SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
--------------- ---------------
Commission File Number 1-3506
GEORGIA-PACIFIC CORPORATION
(exact name of registrant as specified in its Charter)
Georgia 93-0432081
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
133 Peachtree Street, N.E., Atlanta, Georgia 30303
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 652-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock ($.80 par value) New York Stock Exchange
Junior Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 6, 1997, was $7,031,901,005.62.
As of the close of business on March 6, 1997, the Registrant had
91,471,883 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Listed hereunder are the documents any portions of which are incorporated
by reference and the Parts of this Form 10-K into which such portions are
incorporated:
1. The Corporation's Annual Report to Shareholders for the fiscal year
ended December 31, 1996, portions of which are incorporated by
reference in Parts I, II and IV of this Form 10-K; and
2. The Corporation's definitive Proxy Statement expected to be dated
March 26, 1997, for use in connection with the Annual Meeting of
Shareholders to be held on May 6, 1997, portions of which are
incorporated by reference into Part III of this Form 10-K.
<PAGE>
Georgia-Pacific Corporation
Table of Contents
PART I Page
Item 1. Business 1
Item 2. Properties 1
Item 3. Legal Proceedings 2
Item 4. Submission of Matters to a Vote of Security Holders
2
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 3
Item 6. Selected Financial Data 3
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 3
Item 8. Financial Statements and Supplementary Data 3
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 3
PART III
Item 10. Directors and Executive Officers of the Registrant
4
Item 11. Executive Compensation 7
Item 12. Security Ownership of Certain Beneficial Owners
and Management 7
Item 13. Certain Relationships and Related Transactions 7
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 8
<PAGE>
PART I
ITEM 1. BUSINESS
Georgia-Pacific Corporation (together with its subsidiaries herein referred to
as the "Corporation") was organized in 1927 under the laws of the State of
Georgia.
Information pertaining to the Corporation's business, including industry
segments, set forth under the captions "Building Products," "Pulp and Paper,"
"Management's Discussion and Analysis," Note 2 of the Notes to Financial
Statements, "Sales and Operating Profits by Industry Segment," and "Operating
Statistics" of the Corporation's 1996 Annual Report to Shareholders is
incorporated herein by reference.
TIMBER RESOURCES
Information pertaining to the Corporation's timber resources set forth under
the captions "Building Products - Forest Resources" and "Operating Statistics"
of the Corporation's 1996 Annual Report to Shareholders is incorporated herein
by reference.
MINERAL RESOURCES
Information pertaining to the Corporation's gypsum resources set forth under
the caption "Building Products - Gypsum Products" of the Corporation's 1996
Annual Report to Shareholders is incorporated herein by reference.
ENVIRONMENT
Information pertaining to environmental issues and the Corporation's
expenditures for pollution control facilities and equipment set forth under the
captions "Environment," "Management's Discussion and Analysis - Investing
Activities" and Note 10 of the Notes to Financial Statements of the
Corporation's 1996 Annual Report to Shareholders is incorporated herein by
reference.
EMPLOYEES
Information pertaining to persons employed by the Corporation set forth under
the caption "Management's Discussion and Analysis - Other" of the Corporation's
1996 Annual Report to Shareholders is incorporated herein by reference.
ITEM 2. PROPERTIES
Information pertaining to the number of manufacturing facilities as of December
31, 1996 and capacity and historical production volumes as of December 31, 1996
by plant type set forth under the caption "Operating Statistics" of the
Corporation's 1996 Annual Report to Shareholders is incorporated herein by
reference.
Information concerning the Corporation's timber and mineral resources is
presented under Item 1 of this Form 10-K.
<PAGE> 1
ITEM 3. LEGAL PROCEEDINGS
The information contained in Note 10 of the Notes to Financial Statements of
the Corporation's 1996 Annual Report to Shareholders ("Note 10") is
incorporated herein by reference.
ENVIRONMENTAL PROCEEDINGS
Pursuant to the rules of the Securities and Exchange Commission, the
Corporation is required to describe environmental proceedings to which a
governmental authority is a party and which involve potential monetary
sanctions, exclusive of interest and costs, of at least $100,000. Following
are descriptions of the legal proceedings meeting this criteria.
The Corporation is involved in environmental remediation activities at
approximately 200 sites, both owned by the Corporation and owned by others,
where it has been notified that it is or may be a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act or similar state "superfund" laws, or which the Corporation
has identififed for remediation. Of the known sites in which it is involved,
the Corporation estimates that approximately 31 percent are being investigated,
approximately 43 percent are being remediated and approximately 26 percent
are being monitored (an activity which occurs after either site investigation
or remediation has been completed). The ultimate cost to the Corporation for
the investigation, remediation, and monitoring of many of these sites
cannnot be predicted with certainty due to the often unknown magnitude of
the pollution or the necessary cleanup, the varying costs of alternative
cleanup methods, the amount of time necessary to accomplish such cleanups,
the evolving nature of cleanup technologies and government regulations, and
the inability to determine the Corporation's share multi-party cleanups or
the extent to which contribution will be available from other parties. The
Corporation has established reserves for environmental remediation costs
for these sites in amounts for which it believes are probable and reasonably
estimable. Based on analysis of currently available information and
previous experience with respect to the cleanup of hazardous substances, the
Corporation believes that it is reasonably possible that costs associated with
these sites may exceed current reserves by amounts that may prove insignificant
or that could range, in the aggregate, up to approximately $63 million. This
estimate of the range of reasonably possible additional costs is less certain
than the estimates upon which reserves are based, and in order to establish
the upper limit of such range, assumptions least favorable to the Corporation
among the range of reasonably possible outcomes were used. In estimating both
its current reserve for environmental remediation and the possible range of
additional costs, the Corporation has not assumed it will bear the entire cost
of remediation of every site to the exclusion of other known potentially
responsible parties who may be jointly and severally liable. The ability of
other potentially responsible parties to participate has been taken into
account, based generally on such parties' financial condition and probable
contribution on a per site basis.
In July of 1996, the Corporation executed an agreement with the United States
Department of Justice and the Environmental Protection Agency (EPA), which
subsequently was approved by the Federal District Court in Atlanta, to settle
numerous allegations made by the EPA involving potential claims under the Clean
Air Act at 41 of the Corporation's building product manufacturing plants.
Pursuant to this settlement, the Corporation has begun to install emissions
control equipment at ten of its plywood plants and at one oriented strand board
manufacturing plant for a cost currently estimated at $30 million. The
Corporation also has paid a civil penalty of $6 million and is funding various
environmental improvement projects having a cost of $4.25 million.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1996, there were no matters submitted to a vote of
security holders through the solicitation of proxies or otherwise.
<PAGE> 2
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information with respect to the Market for the Corporation's Common Equity and
Related Stockholder Matters set forth under the captions "Highlights," Note 12
of the Notes to Financial Statements and "Investor Information" of the
Corporation's 1996 Annual Report to Shareholders is incorporated herein by
reference. As of the close of business on March 6, 1997, the Corporation's
common stock price was $76.875 and there were approximately 39,811 record
holders of its Common Stock.
The Corporation unconditionally guaranteed $100 million of 7.20% Senior Notes
which were issued on December 11, 1996, by one of its indirect wholly-owned
subsidiaries, G-P Canada Finance Company (the "Issuer"). The Notes were
issued under a Fiscal and Paying Agency Agreement dated as of December 16, 1996,
among the Issuer, the Corporation and The Bank of New York, as fiscal agent.
The Notes were sold to Salomon Brothers Inc as Initial Purchaser at a purchase
price equal to 99.287% of the principal amount, representing the offer price of
the Notes of 99.937% less a commission of 0.650% of such offer price to
Qualified Institutional Buyers as defined in Rule 144A under the Securities Act
of 1933, as amended, in accordance with the exemption from the registration
requirements of such Act.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to Selected Financial Data set forth under the captions
"Selected Financial Data - Operations" and "Selected Financial Data -
Financial Position, End of Year" of the Corporation's 1996 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information with respect to Management's Discussion and Analysis set forth
under the caption "Management's Discussion and Analysis" of the Corporation's
1996 Annual Report to Shareholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to Financial Statements and Supplementary Data as set
forth under the captions "Statements of Income," "Statements of Cash Flows,"
"Balance Sheets," "Statements of Shareholders' Equity," "Notes to Financial
Statements" and "Report of Independent Public Accountants" of the
Corporation's 1996 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on accounting
and financial disclosure within the twenty-four months prior to the date of the
most recent financial statements filed as part of the 1996 Annual Report on
Form 10-K.
<PAGE> 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Corporation and disclosure pursuant
to Item 405 of Regulation S-K is incorporated herein by reference to the
Corporation's Notice of 1997 Annual Meeting of Shareholders and Proxy Statement
expected to be dated March 26, 1997.
Executive Officers of the Registrant
The executive officers of the Corporation are as follows:
Date first
elected as
Name Age an officer Position or office
A. D. Correll 55 1988 Chairman, Chief Executive Officer,
President and a Director
W. E. Babin(1) 61 1990 Executive Vice President -
Pulp and Paper
Donald L. Glass 48 1982 Executive Vice President -
Building Products
Clint M. Kennedy 47 1988 Executive Vice President - Pulp and
Paperboard
John F. McGovern 50 1983 Executive Vice President - Finance
and Chief Financial Officer
Davis K. Mortensen(2) 64 1982 Executive Vice President -
Building Products
John F. Rasor 53 1983 Executive Vice President -
Forest Resources
Lee M. Thomas 52 1993 Executive Vice President - Paper
James E. Bostic, Jr. 49 1991 Senior Vice President -
Environmental, Government
Affairs and Communications
Gerard R. Brandt 57 1990 Senior Vice President -
Human Resources
<PAGE> 4
James F. Kelley 55 1993 Senior Vice President - Law,
General Counsel and Secretary
Maurice W. Kring 60 1983 Senior Vice President -
Containerboard and Packaging
George A. MacConnell 49 1983 Senior Vice President -
Distribution and Millwork
David W. Reynolds(3) 65 1983 Senior Vice President -
Administration
James E. Terrell 47 1989 Vice President and Controller
Alston D. Correll has been Chief Executive Officer of Georgia-Pacific since May
1993, Chairman since December 1993 and President since May 1996. He served as
Chief Operating Officer of the Corporation from August 1991 until May 1993, and
President and Chief Executive Officer from May 1993 until December 1993. Mr.
Correll was elected as a Director of the Corporation on May 5, 1992. Mr.
Correll served as Executive Vice President-Pulp and Paper from April 1989
through July 1991.
(1) W. E. Babin has been Executive Vice President - Pulp and Paper since January
1993. Prior to that time, Mr. Babin served as Executive Vice President - Pulp
and Paperboard from May 1992 to January 1993, Senior Vice President -
Containerboard and Packaging from January 1991 to May 1992, and Group Vice
President - Containerboard and Packaging from February 1990 to January 1991.
Mr. Babin will retire from the Corporation on April 1, 1997.
Donald L. Glass has been Executive Vice President - Building Products since
January 1, 1997. Mr. Glass served as Senior Vice President - Building Products
Manufacturing and Sales from 1991 until December 1996 and Senior Vice President
- - Building Products Manufacturing from 1989 to 1991.
Clint M. Kennedy has been Executive Vice President - Pulp and Paperboard since
January 1, 1997. Prior to that time, he served as Senior Vice President - Pulp,
Bleached Board and Logistics from February 1995 until December 1996, Group Vice
President - Pulp and Bleached Board from July 1992 through January 1995 and Vice
President - Sales and Marketing, Pulp and Bleached Board from May 1990 to July
1992.
John F. McGovern has been Executive Vice President - Finance since September
1995, and Chief Financial Officer since February 1994. He served as Senior Vice
President - Finance from January 1993 until September 1995, Vice President -
Finance from 1983 until January 1993, and Treasurer from March 1992 to October
1993.
(2) Davis K. Mortensen has been Executive Vice President - Building Products
since 1989. Mr. Mortensen will retire from the Corporation on March 1, 1997.
<PAGE> 5
John F. Rasor has been Executive Vice President - Forest Resources since January
1, 1997. Prior to that time, he served as Senior Vice President - Forest
Resources from February 1995 until December 1996, Group Vice President - Forest
Resources from May 1992 through January 1995, Group Vice President - Timber from
January 1992 to May 1992, Vice President - Forest Resources from 1991 to January
1992, and Vice President - Eastern Wood Products Manufacturing Division from
1989 to 1991.
Lee M. Thomas has been Executive Vice President - Paper since January 1, 1997.
Prior to that time, he served as Senior Vice President - Paper from February
1995 until December 1996, Senior Vice President - Environmental, Government
Affairs and Communications from February 1994 through January 1995, and Senior
Vice President - Environmental and Government Affairs from March 1993 through
January 1994. Prior to joining the Corporation in March 1993, Mr. Thomas served
as Chairman and Chief Executive Officer of Law Companies Environmental Group,
Inc. (an engineering and environmental services company) from 1989 until March
1993.
James E. Bostic, Jr. has been Senior Vice President - Environmental, Government
Affairs and Communications since February 1995. Prior to that time, he served
as Group Vice President - Communication Papers from April 1992 through January
1995, Group Vice President - Butler Paper and Mail-Well from January 1992 to
April 1992, and Vice President - Butler Paper and Mail-Well from January 1991 to
January 1992.
Gerard R. Brandt has been Senior Vice President - Human Resources since February
1995. Prior to that time, he served as Group Vice President - Packaged Products
from July 1993 through January 1995, Group Vice President - Butler Paper and
Mail-Well from May 1992 to July 1993, Vice President - Butler Paper and Mail-
Well from April 1992 to May 1993, and Vice President - Communication Papers
Manufacturing from May 1990 to April 1992.
James F. Kelley has been Senior Vice President - Law, General Counsel and
Secretary since March 1, 1997. Prior to that time he served as Senior Vice
President - Law and General Counsel from December 1993 to February 1997.
Maurice W. Kring has been Senior Vice President - Containerboard and Packaging
since February 1994. Prior to that time, he served as Group Vice President -
Containerboard and Packaging from July 1993 until February 1994 and Group Vice
President- Packaged Products from 1987 to July 1993.
George A. MacConnell has been Senior Vice President - Distribution and Millwork
since February 1993 and served as Senior Vice President - Distribution and
Specialty Operations from 1989 to February 1993.
(3) David W. Reynolds has been Senior Vice President - Administration since
February 1995. Prior to that time, he served as Senior Vice President - Human
Resources and Administration from 1989 through January 1995. Mr. Reynolds will
retire from the Corporation on April 1, 1997.
James E. Terrell was elected Vice President of the Corporation in January 1991
and has served as Controller since 1989.
<PAGE> 6
The Corporation's Board of Directors elects officers of the Corporation who hold
the offices to which they are elected until the next annual organizational
meeting of the Board. The Compensation Committee determines the compensation of
all officers of the Corporation, including officers who are also directors of
the Corporation. There are no other arrangements or understandings between the
respective officers and any other person pursuant to which such officers are
elected.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to Executive Compensation is incorporated herein by
reference to the Corporation's Notice of 1997 Annual Meeting of Shareholders and
Proxy Statement expected to be dated March 26, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to Security Ownership of Certain Beneficial Owners and
Management is incorporated herein by reference to the Corporation's Notice of
1997 Annual Meeting of Shareholders and Proxy Statement expected to be dated
March 26, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to Certain Relationships and Related Transactions is
incorporated herein by reference to the Corporation's Notice of 1997 Annual
Meeting of Shareholders and Proxy Statement expected to be dated March 26, 1997.
<PAGE> 7
PART IV
ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Annual Report for
Georgia-Pacific Corporation and subsidiaries:
(1) The Financial Statements, Notes to Financial Statements and the
Report of Independent Public Accountants dated February 7, 1997
listed below are incorporated herein by reference to the
Corporation's 1996 Annual Report to Shareholders:
Statements of Income for the years ended December 31, 1996, 1995
and 1994.
Statements of Cash Flows for the years ended December 31, 1996,
1995 and 1994.
Balance Sheets as of December 31, 1996 and 1995.
Statements of Shareholders' Equity for the years ended December
31, 1996, 1995 and 1994.
Notes 1 through 12 of the Notes to Financial Statements
Report of Independent Public Accountants
(2) Financial Statement Schedules:
Report of Independent Public Accountants as to Schedule
II Valuation and Qualifying Accounts for the years ended
December 31, 1996, 1995 and 1994.
Schedules other than that listed above are omitted because they
are not required, are inapplicable or the information is
otherwise shown in the financial statements or notes thereto.
(3) Exhibits
The exhibits required to be filed as part of this Annual Report
on Form 10-K are as follows:
<PAGE> 8
NUMBER DESCRIPTION
2 Asset Purchase Agreement between Georgia-Pacific
West, Inc., Amador Central Railroad Company and
Sierra Pacific Holding Company dated December 24,
1996.
3.1 Articles of Incorporation, restated as of October 30,
1989 (Filed as Exhibit 3.1 to the Corporation's Annual
Report on Form 10-K for the year ended December 31,
1994, and incorporated herein by this reference
thereto).
3.3 Bylaws as amended to date (Filed as Exhibit 3.3 to the
Corporation's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, and incorporated herein
by this reference thereto).
4.1(i) Credit Agreement, dated as of December 23, 1996,
among Georgia-Pacific Corporation, as borrower, the
lenders named therein, and Bank of America National
Trust and Savings Association, as agent.
4.2 In reliance upon Item 601(b)(4)(iii) of Regulation S-K,
various instruments defining the rights of holders of
long-term debt of the Corporation are not being filed
herewith because the total of securities authorized
under each such instrument does not exceed 10% of the
total assets of the Corporation. The Corporation
hereby agrees to furnish a copy of any such instrument
to the Commission upon request.
4.3 Rights Agreement, dated as of July 31, 1989, between
Georgia-Pacific Corporation and First Chicago Trust
Company of New York, with form of Rights Certificate
attached as Exhibit A (Filed as Exhibit 4.3 to the
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by the
reference thereto).
4.4(i) Indenture, dated as of March 1, 1983, between
Georgia-Pacific Corporation and The Chase Manhattan
Bank (National Association), Trustee.
4.4(ii) First Supplemental Indenture, dated as of July 27,
1988, among Georgia-Pacific Corporation, The Chase
Manhattan Bank (National Association), Trustee, and
Morgan Guaranty Trust Company of New York.
<PAGE> 9
4.4(iii) Agreement of Resignation, Appointment and
Acceptance, dated as of January 31, 1992 by and among
Georgia-Pacific Corporation, Morgan Guaranty Trust
Company of New York and The Bank of New York, as
Successor Trustee.
10.1 Directors Group Life Insurance Program (Filed as
Exhibit 10.1 to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1993, and
incorporated herein by this reference thereto).*
10.2(i) Executive Retirement Agreement (Officers
Retirement Plan)*
10.2(ii) Amendment No. 1 to Executive Retirement Agreement
(Officers Retirement Plan).*
10.2(iii) Executive Retirement Agreement (Officers Retirement
Plan), as amended, as in effect after January 1, 1992.*
10.2(iv) Executive Retirement Agreement of James F. Kelley
(entered into December 6, 1993). (Filed as Exhibit 10.2
(v) to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1994, and incorporated
herein by this reference thereto).*
10.3(i) Key Salaried Employees Group Insurance Plan - Pre-
1987 Group (As Amended and Restated Effective January
1, 1987).*
10.3(ii) Amendment No. 1 (Effective January 1, 1991) to the
Key Salaried Employees Group Insurance Plan - Pre-1987
Group (As Amended and Restated Effective January 1,
1987).*
10.3(iii) Key Salaried Employees Group Insurance Plan - Post-1986
Group (Effective January 1, 1987).*
10.3(iv) Amendment No. 1 (Effective January 1, 1991) to the
Key Salaried Employees Group Insurance Plan - Post-1986
Group (Effective January 1, 1987).*
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
<PAGE> 10
10.3(v) Amendment No. 2 to the Key Salaried Employees
Group Insurance Plan - Post-1986 Group (effective
January 1, 1987) (Filed as Exhibit 10.3(v) to the
Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, and incorporated
herein by this reference thereto).*
10.3(vi) Amendment No. 3 to the Key Salaried Employees
Group Insurance Plan - Post-1986 Group (effective
August 1, 1994) (Filed as Exhibit 10.3(vi) to the
Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, and incorporated herein by
this reference thereto).*
10.4 Directors Retirement Program.*
10.5(i) 1990 Long-Term Incentive Plan. *
10.5(ii) Amendment No. 1 to 1990 Long-Term Incentive Plan.*
10.5(iii) Amendment No. 2 to the 1990 Long-Term Incentive Plan
(Filed as Exhibit 10.8(iii) to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995, and incorporated herein by this
reference thereto).*
10.6 1994 Management Incentive Plan (Filed as Exhibit 10.11
to the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993, and incorporated herein
by this reference thereto).*
10.7 1995 Economic Value Incentive Plan (Filed as Exhibit
10.10 to the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1994, and incorporated
herein by this reference thereto).*
10.8(i) 1995 Shareholder Value Incentive Plan (Filed as
Exhibit 10.11(i) to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1994, and
incorporated herein by this reference thereto).*
10.8(ii) Amendment No. 1 to 1995 Shareholder Value
Incentive Plan. (Filed as Exhibit 10.8(ii) to the
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1995, and incorporated herein by
this referenced thereto).*
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
<PAGE> 11
10.8(iii) Form of Shareholder Value Incentive Stock Option (Filed
as Exhibit 10.11(ii) to the Corporation's Annual Report
on Form 10-K for the year ended December 31, 1994, and
incorporated herein by this reference thereto).*
10.9(i) Outside Directors Stock Plan, adopted March 17,
1995 (Filed as Exhibit 10.12 to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995, and incorporated herein by this
reference thereto).*
10.9(ii) Receivables Purchase Agreement dated as of June 1,
1990, among Georgia-Pacific Corporation, as the Seller,
and Asset Securitization Cooperative Corporation,
Corporate Asset Funding Company, Inc., Falcon Asset
Securitization Corporation and Matterhorn Capital
Corporation, as the Purchasers, and Canadian Imperial
Bank of Commerce, as the Administrative Agent, as
amended.
10.9(iii) Receivables Purchase Agreement dated as of June 1,
1990, among Georgia-Pacific Corporation, as the Seller,
and Canadian Imperial Bank of Commerce, Citibank, N.A.
and The First National Bank of Chicago, as the
Secondary Purchasers, and Matterhorn Capital
Corporation and Canadian Imperial Bank of Commerce, as
the Administrative Agent.
10.10(i) Agreement, effective as of March 15, 1993, among
Georgia-Pacific Corporation, Hercules Incorporated, and
Lee M. Thomas (Filed as Exhibit 10.13 to the
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by
this reference thereto).
10.10(ii) First Addendum to Agreement, effective as of February
1, 1995, among Georgia-Pacific Corporation, Hercules
Incorporated, and Lee M. Thomas (Filed as Exhibit
10.13(ii) to the Corporation's Quarterly Report on Form
10-Q for the quarter ended March 31, 1995, and
incorporated herein by this reference thereto).
11 Statements of Computation of Per Share Earnings.
12 Statements of Computation of Ratio of Earnings to Fixed
Charges.
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
<PAGE> 12
13 Portions of Georgia-Pacific Corporation's 1996 Annual
Report to Shareholders. Such Report is not deemed to
be filed with the Commission as part of this Annual
Report on Form 10-K, except for the portions thereof
expressly incorporated by reference.
21 Subsidiaries.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
(b) Reports on Form 8-K
The Corporation filed Current Reports on Form 8-K dated November 25,
1996, in which it reported under Item 5 - "Other Events," December
5, 1996, in which it reported under Item 5 - "Other Events" and
December 26, 1996, in which it reported under Item 5 - "Other
Events."
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GEORGIA-PACIFIC CORPORATION
(Registrant)
/s/ A. D. Correll
By: ________________________
(A. D. Correll,
Chairman, Chief Executive
Officer and President)
Date: March 13, 1997
--
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
As Officers or Directors of GEORGIA-PACIFIC CORPORATION
/s/ A. D. Correll Director, Chairman, Chief March 13, 1997
Executive Officer and President
- ---------------------
(A. D. Correll) (Principal Executive Officer)
/s /John F. McGovern Executive Vice President - Finance
and Chief Financial Officer March 13, 1997
- ---------------------
(John F. McGovern) (Principal Financial Officer)
/s/ James E. Terrell Vice President and Controller March 13, 1997
(Principal Accounting Officer)
- ---------------------
(James E. Terrell)
* Director March 13, 1997
- ---------------------
(Robert Carswell)
* Director March 13, 1997
- ---------------------
(Jane Evans)
<PAGE> 14
* Director March 13, 1997
- ---------------------
(Donald V. Fites)
* Director March 13, 1997
- ---------------------
(Harvey C. Fruehauf, Jr.)
* Director March 13, 1997
- ---------------------
(Richard V. Giordano)
* Director March 13, 1997
- ---------------------
(David R. Goode)
* Director March 13, 1997
- ---------------------
(T. Marshall Hahn, Jr.)
* Director March 13, 1997
- ---------------------
(M. Douglas Ivester)
* Director March 13, 1997
--------------------
(Francis Jungers)
* Director March 13, 1997
- ---------------------
(Louis W. Sullivan)
* Director March 13, 1997
- ---------------------
(James B. Williams)
*By/s/ James F. Kelley
(James F. Kelley)
*As Attorney-in-Fact for the Directors or Officers by whose names an asterisk
appears.
<PAGE> 15
Report of Independent Public Accountants as to Schedule
To the Shareholders and the Board of
Directors of Georgia-Pacific Corporation:
We have audited in accordance with generally accepted auditing standards, the
financial statements of Georgia-Pacific Corporation incorporated by reference in
this Form 10-K, and have issued our report thereon dated February 7, 1997. Our
audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. Schedule II is the responsibility of the
Corporation's management and is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/S/ARTHUR ANDERSEN LLP
_______________________
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 7, 1997
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
(Millions)
<TABLE>
<CAPTION>
Balance at Charged to Charged to Balance
beginning costs and Other at end of
Description of period expenses Accounts* Deductions**period
- ----------- --------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Year ended
December 31,
1996
- -------------
Allowance for
doubtful
accounts $ 25 $(10) $ 2 $ (7) $ 10
------- ------- ------- ------- ------
Year ended
December 31,
1995
- -------------
Allowance for
doubtful
accounts $ 28 $ 3 $ 1 $ (7) $ 25
------ ------ ------ ------ ------
Year ended
December 31,
1994
- -------------
Allowance for
doubtful
accounts $ 32 $ 3 $ 1 $ (8) $ 28
------ ------ ------- ------- ------
</TABLE>
*Recoveries of accounts previously written off.
**Accounts written off.
<PAGE> 16
GEORGIA-PACIFIC CORPORATION
INDEX TO EXHIBITS
FILED WITH THE ANNUAL REPORT
ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1996
NUMBER DESCRIPTION
2 Asset Purchase Agreement between Georgia-Pacific West, Inc., Amador
Central Railroad Company and Sierra Pacific Holding Company dated
December 24, 1996. (1)
3.1 Articles of Incorporation, restated as of October 30, 1989 (Filed as
Exhibit 3.1 to the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994, and incorporated herein by this
reference thereto).
3.3 Bylaws as amended to date (Filed as Exhibit 3.3 to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996,
and incorporated herein by this reference thereto).
4.1(i) Credit Agreement, dated as of December 23, 1996, among Georgia-
Pacific Corporation, as borrower, the lenders named therein, and Bank
of America National Trust and Savings Association, as agent. (1)
4.2 In reliance upon Item 601(b)(4)(iii) of Regulation S-K, various
instruments defining the rights of holders of long-term debt of the
Corporation are not being filed herewith because the total of
securities authorized under each such instrument does not exceed 10%
of the total assets of the Corporation. The Corporation hereby agrees
to furnish a copy of any such instrument to the Commission upon
request.
4.3 Rights Agreement, dated as of July 31, 1989, between Georgia-Pacific
Corporation and First Chicago Trust Company of New York, with form of
Rights Certificate attached as Exhibit A (Filed as Exhibit 4.3 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1994, and incorporated herein by the reference thereto).
4.4(i) Indenture, dated as of March 1, 1983, between Georgia-Pacific
Corporation and The Chase Manhattan Bank (National Association),
Trustee. (1)
4.4(ii) First Supplemental Indenture, dated as of July 27, 1988, among
Georgia-Pacific Corporation, The Chase Manhattan Bank (National
Association), Trustee, and Morgan Guaranty Trust Company of New York.
(1)
4.4(iii) Agreement of Resignation, Appointment and Acceptance, dated as of
January 31, 1992 by and among Georgia-Pacific Corporation, Morgan
Guaranty Trust Company of New York and The Bank of New York, as
Successor Trustee. (1)
(1) Filed via EDGAR
<PAGE> 17
10.1 Directors Group Life Insurance Program (Filed as Exhibit 10.1 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference thereto).
10.2(i) Executive Retirement Agreement (Officers Retirement Plan). (1)
10.2(ii) Amendment No. 1 to Executive Retirement Agreement (Officers
Retirement Plan). (1)
10.2(iii) Executive Retirement Agreement (Officers Retirement Plan), as amended,
as in effect after January 1, 1992. (1)
10.2(iv) Executive Retirement Agreement of James F. Kelley (entered into
December 6, 1993). (Filed as Exhibit 10.2(v) to the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994, and
incorporated herein by this reference thereto).
10.3(i) Key Salaried Employees Group Insurance Plan - Pre-1987 Group (As
Amended and Restated Effective January 1, 1987). (1)
10.3(ii) Amendment No. 1 (Effective January 1, 1991) to the Key Salaried
Employees Group Insurance Plan - Pre-1987 Group (As Amended and
Restated Effective January 1, 1987). (1)
10.3(iii) Key Salaried Employees Group Insurance Plan - Post-1986 Group
(Effective January 1, 1987). (1)
10.3(iv) Amendment No. 1 (Effective January 1, 1991) to the Key Salaried
Employees Group Insurance Plan - Post-1986 Group (Effective January 1,
1987). (1)
10.3(v) Amendment No. 2 to the Key Salaried Employees Group Insurance
Plan - Post-1986 Group (effective January 1, 1987) (Filed as Exhibit
10.3(v) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, and incorporated herein by this
reference thereto).
10.3(vi) Amendment No. 3 to the Key Salaried Employees Group Insurance
Plan - Post-1986 Group (effective August 1, 1994) (Filed as Exhibit
10.3(vi) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, and incorporated herein by this reference
thereto).
10.4 Directors Retirement Program. (1)
10.5(i) 1990 Long-Term Incentive Plan. (1)
10.5(ii) Amendment No. 1 to 1990 Long-Term Incentive Plan. (1)
(1) Filed via EDGAR
<PAGE> 18
10.5(iii) Amendment No. 2 to the 1990 Long-Term Incentive Plan (Filed as Exhibit
10.8(iii) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, and incorporated herein by this
reference thereto).
10.6 1994 Management Incentive Plan (Filed as Exhibit 10.11 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference thereto).
10.7 1995 Economic Value Incentive Plan (Filed as Exhibit 10.10 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1994, and incorporated herein by this reference thereto).
10.8(i) 1995 Shareholder Value Incentive Plan (Filed as Exhibit 10.11(i)
to the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994 and incorporated therein by this reference thereto).
10.8(ii) Amendment No. 1 to 1995 Shareholder Value Incentive Plan. (Filed
as Exhibit 10.8(ii) to the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995, and incorporated herein by this
reference thereto).
10.8(iii) Form of Shareholder Value Incentive Stock Option (Filed as Exhibit
10.11(ii) to the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by this reference
thereto).
10.9(i) Outside Directors Stock Plan, adopted March 17, 1995 (Filed as
Exhibit 10.12 to the Corporation's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995, and incorporated herein by this
reference thereto).
10.9(ii) Receivables Purchase Agreement dated as of June 1, 1990, among
Georgia-Pacific Corporation, as the Seller, and Asset Securitization
Cooperative Corporation, Corporate Asset Funding Company, Inc., Falcon
Asset Securitization Corporation and Matterhorn Capital Corporation,
as the Purchasers, and Canadian Imperial Bank of Commerce, as the
Administrative Agent, as Amended. (1)
10.9(iii) Receivables Purchase Agreement dated as of June 1, 1990, among
Georgia-Pacific Corporation, as the Seller, and Canadian Imperial Bank
of Commerce, Citibank, N.A. and The First National Bank of Chicago, as
the Secondary Purchasers, and Matterhorn Capital Corporation and
Canadian Imperial Bank of Commerce, as the Administrative Agent. (1)
10.10(i) Agreement, effective as of March 15, 1993, among Georgia-Pacific
Corporation, Hercules Incorporated, and Lee M. Thomas (Filed as
Exhibit 10.13 to the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994, and incorporated herein by this
reference thereto).
(1) Filed via EDGAR
<PAGE> 19
10.10(ii) First Addendum to Agreement, effective as of February 1, 1995, among
Georgia-Pacific Corporation, Hercules Incorporated, and Lee M. Thomas
(Filed as Exhibit 10.13(ii) to the Corporation's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, and incorporated
herein by this reference thereto).
11 Statements of Computation of Per Share Earnings. (1)
12 Statements of Computation of Ratio of Earnings to Fixed Charges. (1)
13 Portions of Georgia-Pacific Corporation's 1995 Annual Report to
Shareholders. Such Report is not deemed to be filed with the
Commission as part of this Annual Report on Form 10-K, except for the
portions thereof expressly incorporated by reference. (1)
21 Subsidiaries. (1)
23 Consent of Independent Public Accountants. (1)
24 Powers of Attorney. (1)
27 Financial Data Schedule. (1)
(1) Filed via EDGAR
<PAGE> 20
ASSET PURCHASE AGREEMENT
by and between
GEORGIA-PACIFIC WEST, INC.,
AMADOR CENTRAL RAILROAD COMPANY
and
SIERRA PACIFIC HOLDING COMPANY
dated
December 24, 1996
STOCK AND ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE I
PAGE
PURCHASE AND SALE OF ASSETS ...................2
Section 1.1 Purchase and Sale 2
Section 1.2 Excluded Assets ...............................4
Section 1.3 Assumed Liabilities ...........................5
Section 1.4 Purchase Price ................................6
Section 1.5 Allocation of Purchase Price...................7
Section 1.6 Prorations.....................................8
Section 1.7 Closing Costs; Transfer Taxes..................8
Section 1.8 Time and Place of Closing......................9
Section 1.9 Deliveries at Closing........................ 9
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND
AMADOR....................................... 11
Section 2.1 Corporate Organization and Authority ........ 11
Section 2.2 Absence of Conflicts and Consent Requirements .13
Section 2.3 Financial Statements ..........................13
Section 2.4 Absence of Certain Changes ....................14
Section 2.5 Ownership of Assets ...........................15
Section 2.6 Litigation ....................................18
Section 2.7 Disclaimer of Warranties ......................19
Section 2.8 Licenses, Permits and Compliance With Law .....19
Section 2.9 Environmental Matters .........................20
Section 2.10 Contracts .....................................22
Section 2.11 Brokers, Finders, etc. ........................22
Section 2.12 Labor and Employment Matters ..................22
Section 2.13 Taxes..................................... 23
Section 2.14 Insurance......................................23
Section 2.15 Trademark......................................23
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER .......23
Section 3.1 Corporate Organization and Authority...... 23
Section 3.2 Absence of Conflicts and Consent Requirements .24
Section 3.3 Litigation Affecting Buyer.....................24
Section 3.4 Finders' Fees.................... 25
Section 3.5 Financial Capability...................... 25
ARTICLE IV
COVENANTS OF SELLER, AMADOR AND BUYER......... .25
Section 4.1 Investigation of Business; Access to Properties
and Records 25
Section 4.2 Reasonable Efforts ............................26
Section 4.3 Further Assurances ............................26
Section 4.4 Preservation of Business ......................27
Section 4.5 Public Announcements ..........................27
Section 4.6 No Implied Representation .....................27
Section 4.7 Inventory .....................................28
Section 4.8 Bulk Transfer Compliance ......................28
Section 4.9 Assignment of Contracts .......................28
Section 4.10 Access to Books and Records after Closing .....29
Section 4.11 Employees .....................................29
Section 4.12 Environmental Audit ...........................30
Section 4.13 Product Claims ................................32
Section 4.14 Intermediary...................................32
Section 4.15 Right to Update ...............................33
Section 4.16 Removal of Trademarks, Etc.....................34
Section 4.17 Antitrust Regulatory Approvals ................34
Section 4.18 Responsibility for Certain Environmental
Liabilities ............................34
Section 4.19 Licenses and Permits ..........................36
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE .....37
Section 5.1 Representations, Warranties and Covenants of Seller and
Amador ....................................37
Section 5.2 Filings; Consents; Waiting Periods ....... 37
Section 5.3 No Injunction .................................37
Section 5.4 Environmental Matters .........................38
Section 5.5 Closing Documents .............................38
Section 5.6 Absence of Litigation .........................38
Section 5.7 Simultaneous Closings................. 39
ARTICLE VI
CONDITIONS TO SELLER'S AND AMADOR'S
OBLIGATIONS TO CLOSE............................39
Section 6.1 Representations, Warranties and Covenants of Buyer 39
Section 6.2 Filings; Consents; Waiting Periods ............ 39
Section 6.3 No Injunction ................................ .40
Section 6.4 Closing Items ................................. 40
Section 6.5 Simultaneous Closings...........................40
ARTICLE VII
SURVIVAL; INDEMNIFICATION ..................... 40
Section 7.1 Survival ...................................... 40
Section 7.2 Indemnification .............................. .41
Section 7.3 Exclusive Remedy .............................. 46
ARTICLE VIII
TERMINATION ................................... 47
Section 8.1 Termination ................................... 47
Section 8.2 Procedure and Effect of Termination.............47
ARTICLE IX
MISCELLANEOUS ..................... ............48
Section 9.1 Counterparts ....................... ...........48
Section 9.2 Governing Law/Dispute Resolution .... ..... 48
Section 9.3 No Third Party Beneficiaries ......... .........50
Section 9.4 Entire Agreement ...................... ........50
Section 9.5 Expenses ............................... .......50
Section 9.6 Notices ................................. ......50
Section 9.7 Successors and Assigns ................... .....52
Section 9.8 Headings; Definitions ..................... ....52
Section 9.9 Schedules and Exhibits ..................... ...52
Section 9.10 Amendments and Waivers ...................... ..52
Section 9.11 Specific Performance ......................... .53
Section 9.12 Severability of Provisions......................53
LIST OF EXHIBITS
Exhibit A Timberlands Purchase Agreement
Exhibit 1.11(a)(vi) Grant Deed
Exhibit 4.1(b) Confidentiality Agreement
LIST OF SCHEDULES
Schedule Title
-------- -----
1.1(a) Equipment
1.1(b) Real Property
1.1(e) Computer Equipment and Software
1.1(g) Leases
1.1(h) Contracts
1.1(i) Trademark Registrations
2.3 Balance Sheets/Financial Information
2.4 Post-October 31, 1996 Changes
2.5(a) Liens on Real Property
2.6 Litigation
2.9 Environmental Matters
2.9(b)(i) Actual Knowledge of Seller and Amador
2.12(a) Seller's Benefit Plans
2.12(b) Employees
2.14 Insurance
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of the 24th day of
December, 1996, is made and entered into by and between GEORGIA-PACIFIC WEST,
INC., an Oregon corporation ("Seller"), AMADOR CENTRAL RAILROAD COMPANY, a
California corporation ("Amador"), and SIERRA PACIFIC HOLDING COMPANY., a
California corporation ("Buyer").
W I T N E S S E T H:
-------------------
WHEREAS, Seller owns and operates approximately 127,000 acres of
timberlands in central California (the "Timberlands"), together with a dual-
line sawmill (the "Sawmill") and a particleboard manufacturing plant (the
"Particleboard Plant") located in Martell, California (the Sawmill and
Particleboard Plant, together with their respective businesses as currently
conducted, being sometimes hereinafter referred to collectively as the
"Manufacturing Operations"); and
WHEREAS, the Manufacturing Operations are serviced by a short-line railroad
(the "Railroad") owned and operated by Amador (the Railroad and the
Manufacturing Operations, together with their respective businesses as currently
conducted, being sometimes hereinafter referred to collectively as the "Martell
Operations"); and
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell to
Buyer, the Timberlands and related assets in accordance with the terms and
conditions of a Timberlands Purchase Agreement in the form attached hereto as
Exhibit A (the "Timberlands Purchase Agreement"); and
- ---------
WHEREAS, Buyer wishes to purchase from Seller and Amador, and Seller and
Amador wish to sell to Buyer, substantially all of the assets and properties of
the Martell Operations in accordance with the following terms and conditions.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
SECTION 1.1 PURCHASE AND SALE. On the basis of the representations,
-----------------
warranties, covenants and agreements, and subject to the satisfaction or waiver
of the conditions set forth herein, at the "Closing" (as defined in Section
-------
1.8), Seller and Amador will sell and convey to Buyer, and Buyer will purchase
- ---
and acquire from Seller and Amador, all of their respective right, title and
interest, as of the date of the Closing (the "Closing Date"), in the following
assets of the Martell Operations (collectively, the "Purchased Assets"), but
specifically excluding the "Excluded Assets" (as defined in Section 1.2):
-----------
(a) all of the machinery, equipment, vehicles, including tractors,
trailers and other transportation equipment, and supplies identified on Schedule
--------
1.1(a), with such additions and deletions as may occur in the ordinary course of
- ------
business after the date hereof (the "Equipment");
(b) approximately 454 acres of real estate in Amador County, California on
which the Martell Operations are located, a legal description of which is
attached as Schedule 1.1(b), together with all right, title and interest of
---------------
Seller or Amador to any buildings, facilities and other structures or
improvements thereon (the "Real Property");
(c) all of the inventory of raw materials, work-in process, finished
goods, spare parts and supplies, wrapping, supply and packaging items and
finished goods located at and used in connection with the Martell Operations,
including, without limitation, all log inventories on site at or in transit to
the Martell Operations (the "Inventory");
(d) all of the other tangible assets, other than computer equipment,
located at and used in connection with the Martell Operations including, without
limitation, office furniture, office equipment and supplies;
(e) all computer hardware and software listed on Schedule 1.1(e);
---------------
(f) all of the books, records, manuals, documents, equipment supplier
lists and similar information relating exclusively to the Martell Operations;
(g) all leases and subleases of real property, equipment and other
tangible property identified on Schedule 1.1(g) (the "Leases");
---------------
(h) those contracts, agreements and commitments with suppliers, vendors,
or others identified on Schedule 1.1(h) (the "Contracts");
---------------
(i) the trademark A"mpine" and all registrations and applications
thereof identified on Schedule 1.1(i) (the "Trademark);
---------------
(j) to the extent transferable, all franchises, licenses, permits,
consents and certificates of all regulatory, administrative, and other
governmental agencies and bodies issued to or held by either Seller or Amador
and which are related exclusively to the conduct of the Martell Operations (the
"Licenses and Permits"); and
(k) all historic photographs and memorabilia located at the Martell
Operations' offices.
SECTION 1.2 EXCLUDED ASSETS. All assets of Seller or Amador on the
---------------
Closing Date not referred to in Section 1.1 (the "Excluded Assets") shall be
-----------
retained by Seller or Amador, as the case may be, and shall not be transferred
to or purchased by Buyer. Without limiting the generality of the foregoing,
Buyer shall not purchase from Seller or Amador:
(a) any asset of whatsoever nature relating to Georgia-Pacific
Corporation's Atlanta headquarters or Portland offices, including any
information systems used in connection with transmitting information from the
Martell Operations to the Atlanta or Portland facilities;
(b) any of the cash, cash equivalents, bank accounts, deposits, lock boxes
and other similar accounts (whether maintained at a bank, savings and loan or
other financial institution), marketable securities, including petty cash and
cash deposits, and investments of Seller or Amador as of the Closing Date;
(c) any of the accounts receivable generated by or in connection with the
Martell Operations on or prior to the Closing Date;
(d) all prepaid and deferred items or credits and deposits, rights of
offset and credits and claims for refund generated or incurred by or in
connection with the Martell Operations prior to the Closing Date;
(e) all claims, choses in action and rights of or actions by Seller or
Amador against third parties;
(f) permits, to the extent not lawfully transferable;
(g) all assets of any pension plan including, but not limited to, the
right to receive any assets of any such plan upon termination thereof if the
plan's assets exceed its liabilities;
(h) personnel files and employee medical records, together with any other
books and records the provision of which to Buyer would violate any applicable
law;
(i) all rights to any patents, trademarks, service marks or trade names,
other than the Trademark, including use of the names "Georgia-Pacific" and
`G-P'' or any derivations thereof and associated logos;
(j) the industry mill stamps utilized by the Manufacturing Operations;
(k) the box car leases currently held by Amador; and
(l) all claims for refunds of taxes and other governmental charges or
assessments arising from or pertaining to periods, activities, operations or
events occurring on or prior to the Closing Date.
SECTION 1.3 ASSUMED LIABILITIES. As partial consideration for
-------------------
consummation of the transactions contemplated hereby, at the Closing, Buyer
shall assume and agree to thereafter perform when due and discharge, and
indemnify and hold Seller and Amador harmless with respect to, the following
liabilities and obligations of Seller or Amador with respect to the Martell
Operations (the "Assumed Liabilities"):
(a) all obligations and liabilities for ad valorem property taxes on the
Real Property or other Purchased Assets which become due and payable after the
Closing Date;
(b) those liabilities, obligations, costs and expenses arising out of or
relating to the operation of the Martell Operations in the ordinary course of
business, including performance of the Contracts or Leases, after the Closing
Date; and
(c) all obligations undertaken by Buyer pursuant to the other provisions
of this Agreement.
SECTION 1.4 PURCHASE PRICE.
--------------
(a) Subject to adjustment in accordance with this Section 1.4, the
-----------
purchase price (the "Purchase Price") payable in consideration for the
Purchased Assets (in addition to assumption of the Assumed Liabilities) shall be
the sum of Fifty Million Dollars ($50,000,000). Buyer will pay to Seller at
Closing, by wire transfer in immediately available funds as directed by Seller,
an amount equal to the Purchase Price plus or minus the amount (the "Inventory
Adjustment") by which the value of the Inventory determined by the physical
inventory described in Section 4.7 either exceeds or is less than the value of
-----------
the Inventory shown on the "Balance Sheets" (as defined in Section 2.3). The
-----------
Inventory Adjustment shall be calculated in accordance with Seller's usual and
customary accounting practices applied on a basis consistent with the Balance
Sheets, except that all log inventories shall be valued based on the
valuations, by species, used in calculating the values for such log inventories
on the Balance Sheets.
(b) If Seller and Buyer are unable to resolve any disagreement with
respect to the Inventory Adjustment prior to Closing, Buyer shall pay the full
Purchase Price to Seller at the Closing, and either Buyer or Seller may submit
any remaining disagreement for final resolution to the Chicago, Illinois office
of KPMG Peat Marwick (the "Neutral Accountants") within ten (10) days
following the Closing. The Neutral Accountants shall act as an arbitrator to
determine and resolve only those issues so submitted by either Buyer or Seller.
The Neutral Accountants' resolution shall be made within thirty (30) days of the
submission of the dispute, shall be made in accordance with the terms of this
Agreement, including, without limitation, Section 1.4(a), shall be set forth in
--------------
a written statement delivered to Seller and Buyer and shall be final, binding
and conclusive. Payment of any Inventory Adjustment determined by the Neutral
Accountants shall be made by the Buyer or Seller, as the case may be, to the
other by wire transfer in immediately available funds within ten (10) days of
receipt of the Neutral Accountant's written statement of resolution, together
with interest thereon from the Closing Date to the date of payment at the rate
of interest per annum equal to the prime rate in effect on the Closing Date as
reported in The Wall Street Journal. All wire transfers shall be to such
accounts as the recipient thereof may designate in writing for that purpose.
(c) Each of Buyer, Seller and Amador represents and warrants that it has
disclosed to the others all significant business and other relationships that it
has had with KPMG Peat Marwick since January 1, 1993. The fees and expenses of
the Neutral Accountants in connection with any determination under Section
-------
1.4(b) shall be apportioned between Seller and Amador, on the one hand, and
- ------
Buyer, on the other hand, by the Neutral Accountants based on the inverse
proportion of disputed amounts resolved in favor of each party. Otherwise,
Buyer, Seller and Amador shall each pay their own costs incurred in connection
with this Section 1.4, including the fees and expenses of their auditors.
-----------
SECTION 1.5 ALLOCATION OF PURCHASE PRICE. Within ninety (90) days
----------------------------
following the Closing Date, Buyer shall provide Seller with a proposed
allocation of the Purchase Price among the Purchased Assets which shall be
determined in accordance with Treas. Reg. Section 1.1060-1T and which, absent
manifest error, shall apply for purposes of completing IRS Form 8594. Subject
to the foregoing, Seller shall have the right to object to such allocation. If
Seller so objects in writing to Buyer's allocation within ten (10) days of
Seller's receipt thereof, the parties shall attempt to resolve among themselves
Seller's objection in good faith and if such resolution is unsuccessful, shall
resolve their dispute by jointly designating a mutually agreeable appraisal or
valuation firm, which shall make such determination. Neither Seller, Amador nor
Buyer shall file any return or take a position with any taxing authority that is
inconsistent with any allocation pursuant to this Section 1.5.
-----------
SECTION 1.6 PRORATIONS.
-----------
(a) Utilities; Taxes. On the Closing Date, or as promptly as practicable
----------------
following the Closing Date, but in no event later than sixty (60) days
thereafter, the real and personal property taxes, water, gas, electricity and
other utility charges, local business or other license fees or taxes, and other
similar periodic charges arising in connection with the Martell Operations or
the Real Property shall be prorated between Buyer and Seller retroactively
effective as of the Closing Date. To the extent practicable, utility meter
readings shall be made as of the Closing Date. If the real property tax rate
for the current tax year is not established by the Closing Date, the prorations
shall be made on the basis of the rate in effect for the preceding tax year and
shall be adjusted when the exact amounts for the current tax year are
determined. All such prorations shall be based upon the most recent available
assessed value of the Real Property prior to the Closing Date.
(b) Rents. Seller shall prepay minimum or basic rent under the Leases
-----
through the end of the calendar month in which the Closing Date occurs (or such
later date as may be required under any specific lease). Buyer shall reimburse
Seller for such rent accrued from the Closing Date through the end of such month
(or any such later date) as part of the post-Closing proration procedure
described in Section 1.6(a) above.
--------------
SECTION 1.7 CLOSING COSTS; TRANSFER TAXES. Seller shall reimburse Buyer
-----------------------------
for one-half of the real estate transfer or conveyance taxes, recording and
filing fees, and any sales, use or other taxes imposed by reason of, and paid by
Buyer in connection with, the transfers of Purchased Assets provided hereunder.
Subject to such partial reimbursement, Buyer shall be responsible for timely
payment of all such taxes and fees and shall be solely responsible for payment
of any deficiency, interest or penalty asserted with respect thereto. Seller
shall provide a title insurance commitment on the Real Property in accordance
with Section 2.5(b). Buyer shall pay all other premiums, costs, fees and
--------------
expenses of any title insurance, surveys or further evidence of title which it
desires to obtain.
SECTION 1.8 TIME AND PLACE OF CLOSING. The closing ("Closing") of the
-------------------------
transactions contemplated by this Agreement will be held at 10:00 a.m. on the
fifth business day after the fulfillment or waiver of the conditions set forth
in Articles V and VI hereof, at the offices of Buyer's title company in San
---------- --
Francisco, California, or such other time and place as the parties may agree.
It is understood that the Closing shall be deemed to take place effective as of
the close of business on the Closing Date, regardless of the time at which the
Closing actually occurs on the Closing Date.
SECTION 1.9 DELIVERIES AT CLOSING. At the Closing, the following
---------------------
deliveries shall be made:
(a) Deliveries by Seller and Amador. Seller and Amador shall deliver or
-------------------------------
cause to be delivered to Buyer:
(i) True and correct copies of the Articles of Incorporation of
Seller and Amador, certified by the Secretary of State of the States of Oregon
and California, respectively, as of a date within five (5) business days
preceding the Closing Date, and true and correct copies of the bylaws of Seller
and Amador, certified as of the Closing Date by their respective Secretaries or
Assistant Secretaries;
(ii) Good standing certificates relating to Seller from the States of
Oregon and California, and relating to Amador from the State of California;
(iii) A resolution of the Boards of Directors of Seller and Amador
authorizing the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby, certified by their respective Secretaries
or Assistant Secretaries;
(iv) Secretary's Certificates attesting to the incumbency of Seller's
and Amador's officers executing this Agreement and the other certificates and
agreements delivered by Seller or Amador at the Closing;
(v) Officer's Certificates attesting to the matters set forth in
Section 5.1;
- -----------
(vi) Grant deeds in the form of Exhibit 1.9(a)(vi) transferring and
-------------------
conveying the Real Property to Buyer;
(vii) Such assignments, bills of sale, certificates of title and
other instruments of transfer, all in form reasonably satisfactory to Buyer, as
are necessary to convey fully and effectively to Buyer the Purchased Assets in
accordance with the terms hereof; and
(viii) Such other and further certificates, assurances and documents
as may reasonably be required by Buyer in connection with the consummation of
the transactions contemplated hereby.
(b) Deliveries by Buyer. Buyer shall deliver or cause to be delivered to
-------------------
Seller:
(i) True and correct copies of the Articles or Certificate of
Incorporation of Buyer, certified by the Secretary of State of California as of
a date within five (5) business days preceding the Closing Date, and true and
correct copies of the bylaws of Buyer, certified as of the Closing Date by the
Secretary or an Assistant Secretary of Buyer;
(ii) A good standing certificate relating to Buyer from the State of
California;
(iii) A resolution of the Board of Directors of Buyer authorizing the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby, certified by the Secretary or an Assistant Secretary of
Buyer;
(iv) A Secretary's Certificate attesting to the incumbency of the
officers executing this Agreement and the other certificates and agreements
delivered by Buyer at the Closing;
(v) An Officer's Certificate attesting to the matters set forth in
Section 6.1;
- -----------
(vi) Instruments executed by Buyer, in form and substance reasonably
satisfactory to Seller, pursuant to which Buyer assumes the Assumed Liabilities;
(vii) The Purchase Price adjusted in accordance with Section 1.4; and
-----------
(viii) Such other and further certificates, assurances and documents
as may reasonably be required by Seller or Amador in connection with the
consummation of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
AND AMADOR
----------
Seller and Amador hereby represent and warrant to Buyer as follows:
SECTION 2.1 CORPORATE ORGANIZATION AND AUTHORITY.
------------------------------------
(a) Incorporation; Authority. Seller is a corporation duly organized,
------------------------
validly existing and in good standing under the laws of the State of Oregon,
with full corporate power and authority to operate the Manufacturing Operations
as now operated and to own the Purchased Assets (other than the Railroad
assets). Amador is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, with full corporate power
and authority to own and operate the Railroad as it presently is being operated
and to own the Purchased Assets (other than the assets of the Manufacturing
Operations). Both Seller and Amador have the power to enter into and perform
their respective obligations pursuant to this Agreement. Both Seller's and
Amador's execution, delivery and performance of this Agreement and the transfer
to Buyer of the Purchased Assets hereunder have been duly authorized by all
requisite corporate action on the part of Seller and Amador. This Agreement
constitutes Seller's and Amador's legal, valid and binding obligation,
enforceable against Seller and Amador in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or similar laws affecting creditors' rights and to equitable
principles.
(b) Foreign Qualification. Both Seller and Amador are duly qualified and
---------------------
authorized to transact business and are in good standing in those jurisdictions
of the United States in which either is required to be qualified to transact
business in order to avert any effect on the Martell Operations or the Purchased
Assets as currently operated by Seller and Amador that is or is reasonably
likely to be materially adverse to the Purchased Assets or the results of
operations, business or financial condition or prospects of the Martell
Operations (a "Material Adverse Effect"). For purposes of this Agreement, a
Material Adverse Effect shall mean an item or event causing an injury to Buyer
or a diminution in the value of the Purchased Assets or the Martell Operations,
either of which would exceed One Million Dollars ($1,000,000).
SECTION 2.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS. Seller's and
---------------------------------------------
Amador's execution and delivery of this Agreement, and the performance of their
respective obligations hereunder, do not and will not: (a) conflict with or
violate either Seller's or Amador's Articles of Incorporation or bylaws; (b)
materially violate or, alone or with notice or the passage of time, result in
the breach or the termination of, or otherwise give any contracting party the
right to terminate or declare a default under, the terms of any written
agreement relating to the Martell Operations to which either Seller or Amador is
a party or by which any of the Purchased Assets may be bound and which in any
case would have a Material Adverse Effect; or (c) violate any judgment, order,
decree, law, statute, regulation or other judicial or governmental restriction
to which Seller or Amador is subject, the violation of which would have a
Material Adverse Effect. Except for any filing required under the Hart-Scott-
Rodino Antitrust Improvement Act of 1976, as amended, and the rules and
regulations promulgated thereunder ("Hart-Scott-Rodino"), or any necessary
governmental or regulatory approvals or exemptions for the transfer of the
principal assets of Amador and resulting control of the Railroad ("Common
Carrier Approvals"), there is no requirement applicable to Seller or Amador to
make any filing with, or to obtain any permit, authorization, consent or
approval of, any governmental or regulatory authority as a condition to the
lawful performance by Seller or Amador of their respective obligations
hereunder.
SECTION 2.3 FINANCIAL STATEMENTS. Copies of the unaudited balance sheets
--------------------
of the Martell Operations and Timberlands as at October 31, 1996 (the "Balance
Sheets") are attached hereto as Schedule 2.3. In addition, Seller has
------------
previously furnished Buyer with copies of the unaudited balance sheets of the
Manufacturing Operations and the Timberlands as at
December 31, 1995, 1994 and 1993 and internally generated statements of earnings
for each of such calendar years, which are also attached as Schedule 2.3 (the
------------
Balance Sheets and other attached financial information being collectively
referred to as the "Financial Information"). The Financial Information has been
prepared in accordance with Seller's usual and customary accounting practices
consistently applied, which accounting practices are in accordance with GAAP
consistently applied except as disclosed on Schedule 2.3(a), and presents fairly
---------------
the financial position of the Martell Operations as at the dates of the
respective balance sheets, and the results of operations of the Martell
Operations for the periods then ended.
SECTION 2.4 ABSENCE OF CERTAIN CHANGES. Since October 31, 1996, except as
--------------------------
set forth on Schedule 2.4, there has not been:
------------
(a) any damage, destruction, loss (not covered by insurance) or other
change in the condition of the Purchased Assets, except normal wear and tear,
which would have a Material Adverse Effect;
(b) any sale or transfer of any of the Purchased Assets other than in the
ordinary course of business;
(c) any material liability incurred by Seller or Amador with regard to the
Martell Operations, contingent or otherwise, other than trade accounts,
operating expenses, obligations under executory contracts incurred for fair
consideration, or taxes accrued with respect to operations during such period,
all of which have been incurred in the ordinary course of business; or
(d) any receipt by Seller or Amador of any written notice of violation of
any land use restrictions (including environmental, endangered species, and
wetlands), building and zoning codes and ordinances, or other laws, ordinances,
regulations, rules, orders, licenses, or determinations of any federal, state,
county, municipal or other governmental authority materially affecting the Real
Property or the Martell Operations.
SECTION 2.5 OWNERSHIP OF ASSETS.
-------------------
(a) Real Property - Permitted Encumbrances. Seller has good and
--------------------------------------
marketable title to the Real Property, free and clear of any liens, claims,
charges, options, rights of tenants or other encumbrances of any nature
whatsoever, except: (i) as set forth on Schedule 2.5(a); (ii) as reflected or
---------------
reserved against in the Balance Sheets; or (iii) for "Permitted Encumbrances".
For purposes of this Agreement, "Permitted Encumbrances" with respect to any
Real Property shall mean all title exceptions shown by the "Title Commitment"
(as defined below) and any items listed below unless objected to in a timely
manner in accordance with Section 2.5(b), or which, if objected to, are cured
--------------
and deleted or affirmatively insured over:
(i) liens and assessments, both general and special, and other
governmental charges which are not yet due and payable as of the Closing;
(ii) all land use restrictions (including environmental, endangered
species and wetlands), building and zoning codes and ordinances, and other laws,
ordinances, regulations, rules, orders, licenses or determinations of any
federal, state, county, municipal or other governmental authority heretofore,
now or hereafter enacted, made or issued by any such authority affecting the
Real Property;
(iii) all easements, rights-of-way, covenants, conditions,
restrictions, reservations, licenses, agreements, and other matters of record;
(iv) all encroachments, overlaps, overhangs, unrecorded easements,
variations in area or measurement, rights of parties in possession, lack of
access or any other matters not of record which would be disclosed by an
accurate survey or inspection of the Real Property and which do not materially
interfere with the present operations of the Particleboard Plant;
(v) all electric power, telephone, gas, sanitary sewer, storm sewer,
water and other utility lines, pipelines, service lines, and facilities of any
nature on, over or under the Real Property, and all licenses, easements, rights-
of-way, and other agreements relating thereto, so long as such do not materially
affect the property's present use;
(vi) all existing public and private roads and streets (whether
dedicated or undedicated), and all railroad lines and rights-of-way affecting
the Real Property;
(vii) prior reservations or conveyances of mineral rights or mineral
leases of every kind and character;
(viii) inchoate mechanic's and materialmen's liens for construction
in progress and workmen's, repairmen's, warehousemen's, carrier's liens and
other similar statutory liens arising in the ordinary course of business;
(ix) other imperfections of title, easements and encumbrances, if
any, which do not materially adversely affect the marketability or insurability
of title to the Real Property or materially detract from the value of or
materially interfere with the present use of the Real Property; and
(x) the pre-printed exceptions listed in Schedule B of the Title
Commitment provided by Seller hereunder.
(b) Real Property - Title Commitment. Seller shall provide, at its sole
--------------------------------
cost and expense, a commitment for an owner's fee title insurance policy with
respect to the Real Property (the "Title Commitment") from Lawyers Title
Insurance Corporation or another nationally-recognized title insurance company
(the "Title Company"). Within five (5) days following Seller's receipt of
such Title Commitment, Seller shall deliver a copy of the Title Commitment to
Buyer, together with true and complete copies of all instruments identified
therein as giving rise to any defects or exceptions to title to the Real
Property. Within fifteen (15) days following Buyer's receipt of the Title
Commitment, Buyer shall advise Seller in writing of any liens, encumbrances or
other defects or exceptions in or to title to the Real Property, other than
Permitted Exceptions, subject to which Buyer is unwilling to accept title
(collectively, the "Unacceptable Encumbrances"). Failure of Buyer to provide
such written notice within such fifteen (15)-day period shall be deemed an
election by Buyer to waive any Unacceptable Encumbrances and to accept such
title as Seller and Amador are able to convey without any reduction in the
Purchase Price. Within five (5) days following Seller's receipt of Buyer's
notice of Unacceptable Encumbrances, if any, Seller shall advise Buyer in
writing whether it or Amador intends to correct such Unacceptable Encumbrances.
In the event Seller or Amador elects to correct all or some of the Unacceptable
Encumbrances, Seller, in its sole discretion, may extend the Closing Date one or
more times for up to ninety (90) days in the aggregate in order to eliminate
such Unacceptable Encumbrances. If Seller is unable or unwilling to eliminate
such Unacceptable Encumbrances and to convey title to the subject portion of the
Real Property in accordance with the terms of this Agreement on or before the
Closing Date (as such date may be extended), Buyer shall elect on the Closing
Date, as its sole remedy for such failure of Seller or Amador to eliminate any
Unacceptable Encumbrances, either: (i) to accept title to the Real Property
subject to such Unacceptable Encumbrances and receive no credit against, or
reduction of, the Purchase Price; or (ii) to terminate this Agreement pursuant
to Section 8.1(c) . Notwithstanding anything to the contrary contained in this
--------------
Section 2.5 or elsewhere in this Agreement, neither Seller nor Amador shall be
- -----------
obligated to bring any action or proceeding, to make any payments or otherwise
to incur any expense in order to eliminate any of the Unacceptable Encumbrances
raised by Buyer.
(c) Leases. Complete and correct copies of all of the Leases have been
------
delivered to or have been made available for inspection by Buyer. Except for
matters which would not have a Material Adverse Effect: (i) all Leases are in
full force and effect and constitute the legal, valid and binding obligations of
Seller, Amador and the other respective parties thereto; and (ii) there are no
existing material defaults of Seller or Amador with respect to the Leases or of
any of the parties thereto (or events or conditions which, with notice or lapse
of time, or both, would constitute a default).
(d) Personal Property. Either Seller or Amador has good and marketable
-----------------
title to all of the material items of tangible personal property included in the
Purchased Assets, free and clear of any liens, claims, charges, options, rights
of tenants or other encumbrances of any nature whatsoever, except for minor
encumbrances that in the aggregate are not substantial in amount, do not
materially detract from the value of the assets subject thereto, or materially
interfere with the present use thereof.
SECTION 2.6 LITIGATION. Except as set forth on Schedule 2.6, there are no
---------- ------------
material actions, suits or proceedings filed or commenced by or before any court
or any governmental or administrative agency, and there are no orders,
injunctions, awards, judgments or decrees outstanding against, affecting or
relating to the Martell Operations or any of the Purchased Assets which, in
either case, would reasonably be anticipated individually or in the aggregate to
have a Material Adverse Effect.
SECTION 2.7 DISCLAIMER OF WARRANTIES. Except with respect to the
------------------------
warranties and representations specifically set forth in this Agreement, neither
Seller nor Amador makes any warranty, express or implied, whether of
merchantability, suitability or fitness for a particular purpose, or quality as
to the Purchased Assets, or any part thereof, or as to the condition or
workmanship thereof, or the absence of any defects therein, whether latent or
patent, it being understood that the Purchased Assets are to be conveyed
hereunder "AS IS, WHERE IS, WITH ALL FAULTS" on the date hereof, and in their
present condition, subject to reasonable use, wear and tear between the dates
hereof and the Closing Date, and Buyer has relied upon its own examination
thereof.
SECTION 2.8 LICENSES, PERMITS AND COMPLIANCE WITH LAW. Except as provided
-----------------------------------------
in Section 2.9 with respect to environmental matters and Section 2.12 with
----------- ------------
respect to labor and employment matters:
(a) Seller and Amador hold all governmental licenses, certificates,
permits, franchises, approvals, exemptions, registrations and rights which are
necessary to operate the Martell Operations as presently operated, except for
such licenses, certificates, permits, franchises, approvals, exemptions,
registrations and rights the absence of which would not, individually or in the
aggregate, have a Material Adverse Effect; and
(b) Seller and Amador are presently operating the Martell Operations so as
to comply with all applicable statutes, ordinances, rules, regulations and
orders of any governmental authority, except to the extent such non-compliance
would not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 2.9 ENVIRONMENTAL MATTERS.
----------------------
(a) Except as set forth on Schedule 2.9, to the "Actual Knowledge of
------------
Seller and Amador" (as defined below):
(i) No "Claim of Environmental Liability" (as defined below)
relating to the conditions at or on the Real Property is pending or threatened
by any governmental agency or other third-party;
(ii) Either Seller or Amador currently holds all permits, licenses,
and approvals of governmental authorities and agencies required under applicable
environmental laws for the current use, occupancy or operation of the Martell
Operations and the Purchased Assets, and are in substantial compliance with such
permits, licenses, and approvals, except in either case for matters which would
not, individually or in the aggregate, have a Material Adverse Effect;
(iii) With respect to the Martell Operations and the Purchased
Assets, Seller is in substantial compliance with all applicable environmental
laws, except for those matters which would not, individually or in the
aggregate, have a Material Adverse Effect;
(iv) Neither Seller nor Amador has received any written notice which
remains pending under any applicable environmental law concerning the Real
Property and which notice relates to any substance that, as of the date hereof,
is a Hazardous Material; and
(v) There is no proceeding against Seller or Amador, or any pending
investigation or inquiry with respect to Seller or Amador, by any federal, state
or local court, tribunal, administrative agency, department, commission, board
or other authority or instrumentality with respect to the presence on the Real
Property of any material which is a Hazardous Material, or the migration thereof
from or to other property.
(b) As used in this Section 2.9, the following terms shall have the
-----------
following meanings:
(i) "Actual Knowledge of Seller and Amador" shall mean the actual
knowledge as of the Closing Date of any of the persons listed on Schedule
--------
2.9(b)(i).
- ---------
(ii) "Claim of Environmental Liability" shall mean any and all
claims, liabilities, obligations, losses or damages suffered or incurred as a
result of (A) any suit, action, legal or administrative proceeding, or demand
asserted or threatened by any third-party, including any governmental agency or
authority, arising under any federal, state or local environmental law or
regulation, (B) requirements imposed by applicable federal, state or local
environmental laws and regulations, including all costs of remediation or costs
otherwise incurred in complying with applicable laws and regulations, and (C)
any and all judgments, courts costs, legal fees, and other costs of discovery
and defense associated with (A) or (B) above.
(iii) "Hazardous Material" shall mean any hazardous material,
hazardous wastes, or hazardous or toxic substances as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section Section 9601 et seq.), the Resource Conservation and
-- ---
Recovery Act, as amended, (42 U.S.C. Section Section 6901 et seq.), and the
-- ---
Toxic Substances Control Act, as amended (15 U.S.C. Section Section 2601 et
--
seq.).
- ---
SECTION 2.10 CONTRACTS. Complete and correct copies of all of the
---------
Contracts have been delivered to or have been made available for inspection by
Buyer. Except for matters which would not, individually or in the aggregate,
have a Material Adverse Effect: (a) each Contract is valid, binding and
enforceable in accordance with its terms; (b) no other party to any Contract is
in breach or default of the express written terms of such contract; and (c)
there does not exist under any provision of any Contract any event that, with
the giving of notice or the passage of time or both, would constitute such a
breach or default.
SECTION 2.11 BROKERS, FINDERS, ETC. Except for the services of Dillon,
---------------------
Read & Co. Inc., neither Seller nor Amador has employed any broker, finder,
consultant or other intermediary in connection with the transactions
contemplated by this Agreement who might be entitled to a fee or commission in
connection with such transactions. Seller and Amador are solely responsible for
any payment, fee or commission that may be due to Dillon, Read & Co. Inc. in
connection with the transactions contemplated hereby.
SECTION 2.12 LABOR AND EMPLOYMENT MATTERS.
-----------------------------
(a) Schedule 2.12(a) sets forth all bonus, pension, profit sharing,
----------------
401(k), stock option, commission, deferred compensation, retirement,
hospitalization, medical, vision or dental reimbursement, post-retirement
medical, sickness, accident, scholarship, severance pay, vacation pay,
disability, death benefits, insurance and other similar plans, programs, funds,
contracts or arrangements providing benefits to the employees, former employees
or their dependents which are "employee benefit plans"' within the meaning of
Section 3(3) of the Employment Retirement Income Security Act of 1974, as
amended ("ERISA") (collectively the "Benefit Plans") sponsored or maintained
by Seller or Amador, or to which Seller or Amador contributes or is obligated to
make contributions, which are applicable to any salaried or hourly employees of
the Martell Operations or the Timberlands (the "Employees").
(b) Schedule 2.12(b) sets forth a true and correct list, as of the date
----------------
hereof, of all the Employees, together with their respective job titles,
continuous service dates and compensation.
SECTION 2.13 TAXES. Seller and Amador have timely filed all tax returns
------
pertaining to the Purchased Assets and have paid all taxes due with such
returns.
SECTION 2.14 INSURANCE. Schedule 2.14 contains a complete list of all
--------- -------------
current casualty, property, workers compensation and other insurance policies
and arrangements affecting or relating to the ownership, use or operation of the
Purchased Assets.
SECTION 2.15 TRADEMARK. Schedule 1.1(i) sets forth a list of all
---------- ---------------
trademark registrations and pending applications for registration of the
Trademark. To the knowledge of Seller: (a) the current use of the Trademark
does not infringe upon or otherwise violate a valid and enforceable trademark of
any third party; and (b) there are no actions or proceedings pending or
threatened challenging any rights of Seller in and to the Trademark.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller and Amador as follows:
SECTION 3.1 CORPORATE ORGANIZATION AND AUTHORITY. Buyer is a corporation
------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of California, with full corporate power and authority to conduct its
business as now conducted and to own its assets. Buyer has the power to enter
into and perform its obligations pursuant to this Agreement. Buyer's execution,
delivery and performance of this Agreement, and its acquisition of and payment
for the Purchased Assets hereunder have been duly authorized by all requisite
corporate action on the part of Buyer. This Agreement constitutes Buyer's
legal, valid and binding obligations, enforceable against Buyer in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or similar laws affecting creditors'
rights and to equitable principles.
SECTION 3.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS. Buyer's
---------------------------------------------
execution and delivery of this Agreement, and the performance of its obligations
hereunder, do not and will not: (a) conflict with or violate Buyer's Articles or
Certificate of Incorporation or bylaws; (b) violate or, alone or with notice or
passage of time, result in the material breach or termination of, or otherwise
give any contracting party the right to terminate or declare a default under,
the terms of any material written agreement to which Buyer is a party or by
which Buyer or its assets are bound; or (c) violate any judgment, order, decree,
or to the best knowledge of Buyer, any material law, statute, regulation or
other judicial or governmental restriction to which Buyer is subject. Except as
may be required under Hart-Scott-Rodino or for Common Carrier Approvals, there
is no requirement applicable to Buyer to make any filing with, or to obtain any
permit, authorization, consent or approval of, any governmental or regulatory
authority as a condition to the lawful performance by Buyer of its obligations
hereunder.
SECTION 3.3 LITIGATION AFFECTING BUYER. There is no claim, action,
--------------------------
proceeding or investigation pending or, to the best knowledge of Buyer,
threatened in writing, nor is there outstanding any writ, order, decree or
injunction that (a) calls into question Buyer's authority or right to enter into
this Agreement and consummate the transactions contemplated hereby, or (b) would
otherwise prevent or delay the transactions contemplated by this Agreement.
SECTION 3.4 FINDERS' FEES. Neither Buyer nor any of its affiliates, nor
-------------
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any brokerage fees, commissions, or
finder's fees in connection with the transactions contemplated herein.
SECTION 3.5 FINANCIAL CAPABILITY. Buyer has (a) immediately available
--------------------
funds sufficient to consummate the transactions contemplated by this Agreement
or (b) obtained from an established lender or lenders verbal commitments to
financing which, when combined with Buyer's available resources, is sufficient
to enable Buyer to timely consummate the transactions contemplated by this
Agreement.
ARTICLE IV
COVENANTS OF SELLER, AMADOR AND BUYER
-------------------------------------
SECTION 4.1 INVESTIGATION OF BUSINESS; ACCESS TO PROPERTIES AND RECORDS.
------------------------------------------------------------
(a) Subject to restrictions contained in confidentiality agreements to
which Seller or Amador is subject with respect to any information relating to
any third party, prior to the Closing Seller shall give to Buyer and its legal
counsel, accountants and other representatives reasonable access during normal
business hours to all of the Purchased Assets for inspection (including
environmental inspection), and to the books, contracts, commitments and records
of the Martell Operations (excluding personnel files and employee medical
records), and shall permit them to consult with management employees of the
Martell Operations to allow Buyer full opportunity to make such investigations
as are necessary to analyze the affairs of the Martell Operations.
(b) Any information provided to or obtained by Buyer or its
representatives pursuant to this Agreement shall be held by Buyer and its
representatives in accordance with, and shall be subject to the terms of, the
Confidentiality Agreement dated October 1, 1996 by and between Georgia-Pacific
Corporation (``eorgia-Pacific'') and Buyer, a copy of which is attached as
Exhibit 4.1(b).
- ---------------
SECTION 4.2 REASONABLE EFFORTS. Subject to the terms and conditions
------------------
herein provided, including but not limited to those contained in Section 4.17,
------------
Seller, Amador and Buyer agree to use reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with the other in
connection with the foregoing, including using reasonable efforts:
(a) to obtain all necessary waivers, consents, releases and approvals from
other parties to the transfer of any Leases, Contracts or Licenses and Permits;
(b) to obtain all consents, approvals and authorizations that are required
to be obtained under any federal, state, local or foreign law or regulation,
including any Common Carrier Approvals;
(c) to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby;
(d) to effect all necessary registrations and filings and submissions of
information requested by governmental authorities; and
(e) to fulfill all conditions to this Agreement.
SECTION 4.3 FURTHER ASSURANCES. Seller, Amador and Buyer agree that, from
------------------
time to time, at or after the Closing Date, each of them will execute and
deliver such further instruments of conveyance and transfer and take such other
action as may be reasonably necessary to carry out the purpose and intent of
this Agreement.
SECTION 4.4 PRESERVATION OF BUSINESS.
------------------------
(a) Subject to the terms and conditions of this Agreement and except as
otherwise contemplated hereby, Seller and Amador shall, from the date hereof
through the Closing Date, use reasonable efforts to:
(i) preserve the Purchased Assets; and
(ii) preserve generally the goodwill of customers, suppliers,
creditors and others having business relations with the Martell Operations.
(b) Subject to the terms and conditions of this Agreement and except as
otherwise expressly permitted by Seller or Amador, Buyer shall not interfere
with Seller's or Amador's conduct of the Martell Operations pending the Closing
and Buyer shall not take any action which might impair Seller's, or Amador's
relationships with customers, suppliers and employees of the Martell Operations.
SECTION 4.5 PUBLIC ANNOUNCEMENTS. Neither Seller, Amador nor Buyer shall
---------------------
make, nor permit any agent or affiliate to make, any public statements,
including, without limitation, any press releases, with respect to this
Agreement and the transactions contemplated hereby without the prior written
consent of the other parties hereto except as may be required by law.
SECTION 4.6 NO IMPLIED REPRESENTATION. It is the explicit intent of each
-------------------------
party hereto that neither Buyer, Seller, Amador nor Georgia-Pacific is making
any representation or warranty whatsoever, express or implied, beyond those
expressly given in this Agreement. Without limiting the generality of the
foregoing, it is understood that any cost estimates, projections or other
predictions contained or referred to in any of the offering materials that have
been provided to Buyer, including without limitation those documents and
materials provided to Buyer by Dillon, Read & Co. Inc., are not and shall not be
deemed to be representations or warranties of Seller, Amador or Georgia-Pacific.
Buyer assumes full responsibility for making its own evaluation of the adequacy
and accuracy of any and all such estimates, projections and predictions.
SECTION 4.7 INVENTORY. Within three (3) days prior to Closing, designees
---------
of Seller and Amador shall conduct, and Buyer shall have the right to observe,
a physical inventory of the Inventory, the results of which shall be used in
determination of the Inventory Adjustment pursuant to Section 1.4. Any dispute
-----------
with respect to such inventory shall be resolved in accordance with the
procedures set forth in Section 1.4.
-----------
SECTION 4.8 BULK TRANSFER COMPLIANCE. Buyer hereby waives compliance with
------------------------
the provisions of any applicable Bulk Sales Act under the Uniform Commercial
Code in effect in any jurisdiction (the "Bulk Sales Laws"), to the extent
applicable to the transactions contemplated hereby.
SECTION 4.9 ASSIGNMENT OF CONTRACTS. To the extent the assignment of any
------------------------
contract, lease, commitment, security or other asset to be assigned to Buyer
pursuant to the provisions hereof shall require the consent of any other person,
this Agreement shall not constitute a contract to assign the same if an
attempted assignment would constitute a breach thereof or give rise to any right
of acceleration or termination. Seller and Amador shall use their reasonable
efforts to procure consents to any such assignment. If any such consent is not
obtained, Seller and Amador shall cooperate with Buyer in any reasonable
arrangement designed to provide Buyer the benefit of any such contract,
agreement, commitment, security or other asset, including enforcement of any and
all rights of Seller or Amador against the other party thereto arising out of
breach or cancellation thereof by such party or otherwise.
SECTION 4.10 ACCESS TO BOOKS AND RECORDS AFTER CLOSING. The parties agree
-----------------------------------------
that, for the purpose of this Section 4.10, the "Access Period" is defined as
------------
the longer of (a) a period of three (3) years following the Closing Date or (b)
the period of time beginning on the Closing Date and ending on the date on which
taxes may no longer be assessed against Seller, Amador or Georgia-Pacific with
respect to the ownership or operation of the Martell Operations or the
Timberlands under all applicable statutes of limitation, including the period
covered by any waivers or extensions thereof. During the Access Period, Buyer
shall maintain in a reasonably accessible location all books and records of the
Purchased Assets and the Timberlands, and shall provide to Seller any
information reasonably necessary for the filing of tax returns or the response
to tax audits or other inquiries of any taxing authority. Buyer shall notify
Seller prior to disposing of any such books and records after the Access Period
has expired and, upon request made by Seller within sixty (60) days after
receipt of such notice, Buyer shall deliver such books and records to Seller at
Seller's expense.
SECTION 4.11 EMPLOYEES.
---------
(a) Within fourteen (14) days following the Closing Date, Buyer will
notify all Employees of the procedures pursuant to which they will have the
opportunity to apply for employment with Buyer.
(b) Buyer shall notify Seller in writing of any decision not to hire an
Employee or of any offer of employment made to any Employee (regardless of
whether the offer is accepted) within five (5) days of the decision not to hire
or the offer, as the case may be. Such notice shall include the name of the
affected Employee, his/her Social Security number, the date the offer was made
or the rejection decision was made and a description of the action taken (offer
or rejection). Buyer need not provide this notice with respect to offers made
or rejection decisions made more than one hundred twenty (120) days following
the Closing Date.
(c) Within ninety-five (95) days following the Closing Date, Buyer shall
also identify to Seller in writing all Employees who have not applied for
employment with Buyer within the ninety (90) days following the Closing Date.
This notice shall include the name and Social Security number of each Employee
listed.
(d) Seller shall notify all Employees prior to Closing that their
employment by either Seller or Amador, as the case may be, with respect to the
Martell Operations or the Timberlands will cease effective as of the Closing.
SECTION 4.12 ENVIRONMENTAL AUDIT.
-------------------
(a) Within forty-five (45) days of the date of this Agreement, Buyer shall
conduct, or cause to be conducted, at its sole cost and expense, such
environmental audits or surveys of the Real Property and the Martell Operations,
if any, as it may deem reasonably necessary. The scope, methodology, timing and
conduct of such activities shall be subject to the prior written approval of
Seller, which approval shall not be unreasonably withheld and will either be
given or refused within five (5) days of receipt by Seller of a request from
Buyer. To the extent practicable, such environmental audits or surveys shall be
conducted in a manner which will not disrupt the operation of the Martell
Operations, and Buyer and Seller shall cooperate in scheduling the environmental
audit work performed at the Real Property and the Martell Operations pursuant to
this Section 4.12. Buyer will begin such environmental audits or surveys as
------------
soon as practicable and will cause all such work to be completed within forty-
five (45) days of the date hereof. If such environmental audits or surveys
identify any matter which Buyer intends to assert as a breach of a condition to
Buyer's obligation to close pursuant to Section 5.4 ( a "Material Environmental
-----------
Matter"), Buyer shall provide Seller written notice of such matter indicating
such intention no later than fifty (50) days from the date hereof. Absent
receipt of such notice by Seller within such fifty(50)-day period, Buyer may not
assert any matter identified in the environmental audits or surveys performed
pursuant to this Section 4.12 as a breach of a condition to Buyer's obligation
------------
to close under Section 5.4 or otherwise, or as grounds for termination under
-----------
Article VIII. Within ten (10) days following Seller's receipt of any notice
- ------------
from Buyer of a Material Environmental Matter, Seller shall advise Buyer in
writing whether, to what extent, and by what means it intends to correct such
matter. In the event Seller elects to remediate or otherwise correct a Material
Environmental Matter, Buyer and Seller shall agree in writing as to the specific
actions to be taken, including any necessary postponement of the Closing Date.
(b) In addition, Buyer shall deliver to Seller copies of all environmental
reports, surveys or audits (both drafts and final versions) which Buyer obtains
with respect to the Real Property or the Martell Operations pursuant to this
Section 4.12. Buyer, Amador and Seller agree to keep all environmental audit or
- ------------
survey reports and other environmental information generated by or exchanged
among the parties pursuant to this Agreement confidential and not to disclose or
use for any purpose not expressly contemplated by this Agreement, or permit any
other party to use for any purpose, any such reports or information concerning
the Real Property or the Martell Operations. Buyer shall remedy any damage to
the Real Property or the Martell Operations which is caused by any
environmental audit or survey performed on Buyer's behalf at the Real Property
or the Martell Operations pursuant to this Section 4.12.
------------
SECTION 4.13 PRODUCT CLAIMS.
--------------
(a) Seller shall retain any and all liability and responsibility for those
``roduct Claims'' (as defined below) attributable to operations of the
Manufacturing Operations on or prior to the Closing Date, whenever asserted.
Buyer shall have liability and responsibility for those Product Claims
attributable to operations of the Manufacturing Operations after the Closing
Date, whenever asserted. In apportioning the respective obligations of the
parties pursuant to this Section 4.13, Buyer and Seller agree that: (i) a
------------
rebuttable presumption shall exist that Product Claims are attributable to the
operations of the Manufacturing Operations on or prior to the Closing Date if
installation of the product at issue occurred prior to thirty (30) days after
the Closing Date; and (ii) a rebuttable presumption shall exist that Product
Claims are attributable to the operations of the Manufacturing Operations after
the Closing Date if installation of the product at issue occurred ninety (90) or
more days after the Closing Date.
(b) For purposes of this Section 4.13, "Product Claims" shall mean any
------------
and all obligations, liabilities, costs and expenses in respect of or arising in
connection with claims pertaining to lumber and particleboard products
manufactured at the Manufacturing Operations, whether based on theories of tort,
contract, strict liability, express or implied warranty or otherwise, and
including, without limitation, demands for refunds, returns or allowances.
SECTION 4.14 INTERMEDIARY. The parties agree that Seller may, in its
------------
discretion, substitute an intermediary (an "Intermediary") to act in place of
Seller, in whole or in part, as the seller of the Real Property, and thereby
elect to consummate the transaction as a like kind exchange pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended. Buyer agrees to accept
all or any portion of the Real Property, any escrow instructions and any other
required performance of the Seller hereunder from an Intermediary and to render
performance of Buyer's obligations hereunder to an Intermediary. Seller agrees
to pay any and all additional costs incurred as a result of substituting an
Intermediary.
SECTION 4.15 RIGHT TO UPDATE. From time to time prior to the Closing,
---------------
Seller and Amador shall have the right (but not any obligation) to update or
amend in any respect its disclosure of any matter set forth or permitted to be
set forth in an Exhibit or Schedule hereto. If the Buyer believes in good faith
that the information in any such update or amendment results in a material
change to the value of the Purchased Assets, the results of operations or the
business or financial condition or prospects of the Martell Operations which
would constitute a Material Adverse Effect (when compared with the matters set
forth in the subject Exhibit or Schedule immediately prior to such update or
amendment), then Buyer shall so notify Seller in writing within ten (10)
business days after the date on which Seller or Amador notifies Buyer of the
proposed update or amendment. If Buyer fails to so notify Seller within such
ten (10) business day period, the update or amendment shall be deemed to have
been accepted by Buyer. If Buyer does so notify Seller, within ten (10)
business days of Seller's receipt of such notice, the parties shall meet to
attempt in good faith to negotiate an equitable resolution, by adjustment of the
Purchase Price or otherwise. If the parties are unable to reach such a
resolution within ten (10) business days of such meeting, Buyer may terminate
this Agreement by written notice to Seller.
SECTION 4.16 REMOVAL OF TRADEMARKS, ETC. As promptly as practical after
---------------------------
the Closing, and in no event later than sixty (60) days after the Closing Date,
Buyer shall delete, remove or otherwise obliterate from the Purchased Assets all
trade names, trademarks and service marks of the Seller, Amador or Georgia-
Pacific, other than the Trademark, including, without limitation, references to
"Georgia-Pacific", "G-P" and derivatives thereof and related logos.
SECTION 4.17 ANTITRUST REGULATORY APPROVALS. The Buyer and the Seller
-------------------------------
shall each use its best efforts, with all reasonable diligence, to obtain
governmental approval of the transaction contemplated hereunder, including,
without limitation, the accurate preparation and prompt filing of all
notifications, forms, reports, and documents required under Hart-Scott-Rodino
and any requests for additional information and documentary material thereunder.
Seller shall reimburse Buyer for one-half of the cost of the filing fee for the
merger prenotification filing under Hart-Scott-Rodino.
SECTION 4.18 RESPONSIBILITY FOR CERTAIN ENVIRONMENTAL LIABILITIES.
----------------------------------------------------
Buyer and Seller hereby agree to the following arrangement with regard to
actual, out-of-pocket expenses necessarily incurred in the testing for, removal
or remediation of any "Hazardous Material" (as defined in Section 2.9) found
-----------
on the Real Property or the Timberlands purchased by Buyer pursuant to the
Timberlands Purchase Agreement (the Real Property and purchased Timberlands
being hereinafter referred to collectively as the "Purchased Property") which
testing, removal or remediation is required by order of any environmental
regulatory agency having jurisdiction to enforce environmental laws in
connection with the Purchased Property (a "Remediation Expense"):
(a) Buyer shall be responsible for the first One Million Dollars
($1,000,000) of Remediation Expenses; provided, however, that no amount of such
expenses which is subject to an indemnity claim under Article VII hereof or
-----------
Article VII of the Timberlands Purchase Agreement shall constitute a Remediation
- -----------
Expense for any purpose under this Section 4.18.
------------
After Buyer has incurred One Million Dollars ($1,000,000) in Remediation
Expenses, any additional Remediation Expenses shall be shared equally as
incurred between Buyer and Seller subject to the limitations of Section 4.18(e).
---------------
(b) Buyer shall notify Seller in writing prior to incurring any
Remediation Expense for which Seller may share responsibility under this Section
-------
4.18, which notice shall include information regarding the nature and scope of
- -----
the subject testing, remediation or removal, including all orders requiring
Buyer's performance in accordance with Section 4.18(c). Thereafter, Buyer and
---------------
Seller shall cooperate in overseeing the required testing, remediation or
removal, including selection of any third-party contractors.
(c) A Remediation Expense shall be required to be incurred for purposes of
this Section 4.18, and Seller's payment obligation hereunder shall apply, only
------------
if the appropriate environmental regulatory agency has either: (i) filed a
complaint in an appropriate state or federal court seeking testing for, removal
or remediation of a Hazardous Substance from the Purchased Property; or (ii)
issued an administrative order requiring such testing, removal or remediation.
(d) Seller shall have no obligation with respect to any Remediation
Expense incurred in connection with the testing for, removal or remediation of
any material from the Purchased Property which was not present thereon as of the
Closing Date.
(e) Seller's payment obligation under Section 4.18(a) with regard to any
---------------
Remediation Expense shall expire upon the earlier to occur of: (i) Seller's
payment pursuant to this Section 4.18 of aggregate Remediation Expenses of Nine
------------
Million Five Hundred Thousand Dollars ($9,500,000); or (ii) the fifth
anniversary of the Closing Date, provided, however, that Seller's payment
obligation shall continue beyond such fifth anniversary, subject to termination
pursuant to Section 4.18(e)(i), as to any matter as to which Seller shall have
------------------
received notice in accordance with Section 4.18(b) prior to such fifth
---------------
anniversary.
(f) If at any time prior to the expiration of Seller's obligations
pursuant to Section 4.18(e), Buyer intends to give notice to any environmental
---------------
regulatory agency that Buyer has found any Hazardous Material on the Purchased
Property, Buyer shall give Seller prior written notice of its intention to
notify such agency so that Seller may offer its opinion as to the existence of
any duty of disclosure and, if necessary, participate in the disclosure and any
future discussions with the regulatory agency concerning the matter. Nothing in
this Section 4.18(f) shall preclude Buyer from proceeding to notify the
-----------------
appropriate regulatory agency, after notifying and consulting with Seller, if
the Buyer has a good faith belief that such notification is required by law.
SECTION 4.19 LICENSES AND PERMITS. Prior to Closing, Seller shall provide
---------------------
Buyer with a list of the Licenses and Permits, which list shall be complete and
accurate to Seller's and Amador's knowledge.
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
-----------------------------------------
Buyer's obligation to consummate the transactions contemplated
hereunder are contingent upon the satisfaction on or prior to the Closing Date
of each of the following conditions, any of which may be waived by Buyer, in
whole or in part, in its absolute discretion, at any time or from time to time
prior to the Closing:
SECTION 5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND
-------------------------------------------------------
AMADOR. The representations and warranties of Seller and Amador in this
- -------
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date except for representations and warranties
that speak as of a specific date or time other than the Closing Date (which need
only be true and correct in all material respects as of such date or time), and
the covenants and agreements of Seller and Amador to be performed on or before
the Closing Date in accordance with this Agreement shall have been duly
performed in all material respects.
SECTION 5.2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
-----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Seller or Amador shall have been filed, made or obtained and copies
thereof shall have been delivered to Buyer.
SECTION 5.3 NO INJUNCTION. At the Closing Date, no injunction,
--------------
restraining order or decree of any nature of any court or governmental agency or
body of competent jurisdiction shall be in effect which restrains or prohibits
the consummation of the transactions contemplated hereunder or imposes
conditions on such consummation not otherwise provided for herein.
SECTION 5.4 ENVIRONMENTAL MATTERS. The results of the environmental
----------------------
audits or surveys of the Real Property described in Section 4.12 shall not have
------------
identified any matter or matters relating to the handling, storage,
transportation, treatment, disposal, release or potential release into the soil
or groundwater on the Real Property or the Martell Operations of any Hazardous
Material which, in the aggregate, would have a Material Adverse Effect, and as
to which: (a) Buyer shall have given timely notice in accordance with Section
-------
4.12(a) of its intention to assert same as a breach of a condition to Buyer's
- -------
obligation to close under this Section 5.4; and (b) Seller was unable or
------------
unwilling to remediate or otherwise correct to Buyer's reasonable satisfaction.
SECTION 5.5 CLOSING DOCUMENTS. Seller shall have delivered the items set
------------------
forth in Section 1.9(a).
--------------
SECTION 5.6 ABSENCE OF LITIGATION. With the exception of any continuing
----------------------
inquiry or investigation into compliance with Hart-Scott-Rodino: (a) no claim,
action, suit, arbitration, investigation, inquiry or other proceeding by any
United States federal or state governmental, regulatory or administrative agency
or authority or any other person shall be pending on the Closing Date; or (b)
prior to the Closing Date, no party to this Agreement shall have been advised by
any United States federal or state governmental, regulatory or administrative
agency or authority (which advisory has not been officially withdrawn by such
agency or authority on or prior to the Closing Date) that such agency or
authority is investigating the transactions contemplated by this Agreement to
determine whether to file or commence any litigation, which, in the case of
either (a) or (b) above, seeks or would seek to enjoin, restrain or prohibit the
consummation of the transactions contemplated by this Agreement, or to impose
limitations on the ability of Buyer to continue operation of the Martell
Operations as presently conducted with the Purchased Assets, or to require the
divestiture by Buyer of the Purchased Assets.
SECTION 5.7 SIMULTANEOUS CLOSINGS. The transactions contemplated by the
---------------------
Timberlands Purchase Agreement shall have been consummated.
ARTICLE VI
CONDITIONS TO SELLER'S AND AMADOR'S
-----------------------------------
OBLIGATIONS TO CLOSE
--------------------
Seller's and Amador's obligations to consummate the transactions
contemplated hereunder are contingent upon the satisfaction on or prior to the
Closing Date of each of the following conditions, any of which may be waived by
Seller and Amador, in whole or in part, in their absolute discretion, at any
time or from time to time prior to the Closing:
SECTION 6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF
BUYER. The
---------------------------------------------------
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time other than the Closing Date (which need only be true and correct in
all material respects as of such date or time), and the covenants and agreements
of Buyer to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects.
SECTION 6.2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
-----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Buyer shall have been filed, made or obtained, and copies thereof
shall have been delivered to Seller; and Seller or Amador shall have obtained
any necessary Common Carrier Approvals.
SECTION 6.3 NO INJUNCTION. At the Closing Date, no injunction,
--------------
restraining order or decree of any nature of any court or governmental agency or
body of competent jurisdiction shall be in effect which restrains or prohibits
the consummation of the transactions contemplated hereunder or imposes
conditions on such consummation not otherwise provided for herein.
SECTION 6.4 CLOSING ITEMS. Buyer shall have delivered the items listed in
--------------
Section 1.9(b), including, without limitation, instruments executed by Buyer, in
- --------------
form and substance reasonably satisfactory to Seller, pursuant to which Buyer
assumes the Assumed Liabilities.
SECTION 6.5 SIMULTANEOUS CLOSINGS. The transactions contemplated by the
---------------------
Timberlands Purchase Agreement shall have been consummated.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
-------------------------
SECTION 7.1 SURVIVAL. Subject to the specific limitations and other
---------
express provisions of this Agreement: (a) the representations and warranties of
the parties contained in Sections 2.5, 2.6, 2.8 and 2.10 shall survive the
------------ --- ---- -----
Closing and shall remain in full force and effect for a period of three (3)
years after the Closing Date; (b) the representations and warranties of the
parties contained in Section 2.9 shall remain in full force and effect for a
----------
period of five (5) years after the Closing Date; (c) the representations and
warranties of the parties contained in Section 2.13 shall remain in full force
------------
and effect until expiration of the applicable statute of limitations with regard
to tax matters; and (d) all other representations and warranties of the parties
contained herein shall remain in full force and effect for a period of one (1)
year after the Closing Date; provided, however, that the representations and
warranties in Section 3.5 shall not survive the Closing; and provided, further,
-----------
that if a party shall have made a claim for indemnification pursuant to Section
-------
7.2 within the applicable aforesaid survival period, the representations and
- ---
warranties to which such claim relates shall survive only for purposes of that
claim and no others until such claim is disposed of as provided in this Article
-------
VII.
- ---
SECTION 7.2 INDEMNIFICATION.
----------------
(a) Indemnification by Seller and Amador. Seller and Amador hereby agree
-------------------------------------
to indemnify and hold Buyer harmless from any and all liabilities, losses,
claims, judgments, damages, expenses and costs (including, without limitation,
reasonable counsel fees and costs and expenses incurred in connection therewith)
(collectively, the "Indemnifiable Damages" which it may suffer or incur by
reason of: (i) the breach or inaccuracy of any of the representations and
warranties of Seller or Amador contained in this Agreement; (ii) the breach by
Seller or Amador of any of the covenants or agreements made by either of them in
this Agreement; (iii) any misrepresentation contained in any certificate
furnished by Seller or Amador pursuant to this Agreement; or (iv) any loss
arising or resulting from the Excluded Assets or any liabilities of Seller or
Amador not expressly assumed by Buyer hereunder, including, without limitation,
any and all liabilities to Employees arising out of their employment or
termination by Seller or Amador including any such liabilities arising under the
Worker Adjustment and Retraining Notification Act (Pub. L. 100-379, 102 Stat.
890 (1988)), as amended; or (v) any and all loss and expense (except for those
arising out of Assumed Liabilities) arising out of failure to comply with the
Bulk Sales laws.
(b) Indemnification by Buyer. Buyer hereby agrees to indemnify and hold
-------------------------
Seller and Amador harmless from any and all Indemnifiable Damages which either
of them may suffer or incur by reason of: (i) the breach or inaccuracy of any of
the representations or warranties of Buyer contained in this Agreement; (ii) the
breach by Buyer of any of the covenants or agreements made by it in this
Agreement; (iii) any misrepresentation contained in any certificate furnished by
Buyer pursuant to this Agreement; (iv) any Assumed Liabilities; or (v) any and
all liabilities to Employees arising out of any decision by Buyer to extend or
not to extend to such Employees an offer of employment with Buyer.
(c) Third-Party Claims. If any claim or demand is asserted against the
------------------
indemnified party by a third party with respect to any matter under the
indemnities set forth in Sections 7.2(a) or (b) (a "Third Party Claim"), the
--------------- ---
indemnified party shall promptly give written notice and details thereof,
including copies of all pleadings and the pertinent documents, to the
indemnifying party. Within twenty (20) days of receipt of such notice, the
indemnifying party shall either (i) pay or settle the Third Party Claim or (ii)
notify the indemnified party that the indemnifying party disputes the Third
Party Claim and intends to defend against it, and thereafter so defend and pay
any adverse final judgment or award or settlement amount in regard thereto.
Such defense shall be controlled by the indemnifying party, and the cost of such
defense shall be borne by it, except that the indemnified party shall have the
right to participate in such defense at its own expense. The indemnified party
agrees that it will cooperate in all reasonable respects in the defense of any
such claim or demand, including making personnel, books, and records relevant to
the claim available to the indemnifying party, without charge, except for
reimbursement of reasonable out-of pocket expenses.
If the indemnifying party fails to take action within twenty (20) days as
set forth above, then the indemnified party shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the expense of defense or settlement as an
indemnity claim. The indemnified party shall also have the right, exercisable
in good faith, to take such action as may be necessary to avoid a default prior
to the assumption of the defense of the Third Party Claim by the indemnifying
party and any expenses incurred by so acting shall be paid by the indemnifying
party.
(d) Payment. With respect to all claims other than Third Party Claims,
--------
the indemnifying party shall promptly pay or reimburse the indemnified party in
respect of any claim or liability for Indemnifiable Damages to which the
foregoing indemnities relate after receipt of written notice from the
indemnified party outlining with reasonable particularity the nature and amount
of the claim(s). All claims for indemnity hereunder must be submitted by the
indemnified party to the indemnifying party within the applicable time periods
set forth in Section 7.1. In the event the indemnifying party fails or refuses
-----------
to make payment for such claims within a period of twenty (20) days from the
date of notice to the indemnifying party, the indemnified party shall be
entitled to exercise all legal means of relief available.
(e) Access and Information. With respect to any claim for indemnification
-----------------------
hereunder, the indemnified party will give to the indemnifying party and its
counsel, accountants and other representatives full and free access, during
normal business hours and upon the giving of reasonable prior notice, to their
books and records relating to such claims, and to their employees, accountants,
counsel and other representatives, all without charge to the indemnifying party,
except for reimbursement of reasonable out-of-pocket expenses. In this regard,
the indemnified party agrees, notwithstanding the provisions of Section 4.10, to
------------
maintain any of its books and records which may relate to a claim for
indemnification hereunder for such period of time as may be necessary to enable
the indemnifying party to resolve such claim.
