and each Combined Security Document; and

(ii)                          perform
such duties and exercise such rights and powers under this Deed and the
Combined Security Documents as are specifically delegated to the Security Agent
by the terms thereof, together with such rights, powers and discretions as are
reasonably incidental thereto.

(b)                                 The
Security Agent shall have only those duties which are expressly specified in
this Deed and/or the Combined Security Documents.  The Security Agent’s duties under this Deed
and/or the Combined Security Documents are of a mechanical and administrative
nature.

25.2                        Terms

Save as set out in
Schedule 7 (Security Agent), the terms of the
appointment of the Security Agent by the Hedging Banks are the same as those
set out in Clause 25 (The
Administrative Parties) of the Senior Facility Agreement, applying mutatis mutandis to this Deed.

25.3                        Trust for
Secured Parties

(a)                                  Declaration of Trust:  To the extent the Security is not
transferred, charged or granted to the Security Agent on trust and subject to
the provisions of Clause 25.5 (Special Appointment of
Security Agent (Germany and Austria)), Clause 25.6 (Agent for the Secured Parties (France)), 25.7 (Agent for the Secured Parties (Spain)) or 25.8 (Declaration of Trust and appointment as agent (mandatorio con
rappresentanza)) the Security Agent declares itself trustee of the
Security to hold the same on trust for the Secured Parties on the terms and
subject to the conditions set out in this Deed. The following provisions are
supplementary to the provisions of the Trustee Act 1925.

(b)                                 The
perpetuity period for the trusts in this Deed is 80 years from the date of this
Deed.

(c)                                  Trust:

(i)                             The
Security Agent shall have only those duties, obligations and responsibilities
expressly specified in the Combined Security Documents and this Deed and no
duties, obligations and responsibilities shall be inferred or implied.

 41
 

(ii)                          In
performing or carrying out its duties, obligations and responsibilities, the
Security Agent shall be considered to be acting only in a mechanical and
administrative capacity (save as expressly provided in the Combined Security
Documents or this Deed) and shall not have or be deemed to have any duty,
obligation or responsibility to, or relationship of trust or agency with, any
Obligor (save in respect of certain notification requirements as expressly
provided in the Combined Security Documents).

25.4                        Disapplication

Section 1 of the
Trustee Act 2000 shall not apply to the duties of the Security Agent in
relation to the trusts constituted by this Deed. Where there are any inconsistencies
between the Trustee Acts and the provisions of this Deed, the provisions of
this Deed shall, to the extent allowed by law, prevail and, in the case of any
such inconsistency with the Trustee Act 2000, the provisions of this Deed shall
constitute a restriction or exclusion for the purposes of that Act.

25.5                        Special
Appointment of Security Agent (Germany and Austria)

Without prejudice
to the generality of Clause 25.3(a) (Declaration of Trust):

(a)                                  Each
Secured Party that is or will become party to this Deed hereby appoints the
Security Agent as trustee (Treuhaender)
and administrator for the purpose of holding on trust (Treuhand),
administering, enforcing and releasing the German Security (as defined below)
or Austrian Security (as defined below) for the Secured Parties, (ii) the
Security Agent accepts its appointment as a trustee and administrator of the
German Security and Austrian Security on the terms and subject to the
conditions set out in this Deed and (iii) the Secured Parties, the Security Agent
and all other parties to this Deed agree that, in relation to the German
Security or Austrian Security, no Secured Party shall exercise any independent
power to enforce any German Security or Austrian Security or take any other
action in relation to the enforcement of the German Security or the Austrian
Security, or make or receive any declarations in relation thereto.

(b)                                 The
Security Agent shall hold and administer any German Security which is security
assigned, transferred or pledged under German law to it as a trustee for the
benefit of the Secured Parties, where “German
Security” means the assets which are the subject of a security
document which is governed by German law. The Security Agent shall hold and
administer any Austrian Security which is security assigned, transferred or
pledged under Austrian law to it as a trustee for the benefit of the Secured
Parties, where “Austrian Security”
means the assets which are the subject of a security document which is governed
by Austrian law.

(c)                                  Each Secured Party
hereby instructs the Security Agent (with the right of sub-delegation) to enter
into any documents evidencing German Security or Austrian Security and to make
and accept all declarations and take all actions it considers necessary or
useful in connection with any German Security or Austrian Security on behalf of
such Secured Party. The Security Agent shall

 42
 

further be
entitled to rescind, release, amend and/or execute new and different documents
securing the German Security or Austrian Security.