(f) Monetary Limitations On Indemnification.
------------------- -----------
(i) Neither Seller nor Amador shall be obligated hereunder to
indemnify Buyer with respect to any liabilities, losses, claims, judgments,
damages, expenses and costs as to which Buyer is otherwise entitled to
indemnification under this Agreement unless and until the aggregate amount of
indemnification so asserted exceeds Five Hundred Thousand Dollars ($500,000),
and thereafter Buyer shall be entitled to indemnity from Seller and Amador
hereunder only with respect to any amounts in excess of Five Hundred Thousand
Dollars ($500,000). Notwithstanding anything in this Agreement to the
contrary, Seller's and Amador's maximum aggregate obligation to Buyer pursuant
to this Section 7.2 shall not exceed Seven Million Five Hundred Thousand Dollars
-----------
($7,500,000). The limitations of this Section 7.2(f) shall not apply with
--------------
regard to any breach or inaccuracy in the representations and warranties set
forth in Section 2.9(a).
--------------
(ii) Buyer shall not be obligated hereunder to indemnify Seller or
Amador with respect to any liabilities, losses, claims, judgments, damages,
expenses and costs as to which Seller or Amador is otherwise entitled to
indemnification under this Agreement unless and until the aggregate amount of
indemnification so asserted exceeds Five Hundred Thousand Dollars ($500,000),
and thereafter Seller and Amador shall be entitled to indemnity from Buyer
hereunder only with respect to any amounts in excess of Five Hundred Thousand
Dollars ($500,000). Notwithstanding anything in this Agreement to the contrary,
Buyer's maximum aggregate obligation to Seller and Amador pursuant to this
Section 7.2 shall not exceed Seven Million Five Hundred Thousand Dollars
- -----------
($7,500,000).
(iii) The liability of any indemnifying party under this Section 7.2
-----------
shall be offset dollar for dollar by: (A) any insurance proceeds received or
recoverable by the indemnified party after the Closing in respect of the item
of Indemnifiable Damages involved; (B) any other recovery made or recoverable by
the indemnified party from any third party on account of the item of
Indemnifiable Damages involved; and (C) any tax benefit realizable by the
indemnified party or any affiliate thereof on account of the item of
Indemnifiable Damages involved.
(g) Other Limitations on Indemnification.
-------------------------------------
(i) No indemnifying party under this Section 7.2 shall have any
-----------
obligation to an indemnified party with respect to any matter unless the
indemnified party shall have taken all reasonable steps to mitigate the
liabilities, losses, claims, judgments, damages, expenses and costs involved
upon and after becoming aware of such matter. In no event shall an indemnifying
party be liable for consequential or punitive damages.
(ii) Anything in this Agreement to the contrary notwithstanding, no
claim may be asserted nor any action commenced against any party for breach of
any representation, warranty, covenant or agreement contained herein, unless
written notice of such claim or action is received by such party describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the representation,
warranty, covenant or agreement on which such claim or action is based ceases to
survive as set forth in this Agreement irrespective of whether the subject
matter of such claim or action shall have occurred before or after such date.
SECTION 7.3 EXCLUSIVE REMEDY.
-----------------
(a) Each of Buyer, Seller and Amador hereby acknowledges and agrees that
its sole and exclusive remedy with respect to any and all claims relating to the
representations, warranties and covenants contained in this Agreement, other
than the parties' respective obligations under Section 4.18, shall be pursuant
------------
to the indemnification provisions set forth in this Article VII. In furtherance
-----------
of the foregoing, each of the parties hereto hereby waives, to the fullest
extent permitted under applicable law, any and all rights, claims and causes of
action it may have against any other party hereto arising under or based upon
any federal, state or local statute, law, ordinance, rule or regulation
(including, without limitation, any such rights, claims or causes of action
arising under or based upon common law or otherwise) with respect to the
representations, warranties and covenants contained in this Agreement.
(b) Notwithstanding the foregoing subsection (a), nothing contained in
--------------
this Section 7.3 shall prevent any party hereto from seeking and obtaining
-----------
specific performance by the other party hereto of any of its obligations under
this Agreement as provided in Section 9.11 or from seeking and obtaining
------------
injunctive relief against the other party's activities in breach of this
Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, no breach
of any representation, warranty, covenant or agreement contained herein shall
give rise to any right on the part of Buyer after the Closing to rescind this
Agreement or any of the transactions contemplated hereby.
ARTICLE VIII
TERMINATION
-----------
SECTION 8.1 TERMINATION. This Agreement may be terminated at any time
------------
prior to Closing by:
(a) the mutual consent of Seller and Buyer;
(b) either Seller or Buyer if the Closing has not occurred by the close of
business on June 20, 1997, so long as the failure to consummate the transaction
on or before such date did not result solely from the failure by the party or
its affiliate seeking termination of this Agreement to fulfill any undertaking
or commitment on its part provided for herein prior to Closing; or
(c) Buyer pursuant to Section 2.5(b) or Section 4.15.
-------------- ------------
SECTION 8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of
------------------------------------
termination of this Agreement pursuant to Section 8.1, written notice thereof
-----------
shall forthwith be given by the terminating party to the other parties hereto,
and this Agreement shall thereupon terminate and become void and have no effect,
and the transactions contemplated hereby shall be abandoned without further
action by the parties hereto, except that the provisions of Sections 4.5,
------------
4.12(b), 8.2, 9.3 and 9.5 and the Confidentiality Agreement referred to in
- ------- --- --- ---
Section 4.1(b) shall survive the termination of this Agreement, provided,
- --------------
however, that such termination shall not relieve any party hereto of any
liability for any breach of this Agreement.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.1 COUNTERPARTS. This Agreement may be executed in two or more
-------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 9.2 GOVERNING LAW/DISPUTE RESOLUTION.
---------------------------------
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of California without reference to the choice of law
principles thereof.
(b) The parties will attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly by negotiations
between representatives and senior executives of the parties who have authority
to settle the controversy. If a controversy or claim should arise, Danny W.
Huff, Vice President and Treasurer of Seller and M.D. Emmerson, Vice President
and Chief Financial Officer of Buyer, or their respective successors in the
positions they now hold (the "Project Managers"), will meet at least once and
will attempt to resolve the matter. Either Project Manager may request the
other to meet within fourteen (14) days, at a mutually agreed time and place.
If the matter has not been resolved within twenty (20) days of their first
meeting, the Project Managers shall refer the matter to senior executives who do
not have direct responsibility for administration of this Agreement (the
"Senior Executives"). Thereupon, the Project Managers shall promptly prepare
and exchange memoranda stating: (a) the issues in dispute and their respective
positions, summarizing the evidence and arguments supporting their positions,
and the negotiations which have taken place, and attaching relevant
documents; and (b) the name and title of the Senior Executive who will represent
that party. The Senior Executives shall meet for negotiations at a mutually
agreed time and place within fourteen (14) days of the end of the twenty (20)-
day period referred to above, and thereafter as often as they reasonably deem
necessary to exchange relevant information and to attempt to resolve the
dispute.
If the matter has not been resolved within thirty (30) days of the initial
meeting of the Senior Executives, or if either party will not meet within thirty
(30) days of the end of the twenty (20)-day period referred to above, the
parties will attempt in good faith to resolve the controversy or claim by
mediation in accordance with the American Arbitration Association model
procedures for mediation of business/commercial disputes. If the matter has not
been resolved pursuant to the aforesaid mediation procedure within thirty (30)
days of the commencement of such procedure, or if either party will not
participate in a mediation, the controversy shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Section 1 - 16, and judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Atlanta, Georgia. The arbitrator(s) are not
empowered to award damages in excess of actual damages, including punitive or
consequential damages. All deadlines specified in this Section 9.2(b) may be
--------------
extended by mutual agreement.
(c) Except as specifically provided to the contrary herein, the procedures
specified in Section 9.2(b) shall be the sole and exclusive procedures for the
--------------
resolution of disputes between the parties arising out of or relating to this
Agreement; provided, however, that a party may seek a preliminary injunction or
other preliminary judicial relief if in its judgment such action is necessary to
avoid irreparable damage. Despite such action the parties will continue to
participate in good faith in the procedures specified in Section 9.2(b). All
--------------
applicable statutes of limitation shall be tolled while the procedures specified
in Section 9.2(b) are pending, and the parties will take such action, if any,
--------------
required to effectuate such tolling.
SECTION 9.3 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement or
-----------------------------
any ancillary documents, whether expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement.
SECTION 9.4 ENTIRE AGREEMENT. Except for the Confidentiality Agreement
-----------------
referred to in Section 4.1(b), this Agreement (including any agreements
--------------
incorporated herein) and the Schedules and Exhibits hereto contain the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, representations and warranties
regarding the subject matter hereof between the parties other than those set
forth or referred to herein.
SECTION 9.5 EXPENSES. Except as expressly provided herein to the
---------
contrary, whether or not the transactions contemplated by this Agreement are
consummated, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
SECTION 9.6 NOTICES. All notices hereunder shall be sufficiently given
--------
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service, or to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to Seller or Amador shall be
addressed to:
Georgia-Pacific West, Inc.
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: James F. Kelley, General Counsel
Telecopier: (404) 230-1674
or at such other address and to the attention of such other person as Seller may
designate by notice to Buyer in accordance with this Section 9.6. Notices to
-----------
Buyer shall be addressed to:
Sierra Pacific Holding Company
P.O. Box 496028
Redding, California 96049-6028
Attention: M.D. Emmerson, Vice President and Chief
Financial Officer
Telecopier: (916) 378-8266
with a copy to:
David H. Dun, Esq.
Dun & Martinek
730 Seventh Street, Suite B
Eureka, California 95501
Telecopier: (707) 442-9251
or to such other address and to the attention of such other person as Buyer may
designate by written notice to Seller in accordance with this Section 9.6.
-----------
SECTION 9.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
-----------------------
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided, however, that Buyer will not assign its rights
or delegate its obligations under this Agreement without the express prior
written consent of Seller; and provided further, that Buyer may assign its
rights or delegate its obligations under this Agreement, in whole or in part, to
an affiliate of Buyer upon showing of documentation detailing such affiliate's
financial ability to consummate the transactions contemplated by this Agreement
expeditiously, which documentation must be reasonably satisfactory to Seller.
SECTION 9.8 HEADINGS; DEFINITIONS. The section and article headings
----------------------
contained in this Agreement are inserted for convenience and reference only and
will not affect the meaning or interpretation of this Agreement. All references
to "Sections", "Articles", "Schedules" or "Exhibits" contained herein mean
Sections or Articles of this Agreement and Schedules or Exhibits attached to
this Agreement, which are hereby incorporated by reference, unless otherwise
stated. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
SECTION 9.9 SCHEDULES AND EXHIBITS. The inclusion of any matter in a
-----------------------
Schedule or Exhibit hereto shall be deemed to relate to all parts of this
Agreement, despite any references therein to particular sections of this
Agreement.
SECTION 9.10 AMENDMENTS AND WAIVERS. This Agreement may not be modified
-----------------------
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, only by an instrument in writing, waive compliance by the
other parties hereto with any term or provision of this Agreement. The waiver
by any party hereto of a breach of any term or provision of this Agreement shall
not be construed as a waiver of any subsequent breach.
SECTION 9.11 SPECIFIC PERFORMANCE. The parties acknowledge that money
---------------------
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
SECTION 9.12 SEVERABILITY OF PROVISIONS. If any provision of this
---------------------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon any such determination, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by or on
behalf of the parties as of the date first above written.
GEORGIA-PACIFIC WEST, INC.
By:
------------------------------
John F. McGovern
Executive Vice President - Finance
and Chief Financial Officer
AMADOR CENTRAL RAILROAD COMPANY
By:
--------------------------------
John F. McGovern
Vice President - Finance
SIERRA PACIFIC HOLDING COMPANY
By:
------------------------------
Title:
---------------------------
EXHIBIT A
---------
TIMBERLANDS PURCHASE AGREEMENT
------------------------------
THIS TIMBERLANDS PURCHASE AGREEMENT ("Agreement") dated as of the 24th day
of December, 1996, is made and entered into by and between GEORGIA-PACIFIC WEST,
INC., an Oregon corporation ("Seller"), and SIERRA PACIFIC HOLDING COMPANY, a
California corporation ("Buyer").
W I T N E S S E T H:
-------------------
WHEREAS, Seller owns and operates approximately 127,000 acres of
timberlands in Tuolumne, Calavera, El Dorado and Amador Counties, California
(the "Timberlands");
WHEREAS, pursuant to an Asset Purchase Agreement of even date herewith (the
"Martell Purchase Agreement") Seller and Amador Central Railroad Company
("Amador") have agreed to sell to Buyer, and Buyer has agreed to purchase from
Seller and Amador, a dual-line sawmill and particleboard manufacturing plant
located in Martell, California; and
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell to
Buyer, the Timberlands and certain related assets in accordance with the
following terms and conditions.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
SECTION 1.1 PURCHASE AND SALE. On the basis of the representations,
-----------------
warranties, covenants and agreements, and subject to the satisfaction or waiver
of the conditions set forth herein, at the "Closing" (as defined in Section
-------
1.8), Seller will sell and convey to Buyer, and Buyer will purchase and acquire
- ---
from Seller, all of their respective right, title and interest, as of the date
of the Closing (the "Closing Date"), in the following assets (collectively,
the "Timberland Assets"), but specifically excluding the "Excluded Assets" (as
defined in Section 1.2):
-----------
(a) the Timberlands, a legal description of which is attached as Schedule
--------
1.1(a), together with any improvements, all down and standing trees, timber,
- ------
saplings, and seedlings thereon, and all easements and access rights thereto
(collectively, the "Fee Timberlands");
(b) all of the machinery, equipment, vehicles and supplies identified on
Schedule 1.1(b), with such additions and deletions as may occur in the ordinary
- ---------------
course of business after the date hereof (the "Equipment");
(c) to the extent transferable, all right, title and interest of Seller in
and to the contracts, licenses, orders, leases and other agreements relating to
the Fee Timberlands listed on Schedule 1.1(c) (the "Contracts");
---------------
(d) to the extent transferable, all franchises, licenses, permits,
consents and certificates of all regulatory, administrative, and other
governmental agencies and bodies issued to or held by Seller and which are
related exclusively to the Timberland Assets (the "Licenses and Permits"); and
(e) all title records, aerial photographs, maps, charts and surveys of the
Fee Timberlands in the possession of Seller.
SECTION 1.2 EXCLUDED ASSETS. All assets of Seller on the Closing Date not
---------------
referred to in Section 1.1 (the "Excluded Assets") shall be retained by Seller
-----------
and shall not be transferred to or purchased by Buyer. Without limiting the
generality of the foregoing, Buyer shall not purchase from Seller:
(a) any of the accounts receivable generated by or in connection with the
Timberland Assets on or prior to the Closing Date;
(b) any certificates of insurance obtained by Seller from third parties
(including, without limitation, contractors, suppliers and truckers);
(c) all prepaid and deferred items or credits and deposits, rights of
offset and credits and claims for refund generated or incurred by or in
connection with the Timberland Assets prior to the Closing Date;
(d) permits, to the extent not lawfully transferable; and
(e) all claims for refunds of taxes and other governmental charges or
assessments arising from or pertaining to periods, activities, operations or
events occurring on or prior to the Closing Date.
SECTION 1.3 ASSUMED LIABILITIES. At the Closing, Buyer shall assume and
-------------------
agree to thereafter perform when due and discharge, and indemnify and hold
Seller harmless with respect to, the following liabilities and obligations of
Seller with respect to the Timberland Assets (the "Assumed Liabilities"):
(a) all obligations and liabilities for ad valorem property taxes on the
Fee Timberlands or other Timberland Assets which become due and payable after
the Closing Date;
(b) those liabilities, obligations, costs and expenses arising out of or
relating to the operation of the Timberland Assets in the ordinary course of
business, including performance of the Contracts, after the Closing Date; and
(c) all obligations undertaken by Buyer pursuant to the other provisions
of this Agreement.
SECTION 1.4 PURCHASE PRICE. The purchase price (the "Purchase Price")
--------------
payable in consideration for the Timberland Assets (in addition to assumption of
the Assumed Liabilities) shall be an amount equal to the sum of Two Hundred
Seventy Million Dollars ($270,000,000). Buyer will pay the Purchase Price to
Seller at Closing, either by wire transfer in immediately available funds as
directed by Seller, or, if the parties shall so agree, by Buyer's promissory
note, the terms of which shall be mutually agreed to prior to Closing.
SECTION 1.5 ALLOCATION OF PURCHASE PRICE. Within ninety (90) days
----------------------------
following the Closing Date, Buyer shall provide Seller with a proposed
allocation of the Purchase Price among the Timberland Assets which shall be
determined in accordance with Treas. Reg. Section 1.1060-1T and which, absent
manifest error, shall apply for purposes of completing IRS Form 8594. Subject
to the foregoing, Seller shall have the right to object to such allocation. If
Seller so objects in writing to Buyer's allocation within ten (10) days of
Seller's receipt thereof, the parties shall attempt to resolve among themselves
Seller's objection in good faith and if such resolution is unsuccessful, shall
resolve their dispute by jointly designating a mutually agreeable appraisal or
valuation firm, which shall make such determination. Neither Seller nor Buyer
shall file any return or take a position with any taxing authority that is
inconsistent with any allocation pursuant to this Section 1.5.
-----------
SECTION 1.6 PRORATIONS. On the Closing Date, or as promptly as
-----------
practicable following the Closing Date, but in no event later than sixty (60)
days thereafter, the real and personal property taxes, water, gas, electricity
and other utility charges, local business or other license fees or taxes, and
other similar periodic charges arising in connection with the Timberland Assets
shall be prorated between Buyer and Seller retroactively effective as of the
Closing Date. If the real property tax rate for the current tax year is not
established by the Closing Date, the prorations shall be made on the basis of
the rate in effect for the preceding tax year and shall be adjusted when the
exact amounts for the current tax year are determined. All such prorations
shall be based upon the most recent available assessed value of the Fee
Timberlands prior to the Closing Date.
SECTION 1.7 CLOSING COSTS; TRANSFER TAXES. Seller shall reimburse Buyer
-----------------------------
for one-half of the real estate transfer or conveyance taxes, recording and
filing fees, and any sales, use or other taxes imposed by reason of, and paid by
Buyer in connection with, the transfers of the Timberland Assets provided
hereunder. Subject to such partial reimbursement, Buyer shall be responsible
for timely payment of all such taxes and fees and shall be solely responsible
for payment of any deficiency, interest or penalty asserted with respect
thereto. Seller shall provide a title insurance commitment on the Fee
Timberlands in accordance with Section 2.3(a). Buyer shall pay all other
--------------
premiums, costs, fees and expenses of any title insurance, surveys or further
evidence of title which it desires to obtain.
SECTION 1.8 TIME AND PLACE OF CLOSING. The closing ("Closing") of the
-------------------------
transactions contemplated by this Agreement will be held at 10:00 a.m. on the
fifth business day after the fulfillment or waiver of the conditions set forth
in Articles V and VI hereof, at the offices of Buyer's title company in San
---------- --
Francisco, California, or such other time and place as the parties may agree.
It is understood that the Closing shall be deemed to take place effective as of
the close of business on the Closing Date, regardless of the time at which the
Closing actually occurs on the Closing Date.
SECTION 1.9 DELIVERIES AT CLOSING. At the Closing, the following
---------------------
deliveries shall be made:
(a) Deliveries by Seller. Seller shall deliver or cause to be delivered
--------------------
to Buyer:
(i) A resolution of the Board of Directors of Seller authorizing the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby, certified by the Secretary or an Assistant Secretary of
Seller;
(ii) A Secretary's Certificate attesting to the incumbency of
Seller's officers executing this Agreement and the other certificates and
agreements delivered by Seller at the Closing;
(iii) An Officer's Certificate attesting to the matters set forth in
Section 5.1;
- -----------
(iv) A grant deed in the form of Exhibit 1.9(a)(iv) transferring and
-------------------
conveying the Fee Timberlands to Buyer;
(v) Such assignments, bills of sale, certificates of title and other
instruments of transfer, all in form reasonably satisfactory to Buyer, as are
necessary to convey fully and effectively to Buyer the Timberland Assets in
accordance with the terms hereof; and
(vi) Such other and further certificates, assurances, consents and
documents as may reasonably be required by Buyer in connection with the
consummation of the transactions contemplated hereby.
(b) Deliveries by Buyer. Buyer shall deliver or cause to be delivered to
-------------------
Seller:
(i) A resolution of the Board of Directors of Buyer authorizing the
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby, certified by the Secretary or an Assistant Secretary of
Buyer;
(ii) A Secretary's Certificate attesting to the incumbency of the
officers executing this Agreement and the other certificates and agreements
delivered by Buyer at the Closing;
(iii) An Officer's Certificate attesting to the matters set forth in
Section 6.1;
- -----------
(iv) Instruments executed by Buyer, in form and substance reasonably
satisfactory to Seller, pursuant to which Buyer assumes the Assumed Liabilities;
(v) The Purchase Price specified in Section 1.4; and
-----------
(vi) Such other and further certificates, assurances, consents and
documents as may reasonably be required by Seller in connection with the
consummation of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Buyer as follows:
SECTION 2.1 CORPORATE ORGANIZATION AND AUTHORITY.
------------------------------------
(a) Incorporation; Authority. Seller is a corporation duly organized,
------------------------
validly existing and in good standing under the laws of the State of Oregon,
with full corporate power and authority to own the Timberland Assets. Seller
has the power to enter into and perform its obligations pursuant to this
Agreement. Seller's execution, delivery and performance of this Agreement and
the transfer to Buyer of the Timberland Assets hereunder have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement constitutes Seller's legal, valid and binding obligation, enforceable
against Seller in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization or
similar laws affecting creditors' rights and to equitable principles.
(b) Foreign Qualification. Seller is duly qualified and authorized to
---------------------
transact business and is in good standing in those jurisdictions of the United
States in which it is required to be qualified to transact business in order to
avert any effect on the Timberland Assets that is or is reasonably likely to be
materially adverse to the Timberland Assets (a "Material Adverse Effect").
For purposes of this Agreement, a Material Adverse Effect shall mean an item or
event causing an injury to Buyer or a diminution in the value of the Timberland
Assets, either of which would exceed One Million Dollars ($1,000,000).
SECTION 2.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS. Seller's
---------------------------------------------
execution and delivery of this Agreement, and the performance of its obligations
hereunder, do not and will not: (a) conflict with or violate Seller's Articles
of Incorporation or bylaws; (b) materially violate or, alone or with notice or
the passage of time, result in the breach or the termination of, or otherwise
give any contracting party the right to terminate or declare a default under,
the terms of any written agreement relating to the Timberland Assets to which
Seller is a party or by which any of the Timberland Assets may be bound and
which in any case would have a Material Adverse Effect; or (c) violate any
judgment, order, decree, law, statute, regulation or other judicial or
governmental restriction to which Seller is subject, the violation of which
would have a Material Adverse Effect. Except for any filing required under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules
and regulations promulgated thereunder ("Hart-Scott-Rodino"), there is no
requirement applicable to Seller to make any filing with, or to obtain any
permit, authorization, consent or approval of, any governmental or regulatory
authority as a condition to the lawful performance by Seller of its obligations
hereunder.
SECTION 2.3 OWNERSHIP OF ASSETS.
-------------------
(a) Timberlands - Permitted Encumbrances. Seller shall convey and Buyer
------------------------------------
shall accept title to the Fee Timberlands subject to the "Permitted
Encumbrances". For purposes of this Agreement, "Permitted Encumbrances"
shall mean all title exceptions shown by the "Title Commitment" (as defined
below) and any items listed below unless objected to in a timely manner in
accordance with Section 2.3(b), or which, if objected to, are cured and deleted
--------------
or affirmatively insured over:
(i) liens and assessments, both general and special, and other
governmental charges which are not yet due and payable as of the Closing;
(ii) all land use restrictions (including environmental, endangered
species and wetlands), building and zoning codes and ordinances, and other laws,
ordinances, regulations, rules, orders, licenses or determinations of any
federal, state, county, municipal or other governmental authority heretofore,
now or hereafter enacted, made or issued by any such authority affecting the Fee
Timberlands;
(iii) all easements, rights-of-way, covenants, conditions,
restrictions, reservations, licenses, agreements, and other matters of record;
(iv) all encroachments, overlaps, overhangs, unrecorded easements,
variations in area or measurement, rights of parties in possession, lack of
access or any other matters not of record which would be disclosed by an
accurate survey or physical inspection of the Fee Timberlands and which do not
materially interfere with the present operations of the Fee Timberlands;
(v) all electric power, telephone, gas, sanitary sewer, storm sewer,
water and other utility lines, pipelines, service lines, and facilities of any
nature on, over or under the Fee Timberlands, and all licenses, easements,
rights-of-way, and other agreements relating thereto, so long as such do not
materially affect the property's present use;
(vi) all existing public and private roads and streets (whether
dedicated or undedicated), and all railroad lines and rights-of-way affecting
the Fee Timberlands;
(vii) prior reservations or conveyances of mineral rights or mineral
leases of every kind and character;
(viii) inchoate mechanic's and materialmen's liens for construction
in progress and workmen's, repairmen's, warehousemen's, and carrier's liens and
other similar statutory liens arising in the ordinary course of business;
(ix) all hunting, fishing, apiary, recreational or similar leases or
licenses or permits affecting the Fee Timberlands which do not contain an option
to purchase and which: (A) have a term of not longer than twelve (12) months; or
(B) are terminable without premium or penalty by the owner of the Fee
Timberlands upon not greater than ninety (90) days' notice;
(x) other imperfections of title, easements and encumbrances, if any,
which do not materially adversely affect the marketability or insurability of
title to the Fee Timberlands or materially detract from the value of or
materially interfere with the present use of the Fee Timberlands; and
(xi) the pre-printed exceptions listed in Schedule B of the Title
Commitment provided by Seller hereunder.
(b) Timberlands - Title Commitment. Seller shall provide, at its sole
------------------------------
cost and expense, a commitment for an owner's fee title insurance policy with
respect to the Fee Timberlands (the "Title Commitment") from Lawyers Title
Insurance Corporation or another nationally-recognized title insurance company
(the "Title Company"). Within five (5) days following Seller's receipt of
such Title Commitment, Seller shall deliver a copy of the Title Commitment to
Buyer, together with true and complete copies of all instruments identified
therein as giving rise to any defects or exceptions to title to the Fee
Timberlands. Within fifteen (15) days following Buyer's receipt of the Title
Commitment, Buyer shall advise Seller in writing of any liens, encumbrances or
other defects or exceptions in or to title to the Fee Timberlands, other than
Permitted Exceptions, subject to which Buyer is unwilling to accept title
(collectively, the "Unacceptable Encumbrances"). Failure of Buyer to provide
such written notice within such fifteen (15)-day period shall be deemed an
election by Buyer to waive any Unacceptable Encumbrances and to accept such
title as Seller is able to convey without any reduction in the Purchase Price.
Within five (5) days following Seller's receipt of Buyer's notice of
Unacceptable Encumbrances, if any, Seller shall advise Buyer in writing whether
it intends to correct such Unacceptable Encumbrances. In the event Seller
elects to correct all or some of the Unacceptable Encumbrances, Seller, in its
sole discretion, may extend the Closing Date one or more times for up to ninety
(90) days in the aggregate in order to eliminate such Unacceptable Encumbrances.
If Seller is unable or unwilling to eliminate such Unacceptable Encumbrances and
to convey title to the subject portion of the Fee Timberlands (the "Encumbered
Property") in accordance with the terms of this Agreement on or before the
Closing Date (as such date may be extended), Buyer shall elect on the Closing
Date, as its sole remedy for such failure of Seller to eliminate any
Unacceptable Encumbrances, either: (A) to accept title to the Fee Timberlands
subject to such Unacceptable Encumbrances and receive no credit against, or
reduction of, the Purchase Price; or (B) to delete the Encumbered Property from
the Fee Timberlands, deducting from the Purchase Price a sum equal to Two
Thousand One Hundred Twenty-Six Dollars ($2,126) multiplied by the number of
acres in the Encumbered Property so deleted. Notwithstanding anything to the
contrary contained in this Section 2.3 or elsewhere in this Agreement, Seller
-----------
shall not be obligated to bring any action or proceeding, to make any payments
or otherwise to incur any expense in order to eliminate any of the Unacceptable
Encumbrances raised by Buyer.
(c) Personal Property. Seller has good and marketable title to all of the
-----------------
material items of tangible personal property owned by Seller and included in the
Timberland Assets, free and clear of any liens, claims, charges, options, rights
of tenants or other encumbrances of any nature whatsoever, except for minor
encumbrances that in the aggregate are not substantial in amount, do not
materially detract from the value of the assets subject thereto, or materially
interfere with the present use thereof.
SECTION 2.4 LITIGATION. Except as set forth on Schedule 2.4, there are no
---------- ------------
material actions, suits or proceedings filed or commenced by or before any court
or any governmental or administrative agency, and there are no orders,
injunctions, awards, judgments or decrees outstanding against, affecting or
relating to any of the Timberland Assets which would reasonably be anticipated
individually or in the aggregate to have a Material Adverse Effect.
SECTION 2.5 DISCLAIMER OF WARRANTIES. Except with respect to the
------------------------
warranties and representations specifically set forth in this Agreement, Seller
makes no warranty, express or implied, whether of merchantability, suitability
or fitness for a particular purpose, or quality as to the Timberland Assets, or
any part thereof, or as to the condition or workmanship thereof, or the absence
of any defects therein, whether latent or patent, it being understood that the
Timberland Assets are to be conveyed hereunder "AS IS, WHERE IS, WITH ALL
FAULTS" on the date hereof, and in their present condition, subject to
reasonable use, wear and tear between the dates hereof and the Closing Date, and
Buyer has relied upon its own examination thereof.
SECTION 2.6 LICENSES, PERMITS AND COMPLIANCE WITH LAW. Except as provided
-----------------------------------------
in Section 2.7 with respect to environmental matters:
-----------
(a) Seller holds all governmental licenses, certificates, permits,
franchises, approvals, exemptions, registrations and rights which are necessary
to own and operate the Timberland Assets as presently operated, except for such
licenses, certificates, permits, franchises, approvals, exemptions,
registrations and rights the absence of which would not, individually or in the
aggregate, have a Material Adverse Effect; and
(b) Seller is presently operating the Timberland Assets so as to comply
with all applicable statutes, ordinances, rules, regulations and orders of any
governmental authority, except to the extent such non-compliance would not,
individually or in the aggregate, have a Material Adverse Effect.
SECTION 2.7 ENVIRONMENTAL MATTERS
---------------------
(a) Except as set forth on Schedule 2.7, to the "Actual Knowledge of
------------
Seller" (as defined below):
(i) No "Claim of Environmental Liability" (as defined below)
relating to the conditions at or on the Fee Timberlands is pending or threatened
by any governmental agency or other third-party;
(ii) Seller currently holds all permits, licenses, and approvals of
governmental authorities and agencies required under applicable environmental
laws for the current use, occupancy or operation of the Timberland Assets, and
is in substantial compliance with such permits, licenses, and approvals, except
in either case for matters which would not, individually or in the aggregate,
have a Material Adverse Effect;
(iii) Seller has not received any written notice which remains
pending under any applicable environmental law concerning the Fee Timberlands
and which notice relates to any substance that, as of the date hereof, is a
Hazardous Material; and
(iv) There is no proceeding against Seller, or any pending
investigation or inquiry with respect to Seller, by any federal, state or local
court, tribunal, administrative agency, department, commission, board or other
authority or instrumentality with respect to the presence on the Fee Timberlands
of any material which is a Hazardous Material, or the migration thereof from or
to other property.
(b) As used in this Section 2.7, the following terms shall have the
-----------
following meanings:
(i) "Actual Knowledge of Seller" shall mean the actual knowledge as
of the Closing Date of any of the persons listed on Schedule 2.7(b)(i).
------------------
(ii) "Claim of Environmental Liability" shall mean any and all
claims, liabilities, obligations, losses or damages suffered or incurred as a
result of (A) any suit, action, legal or administrative proceeding, or demand
asserted or threatened by any third-party, including any governmental agency or
authority, arising under any federal, state or local environmental law or
regulation, (B) requirements imposed by any federal, state or local
environmental laws and regulations, including all costs of remediation or costs
otherwise incurred in complying with applicable laws and regulations, and (C)
any and all judgments, courts costs, legal fees, and other costs of discovery
and defense associated with (A) or (B) above.
(iii) "Hazardous Material" shall mean any hazardous material,
hazardous wastes, or hazardous or toxic substances as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section Section 9601 et seq.), the Resource Conservation and
-- ---
Recovery Act, as amended, (42 U.S.C. Section Section 6901 et seq.), and the
-- ---
Toxic Substances Control Act, as amended (15 U.S.C. Section Section 2601 et
--
seq.).
- ---
SECTION 2.8 CONTRACTS. Complete and correct copies of all of the
---------
Contracts have been delivered to or have been made available for inspection by
Buyer. Except for matters which would not, individually or in the aggregate,
have a Material Adverse Effect: (a) each Contract is valid, binding and
enforceable in accordance with its terms; (b) no other party to any Contract is
in breach or default of the express written terms of such contract; and (c)
there does not exist under any provision of any Contract any event that, with
the giving of notice or the passage of time or both, would constitute such a
breach or default.
SECTION 2.9 BROKERS, FINDERS, ETC. Except for the services of Dillon,
---------------------
Read & Co. Inc., Seller has not employed any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection with such
transactions. As between the parties hereto, Seller is solely responsible for
any payment, fee or commission that may be due to Dillon, Read & Co. Inc., in
connection with the transactions contemplated hereby.
SECTION 2.10 TAXES. Seller has timely filed all tax returns pertaining to
------
the Timberland Assets and has paid all taxes due with such returns.
SECTION 2.11 INSURANCE. Schedule 2.11 hereto contains a complete list of
--------- -------------
all current casualty, property, title and other insurance policies and
arrangements affecting or relating to the ownership, use or operation of the
Timberland Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller as follows:
SECTION 3.1 CORPORATE ORGANIZATION AND AUTHORITY. Buyer is a corporation
------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of California, with full corporate power and authority to conduct its
business as now conducted and to own its assets. Buyer has the power to enter
into and perform its obligations pursuant to this Agreement. Buyer's execution,
delivery and performance of this Agreement, and its acquisition of and payment
for the Timberland Assets hereunder have been duly authorized by all requisite
corporate action on the part of Buyer. This Agreement constitutes Buyer's
legal, valid and binding obligations, enforceable against Buyer in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or similar laws affecting creditors'
rights and to equitable principles.
SECTION 3.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS. Buyer's
---------------------------------------------
execution and delivery of this Agreement, and the performance of its obligations
hereunder, do not and will not: (a) conflict with or violate Buyer's Articles or
Certificate of Incorporation or bylaws; (b) violate or, alone or with notice or
passage of time, result in the material breach or termination of, or otherwise
give any contracting party the right to terminate or declare a default under,
the terms of any material written agreement to which Buyer is a party or by
which Buyer or its assets are bound; or (c) violate any judgment, order, decree,
or to the best knowledge of Buyer, any material law, statute, regulation or
other judicial or governmental restriction to which Buyer is subject. Except as
may be required under Hart-Scott-Rodino, there is no requirement applicable to
Buyer to make any filing with, or to obtain any permit, authorization, consent
or approval of, any governmental or regulatory authority as a condition to the
lawful performance by Buyer of its obligations hereunder.
SECTION 3.3 LITIGATION AFFECTING BUYER. There is no claim, action,
--------------------------
proceeding or investigation pending or, to the best knowledge of Buyer,
threatened in writing, nor is there outstanding any writ, order, decree or
injunction that (a) calls into question Buyer's authority or right to enter into
this Agreement and consummate the transactions contemplated hereby, or (b) would
otherwise prevent or delay the transactions contemplated by this Agreement.
SECTION 3.4 FINDERS' FEES. Neither Buyer nor any of its affiliates, nor
-------------
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any brokerage fees, commissions, or
finder's fees in connection with the transactions contemplated herein.
SECTION 3.5 FINANCIAL CAPABILITY. Buyer has (a) immediately available
--------------------
funds sufficient to consummate the transactions contemplated by this Agreement
or (b) obtained from an established lender or lenders verbal commitments to
financing which, when combined with Buyer's available resources, is sufficient
to enable Buyer to timely consummate the transactions contemplated by this
Agreement.
ARTICLE IV
COVENANTS OF SELLER AND BUYER
-----------------------------
SECTION 4.1 INVESTIGATION OF BUSINESS; ACCESS TO PROPERTIES AND RECORDS.
------------------------------------------------------------
(a) Subject to restrictions contained in confidentiality agreements to
which Seller or Georgia-Pacific Corporation ("Georgia-Pacific") is subject
with respect to any information relating to any third party, prior to the
Closing Seller shall give to Buyer and its legal counsel, accountants and other
representatives reasonable access during normal business hours to all of the
Timberland Assets for inspection (including environmental inspection), and to
the books, contracts, commitments and records of the Timberland Assets
(excluding personnel files and employee medical records), and shall permit them
to consult with management employees of the Seller to allow Buyer full
opportunity to make such investigations as are necessary to analyze the
Timberland Assets.
(b) Any information provided to or obtained by Buyer or its
representatives pursuant to this Agreement shall be held by Buyer and its
representatives in accordance with, and shall be subject to the terms of, the
Confidentiality Agreement dated October 1, 1996 by and between Georgia-Pacific
and Buyer, a copy of which is attached as Exhibit 4.1(b).
---------------
SECTION 4.2 REASONABLE EFFORTS. Subject to the terms and conditions
------------------
herein provided, including but not limited to those contained in Section 4.12,
------------
Seller and Buyer agree to use reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with the other in
connection with the foregoing, including using reasonable efforts:
(a) to obtain all necessary waivers, consents, releases and approvals from
other parties to the transfer of any Contracts or Licenses and Permits;
(b) to obtain all consents, approvals and authorizations that are required
to be obtained under any federal, state, local or foreign law or regulation;
(c) to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby;
(d) to effect all necessary registrations and filings and submissions of
information requested by governmental authorities; and
(e) to fulfill all conditions to this Agreement.
SECTION 4.3 FURTHER ASSURANCES. Seller and Buyer agree that, from time to
------------------
time, at or after the Closing Date, each of them will execute and deliver such
further instruments of conveyance and transfer and take such other action as may
be reasonably necessary to carry out the purpose and intent of this Agreement.
SECTION 4.4 OPERATION OF ASSETS.
-------------------
(a) Subject to the terms and conditions of this Agreement and except as
otherwise contemplated hereby, Seller shall, from the date hereof through the
Closing Date, use reasonable efforts to preserve the Timberland Assets.
Specifically, and notwithstanding any provision to the contrary herein, Seller
shall not perform or allow to be performed any harvesting on the Fee Timberlands
prior to March 30, 1997. However, nothing in this Section 4.4 or elsewhere in
-----------
this Agreement shall operate to prevent the Seller from operating the Timberland
Assets after March 30, 1997 in the ordinary course consistent with prior
practice. Without limiting the generality of the foregoing, after March 30,
1997, Seller may continue, in the ordinary course of business and consistent
with prior practice, to: (i) cut and remove timber from the Fee Timberlands;
(ii) thin or salvage timber from the Fee Timberlands; (iii) consummate the sale
or exchange of real property under any pending Contract; and (iv) grant
easements and rights-of-way on or affecting the Fee Timberlands to third
parties.
(b) Subject to the terms and conditions of this Agreement and except as
otherwise expressly permitted by Seller, Buyer shall not interfere with Seller's
operation of the Timberland Assets pending the Closing and Buyer shall not take
any action which might impair Seller's relationships with its contractors,
customers, suppliers and employees.
SECTION 4.5 PUBLIC ANNOUNCEMENTS. Neither Seller nor Buyer shall make,
---------------------
nor permit any agent or affiliate to make, any public statements, including,
without limitation, any press releases, with respect to this Agreement and the
transactions contemplated hereby without the prior written consent of the other
party hereto except as may be required by law.
SECTION 4.6 NO IMPLIED REPRESENTATION. It is the explicit intent of each
-------------------------
party hereto that neither Buyer nor Seller is making or has authorized anyone
else to make any representation or warranty whatsoever, express or implied,
beyond those expressly given in this Agreement. Without limiting the generality
of the foregoing, it is understood that any cost estimates, timber volume
projections or other predictions contained or referred to in any of the offering
materials that have been provided to Buyer, including without limitation those
documents and materials provided to Buyer by Dillon, Read & Co. Inc., are not
and shall not be deemed to be representations or warranties of Seller or
Georgia-Pacific. Buyer assumes full responsibility for making its own
evaluation of the adequacy and accuracy of any and all such estimates,
projections and predictions.
SECTION 4.7 BULK TRANSFER COMPLIANCE. Buyer hereby waives compliance with
------------------------
the provisions of any applicable Bulk Sales Act under the Uniform Commercial
Code in effect in any jurisdiction (the "Bulk Sales Laws"), to the extent
applicable to the transactions contemplated hereby.
SECTION 4.8 ASSIGNMENT OF CONTRACTS. To the extent the assignment of any
------------------------
contract, lease, commitment, security or other asset to be assigned to Buyer
pursuant to the provisions hereof shall require the consent of any other person,
this Agreement shall not constitute a contract to assign the same if an
attempted assignment would constitute a breach thereof or give rise to any right
of acceleration or termination. Seller shall use its reasonable efforts to
procure consents to any such assignment. If any such consent is not obtained,
Seller shall cooperate with Buyer in any reasonable arrangement designed to
provide Buyer the benefit of any such contract, agreement, commitment, security
or other asset, including enforcement of any and all rights of Seller against
the other party thereto arising out of breach or cancellation thereof by such
party or otherwise.
SECTION 4.9 ENVIRONMENTAL AUDIT.
-------------------
(a) Within forty-five (45) days of the date of this Agreement, Buyer shall
conduct, or cause to be conducted, at its sole cost and expense, such
environmental audits or surveys of the Fee Timberlands, if any, as it may deem
reasonably necessary. The scope, methodology, timing and conduct of such
activities shall be subject to the prior written approval of Seller, which
approval shall not be unreasonably withheld and will either be given or refused
within five (5) days of receipt by Seller of a request from Buyer. To the
extent practicable, such environmental audits or surveys shall be conducted in a
manner which will not disrupt the operation of the Timberland Assets, and Buyer
and Seller shall cooperate in scheduling the environmental audit work performed
at the Fee Timberlands pursuant to this Section 4.9. Buyer will begin such
-----------
environmental audits or surveys as soon as practicable and will cause all such
work to be completed within forty-five (45) days of the date hereof. If such
environmental audits or surveys identify any matter which Buyer intends to
assert as a breach of a condition to Buyer's obligation to close pursuant to
Section 5.4 (a "Material Environmental Matter"), Buyer shall provide Seller
- -----------
written notice of such matter indicating such intention no later than fifty (50)
days from the date hereof. Absent receipt of such notice by Seller within such
fifty(50)-day period, Buyer may not assert any matter identified in the
environmental audits or surveys performed pursuant to this Section 4.9 as a
-----------
breach of a condition to Buyer's obligation to close under Section 5.4 or
-----------
otherwise, or as grounds for termination under Article VIII. Within ten (10)
------------
days following Seller's receipt of any notice from Buyer of a Material
Environmental Matter, Seller shall advise Buyer in writing whether, to what
extent, and by what means it intends to correct such matter. In the event
Seller elects to remediate or otherwise correct a Material Environmental Matter,
Buyer and Seller shall agree in writing as to the specific actions to be taken,
including any necessary postponement of the Closing Date.
(b) In addition, Buyer shall deliver to Seller copies of all environmental
reports, surveys or audits (both drafts and final versions) which Buyer obtains
with respect to the Fee Timberlands pursuant to this Section 4.9. Buyer and
-----------
Seller agree to keep all environmental audit or survey reports and other
environmental information generated by or exchanged among the parties pursuant
to this Agreement confidential and not to disclose or use for any purpose not
expressly contemplated by this Agreement, or permit any other party to use for
any purpose, any such reports or information concerning the Fee Timberlands.
Buyer shall remedy any damage to the Fee Timberlands which is caused by any
environmental audit or survey performed on Buyer's behalf pursuant to this
Section 4.9.
- -----------
SECTION 4.10 RIGHT TO UPDATE. From time to time prior to the Closing,
---------------
Seller shall have the right (but not any obligation) to update or amend in any
respect its disclosure of any matter set forth or permitted to be set forth in
an Exhibit on Schedule hereto. If the Buyer believes in good faith that the
information in any such update or amendment results in a material change to the
value of the Timberland Assets which would constitute a Material Adverse Effect
(when compared with the matters set forth in the subject Exhibit or Schedule
immediately prior to such update or amendment), then Buyer shall so notify
Seller in writing within ten (10) business days after the date on which Seller
notifies Buyer of the proposed update or amendment. If Buyer fails to so notify
Seller within such ten (10) business day period, the update or amendment shall
be deemed to have been accepted by Buyer. If Buyer does so notify Seller,
within ten (10) business days of Seller's receipt of such notice, the parties
shall meet to attempt in good faith to negotiate an equitable resolution, by
adjustment of the Purchase Price or otherwise. If the parties are unable to
reach such a resolution within ten (10) business days of such meeting, Buyer may
terminate this Agreement by written notice to Seller.
SECTION 4.11 REMOVAL OF TRADEMARKS, ETC. As promptly as practical after
---------------------------
the Closing, and in no event later than sixty (60) days after the Closing Date,
except as expressly provided to the contrary in the Martell Purchase Agreement,
Buyer shall delete, remove or otherwise obliterate from the Timberland Assets
all trade names, trademarks and service marks of the Seller or Georgia-Pacific,
including, without limitation, references to "Georgia-Pacific", "G-P" and
derivatives thereof and related logos.
SECTION 4.12 ANTITRUST REGULATORY APPROVALS. The Buyer and the Seller
------------------------------
shall each use its best efforts, with all reasonable diligence, to obtain
governmental approval of the transaction contemplated hereunder, including,
without limitation, the accurate preparation and prompt filing of all
notifications, forms, reports, and documents required under Hart-Scott-Rodino
and any requests for additional information and documentary material thereunder.
SECTION 4.13 INTERMEDIARY. The parties agree that Seller may, in its
-------------
discretion, substitute an intermediary (an "Intermediary") to act in place of
Seller, in whole or in part, as the seller of the Fee Timberlands, and thereby
elect to consummate the transaction as a like kind exchange pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended. Buyer agrees to accept
all or any portion of the Fee Timberlands, any escrow instructions and any other
required performance of the Seller hereunder from an Intermediary and to render
performance of Buyer's obligations hereunder to an Intermediary. Seller agrees
to pay any and all additional costs incurred as a result of substituting an
Intermediary.
SECTION 4.14 LICENSES AND PERMITS. Prior to Closing, Seller shall provide
---------------------
Buyer with a list of the Licenses and Permits, which list shall be complete and
accurate to Seller's knowledge.
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
-----------------------------------------
Buyer's obligation to consummate the transactions contemplated hereunder
are contingent upon the satisfaction on or prior to the Closing Date of each of
the following conditions, any of which may be waived by Buyer, in whole or in
part, in its absolute discretion, at any time or from time to time prior to the
Closing:
SECTION 5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. The
----------------------------------------------------
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time other than the Closing Date (which need only be true and correct in
all material respects as of such date or time), and the covenants and agreements
of Seller to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects.
SECTION 5.2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
-----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Seller shall have been filed, made or obtained and copies thereof
shall have been delivered to Buyer.
SECTION 5.3 NO INJUNCTION. At the Closing Date, no injunction,
--------------
restraining order or decree of any nature of any court or governmental agency or
body of competent jurisdiction shall be in effect which restrains or prohibits
the consummation of the transactions contemplated hereunder or imposes
conditions on such consummation not otherwise provided for herein.
SECTION 5.4 ENVIRONMENTAL MATTERS. The results of any environmental
----------------------
audits or surveys of the Fee Timberlands described in Section 4.9 shall not have
-----------
identified any matter or matters relating to the handling, storage,
transportation, treatment, disposal, release or potential release into the soil
or groundwater on the Fee Timberlands of any Hazardous Material which, in the
aggregate, would have a Material Adverse Effect, and as to which: (a) Buyer
shall have given timely notice in accordance with Section 4.9(a) of its
--------------
intention to assert same as a breach of a condition to Buyer's obligation to
Close under this Section 5.4; and (b) Seller was unable or unwilling to
-----------
remediate or otherwise correct to Buyer's reasonable satisfaction.
SECTION 5.5 CLOSING DOCUMENTS. Seller shall have delivered the items set
------------------
forth in Section 1.9(a).
--------------
SECTION 5.6 ABSENCE OF LITIGATION. With the exception of any continuing
----------------------
inquiry or investigation into compliance with Hart-Scott-Rodino: (a) no claim,
action, suit, arbitration, investigation, inquiry or other proceeding by any
United States federal or state governmental, regulatory or administrative agency
or authority or any other person shall be pending on the Closing Date; or (b)
prior to the Closing Date, no party to this Agreement shall have been advised by
any United States federal or state governmental, regulatory or administrative
agency or authority (which advisory has not been officially withdrawn by such
agency or authority on or prior to the Closing Date) that such agency or
authority is investigating the transactions contemplated by this Agreement to
determine whether to file or commence any litigation, which, in the case of
either (a) or (b) above, seeks or would seek to enjoin, restrain or prohibit the
consummation of the transactions contemplated by this Agreement or to impose
limitations on the ability of Buyer to continue operation of the Timberland
Assets as presently conducted or to require the divestiture by Buyer of the
Timberland Assets.
SECTION 5.7 SIMULTANEOUS CLOSINGS. The transactions contemplated by the
----------------------
Martell Purchase Agreement shall have been consummated.
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
------------------------------------------
Seller's obligation to consummate the transactions contemplated hereunder
are contingent upon the satisfaction on or prior to the Closing Date of each of
the following conditions, any of which may be waived by Seller, in whole or in
part, in its absolute discretion, at any time or from time to time prior to the
Closing:
SECTION 6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER. The
---------------------------------------------------
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of a specific
date or time other than the Closing Date (which need only be true and correct in
all material respects as of such date or time), and the covenants and agreements
of Buyer to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects.
SECTION 6.2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
-----------------------------------
filings, applications, notices, covenants, approvals, waivers, authorizations,
qualifications and orders required by this Agreement to be filed, made or
obtained by Buyer shall have been filed, made or obtained, and copies thereof
shall have been delivered to Seller.
SECTION 6.3 NO INJUNCTION. At the Closing Date, no injunction,
--------------
restraining order or decree of any nature of any court or governmental agency or
body of competent jurisdiction shall be in effect which restrains or prohibits
the consummation of the transactions contemplated hereunder or imposes
conditions on such consummation not otherwise provided for herein.
SECTION 6.4 CLOSING ITEMS. Buyer shall have delivered the items listed in
--------------
Section 1.9(b), including, without limitation, instruments executed by Buyer, in
- --------------
form and substance reasonably satisfactory to Seller, pursuant to which Buyer
assumes the Assumed Liabilities.
SECTION 6.5 SIMULTANEOUS CLOSINGS. The transactions contemplated by the
----------------------
Martell Purchase Agreement shall have been consummated.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
-------------------------
SECTION 7.1 SURVIVAL. Subject to the specific limitations and other
---------
express provisions of this Agreement: (a) the representations and warranties of
the parties contained in Sections 2.3, 2.4, 2.6, and 2.8 shall survive the
------------ ---- --- ----
Closing and shall remain in full force and effect for a period of three (3)
years after the Closing Date; (b) the representations and warranties of the
parties contained in Section 2.7 shall remain in full force and effect for a
-----------
period of five (5) years after the Closing Date; (c) the representations and
warranties of the parties contained in Section 2.10 shall remain in full force
------------
and effect until expiration of the applicable statute of limitations with regard
to tax matters; and (d) all other representations and warranties of the parties
contained herein shall remain in full force and effect for a period of one (1)
year after the Closing Date; provided, however, that the representations and
warranties in Section 3.5 shall not survive the Closing; and provided, further,
-----------
that if a party shall have made a claim for indemnification pursuant to Section
-------
7.2 within the applicable aforesaid survival period, the representations and
- ---
warranties to which such claim relates shall survive only for purposes of that
claim and no others until such claim is disposed of as provided in this Article
-------
VII.
- ---
SECTION 7.2 INDEMNIFICATION.
----------------
(a) Indemnification by Seller. Seller hereby agrees to indemnify and hold
--------------------------
Buyer harmless from any and all liabilities, losses, claims, judgments, damages,
expenses and costs (including, without limitation, reasonable counsel fees and
costs and expenses incurred in connection therewith) (collectively, the
"Indemnifiable Damages'' which it may suffer or incur by reason of: (i) the
breach or inaccuracy of any of the representations and warranties of Seller
contained in this Agreement; (ii) the breach by Seller of any of the covenants
or agreements made by it in this Agreement; (iii) any misrepresentation
contained in any certificate furnished by Seller pursuant to this Agreement;
(iv) any loss arising or resulting from the Excluded Assets or any liabilities
of Seller not expressly assumed by Buyer hereunder; or (v) any and all loss and
expense (except for those arising out of Assumed Liabilities) arising out of
failure to comply with the Bulk Sales Laws.
(b) Indemnification by Buyer. Buyer hereby agrees to indemnify and hold
-------------------------
Seller harmless from any and all Indemnifiable Damages which it may suffer or
incur by reason of: (i) the breach or inaccuracy of any of the representations
or warranties of Buyer contained in this Agreement; (ii) the breach by Buyer of
any of the covenants or agreements made by it in this Agreement; (iii) any
misrepresentation contained in any certificate furnished by Buyer pursuant to
this Agreement; or (iv) any Assumed Liabilities.
(c) Third-Party Claims. If any claim or demand is asserted against the
------------------
indemnified party by a third party with respect to any matter under the
indemnities set forth in Sections 7.2(a) or (b) (a "Third Party Claim"), the
--------------- ---
indemnified party shall promptly give written notice and details thereof,
including copies of all pleadings and the pertinent documents, to the
indemnifying party. Within twenty (20) days of receipt of such notice, the
indemnifying party shall either (i) pay or settle the Third Party Claim or (ii)
notify the indemnified party that the indemnifying party disputes the Third
Party Claim and intends to defend against it, and thereafter so defend and pay
any adverse final judgment or award or settlement amount in regard thereto.
Such defense shall be controlled by the indemnifying party, and the cost of such
defense shall be borne by it, except that the indemnified party shall have the
right to participate in such defense at its own expense. The indemnified party
agrees that it will cooperate in all reasonable respects in the defense of any
such claim or demand, including making personnel, books, and records relevant to
the claim available to the indemnifying party, without charge, except for
reimbursement of reasonable out-of-pocket expenses.
If the indemnifying party fails to take action within twenty (20) days as
set forth above, then the indemnified party shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the expense of defense or settlement as an
indemnity claim. The indemnified party shall also have the right, exercisable
in good faith, to take such action as may be necessary to avoid a default prior
to the assumption of the defense of the Third Party Claim by the indemnifying
party and any expenses incurred by so acting shall be paid by the indemnifying
party.
(d) Payment. With respect to all claims other than Third Party Claims,
--------
the indemnifying party shall promptly pay or reimburse the indemnified party in
respect of any claim or liability for Indemnifiable Damages to which the
foregoing indemnities relate after receipt of written notice from the
indemnified party outlining with reasonable particularity the nature and amount
of the claim(s). All claims for indemnity hereunder must be submitted by the
indemnified party to the indemnifying party within the applicable time periods
set forth in Section 7.1. In the event the indemnifying party fails or refuses
-----------
to make payment for such claims within a period of twenty (20) days from the
date of notice to the indemnifying party, the indemnified party shall be
entitled to exercise all legal means of relief available.
(e) Access and Information. With respect to any claim for indemnification
-----------------------
hereunder, the indemnified party will give to the indemnifying party and its
counsel, accountants and other representatives full and free access, during
normal business hours and upon the giving of reasonable prior notice, to their
books and records relating to such claims, and to their employees, accountants,
counsel and other representatives, all without charge to the indemnifying party,
except for reimbursement of reasonable out-of-pocket expenses. In this regard,
the indemnified party agrees to maintain any of its books and records which may
relate to a claim for indemnification hereunder for such period of time as may
be necessary to enable the indemnifying party to resolve such claim.
(f) Monetary Limitations on Indemnification.
----------------------------------------
(i) Seller shall not be obligated hereunder to indemnify Buyer with
respect to any liabilities, losses, claims, judgments, damages, expenses and
costs as to which Buyer is otherwise entitled to indemnification under this
Agreement unless and until the aggregate amount of indemnification so asserted
exceeds Five Hundred Thousand Dollars ($500,000), and thereafter Buyer shall be
entitled to indemnity from Seller hereunder only with respect to any amounts in
excess of Five Hundred Thousand Dollars ($500,000). Notwithstanding anything in
this Agreement to the contrary, Seller's maximum aggregate obligation to Buyer
pursuant to this Section 7.2 shall not exceed Seven Million Five Hundred
-----------
Thousand Dollars ($7,500,000). The limitations of this Section 7.2(f) shall not
--------------
apply with regard to any breach or inaccuracy in the representations and
warranties set forth in Section 2.7(a).
--------------
(ii) Buyer shall not be obligated hereunder to indemnify Seller with
respect to any liabilities, losses, claims, judgments, damages, expenses and
costs as to which Seller is otherwise entitled to indemnification under this
Agreement unless and until the aggregate amount of indemnification so asserted
exceeds Five Hundred Thousand Dollars ($500,000), and thereafter Seller shall be
entitled to indemnity from Buyer hereunder only with respect to any amounts in
excess of Five Hundred Thousand Dollars ($500,000). Notwithstanding anything in
this Agreement to the contrary, Buyer's maximum aggregate obligation to Seller
pursuant to this Section 7.2 shall not exceed Seven Million Five Hundred
-----------
Thousand Dollars ($7,500,000).
(iii) The liability of any indemnifying party under this Section 7.2
-----------
shall be offset dollar for dollar by: (A) any insurance proceeds received or
recoverable by the indemnified party after the Closing in respect of the item
of Indemnifiable Damages involved; (B) any other recovery made or recoverable by
the indemnified party from any third party on account of the item of
Indemnifiable Damages involved; and (C) any tax benefit realizable by the
indemnified party or any affiliate thereof on account of the item of
Indemnifiable Damages involved.
(g) Other Limitations on Indemnification.
-------------------------------------
(i) No indemnifying party under this Section 7.2 shall have any
-----------
obligation to an indemnified party with respect to any matter unless the
indemnified party shall have taken all reasonable steps to mitigate the
liabilities, losses, claims, judgments, damages, expenses and costs involved
upon and after becoming aware of such matter. In no event shall an indemnifying
party be liable for consequential or punitive damages.
(ii) Anything in this Agreement to the contrary notwithstanding, no
claim may be asserted nor any action commenced against any party for breach of
any representation, warranty, covenant or agreement contained herein, unless
written notice of such claim or action is received by such party describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the representation,
warranty, covenant or agreement on which such claim or action is based ceases to
survive as set forth in this Agreement irrespective of whether the subject
matter of such claim or action shall have occurred before or after such date.
SECTION 7.3 EXCLUSIVE REMEDY.
-----------------
(a) Each of Buyer and Seller hereby acknowledges and agrees that its sole
and exclusive remedy with respect to any and all claims relating to the
representations, warranties and covenants contained in this Agreement shall be
pursuant to the indemnification provisions set forth in this Article VII. In
-----------
furtherance of the foregoing, each of the parties hereto hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action it may have against any other party hereto arising under or
based upon any federal, state or local statute, law, ordinance, rule or
regulation (including, without limitation, any such rights, claims or causes of
action arising under or based upon common law or otherwise) with respect to the
representations, warranties and covenants contained in this Agreement.
(b) Notwithstanding the foregoing subsection (a), nothing contained in
--------------
this Section 7.3 shall prevent any party hereto from seeking and obtaining
-----------
specific performance by the other party hereto of any of its obligations under
this Agreement as provided in Section 9.11 or from seeking and obtaining
------------
injunctive relief against the other party's activities in breach of this
Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, no breach
of any representation, warranty, covenant or agreement contained herein shall
give rise to any right on the part of Buyer after the Closing to rescind this
Agreement or any of the transactions contemplated hereby.
ARTICLE VIII
TERMINATION
-----------
SECTION 8.1 TERMINATION. This Agreement may be terminated at any time
------------
prior to Closing by:
(a) the mutual consent of Seller and Buyer; or
(b) either Seller or Buyer if the Closing has not occurred by the close of
business on June 20, 1997, so long as the failure to consummate the transaction
on or before such date did not result solely from the failure by the party or
its affiliate seeking termination of this Agreement to fulfill any undertaking
or commitment on its part provided for herein prior to Closing; or
(c) Buyer pursuant to Section 4.10.
------------
SECTION 8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of
------------------------------------
termination of this Agreement pursuant to Section 8.1, written notice thereof
-----------
shall forthwith be given by the terminating party to the other parties hereto,
and this Agreement shall thereupon terminate and become void and have no effect,
and the transactions contemplated hereby shall be abandoned without further
action by the parties hereto, except that the provisions of Sections 4.5,
------------
4.9(b), 8.2, 9.3 and 9.5 and the Confidentiality Agreement referred to in
- ------ --- --- ---
Section 4.1(b) shall survive the termination of this Agreement, provided,
- --------------
however, that such termination shall not relieve any party hereto of any
liability for any breach of this Agreement.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.1 COUNTERPARTS. This Agreement may be executed in two or more
-------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 9.2 GOVERNING LAW/DISPUTE RESOLUTION.
---------------------------------
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of California without reference to the choice of law
principles thereof.
(b) The parties will attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly by negotiations
between representatives and senior executives of the parties who have authority
to settle the controversy. If a controversy or claim should arise, Danny W.
Huff, Vice President and Treasurer of Seller, and M.D. Emmerson, Vice President
and Chief Financial Officer of Buyer, or their respective successors in the
positions they now hold (the "Project Managers"), will meet at least once and
will attempt to resolve the matter. Either Project Manager may request the
other to meet within fourteen (14) days, at a mutually agreed time and place.
If the matter has not been resolved within twenty (20) days of their first
meeting, the Project Managers shall refer the matter to senior executives who do
not have direct responsibility for administration of this Agreement (the
``enior Executives''). Thereupon, the Project Managers shall promptly prepare
and exchange memoranda stating: (i) the issues in dispute and their respective
positions, summarizing the evidence and arguments supporting their positions,
and the negotiations which have taken place, and attaching relevant documents;
and (ii) the name and title of the Senior Executive who will represent that
party. The Senior Executives shall meet for negotiations at a mutually agreed
time and place within fourteen (14) days of the end of the twenty (20)-day
period referred to above, and thereafter as often as they reasonably deem
necessary to exchange relevant information and to attempt to resolve the
dispute.
If the matter has not been resolved within thirty (30) days of the initial
meeting of the Senior Executives, or if either party will not meet within thirty
(30) days of the end of the twenty (20)-day period referred to above, the
parties will attempt in good faith to resolve the controversy or claim by
mediation in accordance with the American Arbitration Association model
procedures for mediation of business/commercial disputes. If the matter has not
been resolved pursuant to the aforesaid mediation procedure within thirty (30)
days of the commencement of such procedure, or if either party will not
participate in a mediation, the controversy shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Section 1 - 16, and judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Atlanta, Georgia. The arbitrator(s) are not
empowered to award damages in excess of actual damages, including punitive or
consequential damages. All deadlines specified in this Section 9.2(b) may be
--------------
extended by mutual agreement.
(c) Except as specifically provided to the contrary herein, the procedures
specified in Section 9.2(b) shall be the sole and exclusive procedures for the
--------------
resolution of disputes between the parties arising out of or relating to this
Agreement; provided, however, that a party may seek a preliminary injunction or
other preliminary judicial relief if in its judgment such action is necessary to
avoid irreparable damage. Despite such action the parties will continue to
participate in good faith in the procedures specified in Section 9.2(b). All
--------------
applicable statutes of limitation shall be tolled while the procedures specified
in Section 9.2(b) are pending, and the parties will take such action, if any,
--------------
required to effectuate such tolling.
SECTION 9.3 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement or
-----------------------------
any ancillary documents, whether expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement.
SECTION 9.4 ENTIRE AGREEMENT. Except for the Confidentiality Agreement
-----------------
referred to in Section 4.1(b), this Agreement (including any agreements
--------------
incorporated herein) and the Schedules and Exhibits hereto contain the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, representations and warranties
regarding the subject matter hereof between the parties other than those set
forth or referred to herein.
SECTION 9.5 EXPENSES. Except as expressly provided herein to the
---------
contrary, whether or not the transactions contemplated by this Agreement are
consummated, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
SECTION 9.6 NOTICES. All notices hereunder shall be sufficiently given
--------
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service, or to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to Seller shall be addressed to:
Georgia-Pacific West, Inc.
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: James F. Kelley, General Counsel
Telecopier: (404) 230-1674
or at such other address and to the attention of such other person as Seller may
designate by notice to Buyer in accordance with this Section 9.6. Notices to
-----------
Buyer shall be addressed to:
Sierra Pacific Holding Company
P. O. Box 496028
Redding, California 96049-6028
Attention: M.D. Emmerson, Vice President and Chief
Financial Officer
Telecopier: (916) 378-8266
with a copy to:
David H. Dun, Esq.
Dun & Martinek
730 Seventh Street, Suite B
Eureka, California 95501
Telecopier: (707) 442-9251
or to such other address and to the attention of such other person as Buyer may
designate by written notice to Seller in accordance with this Section 9.6.
-----------
SECTION 9.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
-----------------------
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that Buyer will not assign
its rights or delegate its obligations under this Agreement without the express
prior written consent of Seller; and, provided further, that Buyer may assign
its rights or delegate its obligations under this Agreement, in whole or in
part, to an affiliate of Buyer upon showing of documentation detailing such
affiliate's financial ability to consummate the transactions contemplated by
this Agreement expeditiously, which documentation must be reasonably
satisfactory to Seller.
SECTION 9.8 HEADINGS; DEFINITIONS. The section and article headings
----------------------
contained in this Agreement are inserted for convenience and reference only and
will not affect the meaning or interpretation of this Agreement. All references
to ``ections'', "Articles", "Schedules" or "Exhibits" contained herein mean
Sections or Articles of this Agreement and Schedules or Exhibits attached to
this Agreement, which are hereby incorporated by reference, unless otherwise
stated. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
SECTION 9.9 SCHEDULES AND EXHIBITS. The inclusion of any matter in a
-----------------------
Schedule or Exhibit hereto shall be deemed to relate to all parts of this
Agreement, despite any references therein to particular sections of this
SECTION 9.10 AMENDMENTS AND WAIVERS. This Agreement may not be modified
-----------------------
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, only by an instrument in writing, waive compliance by the
other parties hereto with any term or provision of this Agreement. The waiver
by any party hereto of a breach of any term or provision of this Agreement shall
not be construed as a waiver of any subsequent breach.
SECTION 9.11 SPECIFIC PERFORMANCE. The parties acknowledge that money
---------------------
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
SECTION 9.12 SEVERABILITY OF PROVISIONS. If any provision of this
---------------------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon any such determination, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by or on
behalf of the parties as of the date first above written.
GEORGIA-PACIFIC WEST, INC.
By:
------------------------------
John F. McGovern
Executive Vice President - Finance
and Chief Financial Officer
SIERRA PACIFIC HOLDING COMPANY
By:
------------------------------
Title:
---------------------------
SCHEDULE 1.1(C)
[EXECUTION COPY]
CREDIT AGREEMENT
among
GEORGIA-PACIFIC CORPORATION
THE LENDERS NAMED HEREIN
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
and
BA SECURITIES, INC.,
as Arranger
$1,500,000,000
Dated as of December 23, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms................................. 1
1.02 Computation of Time Periods........................... 15
1.03 Accounting Matters.................................... 15
1.04 Certain Terms......................................... 15
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01 Committed Loans....................................... 16
2.02 Procedure for Committed Borrowings.................... 16
2.03 Bid Borrowings........................................ 17
2.04 Procedure for Bid Borrowings.......................... 17
2.05 Evidence of Indebtedness.............................. 20
2.06 Optional Reduction of the Commitments................. 21
2.07 Repayment............................................. 21
(a) The Committed Loans............................ 21
(b) The Bid Loans.................................. 21
2.08 Optional Prepayments.................................. 21
2.09 Interest.............................................. 22
2.10 Default Interest...................................... 23
2.11 Continuation and Conversion Elections for Committed
Loans 23
Page
----
ARTICLE III
FEES; PAYMENTS; TAXES
3.01 Fees.................................................. 25
(a) Commitment Fee................................. 25
(b) Facility Fee................................... 25
(c) Agency Fee..................................... 26
3.02 Computation of Interest, Fees......................... 26
3.03 Payments by the Company............................... 26
3.04 Payments by the Lenders............................... 27
3.05 Taxes................................................. 28
3.06 Sharing of Payments, Etc.............................. 33
ARTICLE IV
CHANGES IN CIRCUMSTANCES; ETC.
4.01 Eurodollar Rate Protection............................ 35
4.02 Additional Interest on Eurodollar Loans............... 35
4.03 Increased Costs....................................... 35
4.04 Illegality............................................ 36
4.05 Capital Adequacy...................................... 36
4.06 Funding Losses........................................ 36
4.07 Funding; Certificates of Lenders...................... 38
4.08 Change of Lending Office; Limitation on Increased
Costs 38
4.09 Replacement of Lenders................................ 39
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Corporate Existence; Compliance with Law.............. 40
5.02 Corporate Power; Authorization........................ 40
5.03 Enforceable Obligations............................... 41
5.04 Taxes................................................. 41
5.06 Litigation............................................ 42
5.07 Subsidiaries.......................................... 42
5.08 Liens................................................. 42
5.09 No Burdensome Restrictions; No Defaults............... 43
5.10 Investment Company Act; Public Utility Holding
Company Act 43
5.11 Margin Regulations.................................... 43
5.12 Environmental Matters................................. 43
5.13 Labor Matters......................................... 45
5.14 ERISA Plans........................................... 45
ARTICLE VI
CONDITIONS PRECEDENT
6.01 Conditions Precedent to the First Loan................ 46
(a) Board Resolutions; Incumbency Certificates..... 46
(b) Articles of Incorporation; By-Laws and
Good Standing 46
(c) Subsidiary Guaranty............................ 46
(d) Legal Opinion.................................. 46
(e) Termination of the 1993 Credit Agreement....... 47
6.02 Additional Conditions Precedent to the First Loan..... 47
(a) No Material Adverse Effect..................... 47
(b) Margin Regulations............................. 47
(c) Fees Costs and Expenses........................ 47
(d) Company Officer's Certificate.................. 47
6.03 Conditions Precedent to Each Committed Loan........... 47
(a) Notice of Borrowing............................ 47
(b) Accuracy of Representations; No Default; Etc... 47
(c) Other Assurances............................... 48
6.04 Conditions Precedent to Each Bid Borrowing............ 48
(a) Promissory Notes............................... 48
(b) Accuracy of Representations; No Default; Etc... 48
ARTICLE VII
AFFIRMATIVE COVENANTS
7.01 Application of Proceeds............................... 49
7.02 Compliance with Laws, Etc............................. 49
7.03 Payment of Taxes, Etc................................. 49
7.04 Maintenance of Insurance.............................. 49
7.05 Preservation of Corporate Existence, Etc.............. 49
7.06 Access................................................ 50
7.07 Keeping of Books...................................... 50
7.08 Maintenance of Properties, Etc........................ 50
7.09 Financial Statements.................................. 50
7.10 Reporting Requirements................................ 51
7.11 ERISA Plans........................................... 51
7.12 Environmental Compliance; Notice...................... 51
ARTICLE VIII
NEGATIVE COVENANTS
8.01 Liens, Etc............................................ 53
8.02 Sale-Leaseback Transactions........................... 55
8.03 Mergers, Etc.......................................... 56
8.04 Transactions with Affiliates.......................... 57
8.05 Accounting Changes.................................... 57
8.06 Margin Regulations.................................... 57
8.07 Negative Pledges, Etc................................. 57
8.08 Leverage Ratio........................................ 57
ARTICLE IX
EVENTS OF DEFAULT
9.01 Events of Default..................................... 58
(a) Non-Payment.................................... 58
(b) Representations and Warranties................. 58
(c) Specific Defaults.............................. 58
(d) Other Defaults................................. 58
(e) Default under Other Agreements................. 58
(f) Bankruptcy or Insolvency....................... 59
(g) Involuntary Proceedings........................ 59
(h) Monetary Judgments............................. 59
(i) Pension Plans.................................. 60
(j) Change in Control.............................. 60
(k) Impairment of Certain Documents................ 60
9.02 Remedies.............................................. 60
ARTICLE X
THE AGENT
10.01 Appointment........................................... 62
10.02 Delegation of Duties.................................. 62
10.03 Liability of Agent.................................... 62
10.04 Reliance by Agent..................................... 62
10.05 Notice of Default..................................... 63
10.06 Credit Decision....................................... 64
10.07 Indemnification....................................... 64
10.08 Agent in Individual Capacity.......................... 65
10.09 Successor Agent....................................... 65
10.10 The Arranger.......................................... 66
ARTICLE XI
MISCELLANEOUS
11.01 Notices, Etc.......................................... 67
11.02 Amendments, Etc....................................... 67
11.03 No Waiver; Remedies................................... 68
11.04 Costs and Expenses.................................... 68
11.05 Indemnity............................................. 69
11.06 Right of Set-off...................................... 70
11.07 Binding Effect........................................ 70
11.08 Assignments, Participations, Etc...................... 71
11.09 Confidentiality....................................... 73
11.10 Survival.............................................. 73
11.11 Severability.......................................... 74
11.12 Headings.............................................. 74
11.13 GOVERNING LAW......................................... 74
11.14 Execution in Counterparts............................. 74
11.15 ENTIRE AGREEMENT...................................... 74
11.16 WAIVER OF JURY TRIAL.................................. 74
Schedule Description
1.01(a) Commitments; Commitment Percentages
1.01(b) Lending Offices
1.01(c) Reference Banks
5.02(d) Corporate Power; Authorizations
5.07 Subsidiaries
5.12 Environmental Matters
5.13 Labor Matters
5.14 ERISA
8.01 Existing Liens
EXHIBITS
--------
Exhibit Description
2.02 Form of Notice of Borrowing
2.04 Form of Competitive Bid Request
2.05(b) Form of Promissory Note (Committed Loans)
2.05(c) Form of Promissory Note (Bid Loans)
2.11 Form of Notice of Conversion/Continuation
6.01(c) Form of Subsidiary Guaranty
6.01(d) Form of Opinion of Counsel for the Company
6.02(d) Form of Officer's Closing Certificate
7.09 Form of Compliance Certificate
11.08 Form of Notice of Assignment
This CREDIT AGREEMENT is entered into as of December 23, 1996 among
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (the "Company"), the various
-------
financial institutions that are, or may from time to time become, party hereto
(the "Lenders") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
-------
Agent for the Lenders, and BA SECURITIES, INC., as Arranger.
WHEREAS, the Company, certain of the Lenders and the Agent are party to the
Credit Agreement dated as of June 30, 1993, as amended (the "1993 Credit
-----------
Agreement");
- ---------
WHEREAS, the Company desires to terminate the commitments under the 1993
Credit Agreement and enter into a new credit facility to refinance previously
outstanding obligations on different terms and conditions; and
WHEREAS, the Company has obtained commitments from the Lenders, pursuant to
which the Lenders are willing to make loans to the Company and to provide
certain other credit facilities to the Company (including a competitive bid
facility) in a maximum aggregate principal amount at any one time outstanding
not to exceed $1,500,000,000, on the terms and subject to the conditions set
forth herein;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
I.01 Certain Defined Terms. As used in this Agreement and in any Schedules
---------------------
and Exhibits to this Agreement, the following terms have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Adjusted Reference Rate" means the fluctuating interest rate per annum
-----------------------
equal to the higher of (a) the sum of the Federal Funds Rate plus 1/2% and (b)
----
the rate of interest (the "Reference Rate") publicly announced from time to time
--------------
by Bank of America in San Francisco, California, as its reference rate. The
Reference Rate is a rate set by Bank of America based upon various factors
including Bank of America's cost and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above or below the Reference Rate. Any change in the
Reference Rate shall take effect at the opening of business on the day specified
in the public announcement of such change.
"Affiliate" means, with respect to any Person, any Subsidiary of such
---------
Person and any other Person which, directly or indirectly, controls, or is
controlled by, or is under common control with, such Person (excluding any
trustee under, or any committee with responsibility for administering, any
Plan). A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power:
(a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such other Person; or
(b) to direct or cause the direction of the management and policies of
such other Person, whether through the ownership of voting securities, by
contract or otherwise.
Notwithstanding the foregoing, neither Bowater Incorporated nor Great
Northern Paper, Inc. shall be deemed to be an Affiliate of the Company or of any
Subsidiary or any other Affiliate of the Company from and after the date of
acquisition of Great Northern Paper, Inc. by Bowater Incorporated.
"Agent" means Bank of America in its capacity as agent for the Lenders,
-----
together with any successor thereto in such capacity.
"Aggregate Commitments" means the aggregate amount of the Commitments of
---------------------
all the Lenders as in effect from time to time.
"Agreement" means this Credit Agreement, as from time to time amended,
---------
modified or supplemented.
"Arranger" means BA Securities, Inc., in its capacity as Arranger hereof.
--------
"Assignee" means any bank which becomes a party to this Agreement pursuant
--------
to Section 11.08.
-------------
"Available Commitments" means, at any time, the excess, if any, of the
---------------------
Aggregate Commitments in effect at such time over the sum of (a) the aggregate
principal amount of all Committed Loans then outstanding, plus (b) the aggregate
----
principal amount of all Bid Loans then outstanding plus (c) the aggregate
----
principal amount of all 1993 Facility Bid Loans then outstanding.
"Bank of America" means Bank of America National Trust and Savings
---------------
Association, a national banking association.
"Base Rate" has the meaning specified in Section 2.04(a)(iv).
--------- -------------------
"Base Rate Bid Loan" means any Bid Loan that bears interest at a rate
------------------
determined with reference to a Base Rate.
"Bid Borrowing" means an extension of credit hereunder consisting of one or
-------------
more Bid Loans made to the Company on the same day by one or more Lenders.
"Bid Loan" means a Loan made by a Lender to the Company pursuant to Section
-------- -------
2.03 and may be a Base Rate Bid Loan or a Fixed Rate Bid Loan.
- ----
"Borrowing" means a Bid Borrowing or a Committed Borrowing.
---------
"Business Day" means any day other than a Saturday, Sunday or other day on
------------
which commercial banks in New York City, New York, or San Francisco, California,
are authorized or required by law to close and, if the applicable Business Day
relates to any Eurodollar Loan, means such a day on which dealings are carried
on in the London interbank market.
"CERCLA" means the Comprehensive Environmental Response Compensation and
------
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
-------
Liability Information System List.
"Closing Date" means the date on which all the conditions precedent set
------------
forth in Sections 6.01 and 6.02 shall have been satisfied or waived.
------------- ----
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"Commitment" means for each Lender, as the context may require (a) the
----------
amount in dollars set forth in Schedule 1.01(a) opposite the name of such Lender
----------------
under the heading "Commitments" or as otherwise set forth in any Notice of
-----------
Assignment, as such amount may be reduced pursuant to Section 2.06 or as a
------------
result of one or more assignments pursuant to Section 11.08 or (b) the
-------------
obligation of such Lender to extend credit to the Company hereunder in the
amount specified in the immediately preceding clause (a).
"Commitment Percentage" means, as to any Lender at any time, the percentage
---------------------
of the Aggregate Commitments represented by such Lender's Commitment at such
time, as set forth in Schedule 1.01(a), as such percentage may be modified from
----------------
time to time in accordance with Notices of Assignment delivered hereunder
pursuant to Section 11.08.
-------------
"Committed Borrowing" means an extension of credit hereunder consisting of
-------------------
Committed Loans of the same type made on the same day by the Lenders ratably
according to their respective Commitment Percentages and, in the case of
Eurodollar Loans, having the same Interest Periods.
"Committed Loan" means a loan by a Lender to the Company pursuant to
--------------
Section 2.01 and may be a Eurodollar Loan or a Reference Rate Loan, each of
- ------------
which shall be a "type" of Committed Loan.
----
"Company" has the meaning specified in the introduction to this Agreement.
-------
"Competitive Bid" means an offer by a Lender to make a Bid Loan in
---------------
accordance with Section 2.04(b).
---------------
"Competitive Bid Request" has the meaning specified in Section 2.04(a).
----------------------- ---------------
"Contractual Obligation" means, with respect to any Person, any provision
----------------------
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument to which such
Person is a party or by which it or any of its property is subject.
"Controlled Group" means all members of a controlled group of corporations
----------------
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.
"Debt Rating" means, on any date, the rating of the Company's senior
-----------
unsecured long-term Indebtedness, as most recently publicly announced by Moody's
and S&P, whichever is higher; provided, however, that if only one such rating is
-------- -------
available, the applicable interest rate or fee to be determined based on such
rating shall be determined solely by reference to such one rating.
"Default" means any event or condition which, with the giving of notice or
-------
the lapse of time, or both, would become an Event of Default.
"dollar" and "$" mean lawful money of the United States of America.
------
"Environmental Laws" means all applicable federal, state or local statutes,
------------------
laws, ordinances, codes, rules and regulations (including consent decrees and
administrative orders) relating to public health and safety and protection of
the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Loan" means any Committed Loan that bears interest at a rate
---------------
determined with reference to LIBOR.
"Eurodollar Reserve Percentage" means the maximum reserve percentage of any
-----------------------------
Lender (expressed as a decimal) in effect on the date LIBOR for any Interest
Period is determined under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 9.01.
---------------- ------------
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
------------------
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective"). If
--------
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
------------------------------
day under the caption "Federal Funds Effective Rate".
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System.
"Fee Letter" means the letter agreement dated the Closing Date between the
----------
Company and Bank of America regarding the payment of certain fees.
"Fixed Rate" means a fixed annual percentage rate.
----------
"Fixed Rate Bid Loan" means any Bid Loan that bears interest determined
-------------------
with reference to a Fixed Rate.
"Form 1001" has the meaning specified in Section 3.05(f)(i)(B).
--------- ---------------------
"Form 4224" has the meaning specified in Section 3.05(f)(i)(A).
--------- ---------------------
"Form W-8" has the meaning specified in Section 3.05(f)(i)(B).
-------- ---------------------
"Form W-9" has the meaning specified in Section 3.05(f)(i)(A).
-------- ---------------------
"Funded Indebtedness" means, for any day, the sum of (i) all Indebtedness
-------------------
for Borrowed Money of the Company and its consolidated Subsidiaries outstanding
on such day plus (ii) the aggregate capital invested as of such day by Persons
----
other than the Company and its consolidated Subsidiaries in receivables and
other accounts sold to such Persons by the Company and its consolidated
Subsidiaries, excluding receivables and other accounts sold in connection with
the sale of a business or the sale of the assets and/or operations generating
such receivables and other accounts.
"GAAP" means, as of any date of determination, generally accepted
----
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession) or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession.
"Governmental Authority" means any nation or government, any federal,
----------------------
state, local or other political subdivision thereof and any central bank thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Material" means:
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from time to
-- ---
time;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance, or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended or hereafter
amended.
"Indebtedness" of any Person means, without duplication, the consolidated
------------
Indebtedness for Borrowed Money of such Person and guaranties of indebtedness of
others provided by such Person, all as determined in accordance with GAAP
consistent with the accounting principles applied in the preparation of the
financial statements referred to in Section 5.05(a).
---------------
"Indebtedness for Borrowed Money" of any Person means, without duplication,
-------------------------------
(a) all indebtedness of such Person for borrowed money;
(b) all obligations of such Person issued or assumed as the deferred
purchase price of property or services other than bank overdrafts and trade
accounts payable arising in the ordinary course of business consistent with
past practices;
(c) all obligations of such Person evidenced by notes, bonds,
debentures, commercial paper or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property,
assets or businesses;
(d) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or creditor under such agreement in the event of default are
limited to repossession or sale of such property);
(e) all rental obligations of such Person under leases capitalized
under GAAP as disclosed in the financial statements delivered pursuant to
Section 7.09; and
------------
(f) all indebtedness of such Person or of others referred to in
paragraphs (a) through (e) above secured by (or for which the holder of
-------------- ---
such indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such indebtedness.
"Indemnified Party" has the meaning specified in Section 11.05(a).
----------------- ----------------
"Interest Expense" means, for any period, (a) the total interest expense of
----------------
the Company and its consolidated Subsidiaries for such period minus (b) the
-----
total interest income of the Company and its consolidated Subsidiaries for such
period plus (c) the "cost of receivables sold" for such period as reflected in
----
the income statements delivered pursuant to Section 7.09.
------------
"Interest Payment Date" means (a) (i) with respect to any Eurodollar Loan,
---------------------
the last day of each Interest Period applicable to such Eurodollar Loan and,
with respect to any Interest Period of six months' duration, the date which
falls three months after the beginning of such Interest Period, and (ii) with
respect to any Reference Rate Loan, the last Business Day of each calendar
quarter and (b) with respect to any Bid Loan, the maturity date or dates
specified by the Company in the relevant Competitive Bid Request.
"Interest Period" means, with respect to any Eurodollar Loan, the period
---------------
commencing on the Business Day such Eurodollar Loan is disbursed or continued as
a Eurodollar Loan or on the date on which a Reference Rate Loan or any portion
thereof is converted into a Eurodollar Loan and ending on the date one, two,
three or six months thereafter, as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation; provided that:
--------
(a) in the case of the continuation of a Eurodollar Loan pursuant to
Section 2.11, the Interest Period applicable after the continuation of such
------------
Loan shall commence on the last day of the preceding Interest Period;
(b) if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(c) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(d) no Interest Period for any Eurodollar Loan shall extend beyond the
Termination Date.
"Interest Rate Contracts" means interest rate cap agreements, interest rate
-----------------------
swap agreements, interest rate collar agreements, interest rate insurance and
other agreements or arrangements designed to provide protection against
fluctuations in interest rates.
"Investments" means all investments, whether by acquisition of stock or
-----------
indebtedness, or by loan, advance, transfer of property, capital contribution or
otherwise.
"Investments in Unrestricted Subsidiaries" means Investments made by the
----------------------------------------
Company or by any Restricted Subsidiary in Unrestricted Subsidiaries, net of
Investments made by Unrestricted Subsidiaries in the Company or any Restricted
Subsidiary. If any corporation which becomes a Restricted Subsidiary after the
date of this Agreement shall, at the time it becomes a Restricted Subsidiary,
have any Investments in an Unrestricted Subsidiary, such Investments shall be
deemed to be Investments made by the Company in such Unrestricted Subsidiary at
the time such corporation becomes a Restricted Subsidiary, in the amount at
which such Investments are then carried on the books of such corporation. If
any corporation shall become an Unrestricted Subsidiary after the date of this
Agreement, the Investments of the Company and its Restricted Subsidiaries in
such corporation shall be deemed to be Investments made at the time such
corporation becomes an Unrestricted Subsidiary, in the amount at which such
Investments are then carried on the books of the Company and its Restricted
Subsidiaries.
"Lender" has the meaning specified in the introduction to this Agreement
------
and includes each Lender listed on the signature pages hereof and each Assignee.
"Lending Office" means, with respect to any Lender, (a) in the case of a
--------------
Committed Loan, the office or offices of such Lender specified as its "Domestic
--------
Lending Office" or "Eurodollar Lending Office", as the case may be, opposite its
- -------------- -------------------------
name in Schedule 1.01(b) or in the applicable Notice of Assignment, or such
----------------
other office or offices of such Lender as such Lender may from time to time
specify to the Company and the Agent and (b) in the case of a Bid Loan, the
office of such Lender notified by such Lender to the Company as its Lending
Office with respect to such Bid Loan or, if such Lender fails to so notify the
Company, such Lender's Domestic Lending Office.
"LIBOR" means, for any Interest Period, the rate of interest per annum
-----
determined by the Agent to be the arithmetic mean (rounded upward to the nearest
1/16%) of the rates of interest per annum notified to the Agent by each
Reference Bank as the rate of interest at which dollar deposits in an amount
approximately equal to the amount of the Committed Loan to be made or continued
as, or converted into, a Eurodollar Loan by such Reference Bank and having a
maturity equal to such Interest Period would be offered to major banks in the
London interbank market at their request at or about 11:00 a.m. (London time) on
the second Business Day before the commencement of such Interest Period. If one
of the Reference Banks shall be unable or shall otherwise fail to notify the
Agent of such a rate, LIBOR shall be determined on the basis of the rates as
notified by the remaining Reference Banks.
"Lien" means any mortgage, security interest, pledge or lien.
----
"Loan" means a loan by a Lender to the Company pursuant to Article II and
---- ----------
may be a Committed Loan or a Bid Loan.
"Loan Documents" means this Agreement, the Subsidiary Guaranty and any
--------------
promissory note issued pursuant hereto.
"Loan Parties" means, collectively, the Company and each other Person
------------
(other than the Agent and the Lenders) who is a party to a Loan Document.
"Material Adverse Effect" means, with respect to any event, act, condition
-----------------------
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business or properties of the Company and its
Subsidiaries taken as a whole or (b) the legality, validity or enforceability of
any Loan Document.
"Measurement Period" means a period consisting of four consecutive fiscal
------------------
quarters of the Company and ending on the last day of the most recently
completed fiscal quarter of the Company.
"Moody's" means Moody's Investors Services, Inc. or any successor to the
-------
rating agency business thereof.
"Net Tangible Assets" means, at any date, the aggregate amount of assets,
-------------------
including the amount of any receivables or other accounts of the Company and its
Subsidiaries sold in connection with any receivables sale transaction (less
applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities, (b) any item representing Investments in
Unrestricted Subsidiaries and (c) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expenses and other like intangibles, all
of the foregoing as set forth on the then most recent consolidated balance sheet
of the Company and its Subsidiaries and computed in accordance with GAAP.
"Net Worth" means, at any date, the excess of Total Assets at such date
---------
over Total Liabilities at such date.
"1993 Credit Agreement" has the meaning specified in the first recital of
---------------------
this Agreement.
"1993 Facility Bid Loan" means any bid loan of any Lender outstanding under
----------------------
the 1993 Credit Agreement on the Closing Date.
"Notice of Assignment" has the meaning specified in Section 11.08(b).
-------------------- ----------------
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
------------------- ---------------
"Notice of Conversion/Continuation" has the meaning specified in Section
--------------------------------- -------
2.11(b).
- -------
"Obligations" means all Loans and other Indebtedness (including all 1993
-----------
Facility Bid Loans), advances, debts, liabilities, obligations, covenants and
duties owing by the Company, or any other Loan Party to any Lender, the Agent,
any Affiliate of any Lender or the Agent or any Indemnified Party, of any kind
or nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, but in each case only as arising under or in connection with
this Agreement or under or in connection with any other Loan Document, whether
or not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification or in any other manner, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising and however acquired.
The term "Obligations" includes all interest, charges, expenses, fees,
-----------
attorneys' fees and disbursements (including the allocated cost of in-house
counsel) and any other sum chargeable to the Company, or any other Loan Party
under or in connection with this Agreement or any other Loan Document.
"Operating Cash Flow" means, for any Measurement Period, the sum of the
-------------------
Company's
(i) consolidated "income from operations before unusual items
and income taxes" for such period
plus
----
(ii) Interest Expense for such period to the extent deducted in
calculating "income from operations before unusual items and income
taxes" for such period
plus
----
(iii) the sum of the amounts reflected as components of
consolidated "items in net income not affecting cash" (other than
"deferred income taxes") for such period to the extent such amounts
shall have been used in calculating "income from operations before
unusual items and income taxes" for such period, where the term
"income from operations before unusual items and income taxes"
shall have the meaning given such term as reflected in the Company's
statements of income, and the terms "items in net income not
affecting cash" and "deferred income taxes" shall have the
respective meanings given those terms as reflected in the statements
of cash flows, in each case,
referred to in Section 5.05(a) according to GAAP consistent with the
---------------
accounting principles applied in the preparation of such financial
statements.
"Other Taxes" has the meaning specified in Section 3.05(b).
----------- ---------------
"Participant" has the meaning specified in Section 11.08(d).
----------- ----------------
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
------------ ------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which the Company or any
corporation, trade, or business that is, along with the Company, a member of its
Controlled Group, may have liability, including a reasonable possibility of
liability due to having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under Section 4069 of ERISA.
"Permitted Liens" means the Liens permitted or required by Section 8.01.
--------------- ------------
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means each Pension Plan or Welfare Plan, and any other employee
----
benefit plan (within the meaning of Section 3(3) of ERISA) sponsored or
maintained by the Company or any Subsidiary of the Company.
"Principal Property" means any mill, manufacturing plant, manufacturing
------------------
facility or timberlands, owned by the Company and/or one or more Restricted
Subsidiaries and located within the continental United States of America;
provided, however, that the term "Principal Property" shall not include (a) any
- ----------------- ------------------
such mill, plant, facility or timberlands or portion thereof (i) which is
financed by obligations issued by a State, a Territory or a possession of the
United States of America or any political subdivision of any of the foregoing,
or the District of Columbia, the interest on which is excludable from gross
income of the holders thereof pursuant to the provisions of Section 103(a)(1)
(but only if by reason of Section 103(b)(4)(E) or (F)) of the Internal Revenue
Code of 1954, as amended (or any predecessor or successor to such provision) as
in effect at the time of the issuance of such obligations, or (ii) which in the
opinion of the Company's Board of Directors is not of material importance to the
total business conducted by the Company and the Restricted Subsidiaries,
considered as a whole; or (b) any timberlands designated by the Company's Board
of Directors as being held primarily for development and/or sale rather than for
the production of timber; or (c) any minerals or mineral rights.
"Principal Subsidiary" means each of Great Northern Nekoosa Corporation, a
--------------------
Maine corporation; Brunswick Pulp & Paper Company, a Delaware corporation;
Georgia-Pacific West, Inc., an Oregon corporation; G-P Gypsum Corporation, a
Delaware corporation; Leaf River Forest Products, Inc., a Delaware corporation;
Nekoosa Packaging Corporation, a Delaware corporation, and Nekoosa Papers Inc.,
a Wisconsin corporation.
"Reference Banks" means those financial institutions identified in Schedule
--------------- --------
1.01(c).
- -------
"Reference Rate" has the meaning specified in the definition of Adjusted
--------------
Reference Rate.
"Reference Rate Loan" means any Loan that bears interest at a rate
-------------------
determined with reference to the Adjusted Reference Rate.
"Release" means a "release", as such term is defined in CERCLA.
------- -------
"Replacement Lender" has the meaning specified in Section 4.09.
------------------ ------------
"Required Lenders" means at any time Lenders having 51% or more of the
----------------
Commitments and, if the Commitments have been terminated, Lenders holding 51% or
more of the then aggregate unpaid principal amount of the Loans made by the
Lenders.
"Requirement of Law" means, as to any Person, the charter and by-laws or
------------------
other organization or governing documents of such Person, and any law, rule or
regulation including the requirements of Environmental Laws and ERISA, the
Securities Act of 1933, the Securities Exchange Act of 1934, Regulations G, T, U
and X of the Federal Reserve Board or any order, decree or other determination
of an arbitrator or a court or other Governmental Authority applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Responsible Officer" means, with respect to any Person, the Chief
-------------------
Executive Officer, the President, any Vice-Chairman or any of the Vice
Presidents or the Treasurer of such Person or, with respect to financial
matters, the Chief Financial Officer, the Exeuctive Vice President-Finance and
Chief Financial Officer or the Vice President and Treasurer of such Person.
"Restricted Subsidiary" means any Subsidiary of the Company (a)
---------------------
substantially all of the property of which is located within the continental
United States of America and (b) which itself, or with the Company and/or one or
more other Restricted Subsidiaries, owns a Principal Property.
"Sale-Leaseback Transaction" has the meaning specified in Section 8.02.
-------------------------- ------------
"S&P" means Standard & Poor's or any successor to the rating agency
---
business thereof.
"Subsidiary" means, with respect to any Person, any corporation of which
----------
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors (or others performing a comparable
function) of such corporation is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person.
"Subsidiary Guaranty" has the meaning specified in Section 6.01(c).
------------------- ---------------
"Taxes" has the meaning specified in Section 3.05(a).
----- ---------------
"Termination Date" means December 21, 2001.
"Total Assets" means, at any date, without duplication, the total
------------
consolidated assets of the Company and its Subsidiaries, as determined in
accordance with GAAP.
"Total Liabilities" means, at any date, without duplication, the total
-----------------
consolidated liabilities of the Company and its Subsidiaries, determined in
accordance with GAAP.
"Unrestricted Subsidiary" means any Subsidiary of the Company other than a
-----------------------
Restricted Subsidiary.
"Value" means, with respect to a Sale-Leaseback Transaction, as of any
-----
particular time, the amount equal to the greater of (a) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale-Leaseback
Transaction or (b) the fair value in the opinion of the Board of Directors of
the Company of such property at the time of entering into such Sale-Leaseback
Transaction, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
------------ ------------
(3)(1) of ERISA.
I.02 Computation of Time Periods. In this Agreement, in the computation of
---------------------------
periods of time from a specified date to a later specified date, the word "from"
----
means "from and including" and the words "to" and "until" each means "to but
------------------ -- ----- ------
excluding".
- ---------
I.03 Accounting Matters. All accounting terms not specifically defined
------------------
herein shall be construed in accordance with GAAP, and all financial statements
referred to in Sections 7.09(a) and (b) shall be prepared in accordance with
----------------
GAAP; provided, however, that all computations determining compliance with
-------- -------
Article VIII shall use accounting principles consistent with those applied in
- ------------
the preparation of the financial statements of the Company referred to in
Section 5.05(a). The parties hereto agree that to the extent that any change in
- ---------------
GAAP affects the calculation of the financial covenant contained herein, the
Agent (at the direction of the Required Lenders) and the Company shall negotiate
in good faith to amend such financial covenant to account for such changes in
GAAP.
I.04 Certain Terms. The words "herein", "hereof" and "here-under" and other
------------- ------ ------ ----------
words of similar import refer to this Agreement as a whole, including the
Exhibits and Schedules hereto, as the same may from time to time be amended or
supplemented, and not to any particular Article, Section, paragraph or clause in
this Agreement. The word "including" when used herein is not intended to be
---------
exclusive and means "including, without limitation". References herein to an
-----------------------------
Article, Section, paragraph or clause shall refer to the appropriate Article,
Section, paragraph or clause in this Agreement.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
------------------------------
II.01 Committed Loans. Each Lender severally agrees, on the terms and
---------------
subject to the conditions hereinafter set forth, to make one or more Committed
Loans to the Company on any Business Day during the period commencing on the
Closing Date and ending on the Business Day next preceding the Termination Date
in an aggregate principal amount at any time outstanding which does not exceed
such Lender's Commitment; provided, however, that after giving effect to any
-------- -------
Committed Borrowing, (a) the aggregate principal amount of all Committed Loans
then outstanding plus (b) the aggregate principal amount of all Bid Loans then
----
outstanding plus (c) the aggregate principal amount of all 1993 Facility Bid
----
Loans then outstanding shall not exceed the Aggregate Commitments. Any
principal amount of the Committed Loans which is repaid or prepaid by the
Company may be reborrowed within the limitations set forth in this Section 2.01.
------------
II.02 Procedure for Committed Borrowings.
----------------------------------
(a) Each Committed Borrowing shall be made on notice, delivered by the
Company to the Agent not later than 12:00 noon (New York City time) at least (i)
four Business Days prior to the date of such proposed Borrowing, in the case of
Eurodollar Loans, and (ii) one Business Day prior to the date of such proposed
Borrowing, in the case of Reference Rate Loans. Each such notice of a Committed
Borrowing (a "Notice of Borrowing") shall be irrevocable and shall be by
-------------------
facsimile or telex, in substantially the form of Exhibit 2.02, specifying
------------
therein:
(i) the date of such Borrowing, which shall be a Business Day;
(ii) the amount of such Borrowing which, in the case of a Borrowing of
Eurodollar Loans, shall be in the amount of $20,000,000 or an integral
multiple of $10,000,000 in excess thereof and, in the case of a Borrowing
of Reference Rate Loans, shall be in the amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof and shall not, in any
case, exceed the Available Commitments on the date such Borrowing is made
(after giving effect to each payment and prepayment made on such date);
(iii) whether such Borrowing is to be comprised of Eurodollar Loans or
Reference Rate Loans; and
(iv) if such Borrowing is to be comprised of Eurodollar Loans, the
duration of the initial Interest Period applicable to such Loans.
If the Notice of Borrowing shall fail to specify the duration of the initial
Interest Period for any Committed Borrowing comprised of Eurodollar Loans, such
Interest Period shall be one month.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify
each Lender thereof and of the amount of such Lender's share of such Borrowing
determined on the basis of such Lender's Commitment Percentage. Each Lender
shall make available to the Agent the amount of its ratable share of such
Borrowing in the manner and at the time set forth in Section 3.04(a).
---------------
(c) After giving effect to any Committed Borrowing, there shall not be
more than seven different Interest Periods in effect.
(d) Unless any applicable condition specified in Article VI has not been
----------
satisfied or waived, the Agent will make the funds received from the Lenders
promptly available to the Company by crediting the account of the Company on the
books of Bank of America, or such other account as shall have been specified by
the Company, with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.
II.03 Bid Borrowings. In addition to Committed Borrowings
--------------
pursuant to Section 2.01, each Lender severally agrees that the Company may, as
------------
set forth in Section 2.04, from time to time on any Business Day during the
------------
period commencing on the Closing Date and ending on the Business Day next
preceding the Termination Date request the Lenders to submit offers to make Bid
Loans to the Company; provided, however, that the Lenders may, but shall have no
-------- -------
obligation to, submit such offers and the Company may, but shall have no
obligation to, accept any such offers; and provided, further, that at no time
-------- -------
shall (a)(i) the aggregate principal amount of all Bid Loans made by all Lenders
then outstanding plus (ii) the aggregate principal amount of all Committed Loans
----
then outstanding plus (iii) the aggregate principal amount of all 1993 Facility
----
Bid Loans then outstanding exceed (b) the Aggregate Commitments.
II.04 Procedure for Bid Borrowings.
----------------------------
(a) The Company may request a Bid Borrowing hereunder by delivering to the
Agent by facsimile or telex not later than 11:00 a.m. (New York City time) at
least (i) four Business Days prior to the date of the proposed Borrowing, in the
case of a request for Base Rate Bid Loans, and (ii) two Business Days (or, in
the event the Company desires that Competitive Bids be furnished on the date of
the proposed Bid Borrowing, one Business Day) prior to the date of the proposed
Bid Borrowing in the case of a request for Fixed Rate Bid Loans, a solicitation
for Bid Loans (a "Competitive Bid Request"), in substantially the form of
-----------------------
Exhibit 2.04 specifying therein:
- ------------
(i) the date of such Bid Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall not, in any case, exceed the Available Commitments
on the date such proposed Borrowing is made (after giving effect to each
payment and prepayment made on such date);
(iii) the maturity date or dates for the partial or complete
repayment of each Bid Loan to be made as part of such Bid Borrowing (none
of which shall occur after the Termination Date) and, in the case of each
partial repayment, the amount thereof;
(iv) whether the Bid Loans requested are Base Rate Bid Loans or Fixed
Rate Bid Loans and, in the case of Base Rate Bid Loans, the basis of
calculation of such interest rate (the "Base Rate") to be used by the
---------
Lenders in determining the rate or rates of interest to be offered by them;
and
(v) any other terms to be applicable to such Bid Borrowing (including
the extent to which terms similar to Section 3.05 shall be applicable to
------------
such Bid Borrowing).
The Agent shall promptly notify each Lender of its receipt of a Competitive Bid
Request by sending such Lender by facsimile or telex a copy of such Competitive
Bid Request.
(b) (i) Each Lender may, in response to a Competitive Bid Request, at its
option, irrevocably submit a Competitive Bid containing an offer to make
one or more Bid Loans at a rate or rates of interest specified by such
Lender in its sole discretion. Each Competitive Bid must be submitted to
the Company before 10:00 a.m. (New York City time) (i) three Business Days
prior to the date of the proposed Bid Borrowing, in the case of a request
for Base Rate Bid Loans, and (ii) one Business Day prior to the date of the
proposed Bid Borrowing (or, in the event the Company desires that
Competitive Bids be furnished on the date of the proposed Bid Borrowing, on
the date of such proposed Borrowing), in the case of a request for Fixed
Rate Bid Loans.
(ii) Each Competitive Bid (which shall be by telephone, promptly
confirmed in writing) shall specify:
(A) the minimum amount of each Bid Loan for which such
Competitive Bid is being made (which shall be at least $5,000,000) and
the maximum amount thereof (which may exceed such Lender's
Commitment);
(B) the rate or rates of interest per annum offered for each Bid
Loan, which, in the case of a Base Rate Bid Loan, shall be expressed
as a margin to be added to, or subtracted from, the Base Rate
specified by the Company in its Bid Request; and
(C) the applicable Lending Office of the quoting Lender.
(iii) Any Competitive Bid may be disregarded if it:
(A) does not specify all of the information required by clause
------
(ii) above;
----
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than, or in addition to, those set
forth in the applicable Competitive Bid Request; or
(D) arrives after the time set forth in clause (i) above.
----------
(c) Not later than 11:00 a.m. (New York City time) three Business Days
prior to the date of the proposed Bid Borrowing, in the case of a Borrowing of
Base Rate Bid Loans, and 11:00 a.m. (New York City time) one Business Day prior
to the date of the proposed Bid Borrowing (or, in the event the Company desires
that Competitive Bids be furnished on the date of the proposed Bid Borrowing, on
the date of such proposed Borrowing), in the case of a Borrowing of Fixed Rate
Bid Loans, the Company shall either
(i) cancel such Bid Borrowing by giving the Agent and the Lenders
notice thereof (which notice may be given by telephone and confirmed in
writing by facsimile) or
(ii) accept one or more of the offers made by any Lender or Lenders
pursuant to paragraph (b) above, in its sole discretion, by giving notice
-------------
(which notice may be given by telephone, confirmed in writing by facsimile)
to such Lenders of the amount of each Bid Loan (which amount shall be equal
to or greater than the minimum amount, and equal to or less than the
maximum amount, notified to the Company by such Lender for such Bid Loan
pursuant to paragraph (b) above) to be made by each such Lender as part of
-------------
such Bid Borrowing, and reject any remaining offers made by giving the
Lenders notice (which notice may be given by telephone, confirmed in
writing by facsimile) to that effect; provided, however, that to the extent
-------- -------
that the Company elects to accept one or more Competitive Bids submitted by
Lenders for a given Interest Period, the Company shall accept such
Competitive Bids on the basis of ascending interest rates; and, provided,
further, that in the event the Company does not, before the time stated
above, either cancel the proposed Bid Borrowing pursuant to clause (i)
----------
above or accept one or more of the offers pursuant to this clause (ii),
-----------
such Bid Borrowing shall be deemed cancelled and provided, further, that in
-------- -------
the event the Company accepts one or more of the offers pursuant to this
clause (ii) but does not expressly reject the remaining offers, such offers
-----------
shall be deemed rejected. The Company shall promptly notify the Agent of
the date and amount of any proposed Bid Borrowing.
(d) For purposes of Sections 2.01, 2.06 and 3.01(a), each outstanding Bid
------------------- -------
Loan (and until repayment in full thereof, each 1993 Facility Bid Loan) shall be
deemed to utilize the Commitment of each Lender, whether or not such Lender has
made such Bid Loan, by an amount equal to such Lender's Commitment Percentage
times the amount of such Bid Loan (or 1993 Facility Bid Loan).
(e) The rights of any lender under the 1993 Credit Agreement which is also
a Lender under this Agreement and which has made 1993 Facility Bid Loans that
are outstanding on the Closing Date shall terminate on the Closing Date and such
Lender shall have the same rights with respect to its 1993 Facility Bid Loans as
if such 1993 Facility Bid Loans were Bid Loans made hereunder.
II.05 Evidence of Indebtedness.
------------------------
(a) Each Lender, with respect to amounts payable to it hereunder, and the
Agent, with respect to all amounts payable hereunder in respect of Committed
Borrowings, shall maintain on its books in accordance with its usual practice,
loan accounts and control accounts, respectively, setting forth each Committed
Loan and, in the case of each Lender having made a Bid Loan, each such Bid Loan,
the applicable interest rate and the amounts of principal, interest and other
sums paid and payable by the Company from time to time hereunder with respect
thereto; provided, however, that the failure by any Lender to record any such
-------- -------
amount on its books shall not affect the obligations of the Company with respect
thereto. In the case of any dispute, action or proceeding relating to any
amount payable hereunder, the entries in each such account shall be prima facie
evidence of such amount, absent manifest error. In case of any discrepancy
between the entries in the Agent's books and any Lender's books, such Lender's
books shall be considered correct in the absence of manifest error
(b) Notwithstanding the foregoing, if any Lender shall so request for
purposes of Section 11.08(a)(iii), the obligation to repay the Committed Loans
---------------------
shall also be evidenced by a promissory note in the form of Exhibit 2.05(b).
---------------
(c) The obligation to repay a Bid Loan shall also, if so requested by the
Lender making such Bid Loan in its Competitive Bid, be evidenced by a promissory
note in the form of Exhibit 2.05(c).
---------------
II.06 Optional Reduction of the Commitments. The Company shall
-------------------------------------
have the right, upon at least four Business Days' prior notice to the Agent
(which notice shall be irrevocable), at any time permanently to terminate the
remaining Commitments in whole or reduce ratably in part the unused portions of
the Commitments of the Lenders; provided, however, that each partial reduction
-------- -------
shall be in the aggregate amount of $20,000,000 or an integral multiple of
$10,000,000 in excess thereof. The Agent shall promptly notify each Lender of
its receipt of any notice under this Section 2.06.
------------
II.07 Repayment.
---------
(a) The Committed Loans. The Company agrees to repay to the Agent for the
-------------------
account of the Lenders, the outstanding principal amount of all Committed Loans
on the Termination Date.
(b) The Bid Loans. The Company agrees to repay to each Lender which has
-------------
made a Bid Loan on the maturity date of such Bid Loan (as each such maturity
date shall have been specified by the Company in the applicable Competitive Bid
Request pursuant to Section 2.04(a)(iii)) the unpaid principal amount of such
---------------------
Bid Loan then due and payable (each such amount being as specified for such date
in such Competitive Bid Request pursuant to Section 2.04(a)(iii)).
--------------------
II.08 Optional Prepayments.
--------------------
(a) Subject to Section 4.06(a), the Company may, upon (i) at least four
---------------
Business Days' prior notice to the Agent, in the case of a prepayment of
Eurodollar Loans, and (ii) at least one Business Day's prior notice to the
Agent, in the case of a prepayment of Reference Rate Loans, stating the proposed
date and aggregate principal amount of the prepayment, prepay, ratably among the
Lenders in accordance with their Commitment Percentages, the outstanding
principal amount of the Committed Loans, in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid.
(b) Each partial prepayment of Committed Loans shall, in the case of
Eurodollar Loans, be in the aggregate principal amount of $20,000,000 or an
integral multiple of $10,000,000 in excess thereof, and, in the case of
Reference Rate Loans, be in the aggregate principal amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof; provided, however, that, if
-------- -------
the aggregate amount of Eurodollar Loans comprised in the same Committed
Borrowing would be reduced as a result of any voluntary prepayment to an amount
less than $20,000,000, such Eurodollar Loans shall automatically convert into
Reference Rate Loans on the last day of the then current Interest Period.
(c) If a notice of prepayment is given, such notice shall be irrevocable
and the principal amount stated in such notice, together with accrued interest
thereon and any amount payable pursuant to Section 4.06(a), shall be due and
---------------
payable on the date specified in such notice. The Agent shall promptly notify
each Lender of its receipt of any notice of prepayment under this Section 2.08.
------------
(d) Bid Loans may not be prepaid.
II.09 Interest.
--------
(a) Each Committed Loan shall bear interest on the outstanding principal
amount thereof from the date when made until paid in full, at the option of the
Company, as set forth in its Notice of Borrowing or in its Notice of
Conversion/Continuation,
(i) if such Loan is a Reference Rate Loan, at a rate per annum equal
to the Adjusted Reference Rate; or
(ii) if such Loan is a Eurodollar Loan, at a rate per annum equal to
the sum of (A) LIBOR plus (B) the applicable margin, as follows:
----
Debt Rating Applicable Margin
----------- -----------------
on
Moody's S&P Eurodollar Loans
------- --- ----------------
Baal or higher or BBB+ or higher 0.2275%
--
Baa2 or BBB 0.2625%
--
Baa3 or BBB- 0.3025%
--
Bal or BB+ 0.4650%
--
Ba2 or lower and BB or lower 0.6250%
---
provided, however, that if at any time no Debt Rating is available, the
-----------------
applicable margin shall be 0.6250%.
(b) Any change in the applicable margin due to a change in the applicable
Debt Rating shall be effective on the effective date of such change in the
applicable Debt Rating and shall apply to all Eurodollar Loans that are
outstanding at any time during the period commencing on the effective date of
such change in applicable Debt Rating and ending on the date immediately
preceding the effective date of the next such change in applicable Debt Rating.
(c) Accrued interest shall be paid on each Interest Payment Date (and,
after maturity, on demand), on the date of repayment or prepayment of any
Committed Loan on the amount repaid or prepaid and, in the case of any Reference
Rate Loan, on each date such Loan is converted into a Eurodollar Loan.
(d) The Company shall pay to each Lender which has made a Bid Loan
interest on the unpaid principal amount of such Bid Loan from the date when made
until paid in full, on each Interest Payment Date (and, after maturity, on
demand), at the rate of interest specified by such Lender in its Competitive Bid
pursuant to Section 2.04(b)(ii)(B).
----------------------
II.10 Default Interest. During the continuation of any Event of
----------------
Default pursuant to Section 9.01(a), the Company shall pay interest (after as
---------------
well as before judgment to the extent permitted by law) on the principal amount
of all Committed Loans outstanding and on all other Obligations of the Company
due and unpaid (other than Bid Loans), at a rate per annum which is determined
by increasing the interest rate then in effect by 2% per annum for the principal
amount of the Eurodollar Loans outstanding and at a rate per annum equal to the
Adjusted Reference Rate plus 2% for any other Obligation due hereunder (other
than Bid Loans).
II.11 Continuation and Conversion Elections for Committed Loans.
---------------------------------------------------------
(a) The Company may upon irrevocable written notice to the Agent:
(i) elect to convert, on any Business Day, all or any portion of
outstanding Reference Rate Loans (in the aggregate amount of $20,000,000 or
an integral multiple of $10,000,000 in excess thereof) into Eurodollar
Loans;
(ii) elect to convert, on the last day of any Interest Period
therefor, all or any portion of outstanding Eurodollar Loans comprising the
same Borrowing (in the aggregate amount of $10,000,000 or an integral
multiple of $5,000,000 in excess thereof) into Reference Rate Loans; or
(iii) elect to continue, on the last day of any Interest Period
therefor, any Eurodollar Loans;
provided, however, that if the aggregate amount of outstanding Eurodollar Loans
- -------- -------
comprised in the same Borrowing would be reduced as a result of any conversion
of part thereof to Reference Rate Loans to an amount less than $20,000,000, such
Eurodollar Loans shall automatically convert into Reference Rate Loans on the
last day of the Interest Period on which such conversion occurs.
(b) The Company shall deliver a notice of conversion or continuation (a
"Notice of Conversion/Continuation"), in substantially the form of Exhibit 2.11,
--------------------------------- ------------
to the Agent not later than 12:00 noon (New York City time) (i) four Business
Days prior to the proposed date of conversion or continuation, if the Committed
Loans or any portion thereof are to be converted into or continued as Eurodollar
Loans, and (ii) one Business Day prior to the proposed date of conversion, if
the Committed Loans or any portion thereof are to be converted into Reference
Rate Loans.
Each such Notice of Conversion/Continuation shall be irrevocable and shall be
made by facsimile or telex, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Committed Loans to be converted or
continued; and
(iii) the duration of the applicable Interest Period if such
Committed Loans are Eurodollar Loans.
(c) If, on the fourth Business Day prior to the expiration of any Interest
Period applicable to Eurodollar Loans, the Company shall have failed to select a
new Interest Period to be applicable to such Eurodollar Loans, the Company shall
be deemed to have elected to convert such Eurodollar Loans into Reference Rate
Loans effective as of the last day of such Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent shall
promptly notify each Lender thereof. All conversions and continuations shall be
made ratably among the Lenders based on their Commitment Percentages of the
Committed Loans with respect to which such notice was given.
(e) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Committed Loans, there
shall not be more than seven different Interest Periods for Committed Loans in
effect.
ARTICLE III
FEES; PAYMENTS; TAXES
---------------------
III.01 Fees.
----
(a) Commitment Fee.
--------------
(i) The Company agrees to pay to the Agent for the account of each
Lender, a commitment fee on the average daily unused portion of such
Lender's Commitment from the Closing Date until the Termination Date at a
rate per annum as follows:
Debt Rating
-----------
Moody's S&P Commitment Fee
------- --- --------------
Baal or higher or BBB+ or higher 0.0525%
--
Baa2 or BBB 0.0625%
--
Baa3 or BBB- 0.0725%
--
Bal or BB+ 0.0850%
--
Ba2 or lower and BB or lower 0.125%
---
provided, however, that if at any time no Debt Rating is available, the
-----------------
commitment fee shall be 0.125% per annum.
(ii) The commitment fee shall be payable (A) quarterly in arrears on
the last Business Day of each calendar quarter, commencing with the
calendar quarter ending on March 31, 1997, (B) on any date of reduction or
termination of the Commitments and (C) on the Termination Date.
(b) Facility Fee.
------------
(i) The Company agrees to pay to the Agent for the account of each
Lender, a facility fee from the Closing Date until the Termination Date at
a rate per annum times the Commitment of such Lender (regardless of
utilization thereof) as follows:
Debt Rating
-----------
Moody's S&P Facility Fee
------- --- ------------
Baal or higher or BBB+ or higher 0.0525%
--
Baa2 or BBB 0.0625%
--
Baa3 or BBB- 0.0725%
--
Bal or BB+ 0.0850%
--
Ba2 or lower and BB or lower 0.125%
---
provided, however, that if at any time no Debt Rating is available, the
-----------------
facility fee shall be 0.125% per annum.
(ii) The facility fee shall be payable (A) quarterly in arrears on the
last Business Day of each calendar quarter, commencing with the calendar
quarter ending on March 31, 1997, (B) on any date of reduction or
termination of the Commitments and (C) on the Termination Date.
(c) Agency Fee. The Company agrees to pay to the Agent for its account an
----------
agency fee in such amounts and at such times as are set forth in the Fee Letter.
III.02 Computation of Interest, Fees.
-----------------------------
(a) All computations of interest payable in respect of Reference Rate
Loans shall be made on the basis of a year of 365 days or 366 days, as the case
may be, and actual days elapsed. All computations of interest in respect of
Eurodollar Loans and Bid Loans and all computations of fees under this Agreement
shall be made on the basis of a year of 360 days and actual days elapsed.
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Company and
the Lenders in the absence of manifest error. The Agent, upon determining LIBOR
for any Interest Period, shall promptly notify the Company and the Lenders
thereof.
III.03 Payments by the Company.
-----------------------
(a) The Company shall make each payment hereunder not later than 1:00 p.m.
(New York City time) on the day when due (i) in respect of any Committed Loan,
to the Agent or (ii) in respect of any Bid Loan, to the Lender which made such
Bid Loan, without defense, setoff or counterclaim, in dollars and in immediately
available funds to such account in the continental United States of America as
the Agent shall specify from time to time by notice to the Company or, in the
case of a Bid Loan made by a Lender, to the Lending Office of such Lender. The
Agent will promptly after receiving any payment in respect of any Committed Loan
from the Company cause to be distributed like funds to the Lenders ratably based
on their Commitment Percentages (other than amounts payable to any Lender or any
amounts payable pursuant to Section 3.05, 4.02, 4.03, 4.04, 4.05 or 4.06) for
------------------------------------ ----
the account of their respective Lending Offices. Any payment which is received
by the Agent later than 1:00 p.m. (New York City time), as confirmed by Federal
Reserve wire number, shall be deemed to have been received on the immediately
succeeding Business Day.
(b) Whenever any payment of a Committed Loan (and, unless otherwise stated
in the relevant Competitive Bid Request, a Bid Loan) shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of principal of or
- -----------------
interest on Eurodollar Loans to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day.
(c) Unless the Agent shall have received notice from the Company prior to
the date on which any payment is due to the Lenders hereunder that the Company
will not make such payment in full, the Agent may assume that the Company has
made such payment in full to the Agent on such date, and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Company shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand the excess of the
amount distributed to such Lender over the amount, if any, paid by the Company
for the account of such Lender, together with interest thereon at the Federal
Funds Rate, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent; provided, however,
-----------------
that if any Lender shall fail to repay such amount within three Business Days
after demand therefor, such Lender shall, from and after such third Business Day
until payment is made to the Agent, pay interest thereon at a rate per annum
equal to the sum of the Adjusted Reference Rate plus 1%.
----
III.04 Payments by the Lenders.
-----------------------
(a) Not later than 12:00 noon (New York City time) on the date of each
proposed Committed Borrowing, each Lender shall make available to the Agent to
such account as the Agent shall specify from time to time in immediately
available funds for the account of the Company, the amount of such Lender's
Commitment Percentage of such Borrowing.
(b) Unless the Agent shall have received notice from a Lender at least one
Business Day prior to the date of any proposed Committed Borrowing that such
Lender will not make available to the Agent for the account of the Company, the
amount of such Lender's Commitment Percentage of such Borrowing, the Agent may
assume that such Lender has made such amount available to the Agent on the date
of such Borrowing, and the Agent may, in reliance upon such assumption, make
available to the Company on such date a corresponding amount. If and to the
extent any Lender shall not have made such full amount available to the Agent,
and the Agent in such circumstances makes available to the Company such amount,
such Lender shall, within two Business Days following the date of such
Borrowing, make such amount available to the Agent, together with interest
thereon for each day from and including the date of such Borrowing, at a rate
per annum equal to the Federal Funds Rate. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Committed Loan on the
date of such Borrowing for all purposes of this Agreement. If such amount is
not made available to the Agent within two Business Days following the date of
such Borrowing, the Agent shall notify the Company of such failure to fund, and,
on the third Business Day following the date of such Borrowing, the Company
shall pay to the Agent such amount, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
Nothing contained in this Section 3.04(b) shall relieve any Lender which has
---------------
failed to make available its pro rata share of any Committed Borrowing hereunder
from its obligation to do so in accordance with the terms hereof.
(c) The failure of any Lender to make any Committed Loan on the date of
any Committed Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make a Committed Loan on the date of such Borrowing pursuant
to the provisions contained herein, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
the date of any Committed Borrowing.
(d) If the Company accepts one or more of the offers made by any Lender or
Lenders pursuant to Section 2.04(c)(ii), each such Lender which is to make a Bid
-------------------
Loan as part of any Bid Borrowing shall before 12:00 noon (New York City time)
on the date of such proposed Bid Borrowing (or before 2:00 p.m. (New York City
time) on the date of such Bid Borrowing in the case of a Fixed Rate Bid Loan)
make available to the Company at such Lender's Lending Office such Lender's
portion of such Bid Borrowing in immediately available funds. The Company will
promptly notify the Agent of the total amount of Bid Loans made in connection
with such Bid Borrowing, each date on which all or any part of such Bid Loans
shall mature and the principal amount which shall mature on each such date, and
the Agent will, in turn, promptly notify each Lender of the amount of such Bid
Borrowing and the relevant maturity date or dates of the Bid Loans comprised in
such Bid Borrowing.
III.05 Taxes.
-----
(a) Subject to paragraph (g) of this Section 3.05, any and all payments by
------------- ------------
the Company to the Agent for its account and for the account of any Lender under
this Agreement (other than on account of a Bid Loan, except to the extent
otherwise specified as being applicable to any such Bid Loan) shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto incurred in connection with any Borrowing
pursuant to this Agreement, excluding (i) such taxes (including income taxes or
franchise taxes or branch profit taxes) as are imposed on or measured by such
Lender's or the Agent's, as the case may be, net income and (ii) such taxes as
are imposed by a jurisdiction other than the United States of America or any
political subdivision thereof and that would not have been imposed but for the
existence of a connection between such Lender or the Agent and the jurisdiction
imposing such taxes (other than a connection arising principally by reason of
this Agreement) (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company agrees to pay any present or future stamp or
documentary taxes or any other sales, excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (other than on account of a Bid Loan, except to the extent otherwise
specified as being applicable to any such Bid Loan) or any other Loan Document
(hereinafter referred to as "Other Taxes").
-----------
(c) Subject to paragraph (g) of this Section 3.05, the Company agrees to
------------- ------------
indemnify and hold harmless each Lender and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.05) paid by such Lender or
------------
the Agent, as the case may be, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted;
provided, however, that each Lender and the Agent agree to contest in good faith
- -------- -------
in cooperation with the Company any Taxes or Other Taxes that such Lender or the
Agent, as the case may be, in consultation with the Company has determined have
been incorrectly asserted. This indemnification shall be made within 30 days
from the date such Lender or the Agent, as the case may be, makes written demand
therefor.
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to paragraph (g) of this Section 3.05 below,
------------- ------------
(i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.05), such Lender or the Agent,
------------
as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Company of Taxes
or Other Taxes under this Section 3.05, the Company will furnish to the Agent,
------------
for the account of each Lender receiving a payment from which Taxes or Other
Taxes were deducted, the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment reasonably satisfactory to the
Agent.
(f) Each Lender that is other than a United States Person as defined in
the Code hereby agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 11.08 after the
-------------
Closing Date, the date upon which such Lender becomes a party hereto)
deliver to the Agent (two (2) originals) and to the Company (one (1)
original):
(A) if its Lending Office is located in the United States of
America, accurate and complete signed originals of Internal Revenue
Service Form 4224 or any successor thereto ("Form 4224") and Internal
---------
Revenue Service Form W-9 or any successor thereto ("Form W-9"), and/or
--------
(B) if its Lending Office is located outside the United States
of America, accurate and complete signed originals of Internal Revenue
Service Form 1001 or any successor thereto ("Form 1001") and Internal
---------
Revenue Service Form W-8 or any successor thereto ("Form W-8");
--------
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such Lending Office or Offices under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time such Lender changes its Lending Office or Offices
or selects an additional Lending Office, it shall, at the same time or
reasonably promptly thereafter but only to the extent the forms previously
delivered by it hereunder are no longer effective, deliver to the Agent
(two originals) and to the Company (one original) in replacement for the
forms previously delivered by it hereunder:
(A) if such changed or additional Lending Office is located in
the United States of America, accurate and complete signed originals
of Form 4224 and Form W-9; or
(B) otherwise, accurate and complete signed originals of Form
1001 and Form W-8,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such changed or additional Lending Office under this Agreement
free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time and, as provided above, any event mentioned
in clause (ii) above) requiring a change in the most recent Form 4224, Form
-----------
W-9, Form 1001 or Form W-8 previously delivered by such Lender and if no
change in law shall have occurred since the date of delivery of such most
recent form that would make the delivery of replacement forms hereunder
unlawful, deliver to the Agent (two originals) and to the Company (one
original) accurate and complete signed originals of Form 4224 and Form W-9
or Form 1001 and Form W-8 (or any successor forms) in replacement for the
forms previously delivered by such Lender; and
(iv) it shall, promptly upon the request of the Company to that
effect, deliver to the Agent and the Company such other accurate and
complete forms or similar documentation as may be required from time to
time by any applicable law, treaty, rule or regulation in order to
establish such Lender's tax status for withholding purposes or may
otherwise be appropriate to eliminate or minimize any Taxes on payments
under this Agreement.
(g) The Company shall not be required to pay any amounts pursuant to
paragraph (a), (c) or (d) of this Section 3.05 to any Lender for the account of
- ------------- --- --- ------------
any Lending Office of such Lender in respect of any sum payable hereunder:
(i) if the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with its obligations
under Section 3.05(f) in respect of such Lending Office;
---------------
(ii) if such Lender shall have delivered to the Agent a Form 4224 and
a Form W-9 in respect of such Lending Office pursuant to subclause
---------
(f)(i)(A), (f)(ii)(A) or (f)(iii) above and such Lender shall not be
--------------------- --------
entitled to exemption from deduction or withholding of United States
Federal income tax in respect of the payment of such sum by the Company
hereunder for the account of such Lending Office for any reason other than
a change in United States law or regulations or in the official
interpretation of such law or regulations by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such Form 4224 and
Form W-9; provided, however, that if, notwithstanding such change in law, a
-------- -------
Lender would be legally able to provide such other forms or information as
would reduce or eliminate United States withholding taxes applicable to
payments made hereunder, such Lender shall, if requested by the Company,
timely provide such forms or other information to the Company, and the
Company shall not be required to pay any amounts pursuant to paragraphs
----------
(a), (c) or (d) above to the extent such amount would not have been owed
--- --- ---
but for a failure of such Lender to comply with its obligations under this
proviso; or
(iii) if such Lender shall have delivered to the Company a Form 1001
and a Form W-8 in respect of such Lending Office pursuant to subclause
---------
(f)(i)(B), (f)(ii)(B) or (f)(iii) above and such Lender shall not be
--------- ---------- --------
entitled to exemption from deduction or withholding of United States
Federal income tax in respect of the payment of such sum by the Company
hereunder for the account of such Lending Office for any reason other than
a change in United States law or regulations or any applicable tax treaty
or regulations or in the official interpretation of any such law, treaty or
regulations by any Governmental Authority charged with the interpretation
or administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001 and Form W-8; provided, however,
-------- -------
that if, notwithstanding such change in law, a Lender would be legally able
to provide such other forms or information as would reduce or eliminate
United States withholding taxes applicable to payments made hereunder, such
Lender shall, if requested by the Company, timely provide such forms or
other information to the Company, and the Company shall not be required to
pay any amounts pursuant to paragraph (a), (c) or (d) of this Section 3.05
------------- --- --- ------------
to the extent such amount would not have been owed but for a failure of
such Lender to comply with its obligations under this proviso.
(h) Each Lender shall use reasonable efforts to avoid or minimize any
amounts which might otherwise be payable pursuant to this Section 3.05;
------------
provided, however, that such efforts shall not include the taking of any actions
- -------- -------
by a Lender that would result in any tax, cost or other expense to such Lender
(other than a tax, cost or expense for which such Lender shall have been
reimbursed or indemnified by the Company pursuant to this Agreement or
otherwise) or any action which would in the reasonable opinion of such Lender
have an adverse effect upon its financial condition, operations, business or
properties.
(i) Each Lender agrees to indemnify the Agent and hold the Agent harmless
for the full amount of any and all present or future Taxes, Other Taxes and
related liabilities (including penalties, interest, additions to tax and
expenses, and any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable to Agent under this paragraph (i)) which are imposed on or with respect
-------------
to principal, interest or fees payable to such Lender hereunder and which are
not paid by the Company pursuant to this Section 3.05, whether or not such
------------
Taxes, Other Taxes or related liabilities were correctly or legally asserted.
This indemnification shall be made within 30 days from the date the Agent makes
written demand therefor.
III.06 Sharing of Payments, Etc. If, other than as provided in Section
------------------------ -------
3.05, 4.02, 4.03, 4.04, 4.05 or 4,06, any Lender shall obtain any payment
- ---------------------------- ----
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of any Committed Loan made by it or, after the occurrence
and during the continuation of an Event of Default pursuant to Section 9.01(a),
---------------
in respect of any Obligation owing to it (including with respect to any Bid Loan
or 1993 Facility Bid Loan), in excess of its Commitment Percentage of payments
on account of the Committed Loans or, after the occurrence and during the
continuation of an Event of Default pursuant to Section 9.01(a), in excess of
---------------
its pro rata share of all Obligations, such Lender shall forthwith purchase from
the other Lenders such participations in the Committed Loans made by them or,
after the occurrence and during the continuation of an Event of Default pursuant
to Section 9.01(a), in all Obligations owing to them, as shall be necessary to
---------------
cause such purchasing Lender to share the excess payment ratably with each of
the other Lenders according to their Commitment Percentages or, after the
occurrence and during the continuation of an Event of Default pursuant to
Section 9.01(a), their pro rata shares of all Obligations then owing to them;
- ---------------
provided, however, that if all or any portion of such excess payment is
- -------- -------
thereafter recovered from such purchasing Lender, such purchase by such Lender
from each other Lender shall be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such paying Lender's pro rata share (according to the
proportion of (a) the amount of such paying Lender's required repayment to the
purchasing Lender to (b) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Company agrees that any Lender
so purchasing a participation from another Lender pursuant to the provisions of
this Section 3.06 may, to the fullest extent permitted by law, exercise all its
------------
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the Company
in the amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 3.06 applies, such Lender shall, to the extent
------------
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 3.06 to
------------
share in the benefits of any recovery on such secured claim.
ARTICLE IV
CHANGES IN CIRCUMSTANCES; ETC.
------------------------------
IV.01 Eurodollar Rate Protection. If with respect to any Interest
--------------------------
Period for Eurodollar Loans, either (a) more than one Reference Bank shall fail
to notify the Agent of the rate of interest on the basis of which LIBOR is to be
determined as set forth in the definition of LIBOR or (b) by the first day of
such Interest Period, the Required Lenders notify the Agent that LIBOR for such
Interest Period will not adequately reflect the cost to the Required Lenders of
making such Eurodollar Loans or funding or maintaining their respective
Eurodollar Loans for such Interest Period, the Agent shall forthwith so notify
the Company and the Lenders, whereupon the obligations of the Lenders to make or
continue Loans as Eurodollar Loans or to convert Reference Rate Loans into
Eurodollar Loans shall be suspended until the Agent shall notify the Company and
the Lenders that the circumstances causing such suspension no longer exist and
any then outstanding Eurodollar Loans shall at the end of the then current
Interest Period for such Loans be converted into Reference Rate Loans.
IV.02 Additional Interest on Eurodollar Loans. The Company shall
---------------------------------------
pay to each Lender, on demand of such Lender, as long as such Lender shall be
required under regulations of the Federal Reserve Board to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each
Eurodollar Loan of such Lender from the date such Eurodollar Loan is made until
such principal amount is paid in full, at a rate per annum equal at all times to
the remainder obtained by subtracting (i) LIBOR for the Interest Period for such
Eurodollar Loan from (ii) the rate obtained by dividing such LIBOR by a
percentage equal to 100% minus the Eurodollar Reserve Percentage of such Lender
for such Interest Period, payable on each Interest Payment Date for such
Eurodollar Loan.
IV.03 Increased Costs. If, due to either (a) the introduction of
---------------
or any change (other than any change by way of imposition of or increase in
reserve requirements covered by Section 4.02) in or in the interpretation of any
------------
law or regulation after the date hereof (except to the extent such introduction,
change or interpretation affects Taxes or Other Taxes) or (b) the compliance
with any guideline or request issued after the date hereof (except to the extent
such guideline or request affects Taxes or Other Taxes) from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Eurodollar Loans, then the Company shall, subject to
Section 4.08(b), be liable for, and shall from time to time, upon demand
- ---------------
therefor by such Lender to the Company through the Agent, pay to the Agent for
the account of such Lender, additional amounts as are sufficient to compensate
such Lender for such increased costs. For purposes of this Section 4.03, the
------------
term "Taxes" shall have the meaning specified in Section 3.05(a) without regard
----- ---------------
to the exclusions set forth in Section 3.05(a).
---------------
IV.04 Illegality. Notwithstanding any other provision of this
----------
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall, after the date hereof, make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender or its Lending Office to make or continue Committed Loans as
Eurodollar Loans or to convert Reference Rate Loans into Eurodollar Loans, then,
on notice thereof and demand therefor by such Lender to the Company through the
Agent, (a) the obligation of such Lender to make or to continue Committed Loans
as Eurodollar Loans or to convert Reference Rate Loans into Eurodollar Loans
shall terminate and (b) the Company shall forthwith prepay in full all
Eurodollar Loans of such Lender then outstanding, together with interest accrued
thereon, either on the last day of the then current Interest Period applicable
to each such Eurodollar Loan if such Lender may lawfully continue to maintain
such Eurodollar Loan to such day, or immediately if such Lender may not lawfully
continue to maintain such Eurodollar Loan to such day, unless the Company, on or
prior to the date on which it would otherwise be required to prepay such
Eurodollar Loan, converts all Eurodollar Loans of all Lenders then outstanding
into Reference Rate Loans.
IV.05 Capital Adequacy. In the event that any Lender shall
----------------
determine that the compliance with any law, rule or regulation regarding capital
adequacy, or any change therein or in the interpretation or application thereof
or compliance by such Lender (or its Lending Office) or any corporation
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or other
Governmental Authority, affects or would affect the amount of capital required
or expected to be maintained by such Lender or any corporation controlling such
Lender and such Lender (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's or
such corporation's desired return on capital) determines that the amount of such
capital is increased as a consequence of such Lender's obligation under this
Agreement, then the Company shall, subject to Section 4.08(b), be liable for and
---------------
shall from time to time, upon demand therefor by such Lender through the Agent,
pay to the Agent for the account of such Lender such additional amounts as are
sufficient to compensate such Lender for such increase.
IV.06 Funding Losses.
--------------
(a) If the Company makes any payment or prepayment of principal with
respect to any Eurodollar Loan (including payments made after any acceleration
thereof) or converts any Loan from a Eurodollar Loan to a Reference Rate Loan on
any day other than the last day of an Interest Period applicable thereto, the
Company shall pay to each Lender, upon demand therefor by such Lender, the
amount (if any) by which (i) the present value of the additional interest which
would have been payable on the amount so received had it not been received until
the last day of such Interest Period exceeds (ii) the present value of the
interest which would have been recoverable by such Lender by placing such amount
so received on deposit in the London interbank market for a period starting on
the date on which it was so received and ending on the last day of such Interest
Period. For purposes of determining present value under this Section 4.06(a),
---------------
interest amounts shall be discounted at a rate equal to the sum of (A) LIBOR
determined two Business Days before the date on which such principal amount is
received for an amount substantially equal to the amount received and for a
period commencing on the date of such receipt and ending on the last day of the
relevant Interest Period, plus (B) the percentage above LIBOR payable in respect
of such Eurodollar Loan pursuant to Section 2.09(a)(ii).
-------------------
(b) If the Company fails to prepay, borrow, convert or continue any
Eurodollar Loan after a notice of prepayment, borrowing, conversion or
continuation has been given (or is deemed to have been given) to any Lender, the
Company shall reimburse each Lender, upon demand therefor by such Lender, for
any resulting loss and expense incurred by it, including any loss incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender from third parties to fund any Eurodollar Loan
(c) If for any reason any Lender receives all or part of the principal
amount of a Bid Loan owed to it prior to the scheduled maturity date thereof,
the Company shall, on demand by such Lender, pay such Lender the amount (if any)
by which (i) the present value of the additional interest which would have been
payable on the amount so received had it not been received until such maturity
date exceeds (ii) the present value of the interest which would have been
recoverable by such Lender by placing such amount so received on deposit in the
London interbank market for a period starting on the date on which it was so
received and ending on such maturity date. For purposes of determining present
value under this Section 4.06(c), interest amounts shall be discounted at a rate
---------------
equal to the sum of (A) LIBOR determined two Business Days before the date on
which such principal amount is received for an amount substantially equal to the
amount received and for a period commencing on the date of such receipt and
ending on such maturity date, plus (B) the percentage above LIBOR payable in
respect of Eurodollar Loans pursuant to Section 2.09(a)(ii).
-------------------
IV.07 Funding; Certificates of Lenders.
--------------------------------
(a) Each Lender may fulfill its obligation to make, continue or convert
Loans into Eurodollar Loans by causing one of its foreign branches or Affiliates
(or an international banking facility created by such Lender) to make or
maintain such Eurodollar Loans; provided, however, that such Eurodollar Loans
-----------------
shall in such event be deemed to have been made and to be held by such Lender
and the obligation of the Company to repay such Eurodollar Loans shall be to
such Lender for the account of such foreign branch, Affiliate or international
banking facility. In addition, the Company hereby consents and agrees that, for
purposes of any determination to be made pursuant to Section 4.01, 4.02, 4.03,
-------------------------
4.04 or 4,06, it shall be conclusively assumed that each Lender elected to fund
- ---- ----
all Eurodollar Loans by purchasing dollar deposits in the interbank eurodollar
market for its Eurodollar Lending Office.
(b) Any Lender claiming reimbursement or compensation pursuant to Sections
--------
3.05, 4.02, 4.03, 4.05 and/or 4,06 shall deliver to the Company through the
- ---------------------- ----
Agent a certificate setting forth in reasonable detail the basis for computing
the amount payable to such Lender hereunder and such certificate shall be
conclusive and binding on the Company in the absence of manifest error. The
Company shall pay to any Lender claiming compensation or reimbursement from the
Company pursuant to Section 4.02, 4.03, 4.05 or 4.06 the amount requested by
------------------------ ----
such Lender no later than five Business Days after such demand.
IV.08 Change of Lending Office; Limitation on Increased Costs.
-------------------------------------------------------
(a) Each Lender agrees that upon the occurrence of any event giving rise
to the operation of Section 3.05(c) or (d) or Section 4.02, 4.03, 4.04 or 4.05
--------------- --- ------------------------ ----
with respect to such Lender, it will use commercially reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
minimize the imposition of any costs and expenses pursuant to such Sections and
to designate a different Lending Office for any Loans affected by such event
with the object of avoiding the consequence of the event giving rise to the
operation of such Section. Nothing in this Section 4.08 shall affect or
------------
postpone any of the obligations of the Company or the right of any Lender
provided in Section 3.05(c) or (d) or Section 4.02, 4.03, 4.04 or 4.05.
--------------- --- ------------------------ ----
(b) Notwithstanding the provisions of Section 3.05(c) and (d) and Sections
--------------- --- --------
4.02, 4.03 and 4.05, the Company shall only be obligated to compensate any
- ---------- ----
Lender for any amount arising or occurring during (i) any time or period
commencing (A) in the case of Section 3.05(c) or (d), not more than six months
--------------- ---
and (B) in the case of Section 4.02, 4.03 or 4.05, not more than three months,
------------------ ----
prior to the date on which such Lender notifies the Agent and the Company that
such Lender proposes to demand such compensation and (ii) any time or period
during which, because of the unannounced retroactive application of any statute,
regulation or other basis, such Lender could not have known that such amount
might arise or accrue.
IV.09 Replacement of Lenders. The Company may from time to time
----------------------
for reasonable cause, as determined by the management of the Company, including
invocation of any provision of this Article IV by any Lender, designate one or
----------
more banks (any such bank so designated being herein called a "Replacement
-----------
Lender') willing, in its or their sole discretion, to purchase all of the
- --------
Committed Loans of any one or more Lenders and each such Lender's rights
hereunder (other than any such rights with respect to Bid Loans), without
recourse to or warranty by, or expense to, such Lender for a purchase price
equal to the outstanding principal amount of the Committed Loans payable to such
Lender plus any accrued but unpaid interest on such Committed Loans and accrued
but unpaid commitment fees in respect of such Lender's Commitment, if any, and
any other amounts payable to such Lender under this Agreement or any other Loan
Document (other than with respect to Bid Loans), including any amount payable
pursuant to Section 4.06 as though such Lender's Eurodollar Loans were being
------------
prepaid on the date of such purchase, and to assume all the obligations of such
Lender hereunder (other than with respect to Bid Loans), and, upon such
purchase, such Lender shall no longer be a party hereto or have any rights
hereunder (except those that pertain to its Bid Loans and those that survive
full payment hereunder) and shall be relieved from all obligations to the
Company hereunder, and the Replacement Lender shall succeed to the rights and
obligations of such Lender hereunder (other than with respect to Bid Loans).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Lenders and the Agent to enter into this Agreement
and to induce the Lenders to extend their Commitments and to make Loans, the
Company represents and warrants to the Lenders and the Agent as follows:
V.01 Corporate Existence; Compliance with Law. The Company and each
----------------------------------------
Restricted Subsidiary:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) is duly qualified as a foreign corporation and in good standing under
the laws of each jurisdiction in which the character of the properties owned or
held under lease by it or the nature of the business transacted by it requires
such qualification except where the failure to be so qualified is not likely to
have a Material Adverse Effect;
(c) has all requisite corporate power and authority to own, pledge,
mortgage, hold under lease and operate its properties and to conduct its
business as now or currently proposed to be conducted; and
(d) is in compliance with all Requirements of Law applicable to it and its
business except for such non-compliance which is not likely to have a Material
Adverse Effect.
V.02 Corporate Power; Authorization. The execution, delivery and
------------------------------
performance by each Loan Party of the Loan Documents to which such Loan Party is
a party:
(a) are within the respective corporate powers of such Loan Party;
(b) have been, or prior to such execution will have been, duly authorized
by all necessary corporate action, including the consent of shareholders where
required;
(c) do not:
(i) contravene the articles or certificate of incorporation or by-
laws of such Loan Party;
(ii) violate any other Requirement of Law;
(iii) conflict with or result in the breach of, or constitute a
default under, any Contractual Obligation of such Loan Party, except for
such conflicts, breaches or defaults which are not likely to have a
Material Adverse Effect and which do not subject any Lender or the Agent to
any criminal liability or any material civil liability; or
(iv) result in the creation or imposition of any Lien upon any of the
property of any Loan Party; and
(d) do not require the consent of, authorization by, approval of or notice
to, or filing or registration with, any Governmental Authority or any other
Person other than (i) as of the Closing Date, those which have been obtained,
made or given and which are fully disclosed in Schedule 5.02(d) and (ii) those
----------------
which are not required to be obtained, made or given as of the Closing Date but
which will be obtained, made or given as and when required.
V.03 Enforceable Obligations. This Agreement and each other Loan
-----------------------
Document to which any Loan Party is a party have been duly executed and
delivered by such Loan Party. This Agreement is, and each other Loan Document
when delivered hereunder will be, legal, valid and binding obligations of each
Loan Party, a party thereto, enforceable against each such Loan Party in
accordance with their respective terms except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.
V.04 Taxes.
-----
As of the Closing Date, the Company and each Restricted Subsidiary have
filed all federal, state, local and foreign tax returns which are required to
have been filed in any jurisdiction and have paid all taxes shown to be due
thereon or otherwise assessed, to the extent the same have become due and
payable and before they have become delinquent, except for any taxes and
assessments the amount, applicability or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which the
Company has set aside on its books reserves (adequate in accordance with, and
segregated to the extent required by, GAAP) and the non-filing or non-payment of
which is not likely to have a Material Adverse Effect.
V.05 Financial Matters.
-----------------
(a) The consolidated balance sheet of the Company and its Subsidiaries as
of the last day of the fiscal year ended on December 31, 1995, and the related
consolidated statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, all with reports thereon by Arthur Andersen &
Co., independent public accountants, copies of which have been delivered to the
Agent and each Lender prior to the execution of this Agreement, fairly present
the consolidated financial position of the Company and its Subsidiaries as of
the date of said balance sheet and the consolidated results of their operations
for the period covered by said statements of income and cash flows, and have
been prepared in accordance with GAAP consistently applied in all material
respects by the Company and its Subsidiaries throughout the period involved,
except as set forth in the notes thereto. There are no material liabilities,
contingent or otherwise, of the Company or any Subsidiary not reflected in the
consolidated balance sheet as of December 31, 1995 or in the notes thereto which
are required to be disclosed therein.
(b) Since December 31, 1995, there has been no Material Adverse Effect and
no development which is likely to have a Material Adverse Effect, except as
reflected in the Company's periodic reports filed with the Securities and
Exchange Commission prior to the Closing Date.
(c) There is no material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitments which is not
reflected in the December 31, 1995 consolidated financial statements of the
Company and its Subsidiaries or in the notes thereto which are required by GAAP
to be disclosed therein and no liability reflected in such notes is likely to
have a Material Adverse Effect.
V.06 Litigation. As of the Closing Date, there are no pending or, to
----------
the knowledge of the Company, threatened, actions or proceedings affecting the
Company or any Restricted Subsidiary before any court or other Governmental
Authority or any arbitrator that are likely to have a Material Adverse Effect.
V.07 Subsidiaries.
------------
(a) A complete and correct list of the Company's Subsidiaries as of the
Closing Date, showing, as to each such Subsidiary, the correct name thereof, the
jurisdiction of its incorporation and the percentage of shares of each class of
its securities outstanding owned by the Company and each other Subsidiary of the
Company, is set forth in Schedule 5.07.
-------------
(b) (i) All of the outstanding shares of securities of each of the
Subsidiaries of the Company listed in Schedule 5.07 have been validly issued,
-------------
are fully paid and nonassessable and are owned by the Company or another
Subsidiary of the Company, free and clear of any Lien, except as otherwise
permitted hereunder, and (ii) no Subsidiary of the Company owns any shares of
securities of the Company.
V.08 Liens. As of the Closing Date, there are no Liens of any nature
-----
whatsoever on any properties owned by the Company or any Restricted Subsidiary
other than Permitted Liens.
V.09 No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) As of the Closing Date, neither the Company nor any Restricted
Subsidiary is a party to any Contractual Obligation the performance of which is
likely to have a Material Adverse Effect.
(b) As of the Closing Date, no provision or provisions of any applicable
Requirement of Law has or is likely to have a Material Adverse Effect.
(c) Neither the Company nor any Restricted Subsidiary is in default under
or with respect to any Contractual Obligation which default is likely to have a
Material Adverse Effect.
(d) No Default or Event of Default has occurred and is continuing.
V.10 Investment Company Act; Public Utility Holding Company Act. No
----------------------------------------------------------
Loan Party is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a subsidiary company of a
holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended. The making of the Loans by the Lenders, the application of
the proceeds and repayment thereof by the Company and the consummation of the
transactions contemplated by the Loan Documents will not violate any provision
applicable to any Loan Party of (a) the Investment Company Act of 1940, as
amended, or (b) any rule, regulation or order issued by the Securities and
Exchange Commission thereunder.
V.11 Margin Regulations. No part of the proceeds of any Loan will be
------------------
used in violation of Regulation G, T, U or X of the Federal Reserve Board.
After giving effect to the application of the proceeds of the Loans (including
the Loans to be made on the Closing Date) less than twenty-five percent (25%) of
the assets of the Company, individually and on a consolidated basis with its
Subsidiaries, consists of margin stock. The Company is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock. Terms for which meanings
are provided in Regulation U of the Federal Reserve Board or any regulations
substituted therefor, as from time to time in effect, are used in this Section
-------
5.11 with such meanings.
- ----
V.12 Environmental Matters. As of the Closing Date, except as set
---------------------
forth in Schedule 5.12:
-------------
(a) all facilities and property (including underlying groundwater)
presently owned or leased by the Company or any of its Subsidiaries have been,
and continue to be, owned or leased by the Company and its Subsidiaries in
material compliance with all Environmental Laws, except for such non-compliance
as is not likely to have a Material Adverse Effect;
(b) there are no pending or threatened
(i) claims, complaints, notices or requests for information received
by the Company or any of its Subsidiaries with respect to any alleged
violation of any Environmental Law which are likely to have a Material
Adverse Effect, or
(ii) claims, complaints, notices or inquiries to the Company or any of
its Subsidiaries regarding potential liability under any Environmental Law
which are likely to have a Material Adverse Effect;
(c) except for Releases of Hazardous Materials which occurred after the
date that the Company or any of its Subsidiaries sold, transferred, assigned or
otherwise disposed of its interests in any previously owned or leased property,
there have been no Releases of Hazardous Materials at, on or under any property
now or previously owned or leased by the Company or any of its Subsidiaries that
are likely to have a Material Adverse Effect;
(d) the Company and its Subsidiaries have been issued and are in material
compliance with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and necessary or desirable for
their businesses except for such non-compliance as is not likely to have a
Material Adverse Effect;
(e) (i) no property presently owned or leased by the Company or any of
its Subsidiaries, and (ii) to the best of the knowledge of the Company, no
property previously owned or leased by the Company or any of its Subsidiaries,
is listed or proposed for listing on the National Priorities List pursuant to
CERCLA or on any similar published state list of sites requiring investigation
or clean-up;
(f) to the knowledge of the Company, there are no underground storage
tanks, active or abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Company or any of its
Subsidiaries that are likely to have a Material Adverse Effect;
(g) neither the Company nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar published
state list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to claims against the Company or
such Subsidiary for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA, except for such claims which are not
likely to have a Material Adverse Effect;
(h) there are no polychlorinated biphenyls or friable asbestos present at
any property now or previously owned or leased by the Company or any of its
Subsidiaries that are likely to have a Material Adverse Effect; and
(i) to the knowledge of the Company, no conditions exist at, on or under
any property now or previously owned or leased by the Company or any of its
Subsidiaries which, with the passage of time, or the giving of notice or both,
are likely to have a Material Adverse Effect.
V.13 Labor Matters. Except as set forth in Schedule 5.13, there are
------------- -------------
no strikes or other labor disputes or grievances or charges or complaints with
respect to any employee or group of employees pending or, to the knowledge of
the Company, threatened against the Company or any Restricted Subsidiary which
are likely to have a Material Adverse Effect.
V.14 ERISA Plans. During the twelve-consecutive-month period prior to
-----------
the Closing Date, no steps have been taken to terminate any Pension Plan (other
than a standard termination as defined in Section 4041(b) of ERISA for which a
---------------
commitment to make the terminating Pension Plan sufficient is not required), and
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA. Other than liability for
--------------
benefit payments or contributions in the ordinary course, no condition exists or
event or transaction has occurred with respect to any Plan which is likely to
result in the incurrence by the Company or any member of the Controlled Group of
any material liability, fine or penalty. Each Plan complies with the applicable
provisions of ERISA and the Code, except where such non-compliance is not likely
to have a Material Adverse Effect. Except as disclosed in Schedule 5.14, neither
-------------
the Company nor any Subsidiary of the Company has any material contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Subtitle B
of Title I of ERISA.
ARTICLE VI
CONDITIONS PRECEDENT
--------------------
VI.01 Conditions Precedent to the First Loan. The obligation of
--------------------------------------
each Lender to make its initial Loan is subject to satisfaction of the condition
precedent that the Agent shall have received the following, each, unless
otherwise specified below, dated the Closing Date, in form and substance
satisfactory to the Agent and its counsel:
(a) Board Resolutions; Incumbency Certificates. A certificate of the
------------------------------------------
Secretary or an Assistant Secretary of each Loan Party certifying (i) the
resolutions of the Board of Directors of such Loan Party approving each Loan
Document to which such Loan Party is a party and the transactions contemplated
hereby and thereby, (ii) all documents evidencing other necessary corporate
action, if any, by each Loan Party with respect to each Loan Document and (iii)
the names and signatures of the officers authorized to act with respect to each
Loan Document executed by it, upon which certificate the Agent and each Lender
may conclusively rely until it shall have received a further certificate of the
Secretary or Assistant Secretary of such Loan Party cancelling or amending such
prior certificate;
(b) Articles of Incorporation; By-Laws and Good Standing. Each of the
-----------------------------------------------------
following documents:
(i) the articles or certificate of incorporation of each Loan Party
as in effect on the Closing Date, certified (A) by the Secretary of State
of the state of incorporation of such Loan Party as of a date reasonably
close to the Closing Date, and (B) by the Secretary or an Assistant
Secretary of such Loan Party as of the Closing Date, and the by-laws of
each Loan Party, as in effect on the Closing Date, certified by the
Secretary or an Assistant Secretary of such Loan Party as of the Closing
Date; and
(ii) a good standing certificate for each Loan Party from the
Secretary of State of the state of incorporation of such Loan Party as of a
date reasonably close to the Closing Date;
(c) Subsidiary Guaranty. A guaranty, duly executed by each Principal
-------------------
Subsidiary, in substantially the form of Exhibit 6.01(c) (as from time to time
---------------
amended, modified or supplemented, the "Subsidiary Guaranty");
-------------------
(d) Legal Opinion. A favorable opinion addressed to the Agent and all
-------------
Lenders from counsel to the Company and its Subsidiaries, in substantially the
form of Exhibit 6.01(d) (which opinion the Company and its Subsidiaries hereby
---------------
expressly instruct such counsel to prepare and deliver); and
(e) Termination of the 1993 Credit Agreement. Evidence satisfactory to
----------------------------------------
the Agent that the 1993 Credit Agreement and the commitments of the lenders
thereunder shall have been terminated and all committed loans owing to the
lenders thereunder shall have been paid in full; provided, however, that the
-----------------
obligations of the Company with respect to the 1993 Facility Bid Loans
outstanding on the Closing Date shall survive the termination of the 1993 Credit
Agreement and such 1993 Facility Bid Loans shall be repaid when due in
accordance with their respective terms.
VI.02 Additional Conditions Precedent to the First Loan. The
-------------------------------------------------
obligation of each Lender to make its initial Loan is subject to the further
conditions precedent that:
(a) No Material Adverse Effect. Since December 31, 1995, there shall have
--------------------------
been no Material Adverse Effect and no development which is likely to have a
Material Adverse Effect, except as reflected in the Company's periodic reports
filed with the Securities and Exchange Commission prior to the Closing Date.
(b) Margin Regulations. All Loans made by the Lenders shall be in full
------------------
compliance with all applicable Requirements of Law, including Regulations G, T,
U and X of the Federal Reserve Board
(c) Fees Costs and Expenses. The Company
-----------------------
shall have paid all fees referred to in Section 3.01 to the extent then due and
------------
payable and all reasonable costs and expenses referred to in Section 11.04
-------------
(including legal fees and expenses) and any indemnity pursuant to Section 11.05
-------------
which, in each case, may be then due and payable.
(d) Company Officer's Certificate. The Company shall have delivered to
-----------------------------
the Agent a certificate from a Responsible Officer of the Company in
substantially the form of Exhibit 6.02(d) as to the satisfaction of the
---------------
conditions set forth in Section 6.02 and to the effect that on the date of the
------------
Initial Borrowing, the representations and warranties contained in Article V are
---------
correct.
VI.03 Conditions Precedent to Each Committed Loan. The obligation
-------------------------------------------
of each Lender to make any Committed Loan (including its initial Committed Loan)
shall be subject to the further conditions precedent that:
(a) Notice of Borrowing. The Agent shall have received.a Notice of
-------------------
Borrowing as required by Section 2.02.
------------
(b) Accuracy of Representations; No Default; Etc. The following
--------------------------------------------
statements shall be true on the date of each Committed Loan, before and after
giving effect thereto:
(i) The representations and warranties contained in Article V are
---------
correct on and (except for representations and warranties relating solely
to a particular point in time and, after the initial Committed Borrowing,
other than under paragraph (b) of Section 5.05) as of such date as though
------------
made on and as of such date; and
(ii) No Default or Event of Default has occurred and is continuing or
would result from such Committed Loan being made on such date.
(c) Other Assurances. The Agent shall have received such other approvals,
----------------
opinions or documents as any Lender through the Agent may reasonably request
related to the transactions contemplated hereby.
VI.04 Conditions Precedent to Each Bid Borrowing. The obligation
------------------------------------------
of each Lender which is to make a Bid Loan in connection with a Bid Borrowing
(including the initial Bid Borrowing) to make such Bid Loan shall be subject to
the further conditions precedent:
(a) Promissory Notes. If so requested by such Lender, the Company shall
----------------
have delivered to such Lender a promissory note in the form of Exhibit 2.05(c)
---------------
evidencing the Indebtedness of the Company in respect of such Bid Loan.
(b) Accuracy of Representations; No Default; Etc. The following
--------------------------------------------
statements shall be true on the date of each Bid Borrowing, before and after
giving effect thereto and to the application of the proceeds from the Bid Loans
being made on such date:
(i) The representations and warranties contained in Article V are
---------
correct on and (except for representations and warranties relating solely
to a particular point in time and other than under paragraph (b) of Section
------------- -------
5.05) as of such date as though made on and as of such date; and
-----
(ii) No Default or Event of Default has occurred and is continuing or
would result from such Bid Loan being made on such date.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
The Company agrees that as long as the obligations of the Lenders to make
Loans shall remain in effect and until all Obligations shall have been paid or
performed in full, unless the Required Lenders shall otherwise consent in
writing:
VII.01 Application of Proceeds. The Company will apply the proceeds of
-----------------------
the Loans for general corporate purposes.
VII.02 Compliance with Laws, Etc. The Company will comply, and cause
-------------------------
each of its Subsidiaries to comply, in all material respects with all applicable
Requirements of Law except for such non-compliance as is being contested in good
faith by appropriate proceedings or is not likely to have a Material Adverse
Effect.
VII.03 Payment of Taxes, Etc. The Company will pay and discharge, and
---------------------
cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, all lawful claims and all taxes, assessments and governmental
charges or levies except where contested in good faith, by proper proceedings,
if adequate reserves therefor have been established on the books of the Company
in accordance with, and to the extent required by, GAAP, or if such non-payment
(individually and in the aggregate with all other such non-payments) is not
likely to have a Material Adverse Effect.
VII.04 Maintenance of Insurance. The Company will maintain, and cause
------------------------
each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Company and such Subsidiaries
operate; provided, however, that the Company and its Subsidiaries may self-
-------- -------
insure to the extent that the Company or any such Subsidiary may in its
discretion determine; and provided, further, that the Company may maintain
-------- -------
insurance on behalf of any of its Subsidiaries. Without limiting the generality
of the foregoing, the Company will, and will cause each of its Subsidiaries to,
maintain insurance coverages that are at least substantially the same as the
insurance coverages maintained on the Closing Date.
VII.05 Preservation of Corporate Existence, Etc. The Company will
----------------------------------------
preserve and maintain, and cause each Restricted Subsidiary to preserve and
maintain, its corporate existence, rights (charter and statutory), and
franchises, except as permitted under Section 8.03 or except to the extent that
------------
the failure by the Company or any such Restricted Subsidiary to comply with the
foregoing is not likely to have a Material Adverse Effect.
VII.06 Access. The Company will from time to time, during normal
------
business hours upon reasonable notice, or, if a Default or an Event of Default
shall have occurred and be continuing, at any time upon notice to an officer of
the Company having at least the rank of Vice President, permit the Agent, any
Lender and any agent or representative thereof, to examine and make copies of
and abstracts from the records and books of account of, and visit the properties
of, the Company and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and any of its Subsidiaries with any of
their respective officers.
VII.07 Keeping of Books. The Company will keep proper books of record
----------------
and account, in which full and correct entries, on a consolidated basis for the
Company and its Subsidiaries, shall be made of all financial transactions and
the assets and business of the Company and its Subsidiaries in accordance with
GAAP consistently applied.
VII.08 Maintenance of Properties, Etc. The Company will maintain and
------------------------------
preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties in good repair, working order and condition, and from time to
time make or cause to be made all necessary and proper repairs, renewals,
replacements and improvements so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
--------
however, that nothing in this Section 7.08 shall prevent the Company or any of
- ------- ------------
its Subsidiaries from discontinuing the maintenance or preservation of any of
its properties if such discontinuance is, in the opinion of the Company,
desirable in the conduct of its business and is not likely to have a Material
Adverse Effect.
VII.09 Financial Statements. The Company will furnish to the Agent,
--------------------
with sufficient copies for the Lenders:
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Company,
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such quarter and the related statements of income and cash flows for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter;
(b) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, audited consolidated balance sheets of the
Company and its Subsidiaries as of the end of such year and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the period commencing at the end of the previous fiscal year and
ending with the end of such year; and
(c) at the same time it furnishes each set of financial statements
pursuant to paragraphs (a) and (b) above, (i) a certificate of a Responsible
-------------- ---
Officer of the Company to the effect that no Default or Event of Default has
occurred and is continuing (or if any Default or Event of Default has occurred
and is continuing, describing the same in reasonable detail and the action which
the Company proposes to take with respect thereto) and (ii) a compliance
certificate in substantially the form of Exhibit 7.09.
------------
VII.10 Reporting Requirements. The Company will furnish to the Agent,
----------------------
with sufficient copies for the Lenders:
(a) promptly and in any event within three Business Days after the Company
becomes aware of the existence of any Default or Event of Default, notice by
telephone or facsimile specifying the nature of such Default or Event of
Default, which notice, if given by telephone, shall be promptly confirmed in
writing within five Business Days;
(b) promptly after the sending or filing thereof, copies of all reports
which the Company sends to its security holders generally and copies of all
reports and registration statements which the Company or any of its Subsidiaries
files with the Securities and Exchange Commission or any national securities
exchange (including the Company's Quarterly Report on Form 10-Q and Annual
Report on Form 10-K);
(c) promptly but not later than three Business Days after the Company
becomes aware of any change by Moody's or S&P in its Debt Rating, notice by
telephone or facsimile of such change; and
(d) such other information respecting the business, prospects, properties,
operations or condition, financial or otherwise of the Company or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.
VII.11 ERISA Plans. The Company will maintain and operate, and cause
-----------
each Subsidiary to maintain and operate, each Plan in material compliance with
ERISA and the Code and all applicable regulations thereunder.
VII.12 Environmental Compliance; Notice. The Company will, and will
--------------------------------
cause each of its Subsidiaries to:
(a) endeavor to use and operate all of its facilities and properties in
substantial compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in substantial compliance therewith,
and handle all Hazardous Materials in substantial compliance with all applicable
Environmental Laws;
(b) promptly upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws, evaluate such claims, complaints, notices
and inquiries and forward copies of (i) all such claims, complaints, notices and
inquiries which individually are likely to have a Material Adverse Effect and
(ii) all such claims, complaints, notices and inquiries, arising from a single
occurrence which together are likely to have a Material Adverse Effect, and
endeavor to promptly resolve all such actions and proceedings relating to
compliance with Environmental Laws; and
(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this Section
-------
7.12.
- ----
ARTICLE VIII
NEGATIVE COVENANTS
------------------
The Company agrees that as long as the obligations of the Lenders to make
Loans shall remain in effect and until all Obligations shall have been paid or
performed in full, unless the Required Lenders shall otherwise consent in
writing:
VIII.01 Liens, Etc. The Company shall not create or assume and shall not
----------
permit any Restricted Subsidiary to create or assume, any Lien upon or with
respect to any of its Principal Properties or shares of capital stock or
Indebtedness of any Restricted Subsidiary, whether now owned or hereafter
acquired, without making effective provision, and the Company in such case will
make or cause to be made effective provision, whereby the Obligations shall be
secured by such Lien equally and ratably with any and all other Indebtedness or
obligations thereby secured, so long as such other Indebtedness or obligations
shall be so secured; provided, however, that the foregoing shall not apply to
-------- -------
any of the following:
(a) Liens existing on the Closing Date and set forth in Schedule 8.01;
-------------
(b) Liens on any Principal Property acquired, constructed or improved
after the date of this Agreement which are created or assumed contemporaneously
with, or within 120 days after, or pursuant to financing arrangements for which
a firm commitment is made by a bank, insurance company or other lender or
investor (not including the Company or any Restricted Subsidiary) within 120
days after, the completion of such acquisition, construction or improvement to
secure or provide for the payment of any part of the purchase price of such
property or the cost of such construction or improvement, or, in addition to
Liens contemplated by paragraphs (c) and (d) below, Liens on any Principal
-------------- ---
Property existing at the time of acquisition thereof; provided, however, that in
-------- -------
the case of any such acquisition, construction or improvement the Lien shall not
apply to any property theretofore owned by the Company and/or one or more
Restricted Subsidiaries other than, in the case of such construction or
improvement, any theretofore unimproved real property on which the property so
constructed, or the improvement, is located;
(c) Liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation is merged into or consolidated
with the Company or a Restricted Subsidiary or existing at the time of a sale,
lease or other disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company, or to a Restricted Subsidiary;
(d) Liens on property or shares of capital stock of a corporation existing
at the time such corporation becomes a Restricted Subsidiary;
(e) Liens to secure Indebtedness of a Restricted Subsidiary to the Company
or one or more Subsidiaries;
(f) Liens in favor of the United States of America or any State thereof,
or any department, agency or political subdivision of the United States of
America or any State thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any Indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of constructing or improving the property subject to such Liens;
(g) Liens on timberlands in connection with an arrangement under which the
Company and/or one or more Restricted Subsidiaries are obligated to cut or pay
for timber in order to provide the lienholder with a specified amount of money,
however determined;
(h) Liens created or assumed in the ordinary course of the business of
exploring for, developing or producing oil, gas or other minerals (including in
connection with borrowings of money for such purposes) on, or on any interest
in, or on any proceeds from the sale of, property acquired or held for the
purpose of exploring for, developing or producing oil, gas or other minerals, or
production therefrom, or proceeds of such production, or material or equipment
located on such property;
(i) Liens in favor of any customer arising in respect of performance
deposits and partial, progress, advance or other payments made by or on behalf
of such customer for goods produced or to be produced or for services rendered
or to be rendered to such customer in the ordinary course of business, which
Liens shall not exceed the amount of such deposits or payments;
(j) Liens on the property of the Company or any Restricted Subsidiary
incurred or pledges and deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, old-age pensions
and other social security benefits other than in respect of employer plans
subject to ERISA;
(k) Liens pertaining to receivables or other accounts sold by the Company
or any of its Subsidiaries pursuant to a receivables sale transaction in favor
of the purchaser or purchasers of such receivables or other accounts;
(l) purchase money liens or purchase money security interests upon or in
any other property acquired by the Company or any Restricted Subsidiary in the
ordinary course of business to secure the purchase price of such property or to
secure Indebtedness incurred solely for the purpose of financing the acquisition
of such property;
(m) extensions, renewals and replacements of Liens referred to in
paragraphs (a) through (l) above or this paragraph (m), provided, however, that
- -------------- --- -------------- -----------------
the Indebtedness secured thereby shall not exceed the principal amount of the
Indebtedness so secured at the time of such extension, renewal or replacement,
and such extension, renewal or replacement shall be limited to all or part of
the property or assets which secured the Lien extended, renewed or replaced
(plus improvements on such property);
(n) Liens imposed by law, such as workers', materialmen's, mechanics',
warehousemen's, carriers', lessors', vendors' and other similar Liens incurred
by the Company or any Restricted Subsidiary arising in the ordinary course of
business which secure its obligations to any Person;
(o) Liens created by or resulting from any litigation or proceedings which
are being contested in good faith by appropriate proceedings; Liens arising out
of judgments or awards against the Company and/or one or more Restricted
Subsidiaries with respect to which the Company and/or such Restricted Subsidiary
or Subsidiaries are in good faith prosecuting an appeal or proceedings for
review; or Liens incurred by the Company and/or one or more Restricted
Subsidiaries for the purpose of obtaining a stay or discharge in the course of
any legal proceeding to which the Company and/or such Restricted Subsidiary or
Subsidiaries are a party;
(p) Liens for taxes, assessments or other governmental charges or levies,
either not yet due and payable or to the extent that non-payment thereof shall
be permitted by Section 7.03, landlord's liens on property held under lease and
------------
tenants' rights under leases;
(q) zoning restrictions, easements, licenses, reservations, restrictions
on the use of real property or minor irregularities of title incident thereto
which do not materially impair the value of any parcel of property material to
the operation of the business of the Company and its Subsidiaries taken as a
whole or the value of such property for the purpose of such business; and
(r) Liens arising in connection with Sale-Leaseback Transactions permitted
by Section 8.02.
------------
VIII.02 Sale-Leaseback Transactions. The Company shall not, and shall not
---------------------------
permit any Restricted Subsidiary to, enter into any arrangement with any Person
providing for the leasing by the Company and/or one or more Restricted
Subsidiaries of any Principal Property (except for temporary leases for a term,
including any renewal thereof, of not more than three years and except for
leases between the Company and one or more Restricted Subsidiaries or between
Restricted Subsidiaries) which property has been or is to be sold or transferred
by the Company and/or such Restricted Subsidiary or Subsidiaries to such Person
(a "Sale-Leaseback Transaction") unless (a) the Company and/or such Restricted
--------------------------
Subsidiary or Subsidiaries would be entitled to incur Indebtedness secured by a
Lien on such property without equally and ratably securing the Obligations
pursuant to the provisions of Section 8.01, or (b) the Company shall apply or
------------
cause to be applied an amount equal to the Value of such Sale-Leaseback
Transaction within 120 days of the effective date of any arrangement (i) to the
retirement of Indebtedness for Borrowed Money incurred or assumed by the Company
or any Restricted Subsidiary (other than indebtedness for borrowed money owed to
the Company and/or one or more Restricted Subsidiaries) which by its terms
matures on, or is extendable or renewable at the option of the obligor to, a
date more than 12 months after the date of the incurrence or assumption of such
indebtedness and which is senior in right of payment to, or ranks pari passu
---- -----
with, the Loans, or (ii) to the purchase of other property which will constitute
"Principal Property" having a fair value in the opinion of the Board of
Directors of the Company at least equal to the Value of such Sale-Leaseback
Transaction, or (c) the Company shall use the net proceeds to repay Loans
hereunder.
Notwithstanding the provisions of Sections 8.01 and 8.02, the Company and
------------- ----
any one or more of its Restricted Subsidiaries may nevertheless create or assume
Liens which would otherwise require securing of the Obligations under said
provisions, and enter into Sale-Leaseback Transactions without compliance with
either paragraph (b) or (c) of this Section 8.02, provided that the aggregate
------------- --- ------------ --------
amount of all such Liens and Sale-Leaseback Transactions permitted by this
Section 8.02 at any time outstanding (as measured by the sum of (a) all
- ------------
Indebtedness secured by all such Liens then outstanding or to be so created or
assumed, but excluding secured Indebtedness permitted under the exceptions in
Section 8.01, and (b) the Value of all such Sale-Leaseback Transactions then
- ------------
outstanding or to be so entered into, but excluding such transactions in which
indebtedness is retired or property is purchased or Loans are repaid) shall not
exceed 10% of Net Tangible Assets.
VIII.03 Mergers, Etc. The Company shall not merge or consolidate with or
------------
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets, whether now owned or hereafter acquired, to any Person; provided,
---------
however, that the Company may merge or consolidate with or into any corporation
- -------
(whether or not affiliated with the Company) or convey, transfer, lease or
otherwise dispose of all or substantially all of its assets, to any other
corporation (whether or not affiliated with the Company) authorized to acquire
or operate the same, so long as (a) in the case of such merger or consolidation,
the Company is the surviving corporation or (b) if either (i) in the case of
such merger or consolidation, if the Company is not the surviving corporation,
or (ii) upon any such conveyance, transfer, lease or other disposition, the
surviving or transferee corporation expressly assumes the due and punctual
payment of all Obligations according to their terms and the due and punctual
performance and observance of all of the covenants and conditions of this
Agreement to be performed by the Company.
VIII.04 Transactions with Affiliates. The Company shall not enter into
----------------------------
or be a party to, or permit any of its Subsidiaries to enter into or be a party
to, any transaction with any Affiliate of the Company except (i) as may be
permitted under Sections 8.01, 8.02 or 8.03 or (ii) transactions in the ordinary
------------------- ----
course of business which are not likely to have a Material Adverse Effect.
VIII.05 Accounting Changes. The Company (a) shall not make, or permit
------------------
any of its Subsidiaries to make, any significant change in accounting treatment
and reporting practices except as permitted or required by GAAP or the
Securities and Exchange Commission and (b) shall not designate a different
fiscal year than the fiscal year used in the preparation of the financial
statements referred to in Section 5.05(a).
---------------
VIII.06 Margin Regulations. The Company shall not use the proceeds of
------------------
any Loan in violation of Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System.
VIII.07 Negative Pledges, Etc. The Company shall not, and shall not
---------------------
permit any Restricted Subsidiary to, enter into any agreement prohibiting
compliance by the Company with the provisions of the introduction to Section
-------
8.01 or restricting the ability of the Company or any other Loan Party to amend
- ----
or otherwise modify this Agreement or any other Loan Document.
VIII.08 Leverage Ratio. The Company shall not permit the ratio of (a)
--------------
Funded Indebtedness on the last day of any fiscal quarter to (b) Operating Cash
Flow for the Measurement Period ending on such date (in each case calculated on
a consolidated basis for the Company and its consolidated Subsidiaries) to be
greater than 4.50 to 1.00.
ARTICLE IX
EVENTS OF DEFAULT
-----------------
IX.01 Events of Default. The term "Event of Default" shall mean
----------------- ----------------
any of the events set forth in this Section 9.01.
------------
(a) Non-Payment. The Company shall (i) fail to pay any principal of any
-----------
Loan when the same shall become due and payable; or (ii) fail to pay any
interest on any Loan or fail to pay any fee due under this Agreement within
three Business Days after the same shall become due and payable;
(b) Representations and Warranties. Any representation or warranty made
------------------------------
by the Company in this Agreement or by any Loan Party in any other Loan Document
or in any certificate, document or financial or other statement delivered at any
time under or in connection with this Agreement or any other Loan Document shall
prove to have been incorrect or untrue in any material respect when made or
deemed made;
(c) Specific Defaults. The Company shall fail to perform or observe any
-----------------
term, covenant or agreement contained in Section 7.01, 7.05, 7.06 or 7.10(a) or
------------ ---------- -------
Article VIII;
- ------------
(d) Other Defaults. The Company shall fail to perform or observe any
--------------
other term or covenant contained in this Agreement or any Loan Party shall fail
to perform any other term or covenant in any other Loan Document, and such
Default shall continue unremedied for a period of 30 days after the date upon
which written notice thereof shall have been given to the Company by the Agent;
(e) Default under Other Agreements. Any default shall occur and be
------------------------------
continuing under the terms applicable to:
(i) any Funded Indebtedness or any Indebtedness or items of
Indebtedness of the Company or any of its Subsidiaries (other than under
this Agreement or any other Loan Document) which Funded Indebtedness or
Indebtedness, as the case may be, has an aggregate outstanding principal
amount of $75,000,000 or more, or
(ii) under one or more Interest Rate Contracts of the Company or any
of its Subsidiaries resulting in aggregate net obligations of the Company
and its Subsidiaries of $75,000,000 or more and,
in either of the above cases, such default shall:
(A) consist of the failure to pay such Indebtedness or such net
obligations when due (whether at scheduled maturity, upon early
termination, by required prepayment, acceleration, demand or
otherwise) after giving effect to any applicable grace period; or
(B) result in, or continue unremedied and unwaived for a period
of time sufficient to permit, the acceleration of such Indebtedness or
the early termination of any such Interest Rate Contract;
(f) Bankruptcy or Insolvency. The Company or any Restricted Subsidiary
------------------------
shall:
(i) generally fail to pay, or admit in writing its inability to pay,
its debts as they become due (provided, however, that this clause (i) shall
----------------- ----------
not apply to any Subsidiary of the Company designated with an asterisk in
Schedule 5.06);
--------------
(ii) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect;
(iii) seek the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property or consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it;
(iv) make a general assignment for the benefit of creditors; or
(v) take any corporate action to authorize any of the foregoing;
(g) Involuntary Proceedings. An involuntary case or other proceeding
-----------------------
shall be commenced against the Company or any Restricted Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any-substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Company
or any Restricted Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;
(h) Monetary Judgments. One or more judgments or orders for the payment
------------------
of money exceeding in the aggregate $75,000,000 shall be rendered against the
Company or any of its Subsidiaries and either (i) enforcement proceedings shall
have been initiated by any creditor upon such judgment or order or (ii) such
judgment or order shall continue unsatisfied or unstayed for a period of 30
days;
(i) Pension Plans. Any of the following events shall occur with respect
-------------
to any Pension Plan:
(i) the institution of any steps by the Company, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Company or any such member could reasonably
expect to be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension Plan
or the PBGC, in excess of $75,000,000; or
(ii) a contribution failure occurs with respect to any Pension Plan
which gives rise to a Lien under Section 302(f) of ERISA with respect to a
--------------
liability or obligation in excess of $75,000,000;
(j) Change in Control. The acquisition by any Person or group (within the
-----------------
meaning of Rule 13d-5 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of either (i) 33-
1/3% or more of the outstanding shares of voting stock of the Company or (ii)
the power to direct or cause the direction of the management and policies of the
Company, whether through the ownership of voting securities, by contract or
otherwise; or
(k) Impairment of Certain Documents. Except as otherwise expressly
-------------------------------
permitted in any Loan Document, any of the Loan Documents shall terminate or
cease in whole or in part to be the legally valid, binding, and enforceable
obligation of the relevant Loan Party, or such Loan Party or any Person acting
for or on behalf of any Loan Party, contests such validity, binding effect or
enforceability, or purports to revoke any Loan Document.
IX.02 Remedies. If any Event of Default shall have occurred and
--------
be continuing:
(a) The Agent shall at the request of, or may with the consent of, the
Required Lenders, declare the Commitments to be terminated, whereupon the
Commitments shall forthwith be terminated; and/or
(b) The Agent shall at the request of, and may with the consent of, the
Required Lenders, declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon and all other Obligations payable
hereunder or under any other Loan Document to be immediately due and payable,
whereupon the Loans, all such interest and all such Obligations shall become and
be forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company;
and/or
(c) The Agent shall at the request of, and may with the consent of, the
Required Lenders, exercise all rights and remedies available to it as Agent
under any Loan Document; provided, however, that upon the occurrence of any
-----------------
Event of Default specified in paragraph (f)(ii) or (g) of Section 9.01 or in the
----------------- --- ------------
event of an actual or deemed entry of an order for relief with respect to the
Company or any of its Subsidiaries under any bankruptcy, insolvency or other
similar law now or hereafter in effect, the Commitments shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest accrued thereon and all other Obligations shall automatically become
due and payable without further action of the Agent or any Lender.
ARTICLE X
THE AGENT
---------
X.01 Appointment. Each Lender hereby irrevocably appoints, designates
-----------
and authorizes the Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities except those expressly set forth
herein or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
X.02 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through its employees, agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
Error! Bookmark not defined.X.03 Liability of Agent. Neither the Agent
------------------
nor any of its directors, officers, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct) or (b)
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company or any of its officers contained
in this Agreement or by any Loan Party or any officer of any thereof in any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document or for the value of any
collateral or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
the Company or any other Loan Party to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document or to inspect the properties, books or records of the Company or any of
its Subsidiaries.
X.04 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon any advice and statements
of legal counsel (including counsel to the Company), independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Except to the extent expressly provided in Section 11.02,
-------------
the Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or the consent of the Required Lenders and such request or consent and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans or any portion thereof.
(b) For purposes of determining compliance with the conditions specified
in Sections 6.01 and 6.02, each Lender shall be deemed to have consented to,
------------- ----
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Lender prior to the initial Borrowing specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the Agent to
that effect or such Lender shall not have made available to the Agent such
Lender's Commitment Percentage of such Borrowing.
X.05 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees payable to
the Agent for the account of the Lenders, unless the Agent shall have received
notice from a Lender or the Company referring to this Agreement or any other
Loan Document, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Required Lenders in accordance with Article IX; provided,
---------- --------
however, that unless and until the Agent shall have received any such request
- -------
from the Required Lenders, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
X.06 Credit Decision. Each Lender expressly acknowledges that neither
---------------
the Agent nor any of its Affiliates nor any director, officer, employee, agent
or attorney-in-fact of any of them has made any representation or warranty to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, properties,
operations or condition, financial or otherwise, and creditworthiness of the
Company and its Subsidiaries and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, properties, operations or condition, financial or otherwise, and
creditworthiness of the Company and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, properties, operations or condition, financial or otherwise, and
creditworthiness of the Company and its Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
X.07 Indemnification. The Lenders agree to indemnify the Agent (to the
---------------
extent not reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so), ratably according to the respective amounts
of their outstanding Loans, or, if no Loans are outstanding, their Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time after the repayment
of the Loans and all other Obligations) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment to the Agent
- -----------------
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses and reasonable
fees of counsel (including the allocated cost of in-house counsel) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal advice in respect of
its or the Lenders' rights or responsibilities under, this Agreement, any other
Loan Document or any document contemplated by or referred to herein to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Company.
X.08 Agent in Individual Capacity. Bank of America and its Affiliates
----------------------------
may make loans to, issue, amend, renew (or participate in) letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company and its Subsidiaries and their respective Affiliates as though Bank
of America were not the Agent hereunder. With respect to its Loans, Bank of
America shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include Bank of America in its individual capacity.
------ -------
X.09 Successor Agent. The Agent may resign at any time by giving written
---------------
notice thereof to the Lenders and the Company and may be removed at any time
with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent
which shall be a commercial bank organized, chartered or licensed under the laws
of the United States of America or of any State thereof having combined capital
and surplus of at least $500,000,000. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment
within 30 days after the notice of resignation or the removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders, with the consent
of the Company which consent shall not be unreasonably withheld or delayed,
appoint a successor Agent, which shall be a commercial bank organized or
chartered under the laws of the United States of America or of any State thereof
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its future duties and obligations under this Agreement and the
other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article X and Sections 11.04 and
--------- --------------
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
- -----
by it while it was Agent under this Agreement and the other Loan Documents.
X.10 The Arranger. The Arranger shall have no right, power, obligation,
------------
liability, responsibility or duty under this Agreement other than the right to
indemnity under Section 11.05.
-------------
ARTICLE XI
MISCELLANEOUS
-------------
XI.01 Notices, Etc. All notices, requests and other communications
------------
provided to any party under this Agreement shall, except as otherwise expressly
specified herein, be in writing (including by facsimile) and mailed by overnight
delivery, transmitted by facsimile or delivered: if to the Company, to its
address specified on the signature pages hereof; if to any Lender, to its
Domestic Lending Office specified opposite its name in Schedule 1.01(b); and, if
----------------
to the Agent, to its address specified on the signature pages hereof; or, as to
the Company or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Agent. All such notices and communications shall be
effective, if transmitted by facsimile, when transmitted, or, if mailed by
overnight delivery or delivered, upon delivery, except that (a) notices and
facsimile communications to the Agent pursuant to Article II or X shall not be
---------- -
effective until received by the Agent and (b) any notice by facsimile to the
Agent must be confirmed by telephone or mail.
XI.02 Amendments, Etc. No amendment or waiver of any provision of this
---------------
Agreement or of any other Loan Document, and no consent to any departure by the
Company or any other Loan Party herefrom or therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders
and, in the case of amendments, the Company, and then any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that
-------- -------
(a) no amendment, waiver or consent shall, unless in writing and signed
by all the Lenders and, in the case of amendments, the Company, do any of the
following:
(i) increase the Commitments of the Lenders (other than by
assignment); provided, however, that any Lender may increase its own
-------- -------
Commitment without the consent of the other Lenders;
(ii) reduce the principal of, or interest (other than under
Section 2.10) on, the Committed Loans or reduce the amount of any fees
------------
payable hereunder;
(iii) postpone any date fixed for any payment of principal of, or
interest on, the Committed Loans or any fees payable hereunder;
(iv) modify any requirement hereunder that any particular action
be taken by all of the Lenders or by the Required Lenders or change the
percentage of the Commitments or of the aggregate unpaid principal amount
of the Loans which shall be required for the Lenders or any of them to take
any action hereunder;
(v) terminate the Subsidiary Guaranty;
(vi) amend or waive the provisions of Section 6.01 or 6.02; or
------------ ----
(vii) amend this Section 11.02;
-------------
(b) no amendment, waiver or consent which affects the rights or duties
of the Agent under this Agreement or any other Loan Document shall become
effective unless signed by the Agent in addition to the Lenders required above
to take such action; and
(c) no amendment, waiver or consent which affects the principal amount,
the rate of interest or the maturity date of any outstanding Bid Loan shall
become effective without the consent of the Lender having made such Bid Loan in
addition to the Lenders required above to take such action.
XI.03 No Waiver; Remedies. No failure on the part of any Lender or the
-------------------
Agent to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
XI.04 Costs and Expenses. The Company agrees to pay on demand:
------------------
(a) all out-of-pocket costs and expenses incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents and any other document to be
delivered hereunder or thereunder or in connection with the transactions
contemplated hereby or thereby, including the out-of-pocket expenses and
reasonable fees of counsel for the Agent (including local counsel which may be
retained by the Agent and the allocated cost of in-house counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents;
(b) all out-of-pocket costs and expenses incurred by the Agent or any
Lender in connection with the preservation of any rights under any Loan Document
or in connection with any restructuring or "work-out" of any of the Obligations
(whether through negotiations, legal proceedings or otherwise), including the
out-of-pocket expenses and reasonable fees of counsel for the Agent (including
the allocated cost of in-house counsel);
(c) all out-of-pocket costs and expenses incurred by the Agent or any
Lender in connection with the enforcement of any of the Obligations, including
the out-of-pocket expenses and reasonable fees of counsel for the Agent or such
Lender (including the allocated cost of in-house counsel);
(d) all out-of-pocket costs and expenses incurred by the Agent in
connection with due diligence, transportation, use of computers, duplication,
search reports and all filing and recording fees; and
(e) to each Lender being replaced pursuant to Section 4.09, the
------------
reasonable out-of-pocket expenses and reasonable fees of counsel (including the
allocated cost of in-house counsel) not exceeding $5,000 in connection with such
replacement.
XI.05 Indemnity.
---------
(a) The Company agrees to indemnify and hold harmless the Agent, the
Arranger and each Lender and each of their Affiliates and all directors,
officers, employees, agents and advisors of all of the foregoing (each, an
"Indemnified Party") from and against any and all claims, actions, proceedings,
-----------------
suits, damages, losses, liabilities, costs, expenses and disbursements,
including the out-of-pocket expenses and reasonable fees of counsel (including
the allocated cost of in-house counsel) which may be incurred by or asserted
against any Indemnified Party as a result of any investigation, litigation,
suit, action or proceeding (regardless of whether an Indemnified Party is a
party thereto) arising out of, relating to, or in connection with this
Agreement, any other Loan Document or any transaction or proposed transaction
(whether or not consummated) financed or to be financed, in whole or in part,
directly or indirectly, with the proceeds of any Borrowing (other than costs of
the type covered by Section 11.04) or any other transaction contemplated hereby;
-------------
except to the extent such claim, damage, loss, liability, cost or expense has
resulted primarily from such Indemnified Party's gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Notwithstanding any other provision contained in this Agreement,
this indemnity shall not be limited in any way by the passage of time or the
occurrence of any event.
(b) The Agent, the Arranger and each Lender agree that in the event that
any investigation, litigation, suit, action or proceeding is asserted or
threatened in writing or instituted against it or any other Indemnified Party,
or any remedial, removal or response action is requested of it or any other
Indemnified Party, for which the Agent, the Arranger or any Lender may desire
indemnity or defense hereunder, the Agent, the Arranger or such Lender shall
promptly notify the Company thereof in writing and agree, to the extent
appropriate, to consult with the Company with a view to minimizing the cost to
the Company of its obligations under this Section 11.05. The Company will not
-----
be required to pay the fees and expenses of more than one counsel for the
Indemnified Parties unless the employment of separate counsel has been
authorized by the Company, or unless any Indemnified Party reasonably concludes
that there may be defenses available to it which are not available to the other
Indemnified Parties or that there is a conflict between its interests and those
of the other Indemnified Parties.
(c) No action taken by legal counsel chosen by the Agent, the Arranger
or any Lender in defending against any such investigation, litigation, suit,
action or proceeding or requested remedial, removal or response action shall
vitiate or in any way impair the obligations and duties of the Company hereunder
to indemnify and hold harmless each Indemnified Party; provided, however, that
-----------------
if the Company is required to indemnify any Indemnified Party pursuant hereto,
neither the Agent nor the Arranger nor any Lender will settle or compromise any
such investigation, litigation, suit, action or proceeding without the prior
written consent of the Company (which consent shall not be unreasonably withheld
or delayed) so long as the Company has provided evidence reasonably satisfactory
to the Agent, the Arranger or such Lender that the Company and its Subsidiaries
on a consolidated basis do not at such time have a negative Net Worth.
XI.06 Right of Set-off. Upon the occurrence and during the continuation
----------------
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits in whatever currency (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Company against any
and all of the Obligations, whether or not such Lender shall have made any
demand under this Agreement. Each Lender agrees promptly to notify the Company
after any such set-off and application made by such Lender; provided, however,
-----------------
that the failure to give such notice shall not affect the validity of such set-
off and application. The rights of each Lender under this Section 11.06 are in
-------------
addition to any other right or remedy (including any other right of set-off)
which such Lender may have under applicable law or under any Loan Document.
XI.07 Binding Effect. This Agreement shall become effective when a
--------------
counterpart hereof shall have been executed by the Agent and counterparts hereof
executed by the Company and each Lender shall have been received by the Agent
and notice thereof shall have been given by the Agent to the other parties
hereto and thereafter shall be binding upon and inure to the benefit of the
Company, the Agent and each Lender and their respective successors and assigns;
provided, however, that (a) except as permitted under clause (b)(ii) of Section
- ----------------- -------------- -------
8.03, the Company may not assign or transfer its rights or obligations hereunder
- ----
without the prior written consent of all the Lenders and (b) the rights of
assignment and transfer of the rights and obligations of the Lenders hereunder
are subject to the provisions of Section 11.08.
-------------
XI.08 Assignments, Participations, Etc.
--------------------------------
(a) (i) Any Lender may with the prior consent of the Company (which
will not be unreasonably withheld) at any time assign to one or more
commercial banks all or any fraction of its Commitment and outstanding
Committed Loans in a minimum amount of $25,000,000 and in multiples of
$1,000,000 in excess thereof or, if its Commitment is less than
$25,000,000, in the amount of its Commitment.
(ii) Any Lender may without the prior consent of the Company
assign to another Lender all or any fraction of its Commitment and
outstanding Committed Loans in a minimum amount of $5,000,000 and in
multiples of $1,000,000 in excess thereof or, if the Commitment is less
than $5,000,000, in the amount of its Commitment.
(iii) Any Lender may at any time assign all or any portion of its
rights under this Agreement and any note issued pursuant to Section 2.05 to
------------
a Federal Reserve Bank; provided, however, that no such assignment shall
-----------------
release any Lender from its obligations hereunder.
(iv) Any Lender, if so requested by the Company under Section
-------
4.09, shall assign to another bank its entire Commitment and all
----
outstanding Committed Loans.
(v) Except as provided in clause (iii) above, no Lender may
assign any Bid Loans made by it hereunder except to another Lender or to
any other Person to which it is also assigning all or a fraction of its
Commitment and outstanding Committed Loans pursuant to clause (i) above.
----------
(b) No assignment shall become effective, and the Company and the Agent
shall be entitled to continue to deal solely and directly with each Lender in
connection with the interests so assigned by such Lender to an Assignee, until
(i) written notice of such assignment, together with an agreement to be bound,
payment instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agent by such Lender and
such Assignee, in substantially the form of Exhibit 11.08 (a ``otice of
------------- ---------
Assignment", and such Lender and such Assignee shall have executed in
- ------------
connection therewith an Assignment and Assumption Agreement substantially in the
form of Attachment A to such Notice of Assignment, (ii) a processing fee in the
------------
amount of $2,500 (provided, however, that in case of an assignment by a Lender
-----------------
to another Lender, such fee shall be in the amount of $750 and, in the case of
an assignment by a Lender to one of its Affiliates, no processing fee shall be
payable) shall have been paid to the Agent by the assignor Lender or the
Assignee, and (iii) either (A) five Business Days shall have elapsed after
receipt by the Agent of the items referred to in clauses (i) and (ii) or (B) if
----------- ---- ---
earlier, the Agent has notified the assignor Lender and the Assignee of its
receipt of the items mentioned in clauses (i) and (ii) and that it has
----------- ----
acknowledged the assignment by countersigning the Notice of Assignment.
(c) From and after the effective date of any assignment hereunder, (i)
the Assignee thereunder shall be deemed automatically to have become a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to such Assignee by the assignor Lender, shall have the rights and
obligations of a Lender hereunder and under each other Loan Document, and (ii)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned by it to the Assignee, shall be released from its future
obligations hereunder and under each other Loan Document.
(d) Any Lender may at any time sell to one or more financial
institutions or other Persons (each of such Persons being herein called a
"Participant") participating interests in any of the Loans, its Commitment or
-------------
other interests of such Lender hereunder; provided, however, that
-----------------
(i) no participation contemplated in this Section 11.08(d) shall
----------------
relieve such Lender from its Commitment or its other obligations hereunder
or under any other Loan Document;
(ii) such Lender shall remain solely responsible for the
performance of its Commitment and such other obligations;
(iii) the Company and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each other Loan Document; and
(iv) no Participant, unless such Participant is an Affiliate of
such Lender, shall be entitled to require such Lender to take or refrain
from taking any action hereunder or under any other Loan Document, except
that such Lender may agree with any Participant that such Lender will not,
without such Participant's consent, take any action of the type described
in the Section 11.02.
-------------
The Company acknowledges and agrees that each Participant, for purposes of
Section 3.05, 3.06, 4.02, 4.03, 4.05, 4.06 or 11.06, shall be considered a
- ------------------------------------------ -----
Lender; provided, however, that for purposes of Sections 3.05, 4.02, 4.03, 4.05
-------- ------- -------------------------------
and 4.06, no Participant shall be entitled to receive any payment or
----
compensation in excess of that to which such Participant's selling Lender would
have been entitled with respect to the amount of such Participant's
participation interest if such Lender had not sold such participation interest.
XI.09 Confidentiality. Each Lender agrees that all nonpublic information
---------------
provided to it by the Company or by the Agent on behalf of the Company in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby or thereby will be held and treated by such Lender, its
agents, directors, Affiliates, officers and employees in confidence and further
agrees and undertakes that neither it nor any of its Affiliates shall use any
such information for any purpose or in any manner other than pursuant to the
terms contemplated by this Agreement or relating to other business transactions
between the Company and such Lender. Any Lender may disclose such information
(a) at the request of any bank regulatory authority or in connection with an
examination of such Lender by any such authority or examiner; (b) pursuant to
subpoena or other court process; (c) when required to do so in accordance with
the provisions of any applicable law; (d) at the written request or the express
direction of any other agency of any State of the United States of America or of
any other jurisdiction in which such Lender conducts its business; and (e) to
such Lender's independent auditors, counsel and other professional advisors.
Notwithstanding the foregoing, the Company authorizes each Lender to disclose to
any Participant or Assignee and any prospective Participant or Assignee such
financial and other information in such Lender's possession concerning the
Company or its Subsidiaries which has been delivered to the Lenders pursuant to
this Agreement or any other Loan Document or which has been delivered to the
Lenders by the Company in connection with the Lenders' credit evaluation of the
Company and its Subsidiaries prior to entering into this Agreement; provided
that such Participant or Assignee or prospective Participant or Assignee agrees
in writing to such Lender to keep such information confidential to the same
extent as required of the Lenders hereunder.
XI.10 Survival. The obligations of the Company under Sections 3.05, 4.02,
-------- --------------------
4.03, 4.05, 4.06, 11.04 and 11.05, and the obligations of the Lenders under
- ----------------------- -----
Sections 3.05(j) and 10.07, shall in each case survive the repayment of the
- ---------------- -----
Loans and all other Obligations and the termination of this Agreement and the
Commitments; provided, however, that no request for reimbursement pursuant to
-----------------
such Sections (other than Sections 11.04(b) and (c) and 11.05) may be made more
----------------- --- -----
than six months after the termination of this Agreement and the Commitments.
The representations and warranties made by the Company in this Agreement and by
each Loan Party in each other Loan Document shall survive the execution and
delivery of this Agreement and such other Loan Document.
XI.11 Severability. Any provision of this Agreement or any other Loan
------------
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
XI.12 Headings. The various headings of this Agreement are inserted for
--------
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
XI.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
-------------
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
XI.14 Execution in Counterparts. This Agreement may be executed in any
-------------------------
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
XI.15 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
----------------
EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE COMPANY, THE LENDERS AND
THE AGENT AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS AND
UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN, RELATING TO THE SUBJECT
MATTER HEREOF EXCEPT FOR THE FEE LETTER AND ANY PRIOR ARRANGEMENTS MADE WITH
RESPECT TO THE PAYMENT BY THE COMPANY OF (OR ANY INDEMNIFICATION FOR) ANY FEES,
COSTS OR EXPENSES PAYABLE TO OR INCURRED (OR TO BE INCURRED) BY OR ON BEHALF OF
THE AGENT OR THE LENDERS.
XI.16 WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE LENDERS AND THE
--------------------
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
GEORGIA-PACIFIC CORPORATION
By:
--------------------------
Title:
-----------------------
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Treasurer's Department
Facsimile No.: (404) 230-5598
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
--------------------------
Title:
-----------------------
1230 Peachtree Street, N.E.
Suite 3800
Atlanta, Georgia 30309
Attention: Lynda Allen
Facsimile No.: (404) 249-6938
with a copy to:
Agency Administrative Services #5596
1455 Market Street, 12th Fl.
San Francisco, California 94103
Attention: Jon Y. Kubokawa
Facsimile No.: (415) 436-2700
Address for Payments:
ABA #121-000-358SF
Attention: Agency Administrative
Services #5596
1850 Gateway Boulevard
Concord, California 94520
Credit to Account number:
1233-7-15242
Reference: Georgia-Pacific
BA SECURITIES, INC.,
as Arranger
By:
--------------------------
Title:
-----------------------
335 Madison Avenue
New York, New York 10017
Attention: John Finan
Telephone: (212) 503-8327
Facsimile No.: (212) 503-7355
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
--------------------------
Title:
-----------------------
THE BANK OF NEW YORK
By:
--------------------------
Title:
-----------------------
THE BANK OF NOVA SCOTIA
By:
--------------------------
Title:
-----------------------
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:
--------------------------
Title:
-----------------------
BANQUE PARIBAS
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
THE CHASE MANHATTAN BANK
By:
--------------------------
Title:
-----------------------
CIBC INC.
By:
--------------------------
Title:
-----------------------
CITIBANK, N.A.
By:
--------------------------
Title:
-----------------------
COMMERZBANK AG, ATLANTA AGENCY
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
CREDIT LYONNAIS
ATLANTA AGENCY
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
THE FIRST NATIONAL BANK OF CHICAGO
By:
--------------------------
Title:
-----------------------
THE FUJI BANK, LIMITED,
ATLANTA AGENCY
By:
--------------------------
Title:
-----------------------
MIDLAND BANK PLC, NEW YORK BRANCH
By:
--------------------------
Title:
-----------------------
NATIONSBANK, N.A.
By:
--------------------------
Title:
-----------------------
THE SANWA BANK, LIMITED
By:
--------------------------
Title:
-----------------------
THE SUMITOMO BANK, LIMITED
By:
--------------------------
Title:
-----------------------
SUNTRUST BANK, ATLANTA
By:
--------------------------
Title:
-----------------------
TORONTO DOMINION (TEXAS), INC.
By:
--------------------------
Title:
-----------------------
UNION BANK OF SWITZERLAND
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
WACHOVIA BANK OF GEORGIA, N.A.