(d)                                 The
Secured Parties and the Security Agent agree that all rights and claims
constituted by the abstract acknowledgement of indebtedness pursuant to Section
20 of Schedule 7 (Security Agent) and all proceeds
held by the Security Agent pursuant to or in connection with such abstract
acknowledgement of indebtedness are held by the Security Agent with effect from
the date of such abstract acknowledgement of indebtedness in trust for the
Secured Parties and will be administered in accordance with Deed. The Secured
Parties and the Security Agent agree further that the respective Obligor’s
obligations under such abstract acknowledgement of indebtedness shall not
increase the total amount of the Secured Obligations (as defined in the
Security Documents relating to German Security or Austrian Security) and shall
not result in any additional liability of any of the Obligors or otherwise
prejudice the rights of any of the Obligors under any Finance Document.
Accordingly, payment of the obligations under such abstract acknowledgement of
indebtedness shall, to the same extent, discharge the corresponding Secured
Obligations (as defined in the Security Documents relating to German Security
or Austrian Security) and vice versa.

(e)                                  For
purposes of this Priority Agreement, the Security Agent shall be released from
the restrictions set out in Section 181 of the German Civil Code (Bürgerliches Gesetzbuch) or restrictions having a similar
effect under any other applicable law, shall be authorized to act also on
behalf of other parties and shall have the right to grant substitute powers of
attorney under release from such restrictions.

25.6                        Agent for
the Secured Parties (France):

(a)                                  Each
Secured Party (other than the Security Agent) as “mandants”
under French law:

(i)                             hereby
irrevocably appoints the Security Agent to act as its agent (“mandataire” under French law) under and in connection with
the French Security Documents; and

(ii)                          irrevocably
authorises the Security Agent to execute for and on its behalf the French
Security Documents and to perform the duties and to exercise the rights, powers
and discretions that are specifically delegated to it under or in connection
with the French Security Documents, together with any other rights, powers and
discretions which are incidental thereto and to give a good discharge for any
moneys payable under the French Security Documents.

(b)                                 The
Security Agent will act solely for itself and as agent for the other Secured
Parties in carrying out its functions as agent under the French Security Documents.

(c)                                  The relationship
between the Secured Parties (other than the Security Agent) on the one hand and
the Security Agent on the other is that of principal 

 43
 

(“mandant” under
French law) and agent (“mandataire”
under French law) only.  The Security Agent
shall not have, nor be deemed to have, assumed any obligations to, or trust or
fiduciary relationship with, any party to this Deed other than those for which
specific provision is made by the French Security Documents and, to the extent
permissible under French law, the other provisions of this Deed, which shall be
deemed to be incorporated in this Clause 25.6, where reference is made to any
French Security Documents.

(d)                                 Notwithstanding
Clause 28 (Governing Law) of this Deed, the
provision of this Clause 25.6 and the other provisions of this Deed which are
deemed to be incorporated herein, shall be governed by, and construed in
accordance with, French law. 
Notwithstanding Clause 29.1 (Submission),
any dispute arising out of this Clause 25.6 shall be submitted to the Tribunal
de Commerce de Paris.

(e)                                  The
Secured Parties, the Security Agent and the other parties hereto which are also
party to any French Security Document irrevocably acknowledge that the
existence and extent of the Security Agent’s authority resulting from this
Clause 25.6 and the effects of the Security Agent’s exercise of this authority
shall be governed by French law.

25.7                        Agent for
the Secured Parties (Spain):

In particular,
with respect to any Spanish Security Documents, each of the Secured Parties
(other than the Security Agent) (i) agrees that the Security Agent shall
execute the Spanish Security Documents in its own name and behalf and on behalf
of the relevant Secured Parties (undisclosed representation or “representación indirecta”), with the power to determine and
agree any term and condition of such Spanish Security Documents, execute any
other agreement or instrument, give or receive any notice and take any other
action and exercise any right, remedy, power and discretion in relation to the
creation, perfection, maintenance, enforcement and release of the security
created under the Spanish Security Documents, (ii) undertakes to ratify and
approve such action in the name of and on behalf of the relevant Secured
Parties by the Security Agent acting in such capacity in relation to the
Spanish Security Documents, and (iii) agrees that the provisions of this Deed
which apply to the Security Agent in its capacity as trustee shall apply to it
in its capacity as the relevant Secured Parties’ undisclosed representative, to
the extent permitted by Spanish law.