By:
--------------------------
Title:
-----------------------
[CONFORMED COPY]
GEORGIA-PACIFIC CORPORATION
TO
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
TRUSTEE
INDENTURE
DATED AS OF MARCH 1, 1983
<PAGE>
TABLE OF CONTENTS
Page
PARTIES...................................... .........1
RECITALS OF THE COMPANY.......... .....................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions::
Act ......................................2
Affiliate; control ................................. 2
Authenticating Agent ............................ 2
Board of Directors .......................2
Board Resolution ............................... 2
Business Day ...... ............................. 2
Commission ...................................2
Company ...................................... 2
Company Request; Company Order ..........3
Corporate Trust Office .......................3
corporation ............................3
Defaulted Interest ............................... 3
Event of Default ................................ 3
Holder ......................................... 3
Indenture ...................................... 3
interest ........................................ 3
Interest Payment Date ........................... 4
Investments .................................... 4
Investments in Unrestricted Subsidiaries .4
Maturity ...................................... 4
Net Tangible Assets ............................4
Officers' Certificate .............................. 4
Opinion of Counsel .............................. 5
Original Issue Discount Security ......... 5
Outstanding .................................... 5
Paying Agent ................................... 6
Person ......................................... 6
Place of Payment ............................... 6
Predecessor Security ............................. 6
Principal Property................ .............6
Redemption Date ........................ ....... 7
Redemption Price .........................7
Regular Record Date ......................7
Responsible Officer ......................7
Restricted Subsidiary ....................7
Securities ..............................8
Security Register and Security Registrar .8
Special Record Date ......................8
Stated Maturity ..........................8
Subsidiary ...............................8
Trustee ..................................8
Trust Indenture Act ......................9
Unrestricted Subsidiary ..................9
Vice President ...........................9
SECTION 102. Compliance Certificates and Opinions 9
SECTION 103. Form of Documents Delivered to Trustee 10
SECTION 104. Acts of Holders ...................10
SECTION 105. Notices, Etc., to Trustee and Company 11
SECTION 106. Notice to Holders; Waiver ........12
SECTION 107. Conflict with Trust Indenture Act 12
SECTION 108. Effect of Headings and Table of Contents 13
SECTION 109. Successors and Assigns ............13
SECTION 110. Separability Clause ...............13
SECTION 111. Benefits of Indenture .............13
SECTION 112. Governing Law .....................13
SECTION 113. Legal Holidays ....................13
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally ...................14
SECTION 202. Form of Face of Security ..........14
SECTION 203. Form of Reverse of Security .......17
SECTION 204. Form of Trustee's Certificate of
Authentication 22
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series........22
SECTION 302. Denominations .....................24
SECTION 303. Execution; Authentication, Delivery
and Dating 24
SECTION 304. Temporary Securities ..............25
SECTION 305. Registration, Registration of Transfer
and Exchange 26
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities 27
SECTION 307. Payment of Interest; Interest Rights
Preserved 28
SECTION 308. Persons Deemed Owners .........30
SECTION 309. Cancellation ...................30
SECTION 310. Computation of Interest .........30
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture 31
SECTION 402. Application of Trust Money .....32
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default .............. 32
SECTION 502. Acceleration of Maturity; Rescission
and Annulment 34
SECTION 503. Collection of Indebtedness and Suits
for Enforcement By Trustee 35
SECTION 504. Trustee May File Proofs of Claim ......36
SECTION 505. Trustee May Enforce Claims without
Possession of Securities 37
SECTION 506. Application of Money Collected ..37
SECTION 507. Limitation on Suits ..............38
SECTION 508. Unconditional Right of Holder
to Receive Principal, Premium and
Interest .....39
SECTION 509. Restoration of Rights and Remedies 39
SECTION 510. Rights and Remedies Cumulative ..39
SECTION 511. Delay or Omission Not Waiver 39
SECTION 512. Control by Holders 40
SECTION 513. Waiver of Past Defaults 40
SECTION 514. Undertaking for Costs 40
SECTION 515. Waiver of Stay or Extension Laws 41
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities 41
SECTION 602. Notice of Defaults ...............43
SECTION 603. Certain Rights of Trustee ......43
SECTION 604. Not Responsible for Recitals or
Issuance of Securities 44
SECTION 605. May Hold Securities ..............45
SECTION 606. Money Held in Trust ..............45
SECTION 607. Compensation and Reimbursement ......45
SECTION 608. Disqualification; Conflicting
Interests 46
(a) Elimination of Conflicting
Interest or Resignation 46
(b) Notice of Failure to Eliminate
Conflicting Interest or Resign....46
(c) "Conflicting Interest" Defined ..46
(d) Definitions of Certain Terms Used
in This Section 50
(e) Calculation of Percentages of
Securities 51
SECTION 609. Corporate Trustee Required; Eligibility52
SECTION 610. Resignation and Removal; Appointment of
Successor 52
SECTION 611. Acceptance of Appointment by Successor 54
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business............ 56
SECTION 613. Preferential Collection of Claims
Against Company 56
(a) Segregation and Apportionment
of Certain Collections by Trustee,
Certain Exceptions 56
(b) Certain Creditor Relationships
Excluded from Segregation and
Apportionment 59
(c) Definitions of Certain Terms
Used in This Section 60
SECTION 614. Appointment of Authenticating Agent 61
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders 63
SECTION 702. Preservation of Information;
Communications to Holders 63
SECTION 703. Reports by Trustee ................65
SECTION 704. Reports by Company ..................67
GEORGIA-PACIFIC CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated
as of March 1, 1983
Trust Indenture Act Section Indenture Section
Section310(a)(1).......................609
(a)(2)..........................609
(a)(3)..........................Not Applicable
(a)(4)...........................Not Applicable
(b)..............................608,610
Section311(a)..........................613(a)
(b).............................613(b)
(b)(2)..........................703(a)(2), 703(b)
Section312(a)..........................701, 702(a)
(b).............................702(b)
(c).............................702(c)
Section313(a)..........................703(a)
(b).............................703(b)
(c).............................703(a), 703(b)
(d).............................703(c)
Section314(a)..........................704
(b).............................Not Applicable
(c)(1) ........................102
(c)(2) .........................102
(c)(3) .........................Not Applicable
(d) ............................Not Applicable
(e) ............................102
Section315(a)..................... 601{a)
(b) ....................... 602, 703(a)(6)
(c)... .................... 601(b)
(d)........................ 601(c)
(d)(1) .........................601(a)(1)
(d)(2)..........................601(c)(2)
(d)(3) .........................601(c)(3)
(e) ............................514
Section316(a)..................... 101
(a)(1)(A) ...........................502, 512
(a)(1)(B) ...........................513
(a)(2) ..............................Not Applicable
(b) .................................508
Section317(a)(1) ......................503
(a)(2) ..............................504
(b) .................................1003
Section318(a) .........................107
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 801. Company May Consolidate, etc., on
Certain Terms..................................67
SECTION 802. Securities to be Secured in Certain Events ..68
SECTION 803. Successor Corporation to be Substituted ...68
SECTION 804. Opinion of Counsel to be Given Trustee 69
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent
of Holders 69
SECTION 902. Supplemental Indentures with Consent
of Holders 71
SECTION 903. Execution of Supplemental Indentures 72
SECTION 904. Effect of Supplemental Indentures 73
SECTION 905. Conformity with Trust Indenture Act 73
SECTION 906. Reference in Securities to Supplemental
Indentures 73
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest 73
SECTION 1002. Maintenance of Office or Agency 73
SECTION 1003. Money for Securities Payments to Be Held
in Trust 74
SECTION 1004. Limitation on Liens 76
SECTION 1005. Limitation on Sale and Lease-Back 78
SECTION 1006. Exemption from Limitation on Liens and Sale and
Lease-Back 80
SECTION 1007. Statement by Officers as to Default 80
SECTION 1008. Waiver of Certain Covenants 80
SECTION 1009. Applicability of Covenants 81
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article 81
SECTION 1102. Election to Redeem; Notice to Trustee 81
SECTION 1103. Selection by Trustee of Securities to
Be Redeemed 81
SECTION 1104. Notice of Redemption 82
SECTION 1105. Deposit of Redemption Price 83
SECTION 1106. Securities Payable on Redemption Date 83
SECTION 1107. Securities Redeemed in Part 83
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article 84
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities 84
SECTION 1203. Redemption of Securities for Sinking Fund 85
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1301. Indenture and Securities Solely Corporate
Obligations 85
TESTIMONIUM ..................................86
SIGNATURES AND SEALS ............................86
ACKNOWLEDGEMENTS ..................................87
INDENTURE, dated as of March 1, 1983, between GEORGIA-PACIFIC CORPORATION, a
corporation duly organized and existing under the laws of the State of Georgia
(herein called the "Company"), having its principal office at 133 Peachtree
Street, N.E., Atlanta, Georgia 30303, and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association duly organized and existing under
the laws of the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (herein called the "Securities"), to be
issued in one or more series as in this Indenture, provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition.
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in the
Borough of Manhattan, The City of New York at which at any particular time its
corporate trust business shall be administered except that with respect to
presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which at
any particular time its corporate agency business shall be administered.
"corporation" includes corporations, associations, companies and business
trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Event of Default" has the meaning specified in Section 501.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that such term shall exclude, if more than
one Person is acting as a Trustee under this instrument, any provisions or terms
which relate solely to other series of Securities for which any such Person is
not Trustee, regardless of when such terms or provisions were adopted, and any
provisions or terms adopted by means of one or more indentures supplemental
hereto executed and delivered after such Person had become such Trustee but to
which such Person, as such Trustee, was not a party.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears tnterest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Investments" means all investments, whether by acquisition of stock or
indebtedness, or by loan, advance, transfer of property, capital contribution or
otherwise.
"Investments in Unrestricted Subsidiaries" means Investments made by the
Company or by any Restricted Subsidiary in Unrestricted Subsidiaries, net of
Investments made by Unrestricted Subsidiaries in the Company or any Restricted
Subsidiary. If any corporation which becomes a Restricted Subsidiary after the
date of this Indenture shall, at the time it becomes a Restricted Subsidiary,
have any Investments in an Unrestricted Subsidiary, such Investments shall be
deemed to be Investments made by the Company in such Unrestricted Subsidiary at
the time such corporation becomes a Restricted Subsidiary, in the amount at
which such Investments are then carried on the books of such corporation. If
any corporation shall become an Unrestricted Subsidiary after the date of this
Indenture, the Investments of the Company and its Restricted Subsidiaries in
such corporation shall be deemed to be Investments made at the time such
corporation becomes an Unrestricted Subsidiary, in the amount at which such
Investments are then carried on the books of the Company and its Restricted
Subsidiaries.
"Maturity" when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Net Tangible Assets" means, at any date, the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities, (b) any item representing Investments in
Unrestricted Subsidiaries and (c) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, all
of the foregoing as set forth on the then most recent consolidated balance sheet
of the Company and its Subsidiaries and computed in accordance with generally
accepted accounting principles.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pur-suant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver here-under and for the
purpose of making the calculation required by Section 703(a), (a) the principal
amount of an Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, and (b) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice.
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any mill, manufacturing plant, manufacturing
facility or timberlands, owned by the Company and/or one or more Restricted
Subsidiaries and located within the continental United States of America;
provided that the term "Principal Property" shall not include: (a) any such
mill, plant, facility or timberlands or portion thereof (i) which is financed by
obligations issued by a State, a Territory, or a possession of the United States
of America, or any political subdivision of any of the foregoing, or the
District of Columbia, the interest on which is excludable from gross income of
the holders thereof pursuant to the provisions of Section 103 (a) (1) (but only
if by reason of Section 103 (b)(4)(E) or (F)) of the Internal Revenue Code (or
any successor to such provision) as in effect at the time of the issuance of
such obligations, or (ii) which in the opinion of the Board of Directors is not
of material importance to the total business conducted by the Company and its
Restricted Subsidiaries, considered as a whole; or (b) any timberlands
designated by the Company's Board of Directors as being held primarily for
development and/or sale rather than for the production of timber; or (c) any
minerals or mineral rights.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary (i) substantially all of the
property of which is located within the continental United States of America and
(ii) which itself, or with the Company and/or one or more other Restricted
Subsidiaries, owns a Principal Property.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture; provided. however, that if at any time there is more than one
Person acting as Trustee under this instrument, "Securities" with respect to the
Indenture as to which such Person is Trustee shall have the meaning stated in
the first recital of this instrument and shall more particularly mean Securities
authenticated and delivered under this instrument; exclusive, however, of
Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries
and which is consolidated in the Company's accounts. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
905.
"Unrestricted Subsidiary" means any Subsidiary of the Company other than a
Restricted Subsidiary.
"Vice President", when used with respect to the Company or the Trustee, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which. the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document. but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based arc
erroneous. Any such certificate or Opinion of Counsel may be based, insolaf as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company
and any agent of the Trustee or of the Company, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act
of Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with.
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Division, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid. to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings heroin and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent. any Security Registrar and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the forms set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities. as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
GEORGIA-PACIFIC CORPORATION
No. $
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (hereinafter referred to
as the "Company"), for value received, hereby promises to pay to
, or registered assigns, the principal sum of Dollars on
[If the Security is to bear interest prior to Maturity, insert--and to pay
interest thereon from or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually
on and in each year, commencing ,
at the rate of% per annum, until the principal hereof is
paid or made available for payment [If applicable insert--, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of
% per annum on any overdue principal and premium and on any overdue
- ---
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture
hereinafter referred to, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the ............ or
............ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.]
[If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum (to the extent that the payment of such
---
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment or such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of % per annum (to the extent that the payment of such
---
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert-
- -any such] interest on this Security will be made at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debt [if applicable,
insert--; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
GEORGIA-PACIFIC CORPORATION
BY:
----------------------
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of March 1, 1983 (herein called the "Indenture"),
between the Company and The Chase Manhattan Bank (National Association), as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this
Security is a part), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [limited in aggregate principal amount to
$ ].
[lf applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days notice by mail.
[if applicable. insert--(l) on in any year commencing with the
year and ending with the year through operation of the sinking
fund for this series at a Redemption Price equal to % of the principal
---
amount, and (2)] at any time [on or after ............... 19..], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
.%, and if redeemed] during the 12-month period ending of the years indicated.
REDEMPTION REDEMPTION
Year Price Year Price
and thereafter at a Redemption Price equal to ...% of the principal amount,
together in the case of any such redemption [if applicable, insert-- (whether
through operation of the sinking fund or otherwise)l with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert--The Securities of this series are subject to redemption
upon not less than 30 nor more than 60 days' notice by mail (1) on _____ in any
year commencing with the year .......and ending with the year through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after ......... ], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: if redeemed during the 12-month period ending of the years indicated.
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ... % of the principal, amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to .... , redeem
any
Securities of this series as contemplated by [Clause (2) of the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of money borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than .. % per annum.]
[The sinking fund for this series provides for the redemption on .... in
each
year beginning with the year ... and ending with the year ... of [not less
than]
$.. [("mandatory sinking fund") and not more than l.. ] aggregate principal
amount of Securities of this series.
[Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made [--in the
inverse order in which they become due.]
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
[If the Security is not an Original Issue Discount Security,--If an Event of
Default with respect to Securities of this series shall occur and be continuing,
the principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security,--If an Event of
Default with respect to Securities of this series shall occur and be continuing,
an amount of principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the Indenture. Such amount
shall be equal to--insert formula for determining the amount. Upon payment (i)
of the amount of principal so declared due and payable and (ii) of interest on
any overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on the Securities of this series shall terminate.l]
[If applicable, insert--The covenants set forth in Sections... of the
Indenture shall not be applicable to the Securities of this series.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trusts with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination. as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue. and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION ).
as Trustee
By:
-----------------------------------------
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited: Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series.
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest shall be payable and the Regular Record Date for
the interest payable on any Interest Payment Date:
(5) the place or places where the principal of (and premium, if any) and
interest, if any, on Securities of the series shall be payable:
(6) the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series may be redeemed,
in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the method by which such portion shall be determined; and
(10) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officers' Certificate or in any such
indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to
a Board Resolution. a copy of an appropriate record of such action shall be
certified by the Secretary, or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series. the Securities of such series, shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were
at the time of the execution thereof the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securitie, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the teams of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have
been established in conformity with the provisions of this Indenture;
and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel will constitute valid
and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' fights and to general equity
principles, regardless of' whether such enforceability is considered in
a proceeding at equity or law.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographer, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions. substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securites of such series shall be exchangeable for definitive Securities of such
series upon surrender of the temporary Securities of such series at the office
or agency of the Company in a Place of Payment for that series, without charge
to the Holder. Upon surrender for cancel-lation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations. Until so
exchanged the temporary Securi-ties of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTXON 305. Registration. Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which. subject to such
reasonable regulations as it may prescribe. the Company shall provide for the
registration of Securities and of transfers of Securi-ties. The Trustee i$
hereby initially appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series at
the office or agency in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange. the Company shall execute. and the Trustee shall authenticate and
deliver. the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt. and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or. surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Sec-tion 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 306. Mutilated. Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously ouutanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like tenor and principal amount and bearing a
number not con-temporaneously outstanding.
In case any such mutilated. destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discre-tion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Com-pany may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replace-ment or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest: Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (heroin
called "Defaulted Interest") shall. if such interest remains unpaid for a period
of 30 days, forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed
in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to 'the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangemenu satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than l0 days after the receipt by the Trustee or the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense or the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid. to
each Holder of Securities of such series at his address as it appears in the
Security Register. not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not incon-sistent with
the requiremenu of any securities exchange on which such Securities may be
listed. and upon such notice as may be required by such exchange, if. after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause. such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid. and to accrue. which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Com-pany or the Trustee shall be affected by
notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer
or exchange or for credit against any sinking fund payment shall, if surrendered
to any Person other than the Trustee. be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. If the Company shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order and the Trustee shall deliver a certificate of
destruction to the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with
respect to any series of Securities (except as to any surviving rights of
registration of transfer or exchange of Securities of such series herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction .and discharge of this
Indenture as to such series, when
( 1 ) either
(A) all Securities of such series theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306
and (ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Com-pany or discharged .from such trust. as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giv-ing of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be 'deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not thereto-fore delivered to the
Trustee for cancellation. for principal (and premium. if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date. as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and dis-charge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture. the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and. if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section. the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment. either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto. of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order. rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days: or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture
solely for the benefit of series of Securities other than that series),
and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company
by the Trustee or to the Company and the Trustee by the Holders of at
least
25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder:
or
(4) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary
cue or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed
a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State
law,
or appointing a custodian, receiver, liquidator, assignee, trustee
, sequestrator
or other similar official of the Company or of any substantial part of
its
property, or ordering the winding up or liquidation of its affairs, and
the
continuance of any such decree or order for relief or any such other
decree
or order unstayed and in effect for a period of 60 consecutive days; or
(5) the commencement by the Company of a voluntary case or proceeding
under
any applicable Federal, or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order
for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization
or other similar law or to the commencement of any bankruptcy or
insolvency
case or proceeding against it. or the filing by it of a petition or
answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of
any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability
to pay its debts generally as they become due; or
(6) any other Event of Default provided with respect to Securities of that
series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or spccifcd portion thereof:) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor
in such Securities, and
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable
compensation, expenses, disbursements and advances of the Trustee,
its agents
and counsel;
(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period
of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, inter-est on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the cosU and expenses of
collection, including the reasonable compensation. expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust. may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
khe property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
fights and the fights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation.
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors. the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered. by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal. or such
portion of the principal amount of any series of Original Issue Discount
Securities as may be specified in the terms of such series. (and premium.
if any) and interest owing and unpaid in respect of the Securitie~ and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee. its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and. in the event that the
Trustee shall consent to the making of such payments directly to the Holders. to
pay to the Trustee any amount due it for the reasonable compensation, expenses.
disbursements and advances of the Trustee. its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable tompen-sation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
and
SECOND: TO the payment of the amounts then due and unpaid
for principal of (and premium. if any) and interest on the Securities in
respect of which or for the benefit of which such money has been collected.
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trust-ee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request:
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any fight in any manner whatever by virtue of. or by availing of, any provision
of this Indenture to affect. disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner heroin provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal.
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively tO their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to bc exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, b~ cumulative and in
addition to every other fight and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holders of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time. and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect
to such series and its consequences, except a default
(l) in the payment of the principal of (or premium, if any) or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or
other default
or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party "2, litigant in
such suit of an undertaking to pay the costs of such suit. and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securi-ties of such series, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption. on or
after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein. upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture.
(b) In case an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to such Securities
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own wilful misconduct, except that
(1) this Subsection shall not bc construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the Holders of a majority in principal amount of the Outstanding Securities
of any series, determined as provided in Section 512. relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to expond
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers. tf tt shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
Hability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect to
the Securities of any series, the Trustee shall transmit by mail to all Holders
of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
instalment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
provided, further, that in the case of any default of the character specified in
Section 501 (4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part. rely upon an Officers' Certificate:
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the fights
or powers vested in it by this Indenture at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by
agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the pan of any agent or attorney appointed with due care by it
hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities. except the Trustee's
certificates of authentication. shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee. any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and. subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from. time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursement and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss. liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under this
Section. the Trustee shall have a lien prior to the Securities upon all property
and Funds held or collected by the Trustee as such. except Funds held in trust
for the benefit of the Holders of particular Securities.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as defined
in this Section, with respect to the Securities of any series, it shall, within
90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section with respect to the Securities of any series,
the Trustee shall, within 10 days after the expiration of such 90-day period,
transmit by mail to all Holders of Securities of that series. as their names and
addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have a
conflicting interest with respect to the Securities of that series if
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Securities of any series other than that series or is trustee
under another indenture under which any other securities, or certificates of
interest or participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Securities issued under this
Indenture, provided that there shall be excluded from the operation of this
paragraph this Indenture with respect to the Securities of any series other
than that series or any indenture or indentures under which other securities.
or certificates of interest or participation in other securities. of the
Company are outstanding, if
(i) this Indenture and such other indenture or indentures are wholly unsecured
and such other indenture or indentures are hereafter qualified under the Trust
Indenture Act, unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust Indenture Act that
differences exist between the provisions of this Indenture with respect to
Securities of that series and one or more other series or the provisions of
such other indenture or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such under this
Indenture with respect to the Securities of that series and such other series or
under such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving, on application
to the Commission and after opportunity for hearing thereon, that trusteeship
under this Indenture with respect to the Securities of that series and such
other series or such other indenture or indentures is not so likely to involve
a material conflict of interest as to make it necessary in the public interest
or for the protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Securities of that series and such
other series or under such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an obligor
upon the Securities or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or indirectly
controlled by or is under direct or indirect common control with the Company or
an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a director,
officer, partner, employee, appointee or representative of the Company, or of an
underwriter (other than the Trustee itself) for the Company who is currently
engaged in the business of underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the Trustee and a director or an
executive officer. or both, of the Company but may not be at the same time an
execu-tive officer of both the Trustee and the Company; (ii) if and so long as
the number of directors of the Trustee in office is more than nine. one
additional individual may be a director or an executive officer, or both, of the
Trustee and a director of the Company; and (iii) the Trustee may be designated
by the Company or by any underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent
or depositary, or in any other similar capacity, or, subject to the provisions
of paragraph (1) of this Subsection. to act as trustee, whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is beneficially owned
either by the Company or by any director, partner or executive officer thereof,
or 20% or more of such voting securities is beneficially owned, collectively, by
any two or more of such persons; or 10% or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for the Company or by any
director, partner or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this Subsection
defined), (i) 5% or more of the voting securities, or 10% or more of any other
class of security, of the Company not including the Securities issued under this
Indenture and securities issued under any other indenture under which the
Trustee is also trustee, or (ii) 10% or. more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this Subsection
defined), 5% or more of the voting securities of any person who, to the
knowledge of the Trustee, owns 10% or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect common control
with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this Subsection
defined), 10% or more of any class of security of any person who, to the
knowledge of the Trustee, owns 50% or more of the voting securities of the
Company; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity of
executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflicting interest under paragraph (6), (7) or (8) of
this Subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator or testamentary trustee of
an estate which included them, the provisions of the preceding sentence shall
not apply, for a period of two years from the date of such acquisition. to
the extent that such securities included in such estate do not exceed 25% oE
such voting securities or 25% of any such class of security. Promptly after
May 15 in each calendar year, the Trustee shall make a check of its holdings
of such securities in any of the above-mentioned capacities as of such May
15. If the Company fails to make payment in full of the principal of (or
premium. if any, or interest on any of the Securities when and as the same
becomes due and payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such securities in
any of the above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the Trustee,
with sole or joint control over such securities vested in it, shall but only
so long as such failure shall continue, be considered as though beneficially
owned by the Trustee for the purposes of paragraphs (6)% (7) and (8) of this
Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive, of this
Subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection only,
(i) the terms "security" and "securities" shall include only such securities as
are generally known as corporate securities, but shall not include any note or
other evidence of indebtedness issued to evidence an obligation to repay moneys
lent to a person by one or more banks, trust companies or banking tirms, or any
certificate of interest or participation in any such note or evidence of
indebtedness: (ii) an obligation shall be deemed to be "in default" when a
default in payment of principal shall have continued for 30 days or more and
shall not have been cured: and (iii) the Trustee shall not be deemed to be the
owner or holder of (A) any security which it holds as collateral security, as
trustee or otherwise, for an obligation which is not in default as defined in
clause (ii) above. or (B) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (C) any security
which it holds as agent for collection, or as custodian, escrow agent or
depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the Company, means
every person who, within three years prior to the time as of which the
determination is made, has purchased from the Company with a view to, or has
offered or sold for the Company in connection with, the distribution of any
security of the Company outstanding at such time, or has participated or has
had a direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, an unincorporated organization
or a government or political subdivision thereof. As used in this paragraph,
the term "trust" shall include only a trust where the interest or interests
of the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently entitling the
owner or holder thereof to vote in the direction or management of the affairs
of a person, or any security issued under or pursuant to any trust agreement
or arrangement whereby a trustee or trustees or agent or agents for the owner
or holder of such security are presently entitled to vote in the direction
or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice president,
every trust officer, the cashier, the secretary and the treasurer of a
corporation, and any individual customarily performing similar functions with
respect to any organization whether incorporated or unincorporated, but shall
not include the chairman of the board of directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee, the
Company or any other person referred to in this Section (each of whom is
referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person are
entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person means such
percentage of the aggregate amount of securities of the class outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to another
class of securities of the issuer, if the obligation evidenced by such
other class of securities is not in default as to principal or interest or
otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another security
if both securities confer upon the holder or holders thereof substantially
the same rights and privileges; provided, however, that, in the case of
secured evidences of indebtedness, all of which are issued under a single
indenture, differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such series
different classes and provided, further, that, in the case of unsecured
evidences of indebtedness, dif-ferences in the interest rates or maturity
dates thereof shall not be deemed sufficient to constitute them securities of
different classes, whether or not they are issued under a single indenture.
SECTION 609. Corporate Trustee Required: Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of one
or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail
to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of Trustee for any cause. with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the securities of such series and to the extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdidtion for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case or the appointment hereunder or a successor Trustee with respect to
the Securities or one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture supplemental hcreto wherein
each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shah continue to be vested in the retiring Trustee, and
(3) shall add to or change any or the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
inden-ture the resignation or removal of the retiring Trustee shah become effec-
tive to the extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shah become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such succtssor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
Whenever there is a successor Trustee with respect to one or more (but less than
all) series or Securities issued pursuant to this instrument, the terms
"Indenture" and "Securities" shall have the meanings specified in the
provisos to
the respective definitions of those terms in Section 101 which contemplate such
situation.
(c) Upon request of any such successor Trustee. the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights. powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated. or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered. by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and owing
upon any claim as such creditor in respect of principal or interest, effected
after the beginning of such four months' period and valid as against the
Company and its other creditors, except any such reduction resulting from the
receipt or disposition of any property described in paragraph (2) of this
Subsection. or from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claims as such
creditor, either as security therefor, or in satisfaction or com-position
thereof, or otherwise, after the beginning of such four months' period. or an
amount equal to the proceeds of any such property, if disposed of, subject.
however, to the rights, if any, of the Company and its other creditors in
such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any such
claim by any Person (other than the Company) who is liable thereon, and (ii)
the proceeds of the bona fide sale of any such claim by the Trustee to a
third Person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the claim
heroinafter mentioned, upon any property held by it as security for any such
claim, if such claim was created after the beginning of such four months'
period and such property was received as security therefor simultaneously
with the creation thereof, and if the Trustee shall sustain the burden of
proving that at the time such property was so received the Trustee had no
reasonable cause to believe that a default, as defined in Subsection (c) of
this Section. would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or (C),
against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be. to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such four months' period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payment from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant
to the Federal Bankruptcy Act or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Holders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash. securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders and the holders of other indenture securities, in accordance with the
provisions of this paragraph. the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Holders and the holders of other indenture securities with respect to their
respective claims, in which event it shall not be necessary to liquidate or to
appraise the value of any securities or other property held in such special
account or as security for any such claim, or to make a specific allocation of
such distributions as between the secured and unseenred portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of such
four months' period shall be subject to the provisions of this Sub-section as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim. which would have given
rise to the obligation to account, if such Trustee had continued as Trustee,
occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of competent
jurisdiction or by this Indenture, for the purpose of preserving any property
which shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances thereon, if notice of
such advances and of the circumstances surrounding the making thereof is given
to the Holders at the time and in the manner provided in this Indenture:
(3) disbursements made in the ordinary course of business in the capacity of
trustee
under an indenture, transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services rendered or premises
rented; or an indebtedness created as a result of goods or securities sold in a
cash transaction, as defined in Subsection (c) of this Section;
(5) the ownership of stock or of other securities of a corporation organized
under the provisions of Section 25(a) of the Federal Reserve Act, as amended,
which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any drafts,
bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of this
Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of the
principal of or interest on any of the Securities or upon the other indenture
securities when and as such principal or interest becomes due and payable;
(2) the term "other indenture securities" means securities upon which the
Company is an obligor outstanding under any other indenture (i) under which the
Trustee is also trustee, (ii) which contains provisions substantially similar to
the provisions of this Section. and (iii) under which a default exists at the
time of the apportionment of the funds and property held in such special
account;
(3) the term "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of the
goods or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand:
(4) the term "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company for the purpose of financing the purchase, processing, manufacturing,
shipment, storage or saic of goods, wares or merchandise and which is secured
by documents evidencing title to, possession of, or a lien upon, the goods,
wares or merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the
creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation;
(5) the term "Company" means any obligor upon the Securities;
and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or Title I 1
of the United States Code.
SECTION 6 14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authen-ticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority. then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, power and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such Series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
This is one of the Securities or the series designated therein referred to in
the within-mentioned Indenture.
THE CHASE MANHANTTAN BANK
(NATIONAL ASSOCIATION),
As Trustee
By:______________________________
As Authenticating Agent
BY: ____________________________
.........Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than March 15 and September 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of the preceding March 1 or
September 1, as the case may be, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information: Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list
furnished to the Trustee as provided in Section 701 and the names and addresses
of Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(b) If three or more Holders of Securities of any series (herein referred to
as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders of
Securities of the same series with respect to their rights under this Indenture
or under the Securities of such series and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five business days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the time
by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities of such series whose name and address appear
in the information preserved at the time by the Trustee in accordance with
Section 702(a) a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interest of such Holders or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such'
Holders with. reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after January 1 of each year commencing with the year
1984, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, a brief report dated as of such
January 1 with respect to:
(1) its eligibility under Section 609 and its qualifications under
Section 608, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) which remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or charge, prior
to that of the Securities, on any property or funds held or collected by it
as Trustee, except that the Trustee shall not be required (but may elect)
to report such advances if such advances so remaining unpaid aggregate not
more than 1/2; of 1% of the principal amount of the Securities Outstanding
on the date of such report:
(3) the amount, interest rate and maturity date of all other indebtedness
owing by the Company (or by any other obligor on the Securities) to the
Trustee in its individual capacity, on the date of such report. with a brief
description of any property held as collateral security therefor, except an
indebtedness based upon a creditor rela-tionship arising in any manner
described in Section 613(b)(2), (3), (4) or (6);
(4) the property and funds, if any, physically in the possession of the
Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not previously
reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so tO state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claim or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company. The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall file
with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses appear
in the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.
SECTION 801. Company May Consolidate, Etc., on Certain Terms.
Subject to the provisions of Section 802, nothing contained in this Indenture
shall prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease of all or substantially all the property of the Company, to any other
corporation (whether or not affili-ated with the Company) authorized to acquire
and operate the same: provided, and the Company. hereby covenants and agrees,
that, if the surviving corporation is other than the Company, upon any such con-
solidation, merger, sale, conveyance or lease, the due and punctual payment of
the principal of and interest on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company, shall
be expressly assumed by supplemental indenture satisfactory in form to the
Trustee, executed and delivered to the Trustee by the corporation formed by such
consolidation, or into which the Company shall have been merged, or by the
corporation which shall have acquired or leased such property.
SECTION 802. Securities to be Secured in Certain Events.
If, upon any consolidation, merger, sale, conveyance of lease referred to in
Section 801, any Principal Property of the Company or of any Restricted
Subsidiary or any shares of stock or indebtedness of any Restricted Subsidiary
owned immediately prior thereto would thereupon become subject to any mortgage,
security interest, pledge, lien or encum-brance, other than liens permitted
under Section 1004 or Section 1006, without securing the Securities, the
Company, prior to such consolidation, merger, sale, conveyance or lease, will by
indenture supplemental hereto secure the due and punctual payment of the
principal of and interest on the Securities (equally and ratably with any other
indebtedness of the Company then, or as a result thereof to be, secured thereby)
by a direct lien on such Principal Property, shares of stock or indebtedness,
prior to all lieu other than any then existing thereon and then so permitted by
Section 1004 or Section 1006.
SECTION 803. Successor Corporation to be Substituted.
In case of any such consolidation, merger, sale, conveyance or lease and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of and interest on all of the Securities
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Company, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named heroin as the party of the first part. Such successor
corporation thereupon may cause to be signed and may issue either in its own
name or in the name of Georgia-Pacific Corporation any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee. or an Authenticating Agent on behalf
of the Trustee, shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers of the
Company to
the Trustee for authentication. and any Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit, under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such conso&idation, merger, sale, conveyance or lease such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 804. Opinion of Counsel to be Given Trustee.
The Trustee shall be entitled to receive, and subject to Sections 601 and
603, shall be fully protected in relying upon an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance or
lease and any such assumption complies with the provisions of this Article
Eight.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee.
for any of the following purposes:
(1) to evidence the succession of another corporation to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities. stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company, provided that
in respect of any such additional covenant, restriction or condition. such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default;
or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities.
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrabie or not rcgistrable as to principal,
and with or without interest coupons; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entided to the benefit of
such provision; or
(6) to secure the Securities pursuant to the requirements of Section
802 or Section 1004 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(g) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section 6
11 (b); or
(9) to cure any ambiguity, to correct or supplement any provi-sion herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than 66-2/3% in principal
amount of
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502, or change
any Place of Payment where, or the coin or currency in which, any Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture. or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby, provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1008, or the deletion of this
proviso, in accordance with the requirements of Sections 61 l(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shah
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee' own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article. this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes: and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided, for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of (and premium, if any) and
interest on, if any, the Securities of that series in accordance with the terms
of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities
an office or agency where Securities of that series may be presented or
surrendered for payment where Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location. and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium. if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment of
principal (and premium, if any) or interest on the Securities of that series;
and
(3) at any time during the continuance of any such default. upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for three years
after such principal (and premium, if any) or interest has become due and
payable shah be paid to the Company on Company Request, or (if then held by the
Company) shah be discharged from such trust; and the Holder of such Security
shah thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trtlSt money, and all liability of the Company as trustee
thereof. shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The Borough of Manhattan, City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Limitation on Liens.
The Company will not create or assume. and will not permit any Restricted
Subsidiary to create or assume, any mortgage, security interest, pledge or lien
(collectively in this Article Ten referred to as "lien") of or upon any
Principal Property or shares of capital stock or indebtedness of any Restricted
Subsidiary, whether owned at the date of this Indenture or thereafter acquired,
without making effective provision, and the Company in such case will make or
cause to be made effective provision, whereby the Outstanding Securities shall
be secured by such lien equally and ratably with any and all other indebtedness
or obligations thereby secured, so long as such other indebtedness or
obligations shall be so secured; provided that the foregoing shall not apply to
any of the following:
(1) liens on any Principal Property acquired, constructed or improved
after the date of this Indenture which are created or assumed
contemporaneously with, or within 120 days after, or pursuant to financing
arrangements for which a firm commitment is made by a bank, insurance
company or other lender or investor (not including the Company or any
Restricted Subsidiary) within 120 days after. the completion of such
acquisition, construction or improvement to secure or provide for the
payment of any part of the purchase price of such property or the cost of
such construction or improvement, or, in addition to liens contemplated by
chuses (2) and (3) below, liens on any Principal Property existing at the
time of acquisition thereof, provided that in the case of any such
acquisition, construction or improvement the lien shall not apply to any
property theretofore owned by the Company and/or, one or more Restricted
Subsidiaries other than, in the case of such construction or improvement
any theretofore unimproved real property on which the property so
constructed, or the improvement, is located:
(2) liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation is merged into or consolidated
with the Company or a Restricted Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted Subsidary;
(3) liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(4) liens to secure indebtedness of a Restricted Subsidiary to the Company
and/or one or more Subsidiaries;
(5) liens in favor of the United States of America or any State thereof. or
any department, agency or political subdivision of the United States of America
or any State thereof, to secure partial progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or the cost of
constructing or improving the property subject to such liens;
(6) liens on timberlands in connection with an arrangement under which the
Company and/or one or more Restricted Subsidiaries are obligated to cut or pay
for timber in order to provide the lienholder with a specified amount of money.
however determined;
(7) liens created or assumed in the ordinary course of the business of
exploring for, developing or producing oil, gas or other minerals (including in
connection with borrowings of money for such purposes) on, or on any interest
in, or on any proceeds from the sale of, property, acquired or held for the
purpose of exploring for, developing or producing oil, gas or other minerals, or
production therefrom, or proceeds of such production, or material or equipment
located on such property;
(8) lieu in favor of any customer arising in respect of performance deposits
and partial. progress, advance or other payments made by or on behalf of such
customer for goods produced or to be produced for or services rendered or to be
rendered to such customer in the ordinary course of business, which liens shall
not exceed the amount of such deposits or payments;
(9) liens for the sole purpose of extending, renewing or replacing in whole
or in part any lien referred to in the foregoing clauses (1) to (8),
inclusive. or in this clause (9), or any lien created prior to and
existing on the date of this Indenture, provided that the indebtedness
secured thereby shall not exceed in principal amount the indebtedness so
secured at the time of such extension, renewal or replacement. and that such
extension, renewal or replacement shall be limited to all or a part of the
property which secured the lien so extended, renewed or replaced (plus
improvements on such property);
(10) mechanics', workmen's, repairmen's, materialmen's, carriers' and other
similar liens arising in the oridinary course of business;
(11 ) liens created by or resulting from any litigation or proceedings
which are being contested in good faith by appropriate proceedings; liens
arising out of judgments or awards against the Company and/or one or more
Restricted Subsidiaries with respect to which the Company and/or such
Restricted Subsidiary or Subsidiaries are in good faith prosecuting an appeal
or proceedings for review; or liens incurred by the Company and/or one or
more Restricted Subsidiaries' for the purpose of obtaining a stay or
discharge in the course of any legal proceeding to which the Company and/or
such Restricted Subsidiary or
Subsidiaries are a party or
(12) liens for taxes or assessments or governmental charges or levies not
yet due or delinquent, or which can thereafter be paid without penalty, or
which are being contested in good faith by appropriate proceedings;
landlord's liens on property held under lease, and tenants' rights under
leases; easements; and any other liens of a nature similar to those
hereinabove
described in this clause (12) which do not, in the opinion of the Company,
materially impair the of such property
in the operation of the business of the Company or any Restricted Subsidiary or
the value of such property for the purposes of such business.
SECTION 1005. Limitation on Sale and Lease-Back.
The Company will not, nor will it permit any Restricted Subsidiary to, enter
into any arrangement with any person providing for the leasing by the Company
and/or one or more Restricted Subsidiaries of any Principal Property (except for
temporary leases for a term. including any renewal thereof, of not more than
three years and except for leases between the Company and one or more Restricted
Subsidiaries or
between Restricted Subsidiaries), which property has been or is to be sold or
transferred by the Company and such Restricted Subsidiary or Subsidiaries
to such person (in this Article Ten referred to as a "Sale and Lease-Back
Transaction") unless (a) the Company and/or Restricted Subsidiary, or
Subsidiaries would be entitled to incur indebtedness secured by a lien on such
property without equally and ratably securing the Securities pursuant to the
provisions of Section 1004, or (b) the Company shall apply or cause to be
applied an amount equal to the Value of such Sale and Lease-Back Transaction
within 120 days of the effective date of any arrangement (i) to the retirement
of indebtedness for borrowed money incurred or assumed by the Company or any
Restricted Subsidiary (other than indebtedness for borrowed money owed to the
Company and/or one or more Restricted Subsidiaries) which by its terms matures
on, or is extendable or renewable at the option of the obligor to a date more
than twelve months after the date of the incurfence or assumption of such
indebtedness and which is senior in right of payment to, or ranks pari passu
with, the Securities ("funded debt"), or (ii) to the purchase of other property
which will constitute "Principal Property" having a fair value in the opinion
of the Board of Directors at least equal to the Value of such Sale and Lease-
Back Transaction. or (c) the Company or a Restricted Subsidiary. shall deliver
to the Trustee or other applicable trustee for cancellation Securities or funded
debt in aggregate principal amount at least equal to the Value of such Sale and
Lease-Back Transaction.
For purposes of this Section 1005 and Section 1006, the term "Value" shall
mean, with respect to a Sale and Lease-Back Transaction. as of any particular
time, the amount equal to the greater of (1) the net proceeds of the sale or
transfer of the property leased pursuant to Such Sale and Lease-Back Transaction
or (2) the fair value in the opinion of the Board of Directors of such property
at the time of entering into such Sale and Lease-Back Transaction, in either
case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination without regard to any renewal or extension options contained in
the lease.
SECTION 1006. Exemption from Limitation on Liens and Sale and Lease-Back.
Notwithstanding the provisions of Sections 1004 and 1005, the Company and
any one or more of its Restricted Subsidiaries may nevertheless create or assume
liens which would otherwise require securing of the Securities under said
provisions, and enter into Sale and Lease-Back Transactions without compliance
with either clause (b) or (c) of Section 1005, provided that the aggregate
amount of all such liens and Sale and Lease-Back Transactions permitted by this
Section at any time outstanding, (as measured by the sum of (i) all
indebtedness secured by all such liens then outstanding or to be so created or
assumed. but excluding secured indebtedness permitted under the exceptions in
Section 1004, and (ii) the Value of all such Sale and Lease-Back Transactions
then out-standing or to be so entered into, but excluding such transactions in
which indebtedness is retired or property is purchased or Securities or funded
debt are delivered pursuant to Section 1005) shall not exceed 5% of the Net
Tangible Assets of the Company and its Restricted Subsidiaries.
SECTION 1007. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of Sections 1004 to 1006, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 802, and 1004 to 1006, inclusive,
with respect to the Securities of any series if before the time for such
compliance the Holders of at least 66-2/3% in principal amount of the
Outstanding
Securities of such series shall, by, Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition excepl to the extent so expressly waived, and. until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term. provision or condition shall remain in
full force and effect.
SECTION 1009. Applicability of Covenants.
Any series of Securities may provide, as contemplated by Section 301 of the
Indenture, that any one or more of the covenants set forth in Sections 802. and
1004 through 1008, inclusive, shall not be applicable to the Securities of such
series.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series. the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series to be redeemed. In the case
of any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed
not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Securities to be redeemed, at his address appearing in the Security
Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable. that
interest thereon will cease to accrue on and after said date.
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(6) that the redemption is for the sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105: Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid. the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price. together with accrued interest
to the Redemption Date; provided, however, that instalments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by. the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any mandatory sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities or such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (I) may deliver to the Trustee Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series: provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be
reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 45 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
SECTION 1301. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal or of interest on any Security,
or for any claim based thereon or otherwise in respect thereof. and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, present, past or
future, of the Company or of any sucessor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise: it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.
This instrument may be executed in any number of counterparts. each of
which so executed shall be deemed to be an origina, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed. and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
GEORGIA-PACIFIC CORPORATION
By:_______________________________
T. MARSHALL HAHN, JR. President
[CORPORATE SEAL]
Attest:
_________________
MARVIN L. WALDREP
Assistant Secretary
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION).
AS TRUSTEE
BYJ. A. PAYNE Vice President
[CORPORATE SEAL] Attest:
C. EERET
FIRST SUPPLEMENTAL INDENTURE
Among
GEORGIA-PACIFIC CORPORATION,
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), Trustee
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Dated as of July 27, 1988
FIRST SUPPLEMENTAL INDENTURE, dated as of July 27, 1988, among Georgia-
Pacific Corporation, a corporation duly organized and existing under the laws of
the State of Georgia (the "Company"), The Chase Manhattan Bank (National
Association) as Trustee, a national banking association duly organized and
existing under the laws of the United States of America ("Chase"), and Morgan
Guaranty Trust Company of New York, a bank duly organized and existing under the
laws of the State of New York ("Morgan").
WITNESSETH:
WHEREAS, the Company and Chase have heretofore executed and delivered
a certain Indenture, dated as of March 1, 1983 (the "Indenture"), pursuant to
which one or more series of unsecured debt securities of the Company may be
issued from time to time; and
WHEREAS, in accordance with Section 610 of the Indenture, the Company
has appointed Morgan as the Trustee under the Indenture with respect to the
Securities of all series issued or to be issued under the Indenture other than
the Company's $100,000,000 aggregate principal amount 13 1/2% Notes due August
l, 1994, $195,000,000 aggregate principal amount of Dual Serial Discount
Debentures due 1986 - 2015, $150,000,000 aggregate principal amount of 9 1/4%
Sinking Fund Debentures due March 15, 2016, $150,000,000 aggregate principal
amount of 9 3/4% Notes due November l, 1992, $200,000,000 aggregate principal
amount of 9 3/4% Sinking Fund Debentures due January 15, 2018, $200,000,000
aggregate principal amount of 9 1/2% Debentures due February 15, 2018 and
$200,000,000 aggregate principal amount of 10 1/8% Notes due May 15, 2000
(collectively, the "Outstanding Securities"); and
WHEREAS, in accordance with Section 611 of the Indenture, Morgan has
accepted the appointment by the Company of Morgan as Trustee under the Indenture
with respect to the Securities of all series issued or to be issued under the
Indenture other than the Outstanding Securities; and
WHEREAS, Section 901 of the Indenture provides that a supplemental
indenture may be entered into without the consent of any Holders to, among other
things, (a) evidence and provide for the acceptance of appointment under the
Indenture by a Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of the Indenture as shall be necessary
to provide for or facilitate the administration of the trusts under the
Indenture by more than one Trustee, pursuant to the requirements of Section
611(b) of the Indenture and (b) to cure any ambiguity, to correct or supplement
any provision of the Indenture which may be inconsistent with any other
provision of the Indenture or to make any other provisions with respect to
matters or questions arising under the Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any series in any
material respect; and
WHEREAS, all things necessary to make this First Supplemental Indenture a
valid agreement of the Company, Chase and Morgan and a valid amendment of and
supplement to the Indenture have been done;
NOW, THEREFORE:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities as follows:
SECTION 1. All terms used in this First Supplemental Indenture which
are defined in the Indenture and are not otherwise defined in this First
Supplemental Indenture shall have the meanings assigned to them in the
Indenture.
SECTION 2. (a) The Company hereby confirms the appointment, pursuant
to Section 610 of the Indenture, of Morgan as Trustee under the Indenture with
respect to the Securities of all series issued or to be issued under the
Indenture other than the Outstanding Securities.
(b) Chase hereby acknowledges the appointment of Morgan as the Trustee
under the Indenture with respect to the Securities of all series issued or to be
issued under the Indenture other than the Outstanding Securities.
(c) Morgan hereby confirms its acceptance, pursuant to Section 611 of
the Indenture, of the appointment by the Company of Morgan as Trustee under the
Indenture with respect to the Securities of all series issued or to be issued
under the Indenture other than the Outstanding Securities.
SECTION 3. The Company, Chase and Morgan hereby confirm that:
(a) The rights, powers, trusts and duties of Chase, as Trustee, with
respect to the Outstanding Securities shall continue to be exclusively vested in
Chase, as Trustee; and
(b) Morgan is exclusively vested with all the rights, powers, trusts
and duties of a Trustee under the Indenture with respect to all series of
Securities issued or to be issued under the Indenture other than the Outstanding
Securities.
SECTION 4. Nothing in the Indenture or this First Supplemental
Indenture shall constitute Chase and Morgan co-trustees of the same trust, and
each of Chase and Morgan shall be deemed to be a trustee of trusts under the
Indenture separate and apart from any trusts under the Indenture administered by
the other such Trustee.
SECTION 5. Each of Chase and Morgan agrees to promptly give the other
notice of any default or Event of Default under the Indenture known to it.
SECTION 6. Chase and Morgan make no undertakings or representations in
respect of, and shall not be responsible in any manner whatsoever for and in
respect of the validity or sufficiency of this First Supplemental Indenture as
an obligation of the Company or the proper authorization or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
SECTION 7. Except as expressly amended hereby, the Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Indenture is in all respects hereby ratified and confirmed. This First
Supplemental Indenture and all its provisions shall be deemed a part of the
Indenture in the manner and to the extent herein and therein provided. The
Indenture is hereby amended as to all Securities of series authenticated and
delivered after the date of this Supplemental Indenture in the following
respects:
(a) In Section 101 of the Indenture, delete, in the second line on
page 6, "and (b)" and insert in lieu thereof "(b) the principal amount of a
Security denominated in a foreign currency or currencies or composite currencies
shall be the U.S. dollar equivalent, determined by the Company on or prior to
the date of original issuance of such Security and set forth in an Officers'
Certificate, of the principal amount (or, in the case of an Original Issue
Discount Security, the U.S. dollar equivalent determined by the Company on or
prior to the date of original issuance of such Security and set forth in an
Officers' Certificate of the amount determined as provided in (a) above) of such
Security and (c)".
(b) In Section 101 of the Indenture, insert as a new paragraph
immediately after the definition of "Paying Agent" on page 6 the following
definition:
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest or interest rate formulas, if any,
thereon, the Stated Maturity or Maturities thereof and the redemption
provisions, if any, with respect thereto, are to be determined by the
Company or its agents upon the issuance from time to time of such
Securities.
(c) The definition of "Responsible Officer" on page 7 is amended so
as to delete the entire text thereof after the first line and substitute
therefore:
any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
(d) The definition of "Trustee" on page 8 is amended so as to delete
the last four lines thereof and to substitute therefore:
ter "Trustee" shall mean such successor Trustee, provided, however,
that if at any time there is more than one Person acting as Trustee
under this Indenture, "Trustee" shall mean or include only the
Person named herein or appointed pursuant to the applicable provisions
of this Indenture to be Trustee with respect to this Indenture
(excluding any provisions or terms which relate solely to Securities
of any series for which such Person is not Trustee) and the Securities
(exclusive of Securities of any series as to which such Person is not
Trustee).
(e) In Section 102 of the Indenture on page 9, insert before "Upon" in
the first line "Except as otherwise expressly provided by this Indenture for
Securities issued in any Periodic Offering," and lowercase "Upon".
(f) In Section 203 of the Indenture, insert "and of like tenor" (a)
immediately after "of this series" in the first full paragraph on page 20 of
the Indenture, (b) immediately after "of this series" in the second full
paragraph on page 21 of the Indenture and (c) immediately after `amount of
Securities of this series''in the third full paragraph on page 21 of the
Indenture.
(g) In Section 203 of the Indenture on page 17, insert in the third
line after March 1, 1983, as amended by a First Supplemental Indenture dated as
of July 27, 1988" and substitute "Morgan Guaranty Trust Company of New York, as
Trustee" for "The Chase Manhattan Bank (National Association), as Trustee"
beginning on the next line.
(h) In each of Section 204 on page 22 and Section 614 of page 63,
substitute "Morgan Guaranty Trust Company of New York, as Trustee" for "The
Chase Manhattan Bank (National Association), as Trustee".
(i) In Section 301 on page 22 of the Indenture, delete in the second
line of the second paragraph ", and set forth" and insert "and, subject to
Section 303, set forth or determined in the manner provided,".
(j) In Section 301 on page 22 of the Indenture, insert after "1107"
in subparagraph 2 "and except for any Securities which, pursuant to Section 303,
are deemed never to have been authenticated and delivered hereunder"; add
immediately after subparagraph (2) a new subparagraph as follows:
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
and renumber subparagraphs (3), (4), (5), (6), (7), (8), (9) and (10) of Section
301 as subparagraphs (4), (5), (6), (7), (8), (9), (12) and (13), respectively.
(k) In Section 301 of the Indenture, insert immediately after newly
renumbered subparagraph (9) (beginning "if other than denominations of $1,000")
two new subparagraphs as follows:
(10) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the
Securities of the series shall be payable if other than the currency
of the United States of America;
(11) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(l) In Section 301 of the Indenture, insert after "and" in the third
line of the first full paragraph on page 23 of the Indenture "(subject to
Section 303)".
(m) In Section 301 of the Indenture, insert "or the manner of
determining the terms" in the last paragraph on page 23 immediately after
"setting forth the terms" and add to the end of such paragraph the following:
With respect to Securities of a series offered in a Periodic
Offering, such Board Resolution or action may provide general terms or
parameters for Securities of such series and provide either that the
specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by
the Company or its agents in accordance with a Company Order as
contemplated by the first proviso of the third paragraph of Section
303.
(n) In Section 303 of the Indenture, insert at the end of the first
sentence of the third paragraph the following:
; provided, however, that, with respect to Securities of a series
offered in a Periodic Offering, (a) the Trustee shall authenticate and
deliver Securities of such series for original issue from time to
time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to a Company
Order or pursuant to such other procedures acceptable to the Trustee
as may be specified from time to time by a Company Order, (b) the
Maturity date or dates, original issue date or dates, currency or
currencies or composite currencies, interest rate or rates or interest
rate formulas and any other terms of the Securities of such series
shall be determined by Company Order or pursuant to such procedures
and (c) if provided for in such procedures, such Company Order may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Company or its duly authorized agent or agents,
which instructions shall be promptly confirmed in writing.
(o) In Section 303 of the Indenture, delete the period at the end of
subparagraph (c) and insert a semicolon in lieu thereof and insert at the
beginning of the text which immediately follows such subparagraph the following:
provided, however, that, with respect to Securities of a series
offered in a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel in connection only with the first
authentication of Securities of such series and that the opinions
described in clauses (b) and (c) above may state, respective]y,
(x) that, when the terms of such Securities shall have been
established pursuant to a Company Order or pursuant to such procedures
as may be specified from time to time by a Company Order, all as
contemplated by a Board Resolution or action taken pursuant thereto,
such terms will have been duly authorized by the Company and will have
been established in conformity with the provisions Of this Indenture;
and
(y) that such Securities, when (i) executed by the Company, (ii)
completed, authenticated and delivered by the Trustee in accordance
with this Indenture, (iii) issued and delivered by the Company and
(iv) paid for, all in accordance with any agreement of the Company
relating to the offering, issuance and sale of such Securities, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company, entitled to the
benefits provided by the Indenture, and enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting the
enforcement of creditors' rights and to general equity principles,
regardless of whether such enforceability is considered in a
proceeding at equity or law.
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company
of any of such Securities, the form and terms thereof and the
legality, validity, binding effect and enforceability thereof, upon
the Opinion of Counsel and other documents delivered pursuant to
Sections 201 and 301 and this Section, as applicable, in connection
with the first authentication of Securities of such series unless and
until such opinion or other documents have been superseded or revoked.
(p) In Section 303 of the Indenture, insert immediately before the
paragraph which reads "Each Security shall be dated the date of its
authentication" on page 25 a new paragraph as follows:
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if any Securities of a series are to be offered
in a Periodic Offering, it shall not be necessary to deliver the
Opinion of Counsel and other documents otherwise required pursuant to
Sections 201,301 and this Section at or prior to the time of
authentication of each Security of such series if such documents are
delivered at or prior to the time of authentication upon original
issuance of the first Security of such series to be issued.
(q) In Section 303 of the Indenture, insert immediately after "the
benefits of this Indenture." in the last paragraph of such section on page 25
the following:
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee
for cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
(r) In Section 304 of the Indenture, insert immediately after "of the
same series" in the tenth line of the first paragraph on page 26 "and of like
tenor".
(s) In Section 305 of the Indenture, insert "and tenor" immediately
after (i) "of a like aggregate principal amount" in the second paragraph thereof
and (ii) "of a like aggregate principal amount" in the third paragraph thereof.
(t) In Section 307 of the Indenture, insert at the beginning of the
first paragraph thereof "Unless otherwise provided as contemplated by Section
301 with respect to any series of Securities," and lowercase "Interest" on the
first line of such paragraph.
(u) In Section 309 of the Indenture, insert in the seventh line
immediately after "in any manner whatsoever" the phrase "and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Securities previously authenticated hereunder which the Company has not
issued and sold," and insert "to the Trustee" immediately after "all Securities
so delivered".
(v) In Section 310 of the Indenture, add "360-day" immediately before
"year of twelve 30-day months."
(w) Immediately after Section 310 of the Indenture, insert the
following new Section:
Section 311. Payment to be in Proper Currency.
---------------------------------
In the case of any Securities denominated in any currency (the
"Required Currency") other than U.S. dollars, except as otherwise provided
therein, the obligation of the Company to make any payment of principal,
premium or interest thereon shall not be discharged or satisfied by any
tender by the Company, or recovery by the Trustee, in any currency other
than the Required Currency, except to the extent that such tender or
recovery shall result in the timely holding by or for the account of the
Trustee of the full amount of the Required Currency then due and payable.
If any such tender or recovery is in a currency other than the Required
Currency, the Trustee may take such actions as it considers appropriate to
exchange such currency for the Required Currency. The costs and risks of
any such exchange, including without limitation the risks of delay and
exchange rate fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full amount of
Required Currency then due and payable, and in no circumstances shall the
Trustee .be liable therefor except in the case of its negligence or wilful
misconduct. The Company hereby waives any defense of payment based upon
any such tender or recovery which is not in the Required Currency, or
which, when exchanged for the Required Currency by the Trustee, is less
than the full amount of Required Currency then due and payable.
(x) In Section 502 of the Indenture, delete the entire first
parenthetical phrase thereof (beginning "(or, if the Securities)") and insert
"(or, if any of the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof)" in place of such deleted parenthetical phrase.
(y) In Section 603 of the Indenture, insert "or as otherwise expressly
provided herein for Securities issued in any Periodic Offering" immediately
after "Company Order" in subparagraph (b) thereof.
(z) In section 607 of the Indenture on pages 45-46:
(i) insert "to the extent" after "except" and delete "as" in
the second-to-last line of clause (2).
(ii) delete "incurred without negligence or bad faith on its
part," on the second-to-third lines of clause (3).
(iii) insert "or the performance of its duties hereunder" after
"hereunder" in the fourth line of clause (3).
(iv) insert at the end of clause (3) ", except to the extent any
such loss, liability or expense may be attributable to its negligence
or bad faith".
(v) insert at the end of Section 607 on page 46:
"Trustee" for purposes of Section 607 shall include every
predecessor Trustee, provided that the negligence or bad faith of
any Trustee shall not affect the rights of any other Trustee
under this Section 607.
(aa) In Section 609 on page 52, insert in the first line after
"hereunder in respect of the Securities of each series".
(bb) In Section 902 of the Indenture, insert immediately after "coin or
currency" in subparagraph (1) thereof the phrase "or composite currency".
(cc) Insert the following sentence at the end of Section 905 on page 73.
Notwithstanding any contrary provision herein, the provisions of this
Indenture which are required to be included under the Trust Indenture
Act may be amended by supplemental indenture hereto without the
consent of any Holders so as to reflect any amendment to the Trust
Indenture Act.
(dd) In Section 1007 on page 84, insert "and of like tenor" after "of
the same series".
SECTION 8. In case any provision in this First Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 9. All covenants and agreements in this First Supplemental
Indenture by or on behalf of the Company, or by or on behalf of Chase, or by or
on behalf of Morgan, shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed or not.
SECTION 10. Any notice or communication required to be given under the
Indenture shall conform to the notice requirements set forth in the Indenture.
Notice to Morgan shall be delivered or mailed to it at 30 West Broadway, New
York, New York 10015.
SECTION 11. This First Supplemental Indenture shall be governed by.
and construed in accordance with. the laws of the State of New York.
SECTION 12. This First Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original; but all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the date first above written.
[CORPORATE SEAL]
GEORGIA-PACIFIC CORPORATION
By:
-----------------------
Senior Vice President -
Legal and Governmental Affairs
[CORPORATE SEAL]
Attest:
Vice President - Law and Secretary
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), Trustee
By:
-----------------------
Title:
[CORPORATE SEAL]
Attest:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
-----------------------
Title:
[CORPORATE SEAL]
Attest:
Title:
<PAGE>
ACCEPTANCE OF APPOINTMENT OF TRUSTEE
Pursuant to Section 611 of the Indenture, dated as of March 1, 1983
(the "Indenture"), between Georgia-Pacific Corporation (the "Company") and The
Chase Manhattan Bank (National Association), Trustee ("Chase"), Morgan Guaranty
Trust Company of New York ("Morgan") hereby (i) accepts the appointment by the
Company of Morgan as Trustee under the Indenture with respect to the Securities
of all series issued or to be issued under the Indenture other than the
Company's $100,000,000 aggregate principal amount of l3 1/2% Notes due August 1,
1994, $195,000,000 aggregate principal amount of Dual Serial Discount Debentures
due 1986 - 2015, $150,000,000 aggregate principal amount of 9 1/4% Sinking Fund
Debentures due March 15, 2016, $150,000,000 aggregate principal amount of 9 3/4%
Notes due November 1, 1992, $200,000,000 aggregate principal amount of 9 3/4%
Sinking Fund Debentures due January 15, 2018, $200,000,000 aggregate principal
amount of 9 1/2% Debentures due February 15, 2018 and $200,000,000 aggregate
principal amount of 10 1/8% Notes due May 15, 2000, (ii) covenants and agrees to
perform the duties and obligations of the Trustee under the Indenture with
respect to such series of Securities for the equal and proportionate benefit of
the respective holders from time to time of such series of Securities and (iii)
agrees to be bound by all the terms and conditions of the Indenture.
Morgan hereby certifies that it is (i) qualified to serve as Trustee in
accordance with Section 608 of the Indenture and (ii) eligible for appointment
as Trustee in accordance with the provisions of Section 609 of the Indenture.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture.
IN WITNESS WHEREOF, Morgan Guaranty Trust Company of New York, has
caused this instrument to be executed by its duly authorized trust officer as of
the 27th day of July, 1988.
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
--------------------------------
J. Thomas Clark
Vice President
<PAGE>
APPOINTMENT OF TRUSTEE
Pursuant to Section 610 of the Indenture, dated as of March 1, 1983
(the "Indenture"), between Georgia-Pacific Corporation (the "Company") and The
Chase Manhattan Bank (National Association), as Trustee ("Chase"), the Company
hereby appoints Morgan Guaranty Trust Company of New York, trustee under the
Indenture with respect to the Securities (as defined in the Indenture) of all
series issued or to be issued under the Indenture other than the Company's
$100,000,000 aggregate principal amount of 13 1/2% Notes due August 1. 1994,
$195,000,000 aggregate principal amount of Dual Serial Discount Debentures due
1986 - 2015, $150,000,000 aggregate principal amount of 9 1/4% Sinking Fund
Debentures due March 15, 2016, $150,000,000 aggregate principal amount of 9 3/4%
Notes due November 1, 1992. $200,000,000 aggregate principal amount of 9 3/4%
Sinking Fund Debentures due January 15, 2018, $200,000,000 aggregate principal
amount of 9 1/2% Debentures due February 15, 2018 and $200,000,000 aggregate
principal amount of 10 1/8% Notes due May 15, 2000.
IN WITNESS WHEREOF. Georgia-Pacific Corporation has caused this
instrument to be executed by its duly authorized officer as of the 27th day of
July, 1988.
GEORGIA-PACIFIC CORPORATION
By:
----------------------
Senior Vice President - Legal
and Governmental Affairs
<PAGE>
ACKNOWLEDGMENT OF THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
The Chase Manhattan Bank (National Association) ("Chase"), hereby
acknowledges the appointment of Morgan Guaranty Trust Company of New York as
Trustee under the Indenture, dated as of March 1, 1988 (the "Indenture"),
between Georgia-Pacific Corporation (the "Company") and Chase, with respect to
the Securities of all series issued or to be issued under the Indenture other
than the Company's $100,000,000 aggregate principal amount of 13 1/2% Notes due
August 1, 1994, $195,000,000 aggregate principal amount of Dual Serial Discount
Debentures due 1986 - 2015, $150,000,000 aggregate principal amount of 9 1/4%
Sinking Fund Debentures due March 15, 2016, $150,000,000 aggregate principal
amount of 9 3/4% Notes due November 1, 1992, $200,000,000 aggregate principal
amount of 9 3/4% Sinking Fund Debentures due January 15, 2018, $200,000,000
aggregate principal amount of 9 1/2% Debentures due February 15, 2018 and
$200,000,000 aggregate principal amount of 10 1/8% Notes due May 15, 2000.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture.
IN WITNESS WHEREOF, The Chase Manhattan Bank (National Association) has
caused this instrument to be executed by its duly authorized trust officer as of
the 27th day of July, 1988.
THE CHASE MANHATTAN BANK (NATIONAL)
ASSOCIATION)
By:
-----------------------------
Corporate Trust Officer
<PAGE>
OFFICERS' CERTIFICATE
Pursuant to Section 102 of that certain Indenture, dated as of March
1, 1983 (the "Indenture"), between Georgia-Pacific Corporation (the "Company")
and The Chase Manhattan Bank (National Association), Trustee ("Chase"), the
undersigned hereby certify that all conditions precedent provided for in the
Indenture relating to the proposed execution, and delivery of the First
Supplemental Indenture, dated as of July 27th, 1988 (the "Supplemental
Indenture"), among the Company, Chase and Morgan Guaranty Trust Company of New
York, have been complied with.
In connection with the execution and delivery of this Certificate, the
undersigned have (a) reviewed the Indenture and the conditions provided for
therein relating to the proposed execution and delivery of the Supplemental
Indenture and (b) in the opinion of the undersigned, made such examination or
investigation as is necessary to enable them to express an informed opinion that
such conditions have been complied with.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
this 27th day of July, 1988.
GEORGIA-PACIFIC CORPORATION
By:
----------------------
Senior Vice President - Legal
and Governmental Affairs
By:
----------------------
Vice President - Law and
Secretary
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE, dated as of January
31, 1992 by and among GEORGIA-PACIFIC CORPORATION, a corporation duly organized
and existing under the laws of the State of Georgia and having its principal
office at 133 Peachtree Street, N.E., Atlanta, Georgia 30303 (the "Company"),
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a banking corporation duly organized
and existing under the laws of the State of New York and having its principal
corporate trust office at 60 Wall Street, New York, New York 10260 (the
"Resigning Trustee") and THE BANK OF NEW YORK, a banking corporation the State
of New York principal corporate duly (the trust organized and existing under the
laws of "Successor Trustee") and having its office at 101 Barclay Street, New
York, New York 10286 (the "Corporate Trust Office").
RECITALS:
WHEREAS, there were(i) $250,000,000 9-1/2% Debentures due December 1, 2011,
(ii) $250,000,000 9-7/8% Debentures due November 1, 2021, (iii) $250,000,000 10-
1/4% Debentures due September 15, 2018, (iv) $250,000,000 10-1/2% Debentures due
August 1, 2018, (v) $300,000,000 10.10% Credit Sensitive Debentures due June 15,
2002, (vi) originally authorized and issued $200,000,000 9-1/4% Notes due
October 1, 1993, and (vii) $300,000,000 10% Credit Sensitive Notes due June 15,
1997 under an Indenture dated as of March 1, 1983, by and between the Company
and The Chase Manhattan Bank (National Association), a national banking
association duly organized and existing under the laws of the United States of
America ("Chase"), as amended and supplemented by that certain First
Supplemental Indenture, dated as of July 27, 1988, among the Company, Resigning
Trustee and Chase, whereby the parties thereto agreed, among other things, that
Resigning Trustee would act as Trustee under the Indenture for all series of
securities issued thereunder subsequent to July 27, 1988 (said Notes, Credit
Sensitive Debentures, Debentures, and Credit Sensitive Notes are hereinafter
collectively referred to as `Securities" and said Indenture, as amended, is
hereinafter referred to asthe "Indenture");
WHEREAS, Section 610(b) of the Indenture provides that the Trustee may at any
time resign by giving resignation to the Company. Section provides that such
resignation shall written notice of such 611(a) of the Indenture be effective
upon the acceptance by a successor Trustee of its appointment as a successor
Trustee;
WHEREAS, Section 610(e) of the Indenture provides that, if the Trustee
shall resign, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee;
WHEREAS, Section 611(a) of the Indenture provides that any successor
Trustee appointed in accordance with the Indenture shall execute, acknowledge
and deliver to the Company and to its predecessor Trustee an instrument
accepting such appointment under the Indenture, and thereupon the resignation of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed of conveyance, shall become vested with all
rights, powers, trusts and duties of the predecessor Trustee;
WHEREAS, pursuant to the Indenture, Resigning Trustee was appointed
Security Registrar and Paying Agent;
WHEREAS, pursuant to Section 301 of the Indenture, the Corporate Trust
Office of Resigning Trustee in the Borough of Manhattan, City of New York was
designated as the Place of Payment with respect to principal and interest on the
Securities;
WHEREAS, the Company desires (i) to appoint Successor Trustee as
Trustee, Paying Agent and Security Registrar to succeed Resigning Trustee under
the Indenture, and (ii) to designate the Corporate Trust Office of Successor
Trustee respect to the Securities;
WHEREAS, Successor Trustee is willing to accept such appointment as
Successor Trustee, Paying Agent and Security Registrar under the Indenture and
such desigation of the Place of Payment; and
WHEREAS, Successor Trustee and Resigning Trustee have entered into a
Letter Agreement, dated as of the date hereof (the "Letter Agreement"),
whereby the Resigning Trustee has agreed, among other things, to maintain
certain records with respect to the Indenture until notified by Successor
Trustee to discontinue such record maintenance;
NOW, THEREFORE, the Company, Resigning Trustee and Successor Trustee,
for and in consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby consent and agree as follows:
ARTICLE 1.
THE RESIGNING TRUSTEE
SECTION 1.1. Pursuant to Section 610(b) of the Indenture, Resigning
Trustee hereby notifies the Company that Resigning Trustee is hereby resigning
as Trustee, Paying Agent and Security Registrar under the Indenture.
SECTION 1.2. Resigning Trustee hereby warrants to Successor Trustee
that:
(a) No covenant or condition contained in the Indenture has been waived by
Resigning Trustee or, to the best of the knowledge of the Responsible Officers
of Resigning Trustee's corporate trust department, by the Holders of the
percentage in aggregate principal amount of the Securities required by the
Indenture to effect any such waiver.
(b) There is no action, suit or proceeding pending or, to the best of the
knowledge of the Responsible Officers assigned to Resigning Trustee's corporate
trust department, threatened against Resigning Trustee before any court or any
governmental authority arising out of any action or omission by Resigning
Trustee as Trustee under the Indenture.
(c) As of the effective date of this Agreement, Resigning Trustee will
hold no moneys or property under the Indenture other than money held to honor
checks issued by Resigning Trustee for payment of interest on or prior to
February 1, 1992. Pursuant to the last paragraph of Section 1003 of the
Indenture, Resigning Trustee shall pay to the Company, upon receipt of a Company
Request, any moneys held by Resigning Trustee that remain unclaimed three years
after the due date for principal or interest with respect to which such moneys
were paid to the Resigning Trustee.
(d) Pursuant to Section 303 of the Indenture and subsequent to July 27,
1988, Resigning Trustee duly authenticated and delivered the Securities, all of
which are outstanding as of the effective date hereof.
(e) Each person who so authenticated the Securities was duly elected,
qualified and acting as an
officer of Resigning Trustee and empowered to authenticate the Securities at the
respective times of such authentication and the signature of such person or
persons appearing on such Securities is each such person's genuine signature.
(f) This Agreement has been duly authorized, executed and delivered on
behalf of Resigning Trustee and constitutes its legal, valid and binding
obligation.
(g) To the best of the knowledge of the Responsible Officers of the
Resigning Trustee's corporate trust department, no event has occurred and is
continuing which is, or after notice or lapse of time would become, an Event of
Default under Section 501 of the Indenture.
SECTION 1.3. Resigning Trustee hereby assigns, transfers, delivers and
confirms to Successor Trustee all right, title and interest of Resigning Trustee
in and to the trust under the Indenture and all the rights, powers and trusts of
the Trustee under the Indenture. Resigning Trustee shall execute and deliver
such further instruments and shall do such other things as Successor Trustee may
reasonably require so as to more fully and certainly vest and confirm in
Successor Trustee all the rights, trusts and powers hereby assigned,
transferred, delivered and confirmed to Successor Trustee as Trustee and Paying
Agent and Security Registrar.
SECTION 1.4. Resigning Trustee shall deliver to Successor Trustee, as
of or promptly after the effective date hereof, all of the documents listed on
Exhibit A hereto.
SECTION 1.5. Notwithstanding the resignation of Resigning Trustee as
Paying Agent as provided in Section 2.2 hereof, the Resigning Trustee shall
serve as Paying Agent with respect to the interest payment due on February 1,
1992 on the $250,000,000 10-1/2% Debentures due August 1, 2018.
ARTICLE 2.
THE COMPANY
SECTION 2.1. The Company hereby accepts the resignation of Resigning
Trustee as Trustee, Paying Agent and Security Registrar under the Indenture.
SECTION 2.2. The Secretary or Assistant Secretary of the Company who is
attesting to the execution of this Agreement by the Company hereby certifies
that Exhibit B annexed hereto is a copy of the Board Resolutions which were duly
adopted by the Board of Directors of the Company, which are in full force and
effect on the date hereof, and which authorize certain officers of the Company
to (a) accept Resigning Trustee's resignation as Trustee, Paying Agent and
Security Registrar under the Indenture; (b) appoint Successor Trustee as
Trustee, Paying Agent and Security Registrar under the Indenture; (c) execute
and deliver such agreements and other instruments as may be necessary or
desirable succession of Successor Trustee as Trustee, Security Registrar under
the Indenture.
SECTION 2.3. With respect to the Securities, the Company hereby appoints
Successor Trustee as Trustee, Paying Agent and Security Registrar under the
Indenture to succeed to, and hereby vests Successor Trustee with, all the
rights, powers, trusts and duties of Resigning Trustee under the Indenture with
like effect as if originally named as Trustee, Paying Agent and Security
Registrar in the Indenture. The Company hereby designates the Corporate Trust
Office of the Successor Trustee as the Place of Payment.
SECTION 2.4. The Company hereby directs the Resigning Trustee to send a
notice, promptly after the effective date of this Agreement, substantially in
the form of Exhibit C annexed hereto, and at the Company's expense, to each
Holder of the Securities in accordance with the provisions of Section 610(f) of
the Indenture.
SECTION 2.5. The Company hereby represents and warrants to Resigning
Trustee and Successor Trustee that:
(a) The Company is a corporation duly and validly organized and
existing pursuant to the laws of the State of Georgia.
(b) This Agreement has been duly authorized, executed and delivered
on behalf of Company and constitutes its legal, valid and binding
obligation.
(c) All conditions precedent relating to the appointment of The Bank
of New York as successor Trustee, Paying Agent and Security
Registrar under the Indenture have been complied with by the
Company.
ARTICLE 3.
THE SUCCESSOR TRUSTEE
SECTION 3.1. Successor Trustee hereby represents and warrants to
Resigning Trustee and to the Company that:
(a) Successor Trustee is not disqualified under the provisions of
Section 608 and is eligible under the provisions of Section 609
of the Indenture to act as Trustee under the Indenture.
(b) This Agreement has been duly authorized, executed and delivered
on behalf of Successor Trustee and constitutes its legal, valid
and binding obligation.
SECTION 3.2. Successor Trustee hereby accepts its appointment as
successor Trustee, Paying Agent and Security Registrar under the Indenture and
accepts the rights, powers, duties and obligations of Resigning Trustee as
Trustee, Security Registrar, under the conditions set forth therein, with named
as Trustee, Paying Agent Security Registrar under the Indenture
SECTION 3.3. References herein and in the Indenture to `Corporate Trust
Office' or other similar terms shall be deemed to refer to the Corporate Trust
Office of Successor Trustee at 101 Barclay Street, New York, New York 10286 or
any other office of
ARTICLE 4.
MISCELLANEOUS
SECTION 4.1. Except as otherwise expressly provided herein or unless
the context otherwise requires, all terms used herein which are defined in the
Indenture shall have the meaning assigned to them in the Indenture.
SECTION 4.2. This Agreement and the resignation, appointment and
acceptance effected hereby shall be effective as of the opening of business on
February 1, 1992.
SECTION 4.3. The Company herewith confirms its obligations to pay the
Resigning Trustee its unpaid fees for services up to the effective date hereof,
and to continue to be responsible for any future services, if necessary, even if
such services are requested by the Successor Trustee. Resigning Trustee
acknowledges that it relinquishes any lien it may have upon all property or
funds held or collected by it to secure any amounts due it pursuant to the
provisions of Section 607 of the Indenture. The Company acknowledges its
obligation set forth in Section 607 of the Indenture to indemnify Resigning
Trustee for, and to hold Resigning Trustee harmless against, any loss, liability
and expense incurred without negligence or bad faith on the part of the
Resigning Trustee and arising out of or in connection with the administration of
the trust evidenced by the obligation shall survive the execution hereof).
SECTION 4.4. This Agreement shall be governed by and construed in
accordance with the laws of the jurisdiction which govern the Indenture.
SECTION 4.5. This Agreement may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 4.6. The Company, Resigning Trustee and Successor Trustee
hereby acknowledge receipt of an executed and acknowledged counterpart of this
Agreement and the effectiveness thereof.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement of
Resignation, Appointment and Acceptance to be duly executed and acknowledged and
their respective seals to be affixed hereunto and duly attested all as of the
day and year first above written.
[SEAL] GEORGIA-PACIFIC CORPORATION, the Company
By:
Name:
Title:
Attest:
[SEAL] MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Resigning Trustee
By:
Attest:
Name:
Title:
[SEAL] THE BANK OF NEW YORK, as Successor Trustee
By:
Name:
Title:
EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT entered into this day of , 19 , and becoming
-- --
effective as of the day of , 199 .between GEORGIA-PACIFIC CORPORATION, a
-
Georgia corporation, having its principal office in Atlanta, Georgia
(hereinafter referred to as "G-P"), and (hereinafter referred to as
-----------
"Employee");
WITNESSETH:
WHEREAS, Employee is and will be rendering valuable services to G-P and its
subsidiaries, and G-P desires to receive the benefit of Employee's continued
loyalty, service and counsel and to assist Employee in providing for the
contingencies of death, disability and old age dependency;
IT IS HEREBY AGREED:
1. General.
Provided that the eligibility conditions of continued employment of
Employee by G-P and/or its subsidiaries as set forth in Paragraphs 2 through 7
of this Agreement are met, G-P agrees to make monthly payments ("Retirement
Payments") to Employee or to Employee's surviving spouse as hereinafter
provided.
2. Normal Retirement.
(a) Employee will be eligible for Normal Retirement as of the date the
Employee's employment terminates after attaining age sixty-five (65) after
continuous service with G-P and/or its subsidiaries (as defined in Paragraph 8)
from the date of this Agreement (or any predecessor agreement described in
Paragraph 17).
(b) If Employee is eligible for such payments under Paragraph 2(a),
Retirement Payments to Employee upon Normal Retirement shall commence on the
first day of the month following the last day for which the Employee receives
either vacation pay or base salary after termination of employment with G-P and
its subsidiaries ("pay-through date"). Such payments shall continue monthly on
the first day of each month during the lifetime of the Employee and, subject to
the survivor annuity provisions of Paragraph 7, shall end with the payment for
the month of his or her death.
(c) The monthly Retirement Payment to Employee if eligible for Normal
Retirement under Paragraph 2(a) shall be calculated as follows:
(1) Fifty percent (50%) of the Employee's average monthly cash salary
(as defined below), including any cash salary which he or she elected to
defer, for the last forty-eight (48) full calendar months of his or her
employment by G-P and/or its subsidiaries (or, if fewer, all full calendar
months of his or her employment with G-P and/or its subsidiaries which
immediately precede termination of such employment);
(2) Less, the annuity equivalent (as defined below) of benefits, if
any, payable to or on behalf of Employee under all other retirement
compensation plans maintained by G-P and/or its subsidiaries (as defined
below), which are attributable to contributions made by G-P and/or its
subsidiaries (excluding any cash salary which he or she elected to defer
under such plans). For purposes of this paragraph the following terms are
defined as follows:
(A) "Cash salary" - shall mean base salary and annual management
incentive bonuses only and excludes without limitation deferred compensation
under any long-term incentive program, bonuses for purpose of offsetting
taxation and any other incentive compensation; provided that annual management
incentive bonuses shall be counted in the year(s) or partial year(s) With
respect to which they are earned (rather than in the year of payment) and shall
be prorated for partial years (if not already prorated to reflect partial year
participation) included in the forty-eight (48) month averaging period and
provided, further, that if the annual management incentive bonus amount with
respect to any part of that period is unavailable at the time Retirement
Payments are to commence, an estimated benefit will be paid based on the
available compensation data, subject to a retroactive adjustment when final data
are available.
(B) "Annuity equivalent" - of a given benefit shall mean the actuarial
equivalent, single life (in the case of an Employee who is single when benefits
commence) or joint and fifty percent (50%) survivor annuity (in all other
situations) determined as of the Employee's last day worked for G-P or its
subsidiaries ("Employee's last day worked") using (without limitation) the
then applicable actuarial equivalence factors adopted for the Georgia-Pacific
Corporation Salaried Employees Retirement Plan (the "SERP"), statutory
restrictions on qualified plan benefits as in effect on the Employee's last day
worked and the methods and assumptions which were published and used by the
Pension Benefit Guaranty Corporation for plan terminations occurring during the
first month of the calendar quarter during which Employee's last day worked
occurs; provided however that notwithstanding the foregoing, if the Employee
elects to retain his or her SERP benefits in that plan after the Employee's last
day worked and the amount of those benefits is increased due to adjustments in
the statutory restrictions on qualified plan benefits between the Employee's
last day worked and the date of distribution of his or her SERP benefits, the
Employee's benefits under this Agreement will be recalculated with respect to
the first payment due after the date of the SERP distribution (and all future
payments) solely to reflect the greater offset necessitated by the above-
described increase in the SERP benefit; and provided further that with respect
to benefits under retirement compensation plans maintained by G-P and/or its
subsidiaries which depend on investment performance and which have been
distributed to the Employee prior to his last day worked, G-P's actuarial
equivalent calculation shall take into account such investment performance by
deeming the appropriate investment gain between the date of any such
distribution of benefits the Employee's last day worked to be the Periodic
Adjustment percentage under the SERP as in effect from time to time during that
period and the investment gain for periods after the Employee's last day worked
to be the Periodic Adjustment percentage for the SERP as of the Employee's last
day worked.
(C) "Retirement compensation plans maintained by G-P and/or its
subsidiaries" shall mean any qualified or non-qualified retirement plans
covering the Employee (including, without limitation, the Georgia-Pacific
Corporation Savings and Capital Growth Plan - formerly the Georgia-Pacific Stock
Bonus Trust - and the SERP but excluding the former Georgia-Pacific Corporation
Payroll-Based Employee Stock Ownership Plan) to the extent that benefits under
such plans are attributable to contributions made by G-P and/or its
subsidiaries.
3. Early Retirement.
(a) Employee will be eligible for Early Retirement as of the date
Employee's employment terminates after reaching age fifty-five (55) and
completing at least fifteen (15) years of continuous service with G-P and/or its
subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such payments under Paragraph 3(a),
Retirement Payment to Employee upon Early Retirement shall commence on the first
day of the month follow'ing the Employee's pay-through date or the Employee's
attainment of the age of sixty-two (62) years, whichever last occurs. Such
payments shall continue monthly on the first day of each month during the
lifetime of the Employee and, subject to the survivor annuity provisions of
Paragraph 7, shall end with the payment for the month of his or her death.
(c) The monthly Retirement Payment payable to Employee if eligible
for Early Retirement under Paragraph 3(a) shall be equal to the Retirement
Payment to which the Employee would be entitled if the Employee were eligible
for Normal Retirement under Paragraph 2(a) as of the Employee's date of
termination of employment.
4. Termination.
(a) Employee will be eligible for Termination benefits as of the date
Employee's employment terminates for any reason other than Normal Retirement,
Early Retirement, Pre-Termination Disability or Pre-Termination Death (under
Paragraphs 2(a), 3(a), 5(a) or 6(a), respectively), after Employee has completed
at least three (3) full years of continuous service with G-P and/or its
subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such payments under Paragraph 4(a),
Retirement Payments to Employee upon Termination shall commence on the first day
of the month following the Employee's pay-through date or the Employee's
attainment of the age of sixty-two (62) years, whichever last occurs. Such
payments shall continue monthly on the first day of each month during the
lifetime of the Employee and, subject to the survivor annuity provisions of
Paragraph 7, shall end with the payment for the month of his or her death.
(c) The monthly Retirement Payment payable to Employee if eligible for
Termination benefits under Paragraph 4(a) shall be calculated as follows:
(1) Determine the Retirement Payment to which the Employee would be
entitled if the Employee were eligible for Normal Retirement under
Paragraph 2(a) as of the date of the Employee's termination of employment;
(2) Multiply that amount by a fraction, the numerator of which
shall equal the number of full years of continuous service which Employee
has completed with G-P and/or its subsidiaries (as defined in Paragraph 8)
on or before the date his or her employment terminates or fifteen (15),
whichever is less, and the denominator of which shall be fifteen (15).
5. Pre-Termination Disability.
(a) Employee will be eligible for Pre-Termination Disability benefits as
of the date Employee's employment terminates by reason of disability - as
determined by the Compensation Committee of G-P's Board of Directors (the
"Committee") - after the completion of at least one (1) year of continuous
service with G-P and/or its subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such benefits under Paragraph 5(a),
Retirement Payments to Employee upon Pre-Termination Disability shall commence
on the first day of the month following the Employee's pay-through date (as
determined by the Committee). Such payments shall continue monthly on the first
day of each month during the lifetime of the Employee and, subject to the
survivor annuity provisions of Paragraph 7, shall end with the payment for the
month of his or her death.
(c) The amount of the monthly Retirement Payment payable to Employee if
eligible under Paragraph 5(a) for Pre-Termination Disability benefits shall be
calculated as follows:
(1)Determine the monthly Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal Retirement
under Paragraph 2(a) as of the Employee's date of termination due to disability;
(2) Multiply the result in subparagraph (c)(1) by the appropriate early
commencement percentage as indicated below:
Age of Employee
At Termination
Because of DisabiliW Percentage
64 100%
63 100%
62 100%
61 94%
60 88%
59 82%
58 76%
57 70%
56 64%
55 58%
54 and prior 50%
6. Pre-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 6(d)) will be
eligible for Pre-Termination Death benefits as of the date Employee's employment
terminates by reason of death after the completion of at least one (1) year of
continuous service with G-P and/or its subsidiaries (as defined in Paragraph 8).
(b) If Employee's surviving spouse (as defined in Paragraph 6(d)) is
eligible for such benefits under Paragraph 6(a), Retirement Payments to
Employee's surviving spouse by reason of Employee's death prior to termination
shall commence on the first day of the month following the later of the date of
death of Employee or the Employee's pay-through date. Such payments shall
continue monthly on the first day of each month during the lifetime of the
Employee's surviving spouse only and shall end with the payment for the month of
his or her death.
(c)The mount of the monthly Retirement Payment payable to
Employee's surviving spouse if eligible under Paragraph 6(a) for Pre-Termination
Death benefits shall be calculated as!follows:
(1) Determine the monthly Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the Employee's date of death;
(2) Multiply the result in subparagraph (c)(1) by the
appropriate early commencement percentage as indicated below:
Age of Employee
At Death Percentage
64 50%
63 50%
62 50%
61 47%
60 44%
59 41%
58 38%
57 35%
56 32%
55 29%
54 and prior 25%
(d) For purposes of this Paragraph 6 only, Employee's "surviving spouse"
shall mean the Employee's spouse at the time of Employee's death.
7. Post-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 7(d)) will
be eligible for Post-Termination Death benefits as of:
(1) The date Employee dies after benefits under this Agreement have
commenced; or;
(2) The date Employee dies if such death occurs after the Employee's
employment wiht G-P and its subsidiaries has terminated, but before Retirement
Benefit Payments pursuant to Paragraph 2(b), 3(b), 4(b) or 5(b) have commenced,
and at a time when the Employee has met the eligibility requirements for
benefits under this Agreement stated in Paragraphs 2(a), 3(a), 4(a) or 5(a).
(b) If Employee's surviving spouse (as defined in Paragraph 7(d)) is
eligible for such benefits, Retirement Payments to Employee's surviving spouse
by reason of Employee's death after termination shall commence on the first day
of the month following the latest of:
(1) The death of Employee, or
(2) If eligible under Paragraph 7(a)(1), the last day of the period
for which Employee's benefit payments have been paid, or
(3) If eligible under Paragraph 7(a)(2), the Employee's pay-through date.
Such payments shall continue monthly on the first day of each month during the
lifetime of the Employee's surviving spouse only and shall end with the payment
for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to Employee's
surviving spouse (as defined in Paragraph 7(d)) if eligible under Paragraph 7(a)
for Post-Termination Death benefits shall be calculated as follows:
(1) If eligible under Paragraph 7(a)(1), Employee's surviving spouse
(as defined in Paragraph 7(d)) shall be entitled to the payment of a
monthly benefit for the rest of such spouse's lifetime equal to fifty
percent (50%) of the monthly Retirement Payment which was being paid to
Employee immediately before his or her death;
(2) If eligible under Paragraph 7(a)(2), Employee's surviving spouse
(as defined in Paragraph 7(d)) shall be entitled to the payment of a
monthly Retirement Payment for the rest of such spouse's lifetime equal to
fifty percent (50%) of the monthly Retirement Payment which would have been
payable to Employee if he or she had survived until Retirement Payments
commenced, provided however that if Employee dies prior to attaining age
sixty-two (62), the survivor benefit shall be further adjusted as provided
in Paragraph 6(c)(2).
(d) For purposes of this Paragraph 7 only (but subject to subparagraph (e)
below), Employee's "surviving spouse" means a spouse who is Employee's lawful
spouse on the date of Employee's death and (i) in the case of Paragraph 7(c)(1),
on the date the Employee's benefits under this Agreement commenced or (ii) in
the case of Paragraph 7(c)(2), on the date of Employee's death.
(e) Notwithstanding anything in Paragraph 7(d) to the contrary, if
Employee is entitled to Retirement Payments and after termination of employment
with G-P and/or its subsidiaries, (i) Employee marries or remarries after the
date he or she reaches age sixty-two (62) or the date his or her employment by
G-P and/or its subsidiaries terminates, whichever is later, and (ii) Employee
desires to provide for the payment of a survivor benefit to his or her new
spouse if such spouse survives Employee, Employee shall have the right to make
an irrevocable election (in a form satisfactory to G-P) to convert the monthly
Retirement Payments to which he or she is entitled under this Agreement into an
actuarial equivalent benefit (as determined by G-P using the actuarial factors
specified in Paragraph 2(c)) which will provide a reduced monthly Retirement
Payment to Employee for his or her lifetime and, if Employee's new spouse
survives Employee, will provide such new spouse with a monthly benefit equal to
fifty percent (50%) of Employee's reduced monthly Retirement Payments for the
rest of such new spouse;s lifetime. If Employee marries or remarries after
termination because of disability under Paragraph 5, the provisions of this
subparagraph (without regard to clause (i)) shall apply.
8. Continuous Service.
For purposes of this Agreement, "continuous service with G-P and/or its
subsidiaries" shall mean a period of unbroken employment with G-P and/or its
subsidiaries. Employment with a subsidiary shall be counted only for periods
during which the subsidiary's relationship with G-P existed.
9. Forfeiture of Benefits.
As consideration for the benefits provided under this Agreement and
notwithstanding any other provisions of this Agreement, Employee shah forfeit
all entitlement to monthly Retirement Payments (whether to Employee or
Employee's spouse) if Employee, within a period of three (3) years after the
date Employee's employment with G-P and its subsidiaries terminates, whether by
retirement or otherwise, is employed as an officer, director, manager, sales
representative (if his or her responsibilities at G-P included sales) or
business consultant in the United States by another employer which, combined
with its affiliates, has annual sales of $25,000,000 or more and which is a
competitor with G-P or its subsidiaries in the United States (a `competing
position'). Employee shall notify the Chairman of the Board of the Company of
his or her acceptance of a competing position within ten (10) days after the
effective date of his acceptance and shall reimburse G-P for any payments under
this Agreement to which he is not entitled. G-P may offset this obligation of
employee against any and all obligations or liabilities it owes to Employee, and
if it is necessary to seek reimbursement through legal process, Employee agrees
to reimburse G-P for its costs and attorneys fees in such an action. For
purposes of this Paragraph 9: (i) the term "affiliate" shall mean any entity
directly or indirectly controlling, controlled by or under common control with
the employer in question, whether by stock ownership, agreement or otherwise;
(ii) the terms "control", "controlling" and "controlled" shall refer to
direct or indirect ownership of at least fifty percent (50%) of the voting
stock, partnership interests or income or other beneficial interest with respect
to the entity in question; and (iii) the term "competitor with G-P or its
subsidiaries" shall mean (A) with respect to any non-executive officer who has
had managerial and or operational responsibility for a period of at least six
(6) months during the three (3) years prior to termination for particular
business unit(s), division(s) or subsidiary(ies) of G-P or its subsidiaries, an
entity which competes with G-P or its subsidiaries with respect to any of the
products manufactured and/or marketed by such business unit(s), division(s) or
subsidiary(ies); (B) with respect to executive officers and officers who have
had corporate staff responsibilities for at least six (6) months during the
three (3) years prior to termination, any entity which competes with G-P or its
subsidiaries in the lumber, plywood, pulp, paper or chemical businesses in the
United States. Once benefits are forfeited under this provision, they may not
be reinstated, even if the competing position is relinquished. If any aspect of
this forfeiture provision is determined to be unenforceable as drafted, it is
the intention of the parties that, to the extent permitted by applicable law,
the objectionable portion(s) of this provision shall be severed or restricted
(as the case may be) and that, except as so modified, the provision shall be
enforced.
10. Nothing contained in this Agreement and no action taken pursuant to the
provisions of this Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between G-P and Employee, or Employee's
spouse, or any other person. This Agreement does not create any escrow account,
trust fund or any other form of asset segregation. Any Retirement Payments due
under the provisions of this Agreement shall be paid from the general funds of
G-P. To the extent any person acquires a right to receive payments from G-P
under this Agreement, such right shall be no greater than the right of any
unsecured general creditor of G-P.
11. The right of Employee or any other person to Retirement Payments
under this Agreement shall not be subject to the claims of their creditors or
others, nor to legal process, and shall not be assigned, transferred, pledged or
encumbered.
12. Nothing Contained herein shall be construed as conferring upon
Employee the right to continue in the employ of G-P and/or its subsidiaries as
an executive or in any other capacity.
13. The annual Retirement Payments provided for by this Agreement
shall not constitute "compensation" for purposes of computing compensation for
any qualified deferred compensation plan maintained by G-P or its subsidiaries.
14. The Board of Directors of G-P shall have full power and authority
to interpret, construe and administer this Agreement and the Board's
interpretation and construction thereof, and actions thereunder shall be binding
and conclusive on all persons for all purposes. No member of the Board shall be
liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Agreement unless attributable to his
own willful misconduct or lack of good faith.
15. This Agreement shall be binding upon and inure to the benefit of
G-P and its subsidiaries, its successors and assigns, and to the Employee and
Employee's heirs, executors, administrators and legal representatives.
16. All actions for the enforcement of any rights under, or
interpretation of, this Agreement shall be brought in the courts of the State of
Georgia or (to the extent that jurisdictional requirements permit) in federal
courts located in the State of Georgia, and all participants in this Plan agree
to be subject to the jurisdiction of such courts for the purpose of any such
actions. The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Georgia and, to the
extent applicable, federal law.
17. It is understood and agreed by the parties that if there is an
Executive Retirement Agreement between Employee and G-P entered into prior to
the date of this Agreement, this Agreement is a mutually-agreed amendment and
restatement of such Agreement and that, further, any such prior Agreement is
acknowledged to be superseded by this Agreement as of the effective date of this
Agreement specified above.
18. Any notices required by this Agreement shall be sent as follows:
If to: Employee: Name and address
G-P: Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Chairman and Chief
Executive Officer
Any party may specify in writing to the other party a change of address for
purposes of this Paragraph 18, and any such change shall be effective upon
receipt of such written notice.
IN WITNESS WHEREOF, G-P has caused this Agreement to be executed by its
duly authorized officer and Employee has hereunto set his/her hand as of the
date first above written.
GEORGIA-PACIFIC CORPORATION
By:
----------------------
A. D. Correll
Chairman and Chief Executive
Officer
EMPLOYEE:
AMENDMENT NO. l
TO THE
EXECUTIVE RETIREMENT AGREEMENT
OF
(Effective January 1, l992)
THIS AMENDMENT to the Executive Retirement Agreement by and between
GEORGIA-PACIFIC CORPORATION, a Georgia corporation ("G-P"), and ("Employee"),
initially effective January 1, 1992 (the "Agreement"), made and entered into
by the original parties this day of , l992, and effective as
provided below;
W I T N E S S E T H :
WHEREAS, G-P and the Employee entered into the Agreement effective
January 1, 1992 whereby G-P agreed to provide certain non-qualified benefits
to Employee (and, upon his death, to his surviving spouse) as specified in,
and subject to the terms and conditions of, the Agreement;
WHEREAS, in consideration of Employee's continuing valuable services
to G-P, G-P desires to modify the provisions of the Agreement with respect to
disability and death benefits to make such benefits more responsive to the
needs of Employee and Employee's spouse under such circumstances;
NOW, THEREFORE, in consideration of the premises and
other mutual covenants and agreements contained herein and in the original
Agreement, the parties hereto hereby mutually covenant
and agree as follows:
l. Paragraph 5(c) of the Agreement is amended to read as follows:
"(a) Employee will be eligible for Pre-Termination
Disability benefits as of the date Employee's employment
terminates by reason of disability - as determined by the
Stock Option Plan and Management Compensation Committee of
G-P's Board of Directors (the "Committee") - after the
completion of at least one (l) year of continuous service
with G-P and/or its subsidiaries (as defined in Paragraph
8)."
2. Paragraph 5(c) of the Agreement is amended by deleting
subparagraph (2) of the present provision and renumbering subparagraph (3) as
subparagraph (2) so that the amended provision (with conforming changes) reads
as follows:
"(c) The amount of the monthly Retirement Payment
payable to Employee if eligible under Paragraph 5(a) for
Pre-Termination Disability benefits shall be calculated as
follows:
"(l) Determine the monthly Retirement Payment to which
the Employee would be entitled if the Employee
were eligible for Normal Retirement under
Paragraph 2(a) as of the Employee's date of
termination due to disability;
"(2) Multiply the result in subparagraph (c)(l) by the
appropriate early commencement percentage as
indicated below:
Age of Employee
At Termination
Because of Disability Percentage
64 100%
63 100%
62 100%
61 94%
60 88%
59 82%
58 76%
57 70%
56 64%
55 58%
54 and prior 50%"
3. Paragraph 6(a) of the Agreement is amended to read as follows:
"(a) Employee's surviving spouse (as defined in
Paragraph 6(d) will be eligible for Pre-Termination Death
benefits as of the date Employee's employment terminates by
reason of death after the completion of at least one (l)
year of continuous service with G-P and/or its subsidiaries
(as defined in Paragraph 8)."
4. Paragraph 6(c) is amended by deleting subparagraph (2) of the
present provision and by renumbering subparagraph (3) as subparagraph (2) so
that the provisions as amended (with confirming changes) reads as follows:
"(c) The amount of the monthly Retirement Payment
payable to Employee's surviving spouse if eligible under
Paragraph 6(a) for Pre-Termination Death benefits shall be
calculated as follows:
"(l) Determine the monthly Retirement Payment to which
the Employee would be entitled if the Employee
were eligible for Normal Retirement under
Paragraph 2(a) as of the Employee's date of death;
"(2) Multiply the result in subparagraph (c)(l) by the
appropriate early commencement percentage as
indicated below:
Age of Employee
At Death Percentage
64 50%
63 50%
62 50%
61 47%
60 44%
59 41%
58 38%
57 35%
56 32%
55 29%
54 and prior 25%"
5. This Amendment shall be effective from and its date of
execution. Except as hereinabove modified, the Agreement, as effective
January 1, 1992, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
GEORGIA-PACIFIC CORPORATION
By:
T. Marshall Hahn, Jr.
Chairman of the Board of
Directors
EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT entered into this day of , l9 , and
becoming effective as of the day of , l99 between GEORGIA-
-------------
PACIFIC CORPORATION, a Georgia corporation, having its principal office in
Atlanta, Georgia (hereinafter referred to as "G-P"), and .............
(hereinafter referred to as "Employee");
W I T N E S S E T H :
WHEREAS, Employee is and will be rendering valuable services to G-P
and its subsidiaries, and G-P desires to receive the benefit of Employee's
continued loyalty, service and counsel and to assist Employee in providing for
the contingencies of death, disability and old age dependency;
IT IS HEREBY AGREED:
1. General.
Provided that the eligibility conditions of continued employment
of Employee by G-P and/or its subsidiaries as set forth in Paragraphs 2
through 7 of this Agreement are met, G-P agrees to make monthly payments
("Retirement Payments") to Employee or to Employee's surviving spouse as
hereinafter provided.
2. Normal Retirement.
(a) Employee will be eligible for Normal Retirement as of the
date the Employee's employment terminates after attaining age sixty-five (65)
after continuous service with G-P and/or its subsidiaries (as defined in
Paragraph 8) from the date of this Agreement (or any predecessor agreement
described in Paragraph 17).
(b) If Employee is eligible for such payments under Paragraph
2(a), Retirement Payments to Employee upon Normal Retirement shall commence on
the first day of the month following the last day for which the Employee
receives either vacation pay or base salary after termination of employment
with G-P and its subsidiaries ("pay-through date"). Such payments shall
continue monthly on the first day of each month during the lifetime of the
Employee and, subject to the survivor annuity provisions of Paragraph 7, shall
end with the payment for the month of his or her death.