25.8                        Declaration
of Trust and appointment as agent (mandatario
con rappresentanza) (Italy):

(a)                                  Each
Secured Party (other than the Security Agent):

(i)                             appoints
the Security Agent to be its “mandatario con rappresentanza” (common
representative) for the purpose of executing any Security Document which might
be subject to the Laws of the Republic of Italy (each an “Italian Security Document” and, together,
the “Italian Security Documents”)
in the name and on behalf of the Secured Parties, with the power to determine
and agree any term and condition of such Italian Security Documents, execute
any other agreement or instrument, give or receive any notice and take any
other action and

 44
 

exercise any right, remedy, power and discretion in relation to the
creation, perfection, maintenance, enforcement and release of the security
created under the Italian Security Documents, in all cases with power to
sub-delegate;

(ii)                          undertakes
to ratify and approve any such action taken in the name and on behalf of the
Secured Parties by the Security Agent acting in such capacity in relation to
the Italian Security Documents and the other documents or instruments described
under paragraph (i) above; and

(iii)                       agrees
that the provisions of this Deed which apply to the Security Agent in its
capacity as trustee, shall apply to it in its capacity as common representative
(mandatario con rappresentanza) of each
of the Secured Parties.

(b)                                 Notwithstanding
the provisions of Clause 28 (Governing Law)
of this Deed the appointment contained in this Clause 25.8 is governed by, and
will be construed in accordance with, Italian Law. Notwithstanding Clause 29.1
(Submission) of this Deed, any dispute
that should arise in relation to the appointment granted pursuant to this
Clause 25.8 will be subject  to the
jurisdiction of the Court of Milan.

25.9                        Agent for
the Secured Creditors (Belgium)

(a)                                  Each
Secured Creditor (other than the Security Agent) in their quality of “mandants” under Belgian law:

(i)                             hereby
irrevocably appoints the Security Agent to act as its agent  (“mandataire”
under Belgian law) under and in connection with the Belgian Security Documents.

(ii)                          irrevocably
authorises the Security Agent to execute for and on its behalf the Belgian
Security Documents and all documents and instruments related thereto and to
perform the obligations and to exercise the rights  that are specifically delegated to it under
or in connection with the Belgian Security Documents, together with any other
rights which are related thereto and to give discharge for the moneys payable
under the Belgian Security Documents.

(iii)                       undertakes
to ratify and approve such action taken in the name and on behalf of the
Secured Creditors by the Security Agent acting in such capacity in relation to
the Belgian Security Documents

(b)                                 Notwithstanding
Clause 28 (Governing Law) of this Deed, the
appointment contained in this Clause 25.9 is governed and construed in
accordance with Belgian law. 
Notwithstanding Clause 29.1 (Submission) of
this Deed, any dispute arising out of this paragraph  shall be submitted to the competent Courts of
Belgium.

 45

 

25.10                 Indemnity to
Security Agent

(a)                                  Each
Obligor agrees to pay, indemnify, and hold the Security Agent (and its
directors, officers, agents and employees) harmless from and against any and
all Losses of the Security Agent (and its directors, officers, agents and
employees).  For purposes of this Deed, “Losses”
means any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including the reasonable fees and
expenses of legal counsel, advisors and agents and any related VAT) or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Deed and the
Combined Security Documents or any action taken or omitted to be taken by the Security
Agent hereunder or under the Combined Security Documents, unless arising from
the gross negligence, bad faith or wilful misconduct of the indemnified
party.  In any suit, proceeding or action
brought by the Security Agent under or with respect to any contract, agreement,
interest or obligation constituting part of the Collateral (including, without
limitation, under the Combined Security Documents) for any sum owing or secured
thereunder, or to enforce any provisions thereof, the Company and each other
Obligor will save, indemnify and keep the Security Agent and the other Secured
Party harmless from and against all expense (including the reasonable fees and
expenses of legal counsel, advisors and agents, and any related VAT), loss or
damage suffered by reason of any defence, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder, arising out of a
breach by any Obligor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favour of such
obligor or its successors from any Obligor, and all such obligations of each
Obligor shall be and remain enforceable against and only against each Obligor
and shall not be enforceable against the Security Agent or any other Secured
Party. The agreements in this Clause 25.10 shall survive the termination of the
other provisions of this Deed and the resignation or removal of the Security
Agent hereunder.  The directors, officers,
agents and employees of the Security Agent may rely on this Clause 25.10.