(c) The monthly Retirement Payment to Employee if eligible for
Normal Retirement under Paragraph 2(a) shall be calculated as follows:
(1) Fifty percent (50%) of the Employee's average
monthly cash salary (as defined below), including any cash salary which he
or she elected to defer, for the last forty-eight (48) full calendar
months of his or her employment by G-P and/or its subsidiaries (or, if
fewer, all full calendar months of his or her employment with G-P and/or
its subsidiaries which immediately precede termination of such
employment);
(2) Less, the annuity equivalent (as defined below) of
benefits, if any, payable to or on behalf of Employee under all other
retirement compensation plans maintained by G-P and/or its subsidiaries
(as defined below), which are attributable to contributions made by G-P
and/or its subsidiaries (excluding any cash salary which he or she elected
to defer under such plans). For purposes of this paragraph the following
terms are defined as follows:
(A) "Cash salary" - shall mean base salary and
annual management incentive bonuses only and excludes without
limitation deferred compensation under any long-term incentive
program, bonuses for purpose of offsetting taxation and any other
incentive compensation; provided that annual management incentive
bonuses shall be counted in the year(s) or partial year(s) with
respect to which they are earned (rather than in the year of payment)
and shall be prorated for partial years (if not already prorated to
reflect partial year participation) included in the forty-eight (48)
month averaging period and provided, further, that if the annual
management incentive bonus amount with respect to any part of that
period is unavailable at the time Retirement Payments are to
commence, an estimated benefit will be paid based on the available
compensation data, subject to a retroactive adjustment when final
data are available.
(B) "Annuity equivalent" - of a given benefit shall
mean the actuarial equivalent, single life (in the case of an
Employee who is single when benefits commence) or joint and fifty
percent (50%) survivor annuity (in all other situations) determined
as of the Employee's last day worked for G-P or its subsidiaries
("Employee's last day worked") using (without limitation) the then
applicable actuarial equivalence factors adopted for the Georgia-
Pacific Corporation Salaried Employees Retirement Plan (the "SERP"),
statutory restrictions on qualified plan benefits as in effect on the
Employee's last day worked and the methods and assumptions which were
published and used by the Pension Benefit Guaranty Corporation for
plan terminations occurring during the first month of the calendar
quarter during which Employee's last day worked occurs; provided
however that notwithstanding the foregoing, if the Employee
elects to retain his or her SERP benefits in that plan after the
Employee's last day worked and the amount of those benefits is
increased due to adjustments in the statutory restrictions on
qualified plan benefits between the Employee's last day worked and
the date of distribution of his or her SERP benefits, the Employee's
benefits under this Agreement will be recalculated with respect to
the first payment due after the date of the SERP distribution (and
all future payments) solely to reflect the greater offset
necessitated by the above-described increase in the SERP benefit; and
provided further that with respect to benefits under retirement
compensation plans maintained by G-P and/or its subsidiaries which
depend on investment performance and which have been distributed to
the Employee prior to his last day worked, G-P's actuarial equivalent
calculation shall take into account such investment performance by
deeming the appropriate investment gain between the date of any such
distribution of benefits the Employee's last day worked to be the
Periodic Adjustment percentage under the SERP as in effect from time
to time during that period and the investment gain for periods after
the Employee's last day worked to be the Periodic Adjustment
percentage for the SERP as of the Employee's last day worked.
(C) "Retirement compensation plans maintained by G-
P and/or its subsidiaries" - shall mean any qualified or non-
qualified retirement plans covering the Employee (including, without
limitation, the Georgia-Pacific Corporation Savings and Capital
Growth Plan - formerly the Georgia-Pacific Stock Bonus Trust - and
the SERP but excluding the former Georgia-Pacific Corporation
Payroll-Based Employee Stock Ownership Plan) to the extent that
benefits under such plans are attributable to contributions made by
G-P and/or its subsidiaries.
3. Early Retirement.
(a) Employee will be eligible for Early Retirement as of the
date Employee's employment terminates after reaching age fifty-five (55) and
completing at least fifteen (l5) years of continuous service with G-P and/or
its subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such payments under Paragraph
3(a), Retirement Payment to Employee upon Early Retirement shall commence on
the first day of the month following the Employee's pay-through date or the
Employee's attainment of the age of sixty-two (62) years, whichever last
occurs. Such payments shall continue monthly on the first day of each month
during the lifetime of the Employee and, subject to the survivor annuity
provisions of Paragraph 7, shall end with the payment for the month of his or
her death.
(c) The monthly Retirement Payment payable to Employee if
eligible for Early Retirement under Paragraph 3(a) shall be equal to the
Retirement Payment to which the Employee would be entitled if the Employee
were eligible for Normal Retirement under Paragraph 2(a) as of the Employee's
date of termination of employment.
4. Termination.
(a) Employee will be eligible for Termination benefits as of
the date Employee's employment terminates for any reason other than Normal
Retirement, Early Retirement, Pre-Termination Disability or Pre-Termination
Death (under Paragraphs 2(a), 3(a), 5(a) or 6(a), respectively), after
Employee has completed at least three (3) full years of continuous service
with G-P and/or its subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such payments under Paragraph
4(a), Retirement Payments to Employee upon Termination shall commence on the
first day of the month following the Employee's pay-through date or the
Employee's attainment of the age of sixty-two (62) years, whichever last
occurs. Such payments shall continue monthly on the first day of each month
during the lifetime of the Employee and, subject to the survivor annuity
provisions of Paragraph 7, shall end with
the payment for the month of his or her death.
(c) The monthly Retirement Payment payable to Employee if
eligible for Termination benefits under Paragraph 4(a) shall be calculated as
follows:
(1) Determine the Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the date of the Employee's
termination of employment;
(2) Multiply that amount by a fraction, the numerator of
which shall equal the number of full years of continuous service which
Employee has completed with G-P and/or its subsidiaries (as defined in
Paragraph 8) on or before the date his or her employment terminates or
fifteen (l5), whichever is less, and the denominator of which shall be
fifteen (l5).
5. Pre-Termination Disability.
(a) Employee will be eligible for Pre-Termination Disability
benefits as of the date Employee's employment terminates by reason of
disability - as determined by the Compensation Committee of G-P's Board of
Directors (the "Committee") - after the completion of at least one (l) year of
continuous service with G-P and/or its subsidiaries (as defined in Paragraph
8).
(b) If Employee is eligible for such benefits under Paragraph
5(a), Retirement Payments to Employee upon Pre-Termination Disability shall
commence on the first day of the month following the Employee's pay-through
date (as determined by the Committee). Such payments shall continue monthly
on the first day of each month during the lifetime of the Employee and,
subject to the survivor annuity provisions of Paragraph 7, shall end with the
payment for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee if eligible under Paragraph 5(a) for Pre-Termination Disability
benefits shall be calculated as follows:
(1) Determine the monthly Retirement Payment to which
the Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the Employee's date of termination
due to disability;
(2) Multiply the result in subparagraph (c)(1) by the
appropriate early commencement percentage as indicated below:
Age of Employee
At Termination
Because of Disability Percentage
64 100%
63 100%
62 100%
61 94%
60 88%
59 82%
58 76%
57 70%
56 64%
55 58%
54 and prior 50%
6. Pre-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 6(d))
will be eligible for Pre-Termination Death benefits as of the date Employee's
employment terminates by reason of death after the completion of at least one
(l) year of continuous service with G-P and/or its subsidiaries (as defined in
Paragraph 8).
(b) If Employee's surviving spouse (as defined in Paragraph
6(d)) is eligible for such benefits under Paragraph 6(a), Retirement Payments
to Employee's surviving spouse by reason of Employee's death prior to
termination shall commence on the first day of the month following the later
of the date of death of Employee or the Employee's pay-through date. Such
payments shall continue monthly on the first day of each month during the
lifetime of the Employee's surviving spouse only and shall end with the
payment for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee's surviving spouse if eligible under Paragraph 6(a) for Pre-
Termination Death benefits shall be calculated as follows:
(1) Determine the monthly Retirement Payment to which
the Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the Employee's date of death;
(2) Multiply the result in subparagraph (c)(1) by the
appropriate early commencement percentage as indicated below:
Age of Employee
At Death Percentage
64 50%
63 50%
62 50%
61 47%
60 44%
59 41%
58 38%
57 35%
56 32%
55 29%
54 and prior 25%
(d) For purposes of this Paragraph 6 only, Employee's
"surviving spouse" shall mean the Employee's spouse at the time of Employee's
death.
7. Post-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 7(d))
will be eligible for Post-Termination Death benefits as of:
(1) The date Employee dies after benefits under this
Agreement have commenced; or
(2) The date Employee dies if such death occurs after
the Employee's employment with G-P and its subsidiaries has terminated,
but before Retirement Benefit Payments pursuant to Paragraph 2(b), 3(b),
4(b) or 5(b) have commenced, and at a time when the Employee has met the
eligibility requirements for benefits under this Agreement stated in
Paragraphs 2(a), 3(a), 4(a) or 5(a).
(b) If Employee's surviving spouse (as defined in Paragraph
7(d)) is eligible for such benefits, Retirement Payments to Employee's
surviving spouse by reason of Employee's death after termination shall
commence on the first day of the month following the latest of:
(1) The death of Employee, or
(2) If eligible under Paragraph 7(a)(1), the last day of
the period for which Employee's benefit payments have been paid, or
(3) If eligible under Paragraph 7(a)(2), the Employee's
pay-through date.
Such payments shall continue monthly on the first day of each month during the
lifetime of the Employee's surviving spouse only and shall end with the
payment for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee's surviving spouse (as defined in Paragraph 7(d)) if eligible under
Paragraph 7(a) for Post-Termination Death benefits shall be calculated as
follows:
(1) If eligible under Paragraph 7(a)(1), Employee's
surviving spouse (as defined in Paragraph 7(d)) shall be entitled to the
payment of a monthly benefit for the rest of such spouse's lifetime equal
to fifty percent (50%) of the monthly Retirement Payment which was being
paid to Employee immediately before his or her death;
(2) If eligible under Paragraph 7(a)(2), Employee's
surviving spouse (as defined in Paragraph 7(d)) shall be entitled to the
payment of a monthly Retirement Payment for the rest of such spouse's
lifetime equal to fifty percent (50%) of the monthly Retirement Payment
which would have been payable to Employee if he or she had survived until
Retirement Payments commenced, provided however that if Employee dies
prior to attaining age sixty-two (62), the survivor benefit shall be
further adjusted as provided in Paragraph 6(c)(2).
(d) For purposes of this Paragraph 7 only (but subject to
subparagraph (e) below), Employee's "surviving spouse" means a spouse who is
Employee's lawful spouse on the date of Employee's death and (i) in the case
of Paragraph 7(c)(1), on the date the Employee's benefits under this Agreement
commenced or (ii) in the case of Paragraph 7(c)(2), on the date of Employee's
death.
(e) Notwithstanding anything in Paragraph 7(d) to the
contrary, if Employee is entitled to Retirement Payments and after termination
of employment with G-P and/or its subsidiaries, (i) Employee marries or
remarries after the date he or she reaches age sixty-two (62) or the date his
or her employment by G-P and/or its subsidiaries terminates, whichever is
later, and (ii) Employee desires to provide for the payment of a survivor
benefit to his or her new spouse if such spouse survives Employee, Employee
shall have the right to make an irrevocable election (in a form satisfactory
to G-P) to convert the monthly Retirement Payments to which he or she is
entitled under this Agreement into an actuarial equivalent benefit (as
determined by G-P using the actuarial factors specified in Paragraph 2(c))
which will provide a reduced monthly Retirement Payment to Employee for his or
her lifetime and, if Employee's new spouse survives Employee, will provide
such new spouse with a monthly benefit equal to fifty percent (50%) of
Employee's reduced monthly Retirement Payments for the rest of such new
spouse's lifetime. If Employee marries or remarries after termination because
of disability under Paragraph 5, the provisions of this subparagraph (without
regard to clause (i)) shall apply.
8. Continuous Service.
For purposes of this Agreement, "continuous service with G-P
and/or its subsidiaries" shall mean a period of unbroken employment with G-P
and/or its subsidiaries. Employment with a subsidiary shall be counted only
for periods during which the subsidiary's relationship with G-P existed.
9. Forfeiture of Benefits.
As consideration for the benefits provided under this Agreement
and notwithstanding any other provisions of this Agreement, Employee shall
forfeit all entitlement to monthly Retirement Payments (whether to Employee or
Employee's spouse) if Employee, within a period of three (3) years after the
date Employee's employment with G-P and its subsidiaries terminates, whether
by retirement or otherwise, is employed as an officer, director, manager,
sales representative (if his or her responsibilities at G-P included sales) or
business consultant in the United States by another employer which, combined
with its affiliates, has annual sales of $25,000,000 or more and which is a
competitor with G-P or its subsidiaries in the United States (a "competing
position"). Employee shall notify the Chairman of the Board of the Company of
his or her acceptance of a competing position within ten (10) days after the
effective date of his acceptance and shall reimburse G-P for any payments
under this Agreement to which he is not entitled. G-P may offset this
obligation of employee against any and all obligations or liabilities it owes
to Employee, and if it is necessary to seek reimbursement through legal
process, Employee agrees to reimburse G-P for its costs and attorneys fees in
such an action. For purposes of this Paragraph 9: (i) the term "affiliate"
shall mean any entity directly or indirectly controlling, controlled by or
under common control with the employer in question, whether by stock
ownership, agreement or otherwise; (ii) the terms "control", "controlling" and
"controlled" shall refer to direct or indirect ownership of at least fifty
percent (50%) of the voting stock, partnership interests or income or other
beneficial interest with respect to the entity in question; and (iii) the term
"competitor with G-P or its subsidiaries" shall mean (A) with respect to any
non-executive officer who has had managerial and/or operational responsibility
for a period of at least six (6) months during the three (3) years prior to
termination for particular business unit(s), division(s) or subsidiary(ies) of
G-P or its subsidiaries, an entity which competes with G-P or its subsidiaries
with respect to any of the products manufactured and/or marketed by such
business unit(s), division(s) or subsidiary(ies); (B) with respect to
executive officers and officers who have had corporate staff responsibilities
for at least six (6) months during the three (3) years prior to termination,
any entity which competes with G-P or its subsidiaries in the lumber, plywood,
pulp, paper or chemical businesses in the United States. Once benefits are
forfeited under this provision, they may not be reinstated, even if the
competing position is relinquished. If any aspect of this forfeiture
provision is determined to be unenforceable as drafted, it is the intention of
the parties that, to the extent permitted by applicable law, the objectionable
portion(s) of this provision shall be severed or restricted (as the case may
be) and that, except as so modified, the provision shall be enforced.
10. Nothing contained in this Agreement and no action taken pursuant
to the provisions of this Agreement shall create or be construed to create a
trust of any kind, or a fiduciary relationship between G-P and Employee, or
Employee's spouse, or any other person. This Agreement does not create any
escrow account, trust fund or any other form of asset segregation. Any
Retirement Payments due under the provisions of this Agreement shall be paid
from the general funds of G-P. To the extent any person acquires a right to
receive payments from G-P under this Agreement, such right shall be no greater
than the right
of any unsecured general creditor of G-P.
11. The right of Employee or any other person to Retirement Payments
under this Agreement shall not be subject to the claims of their creditors or
others, nor to legal process, and shall not be assigned, transferred, pledged
or encumbered.
12. Nothing contained herein shall be construed as conferring upon
Employee the right to continue in the employ of G-P and/or its subsidiaries as
an executive or in any other capacity.
13. The annual Retirement Payments provided for by this Agreement
shall not constitute "compensation" for purposes of computing compensation for
any qualified deferred compensation plan maintained by G-P or its
subsidiaries.
14. The Board of Directors of G-P shall have full power and
authority to interpret, construe and administer this Agreement and the Board's
interpretation and construction thereof, and actions thereunder shall be
binding and conclusive on all persons for all purposes. No member of the
Board shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Agreement unless
attributable to his own willful misconduct or lack of good faith.
15. This Agreement shall be binding upon and inure to the benefit of
G-P and its subsidiaries, its successors and assigns, and to the Employee and
Employee's heirs, executors, administrators and legal representatives.
16. All actions for the enforcement of any rights under, or
interpretation of, this Agreement shall be brought in the courts of the State
of Georgia or (to the extent that jurisdictional requirements permit) in
federal courts located in the State of Georgia, and all participants in this
Plan agree to be subject to the jurisdiction of such courts for the purpose of
any such actions. The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Georgia and, to the
extent applicable, federal law.
17. It is understood and agreed by the parties that if there is an
Executive Retirement Agreement between Employee and G-P entered into prior to
the date of this Agreement, this Agreement is a mutually-agreed amendment and
restatement of such Agreement and that, further, any such prior Agreement is
acknowledged to be superseded by this Agreement as of the effective date of
this Agreement specified above.
18. Any notices required by this Agreement shall be sent as follows:
If to: Employee: Name and address
.................
......................
G-P: Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Chairman and Chief
Executive Officer
Any party may specify in writing to the other party a change of address for
purposes of this Paragraph 18, and any such change shall be effective upon
receipt of such written notice.
IN WITNESS WHEREOF, G-P has caused this Agreement to be executed by
its duly authorized officer and Employee has hereunto set his/her hand as of
the date first above written.
GEORGIA-PACIFIC CORPORATION
By: _______________________________
A. D. Correll
Chairman and Chief Executive
Officer
EMPLOYEE:
Name.........
GEORGIA-PACIFIC CORPORATION
KEY SALARIED EMPLOYEES GROUP INSURANCE PLAN (As Amended and Restated Effective
January 1, 1987) PRE-1987 GROUP
ARTICLE I
PURPOSE
1.1 Purpose of the Plan
The purpose of the Georgia-Pacific Corporation Key Salaried Employees
Group Insurance Plan/Pre-1987 Group (the "Plan") is to provide pre- and post-
retirement death and accident benefits for certain key executive employees of
Georgia-Pacific Corporation (the "Company"). This Plan is the continuation,
amendment and restatement of the Georgia-Pacific Key Salaried Employees Group
Insurance Plan as in existence prior to January 1, 1987 ("Prior Plan"). The
death and accident benefits provided herein are intended to assist in securing
the goodwill, loyalty and efficiency of the covered key executives, to minimize
employee turnover and to attract and retain highly qualified employees. The Plan
is intended to be an unfunded welfare plan maintained by the employer for the
purpose of providing benefits for a select group of management employees
pursuant to Section 104(a)(3) of the Employee Retirement. Income Security Act of
1974 (ERISA), and Labor Department Regulation Section 2520.104-24, thereunder.
ARTICLE II
LIFE INSURANCE BENEFITS
2.1 Participation
All current and former salaried employees who were Participants in the
Prior Plan as of December 31, 1986 shall be eligible for continued participation
in this Plan.
2.2 Amount of Coverage
a. Normal Coverage. Each Participant in the Plan will receive death
benefit coverage equal to twice that Participant's basic annual salary.
Notwithstanding the foregoing, coverage shall issue only in multiples of $25,000
and should the product of twice a Participant's salary not equal a multiple of
$25,000, such Participant's coverage shall be issued in an amount equal to the
next larger multiple of $25,000. The amount of coverage shall be adjusted
upwards as of each January 1, if necessary, to take account of any increase in
Participant's salary during the intervening year effective on such January 1.
No adjustment shall be made in the event of a decrease in Participant's salary.
b. Minimum Coverage. The minimum coverage for any Participant to be
issued under this Plan shall be the greater of $200,000, or the amounts listed
below:
Position With Company Minimum Coverage
Chairman and Chief Executive Officer $700,000
President and Executive Vice Presidents 500,000
Senior Vice Presidents 400,000
Vice President, Building Products Division 250,000
Participants Salaried in Excess of $101,000 300,000
Participants Salaried between $75,000
and $101,000 200,000
c. Maximum Coverage. The maximum coverage for any Participant to be
issued under this Plan shall be $1,000,000.
2.3 Duration of Coveraqe
a. Active Employment. Each participant at all times shall remain
eligible for the coverage provided for herein so long as he shall remain a
salaried employee actively employed by the Company.
b. Upon Retirement From Company. A Participant in this Plan shall
continue to be covered by the Plan as indicated below following his termination
of employment with the Company provided he has terminated his employment with
the Company:
i. After having attained the age of sixty-five (65) without regard to the
duration of his service for the Company,
ii. After having attained the age of sixty (60) and having.completed not
less than ten (10) years of service, or
iii. After having attained the age of fifty-five (55) and having completed
not less than fifteen (15) years of service.
Such coverage will be at a level equal to the Participant's level of coverage
immediately prior to termination of employment. Any Participant entitled to
continued post-retirement benefits under this subsection by reason of retirement
prior to January 1, 1987 will continue to be.covered by the type and level of
death benefits in effect on December 31, 1986. Any Participant entitled to
continued post-retirement benefits under this subsection c by reason of
retirement after December 31, 1986, will no longer be covered by an insured
death benefit, but may, at the time of retirement, elect one of the following
Company-paid (non-insured) options, each of which shall be actuarally equivalent
to the death benefits in effect prior to retirement:
i. A life annuity from Company funds in the form of a single life
annuity, fifty percent (50%) joint and survivor annuity or one hundred percent
(100%) joint and survivor annuity; or
ii. An ultimate Company-paid death benefit of two times basic annual
salary at the time of retirement (rounded up to the next largest multiple of
$25,000); or
iii. An immediate Company-paid lump sum benefit equal to the present value
of the ultimate death benefit.
Pursuant to the three (3) foregoing alternatives, the Participant (or the
Participant's beneficiary(ies)) will also receive a bonus with respect to each
distribution under the selected alternative equal to fifty percent (50%) of the
taxable portion of such distribution (such bonus to be withheld for taxes).
c. Upon Separation From Service On Account of Disability. A Participant
shall continue to be covered by the Plan following his termination of employment
in the event that such termination was occasioned by his becoming totally
disabled.
d. Upon Separation From Service For Other Than Retirement or Disability.
A Participant terminating employment for reasons other than retirement or
disability shall continue to be covered by the Plan for thirty-one (31) days
following the date of such termination.. Within the thirty-one (31) day period
the terminating Participant may convert any group insurance policy contract on
his life held by the Plan to an individual life insurance policy pursuant to the
terms and conditions imposed by the insurance company issuing coverage under the
Plan.
2.4 Additional Compensation to Participants
In addition to the basic annual salary paid to a Participant, the
Company agrees to pay, to each actively employed Participant, a bonus equal to
fifty percent (50%) of the taxable value of the Company-provided death benefit
coverage as determined under applicable law (such bonus to be withheld for
taxes).
ARTICLE III
PERSONAL ACCIDENT INSURANCE BENEFITS
3.1 Participation
In addition to any benefit which may be payable pursuant to Article II
of the Plan, any active employee of the Company eligible for Life Insurance
Benefits as provided in Article II of this Plan, shall be eligible for Personal
Accident Insurance Benefits hereunder.
3.2 Amount of Coverage
A Participant injured in an accident shall be eligible for a fraction of
the maximum coverage provided in subparagraph a of this Section 3.2 according to
the level of loss schedule provided in subparagraph b, below.
a. Maximum Coverage. Each Participant in the Personal Accident Insurance
portion of this Plan shall receive the following Personal Accident Insurance
Coverage:
Classification Maximum Coveraqe
Participants who are officers of the Company $250,000
Participants who are not officers of the Company $200,000.
b. Level of Loss. The proportion of the maximum coverage benefits payable
to an injured participant shall be:
Type of Accident* Amount
Loss of Life Full amount of maximum
coverage provided in 3.2(a) (paid to
Participant's beneficiary)
Loss of:
Both hands Full amount of maximum
Both feet coverage provided in 3.2(a)
Sight of both eyes (paid to Participant)
One hand and one foot
One hand and sight of
one eye
One foot and sight of
one eye
Loss of:
One hand 1/2 the amount of maximum
One foot coverage provided in 3.2(a)
Sight of one eye (paid to Participant)
*Total payment for all losses due to one accident will not be more than the
maximum amount of coverage under Section 3.2(a).
c. Limitations. Notwithstanding the foregoing, no benefit shall be
payable on account of a loss occurring more than 365 days after the accident, or
any loss occurring on account of:
i. War (including undeclared war and armed aggression),
ii. Suicide, attempted suicide, or intentionally self-inflicted injury,
iii. Bodily or mental infirmity or disease,
iv. Infection (other than pyogenic infection of an accidental cut or
wound),
v. Travel in an aircraft, except as a passenger, in a civilian aircraft
or its military equivalent piloted by a qualified licensed pilot or
military equivalent. (You are also not covered if you act as a member of
the fight crew.)
3.3 Duration of Coveraqe
A Participant shall be covered by the Personal Accident Insurance
portion of the Plan so long as he is eligible to participate in the Life
Insurance portion of the Plan and remains actively employed by the Company.
Coverage shall cease upon termination of employment with the Company for
any'reason.
ARTICLE IV
PAYMENT OF BENEFITS
4.l Payment of Benefits
Benefits under the Plan shall be paid in accordance with the terms and
conditions of this Plan and of any group insurance policy or policies then
funding the Plan to such beneficiary or beneficiaries as may be designated by
the Participant upon a written election form. In the event that no beneficiary
has been designated, then the benefits under the Plan shall be paid to the first
surviving class of the following classes of successive preference beneficiaries:
(a) Participant's spouse, (b) Participant's surviving children, (c)
Participant's surviving parents, (d) Participant's surviving brothers and
sisters, or (e) Participant's executor or administrator.
ARTICLE V
FUNDING
5.1 Fundinq of the Plan. Notwithstanding anything in this Plan to the
contrary, the Company shall have sole discretion in determining the methods used
to fund the benefits provided under the Plan.
5.2 Employee Contributions. No Participant contributions shall be required
with respect to the benefits provided in the Plan, and all such benefits will be
funded solely by the Company.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Plan Administration
The Plan will be administered by the Compensation Committee of the Board
of Directors of the Company. Decisions and determinations by the Committee shall
be final and binding upon all parties, including the Company, Shareholders,
Participants, and other employees. The Committee shall have the authority to
interpret the Plan, to adopt and revise rules and regulations relating to the
Plan and to make any other determinations which it believes necessary or
advisable for the administration of the Plan. No member of the Committee shall
be liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Agreement unless attributable to his
own willful misconduct or lack of good faith.
The Committee is expressly authorized to appoint one individual, who
need not be a member of the Committee, to act as its agent in the management and
administration of this Plan. Such individual shall be empowered to undertake
all of the obligations of the Committee as provided herein, and shall serve at
the pleasure of the Committee.
6.2 Amendment and Plan Termination
The Board of Directors of the Company expressly reserves the right to amend or
terminate the Plan at any time, provided however that no amendment or
termination shall have the effect of terminating or reducing the coverage amount
(as determined pursuant to Sections 2.2 and 3=2a) of any employee who at the
time of amendment or termination was covered by the Plan. The coverage provided
each Participant on the date of amendment or termination shall continue at the
level then in effect notwithstanding the fact that such amendment or termination
may preclude increased coverage or new participants.
6.3 Assiqnment of Benefits
Except as specifically provided in this Section, a Participant may not,
either voluntarily or involuntarily assign, anticipate, alienate, commute,
pledge or encumber any benefits to which he or she is or may become entitled to
under the Plan, nor may the same be subject to attachment or garnishment by any
creditor of a Participant.
Notwithstanding the foregoing, nothing in this Section shall prohibit a
Participant from assigning, by gift, the ownership of any policy of insurance
issued upon Participant's life, either directly to or in trust for the benefit
of to one or more of the following: (a) Participant's spouse, (b) ancestors of
Participant or Participant's spouse, (c) Participant's lineal descendants, or
(d) Participant's siblings. An assignment may be made by written notification
to the Plan and to the underlying insurer in such manner and form as shall be
prescribed by the Compensation Committee.
6.4 Continued Employment
Although the Company intends the accident and death benefits provided by
the Plan to be a term of employment and a part of each Participant's
compensation and benefits package, nothing in the establishment of the Plan is
to be construed as giving any Participant the right to be retained in the
employment of the Company.
6.5 Effective Date
This amendment and restatement of the Plan shall be effective as of the
later of the date of its adoption by the Board of Directors of the Company or
January 1, 1987.
AMENDMENT NUMBER ONE
TO THE
GEORGIA-PACIFIC CORPORATION
KEY SALARIED EMPLOYEES GROUP INSURANCE PLAN
PRE-1987 GROUP
(As Amended and Restated Effective January 1, 1987)
Pursuant to the authority granted to the Board of Directors of
Georgia-Pacific Corporation (the "Board") to amend the Georgia-Pacific
Corporation Key Salaried Employees Group Insurance Plan/Pre-1987 Group (the
"Plan") and in accordance with a resolution of the Board adopted July 29,
1991, the Plan has been amended effective January 1, 1991 as follows:
1. The last sentence of Section 2.3b of the Plan is amended and
restated as follows:
"Pursuant to the three (3) foregoing alternatives, the Participant (or
the Participant's beneficiary(ies)) will also receive a bonus with
respect to each distribution under the selected alternative equal to
the product of the amount of the distribution
and the fraction
T
1-T
where T equals the sum of the highest statutory marginal federal and
Georgia income tax rates, expressed in decimal form, applicable to
individuals resident in Georgia on personal service income. For
purposes of calculating the above-described fraction, the ``highest
statutory marginal federal and Georgia income tax rates'' shall be the
appropriate rates in effect at the time the affected distribution is
made. The bonus shall not be distributed to the Participant (or the
Participant's beneficiary(ies)) but shall be withheld for taxes."
2. Section 2.4 of the Plan is amended and restated as follows:
2.4 Additional Compensation to Participants
In addition to the basic annual salary paid to a Participant, the
Company agrees to pay, to each actively employed Participant, a bonus
equal to the product of the taxable value of the Company-provided
death benefit coverage as determined under applicable law and the
fraction
T
1-T
where T equals the sum of the highest statutory marginal federal and
Georgia income tax rates, expressed in decimal form, applicable to
individuals resident in Georgia on personal service income. For
purposes of calculating the above-described fraction, the "highest
statutory marginal federal and Georgia income tax rates" shall be
the appropriate rates in effect at the time the affected distribution
is made. The bonus shall not be distributed to the Participant (or
the Participant's beneficiary(ies)) but shall be withheld for taxes."
GEORGIA-PACIFIC CORPORATION
KEY SALARIED EMPLOYEES GROUP INSURANCE PLAN (Effective January 1, 1987)
POST-1986 GROUP
ARTICLE I
PURPOSE
1.1 Purpose of the Plan
The purpose of the Georgia-Pacific Corporation Key Salaried Employees
Group Insurance Plan/Post-1986 Group (the "Plan") is to provide pre-retirement
death and accident benefits for certain key executive employees of Georgia-
Pacific Corporation (the "Company"). The death and accident benefits provided
herein are intended to assist in securing the goodwill, loyalty and efficiency
of the covered key executives, to minimize employee turnover and to attract and
retain highly qualified employees. The Plan is intended to be an unfunded
welfare plan maintained by the employer for the purpose of providing benefits
for a select group of management: employees pursuant to Section 104(a)(3) of the
Employee Retirement Income Security Act of 1974 (ERISA), and Labor Department
Regulation Section 2520.104-24, thereunder.
ARTICLE II
LIFE INSURANCE BENEFITS
2.1 Participation
All salaried employees who are actively at work and whose basic annual
salaries equal or exceed $100,000 shall become participants in the Plan,
provided that salaried employees who are eligible to participate in the Georgia-
Pacific Key Salaried Employees Group Insurance Plan/Pre-1987 Group will not be
eligible to participate in this Plan. Participation shall commence on the
January 1 as of which the compensation standard is met. In the event an
employee is otherwise eligible but is not actively at work, such employee shall
commence participation upon return to active employment. Once an employee has
become a Participant in the Plan, the employee shall continue to participate
notwithstanding the future failure of employee to meet the minimum annual salary
requirements for new Participants.
2.2 Amount of Coverage
a. Normal Coverage. Each Participant in the Plan will receive death
benefit coverage equal to the amount indicated below opposite the Participant's
age as of January 1 of the year of determination:
Insurance Coverage As A
Age Multiple of Basic Annual Salary
Under 45 5x
45-49 4x
50-54 3x
55 and Over 2x
Notwithstanding the foregoing, coverage shall be issued only in multiples of
$25,000 and should the product of the above-referenced coverage multiple and a
Participant's salary not equal a multiple of $25,000, such Participant's
coverage shall be issuedin an amount equal to the next larger multiple of
$25,000. The amount of coverage shall be adjusted effective as of each January
1 on and after January 1, 1987, if necessary, to take account of any increase in
Participant's salary during the intervening year effective on that January 1 and
any change of coverage pursuant to the coverage schedule (using the
Participant's age on that January 1). No adjustment shall be made solely because
of a decrease in Participant's salary.
b. Maximum Coverage. The maximum coverage for any Participant to be
issued under this Plan shall be $1,000,000.
2.3 Duration of Coverage
a. Active Employment. Each participant at all times shall remain
eligible for the coverage provided for heroin so long as the Participant shall
remain a salaried employee actively employed by the Company.
b. Upon Retirement From Company. Except as provided below in subsections
c and d, coverage under the Life Insurance portion of the Plan shall cease upon
termination of employment with the Company for any reason.
c. Upon Separation From Service On Account of Disability. A Participant
shall continue to be covered by the Plan following his termination of employment
in the event that such termination was occasioned by his becoming totally
disabled.
d. Upon Separation From Service For Other Than Disability. A Participant
terminating employment for reasons other than disability shall continue to be
covered by the Plan for thirty-one (31) days following the date of such
termination. Within the thirty-one (31) day period the terminating Participant
may convert any group insurance policy contract on his life held by the Plan to
an individual life insurance policy pursuant to the terms and conditions imposed
by the insurance company issuing coverage under the Plan.
2.4 Additional Compensation to Participants
In addition to the basic annual salary paid to a Participant, the
Company agrees to pay to each actively employed Participant, a bonus equal to
fifty percent (50%) of the taxable value of the Company-purchased death benefit
coverage as determined under applicable law (such bonus to be withheld for
taxes).
ARTICLE III
PERSONAL ACCIDENT INSURANCE BENEFITS
3.1 Participation
In addition to any benefit which may be payable pursuant to Article II
of the Plan, any active employee of the Company eligible for Life Insurance
Benefits as provided in Article II of this Plan, shall be eligible for Accident
Insurance Benefits hereunder.
3.2 Amount of Coveraqe
A Participant injured in an accident shall be eligible for a fraction of
the maximum coverage provided in subparagraph a of this Section 3.21according to
the level of loss schedule provided in subparagraph b, below.
a. Maximum Coverage. Each Participant in the Personal Accident
Insurance portion of this Plan shall receive the following Personal Accident
Insurance Coverage:
Classification Maximum Coverage
Participants who are officers $250,000
of the Company
Participants who are not $200,000
officers of the Company
b. Level of Loss. The proportion of the maximum coverage benefits
payable to an injured participant shall be:
Type of Accident* Amount
Loss of Life Full amount of maximum
coverage provided in 3.2(a)
(paid to Participant's
beneficiary)
Loss of: Full amount of maximum
Both hands coverage provided in S.2(a) (paid
Both feet to Participant)
Sight of both eyes
One hand and one foot
One hand and sight of
one eye
One foot and sight of
one eye
Loss of: 1/2 the amount of maximum
One hand coverage provided in 3.2(a)
One foot (paid to Participant)
Sight of one eye
*Total payment for all losses due to one accident will not be more than the
maximum amount of,the coverage provided in Section 3.2(a).
c. Limitations. Notwithstanding the foregoing, no benefit shall be
payable on account of a loss occurring more than 365 days after the accident, or
any loss occurring on account of:
i. War (including undeclared war and armed aggression),
ii. Suicide, attempted suicide or intentionally self-inflicted injury,
iii. Bodily or mental infirmity or disease,
iv. Infection (other than pyogenic infection of an accidental cut or
wound),
v. Travel in an aircraft, except as a passenger, in a civilian aircraft
or its military equivalent piloted by a qualified licensed pilot or military
equivalent. (You are also not covered if you act as a member of the fight crew.)
3.3 Duration of Coverage
A Participant shall be covered by the Personal Accident Insurance portion
of the Plan so long as he is eligible to participate in the Life Insurance
port.ion of the Plan and remains actively employed by the Company. Coverage
shall cease upon termination of employment with the Company for any reason.
ARTICLE IV
PAYMENT OF BENEFITS
4.1 Payment of Benefits
Benefits under the Plan shall be paid in accordance with the terms and
conditions of the Plan and of any group insurance policy or policies then
funding the Plan to such beneficiary or beneficiaries as may be designated by
the Participant upon a written election form. In the event that no beneficiary
has been designated, then the benefits under the Plan shall be paid to the first
surviving class of the following classes of successive preference beneficiaries:
(a) Participant's spouse, (b) Participant's surviving children, (c)
Participant's surviving parents, (d) Participant's surviving brothers and
sisters, or (e) Participant's executor or administrator.
ARTICLE V
FUNDING
5.1 Funding of the Plan. Notwithstandig anything in this Plan to the
contrary, the Company shall have sole discretion in determining the methods used
to fund the benefits provided under the Plan.
5.2 Employee Contributions. No Participant contributions shall be
required with respect to the benefits provided in the Plan, and all such
benefits will be funded solely by the Company.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Plan Administration
The Plan will be administered by the Compensation Committee of the Board
of Directors of the Company. Decisions and determinations by the Committee
shall be final and binding upon all parties, including the Company,
Shareholders, Participants and other employees. The Committee shall have the
authority to interpret the Plan, to adopt and revise rules and regulations
relating to the Plan and to make any other determinations which it believes
necessary or advisable for the administration of the Plan. No member of the
Committee shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Agreement unless
attributable to his own willful misconduct or lack of good faith.
The Committee is expressly authorized to appoint one individual, who
need not be a member of the Committee, to act as its agent in the management and
administration of this Plan. Such individual shall be empowered to undertake
all of the obligations of the Committee as provided herein, and shall serve at
the pleasure of the Committee.
6.2 Amendment and Plan Termination
The Board of Directors of the Company expressly reserves the right to
amend or terminate the Plan at any time, provided however that no amendment or
termination shall have the effect of terminating or reducing the coverage amount
(as determined pursuant to Sections 2.2 and 3.2a) of any employee who at the
time of amendment or termination was covered by the Plan. The coverage provided
each Participant on the date of amendment or termination shall continue at the
level then in effect notwithstanding the fact that such amendment or termination
may preclude increased coverage or new participants.
6.3 Assiqnment of Benefits
Except as specifically provided in this Section, a Participant may not,
either voluntarily or involuntarily assign, anticipate, alienate, commute,
pledge or encumber any benefits to which he or she is or may become entitled to
under the Plan, nor may the same be subject to attachment or garnishment by any
creditor of a Participant.
Notwithstanding the foregoing, nothing in this Section shall prohibit a
Participant from assigning, by gift, the ownership of any policy of insurance
issued upon Participant's life, either directly to or in trust for the benefit
of to one or more of the following: (a) Participant's spouse, (b) ancestors of
Participant or Participant's spouse, (c) Participant's lineal descendants, or
(d) Participant's siblings. An assignment may be made by written notification
to the Plan and to the underlying insurer in such manner and form as shall be
prescribed by the Compensation Committee.
6.4 Continued Employment
Although the Company intends the accident and death benefits provided by
the Plan to be a term of employment and a part of each Participant's
compensation and benefits package, nothing in the establishment of the Plan is
to be construed as giving any Participant the right to be retained in the
employment of the Company.
6.5 Effective Date
This Plan shall be effective as of the later of the date of its adoption
by the Board of Directors of the Company of January 1, 1987.
AMENDMENT NUMBER ONE
TO THE
GEORGIA-PACIFIC CORPORATION
KEY SALARIED EMPLOYEES GROUP INSURANCE PLAN
POST-1986 GROUP
(Effective January 1, 1987)
Pursuant to the authority granted to the Board of Directors of
Georgia-Pacific Corporation (the "Board") to amend the Georgia-Pacific
Corporation Key Salaried Employees Group Insurance Plan/Post-1986 Group (the
"Plan") and in accordance with a resolution of the Board adopted July 29,
1991, the Plan has been amended effective January 1, 1991 as follows:
Section 2.4 of the Plan is amended and restated as follows:
"2.4 Additional Compensation to Participants
In addition to the basic annual salary paid to a Participant, the
Company agrees to pay, to each actively employed Participant, a bonus
equal to the product of the taxable value of the Company-provided
death benefit coverage as determined under applicable law and the
fraction
T
1-T
where T equals the sum of the highest statutory marginal federal and
Georgia income tax rates, expressed in decimal form, applicable to
individuals resident in Georgia on personal service income. For
purposes of calculating the above-described fraction, the ``highest
statutory marginal federal and Georgia income tax rates'' shall be the
appropriate rates in effect at the time the affected distribution is
made. The bonus shall not be distributed to the Participant (or the
Participant's beneficiary(ies)) but shall be withheld for taxes."
GEORGIA-PACIFIC CORPORATION
DIRECTORS RETIREMENT PROGRAM
This Georgia-Pacific Corporation Directors Retirement Program (the
"Plan") is intended to be a continuation, amendment and restatement of the
Directors Retirement Program established by resolution of the Board of
Directors of Georgia-Pacific Corporation (the "Company") dated May 1, 1984
("Prior Plan"). The purpose of this document is to formalize the provisions
of the Plan and to augment, clarify and, where necessary, modify the
provisions of the Prior Plan in light of the experience of the Company in
administering the Plan to date. Upon adoption by the Board of Directors of
the Company, this Plan shall supersede the Prior Plan as to all active and
future Directors, but former Directors receiving benefits under the Prior Plan
at such time shall continue to be covered by the provisions of the Prior Plan.
ARTICLE I
DEFINITIONS
The words and phrases used in this Plan shall have the following
meanings:
1.1. Accrued Benefit. The benefit accrued by a participating
Director under this Plan at any given time as determined under Section 3.1.
1.2. Board. The Board of Directors of the Company, as constituted
from time to time.
1.3. Company. Georgia-Pacific Corporation, a Georgia corporation.
1.4. Director. A member of the Board of the Company.
1.5. Effective Date. The date as of which this Plan shall be
effective, as specified in Section 7.1.
1.6. Eligible Director. A Director who has never served as an
officer of the Company.
1.7. Period of Participation. The period(s) of service as an
Outside Director defined in Section 2.1.
1.8. Plan. The Georgia-Pacific Corporation Directors Retirement
Program as set forth in this document effective from and after the Effective
Date.
1.9. Plan Administrator. The entity described in Section 4.1 as
the administrator of the Plan.
1.10. Prior Plan. The Directors Retirement Program as in effect
prior to the Effective Date (as described in a resolution of the Board dated
May 1, 1984).
1.11. Subsidiary. Any corporation (other than the Company) in any
unbroken chain of corporations beginning with the Company if, at the time of
reference, each of the corporations other than the last corporation in an
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
1.12. Years of Service. The number of years of a Director's
service on the Board recognized for purposes of this Plan, as defined in
Section 2.2.
ARTICLE II
PARTICIPATION AND SERVICE
2.1. Participation. Each Eligible Director shall be entitled to
participate in, and accrue benefits under, the Plan during any period, whether
or not continuous, during which he or she serves as a Director of the Company.
An Eligible Director's Period of Participation shall commence with the
effective date of such Director's election to the Board and shall end as of
the latest of (i) the effective date of the Director's resignation or removal
from the Board, (ii) the last day of a three-year term as a Director if he is
not thereafter continuing as a Director and (iii) the date of the Director's
death. Non-continuous Periods of Participation shall be combined to determine
a Director's total service for purposes of this Plan.
2.2 Years of Service. For all purposes under this Plan, a
Director's Years of Service shall be equal to the number of complete three
hundred sixty-five (365) day periods included in the Director's Period of
Participation.
ARTICLE III
BENEFITS
3.1. Benefit Formula. The annual Accrued Benefit of any Eligible
Director under this Plan at any time shall be determined in accordance with
the following formula
Accrued Benefit = (0.1) x Y x R
where R = 100% of the annual retainer for active Directors in effect as
of the date of calculation (in the case of a Director who, at
the time of calculation, (i) is chairman of a standing
committee of the Board, (ii) is eligible for an additional
annual retainer with respect to that position and (iii) has
accrued two (2) Years of Service as chairman of one or more
such committees, R will include the committee chairman's
annual retainer in effect as of the date of calculation)
and Y = the Director's Years of Service as of the date of
calculation, but in no event more than ten (10).
Individual benefit payment amounts shall be calculated in accordance with
Section 3.3 and shall not be adjusted in any individual case to reflect
changes in the amount of the retainer for active Directors after the date of
calculation specified in that Section.
3.2. Vesting. Subject to the provisions of Section 3.4, a Director
shall become one hundred percent (100%) vested in his Accrued Benefit
calculated in accordance with Section 3.1 upon his accumulation of two (2)
Years of Service.
3.3. Payment of Benefits.
(a) Benefits under this Plan shall be paid on a
quarterly basis at the beginning of each calendar quarter commencing with the
calendar quarter next following the later of:
(i) The attainment by the former Director of age sixty-two (62);
or
(ii) The effective date of the former Director's most recent
cessation of service as a Director.
The amount of such quarterly benefit shall be twenty-five percent (25%) of the
Director's Accrued Benefit under Section 3.1 calculated as of the date of his
most recent termination of service as a Director. Subject to Section 3.4,
such benefits shall continue for the life of the former Director and shall
cease with the payment due for the calendar quarter in which he dies.
(b) Notwithstanding anything in Section 3.3(a) to the contrary, a
former Director who is eligible for benefits under this Plan and who is
married at the time his/her benefits commence elect to have his/her benefits
paid in one of the forms described in this subsection by so notifying the Plan
Administrator (or its delegate) in writing prior to the date benefits under
Section 3.3(a) would otherwise commence (such notice to be deemed given upon
actual receipt), the optional benefit forms are as follows:
(i) A monthly joint and one hundred percent (l00%) spousal
survival annuity which is the actuarial equivalent of the benefit
described in Section 3.3(a)
(ii) A monthly joint of fifty percent (50%) spousal survival
annuity which is the actuarial equivalent of the benefit described in
Section 3.3(a).
For purposes of this Section 3.3(b), an "actuarial equivalent" benefit is one
which has the same actuarial value as the Section 3.3(a) benefit calculated
using the actuarial factors used to determine actuarial equivalent benefits
under the Georgia-Pacific Corporation Salaried Employees Retirement Plan.
Such benefits shall commence on the day upon which benefits under Section
3.3(a) would otherwise commence ("normal commencement date") and, subject to
Section 3.4, shall cease with the payment for the month in which the former
Director dies or, if later, the month in which his/her spouse dies; provided,
however, that if the former Director's election of an alternative form of
benefits is received less than thirty (30) days prior to the normal
commencement date, the first benefit payment may be made on the first day of
the month following that date and will include in such case payments
retroactive to the normal commencement date. An election may be revoked at
any time prior to the commencement of benefits, and any new election must be
made during the election period specified above for the original election;
otherwise, an election under this Section 3.3(b) is irrevocable (even if the
spousal contingent annuitant predeceases the former Director). Survivor
annuities under this Section 3.3(b) are available only after commencement of
Plan benefits and then only for the benefit of a spouse married to the former
Director as of the date benefits commence and as of the date of his/her death.
Except as otherwise provided in this Section 3.3(b), no benefits under this
Plan with respect to a given Director or former Director shall be payable to
any person after the death of that Director or former Director.
(c) If a former director or his/her spouse receives benefits to
which he/she is not entitled under this Plan, the recipient shall promptly
notify the Plan Administrator and shall repay any such overpayments
immediately. In the event the overpayments are not repaid within thirty (30)
days after receipt of written demand, the overpaid amount shall be offset
against future benefit payments otherwise due to that former director or
his/her spouse until the overpayment is completely repaid.
3.4. Forfeiture of Benefits. Benefits under this Plan shall be
forfeited under the following circumstances:
(a) If an Eligible Director's Period of Participation ends prior
to his attainment of two (2) Years of Service, he or she shall forfeit any
benefits accrued under this Plan.
(b) If an Eligible Director at any time accepts appointment as an
officer of the Company, (i) such Director's Accrued Benefits under this Plan
shall be forfeited, and in particular but without limitation, if the
Director's benefits are in pay status, he or she shall be entitled to no
payments under this Plan for any calendar quarter commencing after the
effective date of acceptance of the officer position and (ii) the Director
shall no longer be eligible to participate in this Plan in accordance with
Sections 1.6 and 2.1.
(c) If a Director is removed for cause (i) by action of the
shareholders of the Company or (ii) (if permitted) by action of the Board, his
vested benefits under this Plan shall be forfeited, and no such benefits shall
be due or payable.
(d) If a former Director, within five (5) years after his last
period of service as a Director, accepts employment as an officer (or in any
other capacity involving active management) with, becomes a director of,
acquires an ownership interest coupled with direct involvement in active
management in or enters into a business consultant relationship advising any
competitor of the Company (a "competing position"), the Director's benefits
under this Plan shall be forfeited prospectively, and he shall be entitled to
no payments under this Plan for any calendar quarter commencing after the
effective date of his acceptance of the competing position. The former
Director shall notify the Chairman of the Board of the Company of his
acceptance of a competing position within ten (10) days after the effective
date of his acceptance and shall reimburse the Company for any payments under
this Plan to which he was not entitled. The Company may offset this
obligation of the former Director against any and all obligations or
liabilities it owes to that Director, and if it is necessary to seek
reimbursement through legal process, the Director agrees to reimburse the
Company for its costs and attorneys fees in such an action. For purposes of
this subsection, (i) a "competitor" of the Company shall mean any entity,
whether incorporated or not, which, combined with its affiliates, has annual
sales of $25 million or more and which competes with the Company or any of its
subsidiaries in the lumber, plywood, pulp, paper and/or chemical industries in
the United States; (ii) the term "affiliate" shall mean any entity directly or
indirectly controlling, controlled by or under common control with the
employer in question, whether by stock ownership, agreement or otherwise;
(iii) the terms "control", "controlling" and "controlled" shall refer to
direct or indirect ownership of at least fifty percent (50%) of the voting
stock, partnership interests or income or other beneficial interest with
respect to the entity in question; and (iv) "active management" shall mean
direct responsibility and authority with respect to the conduct of some
material aspect of the business of the entity in question (and, without
limitation, shall in no event include mere passive ownership of a minority
interest in any entity). Once benefits are forfeited under this subsection,
they may not be reinstated even if the competing position is thereafter
relinquished. If any aspect of this non-competition provision is determined
to be unenforceable as drafted, it is the intention of the parties that, to
the extent permitted by applicable law, the objectionable portion(s) of this
subsection (b) shall be severed or restricted (as the case may be) and that,
except as so modified, the provision shall be enforced.
3.5. Return of a Director. If a former Director returns to service
as a Director after having ceased such service and his benefits under the Plan
have commenced, his benefits shall be suspended, and he shall receive no
payments after the calendar quarter in which he again becomes a Director. To
the extent provided under the terms of this Plan, he shall accrue additional
benefits while serving as a Director, and the amount and timing of his future
benefits shall be determined based on his Accrued Benefit and status at the
end of his most recent Period of Participation. If the recalled Director had
forfeited his benefits under Section 3.4 prior to his return, his future
benefits will be based solely on his Period(s) of Participation after his
return, provided however that any forfeiture of rights or benefits under this
Plan under Section 3.4(b) will not be affected by this Section 3.5.
ARTICLE IV
PLAN ADMINISTRATION
4.1. Plan Administrator. The Plan will be administered by the
Stock Option Plan and Management Compensation Committee of the Board.
Decisions and determinations by the Committee shall be final and binding upon
all parties, including the Company, shareholders, Directors and Employees.
The Committee shall havethe authority to interpret the Plan, to adopt and
revise rules and regulations relating to the Plan and to make any other
determinations which it believes necessary or advisable for the administration
of the Plan. No member of the Committee shall be liable to any person for any
action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to the member's own willful
misconduct or lack of good faith. Where specified in this Plan or by the
Board, Plan Administrator actions will be subject to approval of the Board.
4.2. Delegation. The Committee is expressly authorized to appoint
one or more individuals, who need not be members of the Committee, or entities
(which may be the Company) to act as its agent in the administration of this
Plan. Such agents shall serve at the pleasure of the Committee.
ARTICLE V
AMENDMENT AND PLAN TERMINATION
5.1. The Board expressly reserves the right to amend or terminate
the Plan at any time, provided however that no amendment or termination shall
have the effect of reducing the Accrued Benefit of any Director, cutting off
the accrual of Years of Service for vesting purposes or otherwise changing the
Plan provisions as they affect vested Accrued Benefits (except as may be
required by law) without the written approval of the affected Director(s) or
former Director(s). Notwithstanding the foregoing, the Board may amend the
Plan to add, modify or delete any provisions to the extent necessary to comply
with provisions of federal and state law.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. Non-Transferability. A Director or former Director may not
either voluntarily or involuntarily assign, anticipate, alienate, commute,
pledge or encumber any benefit to which he is or may become entitled to under
the Plan, nor may the same be subject to attachment or garnishment by any
creditor of a Director or former Director.
6.2. Continuation as Director. Although the Company intends the
benefits under this Plan to be a part of each Director's compensation and
benefits package, nothing in the establishment of the Plan is to be construed
as giving any Director the right to be retained as a Director of the Company.
6.3. Benefits Unfunded. The benefits provided pursuant to this
Plan (if any) shall be provided solely from the general assets of the
Corporation. No trust or other funding device providing for the
identification or segregation of assets to fund Plan benefits has been
established, nor is it the Company's intention to do so. Each Director or
former Director shall be a general and unsecured creditor of the Company with
respect to any interest he may have under this Plan.
6.4. Taxation of Benefits. Benefits under this Plan will be
subject to federal and state tax withholding (including, without limitation,
FICA withholding) requirements (to the extent applicable) in the calendar year
in which they vest or are paid.
6.5. Governing Law. All actions for the enforcement of any
rights under, or interpretation of, this Plan shall be brought in the courts
of the State of New York or (to the extent that jurisdictional requirements
permit) in federal courts located in the State of New York, and all
participants in this Plan agree to be subject to the jurisdiction of such
courts for the purpose of any such actions. The Plan shall be construed and
its provisions enforced and administered in accordance with the laws of the
State of New York and, to the extent applicable, federal law.
6.6. Severability. If any provision of this Plan should be held
illegal or invalid for any reason, such determination shall not affect the
provisions of this Plan, but instead the Plan shall be construed as if such
provisions had never been included herein.
6.7. Headings/Gender. Headings contained in this Plan are for
convenience only and shall in no event be construed as part of this Plan. Any
reference to the masculine, feminine or neuter gender shall be a reference to
other genders as appropriate.
ARTICLE VII
EFFECTIVE DATE
7.1. Effective Date. This Plan shall become effective as of the
date it is approved by the Board.
GEORGIA-PACIFIC CORPORATION
1990 LONG-TERM INCENTIVE PLAN
(Effective March 9, 1990)
GEORGIA-PACIFIC CORPORATION
1990 LONG-TERM INCENTIVE PLAN
By action of its Board of Directors and subject to the approval of
its shareholders, Georgia-Pacific Corporation has established the following
incentive compensation plan for specified key employees, to be known as the
"Georgia-Pacific Corporation 1990 Long-Term Incentive Plan" and to be
effective as of the Effective Date specified below. The purposes of this Plan
are to attract and retain qualified and competent employees and to enhance the
growth and profitability of Georgia-Pacific Corporation (the "Company") and
its Subsidiaries by providing the incentive of long-term rewards for continued
employment and the attainment of established performance objectives. Awards
of restricted shares of Stock will be assigned to officers and key employees
who are capable of having a significant impact on the performance of the
Company and its Subsidiaries and to correlate further the interests of such
officers and employees with those of the Company's share- holders.
ARTICLE I
DEFINITIONS
For purposes of this Plan, the following terms or phrases shall have
the indicated meanings:
1.1 Achieved Performance.
At any given date, the Achieved Performance is calculated by
dividing the Average Stock Price as of that date by the applicable Initial
Stock Price.
1.2 Average Stock Price.
At any given date, the Average Stock Price is equal to the
average Fair Market Value of the Stock for twenty (20) consecutive trading
days (ending on and including the date of calculation) after the Effective
Date but prior to the end of the Term of this Plan. The Average Stock Price
shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the
next higher whole cent).
1.3 Award Date.
The Award Date is the date as of which an award pursuant to
Section 3.2 shall be deemed to have been made and shall be the date during the
Term of the Plan upon which the Achieved Performance first attains a
Performance Target.
1.4 Board.
The Board of Directors of the Company.
1.5 Cause.
"Cause" shall mean any of the following: (i) the willful and
continued failure of a Participant to perform satisfactorily the duties
consistent with his title and position reasonably required of him by the Board
or supervising management (other than by reason of incapacity due to physical
or mental illness); (ii) the commission by a Participant of a felony, or the
perpetration by a Participant of a dishonest act or common law fraud against
the Company or any of its Subsidiaries; or (iii) any other willful act or
omission which is injurious to the financial condition or business reputation
of the Company or any of its Subsidiaries.
1.6 Company.
Georgia-Pacific Corporation, a Georgia corporation, its
successors and assigns.
1.7 Effective Date.
The Effective Date of this Plan, which shall be the date upon
which this Plan is approved by the Board, subject to the subsequent approval
of the shareholders of the Company.
1.8 Fair Market Value of the Stock.
On any date, the mean between the high and low sales
prices of a share of Stock on that date as reported in The Wall
Street Journal, New York Stock Exchange-Composite Transactions, or as reported
in any successor quotation system adopted prospectively for this purpose by
the Plan Administrator, in its discretion. The Fair Market Value of the Stock
shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the
next higher whole cent).
1.9 Good Reason.
With respect to any Participant and any award made under
Section 3.2: (i) failure to elect or reelect or to appoint or reappoint the
Participant to, or removal of the Participant from, the position which the
Participant holds with the Company or a Subsidiary on the Award Date with
respect to such award or any position the Participant subsequently agrees to
accept; (ii) substantial change by the Board or supervising management in the
Participant's functions, duties or responsibilities, which change would cause
the Participant's position with the Company or a Subsidiary to become of less
dignity, responsibility, importance or scope than the position held by the
Participant on the Award Date with respect to such award or any position the
Participant subsequently agrees to accept; or (iii) a substantial reduction
of the Participant's annual base salary from the level in effect on the Award
Date with respect to such award or from any level established thereafter with
the agreement of the Participant.
1.10 Grant Date.
With respect to a Participant under Section 2.1, the Effective
Date; with respect to a Post-Effective Date Participant under Section 2.2 or
an Additional Share Allocation for an existing Participant under Section 2.3,
the effective date specified in the written notice described in those
Sections.
1.11 Initial Stock Price.
The Initial Stock Price shall be the Stock price specified by
the Board (for Initial Participants) or by the Committee (for Additional
Participants or Additional Share Allocations) as the base price to be used in
determining the Achieved Performance with respect to a given Share Allocation.
1.12 Participant.
An employee or officer of the Company or any Subsidiary
designated as a participant in this Plan in accordance with Article II.
1.13 Performance Target.
The Performance Target(s) are the Achieved Performance goals
at which all or a specified portion of a Participants' Share Allocation will
be awarded pursuant to Section 3.2 (subject to the offsets provided in that
Section). The Performance Target(s) and related award percentages are as
specified below:
Performance Target
(In Terms of Achieved Performance) Award Percentage
1.2 20%
1.4 40%
1.6 60%
1.8 80%
2.0 100%
A Performance Target will be deemed to have been attained when the Achieved
Performance equals or exceeds (without rounding) the Achieved Performance
goals stated above.
1.14 Plan Administrator.
The entity designated in Section 4.1 as the administrator of
this Plan.
1.15 Plan.
The Georgia-Pacific Corporation 1990 Long-Term Incentive Plan
as described in this plan document.
1.16 Share Allocation.
The number of shares of Stock assigned to a Participant in
accordance with Article II and Section 3.1 of the Plan which shall constitute
the maximum possible award for the Participant under this Plan, provided that
Share Allocations shall be subject to modification pursuant to Sections 2.3,
3.9 and 3.10 of this Plan.
1.17 Subsidiary.
Subsidiary shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the
time of reference, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
1.18 Stock.
Georgia-Pacific Corporation common stock, eighty cents ($0.80)
par value per share.
1.19 Term or Term of the Plan.
The five-year period commencing on the Effective Date and
ending on the fifth anniversary of the Effective Date (inclusive).
1.20 Vesting Date.
The date upon which the restrictions contained in Section 3.4
lapse with respect to an award made in accordance with Section 3.2, which
shall be the date which is the fifth anniversary of the Award Date with
respect to such award or (in the case of earlier
special vesting under Section 3.5) the date specified in Section 3.5.
ARTICLE II
ELIGIBILITY
2.1 Initial Participants.
Upon the Effective Date, the Board may designate and approve a
list of Initial Participants and their respective Share Allocations. Such
individuals will be considered Initial Participants for all purposes under
this Plan, and their Grant Date shall be the Effective Date and, in such case,
the Plan Administrator will designate the actual Initial Participants in
accordance with such guidelines. In lieu of approving such a list, the Board
may approve initial Share Allocation guidelines based upon management
responsibility, income, position or such other criteria as the Board may
select, and in such a case, the Plan Administrator will designate the actual
Initial Participants and specify their Grant Date in accordance with Section
2.2 and the Board's guidelines.
2.2 Post-Effective Date Participants.
The Plan Administrator, in its discretion, shall have the right
to add Participants to this Plan at any time during the Term of the Plan.
Whenever a Participant is added pursuant to this Section 2.2, the Plan
Administrator shall cause notice to be given to the Participant in writing
specifying:
(a) The effective date of Participant's participation (which
shall be the date of the meeting at which the Plan
Administrator approves such participation);
(b) The Participant's Share Allocation; and
(c) The Initial Stock Price with respect to which the new
Participant's awards will be granted.
2.3 Additional Share Allocations.
If, during the Term of the Plan, a Participant receives a
promotion entailing a significant increase in responsibility after his
original Share Allocation has been specified, the Plan Administrator may, in
its discretion, grant an Additional Share Allocation to the Participant,
provided that:
(a) Such Additional Share Allocation is granted prior to the
expiration of the Term of the Plan; and
(b) The Participant involved receives written notice of the
Additional Share Allocation as described below.
Whenever an increased Share Allocation is granted
pursuant to this Section, the Plan Administrator shall
cause written notice to be given to the Participant
specifying:
(x) The effective date of the Additional Share
Allocation (which shall be the date of the meeting
at which the Plan Administrator approves the
Additional Share Allocation);
(y) The amount of the Additional Share Allocation; and
(z) The Initial Stock Price with respect to which awards
from such Additional Share Allocation will be
granted.
2.4 Additional Participation Condition.
Notwithstanding anything in this Article II to the contrary, on
the recommendation of the management of the Company, the Committee may require
any individual who (i) is designated as a Participant in this Plan during 1990
and (ii) has been granted stock options under the Georgia-Pacific Corporation
1984 Stock Option Plan during 1990 to agree to relinquish his 1990 stock
option grant as a condition of participation in this Plan.
ARTICLE III
INCENTIVE AWARDS
3.1 Share Allocations.
Each Participant in this Plan shall be assigned (as of the
effective date of his participation) a number of shares of Stock which shall
constitute his Share Allocation. No Participant shall have a right to receive
the shares except to the extent specifically provided in this Plan. At no
time during the Term of the Plan may the aggregate Share Allocations
outstanding under this Plan exceed four million (4,000,000) shares of Stock
(subject to adjustment in accordance with Sections 3.9 and 3.10). Shares
assigned to a Participant's Share Allocation remain "outstanding" for purposes
of this Section 3.1 until forfeited under Section 3.4 or, to the extent not
awarded, until the end of the Term of the Plan. Shares not assigned to
Initial Participants under Section 2.1 and shares forfeited under Section 3.4
will be available for allocation to new or existing Participants under
Sections 2.2 and 2.3. Shares awarded under this Plan may be authorized as
unissued shares or treasury shares.
3.2 Performance Targets/Awards.
Subject to the restrictions described in Sections 3.3, 3.4 and
3.5, individual awards for Share Allocations shall be made to Participants as
of an Award Date. The number of shares of Stock awarded to a Participant on
an Award Date shall equal the percentage of the Participant's Share Allocation
specified in Section 1.13 opposite the Performance Target attained on that
date, reduced by the number of shares of Stock previously awarded to
Participant under this Plan. No awards may be made after the end of the Term
of the Plan.
3.3 Delivery of Shares.
(a) Shares awarded pursuant to Section 3.2 of this Plan shall
be registered in the name of the affected Participant within sixty (60) days
after the Award Date. Such shares shall, however, be subject to the
restrictions described in Sections 3.4 and 3.5 below until the Vesting Date
for such shares, and the certificates evidencing the shares shall bear a
legend noticing those restrictions either specifically or by reference to the
provisions of this Plan. Such shares, when issued in accordance with this
Plan, shall be deemed to be fully paid and nonassessable. Certificates
representing such shares shall be held in the custody of the Company (or its
designated agent). Each Participant shall supply the Company with an executed
stock power with respect to each such stock certificate.
(b) Certificates representing awarded shares (without the
legend described in Section 3.3(a)) which have vested pursuant to Sections 3.4
or 3.5 shall be delivered to the affected Participant within ten (10) business
days after the Vesting Date with respect to such shares. At such time, the
stock powers described in Section 3.3(a) will be destroyed.
3.4 Restrictions on Awarded Shares/Forfeitures.
Shares awarded pursuant to Section 3.2 of this Plan will be
subject to the following restrictions until their respective Vesting Dates:
(a) Subject to Section 3.5, if the Participant's employment
with the Company and its subsidiaries is terminated for any reason prior to
the Vesting Date for an award, the Participant shall forfeit all rights with
respect to the shares included in that award, and the certificates evidencing
such shares shall be null, void and of no effect as of the date his employment
terminates. Such shares shall revert to the Company as treasury stock and
may, in the sole discretion of the Company, be cancelled or retained as
treasury stock and, even if cancelled, shall be available for reissue as part
of future awards under this Plan.
(b) Prior to the Vesting Date with respect to such shares,
the shares shall be nontransferable and may not be sold, hypothecated or
otherwise assigned or conveyed by a Participant to any party.
Any shares of stock accruing to awarded shares as a result of
any adjustment under Sections 3.9 or 3.10 will be subject to the same
restrictions (and have the same Vesting Date) as the shares to which they
accrue.
3.5 Special Vesting.
(a) Notwithstanding anything in Section 3.4 to the contrary,
awards will vest upon the earliest of:
(i) The date a Participant terminates
employment with the Company and its Subsidiaries after attaining age
sixty-five (65) or for Good Reason;
(ii) The date the Company terminates the
employment of a Participant for reasons other than Cause;
(iii)The date the Participant dies; or
(iv) The date the Participant becomes totally disabled as
determined by the Plan Administrator in its sole discretion.
(b) Notwithstanding anything in subsection (a) to the
contrary, a Participant who, on the Effective Date, both is an officer of the
Company participating in this Plan and has attained age sixty-two (62) and
who, after the Effective Date, terminates employment with the Company and its
Subsidiaries either:
(i) After attaining age sixty-five (65); or
(ii) On account of total disability (as
determined by the Plan Administrator in its sole discretion)
shall continue to participate in this Plan (and be eligible for additional
awards) as if he were still actively employed by the Company or a Subsidiary.
The post-termination awards of any Participant described in this subsection
(b) shall vest on the respective Award Dates of such awards and shall be
distributed thereafter in accordance with the provisions of Section 3.3. The
continued Plan participation of any Participant described in this subsection
(b) who dies after terminating employment with the Company and its
Subsidiaries will cease as of his date of death.
(c) The dates specified in this Section 3.5 shall be
considered Vesting Dates for purposes of this Plan.
3.6 Ownership Rights.
Except as provided in Section 3.4, Participants who hold shares
of restricted stock awarded pursuant to Section 3.2 shall exercise all
ownership rights (including, without limitation, the right to vote and the
right to receive dividends) with respect to such shares, provided that voting
and dividend rights with respect to the shares will be exercisable only if the
date of record for the proxy distribution or dividend falls on or after an
Award Date and before the effective date of a forfeiture of the shares under
Section 3.4. Participants shall have the same rights with respect to any
shares of stock accruing to awarded shares as a result of any adjustment under
Sections 3.9 and 3.10.
3.7 Additional Bonus.
(a) With respect to each award that vests, the Company will
pay on behalf of the Participant for the taxable year in which the Vesting
Date falls a bonus computed as follows (subject to the limitation of
subsection (d)):
(1) Determine the aggregate Fair Market Value of the award shares on
the Vesting Date, which value shall equal the number of shares of Stock
included in the vested award multiplied by the Fair Market Value of the Stock
on the Vesting Date if that date is a trading date or, if not, the next
preceding trading date;
(2) Multiply the result in (a)(1) by a fraction
T
1 - T
where T equals the sum of the highest statutory marginal federal and Georgia
income tax rates, expressed in decimal form, applicable to individuals
resident in Georgia on personal service income. For purposes of calculating
the fraction described in this subsection (a)(2), the "highest statutory
marginal federal and Georgia tax rates . . . on personal service income" shall
be the appropriate rates for the calendar year in which the Vesting Date
falls.
(b) The bonus under this Section 3.7 shall not be paid
directly to the Participant, but shall be withheld for taxes.
(c) The appropriate bonus amount under this Section 3.7 for a
given calendar year will be calculated by the Company and reviewed by an
independent auditor and paid on behalf of Participants in accordance with
subsection (b) during (or for attribution to) the calendar year for which the
tax is imposed. For purposes of this subsection, "independent auditor" shall
mean a nationally recognized certified public accounting firm.
(d) Notwithstanding anything in this Section 3.7 to the
contrary, in no event shall the bonus paid pursuant to this Section exceed one
hundred percent (100%) of the aggregate Fair Market Value of the award shares
on the Vesting Date as calculated in subsection (a)(1).
3.8 No Bar to Corporate Restructuring.
The existence of this Plan or outstanding awards under this
Plan shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any and all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or preference stocks ahead of or affecting the
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
3.9 Capital Readjustments/Share Allocation Modifications.
The shares included in Share Allocations granted under this
Plan are shares of the Stock as constituted on the Effective Date of this
Plan, but if, and whenever, after such Effective Date and prior to the earlier
of the last day of the Term of this Plan or the delivery by the Company of all
of the shares of Stock included in Participant Share Allocations, the Company
shall effect:
(a) A change in the par value of its Stock;
(b) A change in the number of shares of Stock having par
value into the same or a different number of shares without par value;
(c) A subdivision or consolidation of shares;
(d) Any other capital readjustment;
(e) The payment of a stock dividend; or
(f) Any other increase or reduction of the number of shares
of Stock outstanding; without the receipt of consideration by the Company,
then
(x) in the event of any increase in the number of such shares
outstanding, the number of shares of Stock not yet awarded then remaining in
Share Allocations hereunder shall be proportionately increased;
(y) In the event of a reduction in the number of such shares
outstanding, the number of shares of Stock not yet awarded and then remaining
in Share Allocations hereunder shall be proportionately reduced; and
(z) In the event of no change in the number of shares
outstanding in connection with a change in par value of the Stock or a change
from par value to no par value, the shares resulting from any such change
shall be deemed to be Stock under this Plan.
The Plan Administrator shall make concomitant adjustments in the maximum
outstanding Share Allocation specified in Section 3.1, the Initial Stock
Price(s) and the Fair Market Value of the Stock, as appropriate.
3.10 Mergers and Consolidations. In case at any time the Company
shall be a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of the Common Stock) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company (in a situation not covered under Section 3.9) or
common stock or other securities of another corporation or interests in a non-
corporate entity or other property (including cash) or any combination of the
foregoing (each such transaction being herein called a "Transaction," and the
Company (in the case of the recapitalization of the Common Stock) or such
other corporation or entity (in the case of a merger, consolidation or such
sale) being herein called the "Acquiring Company"), then, as a condition of
the consummation of the Transaction, lawful and adequate provision shall be
made so that (i) each Participant shall be entitled to receive, in lieu of the
Shares which were awarded to such Participant and are still subject to the
restrictions contained in Section 3.4 of this Agreement on or prior to the
consummation of the Transaction, the securities or other property to which
each such Participant would have been entitled upon consummation of the
Transaction if such Participant had been able to tender or otherwise transfer
his Shares without restriction, and (ii) if the remaining term of this Plan
equals or exceeds eighteen (18) months, a plan substantially similar to this
Plan is adopted by the Acquiring Company, effective the date of the
consummation of the Transaction, which will provide benefits substantially
similar to the benefits remaining under this Plan at the time of the
consummation of the Transaction. Any such securities or other property
received as contemplated in clause (i) above shall be held by the Company or
its successor (or an agent designated by the Company or such successor) until
the restrictions as set forth in Section 3.4 of this Agreement shall have
lapsed.
3.11 Legal Impediments to Implementation.
Anything in this Plan to the contrary notwithstanding, if at
any time specified herein for the award or delivery of restricted shares to
Participants or for the payment of cash bonuses to Participants, any law or
regulations of any governmental authority having jurisdiction in the matter
shall require either the Company or the Participant to take any action or
refrain from action in connection therewith, then the award or delivery of
such shares or the payment of such cash bonuses shall be deferred until such
action shall have been taken or such restriction on action shall have been
removed.
3.12 Fractional Shares.
Notwithstanding anything in this Plan to the contrary, Share
Allocations and awards shall always be in whole numbers of shares. In the
event any adjustment to a Share Allocation or the calculation of an award
pursuant to this Plan would otherwise result in the creation of a fractional
share interest, the affected Share Allocation or award shall be rounded to the
nearest whole share (with 0.5 share rounded to the next higher whole number).
ARTICLE IV
PLAN ADMINISTRATION
4.1 Plan Administrator.
The Plan will be administered by the Stock Option Plan and
Management Compensation Committee of the Board. Decisions and determinations
by the Committee shall be final and binding upon all parties, including the
Company, shareholders, Participants and other employees. The Committee shall
have the authority to interpret the Plan, to adopt and revise rules and
regulations relating to the Plan and to make any other determinations which it
believes necessary or advisable for the administration of the Plan. No member
of the Committee shall be liable to any person for any action taken or omitted
in connection with the interpretation and administration of this Plan unless
attributable to the member's own willful misconduct or lack of good faith.
Where specified in this Plan, Plan Administrator actions will be subject to
approval of the shareholders of the Company.
4.2 Delegation.
The Committee is expressly authorized to appoint one or more
individuals, who need not be members of the Committee, or entities (which may
be the Company) to act as its agent in the administration of this Plan. Such
agents shall serve at the pleasure of the Committee. Notwithstanding anything
in this Section 4.2 to the contrary, the Committee may not delegate its
authority to add Participants or to make or adjust grants of Stock under this
Plan.
ARTICLE V
AMENDMENT AND PLAN TERMINATION
5.1 The Board expressly reserves the right to amend or terminate
the Plan at any time, provided, however, that no amendment or termination
shall have the effect of reducing the number of shares of Stock awarded to a
Participant after an Award Date or otherwise changing the Plan provisions as
they impact such previously awarded shares of Stock (except as may be required
by law) without the written approval of the affected Participant(s).
Notwithstanding the foregoing, no amendment may, without the approval of the
Shareholders of the Company:
(a) Increase the maximum number of shares of Stock authorized
for Share Allocations under Section 3.1 (increases
pursuant to Sections 3.9 and 3.10 will not be considered amend- ments for
purposes of this Section); or
(b) Extend the Term of this Plan.
Subject to the foregoing, the Board may amend the Plan to add, modify or
delete any provisions to the extent necessary to comply with provisions of
federal and state securities law.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Non-Transferability/Designation of Beneficiary.
(a) Except as provided in subparagraph (b), a Participant may
not either voluntarily or involuntarily assign, anticipate, alienate, commute,
pledge or encumber any award to which he is or may become entitled to under
the Plan, nor may the same be subject to attachment or garnishment by any
creditor of a Participant.
(b) Notwithstanding anything in subsection (a) to the
contrary, a Participant must designate a person or persons to receive, in the
event of his death, any rights to which he would be entitled under the Plan.
Such a designation shall be made in writing, and filed with the Company. A
beneficiary designation may be changed or revoked by a Participant at any time
by filing a written statement of such change or revocation with the Company.
If a Participant fails to designate a beneficiary, then his estate shall be
deemed to be his beneficiary.
6.2 Continued Employment.
Although the Company intends the awards and bonuses under this
Plan to be a term of employment and a part of each Participant's compensation
and benefits package, nothing in the establishment of the Plan is to be
construed as giving any Participant the right to be retained in the employment
of the Company.
6.3 Awards Unfunded.
The awards and bonuses provided pursuant to this Plan (if any)
shall be provided solely from the general assets of the Corporation. No trust
or other funding device providing for the identification or segregation of
assets to fund Plan awards or bonuses has been established, nor is it the
Company's intention to do so. Each Participant shall be a general and
unsecured creditor of the Company with respect to any interest he may have
under this Plan, provided that awards of Stock with respect to which
certificates have been issued pursuant to Section 3.3 of this Plan shall be
deemed to be property of the Participant in whose name they are issued subject
to the ownership restrictions described in Section 3.4. With respect to such
Stock, the Company shall be deemed a custodian.
6.4 Taxation of Awards.
Awards and bonuses under this Plan will be compen- sation
subject to federal and state tax withholding (including, without limitation,
FICA withholding) in the calendar year in which they vest or (in the case of
bonuses only) are paid. Withholding will be paid out of the cash bonus
described in Section 3.7(a).
6.5 Retirement Plans and Welfare Benefit Plans.
Except as otherwise specified in this Plan and the plan in
question, awards and bonuses will not be included as "compensation" for
purposes of the Company's retirement plans (both qualified and non-qualified)
or welfare benefit plans.
6.6 Governing Law.
The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Georgia and, where
applicable, federal law.
6.7 Severability.
If any provision of this Plan should be held illegal or invalid
for any reason, such determination shall not affect the provisions of this
Plan, but instead the Plan shall be construed as if such provisions had never
been included herein.
6.8 Headings/Gender.
Headings contained in this Plan are for convenience only and
shall in no event be construed as part of this Plan. Any reference to the
masculine, feminine or neuter gender shall be a reference to other genders as
appropriate.
ARTICLE VII
EFFECTIVE DATE/SHAREHOLDER APPROVAL
7.1 Effective Date.
This Plan shall become effective on the Effective Date as
defined in Section 1.7.
7.2 Shareholder Approval.
Notwithstanding anything in this Plan to the contrary, the Plan
shall be null and void from inception if the Plan is not approved by
affirmative votes of the holders of a majority of the securities of the
Company present or represented and entitled to vote at a meeting duly held in
accordance with the applicable corporate law of the State of Georgia and the
By-Laws of the Company on or prior to March 9, 1991.
AMENDMENT NO. 1
TO THE
GEORGIA-PACIFIC CORPORATION
1990 LONG-TERM INCENTIVE PLAN
WHEREAS, the Georgia-Pacific Corporation 1990 Long-Term Incentive Plan (the
"Plan") was adopted by the Board of Directors (the "Board") of Georgia-
Pacific Corporation (the "Company") as of March 9, 1990, and was approved by
the shareholders of the Company on May 7, 1990; and
WHEREAS, Section 5.1 of the Plan authorizes the Board to amend the Plan in
any respect with certain limitations not here pertinent;
NOW, THEREFORE, the Board hereby amends the Plan as follows:
1. Section 2.3 of the Plan is amended by deleting the present
provision. in its entirety and by substituting the following provision in lieu
thereof:
"2.3 Additional Share Allocations.
"If, during the Term of the Plan, (i) a Participant receives a
promotion [entailing] or otherwise accepts a significant increase in
responsibility after his original Share Allocation has been specified,
or (ii) the Plan Administrator deems it appropriate in order to induce
a Participant to continue his employment with the Company or, a
Subsidiary, the Plan Administrator may, in its discretion, grant an
Additional Share Allocation to the Participant, provided that:
(a) Such Additional Share Allocation is granted prior to the
expiration of the Term of the Plan; and
(b) The Participant involved receives written notice of the
Additional Share Allocation as described below.
Whenever an increased Share Allocation is granted pursuant to this
Section, the Plan Administrator shall cause written notice to be given
to the Participant specifying:
(x) The effective date of the Additional Share Allocation
(which shall be the date of the meeting at which the Plan
Administrator approves the Additional Share Allocation);
(y) The amount of the Additional Share Allocation; and
(z) The Initial Stock Price with respect to which awards
from such Additional Share Allocation will be granted."
2.Section 3.5 of the Plan is amended by deleting
the present provision in its entirety and by substituting the
following provision in lieu thereof:
"3.5 Special Vesting.
(a) Notwithstanding anything in Section 3.4 to the contrary,
awards will vest upon the earliest of:
(i) The date a Participant terminates employment with the
Company and its Subsidiaries after attaining age sixty-five (65)
or for Good Reason;
(ii) The date the Company terminates the employment of a
Participant for reasons other than Cause;
(iii The date the Participant dies; or
(iv) The date the Participant becomes totally disabled as
determined by the Plan Administrator in its sole discretion.
"(b) Notwithstanding anything in subsection (a) to the contrary,
a Participant who, on the Effective Date, both is an officer of the
Company participating in this Plan and has attained age sixty-two (62)
and who, after the Effective Date, terminates employment with the
Company and its Subsidiaries either:
(i) After attaining age sixty-five (65);
[or]
(ii) On account of total disability (as determined by the Plan
Administrator in its sole discretion); or
(iii) For Good Reason, provided the Plan Administrator in its
sole discretion has determined it appropriate that the special
vesting provisions of this subsection (b) shall apply in the
circumstances of such Participant's termination of employment,
shall continue to participate in this Plan (and be eligible for
additional awards) as if he were still actively employed by the Company
or a Subsidiary. The post-termination awards of any Participant
described in this subsection (b) shall vest on the respective Award
Dates of such awards and shall be distributed thereafter in accordance
with the provisions of Section 3.3. The continued Plan participation of
any Participant described in this subsection (b) who dies after
terminating employment with the Company and its Subsidiaries will cease
as of his date of death.
"(c) The dates specified in this Section 3.5 shall be
considered Vesting Dates for purposes of this Plan."
3. This amendment shall be effective from and after
July 29, 1991. Except as hereinabove modified, the Plan as originally adopted
on March 9, 1990, shall remain in full force and effect.
$1,000,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 1, 1990
Among
GEORGIA-PACIFIC CORPORATION
as the Seller
and
ASSET SECURITIZATION COOPERATIVE CORPORATION, CORPORATE ASSET FUNDING COMPANY,
INC., FALCON ASSET SECURITIZATION CORPORATION
AND
MATTERHORN CAPITAL CORPORATION
as the Purchasers
and
CANADIAN IMPERIAL BANK OF COMMERCE
as the Administrative Aqent
TABLE OF CONTENTS
Section Page
Preliminary Statement .......................1
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms ..................2
Section 2.02 Other Terms ............................22
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01 Purchase Facility.......................22
Section 2.02 Making Purchases........................25
Section 2.03 Receivable Interest Percentage..........26
Section 2.04 Settlement Procedures...................27
Section 2.05 Fees....................................31
Section 2.06 Payments and Computations, Etc..........33
Section 2.07 Dividing or Combining Receivable
Interest..............................33
Section 2.08 Yield Protection........................34
Section 2.09 Sharing of Payments.....................36
Section 2.10 Effect of Early Payments................36
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01 Conditions Precedent to Initial
Purchase ...............................37
Section 3.02 Conditions Precednet to All
Purchases and Reinvestments.............38
Section 3.03 Conditions Subsequent...................40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of
Seller..................................40
ARTICLE V
COVENANTS
Section 5.01 Covenants of the Seller.................48
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.01 Designation of Collection Agent.........55
Section 6.02 Duties of Collection Agent..............55
Section 6.03 Rights of the Administrative Agent......57
Section 6.04 Responsibilities of the Seller..........60
Section 6.05 Further Actions Evidencing Purchases....60
Section 6.06 Collection Agent Fee....................61
ARTICLE VII
EVENTS OF TERMINATION
Section 7.01 Events of Terminination.................61
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Indemnities by the Seller...............66
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01 Authorization and Action ...............70
Section 9.02 UCC Filings ............................71
Section 9.03 Administrative Agent's Reliance, Etc ...71
Section 9.04 CIBC and Affiliates ....................72
Section 9.05 Purchasers' Purchase Decisions .........72
Section 9.06 Indemnification ........................73
Section 9.07 Successor Administrative Agent .........73
ARTICLE X
ASSIGNMENT OF RECEIVABLE INTEREST
Section 10.01 Assignment .............................74
Section 10.02 Effects of Assignment ..................75
Section 10.03 Authorization of Administrative Agent ..76
ARTICLE XI
PATRONAGE DISTRIBUTIONS
Section 11.01 Patronage Distributions ................76
Section 11.02 Income Tax Consent .....................77
ARTICLE XII
MISCELLANEOUS
Section 12.01 Amendments, Etc ........................77
Section 12.02 Notices, Etc ...........................78
Section 12.03 Assignability; Termination .............78
Section 12.04 Costs, Expenses and Taxes ..............78
Section 12.05 No Proceedings..........................80
Section 12.06 Confidentiality.........................80
Section 12.07 No Recourse.............................80
Section 12,08 Governing Law; Execution in
Counterparts............................80
SCHEDULES
SCHEDULE I - Lock-Box Banks
SCHEDULE II - Depositary Banks
SCHEDULE III - Concentration Banks
SCHEDULE IV - Credit and Collection Policy
SCHEDULE V - Seller Subsidiaries
SCHEDULE VI - Seller's Interest in Seller Subsidiaries
SCHEDULE VII - Defaulted Receivables
EXHIBITS
EXHIBIT A - Form of Investor Report
EXHIBIT B Form of Lock-Box Agreement
EXHIBIT C-1 - Form of Opinion of New York Counsel to the Seller
EXHIBIT C-2 - Form of Opinion of Georgia Counsel to the Seller
Subsidiaries
EXHIBIT C-3 - Form of Opinion of Counsel to each Seller Subsidiary
EXHIBIT C-4 - Form of Opinion of Special Counsel to the Seller
EXHIBIT D - Form of Transfer Agreement
EXHIBIT E - Form of Assignment Agreement
EXHIBIT F - Form of Consent and Acknowledgment
EXHIBIT G - Form of Certificate
EXHIBIT H - Form of Depositary Notice
EXHIBIT I Form of Concentration Notice
RECEIVABLES PURCHASE AGREEMENT dated as of June 1, 1990 among GEORGIA-
PACIFIC CORPORATION, a Georgia corporation (the "Seller"), ASSET SECURITIZATION
COOPERATIVE CORPORATION ("ASCC"), CORPORATE ASSET FUNDING COMPANY, INC.
("CAFCO"), FALCON ASSET SECURITIZATION CORPORATION ("Falcon") and MATTERHORN
CAPITAL CORPORATION ("Matterhorn") (each of ASCC, CAFCO, Falcon and Matterhorn,
individually, a Purchaser, and, collectively, the "Purchasers"), and CANADIAN
IMPERIAL BANK OF COMMERCE ("CIBC"), as agent (the "Administrative Agent") for
the Purchasers. Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Article I hereof.
WITNESSETH
WHEREAS, the Seller has, and expects to have, Receivables in which it
desires to sell Receivable Interests;
WHEREAS, each Seller Subsidiary has, and expects to have, Receivables
which it desires to sell to the Seller;
WHEREAS, the Seller and each Seller Subsidiary has entered into a
Transfer Agreement pursuant to which such Seller Subsidiary agrees to sell its
Receivables to the Seller;
WHEREAS, the Seller desires to purchase such Receivables from each
Seller Subsidiary and to sell Receivable Interests therein to the Purchasers
from time to time;
WHEREAS, the Purchasers desire to purchase Receivable Interests on the
terms set forth herein;
WHEREAS, CIBC has been requested and is willing to perform certain
administrative and clerical functions on behalf of the Purchasers in accordance
with the terms hereof;
WHEREAS, in consideration of the reinvestment in Receivable Interests of
daily Collections attributable to a Receivable Interest, the Seller will sell to
the Purchaser of such Receivable Interest additional interests in the
Receivables as part of such Receivable Interest until such reinvestment is
terminated; and
WHEREAS, it is intended that the dailly reinvestment of Collections be
effected by an automatic daily adjustment to each of the Receivable Interests to
the extent provided in Article II hereof.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted LIBOR Rate" means, with respect to a Purchaser for any Fixed
Period, the rate per annum obtained by dividing (a) the arithmetic average
(rounded upwards, if necessary, to the nearest multiple of one-sixteenth of one
percent per annum) of (i) the offered rates for deposits in United States
dollars which appear on the display designated as page "LIBO" (or any successor
page quoting the offered rates for United States dollars in the London interbank
market) on the Reuter Monitor Money Rates Service, or
(ii) if such rates are not obtainable from the Reuter Monitor Money Rates
Service, the respective rates notified to the Purchaser by each of the Reference
Banks as the rate at which it would offer deposits in United States dollars to
prime banks in the London interbank market, in either case for a period equal to
such Fixed Period as such Purchaser shall select and in an amount comparable to
the aggregate amount of Capital of the Receivable Interest to be funded or
maintained at or about 11:00 a.m. (London time) on the second Business Day
before (and for value on) the first day of such period by (b) a percentage equal
to (i) 100% minus
(ii) the Eurodollar Reserve Percentage for such Fixed Period.
"Administrative Priority" means an administrative priority granted
under Section 364(a) of the Bankruptcy Code.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person.
"Affiliated Obligor" means any Obligor that is an Affiliate of another
Obligor.
"Aggregate Capital" means, at the time of any determination thereof with
respect to a Purchaser, the sum of the Capital for all Receivable Interests of
such Purchaser.
"Average Maturity" means, on any day, that period (expressed in days)
equal to the weighted average maturity of the Pool Receivables, as calculated by
the Collection Agent as set forth in the most recent Investor Report; provided,
however, that if the Required Purchasers shall disagree with any such
calculation, the Purchasers may recalculate the Average Maturity for such day.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
101 et seq.), as amended from time to time, or any successor statute.
"Bankrupt Receivable" means a Receivable the Obligor of which has taken
any action, or suffered to occur any event, of the type described in Section
7.01(h).
"Base Rate" means, for any day, the rate of interest publicly announced
from time to time by the Administrative Agent in its offices in New York, New
York as its base rate, each change in such rate to take effect at the opening of
business on the date specified in the public announcement of such change.
"Business Day" means any day on which banks are not authorized or
required to close in Chicago, Illinois or New York, New York and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the Adjusted LIBOR Rate, any day on which dealings in dollar deposits
are carried on in the London interbank market.
"Capital" of any Receivable Interest owned by a Purchaser means the
original amount paid by such Purchaser to the Seller for such Receivable
Interest at the time of its purchase by such Purchaser pursuant to this
Agreement, or such amount divided or combined in accordance with Section 2.07,
in each case reduced from time to time by Collections distributed on account of
such Capital pursuant to Section 2.04 or by payments pursuant to Section
5.01(q); provided, that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution, as though it had not been
made; provided, further, that such Capital shall not be reduced .for the
purposes of this Agreement to the extent and so long as Collections to be used
to effect an Optional Reduction or a Mandatory Reduction are retained by the
Collection Agent (if the Seller or an Affiliate thereof).
"Certificate" means a certificate of assignment delivered by the Seller
to a Purchaser, in substantially the form of Exhibit G hereto, evidencing each
Receivable Interest purchased by such Purchaser from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collection Agent" means at any time the Person (which may include the
Administrative Agent) then authorized pursuant to Article VI to service,
administer and collect Pool Receivables.
"Collection Agent Fee" has the meaning assigned to that term in Section
6.06.
"Collection Agent Fee Reserve" for any Receivable Interest at any time
means the sum of (i) the Liquidation Collection Agent Fee for such Receivable
Interest at such time plus (ii) the unpaid Collection Agent Fee relating to such
Receivable Interest accrued to such time.
"Collection Delay Period" means 10 days or such other number of days as
the Administrative Agent may select (acting upon the direction of the Required
Purchasers) upon three Business Days' notice to the Seller.
"Collections" means, with respect to any Pool Receivable, all cash
collections and other cash proceeds in respect of such Pool Receivable,
including, without limitation, all cash proceeds of Related Security with
respect to such Pool Receivable, and any Collection of such Pool Receivable
deemed to have been received pursuant to Section 2.04 (d) .
"Combined Capital" means the sum of the Total Aggregate Capital and the
"Total Aggregate Capital" under the Secondary Purchase Agreement.
"Concentration Account" means a concentration account maintained at a
Concentration Bank for the purpose of, among other things, receiving the
proceeds of Collections initially deposited into Lock-box Accounts and
Depositary Accounts.
"Concentration Bank" means, at any time, any of the banks holding one or
more Concentration Accounts (as of the date hereof being those banks specified
in Schedule III hereof).
"Concentration Limit" means, at any time, for any Obligor, 3%, or such
other percentage (a "Special Concentration Limit") for such Obligor designated
by the Administrative Agent in a writing delivered to the Seller at the
instruction of the Purchasers; provided, that in the case of an Obligor with any
Affiliated Obligor, the Concentration Limit shall be calculated as if such
Obligor and such Affiliated Obligor are one Obligor; provided, further, that the
Administrative Agent (acting upon the instructions of any Purchaser) may, upon
not less than three Business Days' notice to the Seller, cancel any Special
Concentration Limit.
"Concentration Notice" means a notice, in substantially the form of
Exhibit I, from the Seller to a Concentration Bank.
"Consent and Acknowledgment" means the agreement, in substantially the
form attached hereto as Exhibit F, by each Seller Subsidiary in favor of the
Purchasers, the Secondary Purchasers and the Seller pursuant to which such
Seller Subsidiary consents to and acknowledges the transactions contemplated
hereby.
"Contract" means an agreement between the Seller or a Seller Subsidiary
and an Obligor, substantially in a form permitted by the Credit and Collection
Policy, pursuant to or under which such Obligor shall be obligated to pay for
merchandise, insurance or services from time to time.
"Coverage Ratio" means (A) with respect to the Purchasers considered as
a whole, a fraction, expressed as a percentage, the numerator of which is the
sum of (i) the aggregate Net Receivables Pool Balance of all Receivables Pools
in which any Purchaser owns a Receivable Interest and
(ii) the aggregate "Net Receivables Pool Balance" of all "Receivables Pools" in
which any Secondary Purchaser owns a "Receivable Interest" under the Secondary
Purchase Agreement, and the denominator of which is the Combined Capital and (B)
with respect to any Purchaser considered individually, a fraction, expressed as
a percentage, the numerator of which is equal to such Purchaser's Pro Rata Share
of the sum of (i) the aggregate Net Receivables Pool Balance of all Receivables
Pools in which such Purchaser owns a Receivable Interest and (ii) the aggregate
"Net Receivables Pool Balance" of all "Receivables Pools" in which the Related
Secondary Purchaser owns a "Receivable Interest" under the Secondary Purchase
Agreement and the denominator of which is the sum of the Aggregate Capital of
such Purchaser and the "Aggregate Capital" of the Related Secondary Purchaser
under the Secondary Purchase Agreement.
"Credit and Collection Policy" means those receivables credit and
collection policies and practices of the Seller and each Seller Subsidiary in
effect on the date hereof and approved by the Purchasers, summarized on Schedule
IV hereto, as the same may be modified in strict compliance with this Agreement.
"Current Default Ratio" means, at the time any determination thereof is
to be made, a fraction, expressed as a percentage, the numerator of which is the
aggregate Outstanding Balance of all Pool Receivables that were Defaulted
Receivables at such time and the denominator of which is the aggregate
Outstanding Balance of all Pool Receivables at such time.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services,
(iv) obligations as lessee under leases which shall have been, or should
be, in accordance with generally accepted accounting principles, recorded as
capital leases,
(v) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above, and (vi) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA.
"Default Ratio" means, at the time any determina-tion thereof is to be
made, a fraction, expressed as a percentage, the numerator of which is 1/12 of
the aggregate Outstanding Balance of all Pool Receivables that were Defaulted
Receivables on the last Business Day of the month most recently ended and the
last Business Day of each of the immediately preceding eleven (11) calendar
months or that would have been Defaulted Receivables on such last Business Days
had they not been written off the books of the Seller or a Seller Subsidiary
during such months (such Outstanding Balances of such Defaulted Receivables for
the eleven (11) calendar months immediately preceding the date hereof as set
forth on Schedule VII hereto), and the denominator of which is 1/12 of the
aggregate Outstanding Balance of all Pool Receivables on the last Business Day
of the month most recently ended and the last Business Day of each of the
immediately preceding eleven (11) calendar months (such Outstanding Balances for
the eleven (11) calendar months immediately preceding the date hereof as set
forth on Schedule VII hereto).
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid for more
than 90 days from the invoice date of such Receivable;
(ii) which is a Bankrupt Receivable and (a) is not entitled to the
benefit of an Administrative Priority (regardless of the Outstanding
Balance of such Receivable) or (b) the Outstanding Balance of which,
together with all other Bankrupt Receivables of the same Obligor, is
greater than $500,000 (whether or not one or more of such Bankrupt
Receivables is entitled to an Administrative Priority); or
(iii) which, consistent with the Credit and Collection Policy, would be
written off on the Seller's or on a Seller Subsidiary's books as
uncollectible.
"Delinquency Yen Ratio" means, at the time any determination thereof is
to be
made, the ratio, expressed as a percentage, computed by dividing (i) the
aggregate Outstanding Balance of all Pool Receivables that were Delinquent
Receivables at such time by (ii) the aggregate Outstanding Balance of all Pool
Receivables at such time.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 60 days or more from the original invoice date
thereof.
"Depositary Account" means a depositary account maintained at a
Depositary Bank, the primary purpose of which'is to receive the proceeds of
Collections from the Seller or a Seller Subsidiary.
"Depositary Bank" means, at any time, any of the banks holding one or
more Depositary Accounts (as of the date hereof being those banks specified on
Schedule II hereof).
"Depositary Yen Notice" means a notice, in substantially the form of
Exhibit H, from the Seller or a Seller Subsidiary to a Depositary Bank.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall, upon not less than three Business Days' notice
given to the Seller by the Administrative Agent at the instruction of any
Purchaser, cease to be a Designated Obligor.
"Eliqible Receivable" means, at any time, a Receivable:
(i) the Obligor of which is not an Affiliate of any of the parties
hereto;
(ii) which, at the earlier of (a) the time of the initial creation of
a Receivable Interest therein under this Agreement or (b) the time of the
initial creation of a "Receivable Interest" therein under the Secondary
Purchase Agreement, is not a Defaulted Receivable;
(iii) which is an obligation representing all or part of the sales
price of merchandise, insurance and services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended, and the nature
of which is such that its purchase with the proceeds of notes would
constitute a "current transaction" within the meaning of Section 3(a)(3) of
the Securities Act of 1933, as amended;
(iv) which is an "account" within the meaning of Section 9-106 of the UCC
of the applicable jurisdiction governing the perfection of the interest in such
Receivable created by a Receivable Interest;
(v) which arises in the ordinary course of the Seller's or a Seller
Subsidiary's business under a Contract which, together with such Receivable, is
in full force and effect and constitutes the legal, valid a'nd binding
obligation of the Obligor of such Receivable and is not subject to any known
dispute, offset, counterclaim or defense whatsoever or any Adverse Claim other
than those of the Purchasers, the Secondary Purchasers and the Administrative
Agent;
(vi) which, together with the Contract related thereto, does not contravene
or violate in any respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) (other than any
contravention or violation which would not have a material adverse effect on the
collectibility of such Receivable in the full Outstanding Balance thereof) and
with respect to which no party to the Contract related thereto is in violation
of any such law, rule or regulation in any respect (other than any contravention
or violation which would not have a material adverse effect on the
collectibility of such Receivable in the full Outstanding Balance thereof);
(vii) which satisfies all applicable requirements of the Credit and
Collection Policy;
(viii) as to which, at or prior to the earlier of (a) the time of the initial
creation of a Receivable Interest therein under this Agreement or (b) the time
of the initial creation of a "Receivable Interest" therein under the Secondary
Purchase Agreement, the Administrative Agent at the instruction of any
Purchaser, has not notified the Seller that such Receivable (or class of
Receivables) is no longer acceptable for purchase by the Purchasers hereunder or
by the Secondary Purchasers under the Secondary Purchase Agreement;
(ix) which, in the case of a Receivable originally owed to a Seller
Subsidiary, all right, title and interest of such Seller Subsidiary in such
Receivable was transferred to the Seller from such Seller Subsidiary
pursuant to a Transfer Agreement;
(x) which is denominated and payable in United States dollars in
the United States or, if payable in other than United States dollars, is
the subject of a forward foreign exchange contract or other hedging
agreement, the effect of which is to fully hedge (based on the expected
payment date thereof) such Receivable against losses due to fluctuations in
the exchange rate between United States dollars and the currency in which
such Receivable is denominated and payable;
(xi) the Obligor of which is not the Obligor of any Receivable which
has been referred to the collection department of the Seller or a Seller
Subsidiary;
(xii) as to which the Seller has good and marketable title thereto,
freely assignable by the Seller to the Administrative Agent for the benefit
of the Purchasers; and
(xiii) which, if a Bankrupt Receivable, is entitled to the benefit of an
Administrative Priority and the Outstanding Balance of which, together with
all other Bankrupt Receivables of the same Obligor entitled to the benefit
of an Administrative Priority, is equal to or less than $500,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurodollar Reserve Percentaqe" for any Purchaser and for any Fixed Period
means the reserve percentage applicable to such Purchaser, its Related Secondary
Purchaser or the bank or banks providing liquidity, back-up purchase or credit
support for the Purchaser during such Fixed Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) (or, if more than one such percentage shall be so applicable, the
weighted daily averages of such percentages for those days in such Fixed Period
during which any such percentage shall be so applicable) for determining the
maximum reserve requirement of such Purchaser, its Related Secondary Purchaser
or the bank or banks providing liquidity, back-up purchase or credit support for
the Purchaser (including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) with respect to liabilities consisting of or
including Eurocurrency liabilities (as that term is defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time) having a term equal to such Fixed Period.
"Event of Termination" has the meaning specified in Article VII.
"Expiration Date" has the meaning specified in Section 2.01(e).
"Facility Termination Date" means the earliest to occur of (i) the
Expiration Date, as determined pursuant to Section 2.01(e), (ii) the date of the
occurrence of an Event of Termination under Section 7.01(h), (iii) the date the
Facility Termination Date is declared pursuant to Section 7.01 or (iv) the date
the Purchase Limit is reduced or falls to zero.
"Fixed Period" means, with respect to any Receivable Interest in respect
of which Yield is computed by reference to the Adjusted LIBOR Rate, a period
from one to and including 30 days, as a Purchaser, after consultation with the
Seller, shall select, provided, that (i) any Fixed Period (other than of one
day) which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day, except that if such extension
would cause the last day of such Fixed Period to occur in the next succeeding
month, the last day of such Fixed Period shall occur on the immediately
preceding Business Day; and (ii) in the case of any Fixed Period for any
Receivable Interest which commences before the Facility Termination Date for
such Receivable Interest and would otherwise end on a date occurring after such
Facility Termination Date, such Fixed Period shall end on such Facility
Termination Date.
"Foreign Obligor" means any Obligor that is not a resident of the United
States.
"Foreign Obligor Concentration Limit" means 13% or such other percentage
as shall be designated by the Administrative Agent in a writing delivered to the
Seller at the instruction of the Required Purchasers.
"Government Obligor" means any Obligor that is an agency, a department,
an instrumentality or a political subdivision of the United States or of any
state or local government.
"Government Obligor Concentration Limit" means 5% or such other
percentage as shall be designated by the Administrative Agent in a writing
delivered to the Seller at the instruction of the Required Purchasers.
"Investor Rate" for any Settlement Period for any Receivable Interest
means:
(a) the rate (or if more than one rate, the weighted average of the
rates) at which (i) in the case of ASCC, all of the Notes of ASCC
outstanding during such Settlement Period have been sold by any placement
agent or commercial paper dealer selected by ASCC, as agreed between each
such agent or dealer and ASCC and notified by ASCC to the Seller and the
Collection Agent, and (ii) in the case of a Purchaser other than ASCC,
Notes of such Purchaser to be issued to fund the purchase or maintenance of
such Receivable Interest during such Settlement Period may have been sold
by any placement agent or commercial paper dealer selected by such
Purchaser, as agreed between such placement agent or such commercial paper
dealer and such Purchaser and notified by 1:30 P.M., New York City time, on
each Settlement Date by such Purchaser to the Seller and the Collection
Agent; provided, that if the rate or rates, as agreed between any such
agent or dealer and such Purchaser with regard to any Settlement Period for
any Receivable Interest, is a discount rate (or rates), the "Investor Rate"
for such Settlement Period shall be the rate (or if more than one rate, the
weighted average of the rates) resulting from converting such discount rate
(or rates) to an interest-bearing equivalent rate per annum; or
(b) if a Purchaser funds its purchase or maintenance of such
Receivable Interest for such Settlement Period or a portion thereof other
than by issuing Notes, a rate equal to the the weighted average of the
Adjusted LIBOR Rates for the Fixed Periods occurring within such Settlement
Period or portion thereof, plus 1%, notified to the Seller and the
Collection Agent as provided in clause (a) above, or such other rate as
such Purchaser and the Seller shall agree to in writing.
(c) If during any Settlement Period more than one of the above-
mentioned rates shall be applicable, then the "Investor Rate" for such
Settlement Period shall be the daily weighted average of such applicable
rates.
"Investor Report" means a report, in substantially the form of Exhibit A
hereto (appropriately completed), furnished by the Collection Agent to each
Purchaser and the Administrative Agent pursuant to Section 6.02(g) hereof.
"Investor Report Date" means, with respect to each Settlement Period,
the 23rd day of the month immediately following a Settlement Date (or if such
day is not a Business Day, the next succeeding Business Day) or such other date
or dates as shall be notified to the Seller from time to time by the
Administrative Agent at the direction of the Required Purchasers.
"Liquidation Collection Aqent Fee" means, for any Receivable Interest
on any date, an amount equal to the product of (i) the Capital of such
Receivable Interest on such date, (ii) the percentage per annum at which the
Collection Agent Fee is accruing on such date and (iii) a fraction the numerator
of which is the sum of the Average Maturity and the Collection Delay Period
(each as in effect at such date) and the denominator of which is 360.
"Liquidation Day" means, for any Receivable Interest, (i) each day
during a Settlement Period for such Receivable Interest on which the conditions
set forth in Section 3.02 are not satisfied (or expressly waived by the
Purchasers), provided such conditions remain unsatisfied (or are not expressly
waived by the Purchasers) during such Settlement Period, or (ii) each day which
occurs on or after the Termination Date for such Receivable Interest.
"Liquidation Fee" means, for any Purchaser and for any Settlement Period
during which a Liquidation Day occurs, the amount, if any, by which (i) the
additional Yield (calculated without taking into account any Liquidation Fee or
any shortened duration of a Fixed Period pursuant to clause (ii) of the
definition thereof) which would have accrued during the remainder of such
Settlement Period on all reductions of Capital of the Receivable Interest during
such Settlement Period exceeds (ii) the income received by such Purchaser's
investing the proceeds of such reductions of Capital.
"Liquidation Yield" means, for any Receivable Interest on any date, an
amount equal to the product of (1) the Capital of such Receivable Interest on
such date, (2) the Adjusted LIBOR Rate for such Receivable Interest for a 30-day
Fixed Period to commence on such date and (3) a fraction having the sum of the
Average Maturity plus the Collection Delay Period (each as in effect at such
date) as its numerator and 360 as its denominator.
"Lock-Box Account" means a lock-box account maintained at a Lock-Box Bank,
the primary purpose of which is to receive Collections.
"Lock-Box Agreement" means an agreement, in sub-stantially the form of
Exhibit B, among the Seller or a Seller Subsidiary, the Administrative Agent and
a Lock-Box Bank.
"Lock-Box Bank" means, at any time, any of the banks holding one or more
Lock-Box Accounts (as of the date hereof being those specified on Schedule I
hereof).
"Lock-Box Notice" means a notice, in substantially the form of Attachment A
to Exhibit B, from the Seller or a Seller Subsidiary to any Lock-Box Bank.
"Loss Reserve" means, on any date, 300% of the Default Ratio.
"Loss-to-Liquidation Ratio" means, at the time of any determination
thereof, a fraction, expressed as a percentage, the numerator of which is equal
to 1/3 of the aggregate Outstanding Balance (net of recoveries) of all
Receivables that were written-off of the books of the Seller or a Seller
Subsidiary as uncollectible in accordance with the Credit and Collection Policy
during the month most recently ended and during the immediately preceding two
calendar months and the denominator of which is equal to 1/3 of the aggregate
Collections received during the month most recently ended and during the
immediately preceding two calendar months less the aggregate amount of
Collections deemed to have been received during such period pursuant to Section
2.04(d).
"Mandatory Reduction" means the required reduction of the Aggregate Capital
of a Purchaser and the "Aggregate Capital" of the Related Secondary Purchaser
under the Secondary Purchase Agreement as a result of the occurrence of a
Mandatory Reduction Day.
"Mandatory Reduction Amount" means, with respect to the weighted average of
the Receivable Interests of any Purchaser and the "Receivable Interests" of the
Related Secondary Purchaser under the Secondary Purchase Agreement on any
Mandatory Reduction Day, the lowest dollar amount of a reduction in the
Aggregate Capital of such Purchaser which, together with the dollar amount of a
corresponding reduction, if any, in the "Aggregate Capital" of the Related
Secondary Purchaser under the Secondary Purchase Agreement, is necessary to
cause such weighted average of such Receivable Interests (if greater than the
product of 98% and the Pro Rata Share of such Purchaser) to reduce to an amount
equal to the product of 98% and the Pro Rata Share of such Purchaser and to
cause the Coverage Ratio with respect to such Purchaser (if less than 120%) to
increase to 120%.
"Mandatory Reduction Day" means (i) each day during a Settlement Period on
which the weighted average of the Receivable Interests of a Purchaser and the
"Receivable Interests" of the Related Secondary Purchaser under the Secondary
Purchase Agreement exceeds an amount equal to the product of 98% and the Pro
Rata share of such Purchaser and/or the Coverage Ratio with respect to such
Purchaser is less than 120% or (ii) each day during a Settlement Period on which
the Coverage Ratio with respect to all of the Purchasers is less than 120%.
"Member" means a Person who holds membership in ASCC other than as an
associate member.
"Moody's" means Moody's Investors Service, Inc.
"Net Receivables Pool Balance" means, at any time with respect to any
Receivables Pool, the Outstanding Balance of Eligible Receivables then in the
Receivables Pool reduced by the sum of (i) the Outstanding Balance of such
Eligible Receivables that have become Defaulted Receivables, (ii) the aggregate
amount by which the Outstanding Balance of Eligible Receivables (other than
Defaulted Receivables) of each Obligor then in the Receivables Pool exceeds the
product of (A) the Concentration Limit or Special Concentration Limit for such
Obligor and (B) the Outstanding Balance of the Eligible Receivables then in the
Receivables Pool, (iii) the aggregate amount by which the Outstanding Balance of
Eligible Receivables (other than Defaulted Receivables) of all Foreign Obligors
then in the Receivables Pool and not deducted from the Receivables Pool pursuant
to clause (ii) exceeds the product of (A) the Foreign Obligor Concentration
Limit and (B) the Outstanding Balance of the Eligible Receivables then in the
Receivables Pool, and (iv) the aggregate amount by which the Outstanding Balance
of Eligible Receivables (other than Defaulted Receivables) of all Government
Obligors then in the Receivables Pool and not deducted from the Receivables Pool
pursuant to clause (ii) exceeds the product of (A) the Government Obligor
Concentration Limit and (B) the Outstanding Balance of the Eligible Receivables
then in the Receivables Pool.
"Notes" means, with respect to a Purchaser, commercial paper notes or other
short-term promissory notes issued by such Purchaser in the United States
commercial paper market from time to time.
"Obligor" means a Person obligated to make payments pursuant to a Contract.
"Optional Reduction" means the election of the Seller to reduce the
Combined Capital by directing the Collection Agent and the Purchasers to
terminate temporarily the reinvestment of Collections.
"Optional Reduction Amount" means the dollar amount specified in a notice
given by the Seller in accordance with Section 2.01(c) hereof as being the
amount by which the Seller would like to reduce temporarily the Combined
Capital.
"Optional Reduction Day" means for each Receivable Interest, each day
during a Settlement Period on which a portion of the Collections which would
ordinarily be reinvested as a return of the Capital thereof are paid to the
Purchaser or held by the Collection Agent for the account of such Purchaser in
order to effect the reduction of the Capital with respect thereto.
"Optional Reduction Effective Date" means the day on which the Purchasers
and the Collection Agent shall commence the temporary termination of
reinvestments of Collections pursuant to Section 2.01(c) hereof.
"Outstandinq Balance" of any Receivable at any time means the then
outstanding principal balance thereof. The `Outstandinq Balance" of a
Receivable which is denominated and payable in a currency other than United
States dollars shall be the United States dollar equivalent of the face amount
of such Receivable as of the date of the invoice therefor converted to United
States dollars at such rate of exchange provided by the Credit and Collection
Policy.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Pool Receivable" means a Receivable in a Receivables Pool.
"Potential Termination Event" means an event which, with the passage of
time or notice or both, would constitute a Termination Event.
"Pro Rata Share" means, for each Purchaser, 25%, or such other percentage
for such Purchaser as shall result from any reallocation in accordance with
Section 2.01(d).
"Provisional Liquidation Day" means each day that would be a Liquidation
Day but for the proviso in clause (i) Of the definition of "Liquidation Day."
"Purchase" has the meaning specified in Section 2.01(a).
"Purchase Limit" means, for all Purchasers in the aggregate, an amount
equal to $1,000,000,000 initially, or such lesser amount as shall reflect any
reduction pursuant to Section 2.01(b), and for each Purchaser, its Pro Rata
Share of such aggregate amount. References to the unused portion of the Purchase
Limit shall mean, at any time, the Purchase Limit in effect at such time, less
the sum of the Total Aggregate Capital under this Agreement and the "Total
Aggregate Capital" under the Secondary Purchase Agreement. Furthermore, on any
day on which the Seller reduces the unused portion of (or terminates) the
"Commitment" under the Secondary Purchase Agreement, the Purchase Limit
automatically shall reduce by the same amount (or so terminate).
"Receivable" means the indebtedness of any Obligor under a Contract, and
includes the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto.
"Receivable Interest" means, at any time, an undivided percentage ownership
interest of a Purchaser in (i) all then outstanding Pool Receivables arising
prior to the time of the most recent computation or recomputation of such
undivided percentage interest pursuant to Section 2.03, (ii) all Related
Security with respect to such Pool Receivables, and (iii) all Collections with
respect to, and other'proceeds of, such Pool Receivables. Such undivided
percentage interest shall be a fraction, expressed as a percentage, the
numerator of which is the sum of (i) the Capital of such Receivable Interest at
the time of computation and (ii) a number equal to the product of (x) the
Reserve and (y) a fraction, expressed as a percentage, the numerator of which is
the Capital of such Receivable Interest, and the denominator of which is the
Combined Capital, and the denominator of which is the Net Receivables Pool
Balance at the time of computation. Each Receivable Interest shall be determined
from time to time pursuant to the provisions of Section 2.03.
"Receivables Pool" means at any time the aggregation of each then
outstanding Receivable in respect of which the Obligor is a Designated Obligor
at such time or was a Designated Obligor on the date of the initial creation Of
an interest in such Receivable under this Agreement.
"Records" means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) relating to such Receivable and the related
Obligor.
"Reference Banks" means Canadian Imperial Bank of Commerce, Citibank, N.A.,
The First National Bank of Chicago and Union Bank of Switzerland, or such other
banks as the Purchasers shall designate with the consent of the Seller.
"Reinvestment Termination Date" means, with respect to any Receivable
Interest, that Business Day which the Administrative Agent at the instruction of
any Purchaser(other than Matterhorn) so designates by notice to the Seller as
being the first day on which reinvestments will not be made with respect to such
Receivable Interest.
"Related Secondary Purchaser" means, with respect to each Purchaser set
forth below, the Person set forth opposite its name.
ASCC The First National Bank of Chicago
CAFCO Citibank, N.A.
Falcon Canadian Imperial Bank of Commerce
"Related Security" means with respect to any Receivable:
(i) all of the Seller's interest in any merchandise (including returned
merchandise) relating to any sale giving rise to such Receivable;
(ii) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements describing any collateral securing such Receivable;
(iii) all guaranties, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise; and
(iv) all Records relating to such Receivable.
"Required Purchasers" means, at a particular time, the Purchasers the
Aggregate Capital of which equals at least 66 2/3% of the Total Aggregate
Capital, or, if no Capital shall then be outstanding, Purchasers the aggregate
Purchase Limit of which equals at least 66 2/3% of the overall Purchase Limit;
provided, that in determining the Aggregate Capital or the Purchase Limit of a
Purchaser for the purposes of this definition, the "Aggregate Capital" of such
Purchaser's Related Secondary Purchaser under the Secondary Purchase Agreement
shall be treated as relating to such Purchaser.
"Reserve" means, on any date, the greater of (i) 12% of Combined Capital
and (ii) the sum of (a) the product of (1) the Loss Reserve and (2) the
aggregate Outstanding Balance of all Pool Receivables on such date,(b) the
aggregate Yield Reserve for all Receivable Interests owned by the Purchasers and
the aggregate "Yield Reserve" for all "Receivable Interests" owned by the
Secondary Purchasers under the Secondary Purchase Agreement, and(c) the
aggregate Collection Agent Fee Reserve, if any, for all Receivable Interests
owned by the Purchasers and the aggregate "Collection Agent Fee Reserve", if
any, of all "Receivable Interests" owned by the Secondary Purchasers under the
Secondary Purchaser Agreement.
"Responsible Officer" means, as to the Seller and the Seller Subsidiaries,
any officer (including, for the purpose of this Agreement, any assistant
secretary and any assistant treasurer) of such entity or any person designated
in writing by any such officer.
"S&P" means Standard & Poor's Corporation.
"Seasonality Amount" means, with respect to each of November and December
of each year, the product of (i) the Seasonality Percentage for such month and
(ii) the aggregate of the Net Receivables Pool Balances for each Receivables
Pool as set forth in the Investor Report delivered on the most recent Investor
Report Date.
"Seasonality Percentage" means, with respect to each of November and
December of each year, a fraction, expressed as a percentage, the numerator of
which is the decline, if any, in the aggregate outstanding balance of all
Receivables of the Seller and the Seller Subsidiaries from the last Business Day
of October to the last Business Day of November or from the last Business Day of
November to the last Business Day of December, as the case may be, during the
preceding calendar year, and the denominator of which is the aggregate
outstanding balance of all Receivables of the Seller and the Seller Subsidiaries
as of the last Business Day of October or November, as the case may be, of such
preceding calendar year.
"Secondary Purchase Agreement" means the Receivables Purchase Agreement,
dated as of the date hereof, among the Seller, the Secondary Purchasers,
Matterhorn and Canadian Imperial Bank of Commerce, as administrative agent, as
the same may, from time to time, be amended, modified or supplemented'.
"Secondary Purchasers" means collectively Canadian Imperial Bank of
Commerce, Citibank, N.A., and The First National Bank of Chicago.
"Seller Subsidiary" means a direct or indirect subsidiary of the Seller
party to a Transfer Agreement and approved by the Purchasers (as of the date
hereof being those subsidiaries specified on Schedule V hereof).
"Settlement Date" means the last day of each Settlement Period, or, if such
day is not a Business Day, the next succeeding Business Day.
"Settlement Period" means, with respect to any Receivable Interest,
initially the period commencing on the date of purchase of such Receivable
Interest and ending on the last day of the calendar month in which such purchase
occurs, and thereafter each calendar month; provided, that on and after the
Termination Date for such Receivable Interest, such period (including, without
limitation, a period of one day) as shall be selected from time to time by the
Purchasers or, in the absence of any such selection, each period of thirty days
from the last day of the immediately preceding Settlement Period.
"Termination Date" means the earlier of (i) the Reinvestment Termination
Date for such Receivable Interest and (ii) the Facility Termination Date.
"Total Aggregate Capital" means, at any time of determination, the sum of
the Aggregate Capital for the Purchasers.
"Transfer Aqreement" means each agreement, in substantially the form
attached hereto as Exhibit D, between the Seller and a Seller Subsidiary
pursuant to which the Seller will purchase Receivables from such Seller
Subsidiary.
"UBS" means Union Bank of Switzerland, a banking corporation organized
under the laws of Switzerland.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"Yield" means for each Receivable Interest for any Settlement Period
IR X C X .ED + LF
360
where:
C = the daily average (calculated at the close of business each day) Capital of
such Receivable Interest during such Settlement Period
IR = InvestOr Rate for such Receivable Interest for such Settlement Period
ED = the actual number of days elapsed during such Settlement Period
LF = the Liquidation Fee, if any, for such Receivable Interest for such
Settlement Period;
provided, that no provision of this Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by applicable
law; and provided, further, that Yield for any Receivable Interest shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Yield Reserve" means, for any Receivable Interest at any time, the sum of
(i) the Liquidation Yield at such time for such Receivable Interest, and (ii)
the then accrued and unpaid Yield for such Receivable Interest.
SECTION 1.02. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchase Facility. (a) On the terms and conditions
hereinafter set forth, each Purchaser (other than Matterhorn) may, in its sole
discretion purchase Receivable Interests from the Seller from time to time
during the period from the date hereof to the Termination
Date; provided, however, that Matterhorn shall be obligated to purchase up to
its Purchase Limit Receivable Interests from the Seller from time to time during
the period from the date hereof to the Facility Termination Date. Each purchase
(each, a "Purchase") of Receivable Interests with respect to a Receivables Pool
requested by the Seller shall be made by the Purchasers electing to Purchase at
such time simultaneously and ratably according to their respective Pro Rata
Shares; provided, that Matterhorn shall be obligated to make a Purchase pursuant
to the terms of this Agreement notwithstanding the election by any other
Purchaser not to make a Purchase. Under no circumstances shall a Purchaser make
any Purchase if after giving effect to such Purchase, such Purchaser's Aggregate
Capital, together with the Related Secondary Purchasers' "Aggregate Capital"
under the Secondary Purchase Agreement, would exceed such Purchaser's Purchase
Limit. Notwithstanding anything to the contrary contained herein, until such
time as the parties expressly agree, all Purchases of Receivable Interests
hereunder and under the Secondary Purchase Agreement shall be made with respect
to a single Receivables Pool.
(b) The Seller may, upon at least five Business Days' notice to the
Administrative Agent and the Purchasers, terminate in whole or reduce in part
the unused portion of the Purchase Limit; provided, that each partial reduction
shall be in the amount of at least $5,000,000 or an integral multiple thereof;
provided, further, that any partial reduction of the Purchase Limit for any
Purchaser must not result in a remaining Purchase Limit of less than $25,000,000
or the Purchase Limit for such Purchaser shall be reduced to zero. Any
reductions in the Purchase Limit pursuant to this subsection (b) shall be
permanent.
(c) The Seller may, upon at least five Business Days' written notice
to the Administrative Agent and the Purchasers specifying an Optional Reduction
Amount and an Optional Reduction Effective Date, effect an Optional Reduction.
Commencing on the Optional Reduction Effective Date, the Collection Agent shall
cease the reinvestment of Collections for a period of time such that after
giving effect to the amount of Collections which are not reinvested in
accordance with the provisions of Section 2.04(b)(ii), the amount of Combined
Capital on the day immediately preceding the Optional Reduction Effective Date
is reduced by an amount equal to the Optional Reduction Amount. Any Optional
Reduction under this subsection (c) shall be applied pro rata among the
Purchasers according to their Pro Rata Shares. The Seller shall indemnify any
Purchaser for all losses, expenses and liabilities, if any (including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds required by any Purchaser in connection
with such Purchaser's funding or maintenance of the Receivable Interests), which
such Purchaser may sustain as a result of any Optional Reduction pursuant to
this subsection (c).
(d) The Seller may, upon 60 days' prior written notice to the
Purchasers, reallocate the Pro Rata Shares of the Purchasers; provided, that
such reallocation may not take place prior to the first anniversary date of the
earlier to occur of the initial Purchase hereunder and the initial "Purchase"
under the Secondary Purchase Agreement; provided, further, that the Seller may
not reallocate the Pro Rata Shares of the Purchasers more than twice in any 12-
month period. Any reallocation of a Purchaser's Pro Rata Share as in effect
prior to such reallocation which increases the Purchase Limit of such Purchaser
shall be at the sole discretion of such Purchaser and shall be effective only if
the Related Secondary Purchaser increases its "Commitment" under the Secondary
Purchase Agreement by an amount corresponding to the amount of the increase, if
any, in the Purchaser's Purchase Limit arising from such reallocation. If, as a
result of any reallocation, a Purchaser's Aggregate Capital exceeds its Pro Rata
Share (as proposed to be reallocated) of the Purchase Limit, such Purchaser
shall transfer a Receivable Interest or Receivables Interest computed on the
basis of such excess Capital to the Purchaser or Purchasers whose Pro Rata Share
has increased as a result of such reallocation in exchange for a cash payment in
an amount equal to the aggregate Capital of the Receivable Interests so
transferred.
(e) The Expiration Date shall be the third anniversary of the date hereof;
provided, that the Expiration Date may be extended for an additional year on
each annual anniversary of the date hereof if the Seller gives each Purchaser
written notice not later than 90 days prior to each such annual anniversary
(beginning with the first such annual anniversary) and each Purchaser provides
the Seller with its written consent to such extension not later than 30 days
after receipt of the Seller's notice; provided, however, that such extension of
the Expiration Date shall not occur unless each Secondary Purchaser consents to
similarly extend the "Expiration Date" of the Secondary Purchase Agreement.
(f) The Seller may, upon thirty days' prior written notice to the
Administrative Agent and the Purchasers, cease purchasing Receivables from any
Seller Subsidiary, and after the Seller ceases purchasing Receivables from such
Seller Subsidiary, such Seller Subsidiary shall no longer be a Selling
Subsidiary for all purposes of this Agreement other than with respect to those
obligations which are expressly intended to survive the termination of this
Agreement, including, without limitation, the indemnities contained in Section
8.01 as incorporated by reference in the Consent and Acknowledgement to which
such Seller Subsidiary is a party. If, as a result of the Seller's decision to
cease purchasing Receivables from any Seller Subsidiary, the Required Purchasers
determine, in their sole discretion, that the Events of Termination in Section
7.01(i) are no longer reasonable or protective, the Required Purchasers may
modify the provisions of such Section 7.01(i) with the consent of the Seller
(which consent shall not be unreasonably withheld or delayed).
SECTION 2.02. Makinq Purchases. (a) Each Purchase shall be made on at
least three Business Days' notice from the Seller to each Purchaser. Each such
notice shall specify (i) the amount requested to be paid to the Seller (which
shall not be less than $5,000,000), and (ii) the date of such Purchase (which
shall be a Business Day). Each Purchaser, other than Matterhorn, shall notify
the Seller whether it has determined to make such Purchase not later than 10:00
A.M., New York City time, on the second Business Day prior to the proposed
purchase date.
(b) On the date of each Purchase, each Purchaser shall, upon satisfaction
of the applicable conditions set forth in Section 3.01 and Section 3.02, make
available to the Seller in same day funds, at the Seller's account with Bank of
America National Trust and Savings Association, account n,~,mher 12334-01430, an
amount equal to the initial Capital of such Receivable Interest purchased by the
Purchaser. Each notice given by the Seller pursuant to subsection (a) above
shall be irrevocable and binding on the Seller and the Seller shall indemnify
each Purchaser against any loss or expense incurred by such Purchaser as a
result of any failure by the Seller to accept the amount requested to be paid by
such Purchaser, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by such Purchaser by reason of the
liquidation or reemployment of funds acquired or requested by such Purchaser to
fund such requested amount.
(c) Each Purchase made by a Purchaser shall be evidenced by, and recorded
on, a Certificate duly executed by the Seller. The Seller hereby authorizes each
Purchaser to make the appropriate notation on the schedule annexed to the
Certificate delivered to such Purchaser for the purposes of recording any
Purchase made by such Purchaser thereon (provided that any failure by such
Purchaser to make any such notation shall not affect the obligations of the
Seller hereunder or under such Certificate in respect of such Purchase). The
Seller agrees that each notation made by a Purchaser on the schedule annexed to
the Certificate delivered to such Purchaser shall be binding absent demonstrable
error.
SECTION 2.03. Receivable Interest Percentage. (a) Each Receivable Interest
shall be initially computed on its date of purchase. Thereafter, until the
Termination Date for such Receivable Interest, such Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day other than a
Liquidation Day. Any Receivable Interest as computed (or deemed recomputed) as
of the close of business on the day immediately succeeding the Termination Date
for such Receivable Interest shall remain constant at all times after such
Termination Date. Such Receivable Interest shall become zero when the Capital
thereof and Yield thereon shall have been paid in full and the Collection Agent
(if not the Seller or an Affiliate thereof) shall have received the accrued
Collection Agent Fee thereon.
(b) If any Receivable Interest would otherwise be reduced on any day on
account of newly arising Pool Receivables, the Purchasers may prevent such
reduction by notifying the Collection Agent on such day that the Receivables
Pool and the Net Receivables Pool Balance for such Receivable Interest will
include, with respect to Receivables arising as Pool Receivables on such day,
only such number or portion of such Receivables as shall cause such Receivable
Interest to remain constant. The remainder of such Receivables or portion
thereof shall be treated as Receivables arising on the next succeeding Business
Day (subject to reapplication of this subsection (b)).
(c) If any Investor Report indicates that the last day of the prior
Settlement Period was a Mandatory Reduction Day, the Collection Agent shall
promptly notify the Purchasers and the Seller (if the Collection Agent is not
the Seller) and shall specify the Mandatory Reduction Amount. In addition, if on
any Business Day the Seller knows such day to be a Mandatory Reduction Day, it
shall promptly notify the Purchasers and the Collection Agent (if the Collection
Agent is not the Seller) and shall specify the Mandatory Reduction Amount. On
the Business Day next succeeding the Investor Report Date or such notification
to the Purchasers and the Collection Agent, unless the Seller can demonstrate to
the satisfaction of the Purchasers that such day is not a Mandatory Reduction
Day, the Seller shall pay to each Purchaser its full Mandatory Reduction Amount
to the extent that the Mandatory Reduction Amount represents Collections which
should have been set aside and held in the trust for such Purchaser pursuant to
Section 2.04 hereof but were previously deemed to be reinvested on behalf of
such Purchaser. If the full Mandatory Reduction Amount is not so paid, the
Collection Agent shall continue the suspension of the reinvestment of
Collections on each Mandatory Reduction Day until such time that, after giving
effect to the amount of Collections which are not reinvested in accordance with
the provisions of Section 2.04(b)(ii) and the recomputation of the Receivable
Interests pursuant to Section 2.03, the amount of the Aggregate Capital of such
Purchaser on the day immediately preceding any Mandatory Reduction Day is
reduced by an amount equal to the Mandatory Reduction Amount for such Mandatory
Reduction Day. The Seller shall indemnify any Purchaser for all losses, expenses
and liabilities, if any (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Purchaser in connection with such Purchaser's funding or
maintenance of the Receivable Interests), which such Purchaser may sustain as a
result of any Mandatory Reduction.
SECTION 2.04. Settlement Procedures. (a) Collection of the Pool Receivables
shall be administered by the Collection Agent, in accordance with the terms of
this Agreement. The Seller shall provide to the Collection Agent (if other than
the Seller) on a timely basis all information needed for such administration,
including notice of the occurrence of any Liquidation Day or Provisional
Liquidation Day and current computations of each Receivable Interest.
(b) The Collection Agent shall, on each day on which Collections of Pool
Receivables are received by it with respect to any Receivable Interest owned by
a Purchaser:
(i) set aside and hold in trust for such Purchaser, out of the
percentage of such Collections represented by such Receivable
Interest, an amount equal to such Purchaser's Yield and Pro Rata Share
of the Collection Agent Fee, if any, accrued through such day for such
Receivable Interest and not previously set aside; provided, that
notwithstanding the preceding clause, unless the Administrative Agent
shall have given notice at the direction of the Required Purchasers to
the contrary, such amounts may, if the Seller is the Collection Agent,
be comingled with the Seller's other funds prior to their payment to
the Purchasers;
(ii) if such day is neither a Liquidation Day nor a Provisional
Liquidation Day nor an Optional Reduction Day nor a Mandatory
Reduction Day, reinvest on behalf of such Purchaser the remainder of
such percentage of Collections, to the extent representing a return of
Capital, by recomputation of such Receivable Interest pursuant to
Section 2.03;
(iii) if such day is a Liquidation Day or a ProvisiOnal
Liquidation Day, refrain from making reinvestments and set aside and
hold in trust for such Purchaser the entire remainder of such
percentage of Collections; provided, that amounts set aside and held
in trust on any Provisional Liquidation Day that is subsequently
determined not to be a Liquidation Day thereupon shall, to the extent
representing a return of Capital, be reinvested in accordance with the
preceding subsection (ii);
(iv) if such day is an Optional Reduction Day, set aside and hold
in trust for the Purchaser the entire remainder of such percentage of
Collections or, if the remainder of such Collections exceeds the
remaining amount of the Optional Reduction Amount, the portion of the
remainder of such Collections equal to such remaining amount of the
Optional Reduction Amount; provided, that, notwithstanding the
preceding clause, unless the Administrative Agent shall have given
notice at the direction of the Required Purchasers to the contrary,
such amounts may, if the Seller is the Collection Agent, be commingled
with the Seller's other funds prior to their payment to the
Purchasers;
(v) if such day is a Mandatory Reduction Day, set aside and hold
in trust for the Purchaser the entire remainder of such percentage of
Collections, or if the remainder of such Collections exceeds the
remaining amount of the Mandatory Reduction Amount for such day, the
portion of the remainder of such Collections equal to such remaining
amount of the Mandatory Reduction Amount; provided, that,
notwithstanding the preceding clause, unless the Administrative Agent
shall have given notice at the direction of the Required Purchasers to
the contrary, such amounts may, if the Seller is then the Collection
Agent, be commingled with the Seller's other funds prior to their
payment to the Purchasers; and
(vi) during such times as amounts are required to be reinvested
in accordance with the foregoing subsection (ii) or the proviso to
subsection (iii), release to the Seller for its own account any
Collections in excess of such amounts and the amounts that are
required to be set aside pursuant to subsection (i) above.
(c) The Collection Agent shall deposit into an account designated by
each Purchaser, on the first Business Day after each Settlement Date, unless the
Required Purchasers, in their sole discretion, require more frequent deposits,
all amounts held by the Collection Agent for each Purchaser in accordance with
Section 2.04(b), unless deposited earlier as provided in the next succeeding
sentence; provided, however, if Collections have been commingled with the
Seller's other funds prior to their payment to the Purchasers as permitted by
the terms of this Agreement, any deposits made pursuant to the preceding clause
shall be made by the Seller from and to the extent of the Collections with
respect to a Receivable Interest owned by such Purchaser. If the Collection
Agent is not the Seller, and if a Liquidation Day or a Provisional Liquidation
Day has occurred and is continuing, all amounts held by the Collection Agent for
each Purchaser in accordance with Section 2.04(b) shall be deposited on the
first Business Day following receipt by the Collection Agent into an account
designated by such Purchaser. The aggregate amount so deposited with respect to
a Receivable Interest owned by a Purchaser shall not exceed the sum of such
Purchaser's Capital of, and accrued Yield and Pro Rata Share of the Collection
Agent Fee, if any, on such Receivable Interest plus the aggregate of any other
amounts then owed by the Seller to such Purchaser hereunder. If the amounts so
deposited are insufficient to pay in full all amounts due to such Purchaser
hereunder, such amounts shall be applied in the following order of priority
(whether or not such funds are sufficient to pay in full all such amounts):
first to the Collection Agent (if other than the Seller or its designee) in
payment of all accrued and unpaid Collection Agent Fee, if any, second to such
Purchaser in payment in full of all accrued and unpaid Yield, third to such
Purchaser in reduction to zero of the Aggregate Capital of such Purchaser, and
fourth to such Purchaser in payment of any other amounts owed by the Seller
hereunder.
After the Capital and Yield with respect to a Receivable Interest, and
any other amounts payable by the Seller to the Purchasers or the Administrative
Agent hereunder, have been paid in full, all additional Collections with respect
to such Receivable Interest shall be paid to the Seller for its own account.
(d) For the purposes of this Section 2.04:
(i) if on any day the Outstanding Balance of any Pool Receivable is
reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed merchandise or services, or any cash discount
or other adjustment made by the Seller or a Seller Subsidiary, or any
setoff, the Seller shall be deemed to have received on such day a
Collection of such Pool Receivable in the amount of such reduction or
adjustment;
(ii) if on any day either (w) any of the representations or
warranties contained in Sections 4.01(h) or 4.01(n) are no longer true
with respect to any Pool Receivable, (x) the Seller shall fail to
perform or observe any term, covenant or agreement contained in Section
5.01(d), (y) the Seller, any Seller Subsidiary or the Collection Agent
(if the Seller or an Affiliate thereof) shall extend, amend or otherwise
modify the terms of any Pool Receivable, or amend, modify or waive the
terms or conditions of the Contract under which such Pool Receivable
arises in a manner which materially and adversely affects the
collectibility of such Pool Receivable, or (z) any Pool Receivable
denominated in a currency other than United States dollars is deemed
uncollectible by any Purchaser as a result of the inability of the
Obligor thereof to make any payment thereon due to restrictions imposed
on the payment of the foreign currency in which such Pool Receivable is
denominated outside of the country of such foreign currency, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full;
(iii) except as provided in subsection (i) or (ii) of this
Section 2.04(d), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor of any
Receivable shall be applied to the Receivables of such Obligor in order
of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates its payment for application
to specific Receivables; and
(iv) if and to the extent any Purchaser shall be required for any
reason to pay over to an Obligor any amount received on its behalf
hereunder, such amount shall be deemed not to have been so received but
rather to have been retained by the Seller and, accordingly, such
Purchaser shall have a claim against the Seller for such amount, payable
when and to the extent that any distribution from or on behalf of such
Obligor is made in respect thereof.
SECTION 2.05. FEES.
(a) The Seller shall pay the following fees:
(i) to each Purchaser, an annual fee (the "Program Fee") equal to the
product of (i) the average daily outstanding Aggregate Capital of such
Purchaser and (ii) the rate per annum indicated below, as determined
by reference to the higher of the long-term senior unsecured debt
ratings for the Seller as announced by S&P and Moody's and in effect
on the Settlement Date such fee is required to be paid hereunder:
Ratinq
S&P Moody's Rate
A A2 .25%
A- A3 .25%
BBB+ Baal .30%
BBB Baa2 .30%
BBB- Baa3 .35%
BB+ Bal .45%
BB Ba2 .65%
BB- Ba3 .75%
B+ B1 1.00%
(ii) to CAFCO, Matterhorn and Falcon, a fee (the "Investor Fee")
computed at the per annum rates of 1/100 of 1%, 1/100 of 1% and
15/1000 of 1%, respectively, on the average daily amount of Aggregate
Capital of each such Purchasers.
(iii) to Matterhorn, ratably according to its Pro Rata Share, a fee
(the "Commitment Fee") at the per annum rate, if the Seller's long-
term senior unsecured debt is rated investment grade by either S&P or
Moody's, of .25% on the average daily amount of Matterhorn's unused
Purchase Limit; provided, that if the Seller's long-term senior
unsecured debt is not rated investment grade by either S&P or Moody's,
the Commitment Fee shall be determined on the same basis as the
Program Fee.
The Program Fee, the Investor Fee and the Commitment Fee shall be
payable in arrears on the first Business Day after each Settlement Date during
the term of this Agreement and on the later of the Facility Termination Date or
the date on which the Aggregate Capital of a Purchaser is reduced to zero. The
Program Fee, the Investor Fee and the Commitment Fee shall be payable by the
Seller notwithstanding any insufficiency in the amount of Collections. The
Program Fee shall be payable to each Purchaser with respect to a day only to the
extent that the Investor Rate applicable for such day is being computed pursuant
to clause (a) of the definition of Investor Rate.
(b) The Seller shall also pay to each Purchaser a fee (the
"Structuring Fee") equal to 0.20% of the amount of the Purchase Limit (whether
used or unused) of such Purchaser, payable on the date of execution of this
Agreement; provided, however, that if the Seller has paid any portion of the
Structuring Fee prior to the execution of this Agreement, the amount payable on
the date of execution of this Agreement shall be equal to the difference between
the entire Structuring Fee and any portion thereof previously paid.
(c) The Collection Agent (if other than the Seller) shall be paid a
Collection Agent Fee as set forth in Section 6.06 hereof.
(d) The Seller shall pay to the Administrative Agent a fee as
separately agreed between the Seller and the Administrative Agent.
SECTION 2.06. Payments and Computations, Etc. (a) All amounts to be paid
or deposited by the Seller hereunder. (whether as Collection Agent or otherwise)
shall be paid or deposited no later than 3:00 P.M. (New York City time) on the
day when due in same day funds to each Purchaser's account (as designated by
each such Purchaser).
(b) The Seller shall, to the extent permitted by law, pay on demand
from time to time interest on any amount not paid or deposited by the Seller
(whether as Collection Agent or otherwise) when due hereunder at an interest
rate per annum equal to 2% per annum above the Base Rate in effect from time to
time; provided, .however, that such interest rate shall not at any time exceed
the maximum rate permitted by applicable law.
(c) All computations of interest under subsection (b) above and all
computations of Yield, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days and the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
SECTION 2.07. Dividing or Combining Receivable Interests. The Seller may,
on notice to and consent by a Purchaser received at least three Business Days
prior to the last day of any Settlement Period, divide any Receivable Interest
of such Purchaser into two or more Receivable Interests having aggregate Capital
equal to the Capital of such divided Receivable Interest. The Seller may, on
notice to and consent by a Purchaser received at least three Business Days prior
to the last day of any Settlement Period either (i) combine two or more existing
Receivable Interests of such Purchaser or (ii) combine an existing Receivable
Interest or existing Receivable Interests and a proposed Receivable Interest,
all of such Purchaser, in each case on such 'last day into a single Receivable
Interest having Capital equal to the aggregate Capital of such existing
Receivable Interest or such existing Receivable Interests and such proposed
Receivable Interest, as the case may be.
SECTION 2.08. Yield Protection.
(a) If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, including Regulation D of the Board
of Governors of the Federal Reserve System, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Purchaser or any Person controlling any thereof, any permitted
assignee under this Agreement or any Person maintaining any liquidity, purchase
or credit enhancement facility for any Purchaser (each of which being an
"Affected Party") with any request or directlye (whether or not having the force
of law) of any such authority, central bank or comparable agency,
(A) shall subject an Affected Party to any tax (except for taxes
on the overall net income of such Affected Party), duty or other
charge with respect to the Receivable Interests or any right to make
purchases, or shall change the basis of taxation of payments to an
Affected Party of its Capital or Yield or any other amounts due under
this Agreement in respect of its Capital or its rights, if any, to
make purchases; or
(B) shall impose, modify or deem applicable any reserve
requirement (including, without limitation, any reserve requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding any reserve requirement, if any, included in the
determination of Yield), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Affected Party; or
(C) shall impose any other condition affecting the Receivable
Interests or the Purchaser's rights, if any, to make purchases;
and the result of any of the foregoing is (i) to increase the cost to, or, in
the case of Regulation D referred to above, to impose a cost on an Affected
Party funding or making or maintaining any Receivable Interest, or (ii) to
reduce the amount of any sum received or receivable by an Affected Party under
this Agreement with respect thereto, then within ten days after demand by such
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Seller shall pay directly to such Affected Party
such additional amount or amounts as will compensate such Affected Party for
such additional or increased cost incurred or such reduction suffered.
(b) If an Affected Party shall reasonably determine that the adoption
of any applicable law, rule, regulation, directlye or guideline regarding
capital adequacy, or any change in or phase-in of any applicable law, rule,
regulation, directlye or guideline or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by an Affected
Party with any request or directlye regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of any Affected Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which any such Affected
Party could have achieved but for such adoption, change or compliance (taking
into consideration the policies of such Affected Party with respect to capital
adequacy) by an amount deemed by such Affected Party to be material, then from
time to time, within ten days after demand by such Affected Party, the Seller
shall pay to such Affected Party such additional amount or amounts as will
compensate such Affected Party for such reduction.
(c) Each Affected Party will promptly notify the Seller of any event
of which it has knowledge occurring after the date hereof which will entitle
such Affected Party to compensation pursuant to this Section 2.08. If an
Affected Party fails to give such notice within 90 days after it obtains actual
knowledge of such event and such result, such Affected Party shall be entitled
to compensation pursuant to this Section 2.08 only to the extent such additional
amount or reduction accrues on or after the date 90 days prior to the date on
which such Affected Party gives such notice.
(d) In determining any amount provided for in this Section 2.08, the
Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this Section 2.08 shall submit to the Seller
a certificate as to such additional or increased cost or reduction, which
certificate shall be conclusive absent demonstrable error; provided, that the
failure to deliver any such certificate shall not affect the Affected Party's
right to payment hereunder unless notice as required by Section 2.08(c) has not
been given.
SECTION 2.09. Sharing of Payments, Etc. If any Purchaser shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Pool Receivables covered by a Receivable
Interest (other than pursuant to Section 2.08) in excess of payments on account
of Pool Receivables allocable to such Receivable Interest, such Purchaser shall
forthwith purchase from the other Purchasers such participations in the Pool
Receivables as shall be necessary to cause such purchasing Purchaser to share
the excess payment ratably with each of them, provided, however, that if all or
any portion of each excess payment is thereafter recovered from such purchasing
Purchaser, such purchase from each Purchaser shall be rescinded and such
Purchaser shall repay to the purchasing Purchaser the purchase price to the
extent of such recovery together with an amount equal to each Purchaser's Pro
Rata Share of any interest or other amount paid or payable by the purchasing
Purchaser in respect of the total amount so recovered.
SECTION 2.10. Effect of Early Payments. In the event any Purchaser
holds payments received pursuant to Section 2.04(c) in payment of such
Purchaser's Aggregate Capital, and such payments are, in accordance with such
Purchaser's normal investment policies, invested prior to applying such payments
to reduce such Purchaser's Aggregate Capital so as to produce income not applied
to reduce such Purchaser's Aggregate Capital, such Purchaser agrees to adjust
the amount owing from the Seller in respect of such Purchaser's Yield in
accordance with, and to the extent provided by, its normal operating and billing
procedures for financing programs of this type. The determinations made by any
Purchaser pursuant to this Section 2.10 shall be binding absent demonstrable
error.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. The initial
Purchase of Receivable Interests under this Agreement is subject to the
conditions precedent that the Purchasers shall have received on or before the
date of such Purchase the following, each (unless otherwise indicated) dated
such date and in form and substance satisfactory to the Purchasers and the
Administrative Agent:
(a) Certificates of the Secretary or Assistant Secretary of the Seller
and each Seller Subsidiary certifying the names and true signatures of their
respective officers authorized to sign this Agreement, the Certificates and the
other documents to be delivered by them hereunder or in connection herewith,
evidence of corporate authorization of the transactions contemplated hereby, the
articles of incorporation (attached and appropriately certified by the Secretary
of State of the Seller's and each Seller Subsidiary's jurisdiction of
incorporation) and the by-laws and all amendments thereto of the Seller and each
Seller Subsidiary.
(b) Time stamped receipt copies of proper financing statements, duly
filed on or before the date of such initial Purchase under the UCC of all
jurisdictions that the Purchasers or the Administrative Agent may deem necessary
or desirable in order (i) to perfect the ownership interests contemplated by
this Agreement and (ii) to perfect the ownership interests of the Seller in the
receivables purchased by the Seller from the Seller Subsidiaries pursuant to the
Transfer Agreements.
(c) Time stamped receipt copies of proper UCC termination statements,
if any, necessary to release all security interests and other rights of any
Person in the Receivables, Contracts or Related Security previously granted by
the Seller or any Seller Subsidiary.
(d) Undated executed copies of Lock-Box Notices to the Lock-Box Banks
for each Lock-Box Account.
(e) A favorable opinion of Shearman & Sterling, counsel for the
Seller, substantially in the form of Exhibit C-1 hereto, and as to such other
matters as the Purchasers may reasonably request.
(f) A favorable opinion of Georgia counsel for the Seller,
substantially in the form of Exhibit C-2 hereto, and as to such other. matters
as the Purchasers may reasonably request.
(g) A favorable opinion of local counsel for each Seller Subsidiary,
substantially in the form of Exhibit C-3 hereto, and as to such other matters as
the Purchasers may reasonably request.
(h) A favorable opinion of special counsel for the Seller,
substantially in the form of Exhibit C-4 hereto, and as to such other matters as
the Purchasers may reasonably request.
(i) A written memorandum from the Seller's independent accountants
substantially to the effect that the Seller may account for the proposed sale of
undivided percentage ownership interests in Receivables hereunder in its
financial statements as a sale consistent with generally accepted accounting
principles.
(j) Evidence that the Seller has been admitted as a Member upon terms
satisfactory to ASCC.
(k) An executed Transfer Agreement and Consent and Acknowledgment from
each Seller Subsidiary.
(1) The Certificates for the Purchasers.
SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments. Each
Purchase (including the initial Purchase) and each reinvestment shall be subject
to the further conditions precedent that (a) in the case of each Purchase, the
Collection Agent shall have delivered to the Purchasers and the Administrative
Agent on or prior to the date of such Purchase, in form and substance
satisfactory to the Purchasers, all Investor Reports as and when due under
Section 6.02(g) and, on or prior to the date of the initial Purchase, an
Investor Report containing then current information acceptable to the
Purchasers, and (b) on the date of each Purchase or reinvestment, the following
statements shall be true (and acceptance of the proceeds of such Purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties contained in Article IV
are correct on and as of the date of such Purchase or reinvestment as
though made on and as of such date,
(ii) no event has occurred and is continuing, or would result
from such Purchase or reinvestment, that constitutes an Event of
Termination or a Potential Termination Event,
(iii) on such date, the Seller has a long-term senior unsecured
debt rating of at least BB by S&P and Ba3 by Moody's,
(iv) the Facility Termination Date shall not have occurred,
(v) the Seller is a Member, and
(vi) the Internal Revenue Service shall not have filed a notice
of lien in an amount greater than $50 million pursuant to Section 6323
of the Code with regard to any assets of the Seller or any Seller
Subsidiary, and the Pension Benefit Guaranty Corporation shall not
have filed a notice of lien in an amount greater than $50 million
pursuant to Section 4068 of ERISA with regard to any assets of the
Seller or any Seller Subsidiary, unless such l&ens (1) have been
suspended or (2) are being contested in good faith by the Seller or
such Seller Subsidiary and have been bonded in the full amount
thereof,
and (c) the Purchasers shall have received such other -approvals, opinions or
documents as they may reasonably request.
SECTION 3.03. Conditions Subsequent. The Seller shall, within 45 days of
the date of this Agreement with respect to items (a), (b) and (c) below, and
within 15 Business Days of the date of this Agreement with respect to items (d)
and (e) below, deliver to the Purchasers and the Administrative Agent:
(a) Acknowledgment copies of the financing statements referred to in
Section 3.01(b).
(b) Acknowledgment copies of the UCC termination statements, if any,
referred to in Section 3.01(c).
(c) Completed requests for information, dated a date subsequent to the
date of the filings made pursuant to subsection (a), listing the financing
statements referred to in subsection (a) above and all other effective financing
statements filed in the jurisdictions referred to in subsection (a) above that
name the Seller or a Seller Subsidiary as debtor, together with copies of such
other financing statements (none of which shall cover any Receivables, Contracts
or Related Security) or any interest therein.
(d) Executed Lock-Box Agreements.
(e) Undated executed Depositary Notices to each Depositary Bank for
each Depositary Account and undated executed Concentration Notices to each
Concentration Bank for each Concentration Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to each Purchaser and the Administrative Agent on
the date of each Purchase and on the date of each reinvestment as follows:
(a) The Seller and each Seller Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its state of
incorporation, and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified except where the failure to be so
qualified has no reasonable likelihood of having a material adverse effect on
(i) its business or properties, (ii) the ability of the Seller to perform its
obligations hereunder or under any Transfer Agreement or the Secondary Purchase
Agreement, (iii) the ability of such Seller Subsidiary to perform its
obligations under the Transfer Agreement or the Consent and Acknowledgment to
which it is a party, or (iv) the collectibility of the Pool Receivables
generally or any significant portion of the Pool Receivables. As of the date
hereof, the Seller owns directly or indirectly at least such percentage of the
issued and outstanding common stock of each Seller Subsidiary as set forth on
Schedule VI hereto.
(b) The execution, delivery and performance by the Seller of this Agreement,
each Certificate, each Transfer Agreement, each Consent and Acknowledgement, and
each Lock-Box Agreement to which it is a party, and by each Seller Subsidiary of
the Transfer Agreement, each Lock-Box Agreement and the Consent and
Acknowledgement to which it is a party, and all of the other documents to which
it is a party to be delivered hereunder, and the Seller's use of the proceeds of
purchases and reinvestments, are within its corporate powers, have been duly
authorized by all necessary corporate action, do not contravene or violate (i)
its certificate of incorporation or articles of incorporation or by-laws; (ii)
any law, rule or regulation applicable to it except for such laws, rules or
regulations (A) the contravention of which has no reasonable likelihood of
having a material adverse effect on (1) its business or properties, (m) the
ability of the Seller to perform its obligations hereunder or under any Transfer
Agreement or the Secondary Purchase Agreement, or (n) the ability of the Seller
Subsidiary to perform its obligations under the Transfer Agreement or the
Consent and Acknowledgment to which it is a party, or (o) the collectibility of
the Pool Receivables generally or any significant portion of the Pool
Receivables, or (B) as may restrict or limit the assignment of Receivables of
Government Obligors or Foreign Obligors; (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound except for such restrictions, (A) the contravention of
which has no reasonable likelihood of having a material adverse effect on (1)
its business or properties, (m) the ability of the Seller to perform its
obligations hereunder or under any Transfer Agreement or the Secondary Purchase
Agreement, (n) the ability of such Seller Subsidiary to perform its obligations
under the Transfer Agreement or the Consent and Acknowledgment to which it is a
party, or (o) the collectibility of the Pool Receivables generally or any
significant portion of the Pool Receivables, or (B) as may restrict or limit the
assignment of Receivables of any Government Obligor or Foreign Obligor; or (iv)
any order, writ, judgment, award, injunction or decree binding on or affecting
it or its property, except such order, writ, judgment, award, injunction or
decree the contravention of which has no reasonable likelihood of having a
material adverse effect on (1) its business or properties, (m) the ability of
the Seller to perform its obligations hereunder or under any Transfer Agreement
or the Secondary Purchase Agreement, (n) the ability of such Seller Subsidiary
to perform its obligations under the Transfer Agreement or the Consent and
Acknowledgment to which it is a party, or (o) the collectibility of the Pool
Receivables generally or any significant portion of the Pool Receivables, and
will not result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of its properties,
except as contemplated by this Agreement, the Secondary Purchase Agreement and
the Transfer Agreements; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law. This Agreement, each
Certificate, each Transfer Agreement, each Consent and Acknowledgement and each
Lock-Box Agreement to which the Seller is a party have been duly executed and
delivered by the Seller, and each Transfer Agreement, each Certificate, each
Lock-Box Agreement and each Consent and Acknowledgement to which a Seller
Subsidiary is a party has been duly executed and delivered by such Seller
Subsidiary.
(c) Other than the filings of the financing statements under the UCC
of the jurisdictions that the Purchasers or the Administrative Agent deem
necessary, all of which, on or prior to the date of the initial Purchase
hereunder, will have been duly made and be in full force and effect, and other
than such filings, registrations and notices as may be required under applicable
law with respect to the assignment of Receivables of Government Obligors and
Foreign Obligors, no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Seller of this Agreement, the
Certificates, the Transfer Agreements or any other document to be delivered
hereunder to which the Seller is a party or by any Seller Subsidiary of the
Transfer Agreement or Consent and Acknowledgment to which it is a party.
(d) Each of this Agreement, each Certificate, each Transfer Agreement,
and each Lock-Box Agreement to which the Seller is a party constitutes the
legal, valid and binding obligation of the Seller enforceable against the Seller
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally. Each Transfer Agreement, each
Consent and Acknowledgement and each Lock-Box Agreement to which a Seller
Subsidiary is a party constitutes the legal, valid and binding obligation of
such Seller Subsidiary, enforceable against such Seller Subsidiary in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally.
(e) The unaudited consolidated financial statements of the Seller and
its subsidiaries as of March 31, 1990, copies of which have been furnished to
the Purchasers, fairly present the financial condition of the Seller and its
subsidiaries as of such date and the consolidated results of their operations
for the period ended on such date, and have been prepared in accordance with
generally accepted accounting principles consistently applied in all material
respects by the Seller and its subsidiaries throughout the period involved,
except as set forth in the notes thereto and there has been no material adverse
change in such financial position or operations as they existed as of such date.
(f) There is no pending or, to the knowledge of the Seller after due
inquiry, threatened action or proceeding against the Seller or any Seller
Subsidiary or any of their respective subsidiaries or properties before any
court, governmental agency or arbitrator that has a reasonable likelihood of
having a material adverse effect on (i) the financial condition or operations of
the Seller and its subsidiaries considered on a consolidated basis as each
existed as of March 31, 1990 or (ii) the ability of the Seller to perform its
obligations under this Agreement, the Certificates, or any Transfer Agreement or
(iii) the ability of a Seller Subsidiary to perform its obligations under the
Transfer Agreement or the Consent and Acknowledgment to which such Seller
Subsidiary is a party, or (iv) the legality, validity or enforceability of this
Agreement, any Transfer Agreement or any Lock-Box Agreement relating to a Lock-
Box Account into which a significant portion of Collections are deposited, or
(v) any Purchaser's interest in the Pool Receivables generally or in any
significant portion of the Pool Receivables, the Related Security or the
Collections with respect thereto, or (vi) the collectibility of the Pool
Receivables generally or of any significant portion of the Pool Receivables.
(g) No proceeds of any purchase or reinvestment will be used (i) for a
purpose which violates, or would be incohsistent with regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire any security (other than the capital stock of Great
Northern Nekoosa Corporation) in any transaction which is subject to Section 13
and 14 of the Securities Exchange Act of 1934, as amended.
(h) Immediately prior to a Purchase hereunder, the Seller shall be the
legal and beneficial owner of the Pool Receivables and Related Security with
respect thereto (except with respect to Related Security and with respect to
Receivables of Government Obligors and Foreign Obligors transferred by the
Seller Subsidiaries, the transfer of which may be limited by applicable law),
free and clear of any Adverse Claim, except as created by this Agreement and the
Secondary Purchase Agreement and the documents entered into in connection
herewith and therewith. This Agreement is effective to, and shall, upon each
purchase or reinvestment, transfer to each Purchaser (and each Purchaser shall
acquire from the Seller) a valid and perfected first priority undivided
percentage ownership interest to the extent of such Purchaser's Receivable
Interest in each Pool Receivable existing or hereafter arising and in the
Related Security and Collections with respect thereto, except as may be limited
by applicable law with respect to the Related Security and with respect to
Receivables of Government Obligors and Foreign Obligors, free and clear of any
Adverse Claim, except as created by this Agreement and the Secondary Purchase
Agreement and the documents entered into in connection herewith and therewith.
No effective financing statement or other instrument similar in effect covering
any Contract or any Pool Receivable or the Related Security or Collections with
respect thereto is on file in any recording office, except those filed in favor
of the Administrative Agent pursuant to this Agreement and the Secondary
Purchase Agreement and, with respect to the Receivables created by a Seller
Subsidiary, those filed in favor of the Seller pursuant to a Transfer Agreement.
(i) Prior to a transfer pursuant to a Transfer Agreement, each Seller
Subsidiary shall be the legal and beneficial owner of the Receivables and the
Related Security sold to the Seller pursuant to such Transfer Agreement free and
clear of any Adverse Claim. Each Transfer Agreement is effective to, and shall,
upon the creation of a Receivable owing to the Seller Subsidiary party to such
Transfer Agreement, transfer to the Seller (and the Seller shall acquire) from
such Seller Subsidiary all right, title and interest of such Seller Subsidiary
in each such Receivable and in the Related Security and Collections with respect
thereto, except as may be limited by applicable law with respect to the Related
Security and with respect to Receivables of Government Obligors and Foreign
Obligors, free and clear of any Adverse Claim, except as contemplated by this
Agreement and the Secondary Purchase Agreement.
(j) Each Investor Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report (other than projections prepared in good faith)
furnished or to be furnished at any time by a Responsible Officer of the Seller
or a Seller Subsidiary to the Administrative Agent or the Purchasers in
connection with this Agreement was, is, or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the Administrative
Agent or the Purchasers, as the case may be, at such time) as of the date so
furnished, and no such document contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
(k) The principal places of business and chief executive offices of
the Seller and the Seller Subsidiaries, are, as of the date hereof, located at
the addresses referred to in Section 12.02 and on Schedule V hereof,
respectively.
(1) The names and addresses of all Lock-Box Banks, Depositary Banks
and Concentration Banks, together with the account numbers of the Lock-Box
Accounts, the Depositary Accounts and the Concentration Accounts of the Seller
and the Seller Subsidiaries at such Lock-Box Banks, such Depositary Banks and
such Concentration Banks, are, as of the date hereof, specified in Schedule I
hereto, Schedule II hereto and Schedule III hereto, respectively (or at such
other Lock-Box Banks, Depositary Banks or Concentration Banks and/or with such
other Lock-Box Accounts, Depositary Accounts or Concentration Accounts as have
been notified to the Administrative Agent and the Purchasers in writing in
accordance herewith).
(m) Each purchase of a Receivable Interest and each reinvestment of
Collections in Pool Receivables hereuhder, and each Purchase by the Seller from
a Seller Subsidiary of a Receivable under the Transfer Agreement to which such
Seller Subsidiary is a party, will constitute (i) a "current transaction" within
the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended, and
(ii) a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(n) Each Pool Receivable (other than those Receivables which (1) were
Eligible Receivables as of April 30, 1990 but were not Eligible Receivables as
of the date of the initial Purchase hereunder, and (2) first became covered by a
Receivable Interest on the initial Purchase hereunder) at the time it first
becomes covered by a Receivable Interest, shall be an Eligible Receivable. Each
Pool Receivable used in computing the Net Receivables Pool Balance shall, at the
time of such computation, be an Eligible Receivable. No event has occurred which
materially and adversely affects the collectibility of the Pool Receivables
generally or the collectibility of a significant portion of the Pool
Receivables.
(o) No event has occurred that has a reasonable likelihood of having a
material adverse affect on the operations of the Seller and its subsidiaries
considered on a consolidated basis as it existed as of March 31, 1990 or the
ability of the Seller, any Seller Subsidiary or the Collection Agent (if the
Seller or an Affiliate thereof) to perform its duty to collect the Pool
Receivables or the ability of the Seller to perform its obligations under this
Agreement or the Transfer Agreements or the ability of a Seller Subsidiary to
perform its obligations under the Transfer Agreement to which such Seller
Subsidiary is a party.
(p) With respect to each Receivable sold by a Seller Subsidiary to the
Seller and included in a Receivables Pool, the Seller shall have paid or
promised to pay to such Seller Subsidiary at the time of such sale an amount
equal to the Outstanding Balance of such Receivable.
(q) The Seller and each Seller Subsidiary will account for each sale
of undivided percentage ownership interests in Pool Receivables hereunder and
each sale of Receivables under the applicable Transfer Agreement, respectively,
in their respective financial statements as sales consistent with generally
accepted accounting principles.
(r) Neither the Seller nor any Seller Subsidiary has extended or
modified the terms of any Pool Receivable or the invoice under which any such
Pool Receivable arose except in accordance with the Credit and Collection
Policy.
(s) The obligations of the Seller hereunder to make payment in respect
of fees payable to the Purchasers, deemed Collections under Section 2.04(d) and
indemnities rank at least equally with indebtedness of the Seller which is not
contractually subordinated.
(t) Neither the Seller nor any Seller Subsidiary has granted any
Person dominion and control of any Lock-Box Account, Depositary Account or
Concentration Account, or the right to take dominion and control of any Lock-Box
Account, Depositary Account or Concentration Account at a future time or upon
the occurrence of a future event.
(u) It is the intention of each Transfer Agreement that the conveyance
by the applicable Seller Subsidiary to the Seller of Receivables shall
constitute a purchase and sale and not a secured loan. It is the intention of
this Agreement that the Purchases and reinvestments shall convey to the
Purchasers, to the extent of their Receivable Interests, undivided ownership
interests in the Pool Receivables and that each such transaction shall
constitute a purchase and sale and not a secured loan. If, notwithstanding such
intention, the conveyance of Receivables from any Seller Subsidiary to the
Seller pursuant to a Transfer Agreement shall ever be characterized as a secured
loan and not a sale, then the Seller shall be deemed to have transferred to the
Purchasers, in addition to the Receivable Interests, all of the Seller's right,
title and interest in, to and under the obligations of such Seller Subsidiary
deemed to be secured by a pledge of such Receivables, and, in such event, this
Agreement and the filings of the UCC statements referred to in Section 3.01(b)
shall be deemed to have granted, subject to the exceptions heretofore in this
Section 4.01 noted, to the Purchasers a duly perfected security interest prior
to all other liens on and security interests in all of the Seller's right,
title, and interest in, to and under the obligations of such Seller Subsidiary
to the Seller deemed to be secured by said pledge, and the Administrative Agent
shall be deemed to be an independent .custodian for purposes of perfection of
the security interest granted to the Seller. If the conveyance of the Receivable
Interests from the Seller to the Purchasers shall ever be characterized as a
secured loan and not a sale, it is the intention of this Agreement that this
Agreement shall constitute a security agreement under applicable law, and that
the Seller shall be deemed to have granted to the Purchasers a duly perfected
security interest in all of the Seller's right, title and interest in, to and
under the Pool Receivables, all payments on or with respect to such Pool
Receivables, all other rights relating to and payments made in respect of the
Pool Receivables, and all proceeds of any thereof prior to all other liens on
and security interests therein.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Seller. Until the later of the Facility
Termination Date or the date on which no Capital of any Receivable Interest
shall be outstanding:
(a) Compliance with Laws, Etc. The Seller shall, and shall cause each
Seller Subsidiary to, comply in all material respects with all applicable laws,
rules, regulations and orders and preserve and maintain its corporate existence,
rights, franchises, qualifications, and privileges except to the extent that the
failure so to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises, qualifications, and
privileges has no reasonable likelihood of having a material adverse effect on
(i) its business or properties, (ii) the ability of the Seller to perform its
obligations under this Agreement, each Transfer Agreement or the Secondary
Purchase Agreement, (iii) the ability of any Seller Subsidiary to perform its
obligations under the Transfer Agreement and Consent and Acknowledgment to which
it is a party, (iv) the collectibility of the Pool Receivables generally or of
any significant portion of the Pool Receivables or (v) the financial condition
of the Seller and its subsidiaries considered on a consolidated basis as it
existed as of March 31, 1990.
(b) Offices, Records and Books of Accounts. The Seller shall, and
shall cause each Seller Subsidiary to, keep its principal place of business and
chief executive office at the address of the Seller referred to in Section 12.02
and at the address of such Seller Subsidiary listed on Schedule V hereof,
respectively, or, upon 30 days' prior written notice to the Administrative Agent
and the Purchasers, at any other locations in a jurisdiction where all action
required by Section 6.05(a) shall have been taken; provided, however, that the
Seller shall be permitted to relocate the chief executive offices of Great
Northern Nekoosa Corporation, Nekoosa Papers Inc. and Nekoosa Packaging
Corporation and the offices where the records concerning the Pool Receivables of
each of such Seller Subsidiaries are kept to Atlanta, Georgia upon 5 days prior
notice to the Administration Agent and the Purchasers. The Seller shall and
shall cause each Seller Subsidiary to maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Pool Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Pool Receivables (including, without limitation, records
adequate to permit the daily identification of each Pool Receivable and all
Collections of and adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall and shall cause each Seller Subsidiary to,
at their own respective expense, timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by
them under the Contracts related to the Pool Receivables, and timely and fully
comply in all material respects with the Credit and Collection Policy in regard
to each Pool Receivable and the related Contract.
(d) Sales, Liens, Etc. The Seller shall not, and shall not permit any
Seller Subsidiary to, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim (other than
as contemplated hereunder) upon or with respect to, any Pool Receivable, Related
Security (except returned or reclaimed merchandise), related Contract or
Collections, or upon or with respect to any account to which any Collections of
any Pool Receivable are sent, or assign any right to receive income in respect
thereof, except as contemplated hereunder and under the Secondary Purchase
Agreement and the Transfer Agreements.
(e) Extension or Amendment of Receivables. Except as provided in
Section 6.02(c), the Seller shall not, and shall not permit any Seller
Subsidiary to, extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto other than in accordance with the Credit and Collection Policy,
except with the prior written consent of the Required Purchasers.
(f) Change in Business or Credit and Collection Policy. The Seller
shall not, and shall not permit any Seller Subsidiary to, make any change in the
character of its business or in the Credit and Collection Policy that could, in
either case, have a material adverse effect on (i) its business or properties,
(ii) the ability of the Seller to perform its obligations under this Agreement,
each Transfer Agreement or the Secondary Purchase Agreement, (iii) the ability
of a Seller Subsidiary to perform its obligations under the Transfer Agreement
or the Consent and Acknowledgment to which it is a party or (iv) the
collectibility of the Pool Receivables generally or of any significant portion
of the Pool Receivables.
(g) Audits. The Seller shall, and shall cause each Seller Subsidiary
to, from time to time during regular business hours as requested by a Purchaser
upon reasonable notice, permit such Purchaser, or its agents or representatives,
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of the Seller or such Seller Subsidiary relating
to Pool Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of the Seller
and such Seller Subsidiary for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to the Seller's and such
Seller Subsidiary's financial condition or the Pool Receivables and the Related
Security or the Seller's performance hereunder or the Seller's or such Seller
Subsidiary's performance under the Contracts with any of the officers or
employees of the Seller or such Seller Subsidiary having knowledge of such
matters.
(h) Chanqe in Payment Instructions to Obliqors. The Seller shall not,
and shall not permit any Seller Subsidiary to, add or terminate any bank as a
Lock-Box Bank or a Depositary Bank or as a Concentration Bank from those listed
in Schedule I hereto or Schedule II hereto or Schedule III hereto, respectively,
or make any change in its instructions to 0bligors regarding payments to be made
to the Seller or a Seller Subsidiary or payments to be made to any Lock-Box Bank
or Depositary Bank, unless the Administrative Agent and the Purchasers shall
have received, at least 10 days before the proposed effective date therefor,
written notice of such addition, termination or change and, with respect to the
addition of the Lock-Box Bank, an executed Lock-Box Agreement from, and undated
executed copies of Lock-Box Notices to, such new Lock-Box Bank, and with respect
to a Depositary Bank, undated executed copies of Depositary Notices and, with
respect to a Concentration Bank, undated executed copies of Concentration
Notices; provided, however, that the Seller or a Seller Subsidiary shall be
permitted to make changes in instructions to Obligors regarding payments if such
new instructions require such Obligor to make payments to another existing Lock-
Box Account or Depositary Account.
(i) Deposits to Depositary Accounts and Concentration Accounts. The
Seller shall, and shall cause each Seller Subsidiary to, deposit, or cause to be
deposited, all Collections of Pool Receivables received by the Seller or a
Seller Subsidiary into Lock-Box Accounts, Depositary Accounts or Concentration
Accounts.
(j) Reportinq Requirements. The Seller will provide to the Purchasers
the following:
(i) as soon as available and in any event within 45 days after the end of
the first three quarters of each fiscal year of the Seller, balance sheets of
the Seller and its subsidiaries as of the end of such quarter and statements of
income and cash flows of the Seller and its subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, certified by the chief financial officer of the Seller;
(ii) as soon as available and in any event within 90 days after the end of
each fiscal year of the Seller, a copy of the annual report for such year for
the Seller and its subsidiaries, containing financial statements for such year
certified in a manner acceptable to the Purchasers by Arthur Andersen & Co. or
other independent public. accountants of recognized national standing acceptable
to the Purchasers;
(iii) as soon as possible and in any event within five days after the
occurrence of each Event of Termination or Potential Termination Event of which
the Treasurer of the Seller has knowledge, a statement of the Treasurer of the
Seller or his designee setting forth details of such Event of Termination or
Potential Termination Event and the action that the Seller has taken and
proposes to take with respect thereto, it being understood that the Seller shall
implement such reasonable procedures as shall be designed to ensure that the
Treasurer shall promptly become aware of any Event of Termination or Potential
Termination Event;
(iv) promptly after the sending or filing thereof, copies of all reports
that the Seller sends to any of its security holders and copies of all reports
and registration statements that the Seller or any subsidiary files with the
Securities and Exchange Commission or any national securities exchange;
(v) promptly after the filing or receipt thereof, copies of all material
reports and notices which the Seller or any Affiliate files with or receives
from the Internal Revenue Service under ERISA or files with or receives from the
Pension Benefit Guaranty Corporation or the United States Department of Labor;
(vi) at least 45 Business Days prior to any change in the Seller's or a
Seller Subsidiary's name, a notice setting forth the proposed name and the
effective date thereof;
(vii) on or prior to each Investor Report Date, a certificate
signed by the Seller's Treasurer or his designee showing the
calculations necessary to determine compliance with this Agreement and
stating that, unless a statement required by clause (iii) above has
been furnished, to the best of his knowledge, after due inquiry, no
Event of Termination or Potential Termination Event has occurred; and
(viii) such other information in respect of the Receivables or the
condition or operations, financial or otherwise, of the Seller or any
of its subsidiaries as the Purchasers may from time to time reasonably
request.
(k) Ratinqs. The Seller shall maintain a long-term senior unsecured
debt rating with either S&P or Moody's.
(1) Purchase of Receivables from a Seller Subsidiary. With respect to
any Receivable sold by a Seller Subsidiary to the Seller and included in the
Receivables Pool, the Seller has paid or will have promised to pay such Seller
Subsidiary an amount equal to the Outstanding Balance of such Receivable.
(m) Collections received by a Seller Subsidiary. Upon notification
from the Administrative Agent, acting at the instruction of the Required
Purchasers, the Seller will cause each Seller Subsidiary to hold in trust and
promptly turn over to the Collection Agent any Collections received by such
Seller Subsidiary on the Seller's behalf.
(n) Ownership of Seller Subsidiaries. The Seller will continue to
directly or indirectly own at least the percentage of the issued and outstanding
shares of the capital stock of each of the Seller Subsidiaries as indicated in
Schedule VI hereof; provided, that upon thirty days' prior written notice to the
Purchasers, the Seller may sell or otherwise convey or dispose of the stock of
any Seller Subsidiary and upon the effective date of such sale, such subsidiary
shall no longer be a Seller Subsidiary under this Agreement; provided, further,
that if the Required Purchasers determine, in their sole discretion, that the
Events of Termination in Section 7.01(i) are no longer reasonable or protective
as a result of such sale, the Required Purchasers may modify the provisions of
such Section 7.01(i) with the consent of the Seller (which consent shall not be
unreasonably withheld or delayed).
(o) Change in Transfer Agreements. The Seller shall not, and shall not
permit any Seller Subsidiary to, amend, modify or waive any term or condition of
any Transfer Agreement.
(p) Coverage Ratio. The Seller shall not permit the Coverage Ratio to
be less than 120% at any time or the weighted average of the Receivable
Interests of any Purchaser and the "Receivable Interests" of the Related
Secondary Purchaser under the Secondary Purchase Agreement to be more than an
amount equal to the product of 98% and the Pro Rata Share of such Purchaser.
(q) Seasonality Coverage. If the Coverage Ratio is less than 130% as
indicated on the Investor Report delivered on the Investor Report Date
immediately preceding the first day of November or December of any year, the
Seller shall on the first Business Day of such month either (i) pay to each
Purchaser or deposit into a segregated account for the benefit of such Purchaser
funds equal to the product of the Seasonality Amount for such month and a
fraction the numerator of which is the Aggregate Capital of such Purchaser and
the denominator of which is the Combined Capital or (ii) provide to the
Administrative Agent for the benefit of the Purchasers a letter of credit from a
bank acceptable to the Required Purchasers in an amount equal to the Seasonality
Amount; provided, that the Seller may, in lieu of the alternative set forth in
such clause (i) of this subsection (q), pay to such Purchaser or deposit into a
segregated account on the first Business Day of such month and on the next three
(3) weekly anniversaries thereof 25% of the amount specified in clause (i)
above; provided further, that the alternative set forth in clause (ii) above
must be used for any month where the long-term senior unsecured debt rating of
the Seller on the first day of such month is less than BB in the case of S&P or
Bal in the case of Moody's.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Desiqnation of Collection Aqent. The administration and
collection of the Pool Receivables shall be conducted by such Person (the
"Collection Agent") so designated from time to time in accordance with this
Section 6.01. The Seller is hereby designated as, and hereby agrees to perform
the duties and obligations of, the ColleCtion Agent pursuant to the terms of
this Agreement. The Purchasers may at any time designate as Collection Agent any
Person (including a Purchaser or a Secondary Purchaser) to succeed the Seller or
any successor Collection Agent, if such Person shall consent and agree to the
terms hereof. Unless the Required Purchasers determine in their sole discretion
that it would be impractical or inadvisable to do so, the Purchasers shall give
the Seller at least five Business Days' notice of any such designation. The
Collection Agent may, with the prior consent of the Purchasers, subcontract with
any other Person for the administration and collection of all or a significant
portion of the Pool Receivables; provided, that the Collection Agent may, so
long as it is the Seller, subcontract with a Seller Subsidiary for the
administration and collection of the Pool Receivables without the consent of the
Purchasers; provided, further, that the Seller may, without the consent of the
Purchasers, subcontract with any other Person for the administration and
collection of Pool Receivables as authorized by the Credit and Collection
Policy. Any such subcontract shall not affect the Collection Agent's liability
for performance of its duties and obligations pursuant to the terms hereof.
SECTION 6.02. Duties of Collection Aqent. (a) The Collection Agent shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Pool Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. Each of the Seller, each
Purchaser and the Administrative Agent hereby appoints the Collection Agent,
from time to time designated pursuant to Section 6.01 hereof, as agent for
itself and for the owners of Receivable Interests to enforce their respective
rights and interests in the Pool Receivables, the Related Security and the
related Contracts.
(b) The Collection Agent shall administer the Collections in
accordance with the procedures described herein and in Section 2.04. The
Collection Agent shall set aside and hold in trust for the account of the Seller
and each Purchaser, their respective shares of the Collections of Pool
Receivables in accordance with Section 2.04 but shall not be required, except
either upon the request of the Administrative Agent acting at the direction of
the Required Purchasers or upon the occurrence and during the continuance of an
Event of Termination or a Potential Termination Event, to segregate the funds
constituting each Purchaser's share of such Collections from the general funds
of the Collection Agent or the Seller prior to the remittance thereof in
accordance with Section 2.04. If the Collection Agent shall be required to
segregate Collections pursuant to the proceeding sentence, the Collection Agent
shall segregate and deposit with a bank (which may be Canadian Imperial Bank of
Commerce, Citibank, N.A., The First National Bank of Chicago or Union Bank of
Switzerland) designated by each Purchaser such allocable share of Collections of
Pool Receivables set aside for such Purchaser on the first Business Day
following receipt by the Collection Agent of such Collections.
(c) If no Event of Termination or Potential Termination Event shall
have occurred, the Seller, while it iS the Collection Agent, may, in accordance
with the Credit and Collection Policy, extend the maturity or adjust the
Outstanding Balance of any Receivable as the Seller deems appropriate to
maximize Collections in respect thereof.
(d) The Collection Agent shall hold in trust for the Seller and the
Purchasers, in accordance with their respective interests, all Records that
evidence or relate to Pool Receivables and shall, as soon as practicable upon
demand of the Administrative Agent acting at the direction of the Required
Purchasers, deliver or make available to the Administrative Agent all Records in
its possession which evidence or relate to Pool Receivables.
(e) The Collection Agent, shall as soon as practicable following
receipt thereof, turn over to the Seller (i) that portion of Collections of Pool
Receivables representing the Seller's undivided fractional ownership interest
therein, less, in the event the Seller is not the Collection Agent, all
reasonable out-of-pocket costs and expenses of the Collection Agent of
servicing, administering and collecting the Pool Receivables to the extent not
covered by the Collection Agent Fee received by it, and (ii) any cash
collections or other cash proceeds received with respect to Receivables not
constituting Pool Receivables.
(f) The Collection Agent shall, from time to time at the request of a
Purchaser, furnish to such Purchaser (promptly after any such request) a
calculation of the amounts set aside for such Purchaser pursuant to Section 2.04
hereof.
(g) On or prior to each Investor Report Date, the Collection Agent
shall prepare and forward to each Purchaser and the Administrative Agent (i) an
Investor Report relating to each Receivable Interest outstanding on the
immediately preceding Settlement Date, and (ii) if requested by a Purchaser, a
listing by Obligor of all Pool Receivables outstanding on such Settlement Date,
together. with an analysis of the aging of such Pool Receivables by Obligor and
such additional information as may be reasonably requested by such Purchaser.
Prior to the occurrence of an Event of Termination or a Potential Termination
Event, the Collection Agent will use its best efforts to provide the Purchasers
and the Administrative Agent with the information in clauses (i) and (ii) above
on a more frequent basis if reasonably requested by the Required Purchasers.
Following an Event of Termination or a Potential Termination Event, the
Collection Agent will provide the Purchasers and the Administrative Agent with
the information in clauses (i) and
(ii) above on a more frequent basis if required by the Required Purchasers.
(h) The Collection Agent will, to the extent permitted by applicable
law and with respect to any amount not paid by the Collection Agent when
required to be paid hereunder, pay on demand interest to each Purchaser at a
rate per annum equal to 2% above the Base Rate, provided, however, that such
interest rate will not at any time exceed the maximum rate permitted by
applicable law.
(i) The Collection Agent's authorization under this Agreement will
terminate after the Facility Termination Date, upon payment in full of 'all
amounts payable to the Purchasers and the Collection Agent under this Agreement.
SECTION 6.03. Rights of the Administrative Aqent. (a) Upon five days
notice to the Seller, unless the Required Purchasers determine in their sole
discretion that it would be impracticable or inadvisable to give such notice,
the Administrative Agent at the direction of the Required Purchasers is
authorized at any time to date and to deliver to the Lock-Box Banks, the Lock-
Box Notices, to the Depositary Banks, the Depositary Notices and to the
Concentration Banks, the Concentration Notices delivered hereunder. The Seller
hereby transfers to the Administrative Agent, effective when the Administrative
Agent delivers such Lock-Box Notices, such Depositary Notices or such
Concentration Notices, as the case may be, the exclusive ownership and control
of such Lock-Box Accounts, such Depositary Accounts or such Concentration
Accounts. The Seller shall, and shall cause each Seller Subsidiary to, take any
actions reasonably requested by the Administrative Agent to effect such
transfer. In case any authorized signatory of the Seller and any Seller
Subsidiary whose signature appears on a Lock-Box Notice, a Depositary Notice or
a Concentration Notice shall cease to have such authority before the delivery of
such Lock-Box Notice, such Depositary Notice or a Concentration Notice, such
signature shall nevertheless be valid as if such authority had remained in
force. The Administrative Agent at the direction of the Required Purchasers may
notify the Obligors of Pool Receivables, at any time and at the Seller's
expense, of the ownership of Receivable Interests under this Agreement and may
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Administrative Agent or its designee. In
furtherance of the foregoing, the Administrative Agent shall, upon the direction
of the Required Purchasers, be entitled to take all such actions at it deems
necessary or advisable to exercise dominion and control over the collection and
servicing of the Pool Receivables including such action as shall be necessary or
desirable to cause all cash, checks and other instruments constituting
Collections of Pool Receivables to come into the possession of the
Administrative Agent rather than the Seller. Unless the Required Purchasers
determine in their sole discretion that it would be impractical or inadvisable
to do so, the Purchasers must give the Seller five days prior notice of any such
action.
(b) At any time following the designation of a Collection Agent other
than the Seller pursuant to Section 6.01:
(i) The Administrative Agent may, and at the direction of the Required
Purchasers shall, direct the Obligors of Pool Receivables that all payments
thereunder be made directly to the Administrative Agent or its designee.
(ii) The Seller shall, and shall cause each Seller Subsidiary to, at the
Administrative Agent's request and at the expense of the Seller and the Seller
Subsidiaries, notify each Obligor of Pool Receivables of the ownership of
Receivable Interests under this Agreement and direct that payments be made
directly to the Administrative Agent or a designee of the Administrative Agent
approved by the Required Purchasers.
(iii) The Seller shall, and shall cause each Seller Subsidiary to, at the
Administrative Agent's request (which shall be at the direction of the Required
Purchasers) and at the expense of the Seller and the Seller Subsidiaries, (A)
assemble all of the Records that evidence or relate to the Pool Receivables, and
the related Contracts and Related Security, or that are otherwise necessary or
desirable to colleot the Pool Receivables, and shall make the same available to
the Administrative Agent or its designee, at a place selected by the
Administrative Agent, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Pool Receivables in
a manner acceptable to the Administrative Agent and the Required Purchasers and,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrative
Agent or its designee.
(iv) The Seller and each Seller Subsidiary hereby authorizes the
Administrative Agent to take any and all steps in the Seller's or such Seller
Subsidiary's name and on behalf of the Seller or such Seller Subsidiary that are
necessary or desirable, in the determinatio~ of the Administrative Agent and the
Required Purchasers, to collect amounts due under the Pool Receivables,
including, without limitation, endorsing the Seller's or such Seller
Subsidiary's name on checks and other instruments representing Collections of
Pool Receivables and enforcing the Pool Receivables and the Related Security and
related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding:
(a) The Seller shall, and shall cause each Seller Subsidiary to,
perform its obligations under the Contracts related to the Pool Receivables to
the same extent as if Receivable Interests and Receivables had not been sold and
the exercise by the Administrative Agent and by the Purchasers of their rights
hereunder shall not release the ColleCtion Agent, the Seller or any Seller
Subsidiary from any of their duties or obligations with respect to any Pool
Receivables or under the related Contracts; and
(b) Neither the Administrative Agent nor the Purchasers shall have any
obligation or liability with respect to any Pool Receivables or related
Contracts, nor shall any of them be obligated to perform the obligations of the
Seller or any Seller Subsidiary thereunder.
SECTION 6.05. Further Actions Evidencing Purchases. (a) The Seller shall,
and shall cause each Seller Subsidiary to, from time to time, at their expense,
promptly execute and deliver all further instruments and documents, and take all
further actions, that may be necessary or desirable, or that the Administrative
Agent or any Purchaser may reasonably request, to perfect, protect or more fully
evidence the Receivable Interests purchased hereunder, or to enable any
Purchaser or the Administrative Agent to exercise and enforce their respective
rights and remedies hereunder or under the Certificates. Without limiting the
foregoing, the Seller and each Seller Subsidiary will upon the request of any
Purchaser or the Administrative Agent (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments and
documents, that may be necessary or desirable, or that any Purchaser or the
Administrative Agent may reasonably request, to perfect, protect or evidence
such Receivable Interests; (ii) mark conspicuously each invoice evidencing each
Pool Receivable and the related Contract with a legend, acceptable to the
Purchasers, evidencing that Receivable Interests therein have been sold; and
(iii) mark its master data processing records evidencing such Pool Receivables
and related Contracts with a legend, acceptable to the Purchasers, evidencing
that Receivable Interests therein have been sold; provided that the actions
specified in clauses (ii) and (iii) may be directed by the Required Purchasers
or the Administrative Agent only upon the occurrence of an Event of Termination
or a Potential Termination Event.
(b) The Seller authorizes the Administrative Agent to file financing
or continuation statements, and amendments thereto, relating to the Pool
Receivables and the Related Security, the related Contracts and the Collections
with respect thereto without the signature of the Seller where permitted by law.
A photocopy or other reproduction of this Agreement shall be sufficient as a
financing statement where permitted by law.
(c) If the Collection Agent fails to perform any of its obligations
hereunder, any Purchaser or the Administrative Agent may (but shall not be
required to) perform, or cause performance of, such obligation; and such
Purchaser's or the Administrative Agent's costs and expenses incurred in
connection therewith shall be payable by the Seller (if the Collection Agent
that fails to so perform is the Seller or an Affiliate thereof) as provided in
Section 8.01 or Section 9.04, as applicable.
SECTION 6.06. Collection Agent Fee. The Collection Agent (if not the
Seller or an Affiliate thereof) shall be paid a collection fee (the "Collection
Agent Fee") of 1/4 of 1% per annum on the average daily amount of the Combined
Capital payable monthly in arrears on each Settlement Date. Upon three Business
Days' notice to the Administrative Agent and the Purchasers, the Collection
Agent (if not the Seller or an Affiliate thereof) may elect to have the
Collection Agent Fee computed on the basis of a different percentage per annum,
but in no event in excess of 110% of the reasonable costs and expenses of the
Collection Agent in administering and collecting the Pool Receivables. The
Collection Agent Fee shall be payable only from Collections pursuant to, and
subject to the priority of payment set forth in, Section 2.04.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the following events
("Events of Termination") shall occur and be continuing:
(a) The Seller or the Collection Agent (if the Seller or an Affiliate
therof) shall fail (i) to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clause (ii) of this subsection (a) or in
Sections 5.01(c), 5.01(d), 5.01(j) or 5.01(p)) and such failure shall remain
unremedied for three Business Days or (ii) to make any payment or deposit
required hereunder on the first Business Day after the due date thereof; or
(b) The Seller shall fail to transfer to the Purchasers when.
requested any rights pursuant hereto which the Seller then has as Collection
Agent; or
(c) Any representation or warranty made or deemed made by the Seller
(or any of its Responsible Officers) in this Agreement or by any Seller
Subsidiary (or any of its Responsible Officers) in the Transfer Agreement or the
Consent and Acknowledgement to which it is a party or in any information or
report delivered by a Responsible Officer of the Seller or any Seller Subsidiary
or the Collection Agent (if the Seller or an Affiliate thereof) pursuant hereto
shall prove to have been incorrect or untrue in any material respect when made
or deemed made or delivered; or
(d) The Seller shall fail to perform or observe any term, covenant or
agreement contained in Sections 5.01(c) or 5.01(j) hereof or any term, covenant
or agreement contained in any Transfer Agreement, or a Seller Subsidiary shall
fail to perform or observe any term, covenant or agreement contained in the
Consent and Acknowledgment or the Transfer Agreement to which such Seller
Subsidiary is a party, on its part to be performed or observed and any such
failure shall remain unremedied for 15 days after the earlier of (i) the time
the Seller or such Seller Subsidiary becomes aware or should have become aware
of such failure and (ii) the date written notice thereof shall have been given
to the Seller or such Seller Subsidiary, as the case may be, by any Purchaser or
the Administrative Agent; or
(e) The Seller or any Seller Subsidiary shall fail to pay when due any
amount in respect of any Debt having a principal amount outstanding of at least
$50,000,000 and such failure shall continue after any applicable grace period,
or any other event shall occur or condition shall exist in respect of such Debt
and shall continue after any applicable grace period, the effect of which is to
cause (or permit any holder thereof to cause) such Debt to become due and
payable prior to the stated maturity thereof; or
(f) Any purchase or any reinvestment pursuant hereto shall for any
reason (other than pursuant to the terms hereof) cease to create, or any
Receivable Interest shall for any reason cease to be, a valid and perfected
first priority undivided percentage ownership interest in Receivables to the
extent of any Purchaser's Receivable Interest in each applicable Pool Receivable
and the Related Security and Collections with.respect thereto or this Agreement
shall for any reason cease to evidence the transfer to a Purchaser (or its
assignees or transferees) of legal and equitable right, title and interest to,
and ownership of, an undivided percentage ownership interest in any Pool
Receivable to the extent of such Purchaser's Receivable Interest or the
pertinent Certificate shall for any reason cease to evidence in any Purchaser
legal and equitable title to, and ownership of, an undivided percentage
ownership interest in such Receivable and the Related Security and Collection to
the extent of the Receivable Interest of such Purchaser, except as may be
limited by applicable law with respect to the Related Security and with respect
to Pool Receivables of Government Obligors and Foreign Obligors; or
(g) Any purchase pursuant to any Transfer Agreement shall for any
reason (other than pursuant to the term thereof) cease to create, or an interest
in any Receivable shall cease to be, a valid and perfected first priority
undivided percentage ownership interest in such Receivable and the Related
Security and Collections with respect thereto or the Transfer Agreement shall
for any reason cease to evidence the transfer to the Seller of all legal and
equitable right, title and interest of the relevant Seller Subsidiary to, and
ownership of, an undivided percentage ownership in any Receivable, except as may
be limited by applicable law with respect to the Related Security and with
respect to Receivables of Government Obligors and Foreign Obligors; or
(h) The Seller, any Seller Subsidiary or the Collection Agent (if the
Seller or an Affiliate therof) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Seller, any Seller Subsidiary
or the Collection Agent (if the Seller or an Affiliate therof) seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 45 days, or any
of the actions sought in such proceeding (including an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or the Seller
or any Seller Subsidiary shall take any corporate action to authorize any of the
actions set forth above in this subsection (h); or
(i) As of any Settlement Date, the Current Default Ratio shall exceed
5%, or the Delinquency Ratio shall exceed 10%, or the Loss-to-Liquidation Ratio
shall exceed .35%; or
(j) There shall have occurred any material adverse change in the
financial condition or operations of the Seller and its subsidiaries, taken as a
whole, as they existed as of March 31, 1990; or there shall have occurred any
event which has a reasonable likelihood of having a material adverse effect on
the collectibility of the Pool Receivables generally or any significant portion
of the Pool Receivables or the ability of the Seller, any Seller Subsidiary or
the Collection Agent (if the Seller or an Affiliate thereof) to perform its duty
to collect Pool Receivables generally or otherwise perform its respective
obligations hereunder or under any Transfer Agreements or under any Consent and
Acknowledgment; or
(k) The Internal Revenue Service shall file a notice of lien in an
amount greater than $50 million pursuant to Section 6323 of the Code with regard
to any of the assets of the Seller or any Seller Subsidiary, or the Pension
Benefit Guaranty Corporation shall file a notice of lien in an amount greater
than $50 million pursuant to Section 4068 of ERISA with regard to any of the
assets of the Seller or any Seller Subsidiary, and such liens have not been
suspended or have not been bonded in the full amount thereof and are not being
contested in good faith by the Seller or such Seller Subsidiary; or
(l) The Seller shall fail to maintain long-term senior unsecured debt
ratings of at least B+ and B1 from S&P and Moody's, respectively; or
(m) There shall have occurred a change of control of the Seller or any
Seller Subsidiary other than as expressly permitted by the provisions of Section
5.01(n) hereof; provided, however, that a change of control of a Seller
Subsidiary shall not be an Event of Termination if after such change of control
the Seller indirectly controls such Seller Subsidiary. A "change of control"
shall mean the failure of the Seller to own directly or indirectly at least 50%
of either the then outstanding common shares of the Seller or any Seller.
Subsidiary or the combined voting rights of the then outstanding voting
securities of the Seller or any Seller Subsidiary; or
(n) If the Seller's long-term senior unsecured debt rating is below BB
by S&P or Bal by Moody's or the Seller has no such ratings, and the Seller has
not, at its own expense, within thirty days of the Seller's long-term senior
unsecured debt rating being so downgraded or withdrawn, restructured the
transaction contemplated hereby in such a manner as shall be fully satisfactory
to the Purchasers and the Administrative Agent, including the creation of a
bankruptcy remote subsidiary, or similar entity, which such subsidiary or entity
shall not be subject to consolidation with the Seller in the event of a
bankruptcy or other similar proceeding instituted by or against the Seller (and
the Seller shall deliver an opinion of counsel to such effect in form and
substance satisfactory to the Purchasers); or
(o) The failure of the Seller and the Required Purchasers to agree on
the amendment of subsection (i) of this Section 7.01 as contemplated by Section
2.01(f) upon the Seller's decision to cease purchasing Receivables from any
Seller Subsidiary and by Section 5.01(n) upon the sale by the Seller of the
stock of any Seller Subsidiary in each case after the expiration of a period of
30 days after such cessation or such sale; or
(p) The occurrence or declaration of an "Event of Termination" under
the Secondary Purchase Agreement, unless the same shall be cured or waived;
then, and in any such event, at the direction of the Required Purchasers, the
Administrative Agent shall, by notice to the Seller, take either or both of the
following actions: (x). declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred),
and (y) designate another Person to succeed the Seller as the Collection Agent,
subject to the approval of the Purchasers; provided, that automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in subsection (h) of this Section 7.01, the Facility
Termination Date shall occur. Upon any such declaration or designation or upon
any such automatic termination, (i) each Receivables Pool shall be fixed as of
the Business Day immediately preceding the Facility Termination Date and the
Collection Agent shall prepare and forward to each Purchaser and the
Administration Agent, within one Business Day after the Facility Termination
Date, an Investor Report relating to each Receivable Interest outstanding on the
Business Day immediately preceding the Facility Termination Date, and (ii) the
Purchasers and the Administrative Agent shall have, in addition to the rights
and remedies which they may have under this Agreement, all other rights and
remedies provided after default under the UCC and under other applicable law,
which rights and remedies shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller. Without limiting any other rights
that the Administrative Agent or the Purchasers or any Affiliate thereof and
their respective officers, directors, employees and agents (each, an
"Indemnified Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, losses and liabilities (including reasonable attorneys fees and
expenses) (all of the foregoing being collectively referred to as. "Indemnified
Amounts") arising out of or resulting from this Agreement or the use of proceeds
of purchases or reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or any Contract, excluding, however, (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables or (c)
except as set forth below, any income taxes incurred by such Indemnified Party
arising out of or as a result of this Agreement or the ownership of Receivable
Interests or in respect of any Receivable or any Contract. Without limitation of
the generality of the foregoing, the Seller shall pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from any of the following:
(i) the creation of a Receivable Interest in any Pool Receivable
which is not at the date of the creation of such Receivable Interest
an Eligible Receivable;
(ii) reliance on any representation or warranty made or deemed
made by the Seller or any Seller Subsidiary (or any of their
respective Responsible Officers) or any statement made by any
Responsible Officer of the Seller or any Seller Subsidiary under or in
connection with this Agreement which shall have been incorrect in any
material respect when made;
(iii) the failure by the Seller or any Seller Subsidiary to
comply with any applicable law, rule or regulation;
(iv) the failure to vest in a Purchaser an undivided percentage
ownership interest, to the extent of such Purchaser's Receivable
Interest, in the Receivables (including, without limitation,
Receivables of Government Obligors and Foreign Obligors) in, or
purporting to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, free and clear of any Adverse Claim
other than as authorized hereunder;
(v) the failure to vest in the Seller all right, title and
interest in the Receivables purchased by the Seller from any Seller
Subsidiary pursuant to a Transfer Agreement, free and clear of any.
Adverse Claim other than as authorized hereunder;
(vi) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction, under applicable law with respect to the
assignment of Receivables of Government Obligors or other applicable
laws with respect to any Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections in respect
thereof, whether at the time of any purchase or reinvestment or at any
subsequent time;
(vii) any dispute, claim, offset or defense (otherthan discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation
of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(viii) any failure of the Seller, as Collection Agent or
otherwise, to perform its duties or obligations in accordance with the
provisions of this Agreement;
(ix) any products liability claim arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract;
(x) any loss incurred by any Purchaser as a result of the
Outstanding Balance of all Pool Receivables from the same Obligor,
expressed as a percentage of the aggregate Outstanding Balance of
Eligible Receivables, being in excess of the Concentration Limit or,
if applicable, Special Concentration Limit for such Obligor;
(xi) the commingling of Collections of Pool Receivables at any
time with other funds;
(xii) any action or omission by the Seller, whether as Collection
Agent or otherwise, reducing or impairing the rights of a Purchaser
with respect to any Pool Receivable or the value of any Pool
Receivable, except in accordance with the Credit and Collection
Policy;
(xiii) any failure of the Seller to give reasonably equivalent
value to any Seller Subsidiary in consideration of the transfer by
such Seller Subsidiary to the Seller of any Receivables, or any
attempt by any Person to void any such transfer under statutory
provisions or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code;
(xiv) any loss incurred by a Purchaser on any Pool Receivable
denominated and payable in a currency other than United States dollars
as a result of such Receivable not being payable when due in the full
amount of United States dollars determined hereunder after giving
effect to any payment under any forward foreign exchange contract or
other hedging agreement entered into by the Seller or a Seller
Subsidiary with respect to such Receivable; or
(xv) any reductions in the amount of a Pool Receivable the
Obligor of which is a Government Obligor, and the Related Security and
Collections with respect thereto, as the result of appropriation by
the government or the inability to collect any amount from a
Government Obligor;
(xvi) any inability to collect the full Outstanding Balance of a
Pool Receivable which was entitled to an Administrative Priority as a
result of the Obligor's bankruptcy and which was included as an
Eligible Receivable as a result of such Administrative Priority;
(xvii) any investigation, litigation or proceeding related to or
arising from this Agreement, the transactions contemplated hereby,
the use of the proceeds of the Purchase, the ownership of the
Receivable Interests or any Pool Receivable, Related Security or
Contract or any other investigation, litigation or proceeding
relating to the Seller or any Seller Subsidiary in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(xviii) all losses, expenses and liabilities, if any (including,
without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any
Purchaser in connection with such Purchaser's funding or maintenance
of the Receivable Interests) which such Purchaser may sustain as the
result of the termination or reduction of any Receivable Interest or
the failure by the Seller or the Collection Agent (if the Seller or an
Affiliate thereof) to make any payment of Capital when due;
(xix) any inability to litigate any claim against any Obligor in
respect of any Pool Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(xx) any inability to enforce any judgment rendered in the United
States against any Foreign Obligor in such Foreign Obligor's country
of domicile in respect of any Pool Receivable without reexamination or
relitigation of the matters adjudicated upon;
(xxi) any Event of Termination described in clause (h) of Section
7.01; or
(xxii) any loss incurred by any Purchaser on any Pool Receivable of
a Government Obligor or a Foreign Obligor, except for such losses of a
commercial nature that result from risks normally taken with non-
governmental United States Obligors in transactions of this nature.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. Authorization and Action. Each Purchaser hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement of collection under
the Certificates), the Administrative Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of any Purchaser; the Required Purchasers or all
of the Purchasers as provided by this Agreement and such instructions shall be
binding upon all parties hereto and all assignees of the Purchasers~ provided
however, that the Administrative Agent shall not be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement or applicable law. The Administrative Agent agrees to
give to each Purchaser prompt notice of each notice given to it by the Seller,
or by it to the Seller, pursuant to the terms of this Agreement. The appointment
and authority of the Administrative Agent hereunder shall terminate at the later
to occur of (i) the payment to (A) each Purchaser of its Aggregate Capital,
accrued and unpaid Yield and all other amounts due to such Purchaser hereunder
and (B) the Administrative Agent of all amounts due hereunder, and (ii) the
Facility Termination Date.
SECTION 9.02. UCC Filinqs. The Purchasers and the Seller expressly
recognize and agree that the Administrative Agent may be listed as the assignee
or secured party of record on the various UCC filings required to be made
hereunder in order to perfect the transfer of the Receivable Interests from the
Seller to the Purchasers, that such listing shall be for administrative
convenience only in creating a record or nominee owner to take certain actions
hereunder on behalf of the Purchasers and that such listing will not affect in
any way the status of the Purchasers as the beneficial owners of the Receivable
Interests. In addition, such listing shall impose no duties on the
Administrative Agent other than those expressly and specifically undertaken in
accordance with the provisions of this Article IX. In furtherance of the
foregoing, each Purchaser shall be entitled to enforce its rights created under
this Agreement without the need to conduct such enforcement through the
Administrative Agent except as provided herein.