(b)                                 Each
Secured Party (other than the Note Creditors) agrees to indemnify the Security
Agent on demand (to the extent not reimbursed by any Obligor and without
prejudice to the liability of any Obligor under any Finance Document) for any
and all liabilities, judgments, costs or expenses of any kind whatsoever
(including legal fees) which may be incurred by or asserted against the
Security Agent in any way relating to or arising out of (i) its acting as
the Security Agent under this Deed and/or the Combined Security Documents, or
performing its duties and functions in such capacity under any of the Secured
Instruments, or (iii) any action taken or omitted by the Security Agent
thereunder, except to the extent arising directly from the Security Agent’s
gross negligence or wilful misconduct.

(c)                                  Such
indemnification by each such Secured Party in paragraph (b) above shall be pro rata to its entitlement in or to the Senior Debt or the
Hedging Debt (as the case may be).  The
liability shall be divided between such Secured Parties pro rata according to
the respective amounts of the Senior Debt and Hedging

 46
 

Debt outstanding at the time the liability
was incurred or, if after enforcement, pro rata to the amount of their
respective Recoveries.

(d)                                 In
the event of the Security Agent seeking a claim for indemnity under this Clause
25.9(b), it must first in writing seek indemnity under Clause 25.9(a) for a
period of 12 months and if unsuccessful, may then seek indemnity under Clause
25.9(b).

(e)                                  As
a consequence of the Danish guarantee limitation set forth in Part IX of
Schedule 12 of the Senior Facility Agreement it is agreed that notwithstanding
anything set out to the contrary in this Deed:

(i)                             any
subordination of claims (and any rights related thereto) of an Obligor
incorporated in Denmark (a “Danish Obligor”)
in respect of any Intercompany Debt (and any undertakings related thereto)
contained in this Deed; and

(ii)                          any
application under Clause 11.1 (Order of Application)
hereof of proceeds from enforcement of security conferred by the Combined
Security Documents granted by a Danish Obligor; and

(iii)                       any
Danish Obligor’s payment obligations under Clause 20 (Expenses)
hereof,

shall be limited to the extent required by Danish law
on financial assistance within the meaning of the limitation of the Danish
guarantees as set forth in Part IX of Schedule 12 of the Senior Facility
Agreement.

25.11                 Covenant to pay

Each Obligor covenants in favour of the Security Agent
to pay the Senior Debt, the Hedging Debt and the Note Debt to the Security
Agent when and to the extent due from it under the terms of the Senior Finance
Documents, the Hedging Documents or the Note Documents, as the case may be, to
such bank account as the Security Agent may direct, except that each Obligor
may (subject to the terms of this Deed) pay the Senior Debt and/or the Hedging
Debt and/or the Note Debt directly to the Senior Agent, the relevant Ancillary
Lenders, the relevant Hedging Bank or the Note Trustee, as the case may be, and
each such payment will constitute a pro
tanto discharge of this covenant to pay in favour of the Security
Agent.

25.12                 Guarantee
Limitations

Clause 19.9 (Guarantee Limitations)
of the Senior Facility Agreement shall apply to the provisions of this Deed as
if set out in full herein, mutatis mutandis.

25.13                 Miscellaneous

(a)                                  Each
Obligor and each other Secured Party agrees to the terms set out in
Schedule 7 (Security Agent).  In the event of any conflict between the
terms of Schedule 7 (Security Agent)
and the Senior Documents and/or the Note Documents, the terms of
Schedule 7 (Security Agent) shall prevail.

 47
 

(b)                                 To
the extent that the Security Agent acts under this Deed on the instructions of
an Instructing Group or the Majority Senior Creditors or an Enforcement
Instructing Group Security, the Hedging Banks appoint the Senior Agent as its
agent under this Deed.  Such appointment
is on the terms set out in Clause 25 (The Administrative Parties) of the
Senior Facility Agreement, mutatis mutandis.