SECTION 9.03. Administrative Aqent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or' their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent (i) may treat the assignee under any
Certificate as the holder thereof until the Administrative Agent receives
written notice of the Assignment in respect thereof signed by such assignee;
(ii) may consult with legal counsel (including counsel for the Seller),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Person and shall not be responsible to any
Person for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Seller, or
of any Transfer Agreement on the part of the Seller or the Seller Subsidiary a
party thereto, or to inspect the property (including the books and records) of
the Seller or any Seller Subsidiary; (v) shall not be responsible to any
Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any Transfer Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by facsimile,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 9.04. CIBC and Affiliates. With respect to any Pool Receivable
owned by CIBC, CIBC shall have the same rights and powers under this Agreement
and any document delivered pursuant hereto as would any Purchaser and may
exercise the same as though it were not the Administrative Agent. CIBC and its
Affiliates may generally engage in any kind of business with the Seller, any
Seller Subsidiary or any Obligor and any of their respective Affiliates and any
Person who may do business with or own securities of the Seller, any Seller
Subsidiary or any Obligor or any of their respective Affiliates, all as if CIBC
were not the Administrative Agent and without any duty to account therefor to
any Purchaser.
SECTION 9.05. Purchasers' Purchase Decisions. Each Purchaser acknowledges
that it has, independently and without reliance upon the Administrative Agent,
any of its Affiliates or any other Purchaser and based on such documents and
information as it has deemed appropriate, made its own evaluation and decision
to enter into this Agreement and, if it so determines, to purchase undivided
ownership interests in Pool Receivables hereunder. Each Purchaser also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any of its Affiliates or any other Purchaser and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under this
Agreement.
SECTION 9.06. Indemnification. Each Purchaser agrees to indemnify the
Administrative Agent (to the extent not reimbursed by the Seller), ratably
according to its Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or qmitted by
the Administrative Agent under this Agreement, provided that a Purchaser shall
not be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Purchaser agrees to
reimburse the Administrative Agent, ratably according to its Pro Rata Share,
promptly upon demand, for any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that such
expenses are incurred in the interests of or otherwise in respect of the
Purchasers hereunder and are approved by the Purchasers and to the extent that
the Administrative Agent is not reimbursed for such expenses by the Seller.
SECTION 9.07. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving 30 days' written notice thereof to the Purchasers,
the Seller, the Collection Agent and the Secondary Purchasers and may be removed
at any time with or without cause by the Required Purchasers. Upon any such
resignation or removal, the Purchasers shall have the right to appoint a
successor Administrative Agent approved by the Seller (which approval will not
be unreasonably withheld or delayed). If no successor Administrative Agent shall
have been so appointed by the Purchasers, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Purchasers' removal of the Administrative Agent,
then the retiring Administrative Agent may, on behalf of the Purchasers, appoint
a successor Administrative Agent approved by the Seller (which approval will not
be unreasonably withheld or delayed), which successor Administrative Agent shall
be
(a) either (i) a commercial bank having a combined capital and surplus of at
least $250,000,000 or (ii) an Affiliate of such bank and (b) experienced in the
types of transactions contemplated by this Agreement. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE X
ASSIGNMENT OF RECEIVABLE INTERESTS
SECTION 10.1. Assignment. (a) Each Purchaser (with respect to any
Receivable Interest) and Matterhorn (with respect to its commitment to make
Purchases hereunder) may (i) without the consent of the Seller, assign to
another Purchaser, any Secondary Purchaser, UBS, or to any vehicle organized by
a Secondary Purchaser or UBS which is rated at least A-1 by S&P and P-1 by
Moody's and (ii) with the prior written consent of the Seller (which consent
shall not be unreasonably withheld or delayed), to any other Person (such
Person, and the Persons described in clause (i) above, referred to herein as
"Assignees"), and any such Assignee, may, without the written consent of the
Seller, assign to any Person described in clause (i) hereof and may, with the
prior written consent of the Seller (which consent shall not be unreasonably
withheld or delayed), assign to any other Person, any Receivable Interest and,
with respect to Matterhorn only, its commitment to make Purchases hereunder, in
either case, in whole or in part; provided, however, that any assignment of
Matterhorn's commitment to another Purchaser or to any vehicle organized by a
Secondary Purchaser pursuant to clause (i) above at a time when such Purchaser
or such vehicle cannot issue a commitment to make Purchases shall be made only
with the prior written consent of the Seller (which consent shall not be
unreasonably withheld or delayed). Upon any assignment of a Receivable Interest,
(i) the Assignee shall become the owner of such Receivable Interest for all
purposes of this Agreement and (ii) the assignor thereof (the "Assignor") shall
relinquish its rights with respect to such Receivable Interest for all purposes
of this Agreement. Any assignments hereunder shall be upon such terms and
conditions as the Assignor and the Assignee may mutually agree. The parties
thereto shall deliver to the Administrative Agent an assignment agreement, in
substantially the form of Exhibit E hereto (an "Assignment"), duly executed by
such parties, and such Assignor shall promptly execute and deliver all further
instruments and documents, and take all further action, that the Assignee may
reasonably request in order to perfect, protect or more fully evidence the
Assignee's right, title and interest in and to any Receivable Interest assigned
hereunder, and to enable the Assignee to exercise or enforce any rights
hereunder or under the Certificate evidencing such Receivable Interest. Upon any
assignment pursuant to this Section 10.01, the Assignee thereof shall have all
of the rights and obligations (and only such rights and obligations) of a
Purchaser hereunder, and shall be subject to the same terms and conditions
hereunder. The Administrative Agent shall provide notice to the Seller of any
assignment hereunder.
SECTION 10.02. Effects of Assiqnment. By executing and delivering an
Assignment, the Assignor thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment, the Assignor makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the pertinent Certificate or any other agreement, instrument or
document furnished pursuant hereto; (ii) the Assignor makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Seller or any Seller Subsidiary or the performance or observance by the
Seller or any Seller Subsidiary of any of its obligations under this Agreement
(in the case of the Seller), the pertinent Certificate or the Transfer
Agreements (in the case of the Seller and the Seller Subsidiaries) or other
agreement, instrument or document furnished pursuant hereto; (iii) such Assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other agreements,
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and to purchaser the
pertinent Receivable Interests, (iv) such Assignee will, independently and
without reliance upon the Administrative Agent, any Purchaser, any Secondary
Purchaser or any of their Affiliates or such Assignor and based on such
agreements, documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (v) such Assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto, (vi)
such Assignee appoints as its agent the Collection Agent from time to time
designated pursuant to Section 6.01 to enforce its respective rights and
interests in and under the pertinent Receivable Interests and the Related
Security and related Contracts, and (vii) such Assignee agrees that it will not
institute against any Purchaser any proceeding of the type referred to in
Section 7.01(h).
SECTION 10.03. Authorization of Administrative Aqent. The Administrative
Agent shall annotate the pertinent Certificate to reflect any assignment made
pursuant to Section 10.01 or otherwise.
ARTICLE XI
PATRONAGE DISTRIBUTIONS
SECTION 11.01. Patronage Distributions. Prior to the 15th day. of the ninth
month following the close of ASCC's taxable year, ASCC shall be required to pay
a Patronage Dividend (as defined in Section 1388(a) of the Code) to the Seller
equal to that portion of the net earnings of ASCC that bears the same ratio to
total net . earnings as the total discounts or other items in the nature of
interest received by ASCC arising pursuant to all transactions with the Seller
and attributable to such taxable year bears to the total discounts or other
items in the nature of interest received by ASCC arising pursuant to all
transactions with all of ASCC's patrons attributable to such taxable year. Net
earnings of ASCC for the purposes of this Section 11.01 shall mean the excess of
income over expense as determined for federal income tax purposes. At least
twenty percent of any Patronage Dividend shall be paid in cash. The balance of
any Patronage Dividend may be paid through the issuance of a qualified written
notice of allocation as provided in Section 1388(c) of the Code. Subject to the
foregoing, the time and manner of patronage distributions shall be determined on
an annual basis by the board of directors of ASCC.
SECTION 11.02. Income Tax Consent. The Seller hereby consents to include
in its income at the stated dollar amount as provided in Section 1385(a) of the
Code, any payment of a Patronage Dividend to the extent it is made in the form
of a qualified written notice of allocation as provided in Section 1388(c) of
the Code and any qualified per-unit retain certificates as defined in Section
1388(h) of the Code which are made in the form of written notices. The Seller
agrees to include in its income the stated amount of such written notices of
allocation or of per-unit retain certificates in the taxable year that such
written notice is received by the Seller.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by the Seller therefrom shall be
effective unless in a writing signed by the Purchasers or, where permitted under
this Agreement, the Required Purchasers, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment or waiver of
Section 6.03 or of any other provision of this Agreement which affects the
rights or obligations of the Administrative Agent shall be effective unless
signed by the Administrative Agent. No failure on the part of the Purchasers or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
SECTION 12.02. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be delivered or sent by facsimile, to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent, and notices and communications sent by
other means shall be effective when received.
SECTION 12.03. Assignability; Termination.
(a) This Agreement and each Purchaser's rights herein (including ownership of
each Receivable Interest) shall be assignable by such Purchaser and its
respective successors and assigns in accordance with Section 10.01. The term
"Purchaser" shall include any owner by assignment or otherwise 'of a Receivable
Interest but shall not include any Person to whom a participation is granted.
The Seller may not assign its rights hereunder or any interest herein without
the prior written consent of the Purchasers.
(b) Any Purchaser may grant participations to any Person without the
consent or knowledge of the Seller, any other Purchaser or the Administrative
Agent; provided, that such grant will not affect the obligation, if any, of such
Purchaser hereunder nor the obligations of the Seller hereunder.
(c) The provisions of Sections 8.01, 12.04, 12.05, 12.06 and 12.07
survive any termination of this Agreement.
SECTION 12.04. Costs, Expenses and Taxes. (a) In addition to the rights of
indemnification granted under Section 8.01 hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic auditing of Pool Receivables) of
this Agreement, the Certificates and the other documents and agreements to be
delivered hereunder, including, without limitation, (i) the fees and expenses of
Seward & Kissel, counsel for the Purchasers, with respect to the preparation,
execution and delivery of this Agreement, the Secondary Purchase Agreement and
the other documents and agreements to be delivered hereunder or thereunder; (ii)
the fees and out-of-pocket expenses of counsel for the Administrative Agent with
respect to administration of this Agreement, including without limitation,
advising the Administrative Agent as to its rights and remedies hereunder; and
(iii) all costs and expenses, if any (including reasonable counsel fees and
expenses), in connection with the enforcement or amendment of this Agreement,
the Certificates and the other documents and agreements to be delivered
hereunder.
(b) In addition, the Seller shall pay on demand (i) any and all
commissions of placement agents and commercial paper dealers in respect of
commercial paper notes issued to fund the purchase or maintenance of any
Receivable Interest, (ii) any and all costs and expenses of any issuing and
paying agent or other Person responsible for the administration of each
Purchaser's commercial paper program in connection with the preparation,
completion, issuance, delivery or payment of commercial paper notes issued to
fund the purchase or maintenance of any Receivable Interest, and (iii) any and
all stamp and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement, the Certificates or the other
documents or agreements to be delivered hereunder, and agrees to save each
Indemnified Party harmless from and against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
(c) The Seller also shall pay on demand all other costs, expenses and taxes
(excluding income taxes) incurred by a Purchaser or any stockholder of a
Purchaser ("Other Costs"), including (i) the costs of auditing such Purchaser's
books by certified public accountants and of rating such Purchaser's commercial
paper by independent financial rating agencies, (ii) the taxes (excluding income
taxes) resulting from such Purchaser's operations and (iii) the reasonable fees
and out-of-pocket expenses of counsel for such Purchaser or any counsel for any
shareholder of such Purchaser with respect to advising such Purchaser or
shareholder as to rights and remedies under this Agreement, the enforcement of
this Agreement, the Certificates or advising such Purchaser or shareholder as to
matters relating to such Purchaser's operations; provided, that the Seller and
any other persons who from time to time sell receivables or interests therein to
such Purchaser ("Other Sellers") each shall be liable for such Other Costs
ratably in accordance with the usage under their respective facilities;
provided, further, that (i) if such Other Costs are attributable to the Seller
and not attributable to any Other Seller, the Seller shall be solely liable for
such Other Costs and (ii) if such Other Costs are attributable to any Other
Seller and not attributable to the Seller in any way, the Seller shall not be
liable for any of such Other Costs.
SECTION 12.05. No Proceedings. The Seller, the Collection Agent and the
Administrative Agent each hereby agrees that it will not institute or join
against any Purchaser any proceeding of the type referred to in Section 7.01(h).
SECTION 12.06. Confidentiality, Unless otherwise required by applicable
law, rule or regulation or by court order or process, the Seller and each Seller
Subsidiary agrees to maintain the confidentiality of this Agreement (and all
drafts thereof) in communications with third parties and otherwise; provided,
that this Agreement may be disclosed to the Seller's and each Seller
Subsidiary's legal counsel and auditors if they agree to hold it confidential.
SECTION 12.07. No Recourse. The obligations of each Purchaser under this
Agreement or any other agreement, instrument, document or certificate executed
and delivered by or issued by such Purchaser or any officer thereof in
connection herewith are solely the corporate obligations of such Purchaser. No
recourse shall be had for payment of any fee or other obligation or claim
arising out of or relating to this Agreement or any other agreement, instrument,
document or certificate executed and delivered or issued by such Purchaser or
any officer in connection herewith, against any stockholder, employee, officer,
director or incorporator of such Purchaser. The provisions of this Section 12.07
shall survive the termination of this Agreement.
SECTION 12.08. Governing Law; Execution in Counterparts. (a) This
Agreement shall be governed by, and construed in accordance with, the law of the
State of New York (including its applicable conflict of laws rules).
(b) This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER:
GEORGIA-PACIFIC CORPORATION
By:
-----------------------
Treasurer
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
PURCHASERS:
ASSET SECURITIZATION COOPERATIVE CORPORATION
BY:
----------------
Secretary
c/o Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization
Group Facsimile No.: (212) 856-3761
CORPORATE ASSET FUNDING COMPANY,
INC. By: CITICORP NORTH AMERICA, INC.,
AS ATTORNEY-IN-FACT
By:
-------------------
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding
Department Facsimile No.: (914) 899-7015
FALCON ASSET SECURITIZATION CORPORATION
By:
---------------------
Authorized Signatory
c/o The First National Bank of Chicago
One First National Plaza Suite 0079, 17th Floor Chicago, Illinois 60670
Attention: Mr. Bradley P. Summers
Mr. Martin Foy
Facsimile No.: (302) 732-2231
Matterhorn Capital Corporation
By:
------------------------
Authorized Signatory
Union Bank of Switzerland, New York Branch,
as Administrator and Attorney-in-Fact
299 Park Avenue
New York, New York
Attention: Asset Finance Group Facsimile No.: (212) 715-3890
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent
By:
-------------------------
Authorized Signatory
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3761
WAIVER AND AMENDMENT NO. 1 TO
RECEIVABLES PURCHASE AGREEMENT
This WAIVER AND AMENDMENT NO. 1 to RECEIVABLES PURCHASE AGREEMENT,
dated as of April 10, 1991, is entered into by and among Georgia Pacific
Corporation, a Georgia corporation (the "Seller"), Asset Securitization
Cooperative Corporation ("ASCC"), Corporate Asset Funding Company, Inc.
("CAFCO"), Falcon Asset Securitization Corporation ("Falcon") and Matterhorn
Capital Corporation ("Matterhorn") (each of ASCC, CAFCO, Falcon and Matterhorn,
individually, a "Purchaser," and, collectively, the "Purchasers").
WHEREAS, the parties hereto, along with Canadian Imperial Bank of
Commerce, as Administrative Agent, are parties to that certain Receivables
Purchase Agreement dated as of June 1, 1990 (the "Agreement"; the terms defined
therein being used herein as therein defined unless otherwise defined herein),
providing for the sale by the Seller of certain Receivable Interests to the
Purchasers; and
WHEREAS, the parties hereto desire to effect a reallocation of the Pro
Rata Shares and to waive certain provisions of Section 2.01(d) of the Agreement
in connection with such reallocation; and
WHEREAS, the Seller and the Purchasers desire to amend Section 5.01(q)
of the Agreement relating to the seasonality coverage provisions of the
Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to the parties
hereto resulting from the reallocation and amendment to the Agreement referred
to above, the parties hereto agree as follows:
1. Reallocation of Pro Rata Shares, Notwithstanding the provisions
of the first sentence of Section 2.01(d) of the Agreement, the Pro Rata Shares
of the Purchasers under the Agreement shall be reallocated, effective as of
April 10, 1991, as follows:
ASCC .............................32.5%
CAFCO .............................2.5%
Falcon ...........................32.5%
Matterhorn .......................32.5%
Each Purchaser expressly consents to the reallocation set forth above and waives
compliance with all of the provisions of the first sentence of Section 2.01(d)
of the Agreement in connection with such reallocation, including, without
limitation, the advance written notice requirement, the prohibition on
reallocations prior to the first anniversary date, and the inclusion of this
reallocation for purposes of the restriction on the number of reallocations
within any 12-month period. The parties further agree that any noncompliance
with the provisions of the Agreement by virtue of the reallocation set forth
above shall be deemed not to constitute a breach or default by the Seller under
the Agreement, and that such reallocation shall be deemed to be permissible and
effective in all respects and for all purposes under the Agreement.
2. Amendment of Section 5.01(q). Section 5.01(q) of the Agreement is
hereby amended, effective as of April 10, 1991, to read in its entirety as
follows:
(q) Seasonality Coverage. If the Coverage Ratio is less than the
sum of 120% and the Seasonality Percentage as indicated on the
Investor Report Date immediately preceding the first day of November
or December of any year, the Seller shall on the first Business Day of
such month either (i) pay to each Purchaser or deposit into a
segregated account for the benefit of such Purchaser funds equal to
the product of the Seasonality Amount for such month and a fraction
the numerator of which is the Aggregate Capital of such Purchaser and
the denominator of which is the Combined Capital or (ii) provide to
the Administrative Agent for the benefit of the Purchasers a letter of
credit from a bank acceptable to the Required Purchasers in an amount
equal to the Seasonality Amount; provided, that the Seller may, in
lieu of the alternative set forth in such clause (i) of this
subsection (q), pay to such Purchaser or deposit into a segregated
account on the first Business Day of such month and on the next three
(3) weekly anniversaries thereof 25% of the amount specified in clause
(i) above; provided further, that the alternative set forth in clause
(ii) above must be used for any month where the long-term senior
unsecured debt rating of the Seller on the first day of such month is
less than BB in the case of S&P or Bal in the case of Moody's.
3. Reference to and Effect on the Agreement. Upon and after the
date of this Waiver and Amendment No. 1, all references to the Agreement in that
document, or in any related document, shall mean the Agreement as amended
hereby. Except as specifically amended by this Waiver and Amendment No. 1, the
Agreement shall remain in full force and effect.
4. Governing Law; Execution in Counterparts. (a) This Waiver and
Amendment No. 1 shall be governed by, and construed in accordance with, the laws
of the State of New York.
(b) This Waiver and Amendment No. 1 may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment No. 1 to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SELLER:
GEORGIA-PACIFIC CORPORATION
By:
----------------------
W.I. Tamblyn
Vice President and Treasurer
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
Purchasers:
ASSET SECURITIZATION COOPERATIVE CORPORATION
By:
------------------------
Name:
Title:
c/o Canadian Imperial Bank of Commerce 425
Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (202) 856-3761
AMENDMENT NUMBER 2.
DATED AS OF DECEMBER 1, 1991
TO THE
$1,000,000,000 RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JUNE 1, 1990
AMONG
GEORGIA-PACIFIC CORPORATION
as the Seller
and
ASSET SECURITIZATION COOPERATIVE CORPORATION, CORPORATE ASSET FUNDING COMPANY,
INC.,
FALCON ASSET SECURITIZATION CORPORATION
AND
MATTMORN CAPITAL CORPORATION
as the Purchasers
and
CANADIAN IMPERIAL BANK OF COMMERCE, as the Administrative Agent
AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT
THIS AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT, dated as of December 1,
1991 (this "Amendment"), among GEORGIA-PACIFIC CORPORATION, a Georgia
corporation (the "Seller"), ASSET SECURITIZATION COOPERATIVE CORPORATION, a
California cooperative corporation ( "ASCC" ), CORPORATE ASSET FUNDING COMPANY,
INC., FALCON ASSET SECURITIZATION CORPORATION, and MATTERHORN CAPITAL
CORPORATION (the "Purchasers"), and CANADIAN IMPERIAL BANK OF COMMERCE,
CITIBANK, N.A., and THE FIRST NATIONAL BANK OF CHICAGO (the "Secondarv
Purchasers") and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), the (
"Administrative Agent" ), hereunder. .
WHEREAS, the Seller, the Purchasers, the Secondary Purchasers and the
Administrative Agent have hereto fore entered into a certain Receivables
Purchase Agreement, dated as of June 1, 1990 (the "Agreement"); and
WHEREAS, the Seller, ASCC and CIBC now desire to amend the Agreement in
certain respects, as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. The following terms (whether or not
underscored) when used in this Amendment, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Agreement" is defined in the first recital.
"ASCC" iS defined in the preamble.
"CIBC" is defined in the preamble.
"Execution Date" means the date this Amendment is executed by the Seller.
"Purchasers" is defined in the preamble.
"Seller" is defined in the preamble.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in the Agreement shall
have such meanings when used in this Amendment.
ARTICLE II
SECTION 2.1. Amendment to Section 1.1 of the Agreement. Subsection (a)(i)
of the definition of "Investor Rate" in Section 1.0 hereby amended to read as
follows:
(i) in the case of ASCC, all of the Notes of ASCC
outstanding during such Settlement Period, excluding those short-term Notes
issued by the Purchaser to purchase receivables on a fixed rate basis or used
solely to fund any arbitrage activities of the Purchaser, have been sold by any
placement agent or commercial paper dealer selected by ASCC, as agreed between
each such agent or dealer and ASCC and notified by ASCC to the Seller and
Collection Agent, and
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of and References to the Agreement. This
Amendment shall be deemed to be an amendment to the Agreement, and the
Agreement, as amended hereby, is hereby ratified, approved and confirmed in each
and every respect. All references to the Agreement in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the
Agreement as amended hereby.
SECTION 3.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 3.3. Execution in Counterparts, Effectiveness. etc. This Amendment
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. This Amendment shall become effective as of the date
when counterparts hereof executed on behalf of the Seller, the Purchasers, and
the Secondary Purchasers shall have been received by the Administrative Agent
and notice thereof shall have been given by the Administrative Agent to the
Seller, the Purchasers and the Secondary Purchasers.
SECTION 3.4. Governinq Law. THE AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
SELLER
GEORGIA-PACIFIC CORPORATION
By:
-----------------------
Name:
Title:
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
PURCHASERS:
ASSET SECURITIZATION COOPERATIVE
CORPORATION
By:
-----------------------
Name:
Title:
c/o Canadian Imperial Bank of Commerce 425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3643
[Signatures continued on following page.]
CORPORATION ASSERT FUNDING COMPANY, INC.
BY: CITICORP NORTH AMERICA, INC.,
AS ATTORNEY-IN-FACT
By:
----------------------
Name:
Title:
450 Mamaroneck Avenue Harrison
New York 10528
Attention: Corporate Asset Funding
Department Facsimile No.: (914) 899-7015
FALCON ASSET SECURITIZATION CORPORATION
By:
----------------------
Name:
Title:
c/o The First National Bank of Chicago
One First National Plaza
Suite 0079, 17th Floor
Chicago, Illinois 60670
Attention: Mr. David Kucera
Facsimile No.: (312) 732-2231
MATTERHORN CAPITAL CORPORATION
By:
---------------------
Name:
Title:
Union Bank of Switzerland
New York Branch As Administrator
and Attorney-in-Fact
299 Park Avenue
New York, New York 10171
Attention: Asset Finance Group
Facsimile No.: (212) 715-3890
The undersigned hereby acknowledge and consent to the foregoing Amendment No. 2,
as of the date first above written:
GEORGIA-PACIFIC CORPORATION
By:
Name:
Title:
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
CANADIAN IMPERIAL BANK OF COMMERCE
By:
Name:
Title:
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3643
ClTIBANK, N.A.
By:.
Name:
Title:
450 Manaroneck Avenue Harrison, New York 10528
Attention: Corporate Asset Funding
Department Facsimile No.: (914) 899-7055
[Signatures continued on following page.]
THE FIRST NATIONAL BANK OF CHICAGO
By:
--------------------
Name:
Title:
One First National Plaza
Suite 0079, 17 Floor
Chicaqo, Illinois 60670
Attention: Mr. David Kucera
Facsimile No.: (312) 732-2231
MATTERHORN CAPITAL CORPORATION
By:
Name:
Title:
Union Bank of Switzerland
New York Branch as Administrator and Attorney-in-Fact
299 Park Avenue
Attention: Asset Finance Group
New York, New York 10171
Facsimile No.: (212) 715-3890
AMENDMENT NO. 3
DATED AS OF JULY 15, 1992
TO THE
$1,000,000,000 RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JUNE 1, 1990
AMONG
GEORGIA-PACIFIC CORPORATION
as the Seller
and
ASSET SECURITIZATION COOPERATIVE CORPORATION, CORPORATE ASSET FUNDING COMPANY,
INC.,
FALCON ASSET SECURITIZATION CORPORATION
AND
MATTERHORN CAPITAL CORPORATION
as the Purchasers
and
CANADIAN IMPERIAL BANK OF COMMERCE, as the Administrative Agent
AMENDMENT NO. 3 to
RECEIVABLES PURCHASE AGREEMENT
This AMENDMENT NO. 3 tO RECEIVABLES PURCHASE AGREEMENT, dated as of July
15, 1992 (this "Amendment"), is entered into by and among Georgia-Pacific
Corporation, a Georgia corporation (the "Seller"), Asset Securitization
Cooperative Corporation, Corporate Asset Funding Company, Inc., Falcon Asset
Securitization Corporation and Matterhorn Capital Corporation (collectively,
the "Purchasers").
WHEREAS, the parties hereto, along with Canadian Imperial Bank of
Commerce (the "Administrative Agent"), are parties to that certain Receivables
Purchase Agreement dated as of June 1, 1990, as amended by a Waiver and
Amendment No. 1 to Receivables Purchase Agreement, dated April 10, 1991, a
letter agreement dated September 16, 1991 and an Amendment No. 2 dated as of
December 1, 1991 (the "Agreement"; the terms defined.therein being used herein
as therein defined unless otherwise defined herein), providing for the sale by
the Seller of certain Receivable Interests to the Purchasers; and
WHEREAS, the Seller and the Purchasers desire to amend section 1.01 of
the Agreement relating to the definitions provision of the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment of Section 1.01. Section 1.01 of the Agreement is
hereby amended, effective as of June , 1992, to read in its entirety as
follows:
"Reserve" means, on any date, the greater of (i) 14.75% of
Combined Capital and (ii) the sum of (a) the product of (1) the Loss
Reserve and (2) the aggregate Outstanding Balance of all Pool
Receivables on such date, (b) the aggregate Yield Reserve for all
Receivable Interests owned by the Purchasers and the aggregate "Yield
Reserve" for all "Receivable Interests" owned by the Secondary
Purchasers under the Secondary Purchase Agreement, and (c) the
aggregate "Collection Agent Fee Reserve", if any, for all Receivable
Interests owned by the Purchasers and the aggregate "Collection Agent
Fee Reserve", if any, of all "Receivable Interests" owned by the
Secondary Purchasers under the Secondary Purchaser Agreement.
2. Ratification of and References to the Agreement. This Amendment
shall be deemed to be an amendment to the Agreement, and the Agreement, as
amended hereby, is hereby ratified, approved and confirmed in each and every
respect. All references to the Agreement in any other document, instrument,
agreement'or writing shall hereafter be deemed to refer to the Agreement as
amended hereby.
3. Execution in Counterparts, Effectiveness, etc. This Amendment
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. This Amendment shall become effective as of the date
when counterparts hereof executed on behalf of the Seller and the Purchasers
shall have been received by the Administrative. Agent, and notice thereof shall
have been given by the Administrative Agent to the Seller and the Purchasers.
4. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER:
GEORGIA-PACIFIC CORPORATION
By:
----------------------
Name: John F. McGovern
Title: Vice President - Finance and Treasurer
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
PURCHASERS:
ASSET SECURITIZATION COOPERATIVE CORPORATION
By:
---------------------
Name: June Slack
Title: Assistant Treasurer
c/o Canadian Imperial Bank of
Commerce 425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3643
CORPORATE ASSET FUNDING COMPANY, INC.
BY: CITICORP NORTH AMERICA, INC., As Attorney-in-fact
By:
------------------
Name: John F. Schwarz
Title:Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding Department
Facsimile No.: (914) 899-7015
FALCON ASSET SECURITIZATION CORPORATION
By:
Name:
Title:
/o The First National Bank of Chicago
ne First National Plaza
uite 0079, 17th Floor
hicago, Illinois 60670
ttention: Mr. David Kucera
acsimile No.: (312) 732-4487
MATTERHORN CAPITAL CORPORATION
By:
----------------------
Name:
Title:
Union Bank of Switzerland,
New York Branch as Administrator and Attorney-in Fact
299 Park Avenue
Attention: Asset Finance Group
New York, New York 10171
Facsimile No.: (212) 715-3890
CORPORATE ASSET FUNDING COMPANY, INC.
BY: CITICORP NORTH AMERICA, INC.,
AS ATTORNEY-IN-FACT
By:
----------------------
Name:
Title:
450 Mamaroneck Avenue
Attention: Corporate Asset Funding Department
Harrison, New York 10528
Facsimile No.: (914) 899-7015
FALCON ASSET SECURITIZATION CORPORATION
By:
----------------------
Name:
Title:
c/o The First National Bank of Chicago
One First National Plaza Suite 0079, 17th Floor
Attention: Mr. David Kucera
Chicago, Illinois 60670
Facsimile No.: (312) 732-4487
MATTERHORN CAPITAL CORPORATION
By:
----------------------
Name:
Title:
Union Bank of Switzerland,
New York Branch as Administrator and Attorney-in Fact
299 Park Avenue
Attention: Asset Finance Group
New York, New York 10171
Facsimile No.: (212) 715-3890
ADMINISTRATIVE: AGENT
CANADIAN IMPERIAL BANK OF COMMERCE
By:
-----------------------
Name:
Title:
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3643
The undersigned hereby acknowledge and consent to the foregoing
Amendment No. 3 to the Receivables Purchase Agreement, as of the date first
above written:
GEORGIA-PACIFIC CORPORATION
By:
---------------------
Name: John F. McGovern
Title: Vice President - Finance and Treasurer
133 Peachtree Street, N.E.
Atlanta, GA 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
CANADIAN IMPERIAL BANK OF COMMERCE
By:
---------------------
Name:
Title:
425 Lexington Avenue
Attention: Asset Securitization
New York, New York 10017
Group Facsimile No.: (212) 856-3643
CITIBANK, N.A.
By:
--------------------
Title:
450 Mamaroneck Avenue
Attention: Corporate Asset
Harrison, New York 10528
Funding Dept Facsimile No.:(914) 899-7015
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------
Name:
Title:
One First National Plaza Suite 0079, 17th Floor
Chicago, Illinois 60670
Attention: Mr. Bradley P. Summers
Mr. Martin Foy
Facsimile No.: (312) 732-4487
MATTERHORN CAPITAL CORPORATION
By:
-----------------------
Name:
Title:
Union Bank of Switzerland,
New York Branch as Administrator and Attorney-in Fact
299 Park Avenue
New York, New York 10171
Attention: Asset Finance Group
Facsimile No.: (212) 715-3890
ADMINISTRATIVE: AGENT
CANADIAN IMPERIAL BANK OF COMMERCE
By:
-----------------------
Name:
Title:
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization
Group
Facsimile No.: (212) 856-3643
October 15, 1993
Asset Securitization Canadian Imperial Bank of
Cooperative Corporation Commerce
c/o Canadian Imperial Bank 425 Lexington Avenue
of Commerce New York, New York 10017
425 Lexington Avenue Attn: Asset Securitization
New York, New York 10017 Group
Attn: Asset Securitization Facsimile No.: (212) 856-
Group 3761
Facsimile No.: (212) 856-
3643
Corporate Asset Funding Citibank, N.A.
Company, Inc. 450 Mamaroneck Avenue
c/o Citicorp North America, Harrison, New York 10528
Inc. Attn: John F. Schwarz
450 Mamaroneck Avenue Corporate Asset Funding
Harrison, New York 10528 Department
Attn: John F. Schwarz Facsimile No.: (914) 899-
Corporate Asset Funding 7015
Department
Facsimile No.: (914) 899-
7015
Falcon Asset Securitization The First National Bank of
Corporation Chicago
c/o The First National Bank Equitable Building
of Chicago 153 West 51st, 8th Floor
One First National Plaza New York, New York 10019
Suite 0079, 21st Floor Attn: Ms. Carol Courtadon
Chicago, Illinois 60670 Facsimile No.: (212) 373-
Attn: Mr. A. Coleman Tuggle 1388
Facsimile No.: (312) 732-
4487
Matterhorn Capital Canadian Imperial Bank of
Corporation Commerce, as Administrative
c/o Union Bank of Agent
Switzerland, 425 Lexington Avenue
New York Branch, as New York, New York 10017
Administrator and Attorney- Attn: Asset Securitization
In-Fact Group
299 Park Avenue Facsimile No.: (212) 856-
New York, New York 10171 3643
Attn: Asset Finance Group
Facsimile No.: (212) 715-
3890
Re: Amendment No. 4 to Receivables Purchase Agreement dated as of
June 1, 1990
Ladies and Gentlemen:
This letter will set forth our agreement with respect to certain matters
relating to (a) the Receivables Purchase Agreement dated as of June 1, 1990,
amended by a Waiver and Amendment No. 1 dated April 10, 1991, a letter agreement
dated September 16, 1991, an Amendment No. 2 dated as of December 1, 1991, and
an Amendment No. 3 dated July 15, 1992 (the "Receivables Purchase Agreement")
among Georgia-Pacific Corporation (the "Seller"), Asset Securitization
Cooperative Corporation, Corporate Asset Funding Company, Inc., Falcon Asset
Securitization Corporation and Matterhorn Capital Corporation (each a
"Purchaser" and collectively the "Purchasers") and Canadian Imperial Bank of
Commerce, as administrative agent (the "Administrative Agent"), and (b) the
Receivables Purchase Agreement dated as of June 1, 1990 (the "Secondary Purchase
Agreement") among the Seller, Canadian Imperial Bank of Commerce, Citibank, N.A.
and The First National Bank of Chicago (each a "Secondary Purchaser" and
collectively the "Secondary Purchasers"), Matterhorn Capital Corporation and the
Administrative Agent. Unless the context otherwise requires, capitalized terms
used herein that are defined terms in the Receivables Purchase Agreement shall
have the same meanings herein as they have therein.
Notwithstanding any terms and provisions contained in the Receivables
Purchase Agreement or the Secondary Purchase Agreement to the contrary, it is
understood and agreed that on October 22, 1993, the Seller will purchase from
the Purchasers, on the basis of their respective Pro Rata Shares as in effect on
the date hereof, portions of their respective Receivable Interests sufficient to
reduce the Combined Capital to $700,000,000, which purchase will be effected by
the payment to each Purchaser of an amount equal to such Purchaser's Capital on
such date with respect to the portion of its Receivable Interest being sold.
Pursuant to Section 2.01(b) of the Receivables Purchase Agreement, notice
is hereby given that, as of October 22, 1993, after giving effect to the
foregoing purchase, the Purchase Limit shall be reduced to $700,000,000.
Pursuant to Section 2.01(b) of the Secondary Purchase Agreement, notice is
hereby given that, as of October 22, 1993, after giving effect to the foregoing
purchase, the Commitment (as defined in such agreement) shall be reduced to
$700,000,000. Pursuant to Section 2.01(d) of the Receivables Purchase Agreement
and notwithstanding any terms and provisions contained in the Receivable
Purchase Agreement or the Seconday Purchase Agreement to the contrary, notice is
hereby given that the Pro Rata Shares of the Purchasers shall be reallocated,
effective as of October 22, 1993, as follows:
ASCC 42%
CAFCO 8%
Falcon 8%
Matterhorn 42%
As you know, Section 2.01(d) of the Receivables Purchase Agreement requires
the Seller to give 60 days' prior written notice of any reallocation pursuant
thereto. Your signature below will evidence your waiver of such notice
requirement and your consent to the validity and effectiveness of the foregoing
reallocation for all purposes under the Receivables Purchase Agreement and the
Secondary Purchase Agreement.
This letter may be executed in any number of counterparts, each of which
when so executed will be deemed to be an original and all of which when taken
together will constitute one and the same writing.
Sincerely,
GEORGIA-PACIFIC CORPORATION
By:
------------------------------
Name: John F. McGovern
Title: Senior Vice President-Finance and
Treasurer
Agreed to as of October 15, 1993, by:
ASSET SECURITIZATION COOPERATIVE CORPORATION,
as Purchaser
By:
----------------------------------
Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE,
as Secondary Purchaser
By:
-----------------------------------
Authorized Signatory
CORPORATE ASSET FUNDING COMPANY, INC.,
as Purchaser
By: Citicorp North America, Inc.,
as Attorney-In-Fact
By:
------------------------------
Authorized Signatory
CITIBANK, N.A., as Secondary Purchaser
By:
-----------------------------------
Authorized Signatory
FALCON ASSET SECURITIZATION CORPORATION,
As Purchaser
By:
-----------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO,
As Secondary Purchaser
By:
-----------------------------------
Authorized Signatory
MATTERHORN CAPITAL CORPORATION,
as Purchaser
By: UNION BANK OF SWITZERLAND,
NEW YORK BRANCH, as Administrator
and Attorney-In-Fact
By:
-----------------------------------
Authorized Signatory
AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENTS
AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENTS dated as of April 22, 1994
(the "Amendment") among Georgia-Pacific Corporation (the "Seller"), Asset
Securitization Cooperative Corporation, Corporate Asset Funding Company, Inc.,
Falcon Asset Securitization Corporation and Matterhorn Capital Corporation
("Matterhorn") (collectively, the "Purchasers"), Canadian Imperial Bank of
Commerce ("CIBC"), Citibank, N.A., The First National Bank of Chicago and The
Sumitomo Bank, Limited, Atlanta Agency (collectively, the "Secondary
Purchasers") and CIBC, as agent for the Purchasers and the Secondary Purchasers
(the "Administrative Agent"). Unless otherwise defined herein, capitalized terms
used herein have the meanings assigned to them in the Agreement.
WITNESSETH
WHEREAS, the Seller, the Purchasers and the Administrative Agent are
parties to that certain Receivables Purchase Agreement dated as of June 1, 1990,
as amended (the "Primary Agreement");
WHEREAS, the Seller, the Secondary Purchasers, Matterhorn and the
Administrative Agent are parties to that certain Receivables Purchase Agreement
dated as of June 1, 1990, as amended (the "Secondary Agreement", and together
with the Primary Agreement, the "Agreements");
WHEREAS, the parties hereto desire to amend the Agreements in the
manner and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. Defined Terms. "Amendment Effective Date" means the first
date on which the Administrative Agent shall have executed and delivered one or
more counterparts of this Amendment and shall have received one or more
counterparts of this Amendment executed by each of the parties hereto.
Section 2. Amendment of the Primary Aqreement.
(a) Effective as of the Amendment Effective Date, the definition of
"Investor Report Date" in Section 1.01 of the Primary Agreement is hereby
amended by deleting the words "23rd day of the month" and substituting in
replacement thereof the words "the Friday of the third full week of the fiscal
month of the Seller".
(b) Effective as of the Amendment Effective Date, the definition of
"Pro Rata Share" in Section 1.01 of the Primary Agreement is hereby amended by
adding the words "or Section 2.01(e)" to the end thereof.
(c) Effective as of the Amendment Effective Date, Section 2.01(e) of
the Primary Agreement is hereby amended in its entirety as follows:
(e) The Expiration Date shall be the third anniversary date hereof,
unless the Expiration Date is otherwise extended by the Purchasers, in their
sole and absolute discretion. Upon the written request of the Seller, which
request shall be delivered to each Purchaser at least 90 days prior to the
Expiration Date as then in effect, each Purchaser shall have the option (without
any obligation whatsoever so to do) of extending the Expiration Date for an
additional 360-day period. In connection with each such extension request, (i)
each Purchaser shall undertake a bona fide credit analysis of the Seller
utilizing current information on financial conditions and trends, and (ii) the
terms of any extension of the Expiration Date shall be negotiated among the
Seller, the Purchasers and the Administrative Agent at the time of the
extension; provided, that should the terms of the extension be other than those
in effect prior to the extension, then this Agreement and the other agreements
entered into in connection herewith shall be amended to the extent necessary to
incorporate any such different terms. In the event that a Purchaser chooses to
extend the Expiration Date for an additional 360-day period, notice (such notice
to be given in writing or by telephone promptly confirmed in writing) shall be
given by such Purchaser to the Seller and the Administrative Agent at least, but
not more than, 30 days prior to the Expiration Date then in effect (or such
lesser period of time as shall be acceptable to the Seller); provided, that the
Expiration Date shall not be extended with respect to any Purchaser unless the
Related Secondary Purchaser consents to similarly extend the "Expiration Date"
of the Secondary Purchase Agreement. If any Purchaser chooses not to extend the
Expiration Date for an additional 360-day period, the Seller may, in such event,
obtain a successor financial institution or institutions rated at least A-1 by
S&P and P-1 by Moody's (which may be one or more of the Purchasers), or, if not
so rated, which shall be acceptable to the Purchasers, (i) to purchase the
Receivable Interests of such non-extending Purchaser for an amount equal to the
Aggregate Capital of the Receivable Interests of such non-extending Purchaser,
plus accrued and unpaid Yield through the date of such purchase with respect to
such Aggregate Capital, plus all other amounts accrued and owing to such non-
extending Purchaser through such date, and (ii) to assume the obligations of
such non-extending Purchaser under this Agreement. Such successor financial
institution or institutions (if not one or more of the Purchasers) shall become
a party to this Agreement by executing and delivering to the Administrative
Agent and the Seller such documentation as the Administrative Agent, the
Purchasers (including the non-extending Purchaser) and the Seller shall request.
Notwithstanding any provision of this Agreement to the contrary, unless the
Seller has selected such successor financial institution or institutions prior
to the Expiration Date as then in effect, upon the Expiration Date as then in
effect, (i) the Seller shall purchase the Receivable Interests of such non-
extending Purchaser for an amount equal to the Aggregate Capital of the
Receivable Interests of such non-extending Purchaser, plus accrued and unpaid
Yield through the date of such purchase with respect to such Aggregate Capital,
plus all other amounts accrued and owing to such non-extending Purchaser through
such date, (ii) the aggregate Purchase Limit for all Purchasers (other than such
non-extending Purchaser) shall be reduced by an amount equal to the Purchase
Limit of such non-extending Purchaser and (iii) the Pro Rata Share (but not the
Purchase Limit) of each Purchaser (other than such non-extending Purchaser)
shall be reallocated so as to equal that percentage which is obtained by
dividing the then-existing Purchase Limit of such Purchaser by the aggregate
amount of the then-existing Purchase Limits of all the Purchasers (other than
such non-extending Purchaser) and multiplying the quotient thereof by 100.
Section 3. Amendment of the Secondary Aqreement. Effective as of the Amendment
Effective Date, Section 2.01(e) of the Secondary Agreement is hereby amended in
its entirety as follows:
(e) The Expiration Date shall be the third anniversary date hereof, unless the
Expiration Date is otherwise extended by the Secondary Purchasers, in their sole
and absolute discretion. Upon the written request of the Seller, which request
shall be delivered to each Secondary Purchaser at least 90 days prior to the
Expiration Date as then in effect, each Secondary Purchaser shall have the
option (without any obligation whatsoever so to do) of extending the Expiration
Date for an additional 360-day period. In connection with each such extension
request, (i) each Secondary Purchaser shall undertake a bona fide credit
analysis of the Seller utilizing current information on financial conditions and
trends, and (ii) the terms of any extension of the Expiration Date shall be
negotiated among the Seller, the Secondary Purchasers and the Administrative
Agent at the time of the extension; provided, that should the terms of the
extension be other than those in effect prior to the extension, then this
Agreement and the other agreements entered into in connection herewith shall be
amended to the extent necessary to incorporate any such different terms. In the
event that a Secondary Purchaser chooses to extend the Expiration Date for an
additional 360-day period, notice (such notice to be given in writing or by
telephone promptly confirmed in writing) shall be given by such Secondary
Purchaser to the Seller and the Administrative Agent at least, but not more
than, 30 days prior to the Expiration Date then in effect (or such lesser period
of time as shall be acceptable to the Seller). If any Secondary Purchaser
chooses not to extend the Expiration Date for an additional 360-day period, the
Seller may, in such event, obtain a successor financial institution or
institutions rated at least A-1 by S&P and P-1 by Moody's (which may be one or
more of the Secondary Purchasers), or, if not so rated, which shall be
acceptable to the Secondary Purchasers, (i) to purchase the Receivable Interests
of such non-extending Secondary Purchaser for an amount equal to the Aggregate
Capital of the Receivable Interests of such non-extending Secondary Purchaser,
plus accrued and unpaid Yield through the date of such purchase with respect to
such Aggregate Capital, plus all other amounts accrued and owing to such non-
extending Secondary Purchaser through such date, and (ii) to assume the
obligations of such non-extending Secondary Purchaser under this Agreement. Such
successor financial institution or institutions (if not one or more of the
Secondary Purchasers) shall become a party to this Agreement by executing and
delivering to the Administrative Agent and the Seller such documentation as the
Administrative Agent, the Secondary Purchasers (including the non-extending
Secondary Purchaser) and the Seller shall request. Notwithstanding any provision
Of this Agreement to the contrary, unless the Seller has selected such successor
financial institution or institutions prior to the Expiration Date as then in
effect, upon the Expiration Date as then in effect, (i) the Seller shall
purchase the Receivable Interests of such non-extending Secondary Purchaser for
an amount equal to the Aggregate Capital of the Receivable Interests of such
non-extending Secondary Purchaser, plus accrued and unpaid Yield through the
date of such purchase with respect to such Aggregate Capital, plus all other
amounts accrued and owing to such non-extending Secondary Purchaser through such
date, (ii) the aggregate Purchase Limit for all Secondary Purchasers (other than
such non-extending Secondary Purchaser) shall be reduced by an amount equal to
the Purchase Limit of such non-extending Secondary Purchaser and (iii) the Pro
Rata Share (but not the Purchase Limit) of each Secondary Purchaser (other than
such non-extending Secondary Purchaser) shall be reallocated in accordance with
any reallocation of the "Pro Rata Shares" of the Purchasers under the Primary
Purchase Agreement.
Section 4. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, when taken together,
shall constitute but one and the same Amendment.
Section 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 6. Severability of Provisions. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 7. Captions. The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
Section 8. Agreements to Remain in Full Force and Effect. This
Amendment shall be deemed to be an amendment to the Agreements. All references
to the Agreements in any other agreements or document shall on and after the
Amendment Effective Date be deemed to refer to the Agreements as amended hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first above written.
GEORGIA-PACIFIC CORPORATION
Authorized Signatory
ASSET SECURITIZATION COOPERATIVE CORPORATION
By:
----------------------
Authorized Signatory
CORPORATE ASSET FUNDING COMPANY,
INC. By: Citicorp North America, Inc.,
as Attorney-in-Fact
By:
------------------
Authorized Signatory
FALCON ASSET SECURITIZATION CORPORATION
By:
----------------
Authorized Signatory
MATTERHORN CASPITAL CORPORATION
By:
-----------------
Union Bank of Switzerland, New York Branch, as Administrator and Attorney-in-
Fact
CANADIAN IMPERIAL BANK OF COMMERCE, as a Secondary
Purchaser and as Administrative Agent
By:
-------------------
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------
THE SUMITOMO BANK, LIMITED, ATLANTA AGENCY
By:
Authorized Signatory
June 22,1995
Asset Securitization Cooperative Corporation
c/o Canadian Imperial Bank of Commerce 425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3643
Corporate Asset Funding Company, Inc. c/o Citicorp North America, Inc.
200 South Wacker
31 st Floor
Chicago, II, 60606
Attn: Michael Storm
Corporate Asset Funding Department Facsimile No.: (312) 993-6730
Falcon Asset Securitization Corporation C/o The First National Bank of Chicago
One First National Plaza
Suite 0079, 21st Floor
Chicago, Illinois 60670
Attn: Mr. A. Coleman Tuggle Facsimile No.: (312) 732-4487
Matterhorn Capital Corporation
c/o Union Bank of Switzerland,
New York Branch, as Administrator and Attorney-In-Fact
299 Park Avenue
New York, New York 10171
Attn: Asset Finance Group
Facsimile No.: (212) 715-3890
The Sumitomo Bank, Limited
Atlanta Agency
133 Peachtree Street
Atlanta, Georgia 30303
AIm: Thomas Savini, Vice President
Facsimile No.: (404) 521-1187
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (2 12) 856-3761
Citibank, N.A.
200 South Wacker
31 st Floor
Chicago, IL 60606
Attn: Michael Storm
Corporate Asset Funding Department
Facsimile No.: (312) 993-6730
The First National Bank of Chicago
Equitable Building
153 West 51 st, 8th Floor
New York, New York 10019
AIm: Ms. Carol Courtadon
Facsimile No.: (212) 373-1388
Canadian Imperial Bank of Commerce, as
Administrative Agent
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3643
Re: Amendment No. 6 to Receivables Purchase Agreement dated as of
June 1, 1990
Ladies and Gentlemen:
This letter will set forth our agreement with respect to certain matters
relating to (a) the Receivables Purchase Agreement dated as of June 1, 1990,
amended by a Waiver and Amendment No. 1 dated April 10, 1991, a letter agreement
dated September 16, 1991, an Amendment No. 2 dated as of December 1, 1991, an
Amendment No. 3 dated July 15, 1992, an Amendment No. 4 dated October 15, 1993,
and an Amendnlent No. 5 dated April 22, 1994 (the "Receivables Purchase
Agreement") among Georgia-Pacific Corporation (the "Seller"), Asset
Securitization Cooperative Corporation, Corporate Asset Funding Company, Inc.,
Falcon Asset Securitization Corporation and Matterhorn Capital Corporation (each
a "Purchaser" and collectively the "Purchasers") and Canadian Imperial Bank of
Commerce, as administrative agent (the "Administrative Agent"), and (b) the
Receivables Purchase Agreement dated as of June 1, 1990, as amended to date (the
"Secondary Purchase Agreement") among the Seller, Canadian Imperial Bank of
Commerce, Citibank, N.A., The First National Bank of Chicago and The Sumitomo
Bank, Limited, Atlanta Agency (each a "Secondary Purchaser" and collectively the
"Secondary Purchasers"), Matterhorn Capital Corporation and the Administrative
Agent. Unless the context otherwise requires, capitalized terms used herein that
are defined terms in the Receivables Purchase Agreement shall have the same
meanings herein as they have therein.
Notwithstanding any terms and provisions contained in the Receivables
Purchase Agreement or the Secondary Purchase Agreement to the contrary, it is
understood and agreed that on June 29, 1995, the Seller will purchase from the
Purchasers, on the basis of their respective Pro Rata Shares as in effect on the
date hereof, portions of their respective Receivable Interests sufficient to
reduce the Combined Capital to $500,000,000, which purchase will be effected by
the payment to each Purchaser of an amount equal to such Purchaser's Capital on
such date with respect to the portion of its Receivable Interest being sold.
Pursuant to Section 2.0 1 (b) of the Receivables Purchase Agreement, notice
is hereby given that, as of June 29, 1995, after giving effect to the foregoing
purchase, the Purchase Limit shall be reduced to $500,000,000. Pursuant to
Section 2.0 1 (b) of the Secondary Purchase Agreement, notice is hereby given
that, as of June 29, 1995, after giving effect to the foregoing purchase, the
Commitment (as defined in such agreement) shall be reduced to $500,000,000.
This letter may be executed in any number of counterparts, each of which
when so executed will be deemed to be an original and all of which when taken
together will constitute one and the same writing.
Sincerely,
GEORGIA-PACIFIC CORPORATION
Name: Danny W. Huff
Title: Treasurer
Agreed to as of June 22, 1995, by:
ASSET SECURITIZATION COOPERATIVE CORPORATION, as Purchaser
By:
------------
Title: ASSISTANT TREASURER
CANADIAN IMPERIAL BANK OF COMMERCE,
as Secondary Purchaser and as Administrative Agent
Title: Authorized Signatory
CORPORATE ASSET FUNDING COMPANY, INC.,
By:
CITIBANK, N.A,
By:
Title:
FALCON ASSET SECURITIZATION CORPORATION, as Purchaser
By:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Secondary Purchaser
By:
----------------
Title:
MATTERHORN CAPITAL CORPORATION, as Purchaser
By:
-----------------
UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as Administrator and Attorney-In-
Fact
By:
Title:
THE SUMITOMO BANK LIMITED, ATLANTA AGENCY, as Secondary Purchaser
By:
Title:
November 7, 1995
Asset Securitization Cooperative Corporation
c/o Canadian Imperial Bank of Commerce 425 Lexington Avenue
New York, New York 10017
AtUt: Asset Securitization Group
Facsimile No.: (212) 856-3643
Corporate Asset Funding Company, Inc. c/o Citicorp North America, Inc.
200 South Wacker
31 st Floor
Chicago, IL 60606
Attn: Michael Storm
Corporate Asset Funding Department Facsimile No.: (312) 993-6730
Falcon Asset Securitization Corporation c/o The First National Bank of Chicago
One First National Plaza
Suite 0079, 21st Floor
Chicago, Illinois 60670
Attn: Mr. A. Coleman Tuggle Facsimile No.: (312) 732-4487
Matterform Capital Corporation
c/o Union Bank of Switzerland,
New York Branch, as Administrator and Attorney-In-Fact
299 Park Avenue
New York, New York 10171
Attn: Asset Finance Group
Facsimile No.: (212) 715-3890
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3761
Citibank, N.A.
200 South Wacker
31 st Floor
Chicago, IL 60606
Attn: Michael Storm
Corporate Asset Funding Department
Facsimile No.: (312) 993-6730
The First National Bank of Chicago
Equitable Building
153 West 51st, 8th Floor
New York, New York 10019
Attn: Ms. Carol Courtadon
Facsimile No.: (212) 373-1388
Canadian Imperial Bank of Commerce, as
Administrative Agent
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3643
Re: Amendment No. 7 to Receivables Purchase Agreement dated as of June 1,
1990
Ladies and Gentlemen:
This letter will set forth our agreement with respect to certain matters
relating to (a) the Receivables Purchase Agreement dated as of June 1, 1990,
mended by a Waiver and Amendment No. 1 dated April 10, 1991, a letter agreement
dated September 16, 1991, an Amendment No. 2 dated as of December 1, 1991, an
Amendment No. 3 dated July 15, 1992, an Amendment No. 4 dated October 15, 1993,
an Amendment No. 5 dated April 22, 1994, and an Amendment No. 6 dated June 22,
1995 (the "Receivables Purchase Agreement") among Georgia-Pacific Corporation
(the "Seller"), Asset Securitization Cooperative Corporation, Corporate Asset
Funding Company, Inc., Falcon Asset Securitization Corporation and Matterhorn
Capital Corporation (each a "Purchaser" and collectively the "Purchasers") and
Canadian Imperial Bank of Commerce, as administrative agent (the "Administrative
Agent"), and Co) the Receivables Purchase Agreement dated as of June 1, 1990, as
amended to date (the "Secondary Purchase Agreement") among the Seller, Canadian
Imperial Bank of Commerce, Citibank, N.A. and The First National Bank of Chicago
(each a "Secondary Purchaser" and collectively the "Secondary Purchasers"),
Matterhorn Capital Corporation and the Administrative Agent. Unless the context
othenvise requires, capitalized terms used herein that are defined terms in the
Receivables Purchase Agreement shall have the same meanings herein as they have
therein.
Notwithstanding any terms and provisions contained in the Receivables
Purchase Agreement or the Secondary Purchase Agreement to the contrary, it is
understood and agreed that on November 14, 1995, the Seller will purchase from
the Purchasers, on the basis of their respective Pro Rata Shares as in effect on
the date hereof, portions of their respective Receivable Interests sufficient to
reduce the Combined Capital to $350,000,000, which purchase will be effected by
the payment to each Purchaser of an amount equal to such Purchaser's Capital on
such date with respect to the portion of its Receivable Interest being sold.
Pursuant to Section 2.01 (b) of the Receivables Purchase Agreement, notice
is hereby given that, as of November 14, 1995, after giving effect to the
foregoing purchase, the Purchase Limit shall be reduced to $350,000,000.
Pursuant to Section 2.01 (b) of the Secondary Purchase Agreement, notice is
hereby given that, as of November 14, 1995, after giving effect to the foregoing
purchase, the Commitment (as defined in such agreement) shall be reduced to
$350,000,000.
Report read as
Pursuant to Section 12.01 of the Receivables Purchase Agreement, effective with
the Investor for the month of November 1995, the defined term "Concentration
Limit" is hereby amended to follows:
"Concentration Limit' means, at any time, for any Obligor, $25,000,000, or such
other amount (a "Special Concentration Limit") for such Obligor designated by
the Administrative Agent in a writing delivered to the Seller at the instruction
of the Purchasers; provided, that in the case of an Obligor with any Affiliated
Obligor, the Concentration Limit shall be calculated as if such Obligor and such
Affiliated Obligor are one Obligor; provided, further, that the Administrative
Agent (acting upon the instructions of any Purchaser) may, upon not less than
three Business Days' notice to the Seller, cancel any Special Concentration
Limit."
This letter may be executed in any number of counterparts, each of which
when so executed will be deemed to be an original and all of which when taken
together will constitute one and the same writing.
Sincerely,
GEORGIA-PACIFIC CORPORATION
By:
-----------
Title: Treasurer
Agreed to as of November 7, 1995, by:
ASSET SECURITIZATION COOPERATIVE CORPORATION, as Purchaser
By:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Secondary Purchaser and as Administrative Agent
CORPORATE ASSET FUNDING COMPANY, INC., as Purchaser
By:
Citicorp North America, Inc., as Attorney-In-Fact
By:.
CITIBANK, N.A., as Secondary Purchaser
By:.
FALCON ASSET SECURITIZATION CORPORATION, as Purchaser
By:.
THE FIRST NATIONAL BANK OF CHICAGO, as Secondary Purchaser
By:
Authorized Signatory
MATTERHORN CAPITAL CORPORATION, as Purchaser
By:
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
as Administrator and Attorney-in-Fact
By:
November 15, 1995
Asset Securitization Cooperative Corporation
c/o Canadian Imperial Bank of Commerce 425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3643
Corporate Asset Funding Company, Inc. c/o Citicorp North America, Inc.
200 South Wacker
31 st Floor
Chicago, IL 60606
Attn: Michael Storm
Corporate Asset Funding Department Facsimile No.: (312) 993-6730
Falcon Asset Securitization Corporation c/o The First National Bank of Chicago
One First National Plaza
Suite 0596, 21st Floor
Chicago, Illinois 60670
Attn: Carol A. Oliver
Facsimile No.: (312) 732-4487
Matterhorn Capital Corporation
c/o Union Bank of Switzerland,
New York Branch, as Administrator and Attorney-In-Fact
299 Park Avenue
New York, New York 10171
Attn: Asset Finance Group
Facsimile No.: (212) 715-3890
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization Group
Facsimile No.: (212) 856-3643
Citibank, N.A.
200 South Wacker
31 st Floor
Chicago, IL 60606
Attn: Michael Storm
Corporate Asset Funding Department
Facsimile No.: (312) 993-6730
The First National Bank of Chicago
One First National Plaza
Suite 0596, 21st Floor
Chicago, Illinois 60670
Attn: Carol A. Oliver
Facsimile No.: (312) 732-4487
Canadian Imperial Bank of Commerce, as
Administrative Agent
425 Lexington Avenue
New York, New York 10017
Attn: Asset Securitization GroupFacsimile No.: (212) 856-3643
Re: Amendment No. 8 to Receivables Purchase Agreement dated as of June
1, 1990
Ladies and Gentlemen:
This letter will set forth our agreement with respect to certain matters
relating to (a) the Receivables Purchase Agreement dated as of June 1, 1990,
mended by a Waiver and Amendment No. I dated April 10, 1991. a letter agreement
dated September 16, 199 !, an Amendment No. 2 dated as of December 1, 1991, an
Amendment No. 3 dated July 15, 1992, an Amendment No. 4 dated October 15, 1993,
an Amendment No. 5 dated April 22, 1994, an Amendment No. 6 dated June 22, 1995,
and an Amendment No. 7 dated November 7, 1995 (the "Receivables Purchase
Agreement") among Georgia-Pacific Corporation (the "Seller"), Asset
Securitization Cooperative Corporation, Corporate Asset Funding Company, Inc.,
Falcon Asset Securitization Corporation and Matterhorn Capital Corporation (each
a "Purchaser" and collectively the "Purchasers") and Canadian Imperial Bank of
Commerce, as administrative agent (the "Administrative Agent"), and (b) the
Receivables Purchase Agreement dated as of June 1, 1990, as amended to date (the
"Secondary Purchase Agreement") among the Seller, Canadian Imperial Bank of
Commerce, Citibank, N.A. and The First National Bank of Chicago (each a
"Secondary Purchaser" and collectively the "Secondary Purchasers"), Matterhorn
Capital Corporation and the Administrative Agent. Unless the context otherwise
requires, capitalized terms used herein that are defined terms in the
Receivables Purchase Agreement shall have the same meanings herein as they have
therein.
Effective with the Investor Report for the month of November 1995, the
defined term "Concentration Limit" contained in Section 1.01 of the Receivables
Purchase Agreement is hereby amended to read as follows:
"Concentration Limit" means, at any time, for any Obligor, $25,000,000, or
such other amount (a "Special Concentration Limit") for such Obligor
designated by the Administrative Agent in a writing delivered to the Seller
at the instruction of the Purchasers; provided. that in the case of an
Obligor with any Affiliated Obligor, the Concentration Limit shall be
calculated as if such Obligor and such Affiliated Obligor are one Obligor;
provided, further, that the Administrative Agent (acting upon the
instructions of any Purchaser) may, upon not less than three Business Days'
notice to the Seller, cancel any Special Concentration Limit."
In addition to the foregoing, by your execution of this letter where
indicated below, you will have confirmed our agreement that the defined term
"Reserve" contained in Section 1.01 of the Receivables Purchase Agreement shall
be amended as of the date of this letter by (a) deleting the word "greater" on
the first line thereof and substituting in replacement thereof the word
"greatest", (b) deleting the word "and" on the second line thereof and adding a
comma after the word "Capital" on such second line and (c) adding the words "and
(iii) $87,500,000" at the end thereof. Upon your execution of this letter, this
letter shall be deemed to be an amendment to the Purchase Agreement and the
Secondary Purchase Agreement, and all references to the Purchase Agreement or
the Secondary Purchase Agreement in such agreements or any related document or
instrument shall be deemed to be a reference to the Purchase Agreement or the
Secondary Purchase Agreement, as the case may be, as amended hereby. By our
delivery to you of this letter, we hereby repeat and reaffirm as of the date
hereof our representations and warranties contained in the Purchase Agreement
and the Secondary Purchase Agreement with the same force and effect as though
such representations and warranties had been made as of the date hereof after
giving effect to this letter. We further represent and warrant that this letter
has been duly authorized and executed by us and constitutes our legal, valid and
binding obligation enforceable against us in accordance with its terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
This letter may be executed in any number of counterparts, each of which
when so executed will be deemed to be an original and all of which when taken
together will constitute one and the same writing.
Sincerely,
GEORGIA-PACIFIC CORPORATION
By:
Name: Danny W. Huff
Title: Treasurer
Agreed to as of November, by:
ASSET SECURITIZATION COOPERATIVE CORPORATION, as Purchaser
By:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Secondary Purchaser and as Administrative Agent
Authorized Signatory
CORPORATE ASSET FUNDING COMPANY, INC., as Purchaser
By:
Citicorp North America, Inc., as Attorney-in-Fact
By:
CITIBANK, N.A., as Secondary Purchaser
By:.
FALCON ASSET SECURITIZATION CORPORATION, as Purchaser
By:
THE FIRST NATIONAL BANK OF CHICAGO, as Sccondary Purchaser
By:
MATTERHORN CAPITAL CORPORATION, as Purchaser
By:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH, as Administrator
and Attorney-In-Fact
$1,000,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 1, 1990
Among
GEORGIA-PACIFIC CORPORATION
as the Seller
-------------
and
CANADIAN IMPERIAL BANK OF COMMERCE CITIBANK, N.A.
AND
THE FIRST NATIONAL BANK OF CHICAGO
as the Secondary Purchasers
---------------------------
and
MATTERHORN CAPITAL CORPORATION and
CANADIAN IMPERIAL BANK OF COMMERCE
as the Administrative Agent
---------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section PAGE
- ------- ----
Section 1.01 Certain Defined Terms...................2
Section 1.02 Defined Terms Incorporated
by Reference ........................7
Section 1.03 Other Terms ............................8
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01 Purchase Facility .......................8
Section 2.02 Making Purchases .......................l0
Section 2.03 Incorporation by Reference .............11
Section 2.04 Incorporation by Reference .............11
Section 2.05 Fees ...................................11
Section 2.06 Incorporation by Reference .............12
Section 2.07 Incorporation by Reference .............12
Section 2.08 Yield Protection .......................12
Section 2.09 Incorporation by Reference .............14
Section 2.10 Incorporation by Reference .............14
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01 Conditions Precedent to Initial
Purchase ............................14
Section 3.02 Conditions Precedent to All
Purchases and Reinvestments .........15
Section 3.03 Conditions Subsequent ..................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Incorporation by Reference .............17
ARTICLE V
COVENANTS
Section 5.01 Incorporation by Reference .............17
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.01 Designation of Collection Agent ........18
Section 6.02 Duties of Collection Agent .............18
Section 6.03 Rights of the Administrative Agent .....20
Section 6.04 Responsibilities of the Seller..........22
Section 6.05 Further Actions Evidencing Purchases ...22
Section 6.06 Collection Agent Fee....................23
ARTICLE VII
EVENTS OF TERMINATION
Section 7.01 Events of Termination ..................24
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Indemnities by the Seller ..............25
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01 Authorization and Action ...............29
Section 9.02 UCC Filings ............................29
Section 9.03 Administrative Agent's
Reliance, Etc..........................29
Section 9.04 CIBC and Affiliates ....................30
Section 9.05 Secondary Purchasers Purchase
Decisions ............................30
Section 9.06 Indemnification ........................31
Section 9.07 Successor Administrative Agent .........31
ARTICLE X
ASSIGNMENT OF RECEIVABLE INTEREST
Section 10.01 Assignment .............................32
Section 10.02 Effects of Assignment ..................33
Section 10.03 Authorization of Administrative
Agent ...............................34
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments, Etc ........................34
Section 11.02 Notices, Etc ...........................34
Section 11.03 Assignability; Termination .............34
Section 11.04 Costs, Expenses and Taxes ..............35
Section 11.05 Confidentiality.........................36
Section 11.06 Governing Law; Execution in
Counterparts..........................36
Section 11.07 Actions by Secondary Purchasers ........36
EXHIBITS
EXHIBIT A-1 Form of Opinion of New York Counsel to the Seller
EXHIBIT A-2 Form of Opinion of Georgia Counsel to the Seller Subsidiaries
EXHIBIT A-3 Form of Opinion of Counsel to each Seller Subsidiary
EXHIBIT A-4 Form of Opinion of Special Counsel to the Seller
EXHIBIT B Form of Assignment Agreement
RECEIVABLES PURCHASE AGREEMENT dated as of June 1,1990 among GEORGIA-
PACIFIC CORPORATION, a Georgia corporation (the "Seller"), CANADIAN IMPERIAL
BANK OF COMMERCE ("CIBC"), CITIBANK, N.A. ("CITIBANK") and THE FIRST NATIONAL
BANK OF CHICAGO ("FIRST CHICAGO") (each of CIBC, CITIBANK AND FIRST CHICAGO,
individually, a "Secondary Purchaser", and, collectively, the "Secondary
Purchasers") MATTERHORN CAPITAL CORPORATION ("Matterhorn") and CIBC, as agent
(the "Administrative Agent") for the Secondary Purchasers. Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Article I hereof.
WITNESSETH
WHEREAS, the Seller has, and expects to have, Receivables in which it
desires to sell Receivable Interests;
WHEREAS, each Seller Subsidiary has, and expects to have, Receivables
which it desires to sell to the Seller;
WHEREAS, the Seller and each Seller Subsidiary has entered into a
Transfer Agreement pursuant to which such Seller Subsidiary agrees to sell its
Receivables to the Seller;
WHEREAS, the Seller desires to purchase such Receivables from each
Seller Subsidiary;
WHEREAS, the Seller has entered into a Receivables Purchase Agreement
dated as of June 1, 1990 (the "Primary Purchase Agreement") with Asset
Securitization Cooperative Corporation ("ASCC"), Corporate Asset Funding
Company, Inc. ("CAFCO"), Falcon Asset Securitization Corporation ("Falcon"),
Matterhorn (each of ASCC, CAFCO, Falcon and Matterhorn, individually, a
"Purchaser", and, collectively, the "Purchasers") and the Administrative Agent
pursuant to which the Seller will sell "Receivable Interests" under the Primary
Purchase Agreement to the Purchasers from time to time;
WHEREAS, the Secondary Purchasers agree to purchase Receivable
Interests on the terms set forth herein;
WHEREAS, CIBC has been requested and is willing to perform certain
administrative and clerical functions on behalf of the Secondary Purchasers in
accordance with the terms hereof;
WHEREAS, in consideration of the reinvestment in Receivable Interests
of daily Collections attributable to a Receivable Interest, the Seller will sell
to the Secondary Purchaser of such Receivable Interest additional interests in
the Receivables as part of such Receivable Interest until such reinvestment is
terminated; and
WHEREAS, it is intended that the daily reinvestment of Collections be
effected by an automatic daily adjustment to each of the Receivable Interests to
the extent provided in Article II hereof.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
----------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted LIBOR Rate" means, with respect to a Secondary Purchaser for any Fixed
- ---------------------
Period, the rate per annum obtained by dividing (a) the arithmetic average
(rounded upwards, if necessary, to the nearest multiple of one-sixteenth of one
percent per annum) of (i) the offered rates for deposits in United States
dollars which appear on the display designated as page "LIBO" (or any
successor page quoting the offered rates for United States dollars in the London
interbank market) on the Reuter Monitor Money Rates Service, or (ii) if such
rates are not obtainable from the Reuter Monitor Money Rates Service, the
respective rates notified to the Secondary Purchaser by each of the Reference
Banks as the rate at which it would offer deposits in United States dollars to
prime banks in the London interbank market, in either case for a period equal to
such Fixed Period as such Secondary Purchaser shall select and in an amount
comparable to the aggregate amount of Capital of the Receivable Interest to be
funded or maintained at or about 11:00 a.m. (London time) on the second Business
Day before (and for value on) the first day of such period by (b) a percentage
equal to (i) 100% minus (ii) the Eurodollar Reserve Percentage for such Fixed
Period.
"Aggregate Capital" means, at the time of any determination thereof
-------------------
with respect to a Secondary Purchaser, the sum of the Capital for all Receivable
Interests of such Secondary Purchaser.
"Base Rate" means, for any day, the rate of interest publicly
-----------
announced from time to time by the Administrative Agent in its offices in New
York, New York as its base rate, each change in such rate to take effect at the
opening of business on the date specified in the public announcement of such
change.
"Capital" of any Receivable Interest owned by a Secondary Purchaser
----------
means the original amount paid by such Secondary Purchaser to the Seller or to a
Purchaser, as the case may be (excluding, in the case of an amount paid to a
Purchaser, any "Yield" accrued under the Primary Purchase Agreement which was
actually paid to such Purchaser by the Secondary Purchaser), for such Receivable
Interest at the time of its purchase by such Secondary Purchaser pursuant to
this Agreement, or such amount divided or combined in accordance with Section
2.07, in each case reduced from time to time by Collections distributed on
account of such Capital pursuant to Section 2.04 or by payments pursuant to
Section 5.01(q); provided, that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution, as though it had not been
made; provided, further, that such Capital shall not be reduced for the purposes
------------------
of this Agreement to the extent and so long as Collections to be used to effect
an Optional Reduction or a Mandatory Reduction are retained by the Collection
Agent (if the Seller or an Affiliate thereof).
"Collection Agent" means at any time the Person (which may include the
------------------
Administrative Agent) then authorized pursuant to Article VI to service,
administer and collect Pool Receivables.
"Collection Agent Fee" has the meaning assigned to that term in
----------------------
Section 6.06.
"Combined Capital" means the sum of the Total Aggregate Capital and
------------------
the "Total Aggregate Capital" under the Primary Purchase Agreement.
"Commitment" means (i) for all Secondary Purchasers in the aggregate,
------------
together with Matterhorn under the Primary Purchase Agreement, an amount equal
to $1,000,000,000 initially, or such lesser amount as shall reflect any
reduction pursuant to Section 2.01(b), (ii) for each Secondary Purchaser, its
Pro Rata Share of such aggregate amount, and (iii) for Matterhorn, its Pro Rata
Share (as defined in the Primary Purchase Agreement) of such aggregate amount.
References to the unused portion of the Commitment shall mean, at any time, the
Commitment in effect at such time, less the sum of the Total Aggregate Capital
under this Agreement and the "Total Aggregate Capital" under the Primary
Purchase Agreement.
"Eurodollar Reserve Percentage" for any Secondary Purchaser and for
-------------------------------
any Fixed Period means the reserve percentage applicable to such Secondary
Purchaser under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor)
(or, if more than one such percentage shall be so applicable, the weighted daily
averages of such percentages for those days in such Fixed Period during which
any such percentage shall be so applicable) for determining the maximum reserve
requirement of such Secondary Purchaser
(including, but not limited to, any emergency, supplemental or other marginal
reserve requirement) with respect to liabilities consisting of or including
Eurocurrency liabilities (as that term is defined in Regulation D of the Board
of Governors of the Federal Reserve System as in effect from time to time)
having a term equal to such Fixed Period.
"Event of Termination" has the meaning specified in Article VII.
----------------------
"Expiration Date" has the meaning specified in Section 2.01(e).
-----------------
"Facility Termination Date" means the earliest to occur of (i) the
---------------------------
Expiration Date, as determined pursuant to Section 2.01(e), (ii) the date of the
occurrence of an Event of Termination under Section 7.01(h), (iii) the date the
Facility Termination Date is declared pursuant to Section 7.01 or (iv) the date
the Commitment is reduced or falls to zero.
"Investor Rate" for any Settlement Period for any Receivable Interest
---------------
means:
(a) a rate equal to the weighted average of the Adjusted LIBOR Rates
for the Fixed Periods occurring within such Settlement Period or portion
thereof, plus 1%, notified to the Seller and the Collection Agent by the
Secondary Purchaser on the first day of each of such Fixed Periods, or such
other rate as such Secondary Purchaser and the Seller shall agree to in
writing.
(b) if such Receivable Interest is acquired by the Secondary Purchaser
pursuant to Section 2.02(d) hereof, with respect to each day during such
Settlement Period which is either the first, second or third day
immediately following the day notice is given by the Related Purchaser of
the assignment of such Receivable Interest, the Base Rate in effect for
such day.
(c) if during any Settlement Period more than one of the above-
mentioned rates shall be applicable, then the "Investor Rate" for such
---------------
Settlement Period shall be the daily weighted average of such applicable
rates.
"Liquidation Collection Agent Fee" means, for any Receivable Interest
----------------------------------
on any date, an amount equal to the product of (i) the Capital of such
Receivable Interest on such date, (ii) the percentage per annum at which the
Collection Agent Fee is accruing on such date and (iii) a fraction the numerator
of which is the sum of the Average Maturity and the Collection Delay Period
(each as in effect at such date) and the denominator of which is 360.
"Liquidation Fee" means, for any Secondary Purchaser and for any
-----------------
Settlement Period during which a Liquidation Day occurs, the amount, if any, by
which (i) the additional Yield (calculated without taking into account any
Liquidation Fee or any shortened duration of a Fixed Period pursuant to clause
(ii) of the definition thereof) which would have accrued during the remainder of
such Settlement Period on all reductions of Capital of the Receivable Interest
during such Settlement Period exceeds (ii) the income received by such Secondary
Purchaser's investing the proceeds of such reductions of Capital.
"Liquidation Yield" means, for any Receivable Interest on any date, an
-------------------
amount equal to the product of (1) the Capital of such Receivable Interest on
such date, (2) the Adjusted LIBOR Rate for such Receivable Interest for a 30-day
Fixed Period to commence on such date and (3) a fraction having the sum of the
Average Maturity plus the Collection Delay Period (each as in effect at such
date) as its numerator and 360 as its denominator.
"Potential Termination Event" means an event which, with the passage
-----------------------------
of time or notice or both, would constitute a Termination Event.
"Pro Rata Share" means, for each Secondary Purchaser, the "Pro Rata
----------------
Share" of the Related Purchaser under the Primary Purchase Agreement and, for
Matterhorn, its "Pro Rata Share" under the Primary Purchase Agreement.
"Purchase" has the meaning specified in Section
----------
2.01(a).
"Reference Banks" means CIBC, Citibank and First Chicago, or such
-----------------
other banks as the Secondary Purchasers shall designate with the consent of the
Seller.
"Related Purchaser" means, with respect to each Secondary Purchaser
-------------------
set forth below, the Person set forth opposite its name.
CIBC ASCC
Citibank CAFCO
First Chicago Falcon
"Required Secondary Purchasers" means, at a particular time, Secondary
-------------------------------
Purchasers the Aggregate Capital of which equals at least 66 2/3% of the Total
Aggregate Capital, or, if no Capital shall then be outstanding, Secondary
Purchasers the aggregate Commitment of which equals at least 66 2/3% of the
overall Commitment; provided, that in determining 66 2/3% of the Aggregate
---------
Capital or the Commitment for purposes of this definition, Matterhorn shall be
treated as a Secondary Purchaser hereunder with Aggregate Capital equal to its
"Aggregate Capital" under the Primary Purchase Agreement and a Commitment equal
to its "Purchase Limit" under the Primary Purchase Agreement; provided further,
-----------------
that in determining the Aggregate Capital or the Commitment of a Secondary
Purchaser for the purposes of this definition, the "Aggregate Capital" of such
Secondary Purchaser's Related Purchaser under the Primary Purchase Agreement
shall be treated as relating to such Secondary Purchaser.
"Total Aggregate Capital" means, at any time of determination, the sum
-------------------------
of the Aggregate Capital for the Secondary Purchasers.
"UBS" means Union Bank of Switzerland, a banking corporation organized
-----
under the laws of Switzerland.
"Unused Commitment" means, with respect to any Secondary Purchaser,
-------------------
the Commitment of such Secondary Purchaser less the Aggregate Capital of such
Secondary Purchaser and the "Aggregate Capital" of the Related Purchaser under
the Primary Purchase Agreement.
"Yield" means for each Receivable interest for any Settlement Period
-------
the daily average (calculated at the close of business each day) Capital of such
Receivable Interest during such Settlement Period
IR x C x ED = LF
--
360
where
C = the daily average (calculated at the close of business
each day) Capital of such Receivable Interest during
such Settlement Period
IR = Investor Rate for such Receivable Interest for such
Settlement Period
ED = the actual number of days elapsed during such
Settlement Period
LF = the Liquidation Fee, if any, for such Receivable
Interest for such Settlement Period;
provided, that no provision of this Agreement shall require the payment or
- ---------
permit the collection of Yield in excess of the maximum permitted by applicable
law; and provided, further, that Yield for any Receivable Interest shall not be
------------------
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
SECTION 1.02. Defined Terms Incorporated by Reference. Unless
----------------------------------------
otherwise defined in this Agreement and subject to the modifications herein set
forth, capitalized terms used in this Agreement or in any provisions of the
Primary Purchase Agreement incorporated in this Agreement by reference shall
have the meanings given to them in the Primary Purchase Agreement. Without
limiting the foregoing, the defined terms "Certificate", "Concentration Bank",
"Concentration Notice", "Consent and Acknowledgment", "Credit and Collection
Policy", "Default Ratio", "Depositary Bank", "Depositary Notice", "Investor
Report", "Lock-Box Agreement", "Lock-Box Bank", "Seller Subsidiary" and
"Transfer Agreement" are hereby incorporated by reference together with the
related Exhibit G, Schedule III, Exhibit I, Exhibit F, Schedule IV, Schedule
VII, Schedule II, Exhibit H, Exhibit A, Exhibit B, Schedule I, Schedule V and
Exhibit D, respectively, of the Primary Purchase Agreement, as well as Schedule
VI thereto. All references to "the Agent" in provisions of the Primary Purchase
Agreement incorporated in this Agreement by reference shall, without further
reference, mean CIBC as Agent under this Agreement. Each use of the word
"hereunder", "herein" or "hereof" in the provisions of the Primary Purchase
Agreement incorporated in this Agreement by reference shall, without further
reference, be deemed to be a reference to this Agreement. Unless the context
otherwise requires, any reference to a "Purchaser", the "Required Purchasers" or
the "Purchasers" under the Primary Purchase Agreement shall be deemed to be a
reference to a "Secondary Purchaser", the "Required Secondary Purchasers" or the
"Secondary Purchasers" hereunder. Furthermore, all references in such
incorporated provisions to "Collections", "Contract", "Net Receivables Pool
Balance", "Pool Receivable", "Receivables Pool" and "Related Security" shall
mean the Collections, a Contract, the Net Receivables Pool Balance, a Pool
Receivable, the Receivables Pool and the Related Security under this Agreement,
respectively. To the extent any word or phrase is defined in this Agreement,
any such word or phrase appearing in provisions so incorporated by reference
from the Primary Purchase Agreement shall have the meaning given to it in this
Agreement. The incorporation by reference into this Agreement from the Primary
Purchase Agreement is for convenience only, and this Agreement and the Primary
Purchase Agreement shall at all times be, and be treated as, separate and
distinct agreements. Incorporations by reference in this Agreement from the
Primary Purchase Agreement shall not be affected or impaired by any subsequent
expiration or termination of the Primary Purchase Agreement, nor by any
amendment thereof or waiver thereunder unless the parties hereto shall have
consented to such amendment or waiver in writing.
SECTION 1.03. Other Terms. All accounting terms not specifically
------------
defined herein shall be construed in accordance with generally accepted
accounting principles. All term s used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchase Facility. (a) On the terms and conditions
------------------
hereinafter set forth, each Secondary Purchaser shall purchase Receivable
Interests from the Seller from time to time during the period from the date
hereof to the Facility Termination Date. Under no circumstances shall a
Secondary Purchaser make any Purchase if after giving effect to such Purchase,
such Secondary Purchaser's Aggregate Capital, together with the Related
Purchasers' "Aggregate Capital" under the Primary Purchase Agreement, would
exceed such Secondary Purchaser's Commitment. Notwithstanding anything to the
contrary contained herein, until such time as the parties expressly agree, all
Purchases of Receivable Interests hereunder and under the Primary Purchase
Agreement shall be made with respect to a single Receivables Pool.
(b) The Seller may, upon at least five Business Days' notice to the
Administrative Agent and the Secondary Purchasers, terminate in whole or reduce
in part the unused portion of the Commitment; provided, that each partial
---------
reduction shall be in the amount of at least $5,000,000 or an integral multiple
thereof; provided, further, that any partial reduction of the Commitment for any
------------------
Secondary Purchaser must not result in a remaining Commitment of less than
$25,000,000 or the Commitment for such Secondary Purchaser shall be reduced to
zero. Any reductions in the Commitment pursuant to this subsection (b) shall be
permanent.
(c) The Seller may, upon at least five Business Days' written notice
to the Administrative Agent and the Secondary Purchasers specifying an Optional
Reduction Amount and an Optional Reduction Effective Date, effect an Optional
Reduction. Commencing on the Optional Reduction Effective Date, the Collection
Agent shall cease the reinvestment of Collections for a period of time such that
after giving effect to the amount of Collections which are not reinvested in
accordance with the provisions of Section 2.04(b)(ii), the amount of Combined
Capital on the day immediately preceding the Optional Reduction Effective Date
is reduced by an amount equal to the Optional Reduction Amount. Any Optional
Reduction under this subsection (c) shall be applied pro rata among the
Secondary Purchasers according to their Pro Rata Shares (after giving effect to
the application of the appropriate portion of the Optional Reduction to
Matterhorn under the Primary Purchase Agreement). The Seller shall indemnify
any Secondary Purchaser for all losses, expenses and liabilities, if any
(including, without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds required by any Secondary
Purchaser in connection with such Secondary Purchaser's funding or maintenance
of the Receivable Interests), which such Secondary Purchaser may sustain as a
result of any Optional Reduction pursuant to this subsection (c).
(d) The Secondary Purchasers recognize and agree that their respective
Pro Rata Shares shall be reallocated in accordance with any reallocation of the
"Pro Rata Shares" of the Purchasers under the Primary Purchase Agreement. If,
as a result of any reallocation, a Secondary Purchaser's Aggregate Capital
exceeds its Pro Rata Share (as reallocated) of the Commitment, such Secondary
Purchaser shall transfer a Receivable Interest or Receivables Interest computed
on the basis of such excess Capital to the Secondary Purchaser or Secondary
Purchasers whose Pro Rata Share has increased as a result of such reallocation
in exchange for a cash payment in an amount equal to the aggregate Capital of
the Receivable Interests so transferred.
(e) The Expiration Date shall be the third anniversary of the date
hereof; provided, that the Expiration Date may be extended for an additional
---------
year on each annual anniversary of the date hereof if the Seller gives each
Secondary Purchaser written notice not later than 90 days prior to each such
annual anniversary (beginning with the first such annual anniversary) and each
Secondary Purchaser provides the Seller with its written consent to such
extension not later than 30 days after receipt of the Seller's notice.
(f) The Seller may, upon thirty days' prior written notice to the
Administrative Agent and the Secondary Purchasers, cease purchasing Receivables
from any Seller Subsidiary, and after the Seller ceases purchasing Receivables
from such Seller Subsidiary, such Seller Subsidiary shall no longer be a Selling
Subsidiary for all purposes of this Agreement other than with respect to those
obligations which are expressly intended to survive the termination of this
Agreement, including, without limitation, the indemnities contained in Section
8.01 as incorporated by reference in the Consent and Acknowledgment to which
such Seller Subsidiary is a party. If, as a result of the Seller's decision to
cease purchasing Receivables from any Seller Subsidiary, the Required Secondary
Purchasers determine, in their sole discretion, that the Events of Termination
in Section 7.01(i) are no longer reasonable or protective, the Required
Secondary Purchasers may modify the provisions of such Section 7.01(i) with the
consent of the Seller (which consent shall not be unreasonably withheld or
delayed).
SECTION 2.02. Making Purchases. (a) Each Purchase shall be made on at
-----------------
least three Business Days' notice from the Seller to each Secondary Purchaser.
Each such notice shall specify (i) the amount requested to be paid to the Seller
(which shall not be less than $5,000,000), and
(ii) the date of such Purchase (which shall be a Business Day). Any
notice from the Seller to a Related Purchaser to make a "Purchase" under the
Primary Purchase Agreement shall be deemed to satisfy the notice provisions
hereof. No Secondary Purchaser shall be responsible for any failure by any
other Secondary Purchaser to perform its obligations to make a Purchase
hereunder nor shall the Commitment of any Secondary Purchaser be increased or
decreased as a result of such failure.
(b) On the date of each Purchase, each Secondary Purchaser shall, upon
satisfaction of the applicable conditions set forth in Section 3.01 and Section
3.02, make available to the Seller in same day funds, at the Seller's account
with Bank of America National Trust and Savings Association, account number
12334-01430, an amount equal to the initial Capital of such Receivable Interest
purchased by such Secondary Purchaser. Each notice given by the Seller pursuant
to subsection (a) above (other than a notice given under the Primary Purchase
Agreement which is deemed to be notice hereunder) shall be irrevocable and
binding on the Seller and the Seller shall indemnify each Secondary Purchaser
against any loss or expense incurred by such Secondary Purchaser as a result of
any failure by the Seller to accept the amount requested to be paid by such
Secondary Purchaser, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by such Secondary Purchaser by reason
of the liquidation or reemployment of funds acquired or requested by such
Secondary Purchaser to fund such requested amount.
(c) Each Purchase made by a Secondary Purchaser shall be evidenced by,
and recorded on, a Certificate duly executed by the Seller. The Seller hereby
authorizes each Secondary Purchaser to make the appropriate notation on the
schedule annexed to the Certificate delivered to such Secondary Purchaser for
the purposes of recording any Purchase made by such Secondary Purchaser thereon
(provided that any failure by such Secondary Purchaser to make any such notation
shall not affect the obligations of the Seller hereunder or under such
Certificate in respect of such Purchase). The Seller agrees that each notation
made by a Secondary Purchaser on the schedule annexed to the Certificate
delivered to such Secondary Purchaser shall be binding absent demonstrable
error.
(d) Each Secondary Purchaser hereby agrees that it shall, subject to
the satisfaction of the applicable conditions set forth in Section 3.01 and
Section 3.02 hereof and upon the request of such Secondary Purchaser's Related
Purchaser, acquire by assignment from such Related Purchaser any "Receivable
Interest" owned and maintained by such Related Purchaser under the Primary
Purchase Agreement. The Seller hereby agrees that each such acquisition shall
be considered to be a Purchase requested by the Seller for all purposes
hereunder other than with respect to the obligation of the Secondary Purchasers
to deliver funds to the Seller in respect of such acquisition and with respect
to the requirement of three Business Days' notice of a Purchase being given by
the Seller.
SECTION 2.03. Incorporation by Reference. Section 2.03 of the Primary
---------------------------
Purchase Agreement is hereby incorporated herein by reference, except that each
reference therein to the "Termination Date" shall be deemed to be a reference to
the "Facility Termination Date".
SECTION 2.04. Incorporation by Reference. 2.04 Of the Primary Purchase
---------------------------
Agreement is hereby incorporated herein by reference.
SECTION 2.05. Fees. (a) The Seller shall pay to each Secondary
-----
Purchaser a fee (the "Commitment Fee") at the per annum rate, if the Seller's
long-term senior unsecured debt is rated investment grade by either S&P
(currently BBB-or higher) or Moody's (currently BAA3 or higher), of .25% on the
average daily amount of the Unused Commitment of such Secondary Purchaser;
provided, that if the Seller's long-term senior unsecured debt is not rated
- ---------
investment grade by either S&P or Moody's, the Commitment Fee shall be equal to
the product of (i) the average daily amount of the Unused Commitment of such
Secondary Purchaser and (ii) the rate per annum indicated below, as determined
by reference to the higher of the long-term senior unsecured debt ratings for
the Seller as announced by S&P and Moody's and in effect on the Settlement Date
such fee is required to be paid hereunder:
S&P Rating Moody' s Rate
--- ------ -------- ----
BB+ Bal .45%
BB Ba2 .65%
BB- Ba3 .75%
B+ B1 1.00%
The Commitment Fee shall be payable in arrears on the first Business
Day after each Settlement Date during the term of this Agreement and on the
later of the Facility Termination Date or the date on which the Aggregate
Capital of a Secondary Purchaser is reduced to zero. The Commitment Fee shall
be payable by the Seller notwithstanding any insufficiency in the amount of
Collections.
(b) The Collection Agent (if other than the Seller) shall be paid a
Collection Agent Fee as set forth in Section 6.06 hereof.
(c) The Seller shall pay to the Administrative Agent a fee as
separately agreed between the Seller and the Administrative Agent.
SECTION 2.06. Incorporation by Reference. Section 2.06 of the Primary
---------------------------
Purchase Agreement is hereby incorporated herein by reference.
SECTION 2.07. Incorporation by Reference. Section 2.07 of the Primary
---------------------------
Purchase Agreement is hereby incorporated herein by reference.
SECTION 2.08. Yield Protection.
-----------------
(a) If, after the date hereof, the adoption of any applicable
law,
rule or regulation, or any change therein, including Regulation D of the Board
of Governors of the Federal Reserve System, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Secondary Purchaser or any Person controlling any Secondary
Purchaser, or any permitted assignee under this Agreement (each of which being
an "Affected Party" with any request or directive (whether or not having the
----------------
force of law) of any such authority, central bank or comparable agency,
(A) shall subject an Affected Party to any tax (except for taxes
on the overall net income of such Affected Party), duty or other
charge with respect to the Receivable Interests or any right to make
purchases, or shall change the basis of taxation of payments to an
Affected Party of its Capital or Yield or any other amounts due under
this Agreement in respect of its Capital or its rights, if any, to
make purchases; or
(B) shall impose, modify or deem applicable any reserve
requirement (including, without limitation, any reserve requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding any reserve requirement, if any, included in the
determination of Yield), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Affected Party; or
(C) shall impose any other condition affecting the Receivable
Interests or the Secondary Purchaser's rights, if any, to make
purchases; and the result of any of the foregoing is (i) to increase
the cost to, or, in the case of Regulation D referred to above, to
impose a cost on an Affected Party funding or making or maintaining
any Receivable Interest, or (ii) to reduce the amount of any sum
received or receivable by an Affected Party under this Agreement with
respect thereto, then within ten days after demand by such Affected
Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate
such Affected Party for such additional or increased cost incurred or
such reduction suffered.
(b) If an Affected Party shall reasonably determine that the adoption
of any applicable law, rule, regulation, directive or guideline regarding
capital adequacy, or any change in or phase-in of any applicable law, rule,
regulation, directive or guideline or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by an Affected
Party with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of any Affected Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which any such Affected
Party could have achieved but for such adoption, change or compliance (taking
into consideration the policies of such Affected Party with respect to capital
adequacy) by an amount deemed by such Affected Party to be material, then from
time to time, within ten days after demand by such Affected Party, the Seller
shall pay to such Affected Party such additional amount or amounts as will
compensate such Affected Party for such reduction.
(c) Each Affected Party will promptly notify the Seller of any event
of which it has knowledge occurring after the date hereof which will entitle
such Affected Party to compensation pursuant to this Section 2.08. If an
Affected Party fails to give such notice within 90 days after it obtains actual
knowledge of such event and such result, such Affected Party shall be entitled
to compensation pursuant to this Section 2.08 only to the extent such additional
amount or reduction accrues on or after the date 90 days prior to the date on
which such Affected Party gives such notice.
(d) In determining any amount provided for in this Section 2.08, the
Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this Section 2.08 shall submit to the Seller
a certificate as to such additional or increased cost or reduction, which
certificate shall be conclusive absent demonstrable error; provided, that the
---------
failure to deliver any such certificate shall not affect the Affected Party's
right to payment hereunder unless notice as required by Section 2.08(c) has not
been given.
SECTION 2.09. Incorporation by Reference. Section 2.09 of the Primary Purchase
---------------------------
Agreement is hereby incorporated herein by reference.
SECTION 2.10. Incorporation by Reference. Section 2.10 of the Primary Purchase
---------------------------
Agreement is hereby incorporated herein by reference.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. The initial
-----------------------------------------
Purchase of Receivable Interests under this Agreement is subject to the
conditions precedent that the Secondary Purchasers shall have received on or
before the date of such Purchase the following, each in form and substance
satisfactory to the Secondary Purchasers and the Administrative Agent:
(a) Certificates of the Secretary or Assistant Secretary of the Seller
and each Seller Subsidiary certifying the names and true signatures of their
respective officers authorized to sign this Agreement, the Certificates and the
other documents to be delivered by them hereunder or in connection herewith,
evidence of corporate authorization of the transactions contemplated hereby, the
articles of incorporation (attached and appropriately certified by the Secretary
of State of the Seller's and each Seller Subsidiary's jurisdiction of
incorporation) and the by-laws and all amendments thereto of the Seller and each
Seller Subsidiary.
(b) Time stamped receipt copies of proper financing statements, duly
filed on or before the date of such initial Purchase under the UCC of all
jurisdictions that the Secondary Purchasers or the Administrative Agent may deem
necessary or desirable in order (i) to perfect the ownership interests
contemplated by this Agreement and (ii) to perfect the ownership interests of
the Seller in the receivables purchased by the Seller from the Seller
Subsidiaries pursuant to the Transfer Agreements.
(c) Time stamped receipt copies of proper UCC termination statements,
if any, necessary to release all security interests and other rights of any
Person in the Receivables, Contracts or Related Security previously granted by
the Seller or any Seller Subsidiary.
(d) Undated executed copies of Lock-Box Notices to the Lock-Box Banks
for each Lock-Box Account.
(e) A favorable opinion of Shearman & Sterling, counsel for the
Seller, substantially in the form of Exhibit A-1 hereto, and as to such other
matters as the Secondary Purchasers may reasonably request.
(f) A favorable opinion of Georgia counsel for the Seller,
substantially in the form of Exhibit A-2 hereto, and as to such other matters as
the Secondary Purchasers may reasonably request.
(g) A favorable opinion of local counsel for each Seller Subsidiary,
substantially in the form of Exhibit A-3 hereto, and as to such other matters as
the Secondary Purchasers may reasonably request.
(h) A favorable opinion of special counsel for the Seller,
substantially in the form of Exhibit A-4 hereto, and as to such other matters as
the Secondary Purchasers may reasonably request.
(i) A written memorandum from the Seller's independent accountants
substantially to the effect that the Seller may account for the proposed sale of
undivided percentage ownership interests in Receivables hereunder in its
financial statements as a sale consistent with generally accepted accounting
principles.
(j) An executed Transfer Agreement and Consent and Acknowledgment from
each Seller Subsidiary.
(k) The Certificates for the Secondary Purchasers.
SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments. Each
--------------------------------------------------------
Purchase (including the initial Purchase and each acceptance of an assignment
pursuant to Section 2.02(d) hereof) and each reinvestment shall be subject to
the further conditions precedent that (a) in the case of each Purchase, the
Collection Agent shall have delivered to the Secondary Purchasers and the
Administrative Agent on or prior to the date of such Purchase, in form and
substance satisfactory to the Secondary Purchasers, all Investor Reports as and
when due under Section 6.02(g) and, on or prior to the date of the initial
Purchase, an Investor Report containing then current information acceptable to
the Secondary Purchasers, and (b) on the date of each Purchase or reinvestment,
the following statements shall be true (and acceptance of the proceeds of such
Purchase or reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
(i) the representations and warranties contained in Article IV
are correct on and as of the date of such Purchase or reinvestment as
though made on and as of such date,
(ii) no event has occurred and is continuing, or would result
from such Purchase or reinvestment, that constitutes an Event of
Termination or a Potential Termination Event,
(iii) on such date, the Seller has a long-term senior unsecured
debt rating of at least BB by S&P and Ba3 by Moody's,
(iv) the Facility Termination Date shall not have occurred,
(v) the Related Purchaser shall have failed to make a "Purchase"
of like amount, term and tenor which was requested by the Seller, or
shall have ceased to make reinvestments, in either case under the
Primary Purchase Agreement, and
(vi) the Internal Revenue Service shall not have filed a notice
of lien in an amount greater than $50 million pursuant to Section 6323
of the Code with regard to any assets of the Seller or any Seller
Subsidiary, and the Pension Benefit Guaranty Corporation shall not
have filed a notice of lien in an amount greater than $50 million
pursuant to Section 4068 of ERISA with regard to any assets of the
Seller or any Seller Subsidiary, unless such liens (1) have been
suspended or (2) are being contested in good faith by the Seller or
such Seller Subsidiary and have been bonded in the full amount
thereof, and (c) the Secondary Purchasers shall have received such
other approvals, opinions or documents as they may reasonably request.
SECTION 3.03. Conditions Subsequent. The Seller shall, no later than
---------------------
July 15, 1990 with respect to items (a), (b) and (c) below, and no later than
June 29, 1990 with respect to items (d) and (e) below, deliver to the Secondary
Purchasers and the Administrative Agent:
(a) Acknowledgment copies of the financing statements referred to in
Section 3.01 (b).
(b) Acknowledgment copies of the UCC termination statements, if any,
referred to in Section 3.01(c).
(c) Completed requests for information, dated a date subsequent to the
date of the filings made pursuant to subsection (a), listing the financing
statements referred to in subsection (a) above and all other effective financing
statements filed in the jurisdictions referred to in subsection (a) above that
name the Seller or a Seller Subsidiary as debtor, together with copies of such
other financing statements (none of which shall cover any Receivables, Contracts
or Related Security) or any interest therein.
(d) Executed Lock-Box Agreements.
(e) Undated executed Depositary Notices to each Depositary Bank for
each Depositary Account and undated executed Concentration Notices to each
Concentration Bank for each Concentration Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Incorporation by Reference. Article IV of the Primary
---------------------------
Purchase Agreement is hereby incorporated herein by reference, except that each
reference to the "Secondary Purchase Agreement" shall be deemed to be a
reference to the "Primary Purchase Agreement", and each reference to Article XII
or the sections contained therein shall be deemed to be a reference to Article
XI or the sections contained therein.
ARTICLE V
COVENANTS
SECTION 5.01. Incorporation by Reference. Article V of the Primary
---------------------------
Purchase Agreement is hereby incorporated herein by reference, except that each
reference therein to the "Secondary Purchase Agreement" shall be deemed to be a
reference to the "Primary Purchase Agreement" and each reference to Article XII
or the sections contained therein shall be deemed to be a reference to Article
XI or the sections contained therein.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The administration and collection
--------------------------------
of the Pool Receivables shall be conducted by such Person (the "Collection
Agent") so designated from time to time in accordance with this Section 6.01.
The Seller is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Collection Agent pursuant to the terms of this Agreement.
The Secondary Purchasers may at any time designate as Collection Agent any
Person (including a Secondary Purchaser or a Purchaser) to succeed the Seller or
any successor Collection Agent, if such Person shall consent and agree to the
terms hereof. Unless the Required Secondary Purchasers determine in their sole
discretion that it would be impractical or inadvisable to do so, the Secondary
Purchasers shall give the Seller at least five Business Days' notice of any such
designation. The Collection Agent may, with the prior consent of the Secondary
Purchasers, subcontract with any other Person for the administration and
collection of all or a significant portion of the Pool Receivables; provided,
---------
that the Collection Agent may, so long as it is the Seller, subcontract with a
Seller Subsidiary for the administration and collection of the Pool Receivables
without the consent of the Secondary Purchasers; provided, further, that the
------------------
Seller may, without the consent of the Secondary Purchasers, subcontract with
any other Person for the administration and collection of Pool Receivables as
authorized by the Credit and Collection Policy. Any such subcontract shall not
affect the Collection Agent's liability for performance of its duties and
obligations pursuant to the terms hereof.