25.14                 ROLE OF THE SECURITY AGENT

The Security Agent shall hold the benefit of the
Security Documents as agent and trustee for itself and the Secured Parties, or
to the extent required by applicable local law shall hold the benefit of such
Security Documents for itself and on behalf of the Secured Parties, to apply
all payments and other benefits received by it by reason thereof, or otherwise
realised thereunder, in accordance with this Deed.

26.                               TERMINATION

Save in respect of any right, claim or liability arising
under this Deed prior to its termination (which right, claim or liability shall
continue notwithstanding the termination referred to in this Clause), this Deed
(other than Clause 25 (Security Agent
and Senior Agent) and Schedule 7 (Security
Agent)) shall terminate after the Senior Discharge Date when all
moneys held in the Collateral Account (if any) have been distributed to the
Senior Creditors, Hedging Banks, and Note Creditors, or released to the
appropriate Obligors in accordance with Clause 11.1 (Order of Application) and the Collateral
has been released.

27.                               SEVERABILITY

If any provision of this Deed is prohibited or
unenforceable in any jurisdiction in relation to any Party, such prohibition or
unenforceability shall not invalidate the remaining provisions hereof or affect
the validity or enforceability of such provision in any other jurisdiction or
in relation to any other Party.

28.                               GOVERNING
LAW

This Deed is governed by English law.

29.                               JURISDICTION

29.1                        Submission

The courts of England have jurisdiction to settle any
disputes in connection with this Deed and accordingly the parties submit to the
jurisdiction of the English courts.

29.2                        Service of
Process

Without prejudice to any other mode of service, the
Junior Creditor:

(a)                                  irrevocably
appoints Smurfit UK Limited (whose address is Darlington Road, West Aukland,
County Durham DL4 9PE) as its agent for service of process relating to any
proceedings before the English courts in connection with this Deed or any
judgment in connection therewith;

 48
 

 

(b)                                 agrees
that failure by a process agent to notify it of the process will not invalidate
the proceedings concerned; and

(c)                                  consents
to the service of process relating to any such proceedings by prepaid posting
of a copy of the process to its address for the time being applying for the
purposes of Clause 23 (Notices).

29.3                        Forum
Convenience and Enforcement Abroad

Each party to this Deed:

(a)                                  waives
objection to English courts on grounds of inconvenient forum or otherwise as
regards proceedings in connection with this Deed;

(b)                                 agrees
that a judgment or order of an English court in connection with this Deed is
conclusive and binding on it and may be enforced against it in the courts of
any other jurisdiction; and

(c)                                  to
the fullest extent permitted by law, waives any right it may have in any
jurisdiction to have any proceedings take the form of a trial by Jury.

29.4                        Non-exclusivity

Nothing in this
Clause 29 limits the rights of a Senior Creditor, the Note Creditors or
the Hedging Bank to bring proceedings against a party to this Deed in
connection with this Deed:

(a)                                  in
any other court of competent jurisdiction; or

(b)                                 concurrently
in more than one jurisdiction.

30.                               COUNTERPARTS

This Deed may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.

THIS DEED has been executed and delivered as a Deed on the date
stated at the beginning of this Deed.

 49

SCHEDULE 1

THE OBLIGORS

SMURFIT KAPPA ACQUISITIONS

SMURFIT KAPPA FINANCE B.V.

SMURFIT KAPPA TREASURY

SMURFIT KAPPA DEUTSCHLAND
GMBH

SMURFIT CORRUGATED B.V.

SMURFIT HOLDINGS B.V.

SMURFIT INTERNATIONAL B.V.

SMURFIT KAPPA IRELAND
LIMITED

SMURFIT INTERNATIONAL
LIMITED

SMURFIT KAPPA PACKAGING
LIMITED

JEFFERSON SMURFIT &
SONS LIMITED

BELGRAY HOLDINGS

IONA PRINT LIMITED

SMURFIT KAPPA FUNDING PLC

MARGRAVE INVESTMENTS  LIMITED

 

 50

SCHEDULE 2

SENIOR CREDITORS

DEUTSCHE
BANK AG, LONDON BRANCH

CITIGROUP
GLOBAL MARKETS LIMITED

CITIBANK,
N.A.

CREDIT
SUISSE FIRST BOSTON INTERNATIONAL

J.P.
MORGAN PLC

JPMORGAN
CHASE BANK, N.A.

 

 51

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