SECTION 6.02. Duties of Collection Agent. (a) The Collection Agent
---------------------------
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy. Each of the Seller,
each. Secondary Purchaser and the Administrative Agent hereby appoints the
Collection Agent, from time to time designated pursuant to Section 6.01 hereof,
as agent for itself and for the owners of Receivable Interests to enforce their
respective rights and interests in the Pool Receivables, the Related Security
and the related Contracts.
(b) The Collection Agent shall administer the Collections in accordance
with the
procedures described herein and in Section 2.04. The Collection Agent shall set
aside and hold in trust for the account of the Seller and each Secondary
Purchaser, their respective shares of the Collections of Pool Receivables in
accordance with Section 2.04 but shall not be required, except either upon the
request of the Administrative Agent acting at the direction of the Required
Secondary Purchasers or upon the occurrence and during the continuance of an
Event of Termination or a Potential Termination Event, to segregate the funds
constituting each Secondary Purchaser's share of such Collections from the
general funds of the Collection Agent or the Seller prior to the remittance
thereof in accordance with Section 2.04. If the Collection Agent shall be
required to segregate Collections pursuant to the proceeding sentence, the
Collection Agent shall segregate and deposit with a bank (which may be CIBC,
Citibank, First Chicago or UBS) designated by each Secondary Purchaser such
allocable share of Collections of Pool Receivables set aside for such Secondary
Purchaser on the first Business Day following receipt by the Collection Agent of
such Collections.
(c) If no Event of Termination or Potential Termination Event shall
have occurred, the Seller, while it is the Collection Agent, may, in accordance
with the Credit and Collection Policy, extend the maturity or adjust the
Outstanding Balance of any Receivable as the Seller deems appropriate to
maximize Collections in respect thereof.
(d) The Collection Agent shall hold in trust for the Seller and the
Secondary Purchasers, in accordance with their respective interests, all Records
that evidence or relate to Pool Receivables and shall, as soon as practicable
upon demand of the Administrative Agent acting at the direction of the Required
Secondary Purchasers, deliver or make available to the Administrative Agent all
Records in its possession which evidence or relate to Pool Receivables.
(e) The Collection Agent, shall as soon as practicable following
receipt thereof, turn over to the Seller (i) that portion of Collections of Pool
Receivables representing the Seller's undivided fractional ownership interest
therein, less, in the event the Seller is not the Collection Agent, all
reasonable out-of-pocket costs and expenses of the Collection Agent of
servicing, administering and collecting the Pool Receivables to the extent not
covered by the Collection Agent Fee received by it, and (ii) any cash
collections or other cash proceeds received with respect to Receivables not
constituting Pool Receivables.
(f) The Collection Agent shall, from time to time at the request of a
Secondary Purchaser, furnish to such Secondary Purchaser (promptly after any
such request) a calculation of the amounts set aside for such Secondary
Purchaser pursuant to Section 2.04 hereof.
(g) On or prior to each Investor Report Date, the Collection Agent
shall prepare and forward to each Secondary Purchaser and the Administrative
Agent (i) an Investor Report relating to each Receivable Interest outstanding on
the immediately preceding Settlement Date, and (ii) if requested by a Secondary
Purchaser, a listing by Obligor of all Pool Receivables outstanding on such
Settlement Date, together with an analysis of the aging of such Pool Receivables
by Obligor and such additional information as may be reasonably requested by
such Secondary Purchaser. Prior to the occurrence of an Event of Termination or
a Potential Termination Event, the Collection Agent will use its best efforts to
provide the Secondary Purchasers and the Administrative Agent with the
information in clauses (i) and (ii) above on a more frequent basis if reasonably
requested by the Required Secondary Purchasers. Following an Event of
Termination or a Potential Termination Event, the Collection Agent will provide
the Secondary Purchasers and the Administrative Agent with the information in
clauses (i) and (ii) above on a more frequent basis if required by the Required
Secondary Purchasers.
(h) The Collection Agent will, to the extent permitted by applicable
law and with respect to any amount not paid by the Collection Agent when
required to be paid hereunder, pay on demand interest to each Secondary
Purchaser at a rate per annum equal to 2% above the Base Rate, provided,
---------
however, that such interest rate will not at any time exceed the maximum rate
- --------
permitted by applicable law.
(i) The Collection Agent's authorization under this Agreement will
terminate after the Facility Termination Date, upon payment in full of all
amounts payable to the Secondary Purchasers and the Collection Agent under this
Agreement.
SECTION 6.03. Rights of the Administrative Agent. (a) Upon five days
-----------------------------------
notice to the Seller, unless the Required Secondary Purchasers determine in
their sole discretion that it would be impracticable or inadvisable to give such
notice, the Administrative Agent at the direction of the Required Secondary
Purchasers is authorized at any time to date and to deliver to the Lock-Box
Banks, the Lock-Box Notices, to the Depositary Banks, the Depositary Notices and
to the Concentration Banks, the Concentration Notices delivered hereunder. The
Seller hereby transfers to the Administrative Agent, effective when the
Administrative Agent delivers such Lock-Box Notices, such Depositary Notices or
such Concentration Notices, as the case may be, the exclusive ownership and
control of such Lock-Box Accounts, such Depositary Accounts or such
Concentration Accounts. The Seller shall, and shall cause each Seller Subsidiary
to, take any actions reasonably requested by the Administrative Agent to effect
such transfer. In case any authorized signatory of the Seller and any Seller
Subsidiary whose signature appears on a Lock-Box Notice, a Depositary Notice or
a Concentration Notice shall cease to have such authority before the delivery of
such Lock-Box Notice, such Depositary Notice or a Concentration Notice, such
signature shall nevertheless be valid as if such authority had remained in
force. The Administrative Agent at the direction of the Required Secondary
Purchasers may notify the Obligors of Pool Receivables, at any time and at the
Seller's expense, of the ownership of Receivable Interests under this Agreement
and may also direct that payments of all amounts due or that become due under
any or all Receivables be made directly to the Administrative Agent or its
designee. In furtherance of the foregoing, the Administrative Agent shall, upon
the direction of the Required Secondary Purchasers, be entitled to take all such
actions at it deems necessary or advisable to exercise dominion and control over
the collection and servicing of the Pool Receivables including such action as
shall be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Pool Receivables to come into the possession of the
Administrative Agent rather than the Seller. Unless the Required Secondary
Purchasers determine in their sole discretion that it would be impractical or
inadvisable to do so, the Secondary Purchasers must give the Seller five days
prior notice of any such action.
(b) At any time following the designation of a Collection Agent other
than the Seller pursuant to Section 6.01:
(i) The Administrative Agent may, and at the direction of the
Required Secondary Purchasers shall, direct the Obligors of Pool
Receivables that all payments thereunder be made directly to the
Administrative Agent or its designee.
(ii) The Seller shall, and shall cause each Seller Subsidiary to,
at the Administrative Agent's request and at the expense of the Seller
and the Seller Subsidiaries, notify each Obligor of Pool Receivables
of the ownership of Receivable Interests under this Agreement and
direct that payments be made directly to the Administrative Agent or a
designee of the Administrative Agent approved by the Required
Secondary Purchasers.
(iii) The Seller shall, and shall cause each Seller Subsidiary
to, at the Administrative Agent's request (which shall be at the
direction of the Required Secondary Purchasers) and at the expense of
the Seller and the Seller Subsidiaries, (A) assemble all of the
Records that evidence or relate to the Pool Receivables, and the
related Contracts and Related Security, or that are otherwise
necessary or desirable to collect the Pool Receivables, and shall make
the same available to the Administrative Agent or its designee, at a
place selected by the Administrative Agent,
(B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections of Pool Receivables in a
manner acceptable to the Administrative Agent and the Required
Secondary Purchasers and, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Administrative Agent or its designee.
(iv) The Seller and each Seller Subsidiary hereby authorizes
the Administrative Agent to take any and all steps in the Seller's or
such Seller Subsidiary's name and on behalf of the Seller or such
Seller Subsidiary that are necessary or desirable, in the
determination of the Administrative Agent and the Required Secondary
Purchasers, to collect amounts due under the Pool Receivables,
including, without limitation, endorsing the Seller's or such Seller
Subsidiary's name on checks and other instruments representing
Collections of Pool Receivables and enforcing the Pool Receivables and
the Related Security and related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything herein to the
-------------------------------
contrary notwithstanding:
(a) The Seller shall, and shall cause each Seller Subsidiary to,
perform its obligations under the Contracts related to the Pool Receivables to
the same extent as if Receivable Interests and Receivables had not been sold and
the exercise by the Administrative Agent and by the Secondary Purchasers of
their rights hereunder shall not release the Collection Agent, the Seller or any
Seller Subsidiary from any of their duties or obligations with respect to any
Pool Receivables or under the related Contracts; and
(b) Neither the Administrative Agent nor the Secondary Purchasers
shall have any obligation or liability with respect to any Pool Receivables or
related Contracts, nor shall any of them be obligated to perform the obligations
of the Seller or any Seller Subsidiary thereunder.
SECTION 6.05. Further Actions Evidencing Purchases. (a) The Seller
-------------------------------------
shall, and shall cause each Seller Subsidiary to, from time to time, at their
expense, promptly execute and deliver all further instruments and documents, and
take all further actions, that may be necessary or desirable, or that the
Administrative Agent or any Secondary Purchaser may reasonably request, to
perfect, protect or more fully evidence the Receivable Interests purchased
hereunder, or to enable any Secondary Purchaser or the Administrative Agent to
exercise and enforce their respective rights and remedies hereunder or under the
Certificates. Without limiting the foregoing, the Seller and each Seller
Subsidiary will upon the request of any Secondary Purchaser or the
Administrative Agent (i) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments and documents,
that may be necessary or desirable, or that any Secondary Purchaser or the
Administrative Agent may reasonably request, to perfect, protect or evidence
such Receivable Interests; (ii) mark conspicuously each invoice evidencing each
Pool Receivable and the related Contract with a legend, acceptable to the
Secondary Purchasers, evidencing that Receivable Interests therein have been
sold; and (iii) mark its master data processing records evidencing such Pool
Receivables and related Contracts with a legend, acceptable to the Secondary
Purchasers, evidencing that Receivable Interests therein have been sold;
provided that the actions specified in clauses (ii) and (iii) may be directed by
- --------
the Required Secondary Purchasers or the Administrative Agent only upon the
occurrence of an Event of Termination or a Potential Termination Event.
(b) The Seller authorizes the Administrative Agent to file financing
or continuation statements, and amendments thereto, relating to the Pool
Receivables and the Related Security, the related Contracts and the Collections
with respect thereto without the signature of the Seller where permitted by law.
A photocopy or other reproduction of this Agreement shall be sufficient as a
financing statement where permitted by law.
(c) If the Collection Agent fails to perform any of its obligations
hereunder, any Secondary Purchaser or the Administrative Agent may (but shall
not be required to) perform, or cause performance of, such obligation; and such
Secondary Purchaser's or the Administrative Agent's costs and expenses incurred
in connection therewith shall be payable by the Seller (if the Collection Agent
that fails to so perform is the Seller or an Affiliate thereof) as provided in
Section 8.01 or Section 9.04, as applicable.
SECTION 6.06. Collection Agent Fee. The Collection Agent (if not the
---------------------
Seller or an Affiliate thereof) shall be paid a collection fee (the "Collection
Agent Fee") of 1/4 of 1% per annum on the average daily amount of the Combined
Capital payable monthly in arrears on each Settlement Date. Upon three Business
Days' notice to the Administrative Agent and the Secondary Purchasers, the
Collection Agent (if not the Seller or an Affiliate thereof) may elect to have
the Collection Agent Fee computed on the basis of a different percentage per
annum, but in no event in excess of 110% of the reasonable costs and expenses of
the Collection Agent in administering and collecting the Pool Receivables. The
Collection Agent Fee shall be payable only from Collections pursuant to, and
subject to the priority of payment set forth in, Section 2.04. Notwithstanding
anything contained in this Section 6.06 to the contrary, the Collection Agent
Fee payable hereunder shall be reduced to the extent and in the amount of the
"Collection Agent Fee" paid to the Collection Agent under the Primary Purchase
Agreement.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Incorporation by Reference; Additional Events of
------------------------------------------------
Termination. If any of the events specified in subsection (a) or subsection (b)
- ------------
below ("Events of Termination") shall occur and be continuing:
(a) The text set forth in Sections 7.01(a) through (p) of the Primary
Purchase Agreement is incorporated herein by reference as if set forth herein in
its entirety, except that each reference to the "Secondary Purchase Agreement"
shall be deemed to be a reference to the "Primary Purchase Agreement", each use
of the word "hereunder", "hereof" or "herein" shall be deemed to be a reference
to this Agreement and any reference to a "Purchaser", the "Required Purchasers"
or the "Purchasers" shall be deemed to be a reference to a "Secondary
Purchaser", the "Required Secondary Purchasers" or the "Secondary Purchasers");
or
(b) the occurrence or declaration of an "Event of Termination" under the Primary
Purchase Agreement, unless cured or waived; then, and in any such event, at the
direction of the Required Secondary Purchasers, the Administrative Agent shall,
by notice to the Seller, take either or both of the following actions: (x)
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred), and (y) designate
another Person to succeed the Seller as the Collection Agent, subject to the
approval of the Secondary Purchasers; provided, that automatically upon the
---------
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in subsection (h) of this Section 7.01, the Facility
Termination Date shall occur. Upon any such declaration or designation or upon
any such automatic termination, (i) each Receivables Pool shall be fixed as of
the Business Day immediately preceding the Facility Termination Date and the
Collection Agent shall prepare and forward to each Secondary Purchaser and the
Administrative Agent, within one Business Day after the Facility Termination
Date, an Investor Report relating to each Receivable Interest outstanding on the
Business Day immediately preceding the Facility Termination Date, and (ii) the
Secondary Purchasers and the Administrative Agent shall have, in addition to the
rights and remedies which they may have under this Agreement, all other rights
and remedies provided after default under the UCC and under other applicable
law, which rights and remedies shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller. Without limiting any other
--------------------------
rights that the Administrative Agent or the Secondary Purchasers or any
Affiliate thereof and their respective officers, directors, employees and agents
(each, an "Indemnified Party") may have hereunder or under applicable law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any
and all claims, losses and liabilities (including reasonable attorneys fees and
expenses) (all of the foregoing being collectively referred to as "Indemnified
Amounts") arising out of or resulting from this Agreement or the use of proceeds
of purchases or reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or any Contract, excluding, however, (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party, (b) recourses(except as otherwise
specifically provided in this Agreement) for uncollectible Receivables or (c)
except as set forth below, any income taxes incurred by such Indemnified Party
arising out of or as a result of this Agreement or the ownership of Receivable
Interests or in respect of any Receivable or any Contract. Without limitation
of the generality of the foregoing, the Seller shall pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from any of the following:
(i) the creation of a Receivable Interest in any Pool Receivable
which is not at the date of the creation of such Receivable Interest
an Eligible Receivable;
(ii) reliance on any representation or warranty made or deemed
made by the Seller or any Seller Subsidiary (or any of their
respective Responsible Officers) or any statement made by any
Responsible Officer of the Seller or any Seller Subsidiary under or in
connection with this Agreement which shall have been incorrect in any
material respect when made;
(iii) the failure by the Seller or any Seller Subsidiary to comply
with any applicable law, rule or regulation;
(iv) the failure to vest in a Secondary Purchaser an undivided
percentage ownership interest, to the extent of such Secondary
Purchaser's Receivable Interest, in the Receivables (including,
without limitation, Receivables of Government Obligors and Foreign
Obligors) in, or purporting to be in, the Receivables Pool and the
Related Security and Collections in respect thereof, free and clear of
any Adverse Claim other than as authorized hereunder;
(v) the failure to vest in the Seller all right, title and interest
in the Receivables purchased by the Seller from any Seller Subsidiary
pursuant to a Transfer Agreement, free and clear of any Adverse Claim
other than as authorized hereunder;
(vi) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction, under applicable law with respect to the
assignment of Receivables of Government obligors or other applicable
laws with respect to any Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections in respect
thereof, whether at the time of any purchase or reinvestment or at any
subsequent time;
(vii) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation
of such 0bligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(viii) any failure of the Seller, as Collection Agent or otherwise,
to perform its duties or obligations in accordance with the provisions
of this Agreement;
(ix) any products liability claim arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract;
(x) any loss incurred by any Secondary Purchaser as a result of the
Outstanding Balance of all Pool Receivables from the same Obligor,
expressed as a percentage of the aggregate Outstanding Balance of
Eligible Receivables, being in excess of the Concentration Limit or,
if applicable, Special Concentration Limit for such Obligor;
(xi) the commingling of Collections of Pool Receivables at any time
with other funds;
(xii) any action or omission by the Seller, whether as Collection
Agent or otherwise, reducing or impairing the rights of a Secondary
Purchaser with respect to any Pool Receivable or the value of any Pool
Receivable, except in accordance with the Credit and Collection
Policy;
(xiii) any failure of the Seller to give reasonably equivalent
value to any Seller Subsidiary in consideration of the transfer by
such Seller Subsidiary to the Seller of any Receivables, or any
attempt by any Person to void any such transfer under statutory
provisions or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code;
(xiv) any loss incurred by a Secondary Purchaser on any Pool
Receivable denominated and payable in a currency other than United
States dollars as a result of such Receivable not being payable when
due in the full amount of United States dollars determined hereunder
after giving effect to any payment under any forward foreign exchange
contract or other hedging agreement entered into by the Seller or a
Seller Subsidiary with respect to such Receivable; or
(xv) any reductions in the amount of a Pool Receivable the Obligor
of which is a Government Obligor, and the Related Security and
Collections with respect thereto, as the result of appropriation by
the government or the inability to collect any amount from a
Government Obligor;
(xvi) any inability to collect the full Outstanding Balance of a
Pool Receivable which was entitled to an Administrative Priority as a
result of the Obligor's bankruptcy and which was included as an
Eligible Receivable as a result of such Administrative Priority;
(xvii) any investigation, litigation or proceeding related to or
arising from this Agreement, the transactions contemplated hereby, the
use of the proceeds of the Purchase, the ownership of the Receivable
Interests or any Pool Receivable, Related Security or Contract or any
other investigation, litigation or proceeding relating to the Seller
or any Seller Subsidiary in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(xviii) all losses, expenses and liabilities, if any (including,
without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any
Secondary Purchaser in connection with such Secondary Purchaser's
funding or maintenance of the Receivable Interests) which such
Secondary Purchaser may sustain as the result of the termination or
reduction of any Receivable Interest or the failure by the Seller or
the Collection Agent (if the Seller or an Affiliate thereof) to make
any payment of Capital when due;
(xix) any inability to litigate any claim against any Obligor in
respect of any Pool Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(xx) any inability to enforce any judgment rendered in the United
States against any Foreign Obligor in such Foreign Obligor's country
of domicile in respect of any Pool Receivable without reexamination or
relitigation of the matters adjudicated upon;
(xxi) any Event of Termination described in clause (h) of Section
7.01; or
(xxii) any loss incurred by any Secondary Purchaser on any Pool
Receivable of a Government Obligor or a Foreign Obligor, except for
such losses of a commercial nature that result from risks normally
taken with non-governmental United States Obligors in transactions of
this nature.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. Authorization and Action. Each Secondary Purchaser
-------------------------
hereby accepts the appointment of and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Primary Purchase
Agreement together with such powers as are reasonably incidental thereto. The
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Secondary Purchaser prompt notice of each notice given to it by the Seller, or
by it to the Seller, pursuant to the terms of this Agreement. The appointment
and authority of the Administrative Agent hereunder shall terminate at the later
to occur of (i) the payment to (A) each Secondary Purchaser of its Aggregate
Capital, accrued and unpaid Yield and all other amounts due to such Secondary
Purchaser hereunder and (B) the Administrative Agent of all amounts due
hereunder, and (ii) the Facility Termination Date.
SECTION 9.02. UCC Filings. The Secondary Purchasers and the Seller
------------
expressly recognize and agree that the Administrative Agent may be listed as the
assignee or secured party of record on the various UCC filings required to be
made hereunder in order to perfect the transfer of the Receivable Interests from
the Seller to the Secondary Purchasers, that such listing shall be for
administrative convenience only in creating a record or nominee owner to take
certain actions hereunder on behalf of the Secondary Purchasers and that such
listing will not affect in any way the status of the Secondary Purchasers as the
beneficial owners of the Receivable Interests. In addition, such listing shall
impose no duties on the Administrative Agent other than those expressly and
specifically undertaken in accordance with the provisions of this Article IX.
In furtherance of the foregoing, each Secondary Purchaser shall be entitled to
enforce its rights created under this Agreement without the need to conduct such
enforcement through the Administrative Agent except as provided herein.
SECTION 9.03. Administrative Agent's Reliance, Etc. Neither the
-------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent (i) may treat the assignee under any
Certificate as the holder thereof until the Administrative Agent receives
written notice of the Assignment in respect thereof signed by such assignee;
(ii) may consult with legal counsel (including counsel for the Seller),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Person and shall not be responsible to any
Person for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Seller, or
of any Transfer Agreement on the part of the Seller or the Seller Subsidiary a
party thereto, or to inspect the property (including the books and records) of
the Seller or any Seller Subsidiary; (v) shall not be responsible to any
Secondary Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any Transfer Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by facsimile,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 9.04. CIBC and Affiliates. With respect to any Pool Receivable
--------------------
owned by CIBC, CIBC shall have the same rights and powers under this Agreement
and any document delivered pursuant hereto as would any Secondary Purchaser and
may exercise the same as though it were not the Administrative Agent. CIBC and
its Affiliates may generally engage in any kind of business with the Seller, any
Seller Subsidiary or any Obligor and any of their respective Affiliates and any
Person who may do business with or own securities of the Seller, any Seller
Subsidiary or any Obligor or any of their respective Affiliates, all as if CIBC
were not the Administrative Agent and without any duty to account therefor to
any Secondary Purchaser.
SECTION 9.05. Secondary Purchasers' Purchase Decisions. Each Secondary
-----------------------------------------
Purchaser acknowledges that it has, independently and without reliance upon the
Administrative Agent, any of its Affiliates or any other Secondary Purchaser and
based on such documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into this Agreement and, if it so
determines, to purchase undivided ownership interests in Pool Receivables
hereunder. Each Secondary Purchaser also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any of its
Affiliates or any other Secondary Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement.
SECTION 9.06. Indemnification. Each Secondary Purchaser agrees to
----------------
indemnify the Administrative Agent (to the extent not reimbursed by the Seller),
ratably according to the ratio its Commitment bears to the aggregate Commitment
of the Secondary Purchasers, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement, provided that a Secondary
--------
Purchaser shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, each
Secondary Purchaser agrees to reimburse the Administrative Agent, ratably
according to the ratio its Commitment bears to the aggregate Commitment of the
Secondary Purchasers, promptly upon demand, for any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that such expenses are incurred in the interests of or otherwise in
respect of the Secondary Purchasers hereunder and are approved by the Secondary
Purchasers and to the extent that the Administrative Agent is not reimbursed for
such expenses by the Seller.
SECTION 9.07. Successor Administrative Agent. The Administrative Agent
-------------------------------
may resign at any time by giving 30 days' written notice thereof to the
Secondary Purchasers, the Seller, the Collection Agent and the Purchasers and
may be removed at any time with or without cause by the Required Secondary
Purchasers. Upon any such resignation or removal, the Secondary Purchasers
shall have the right to appoint a successor Administrative Agent approved by the
Seller (which approval will not be unreasonably withheld or delayed). If no
successor Administrative Agent shall have been so appointed by the Secondary
Purchasers, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Secondary
Purchasers' removal of the Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Secondary Purchasers, appoint a
successor Administrative Agent approved by the Seller (which approval will not
be unreasonably withheld or delayed), which successor Administrative Agent shall
be (a) either (i) a commercial bank having a combined capital and surplus of at
least $250,000,000 or (ii) an Affiliate of such bank and (b) experienced in the
types of transactions contemplated by this Agreement. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE X
ASSIGNMENT OF RECEIVABLE INTERESTS
SECTION 10.1. Assignment. (a) Each Secondary Purchaser may (i) without
-----------
the consent of the Seller, assign to another Secondary Purchaser, any Purchaser,
UBS, or to any vehicle organized by a Secondary Purchaser or UBS which is rated
at least A-1 by S&P and P-1 by Moody's and
(ii) with the prior written consent of the Seller (which consent shall not be
unreasonably withheld or delayed), to any other Person (such Person, and the
Persons described in clause (i) above, referred to herein as "Assignees"), and
any such Assignee, may, without the written consent of the Seller, assign to any
Person described in clause (i) hereof and may, with the prior written consent of
the Seller (which consent shall not be unreasonably withheld or delayed), assign
to any other Person, its Commitment or any Receivable Interest, in either case,
in whole or in part; provided, however, that any assignment of a Secondary
-------------------
Purchaser's Commitment to a Purchaser (other than Matterhorn) or to any vehicle
organized by a Secondary Purchaser pursuant to clause (i) above at a time when
such Purchaser or such vehicle cannot issue a commitment to make Purchases shall
be made only with the prior written consent of the Seller
(which consent shall not be unreasonably withheld or delayed). Upon any
assignment of a Receivable Interest, (i) the Assignee shall become the owner of
such Receivable Interest for all purposes of this Agreement and (ii) the
assignor thereof (the "Assignor") shall relinquish its rights with respect to
such Receivable Interest for all purposes of this Agreement. Any assignments
hereunder shall be upon such terms and conditions as the Assignor and the
Assignee may mutually agree. The parties thereto shall deliver to the
Administrative Agent an assignment agreement, in substantially the form of
Exhibit B hereto (an "Assignment"), duly executed by such parties, and such
Assignor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the Assignee may reasonably request
in order to perfect, protect or more fully evidence the Assignee's right, title
and interest in and to any Receivable Interest assigned hereunder, and to enable
the Assignee to exercise or enforce any rights hereunder or under the
Certificate evidencing such Receivable Interest. Upon any assignment pursuant
to this Section 10.01, the Assignee thereof shall have all of the rights and
obligations (and only such rights and obligations) of a Secondary Purchaser
hereunder, and shall be subject to the same terms and conditions hereunder. The
Administrative Agent shall provide notice to the Seller of any assignment
hereunder.
SECTION 10.02. Effects of Assignment. By executing and delivering an
----------------------
Assignment, the Assignor thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment, the Assignor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the pertinent Certificate or any other
agreement, instrument or document furnished pursuant hereto; (ii) the Assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Seller or any Seller Subsidiary or the
performance or observance by the Seller or any Seller Subsidiary of any of its
obligations under this Agreement (in the case of the Seller), the pertinent
Certificate or the Transfer Agreements (in the case of the Seller and the Seller
Subsidiaries) or other agreement, instrument or document furnished pursuant
hereto; (iii) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other agreements, documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and to purchase the pertinent Receivable Interests; (iv) such
Assignee will, independently and without reliance upon the Administrative Agent,
any Secondary Purchaser, any Purchaser or any of their Affiliates or such
Assignor and based on such agreements, documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such Assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such Assignee appoints as its agent the
Collection Agent from time to time designated pursuant to Section 6.01 to
enforce its respective rights and interests in and under the pertinent
Receivable Interests and the Related Security and related Contracts.
SECTION 10.03. Authorization of Administrative Agent. The
--------------------------------------
Administrative Agent shall annotate the pertinent Certificate to reflect any
assignment made pursuant to Section 10.01 or otherwise.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver of any
----------------
provision of this Agreement or consent to any departure by the Seller therefrom
shall be effective unless in a writing signed by the Secondary Purchasers and
Matterhorn or, where permitted under this Agreement, the Required Secondary
Purchasers, and then such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
---------
however, that no amendment or waiver of Section 6.03 or of any other provision
- --------
of this Agreement which affects the rights or obligations of the Administrative
Agent shall be effective unless signed by the Administrative Agent. No failure
on the part of the Secondary Purchasers, Matterhorn or the Administrative Agent
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
SECTION 11.02. Notices, Etc. All notices and other communications
-------------
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be delivered or sent by facsimile, to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent, and notices and communications sent by
other means shall be effective when received.
SECTION 11.03. Assignability; Termination. (a) This Agreement and each
---------------------------
Secondary Purchaser's rights herein (including ownership of each Receivable
Interest) shall be assignable by such Secondary Purchaser and its respective
successors and assigns in accordance with Section 10.01. The term "Secondary
Purchaser" shall include any owner by assignment or otherwise of a Receivable
Interest but shall not include any Person to whom a participation is granted.
The Seller may not assign its rights hereunder or any interest herein without
the prior written consent of the Secondary Purchasers.
(b) Any Secondary Purchaser may grant participation to any Person
without the consent or knowledge of the Seller, any other Secondary Purchaser or
the Administrative Agent; provided, that such grant will not affect the
---------
obligation, if any, of such Secondary Purchaser hereunder nor the obligations of
the Seller hereunder.
(c) The provisions of Sections 8.0l, 11.04 and 11.05 survive any
termination of this Agreement.
SECTION 11.04. Costs, Expenses and Taxes. (a) In addition to the
--------------------------
rights of indemnification granted under Section 8.01 hereof, the Seller agrees
to pay on demand all costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing of Pool
Receivables) of this Agreement, the Certificates and the other documents and
agreements to be delivered hereunder, including, without limitation, (i) the
fees and expenses of Seward & Kissel, counsel for the Secondary Purchasers, with
respect to the preparation, execution and delivery of this Agreement, the
Primary Purchase Agreement and the other documents and agreements to be
delivered hereunder or thereunder; (ii) the fees and out-of-pocket expenses of
counsel for the Administrative Agent with respect to administration of this
Agreement, including without limitation, advising the Administrative Agent as to
its rights and remedies hereunder; and (iii) all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement or amendment of this Agreement, the Certificates and the other
documents and agreements to be delivered hereunder.
(b) In addition, the Seller shall pay on demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement, the Certificates or the other documents or
agreements to be delivered hereunder, and agrees to save each Indemnified Party
harmless from and against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
(c) The Seller also shall pay on demand all other costs, expenses and
taxes
(excluding income taxes) incurred by a Secondary Purchaser or any stockholder of
a Secondary Purchaser ("Other Costs"), including (i) the costs of auditing such
Secondary Purchaser's books by certified public accountants, (ii) the taxes
(excluding income taxes) resulting from such Secondary Purchaser's operations
and (iii) the reasonable fees and out-of-pocket expenses of counsel for such
Secondary Purchaser or any counsel for any shareholder of such Secondary
Purchaser with respect to advising such Secondary Purchaser or shareholder as to
rights and remedies under this Agreement, the enforcement of this Agreement, the
Certificates or advising such Secondary Purchaser or shareholder as to matters
relating to such Secondary Purchaser's operations; provided, that the Seller and
---------
any other persons who from time to time sell receivables or interests therein to
such Secondary Purchaser ("Other Sellers") each shall be liable for such Other
Costs ratably in accordance with the usage under their respective facilities;
provided, further, that (i) if such Other Costs are attributable to the Seller
- ------------------
and not attributable to any Other Seller, the Seller shall be solely liable for
such Other Costs and(ii) if such Other Costs are attributable to any Other
Seller and not attributable to the Seller in any way, the Seller shall not be
liable for any of such Other Costs.
SECTION 11.05. Confidentiality. Unless otherwise required by
----------------
applicable law, rule or regulation or by court order or process, the Seller and
each Seller Subsidiary agrees to maintain the confidentiality of this Agreement
(and all drafts thereof) in communications with third parties and otherwise;
provided, that this Agreement may be disclosed to the Seller's and each Seller
- ---------
Subsidiary's legal counsel and auditors if they agree to hold it confidential.
SECTION 11.06. Governing Law; Execution in Counterparts. (a) This
-----------------------------------------
Agreement shall be governed by, and construed in accordance with, the law of the
State of New York (including its applicable conflict of laws rules).
(b) This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
SECTION 11.07. Actions by Secondary Purchasers. The Secondary
--------------------------------
Purchasers expressly recognize and agree that in making any determination or
taking any action hereunder which is required to be made or taken by the
Required Secondary Purchasers or all of the Secondary Purchasers, the Purchasers
shall be treated as if they were Secondary Purchasers hereunder and no
determination or action hereunder shall be made or taken which would be
inconsistent with or contrary to a determination or action made or taken under
the Primary Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER:
GEORGIA-PACIFIC CORPORATION
By:
-----------------------------
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attention: Treasurer
Facsimile No.: (404) 827-7076
SECONDARY
PURCHASERS:
CANADIAN IMPERIAL BANK OF COMMERCE
By:
------------------------------
Authorized Signatory
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization
Group Facsimile No.: (212) 856-3761
CITIBANK, N.A.
By:
-------------------------------
Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding
Department Facsimile No.: (914) 899-7015
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------
Vice President
One First National Plaza
Suite 0079, 17th Floor
Chicago, Illinois 60670
Attention: Mr. Bradley P. Summers
Mr. Martin Foy
Facsimile No.: (302) 732-2231
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent
By:
------------------------------
Authorized Signatory
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3761
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------
Vice President
One First National Plaza
Suite 0079, 17th Floor
Chicago, Illinois 60670
Attention: Mr. Bradley P. Summers
Mr. Martin Foy
Facsimile No.: (302) 732-2231
Consented and Agreed:
MATTERHORN CAPITAL CORPORATION
By:
------------------------------
Authorized Signatory
Union Bank of Switzerland, New York Branch,
as Administrator and Attorney-in-Fact
299 Park Avenue
New York, New York
Attention: Asset Finance Group
<PAGE> 1
EXHIBIT 11
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(Millions, except per share amounts)
<TABLE>
<CAPTION>
For the year ended December 31,
-----------------------
1996 1995 1994
------ ------ -----
- -
<S> <C> <C> <C>
Income
- -------------
Income before extraordinary
item and accounting change $ 161 $1,018 $ 326
Extraordinary item,
net of taxes (5) - (11)
Cumulative effect of accounting
change, net of taxes - - (5)
------ ------ ------
Net income $ 156 $1,018 $ 310
====== ====== ======
Weighted Average Shares
- -----------------------
Common shares outstanding,
net of restricted stock 90.6 90.2 89.1
Add - shares assumed to be issued
under long-term incentive
(restricted stock), stock
option and stock purchase
plans at the average
market price .6 .9 .6
------ ------ ------
Primary shares 91.2 91.1 89.7
------ ------ ------
Add - additional shares assumed to be
issued under long-term incentive
(restricted stock), stock option
and stock purchase plans at the
quarter-end market price (if
higher than average market
price) - - .1
------ ------ ------
Fully diluted shares 91.2 91.1 89.8
====== ====== ======
Income Per Share
- ---------------------------------
Income before extraordinary
item and accounting change $1.78 $ 11.29 $3.66
Extraordinary item,
net of taxes (.06) - (.12)
Cumulative effect of accounting
change, net of taxes - - (.06)
------ ------ ------
Net income $1.72 $ 11.29 $3.48
====== ====== ======
Income Per Share - Primary
and Fully Diluted
- ---------------------------------
Income before extraordinary
item and accounting change $1.77 $ 11.18 $3.63
Extraordinary item,
net of taxes (.06) - (.12)
Cumulative effect of accounting
change, net of taxes - - (.06)
------ ------ ------
Net income $1.71 $ 11.18 $3.45
====== ====== ======
</TABLE>
A single presentation of income per share is made on the Statements of Income
because the effects of assuming issuance of common shares under long-term
incentive (restrictive stock), stock option and stock purchase plans are
either antidilutive or insignificant.
EXHIBIT 12
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF RATIO OF EARNINGS TO FIXED
CHARGES (Unaudited)
(Dollar amounts in millions)
<TABLE>
<CAPTION>
For the year ended December 31
--------------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Fixed charges:
Total interest costs $ 470 $ 434 $460
One-third of rent expense 23 21 17
----- ------ ------
Total fixed charges 493 455 477
----- ----- ------
Add (deduct):
Income before income taxes,
extraordinary item and
accounting change 296 1,697 572
Interest capitalized,
net of amortization (12) (18) 11
------ ------ ----
-284 1,679 583
------ ------ -----
Earnings for fixed charges $ 777 $2,134 $1,060
====== ====== ======
Ratio of earnings to fixed charges 1.58x 4.69x 2.22x
====== ====== ======
</TABLE>
HIGHLIGHTS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts, except per share,
and shares are in millions) 1996 1995
- -----------------------------------------------------------
<S> <C> <C>
Net sales $13,024 $14,313
Income before extraordinary item 161 1,018
Income per share before extraordinary
item 1.78 11.29
Cash provided by operations* 1,213 1,824
Property, plant & equipment investments 1,059 1,259
Cash dividends paid 183 173
Total assets at year end 12,818 12,335
Total debt at year end** 5,928 5,591
Total debt to capital at year end,
book basis 50.4% 49.3%
Total debt to capital at year end,
market basis 47.4% 47.2%
- -----------------------------------------------------------
Cash dividends paid per share of
common stock $ 2.00 $ 1.90
Market price per share of common
stock at year end $ 72.00 $ 68.63
Shares of common stock outstanding
at year end 91.4 91.3
-----------------------------------------------------------
</TABLE>
* Excludes the accounts receivable sale program.
** Includes the proceeds from the accounts receivable sale program under the
assumption that at the end of the program the proceeds will be replaced by
debt.
BUILDING PRODUCTS
Georgia-Pacific is the leading manufacturer and distributor of building
products in the United States. The Corporation produces wood panels including
plywood, oriented strand board and industrial panels (21 percent of corporate
sales), lumber (18 percent of corporate sales), gypsum products (5 percent of
corporate sales), chemicals (3 percent of corporate sales) and other products
(10 percent of corporate sales) at 153 facilities in the United States and
seven in Canada. Exports for the building products segment in 1996 were $155
million. Our largest export markets are in the Caribbean and Europe. We
operate building products sales offices in the United Kingdom, the Netherlands
and Japan.
Our building products business is affected primarily by the level of
housing starts; the level of repairs, remodeling and additions; industrial
markets; commercial building activity; the availability and cost of financing;
and changes in industry capacity.
Although sales remained strong in 1996, operating profits shrank more than
20 percent from 1995. A 9 percent increase in lumber prices, combined with
lower log costs and increased gypsum revenues, were more than offset by
approximately 14 percent lower prices for plywood and 25 percent lower prices
for oriented strand board. Furthermore, expenses related to the Corporation's
distribution division restructuring project increased 67 percent and totaled
$117 million for the year.
Our building products plants are benefiting from many continuous
improvement initiatives undertaken during 1996. For instance, increased
automation in our plywood plants improves product quality, increases
efficiency, reduces costs and allows us to further penetrate the growing
industrial, export and do-it-yourself markets. In the softwood lumber
division, where wood costs account for more than 60 percent of the cost of
finished Southern pine lumber, we continued to upgrade our electronic scanning
equipment to optimize the yields from each log. In addition, our particleboard
and medium-density fiberboard operations focused on increased product quality
and reduced unit costs by reducing process variation.
The purchase of Domtar Inc.'s gypsum business in April 1996 proved to be
an excellent addition for Georgia-Pacific, making the company's gypsum division
one of the profit leaders of 1996 and resulting in significant opportunities
for improving our wallboard business in North America.
DISTRIBUTION. Georgia-Pacific is a leading wholesaler of building products
in the U.S. The distribution division continued initiatives to change its
organizational, logistical and information systems to improve customer
service, grow the business and reduce costs. When fully implemented, the
integrated systems and logistics network will link sales centers, triads
(large distribution centers), bulk distribution centers and field service
representatives.
To supplement Georgia-Pacific's production and to offer customers a broader
line of building products, we also purchase products from other manufacturers.
In 1996, these purchases totaled $2.6 billion.
WOOD PANELS. The largest producer of structural wood panels in the United
States, Georgia-Pacific accounts for about 20 percent of domestic capacity.
Our 16 softwood plywood plants and six oriented strand board plants can
produce 7 billion square feet of panels annually. We devote more than 50
percent of our plywood production to specialty applications such as decorative
siding, sanded plywood and concrete forms.
Oriented strand board (OSB) is a non-veneered structural panel made from
strands of wood arranged in layers and bonded with resin. OSB serves many of
the same uses as unsanded plywood, including roof decking, sidewall sheathing
and floor underlayment.
Georgia-Pacific is also a major producer of manufactured board products for
many industrial and construction applications. Twenty-two mills manufacture
hardboard, particleboard, panelboard, softboard and medium-density fiberboard
from logs, sawdust, shavings and chips. Applications include furniture,
cabinets, housing, fixtures and other industrial products.
During the year, Georgia-Pacific successfully completed construction of an
OSB plant in Virgina and a medium density fiberboard plant in Canada.
Combined capital investment for these projects totaled $175 million.
LUMBER. The second-largest lumber producer in the United States, the
Corporation annually manufactures about 2.7 billion board feet, approximately
5
percent of domestic lumber production. Most of our 40 lumber mills are located
in the South. Products include Southern pine, a variety of Appalachian and
Southern hardwoods, cypress, redwood, cedar, spruce, Western pine, Douglas fir
and pressure-treated Southern pine.
Demand for the Corporation's engineered lumber products has increased
rapidly in recent years, primarily as a result of the reduced availability and
higher prices of conventional wide-dimension lumber. Laminated veneer lumber
(LVL) and wood I-joists -- made from veneer, oriented strand board and sawn
lumber -- can be designed to meet the precise performance requirements of
roofing and flooring systems.
During the year, Georgia-Pacific successfully completed construction of a
softwood sawmill in Oklahoma and a modernization project at a softwood sawmill
in Arkansas. Combined capital investment for these projects totaled $55
million.
GYPSUM PRODUCTS. Georgia-Pacific's 21 gypsum board plants have an annual
capacity of 6.4 billion square feet, making G-P the second-largest producer of
gypsum products in North America. Gypsum products include wallboard, Dens
specialty panels, fire-door cores, industrial plaster and joint compound. In
addition, the division also operates four 100 percent recycled gypsum
paperboard mills with a capacity of 282,000 tons per year. The Corporation
owns gypsum reserves of approximately 164 million recoverable tons, an
estimated 35-year supply at current production rates.
The Corporation purchased the U.S. and Canadian gypsum operations of
Domtar, Inc. for $363 million in the second quarter of 1996. The sale of
gypsum wallboard plants at Buchanan, New York, and Wilmington, Delaware, to
Lafarge Corporation in the third quarter generated cash proceeds of
approximately $60 million. Georgia-Pacific agreed with the U.S. Department of
Justice to sell these plants in order to complete the Domtar acquisition.
CHEMICALS. Georgia-Pacific is the forest products industry's leading
supplier of wood resins, adhesives and specialty chemicals, shipping more than
3.5 billion pounds of thermosetting resins and pulp and paper chemicals
annually from its 18 resin plants to company mills and outside customers. The
Corporation also produces chemicals for use in a variety of specialty
applications in other industries.
FOREST RESOURCES. Georgia-Pacific owns or has long-term leases on more than
6 million acres of timber and timberlands in the United States and Canada.
Approximately 70 percent of company timber is in the South, 20 percent in the
East and 10 percent in the West. Timber holdings include pines and hardwoods
in the South and Southeast; Douglas fir, hemlock and other species in the
Pacific Northwest; redwood, Douglas fir, true firs and Western pines in
Northern California; and numerous species of hardwoods and softwoods in Maine,
West Virginia and Wisconsin. These timberlands provide a significant portion
of Georgia-Pacific's wood fiber requirements. The remaining requirements are
acquired through short-term cutting contracts primarily with private
landowners, or through open-market purchases.
PULP AND PAPER. Georgia-Pacific produces containerboard and packaging (17
percent of corporate sales), communication papers (12 percent of corporate
sales), market pulp (6 percent of corporate sales), tissue (7 percent of
corporate sales) and other products (1 percent of corporate sales) at 81
facilities in the United States and one in Canada. The Corporation's combined
production capacity for pulp, paper and paperboard is 9.3 million tons.
Exports for the pulp and paper segment in 1996 were $870 million,
consisting primarily of market pulp and containerboard. Our largest export
markets are
Central America, Europe, and Asia.
Markets for Georgia-Pacific's pulp and paper products are affected
primarily by changes in industry capacity and the level of economic growth in
U.S. and export markets.
Year-over-year operating profits in the Corporation's pulp and paper
segment declined $1.2 billion or 76 percent, primarily as a result of weaker
demand and substantially lower prices for most of the segment's products.
Although attempts to raise prices in the spring and fall were initially
successful in some grades, much of the gains eroded during the summer and late
fall. Compared
to 1995, average net prices were approximately 45 percent lower for market
pulp, 33 percent lower for containerboard, and 24 percent lower for
communication papers. Tissue prices, on the other hand, improved
approximately 6 percent.
Year-end 1996 marked the midpoint of a three-year mill improvement
process. All participating mills completed a rigorous analysis of cost and
throughput
opportunities. Each mill then implemented the findings in prioritized waves
designed to drive the identified opportunities to bottom-line performance with
limited capital investment. The mill improvement process focuses limited mill
resources on reducing cost and increasing production while also installing new
processes to ensure these improvements are sustained.
CONTAINERBOARD AND PACKAGING. Georgia-Pacific produces containerboard,
corrugated containers and packaging, bleached paperboard and kraft paper. The
Corporation is the second-largest producer of containerboard in the United
States. Annual capacity at our four containerboard mills totals 3.5 million
tons, representing approximately 10 percent of U.S. capacity. Approximately
65 percent of its containerboard production is used by the Corporation's
corrugated packaging plants. Georgia-Pacific, the largest U.S. supplier of
containerboard to independent converters, sells the remainder in the United
States, Latin America and the Far East. During 1996, the Corporation exported
487,000 tons of containerboard.
In addition to standard corrugated containers, our packaging plants
manufacture many specialty packaging products. These include double- and
triplewall boxes, bulk bins, water-resistant packaging, and high-finish and
preprinted packaging for point-of-sale displays. Georgia-Pacific's Technology
and Development Center in Norcross, Georgia, uses state-of-the-art technology
to design and test packaging for our customers.
Georgia-Pacific can produce 400,000 tons of bleached paperboard each year
for use in frozen food containers, food service items and other products. The
Corporation annually produces and sells to independent converters over 250,000
tons of kraft paper, primarily for specialty kraft and multiwall bags.
During the year, Georgia-Pacific successfully completed construction of a
900-ton-per-day recycling facility and a 600-ton-per-day recycled linerboard
machine at its Big Island, Virginia containerboard mill as well as a
modernization project and a 300-ton-per-day expansion at its Toledo, Oregon,
containerboard mill. These improvements, which totaled approximately $240
million, will result in increased production, higher product quality and lower
per-unit production costs.
Net prices for Georgia-Pacific's containerboard products rebounded somewhat
after bottoming in September. Still, year-end prices were down significantly
from the beginning of the year largely due to industry-wide capacity
additions.
COMMUNICATION PAPERS. The Corporation is the second-largest producer of
communication papers in the United States. Also known as uncoated free-sheet,
communication papers are used in office reprographics and commercial printing,
business forms, stationery, tablets, books, envelopes and checks. Georgia
Pacific's seven uncoated free-sheet paper mills have a combined annual
capacity of 2.2 million tons, approximately 16 percent of U.S. capacity.
Net prices for communication papers declined significantly from the
beginning of the year. Although several price increases were implemented
successfully over the course of the year, periods of weakness during the
summer and late fall erased the benefits of these increases.
MARKET PULP. As the world's second-largest market pulp producer, Georgia
Pacific owns six mills with a combined annual capacity of 2.1 million tons,
approximately 18 percent of domestic capacity. The Corporation produces
Southern softwood, Southern hardwood and Northern hardwood pulps for use in
the manufacture of many paper grades. Georgia-Pacific also is a major supplier
of fluff pulp and other specialty pulps. Fluff pulp is used primarily in the
manufacture of disposable diapers and other sanitary items. Demand continues
to grow for these products, particularly in developing countries.
Georgia-Pacific exports approximately 65 percent of its market pulp,
primarily to Europe, Asia and Latin America.
Net market pulp prices decreased significantly from the beginning of the
year. Waning demand and high worldwide inventories put pressure on volumes
and forced prices down early in the year; however, prices began to recover
by mid-year and held most of the gain through year end.
TISSUE. Georgia-Pacific ranks fifth among U.S. producers of tissue products
(including bath tissue, paper towels and napkins), with approximately 9
percent of the industry's capacity. Five mills have the capacity to
manufacture approximately 595,000 tons of tissue annually. The Corporation
sells most of its consumer products under the brand names Angel Soft(R),
Sparkle(R), Coronet(R), MD(R) and Delta(R) through major food and general
merchandise retailers. Georgia-Pacific also produces commercial tissue
products for industrial, food service, office, hotel and hospital markets.
During the year the Corporation announced plans to expand its consumer
tissue business by constructing a new tissue machine and associated converting
equipment at the company's Crossett, Arkansas, operations. Expected to be
complete by late 1998 at a cost of $150 million, the tissue machine will be
capable of producing more than 60,000 tons per year of premium tissue
products.
While competition in the tissue business is intense, demand for tissue
products tends to be relatively stable through economic cycles. Unlike
GeorgiaPacific's other major pulp and paper grades, average net prices for
tissue increased in 1996 versus 1995.
ENVIRONMENT
Good environmental stewardship is critical to ensuring that Georgia-Pacific
remains a strong, profitable company. The company seeks to balance our
shareholders' demands for superior financial returns with society's desire for
a clean environment.
To accomplish this goal, Georgia Pacific has placed an emphasis on
protecting the environment while at the same time using our natural resources
responsibly to make the paper and building products on which the United States
and the world depend.
Georgia-Pacific is committed to being a role model in this important area,
and the company continues to demonstrate leadership through its policies and
practices. Environmental policy is set at the highest management levels, and
Georgia-Pacific's Environmental Policy Committee reports regularly to the
board of directors on issues that affect the company.
Georgia-Pacific also has a comprehensive set of principles to guide its
environmental stewardship efforts. These 18 principles cover four main areas -
management focus, conservation and sustainable use of resources, protection of
health and the environment, and community awareness.
The principles addressing management focus reflect Georgia-Pacific's
expectations of how the company will be managed to ensure we meet our
environmental and safety responsibilities. In the area of conservation and
sustainable use of resources, our principles help guide us in managing the
forests and other natural resources needed to manufacture our products so
there will be resources for future generations. The principles covering
protection of health and the environment reflect
Georgia-Pacific's continuing commitment to the health and safety of our
employees, our communities and our environment. In the area of promoting
community awareness, our principles map out the responsibility of Georgia
Pacific operations to actively participate in our communities and to
communicate on environmental and safety issues.
Supported by specific, measurable goals, these 18 principles commit
Georgia-Pacific operations to a course of continuous improvement in
environmental protection. In 1996, Georgia-Pacific published its second
Environmental and Safety Report detailing the company's progress in meeting
its goals.
Good forest management is critical to the company's environmental
performance. Georgia-Pacific is responsible for more than 6 million acres of
timberlands in North America and is committed to the practice of sustainable
forestry. The company not only follows its own comprehensive Forest Resources
Environmental Stratgey but also participates in the American Forest and Paper
Association's Sustainable Forestry Initiative, which establishes broad forest
principles and detailed guidelines for managing forestlands for the future.
Ultimately, Georgia-Pacific's long-range effort to pursue environmental
leadership should result in increased resource and manufacturing efficiencies,
reduced operating costs and fewer penalties. By linking policies and practices
to realistic environmental principles and goals, Georgia-Pacific believes it
can effectively add value for our shareholders. For more information about
Georgia-Pacific's environmental practices or a copy
of the company's 1996 Environmental and Safety Report, please write to:
Corporate Communications, Georgia-Pacific Corp., Dept. GS-32, P.O. Box 105605,
Atlanta, GA 30348-9985, or visit our site on the World Wide Web at www.gp.com.
FINANCIAL STRATEGY
Georgia-Pacific's objective is to provide superior returns to our
shareholders. To achieve this goal, our financial strategy must complement our
operating strategy. We must maintain a capital structure that minimizes our
cost of capital, while providing flexibility in financing our capital
requirements. When cash flow exceeds these requirements, we return our
shareholders' cash to them.
Our specific objective is to provide our shareholders with investment
returns that are at least equal to the cost of equity. Georgia-Pacific's
current cost of equity is approximately 15 percent. The paper and forest
products industry has traditionally provided shareholders a small portion of
their returns through dividend payments. For the most part, however, the
industry has endeavored to increase equity values by reinvesting all its
operating cash flow in expansion projects and acquisitions.
The industry's stock performance suggests that the returns on much of this
reinvestment have been insufficient. Although the cyclical nature of the paper
and forest products industry provides investors with opportunities to earn
handsome returns over short periods, the long-term stock performance of the
industry has generally been unimpressive.
CAPITAL STRUCTURE. G-P tries to balance the mix of debt and equity in a way
that will benefit our shareholders, by keeping our weighted average cost of
capital low, while retaining the flexibility needed to finance attractive
internal projects or acquisitions. Risk factors that contribute to the
volatility of our cash flows include economic cycles, changes in industry
capacity, environmental regulations and litigation. On the other hand,
factors that reduce our risk include the diversity of our manufacturing
businesses and the number, size and liquidity of our capital assets and timber
holdings. G-P's products are not subject to obsolescence, except over the
long term. Furthermore, we employ a high proportion of long-term, fixed-rate
debt in our capital structure.
On December 31, 1996, the Corporation's total debt was $5.9 billion,
including $350 million in proceeds from the accounts receivable sale program.
The weighted average, after-tax cost of debt was 7.76 percent. About 80
percent of our debt was long-term, with an average maturity of approximately
18 years. On a market-value basis, our debt-to-capital ratio was 47 percent.
By employing this capital structure, we believe that our weighted average cost
of capital is nearly optimized - at approximately 10 percent. Although
reducing debt significantly would somewhat reduce the marginal cost of debt,
significant debt reduction would likely increase our weighted average cost of
capital by raising the proportion of higher-cost equity.
Considering Georgia-Pacific's ability to generate strong cash flow - even
at the bottom of the cycle - we believe the current debt structure is quite
manageable. In fact, combining the lowest full-year cash flows from building
products and pulp and paper operations over recent business cycles would still
provide enough cash to pay taxes, cover interest on $5.5 billion of debt, pay
dividends and fund several hundred million dollars of reinvestment needed to
maintain our facilities in competitive condition. Recent capital expenditures
will generate even more cash over time. Still, given the considerable
financial stress endured following the $5.4 billion debt-financed acquisition
of Great Northern Nekoosa Corporation in 1990, any future major acquisition
would likely be financed with equity or a combination of debt and equity.
INVESTMENTS AND DIVESTITURES. The Corporation evaluates most major projects
and acquisitions by their projected rate of return of cash flow. An acceptable
rate of return for a project depends on the risks inherent in the project.
Several factors create risk, including the level of economic growth and demand
in U.S. and export markets, changes in industry capacity, changes in the cost
of wood fiber and other costs of production, and possible competition from
substitute products.
In addition to the evaluations of proposed capital projects that take
place
prior to approval, we rigorously review major investments while the projects
are in process and/or after they are completed. These audits compare the
actual timing and amount of expenditures, product prices, raw material costs
and other critical success factors to the assumptions that were made when the
investments were proposed. These reviews (which are presented to the
Corporation's board of directors) have served to highlight many of the risks
inherent in making capital investments within our industry.
During 1996, Georgia-Pacific concluded a three-year investment program
that
totaled $3.2 billion, excluding timber and timberlands and the Domtar
acquisition. With the completion of these projects, the Corporation
anticipates that its capital spending will decrease from $1.06 billion, $1.26
billion, and $850 million in 1996, 1995, and 1994, respectively, to
approximately $800 million per year in 1997 and 1998, without considering the
cost of any acquisitions. This level of capital investment will maintain the
cost competitive position of our facilities and allow for additional
investment in selected businesses.
In addition, the Corporation routinely evaluates the performance and
strategic fit of its existing operations. Assets not considered strategic or
not expected to deliver adequate returns undergo evaluation for divestment.
In 1995 Georgia-Pacific implemented new performance measurement and
compensation plans based on Economic Value Added (EVA(R)). In applying the EVA
metric, business units are compensated on their ability to generate after-tax
returns on the market value of capital employed that exceed the cost of
capital. These plans are designed to encourage continuing process
improvements, investment in projects that deliver returns above the cost of
capital, cost reductions and the divestiture of underperforming assets.
DIVIDENDS AND SHARE REPURCHASES. We believe that a portion of our cash flow
should be paid to shareholders as regular, sustainable quarterly dividends. In
the second quarter of 1995, the Corporation increased the quarterly dividend
from 40 cents to 50 cents per share, the first increase since 1989. In the
future, the dividend rate will depend on our long-term capital requirements
and our capital structure design.
As in past years, there likely will be periods when the Corporation
generates cash in excess of its opportunities for reinvestment and
requirements for dividends. We believe excess cash should be returned to our
shareholders; we have used share repurchase programs as a flexible and tax-
effective way of distributing excess cash to them.
In August 1995, the company's board of directors authorized management
to
make purchases of the Corporation's common stock, provided that total debt is
below $5.5 billion. When debt fell below that level in the fourth quarter of
1995, the Corporation purchased 618,000 shares at a total price of $47
million. At the end of 1995 and throughout 1996, debt remained above our
target level and no shares were purchased.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Georgia-Pacific Corporation and Subsidiaries
1996 COMPARED WITH 1995
The Corporation reported consolidated net sales of $13 billion and net income
of $156 million ($1.72 per share) for 1996, compared with net sales of $14.3
billion and net income of $1,018 million ($11.29 per share) in 1995. The 1996
results include net unusual pretax expenses of $117 million. The unusual
items include charges of $39 million primarily related to a voluntary early
retirement program, a pretax gain of $39 million from the sale of two gypsum
wallboard facilities and $117 million of expenses resulting from a project to
change and improve certain processes in the Corporation's building products
distribution division. Net income in 1996 also includes an extraordinary,
after-tax loss of $5 million (6 cents per share) for the early retirement of
debt.
The Corporation's building products segment reported net sales of $7.4
billion and operating profits of $516 million for 1996, compared with net
sales of $7.3 billion and operating profits of $669 million in 1995. The 1996
results include net unusual expenses of $97 million. The unusual items
include charges of $19 million primarily related to a voluntary early
retirement program, an unusual gain of $39 million from the sale of two gypsum
wallboard facilities and
$117 million of expenses in the building products distribution division,
discussed below. Return on sales decreased to 7.0 percent from 9.2 percent a
year ago. Excluding unusual items, return on sales decreased to 8.3 percent
from 10.1 percent a year ago. A 9 percent increase in lumber prices combined
with a 4 percent decrease in log costs, and increased gypsum volumes, were
more than offset by approximately 16 percent lower prices for structural
panels. Prices for structural panels are expected to continue to decline in
1997, though not to the same extent they did in1996. Prices for most other
building
products are not expected to change significantly from 1996 levels.
SELECTED INDUSTRY SEGMENT DATA
<TABLE>
<CAPTION>
Year ended December 31 ----------------
-----
(Millions, except per share amounts) 1996 1995 1994
- -------------------------------------------------------------
<S> <C> <C> <C>
Net sales
Building products $ 7,365 $ 7,301 $ 7,561
Pulp and paper 5,609 6,962 5,138
Other operations 50 50 39
- ------------------------------------------------------------
- -Total net sales $ 13,024 $ 14,313 $12,738
============================================================
== Operating profits
Building products $ 516 $ 669 $ 1,013
Pulp and paper 390 1,611 204
Other operations 8 10 10
- ------------------------------------------------------------
- -Total operating profits 914 2,290 1,227
General corporate expense (159) (161) (169)
Interest expense (439) (395) (453)
Cost of accounts receivable
sale program (20) (37) (33)
Provision for income taxes (135) (679) (246)
- ------------------------------------------------------------
- -Income before
extraordinary item and
accounting change 161 1,018 326
Extraordinary item,
net of taxes (5) - (11)
Cumulative effect of
accounting change,
net of taxes - - (5)
- ------------------------------------------------------------
- -Net income $ 156 $ 1,018 $ 310
============================================================
== Per share:
Income before
extraordinary item and
accounting change $ 1.78 $ 11.29 $ 3.66
Extraordinary item,
net of taxes (.06) - (.12)
Cumulative effect of
accounting change,
net of taxes - - (.06)
- ------------------------------------------------------------
- --
Net income $ 1.72 $ 11.29 $ 3.48
============================================================
==
</TABLE>
Operating losses for the Corporation's building products distribution
division increased by $147 million from 1995. Lower operating margins
accounted for most of the decline, while costs associated with the
restructuring of administrative and logistical processes increased to $117
million in 1996 compared with $70 million in 1995. By the time the project is
completed in 1997, capital expenditures for the acquisition and construction
of new facilities are expected to total approximately $400 million, excluding
proceeds from assets sales. Approximately $350 million of that amount had
been invested by the end of 1996.
Selected financial and operating data for the building products
distribution business are shown in the table below.
SELECTED DISTRIBUTION DIVISION DATA
<TABLE>
<CAPTION>
Year ended December 31
----------------
1996 1995 1994
-----------------
<S> <C> <C> <C>
(Millions)
Sales $ 4,407 $ 4,673 $ 4,909
Operating (loss) profit (207) (60) 91
Capital expenditures 224 132 35
Depreciation 45 23 18
ssets 1,304 1,063 966
- -----------------------------------------------------------
Employees at year end 5,700 5,400 4,500
Distribution centers 102 127 134
- ------------------------------------------------------------
</TABLE>
The Corporation's pulp and paper segment reported net sales of $5.6 billion
and operating profits of $390 million for 1996, compared with net sales of
$7.0 billion and operating profits of $1,611 million in 1995. The 1996
results include unusual expenses of $20 million primarily related to a voluntary
early retirement program. Return on sales decreased to 7.0 percent in 1996 (7.3
percent excluding unusual expenses) compared with 23.1 percent a year ago,
primarily as a result of substantially lower prices for most of the
Corporation's pulp and paper products. Compared with 1995, prices were 45
percent lower for market pulp, 33 percent lower for containerboard and 24
percent lower for communication papers. Tissue prices improved approximately
6 percent.
At the end of 1996, pulp and paper prices were lower than average 1996
prices. The Corporation believes there will continue to be weakness in demand
and low prices for most of its pulp and paper products in 1997.
In 1996, the Corporation set a goal of improving its annual pretax earnings
by approximately $400 million through a three-year effort to reduce overhead
costs and improve efficiencies throughout the Corporation. The Corporation
expects to acheive about half of this cost reduction by eliminating work and
the related salaried positions. As part of this effort, the Corporation
implemented a voluntary early retirement program in 1996. Costs associated
with the voluntary early retirement program and severance expenses from the
elimination of certain salaried positions were $39 million in 1996. The
Corporation also expects to realize significant efficiencies and cost savings
from substantial investments it is making to restructure its building products
distribution division and install new information systems.
The Corporation reported income before income taxes of $296 million and a
tax provision of $135 million for the year ended December 31,1996 compared
with pretax income of $1,697 million and an income tax provision of $679
million for the year ended December 31, 1995. The effective tax rate used to
calculate
the provision for income taxes for both years was higher than the statutory
rates used to calulate federal and state income taxes primarily because of
nondeductible goodwill amortization expense associated with past business
acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. The Corporation generated cash from operations of
$1,213 million during 1996. The Corporation's cash provided by operations in
1995 was $1,474 million, after using $350 million to reduce the accounts
receivable sale program. The Corporation repurchased the receivables to
reduce the cost of the program, which was higher than the cost of financing
from alternative sources.
INVESTING ACTIVITIES. Property, plant and equipment investments during 1996
were $1.1 billion, which included $452 million in the pulp and paper segment,
$492 million in the building products segment and $115 million of general
corporate investments (primarily information systems). Investments in 1995
totaled $1.3 billion. During 1997, the Corporation expects to invest
approximately $800 million, including approximately $365 million for projects
started prior to 1997. The Corporation purchased the U.S. and Canadian gypsum
operations of Domtar Inc. for $363 million in the second quarter of 1996. The
Corporation completed the sale of its gypsum wallboard production facilities
at Buchanan, New York, and Wilmington, Delaware, to Lafarge Corporation in the
third quarter. The sale of these facilities generated pretax cash proceeds of
approximately $60 million. The Corporation had agreed with the U.S.
Department of Justice to sell these plants in order to complete the Domtar
acquisition.
During 1996, the Corporation invested $130 million for pollution control
and abatement. The Corporation's 1997 capital expenditure budget currently
includes approximately $80 million for environmental-related projects.
Certain other capital projects which are being undertaken for the primary
reasons of improving financial returns or safety will also include
expenditures for pollution control.
The Corporation expects to incur costs for environmental capital
expenditures over the next several years to conform its operations to
standards for compliance with air, water and solid and hazardous waste
regulations. In December 1993, the Environmental Protection Agency (EPA)
proposed regulations known as the "Cluster Rule" to implement portions of the
Clean Air Act of 1990 and the Clean Water Act applicable to pulp and paper
facilities. The Corporation is evaluating the potential impact of such
proposed regulations and the possible changes to the Corporation's capital
expenditures over the next several years. Based on preliminary estimates, the
Corporation could be required to invest up to $365 million during the 1997-
2005 period to comply with the regulations if they are issued as anticipated.
The ultimate financial impact of the regualtions connot be predicted with any
reasonable certainty at this time and will depend on several factors,
including possible changes in the proposed regulations and new developments in
control process technology. The final rules are expected to be promulgated in
1997 and 1998.
In December 1996, the Corporation announced that it had signed a definitive
agreement with Sierra Pacific Holding Co. to sell the assets of Georgia
Pacific's Martell, California, operations. These operations include 127,000
acres of timberlands, a sawmill, and a particleboard plant. The Corporation
expects the sale to result in pretax proceeds of approximately $320 million
and an after-tax gain of approximately $80 million. The sale, which is
expected to close on March 31, 1997, is subject to customery closing
conditions.
FINANCING ACTIVITES. At December 31, 1996, the Corporation's total debt was
$5.9 billion, compared with $5.6 billion at December 31, 1995. In addition to
bank overdrafts, short-term debt, and long-term debt on the balance sheets,
each of these amounts includes $350 million of proceeds from the Corporation's
accounts receivable sale program. This amount, although not reflected on the
balance sheet, is included in total debt under the assumption that at the end
of the program the proceeds will be replaced by debt. Most of the increase in
total debt is attributable to borrowing incurred in connection with the
acquisition of Domtar's gypsum business for $363 million in the second quarter
of 1996, offset by proceeds from the sale of assets and an excess of cash
provided by operations over capital expenditures. Total debt increased from
$5.6 billion at December 31, 1995 in the following areas: $324 million in
commercial paper and short-term notes; $100 million in notes; $18 million in
Industrial Revenue Bonds; and $50 million in bank overdrafts. The increases
were offset by decreases of $150 million in debentures and $8 million in other
loans.
During 1996, the Corporation issued $100 million of notes and $22 million
of Industrial Revenue Bonds. Also during 1996, the Corporation redeemed $150
million of its 9.25% Debentures Due March 15, 2016. The Corporation recorded
an after-tax extraordinary loss of approximately $5 million (6 cents per
share) related to this redemption.
The Corporation has a $1.5 billion unsecured revolving credit facility
which is used for direct borrwings and as support for commercial paper and
other short-term borrowings. As of December 31, 1996, $856 million of
committed credit was available in excess of all short-term borrowings
outstanding under or supported by the facilty.
At December 31, 1996, the Corporation's weighted average interest rate on
its total debt was 7.7% including the $350 million accounts receivable sale
program and outstanding interest rate exchange agreements. At December 31,
1996, these interest rate exchange agreements effectively converted $496
million of floating rate obligations with a weighted average interest rate of
5.7% to fixed rate obligations with an average effective interest rate of
approximately 9.0%. These agreements have a weighted average maturity of
approximately 2.1 years. As of December 31, 1996, the Corporation's total
floating rate debt, including the accounts receivable sale program, exceeded
related interest rate exchange agreements by $1,363 million.
As of January 31, 1997, the Corporation had registered for sale up to $500
million of debt securities under a shelf registration statement filed with the
Securities and Exchange Commission.
In August 1995, the board of directors authorized management to make
purchases of the Corporation's common stock on the open market or in private
transactions so long as the Corporation's debt, including the accounts
receivable sale program, remained below $5.5 billion. During the year ended
December 31, 1995, the Corporation purchased and retired 618,000 shares of its
common stock at an aggregate price of $47 million on the open market.
In 1997, the Corporation expects its cash flow from operations, together
with proceeds from any asset sales and available financing sources, to be
sufficient to fund planned capital investments, pay dividends and make
scheduled debt payments.
OTHER. The Corporation employs approximately 47,500 people. The majority are
members of unions. Georgia-Pacific considers its relationship with its
employees to be good. Sixty-six union contracts are subject to negotiation
and renewal in 1997, inluding two at large paper facilities.
For a discussion of commitments and contingencies, see Note 10 of the Notes
to Financial Statements.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The statements under
"Management's Discussion and Analysis" and other statements contained herein
which are not historical facts are foward-looking statements based on current
expectations. The accuracy of such statements is subject to a number of risks
and assumptions. In addition to any such risks and assumptions discussed
elsewhere herein, factors that could cause or contribute to actual results
differing materially from such foward-looking statements include the
following: the realization of projected savings for the Corporation's
investments in systems, operations and cost reduction programs, including the
restructuring of the Corporation's building products distribution division;
the ability of the Corporation to eliminate many functions and associated
positions that currently are a part of the Corporation's overhead costs;
changes in the productive capacity of other building products and pulp and
paper producers; the effect on the Corporation of changes in environmental and
pollution control laws and regulations; the general level of economic activity
in U.S. and export markets; variations in the level of housing starts;
fluctuations in currency exchange rates; the supply and cost of wood fiber; an
other risks and assumptions discussed in the Corporation's Form 8-K dated
October 17, 1996.
1995 COMPARED WITH 1994
The Corporation reported consolidated net sales of $14.3 billion in 1995
compared with $12.7 billion in 1994. Net income in 1995 was $1,018 million, a
significant increase from $310 in 1994 which included a $33 million (37 cents
per share) net after-tax gain primarily from assets sales, an $11 million (12
cents per share) after-tax extraordinary loss from the early retirement of
debt and a $5 million (6 center per share) one-time after-tax charge for an
accounting change.
The Corporation's building products segment reported net sales of $7.3
billion and operating profits of $669 million in 1995. Net Sales and
operating profits in 1994 were $7.6 billion and $1,013 million, respectively.
Return on sales decreased to 9.2 percent in 1995 from 13.4 percent in 1994.
Average lumber prices in 1995 were approximately 13 percent below 1994
averages which, combined with higher wood costs, resulted in a significant
decline in profit margins for this business. Although average structural
panel prices were slightly higher than 1994 average prices, margins for this
business were also lower as a result of higher wood costs.
Several factors impacted the building products business, including an
overall slowdown in the economy, a decline in housing starts and an increase
in the availability of lower-priced Canadian lumber. In addition, demand for
building products was weaker in 1995 as evidenced by a decline in shipments
for the Corporations structural panels and lumber businesses, both during the
second half of 1995 and for fiscal year 1995 compared with 1994.
Finally, profits for the Corporation's distribution business were lower
than 1994, primarily because of costs associated with initiatives to change
and improve certain administrative and logistical processes in this business.
The Corporation incurred expenses of approximately $70 million for these
improvements during 1995. These expenses accounted for much of the increase in
selling, general and administrative expenses in 1995 compared with 1994.
The Corporation's pulp and paper segment reported an increase in net sales to
$7 billion in 1995 from $5.1 billion in 1994. Operating profits also
increased to $1.6 billion in 1995 compared with $204 million in 1994. Return
on sales in 1995 was 23.1 percent, up significantly from 4.0 percent in 1994,
primarily as a result of much higher prices for most of the Corporation's pulp
and paper products. Average pulp prices in 1995 were approximately 70 percent
higher than 1994 averages; average containerboard prices were approximately 45
percent higher than 1994 levels; and average communication papers prices were
approximately 50 percent higher than 1994 averages.
The Corporation experienced a significant decline towards the end of 1995
in both demand and prices for many of its pulp and paper products. Although
yearto-year comparisons showed higher average prices in 1995, prices for
containerboard finished 1995 at their lowest level for the year. In addition,
prices for market pulp and communication papers began to fall during the 1995
fourth quarter. Shipment volume also declined for these products during the
second half of the year.
Inventory volume grew in 1995 by approximately 65 percent, primarily in the
areas of market pulp, containerboard and communication papers. The
Corporation reduced production by 200,000 tons by taking downtime at its mills
in the fourth quarter of 1995.
In 1994, the Corporation recognized a net pretax gain of approximately $57
million ($33 million after taxes) primarily from the sale of five roofing
plants and its envelope manufacturing business.
The Corporation's interest expense and cost of accounts receivable sale
program were a combined $432 million in 1995 compared with $486 million in
1994. The 11.1 percent decrease in expense was primarily attributable to an
increase in capitalized interest in 1995 compared with 1994. In addition,
debt levels were lower in 1995 compared with 1994 and $450 million in interest
rate exchange agreements, which had effectively fixed the rates on a portion
of the Corporation's variable rate debt at levels above current interest
rates, expired in 1995.
The Corporation reported income before income taxes of $1,697 million and a
tax provision of $679 million for the year ended December 31, 1995 compared
with pretax income before extraordinary item, accounting change and asset
sales of $515 million and an income tax provision of $222 million for the year
ended December 31, 1994. The effective tax rate used to calculate the
provision for income taxes for both years was higher than the statutory rates
used to calculate federal and state income taxes primarily because of
nondeductible goodwill amortization expense associated with past business
acquisitions.
STATEMENTS OF INCOME
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
---------------------
(Millions, except per
share amounts) 1996 1995 1994
---------------------------------------------------------------
<S> <C> <C> <C>
Net sales $13,024 $ 14,313 $12,738
- --------------------------------------------------------------
Costs and expenses
Cost of sales, excluding
depreciation and cost of
timber harvested shown below 9,933 9,885 9,620
Selling, general and
administrative 1,419 1,410 1,237
Depreciation and cost of timber
harvested 937 926 913
Interest 439 395 453
Other (income) - - (57)
- --------------------------------------------------------------
Total costs and expenses 12,728 12,616 12,166
- --------------------------------------------------------------
Income before income taxes,
extraordinary item and
accounting change 296 1,697 572
Provision for income taxes 135 679 246
- --------------------------------------------------------------
Income before
extraordinary item and
accounting change 161 1,018 326
Extraordinary item - loss
from early retirement of
debt, net of taxes (5) - (11)
Cumulative effect of
accounting change,
net of taxes - - (5)
- --------------------------------------------------------------
Net income $ 156 $ 1,018 $ 310
===============================================================
Per share:
Income before
extraordinary item and
accounting change $ 1.78 $ 11.29 $ 3.66
Extraordinary item - loss
from early retirement of
debt, net of taxes (.06) - (.12)
Cumulative effect of
accounting change,
net of taxes - - (.06)
- --------------------------------------------------------------
Net income $ 1.72 $ 11.29 $ 3.48
===============================================================
Average number of shares
outstanding 90.6 90.2 89.1
===============================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF CASH FLOWS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
----------------------
(Millions) 1996 1995 1994
- ---------------------------------------------------------------
<S> <C> <C> <C>
Cash provided by (used for) operations
Net income $ 156 $ 1,018 $ 310
Adjustments to reconcile net income
to cash provided by operations:
Depreciation 766 707 695
Cost of timber harvested 171 219 218
Deferred income taxes 5 (33) (33)
Amortization of goodwill 59 59 59
Stock compensation programs 20 20 (4)
Other income (39) - (57)
Gain on sales of assets (17) (18) (14)
Amortization of debt issue costs,
discounts and premiums 6 4 10
Cumulative effect of accounting
change, net of taxes - - 5
(Decrease) in accounts receivable
sale program - (350) -
(Increase) decrease in receivables 35 (47) (203)
(Increase) in inventories (3) (237) (44)
Change in other working capital 52 32 40
Increase (decrease) in taxes
payable (10) 26 (12)
Change in other assets and other
long-term liabilities 12 74 39
- --------------------------------------------------------------
Cash provided by operations 1,213 1,474 1,009
- --------------------------------------------------------------
Cash provided by (used for)
investing activities
Property, plant and equipment
investments (1,059) (1,259) (850)
Timber and timberlands purchases (142) (244) (211)
Acquisition (363) - -
(Increase) decrease in cash
restricted for capital
expenditures 84 (90) (13)
Proceeds from sales of assets 132 59 249
Other (11) 1 (4)
- --------------------------------------------------------------
Cash (used for) investing activities (1,359) (1,533) (829)
- --------------------------------------------------------------
Cash provided by (used for)
financing activities
Repayments of long-term debt (165) (228) (333)
Additions to long-term debt 125 1,004 53
Fees paid to issue debt (4) (8) -
Increase (decrease) in bank
overdrafts 44 (11) 39
Increase (decrease) in commercial
paper and other short-term notes 324 (547) 218
Common stock repurchased - (47) -
Proceeds from option plan exercises 4 27 -
Cash dividends paid (183) (173) (145)
- --------------------------------------------------------------
Cash provided by (used for)
financing activities 145 17 (168)
- --------------------------------------------------------------
Increase (decrease) in cash (1) (42) 12
Balance at beginning of year 11 53 41
- ---------------------------------------------------------------
Balance at end of year $ 10 $ 11 $ 53
===============================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
BALANCE SHEETS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
December 31
------------
(Millions, except shares
and per share amounts) 1996 1995
- ---------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash $ 10 $ 11
- ---------------------------------------------------------------
Receivables, less allowances
of $10 and $25 959 949
- ---------------------------------------------------------------
Inventories
Raw materials 415 526
Finished goods 979 896
Supplies 295 283
LIFO reserve (222) (259)
- --------------------------------------------------------------
Total inventories 1,467 1,446
- ---------------------------------------------------------------
Deferred income tax assets 129 123
- ---------------------------------------------------------------
Other current assets 50 66
- --------------------------------------------------------------
Total current assets 2,615 2,595
- --------------------------------------------------------------
Timber and timberlands 1,337 1,374
- --------------------------------------------------------------
Property, plant and equipment
Land and improvements 408 305
Buildings 1,352 1,122
Machinery and equipment 11,671 10,551
Construction in progress 302 598
- ---------------------------------------------------------------
Total property, plant and
equipment, at cost 13,733 12,576
Accumulated depreciation (7,173) (6,563)
- --------------------------------------------------------------
Property, plant and equipment, net 6,560 6,013
- -------------------------------------------------------------
Goodwill 1,658 1,714
- -------------------------------------------------------------
Other assets 648 639
- --------------------------------------------------------------
Total assets $ 12,818 $12,335
===============================================================
<CAPTION>
December 31
----------------
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities
Bank overdrafts, net $ 251 $ 201
Commercial paper and
other short-term notes 645 321
Current portion of
long-term debt 311 15
Accounts payable 662 644
Accrued compensation 196 218
Accrued interest 85 87
Other current liabilities 340 278
- --------------------------------------------------------------
Total current liabilities 2,490 1,764
- --------------------------------------------------------------
Long-term debt, excluding
current portion 4,371 4,704
- --------------------------------------------------------------
Other long-term liabilities 1,275 1,201
- --------------------------------------------------------------
Deferred income tax liabilities 1,161 1,147
- ---------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
Common stock, par value $.80;
150,000,000 shares authorized;
91,396,000 and 90,308,000
shares issued 73 73
Additional paid-in capital 1,277 1,267
Retained earnings 2,200 2,227
Long-term incentive plan
deferred compensation (11) (24)
Other (18) (24)
- -------------------------------------------------------------
Total shareholders' equity 3,521 3,519
- --------------------------------------------------------------
Total liabilities and
shareholders' equity $ 12,818 $12,335
===============================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF SHAREHOLDERS' EQUITY Georgia-Pacific Corporation and
Subsidiaries <TABLE>
<CAPTION>
(Millions, except shares and per share amounts)
Long term
incentive
Addi- Ret- plan
tional ained deferred
Common stock Common paid-in earn- compen
shares issued Total stock capital ings sation
Other
- -------------------------------------------------------------------
<S><C> <C> <C> <C> <C> <C>
<C>
Balance at
December 31,
90,269,000 1993 $ 2,402 $ 71 $ 1,202 $ 1,217 $ (56) $ (32)
Net income 310 - - 310 - -
Cash dividends
declared -
$1.60 per
common
share (145) - - (145) - -
Common stock
issued:
Stock option
97,000 plans 7 - 7 - - -
Employee
stock
purchase
49,000 plans 3 - 3 - - -
Long-term
incentive
51,000 plan 24 1 6 - 17 -
Other 19 - 2 - -
17
- ------------------------------------------------------------------
-Balance at
December 31,
90,466,000 1994 2,620 72 1,220 1,382 (39) (15)
Net income 1,018 - - 1,018 - -
Cash dividends
declared -
$1.90 per
common
share (173) - - (173) - -
Common stock
issued:
Stock option
485,000 plans 41 - 41 - - -
Employee
stock
purchase
991,000 plan 57 1 56 - - -
Long-term
incentive
(16,000) plan 12 - (3) - 15 -
Common stock
(618,000) repurchased (47) - (47) - - -
Other (9) - - - - (9)
- ------------------------------------------------------------------
-Balance at
December 31,
91,308,000 1995 3,519 73 1,267 2,227 (24) (24)
Net income 156 - - 156 - -
Cash dividends
declared -
$2.00 per
common
share (183) - - (183) - Common
Employee
stock
purchase
19,000 plans 1 - 1 - - -
incentive
(10,000) plan 15 - 2 - 13 - (5,000)
- -------------------------------------------------------------------
Balance at
December 31,
91,396,000 1996 $ 3,521 $ 73 $ 1,277 $ 2,200 $ (11) $ (18)
====================================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements. NOTES TO FINANCIAL STATEMENTS
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF
CONSOLIDATION The consolidated financial statements include the accounts of
Georgia-Pacific Corporation and subsidiaries (the Corporation). All
significant intercompany balances and transactions are eliminated in
consolidation.
REVENUE RECOGNITION The Corporation recognizes revenue when title to the
goods sold passes to the buyer, which is generally at the time of shipment.
INCOME PER SHARE Income per share is computed based on net income and the
weighted average number of common shares outstanding (net of restricted
stock). The effects of assuming issuance of common shares under long-term
incentive, stock option and stock purchase plans were either insignificant or
antidilutive. The number of shares used in the income per share computations
were 90,554,000 in 1996, 90,214,000 in 1995 and 89,069,000 in 1994.
INVENTORY VALUATION Inventories are valued at the lower of average cost or
market and include the costs of materials, labor and manufacturing overhead.
The last-in, first-out (LIFO) dollar value pool method was used to determine
the cost of approximately 58 percent and 62 percent of inventories at December
31, 1996 and 1995, respectively. The cost for the remaining portion of the
inventories was determined using the first-in, first-out method.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at
cost. Lease obligations for which the Corporation assumes or retains
substantially all the property rights and risks of ownership are capitalized.
Replacements of major units of property are capitalized and the replaced
properties are retired. Replacements of minor components of property and
repair and maintenance costs are charged to expense as incurred.
Depreciation is computed by the straight-line method over the estimated
useful lives of the related assets. Useful lives are 25 years for land
improvements, 20 to 45 years for buildings and 3 to 20 years for machinery and
equipment. Upon retirement or disposition of assets, cost and accumulated
depreciation are removed from the related accounts and any gain or loss is
included in income.
The Corporation capitalizes incremental costs that are directly
associated with the development of software for internal use and
implementation of the related systems. Amounts are amortized over five
years beginning when the assets are placed in service. Capitalized costs
were $121 million at December 31, 1996 and $65 million at December 31, 1995.
Amounts are included as property, plant and equipment in the Corporation's
balance sheet.
The Corporation capitalizes interest on projects when construction takes
considerable time and entails major expenditures. Such interest is charged
to the property, plant and equipment accounts and amortized over the
approximate life of the related assets. Interest capitalized, expensed and
paid were as follows:
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
(Millions) 1996 1995 1994
- -------------------------------------------------------------
<S> <C> <C> <C>
Total interest costs $ 470 $ 434 $ 460
Interest capitalized (31) (39) (7)
- -------------------------------------------------------------
Interest expense $ 439 $ 395 $ 453
=============================================================
Interest paid $ 468 $ 433 $ 481
=============================================================
</TABLE>
TIMBER AND TIMBERLANDS The Corporation capitalizes timber and timberland
purchases and reforestation costs. The cost of timber harvested is based on
the volume of timber harvested, the capitalized cost and the total timber
volume estimated to be available over the growth cycle. Timber carrying costs
are expensed as incurred.
LANDFILLS AND LAGOONS The Corporation accrues for landfill closure costs
over the periods that benefit from the use of the landfill and accrues for
lagoon clean-out costs over the useful period between clean-outs.
GOODWILL The Corporation amortizes costs in excess of fair value of net
assets of businesses acquired using the straight-line method over a period not
to exceed 40 years. Recoverability is reviewed annually or sooner if events
or changes in circumstances indicate that the carrying amount may exceed fair
value. Recoverability is then determined by comparing the undiscounted net
cash flows of the assets to which the goodwill applies to the net book value
including goodwill of those assets.
Amortization expense was $59 million in 1996, 1995 and 1994. Accumulated
amortization at December 31, 1996 and 1995 was $425 million and $366 million,
respectively.
ENVIRONMENTAL MATTERS The Corporation recognizes a liability for
environmental remediation costs when it believes it is probable a liability
has been incurred and the amount can be reasonably estimated. The liabilities
are developed based on currently available information and reflect the
participation of other potentially responsible parties depending on the
parties' financial condition and probable contribution. The accruals are
recorded at undiscounted amounts and are reflected as other liabilities in the
accompanying balance sheets.
Environmental costs are generally capitalized when the costs improve the
condition of the property or the costs prevent or mitigate future
contamination. All other costs are expensed.
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements as well as reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates.
ACCOUNTING STANDARDS CHANGE In March 1995, the Financial Accounting
Standards Board issued Financial Accounting Standard Number 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," which establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles and goodwill related to
those assets to be held and used, as well as for long-lived assets and certain
identifiable intangibles to be disposed of. The Corporation adopted the new
Standard in the 1996 first quarter. There was no material effect on the
Corporation's consolidated financial position as a result of adoption of this
Standard.
RECLASSIFICATIONS Certain 1995 and 1994 amounts have been reclassified to
conform with the 1996 presentation.
NOTE 2. INDUSTRY SEGMENT INFORMATION
Georgia-Pacific Corporation is a building products and pulp and paper company.
Manufactured products in the building products segment consist primarily of
wood panels (plywood, oriented strand board, hardboard and particleboard),
lumber, gypsum products and chemicals. The distribution division of this
segment sells a wide range of building products manufactured by the
Corporation or purchased from others. This segment of the business is
primarily affected by the level of housing starts; the level of repairs,
remodeling and additions; industrial markets; commercial building activity;
the availability and cost of financing; and changes in industry capacity.
The Corporation's pulp and paper segment produces containerboard and
packaging (linerboard, medium, bleached board, kraft paper and corrugated
packaging), communication papers, market pulp and tissue. Markets for this
segment are affected primarily by changes in industry capacity, the level of
economic growth in the United States and export markets, and fluctuations in
currency exchange rates.
The Corporation has a large and diverse customer base, which includes some
customers located in foreign countries. Sales to foreign markets in 1996,
1995 and 1994 were 8 percent, 10 percent and 8 percent, respectively. These
sales were primarily to customers in Europe, Asia and Latin America. No
single unaffiliated customer accounted for more than 10 percent of total sales
in any year during that period.
Georgia-Pacific Corporation employs approximately 47,500 people at more
than 400 facilities primarily located throughout the United States and Canada.
The Corporation also owns or controls more than 6 million acres of timber and
timberlands in the United States and Canada.
<TABLE>
<CAPTION>
Year ended December 31 -----------------------
- ----------------------------------------
(Millions) 1996 1995 1994 ---------------------
- ------------------------------------------
<S> <C> <C> <C> <C> <C><C>
Net sales
Building products $ 7,365 57% $ 7,301 51% $ 7,561 60%
Pulp and paper 5,609 43 6,962 49 5,138 40
Other operations 50 - 50 - 39
- -------------------------------------------------------------
Total net sales $ 13,024 100% $14,313 100% $12,738 100%
===============================================================
Operating profits*
Building products $ 516 56% $ 669 29% $ 1,013 83%
Pulp and paper 390 43 1,611 71 204 17
Other operations 8 1 10 - 10 -
- --------------------------------------------------------------
Total operating profits 914 100% 2,290 100% 1,227 100%
==== ==== ====
General corporate
expense (159) (161) (169)
Interest expense (439) (395) (453)
Cost of accounts
receivable
sale program (20) (37) (33)
Provision for income
taxes (135) (679) (246)
- -------------------------------------------------------------
- -Income before
extraordinary item and
accounting change 161 1,018 326
Extraordinary item - loss
from early retirement
of debt, net of taxes (5) - (11)
Cumulative effect of
accounting change,
net of taxes - - (5)
- --------------------------------------------------------------
Net income $ 156 $ 1,018 $ 310
===============================================================
Depreciation, cost of timber harvested
and goodwill amortization
Building products $ 404 41% $ 384 39% $ 368 38%
Pulp and paper 568 57 576 59 586 60
Other and general
corporate 24 2 25 2 18 2
- --------------------------------------------------------------
Total depreciation, cost of timber
harvested and goodwill
amortization $ 996 100% $ 985 100% $ 972 100%
===============================================================
Capital expenditures**
Building products $ 840 54% $ 582 39% $ 401 38%
Pulp and paper 452 29 599 40 410 39
Timber and timberlands 142 9 244 16 211 20
Other and general
corporate 115 8 78 5 39 3
- --------------------------------------------------------------
Total capital
expenditures $ 1,549 100% $ 1,503 100% $ 1,061 100%
===============================================================
Assets
Building products $ 3,403 27% $ 2,686 22% $ 2,061 19%
Pulp and paper 7,185 56 7,342 60 6,917 64
Timber and timberlands 1,337 10 1,374 11 1,363 13
Other and general
corporate 893 7 933 7 523 4
- --------------------------------------------------------------
Total assets $ 12,818 100% $12,335 100% $10,864 100%
===============================================================
</TABLE>
* Segment operating profits include expenses of $117 million in 1996 and $70
million in 1995 for the restructuring of the Corporation's building products
distribution business; gains on major asset sales of $39 million in 1996 and
$57 million in 1994; and $39 million net expenses in 1996 primarily related to
an early retirement program. With the exception of distribution business
restructuring charges, these items are included in "Other income" on the
income statement. If these amounts had been excluded from segment operating
profits, building products operating profits would have been $613 million in
1996, $739 million in 1995 and $989 million in 1994. Pulp and paper
operating profits would have been $410 million in 1996 and $171 million in
1994.
** Capital expenditures represent additions (at cost) to property, plant and
equipment and timber and timberlands.
NOTE 3. ACQUISITIONS AND DIVESTITURES
The following acquisition and divestitures were completed during the years
1996 and 1994.
- - In April 1996, the Corporation completed the purchase of Domtar Inc.'s
gypsum wallboard business for $363 million in cash. Domtar's gypsum business
included nine U.S. walboard manufacturing plants, four Canadian wallboard
plants, three joint compound plants, an industrial plaster plant and a gypsum
paperboard plant.
- - In September 1996, the Corporation completed the sale of two gypsum
wallboard facilities in Buchanan, New York, and Wilmington, Delaware. The sale
resulted
in after-tax cash proceeds of approximately $39 million. The Corporation had
agreed with the U.S. Department of Justice to sell these plants in order to
complete the Domtar acquisition. The Corporation recognized a pretax gain of
$39 million ($24 million after taxes).
- - In February 1994, the Corporation completed the sale of five roofing plants
located in Oklahoma, Texas, Ohio, Georgia and Pennsylvania. The sale resulted
in after-tax cash proceeds of approximately $39 million. The Corporation
recognized a pretax gain of $24 million ($15 million after taxes).
- - In February 1994, the Corporation completed the sale of its envelope
manufacturing business which included 15 envelope manufacturing plants and
certain assets of another plant. The sale resulted in after-tax cash proceeds
of approximately $117 million. The Corporation recognized a pretax gain of
$39 million ($24 million after taxes).
Except for the gains on divestitures discussed above, acquisitions and
divestitures did not have a material effect on the sales or net income of the
Corporation.
In December 1996, the Corporation signed a definitive agreement to sell
assets including timberlands, a sawmill and a particleboard plant located in
Martell, California, for approximately $320 million. The Corporation expects
the sale to result in an after-tax gain of approximately $80 million.
NOTE 4. RECEIVABLES
The Corporation has a large, diversified customer base, which includes some
customers who are located in foreign countries. The Corporation closely
monitors extensions of credit and has not experienced significant losses
related to its receivables. In addition, a portion of the receivables from
foreign sales are covered by confirmed letters of credit to help ensure
collectibility.
Supplemental information on the accounts receivable balances at December
31,
1996 and 1995 is as follows:
<TABLE>
<CAPTION>
December 31
------------
(Millions) 1996 1995 -------------------------------------
- ----
<S> <C> <C>
Receivables
Trade $ 885 $ 890
Other 84 84
- ---------------------------------------
-969 974
Less allowances 10 25
- -----------------------------------------
Receivables, net $ 959 $ 949
=========================================
</TABLE>
The Corporation had sold fractional ownership interests in a defined pool of
trade accounts receivable for $350 million as of December 31, 1996 and 1995.
The sold accounts receivable are excluded from receivables in the
accompanying balance sheets. The full amount of the allowance for doubtful
accounts has
been retained because the Corporation has retained substantially the same risk
of credit loss as if the receivables had not been sold. A portion of the cost
of the accounts receivable sale program is based on the purchasers' level of
investment and borrowing costs. The Corporation pays fees based on its senior
debt ratings. The total cost of the program, which was $20 million in 1996,
$37 million in 1995 and $33 million in 1994, is included in selling, general
and administrative expense in the accompanying statements of income.
Under the accounts receivable sale agreement, the maximum amount of the
purchasers' investment is subject to change based on the level of eligible
receivables and restrictions on concentrations of receivables. During 1995,
the Corporation repurchased $350 million of receivables in order to reduce the
cost of the program, which was higher than the cost of financing form
alternative sources. The program has been extended to May 17, 1997.
In June 1996, the Financial Accounting Standards Board issued Financial
Accounting Standards Number 125, `Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities,''which established
accounting and reporting standards for transfers and servicing of financial
assets and extinguishment of liabilities. The Corporation will adopt the new
Standard in the 1997 first quarter. As a result, the Corporation's accounts
receivable program will be accounted for as a secured borrowing; the
receivables and the corresponding debt will be included as an asset and
liability, respectively, on the balance sheet.
NOTE 5. INDEBTEDNESS
The Corporation's indebtedness included the following:
<TABLE>
<CAPTION>
December 31
---------------
(Millions) 1996 1995
- -------------------------------------------------------
<S> <C> <C>
Debentures, 9.0% average rate,
payable through 2025 $ 3,200 $ 3,350
Notes, 7.8% average rate,
payable through 2006 817 717
Commercial paper and other
short-term notes, 5.7%
average rate 645 321
Revenue bonds, 4.9% average rate,
payable through 2026 646 628
Other loans, 8.1% average rate,
payable through 2012 45 53
- -----------------------------------------------------
-5,353 5,069
Less:
Commercial paper and other
short-term notes 645 321
Current portion of
long-term debt 311 15
Unamortized discount 26 29
- ------------------------------------------------------
Long-term debt, excluding
current portion $ 4,371 $ 4,704
=======================================================
</TABLE>
For additional information regarding financial instruments, see Note 6.
The scheduled maturities of long-term debt for the next five years are as
follows: $311 million in 1997, $439 million in 1998, $21 million in 1999, $40
million in 2000 and $12 million in 2001.
NOTES AND DEBENTURES During 1996, the Corporation issued $100 million of
7.20% Notes Due December 15, 2006.
In 1996, the Corporation redeemed approximately $150 million of its 9.25%
Debentures Due March 15, 2016. The Corporation recorded an after-tax
extraordinary loss of approximately $5 million (6 cents per share) related to
this redemption.
During 1995, the Corporation issued $250 million of 8-5/8% Debentures Due
April 30, 2025, $250 million of 7.70% Debentures Due June 15, 2015 and $250
million of 7-3/8% Debentures Due December 1, 2025.
In 1995, the Corporation redeemed approximately $203 million of its
outstanding debt. The after-tax loss on this redemption was less than $1
million.
REVOLVING CREDIT FACILITY In 1996, the Corporation entered into an agreement
with Bank of America National Trust and Savings Association and 19 other
domestic and international banks which provides an unsecured revolving credit
facility of $1.5 billion. The revolving credit facility is being used for
direct borrowings and as support for commercial paper and other short-term
borrowings. The agreement will terminate in 2001. As of December 31, 1996,
$856 million of committed credit was available in excess of all short-term
borrowings outstanding under or supported by the facility.
Borrowings under the agreement bear interest, at the election of the
Corporation, at either (A) the higher of the Federal Funds Rate plus 1/2% or
the stipulated bank lending rate or (B) LIBOR plus .2625% or (C) fixed or
floating rates set by competitive bids. Fees associated with this revolving
credit facility include a commitment fee of .0625% per annum on the unused
portion of the commitments and a facility fee of .0625% per annum on the
aggregate commitments of the lenders. Fees and margins may be adjusted upward
or downward according to a pricing grid based on the Corporation's long-term
debt ratings. At December 31, 1996, $465 million was borrowed under the credit
agreement at a weighted average interest rate of 5.7%.
The revolving credit agreement contains certain restrictive covenants. The
covenants include a maximum leverage ratio (funded indebtedness to operating
cash flow) of 4.5 to 1.0 which is to be maintained throughout the term of the
credit agreement. As of December 31, 1996, the leverage ratio was 3.3 to 1.0.
COMMERCIAL PAPER AND OTHER SHORT-TERM NOTES These borrowings are classified
as current liabilities although all or a portion of them might be refinanced
on a long-term basis in 1997.
REVENUE BONDS At December 31, 1996, the Corporation had outstanding
borrowings of approximately $646 million under certain Industrial Revenue
Bonds, approximately $22 million of which were entered into during 1996 at
variable interest rates. Approximately $26 million from the issuance of these
bonds is being held by trustees and is restricted for the construction of
certain capital projects. Amounts held by trustees are classified as
noncurrent assets in the accompanying balance sheet.
OTHER At December 31, 1996, the amount of long-term debt secured by
property, plant and equipment and timber and timberlands was not material.
In September 1995, the Corporation sold certain of its assets for $354
million and has agreed to lease the assets back from the purchaser over a
period
of 30 years. Under the agreement with the purchaser, the Corporation will
maintain a deposit (initially in the amount of $322 million) which together
with interest earned is expected to be sufficient to fund the Corporation's
lease obligation including the repurchase of assets at the end of the term.
This transaction is being accounted for as a financing arrangement. At
December 31, 1995, the Corporation recorded on its balance sheet an asset for
the deposit from the sale of $305 million and a liability for the lease
obligation of $346 million, of which approximately $16 million was recorded as
a current asset and a current liability.
At December 31, 1996, the deposit and lease obligation balances were $339
million and $340 million, respectively. Of these amounts, approximately $14
million was recorded as a current asset and $18 million was recorded as a
current liabilty.
NOTE 6. FINANCIAL INSTRUMENTS
The carrying amount and estimated fair value of the Corporation's financial
instruments are as follows:
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995 --------------
-----------------------
CarryingFair Carrying Fair
(Millions) Amount Value Amount Value
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial paper and
other short-term notes
(Note 5) $ 645 $ 645 $ 321 $ 321
Notes and debentures
(Note 5) 4,017 4,215 4,067 4,470
Revenue bonds (Note 5) 646 637 628 628
Other loans (Note 5) 45 45 53 53
Interest rate exchange
agreements * 12 * 21
Accounts receivable sale
program (Note 4) 350 350 350 350
- --------------------------------------------------------------
- --
</TABLE>
*The Corporation's balance sheet at December 31, 1996 and 1995 included
accrued interest of $6 million and $5 million, respectively, related to these
agreements.
COMMERCIAL PAPER AND OTHER SHORT-TERM NOTES The carrying amounts approximate
fair value because of the short maturity of these instruments.
NOTES AND DEBENTURES The fair value of notes and debentures was estimated
primarily by obtaining quotes from brokers for these and similar issues. For
notes and debentures for which there are no quoted market prices, the fair
value was estimated by calculating the present value of anticipated cash
flows. The discount rate used was an estimated borrowing rate for similar
debt instruments with like maturities.
REVENUE BONDS AND OTHER LOANS The fair value of revenue bonds and other
loans was estimated by calculating the present value of anticipated cash
flows. The discount rate used was an estimated borrowing rate for similar
debt instruments with like maturities.
INTEREST RATE AND FOREIGN CURRENCY EXCHANGE AGREEMENTS. The Corporation has
used interest rate and foreign currency exchange agreements in the normal
course of business to manage and reduce the risk inherent in interest rate and
foreign currency fluctuations.
Under the interest rate exchange agreements, the Corporation makes payments
to counterparties at fixed interest rates and in turn receives payments at
variable rates. The Corporation entered into interest rate exchange
agreements in prior years to protect against the increased cost associated
with a rise in interest rates. At December 31, 1996, the Corporation had
outstanding interest rate exchange agreements which effectively converted $496
million of floating rate obligations with a weighted average interest rate of
5.7% to fixed rate obligations with an average effective interest rate of
approximately 9.0%. These agreements have a weighted average maturity of
approximately 2.1 years. As of December 31, 1996, the Corporation's total
floating rate debt, including the accounts receivable sale program, exceeded
related interest rate exchange agreements by $1,363 million.
The estimated fair value of the Corporation's liability under interest rate
exchange agreements at December 31, 1996 and 1995 was $12 million and $21
million, respectively, and represents the estimated amount the Corporation
could have paid to terminate the agreements. The fair value at December 31,
1996 and 1995 was estimated by calculating the present value of anticipated
cash flows. The discount rate used was an estimated borrowing rate for similar
debt instruments with like maturities.
The Corporation enters into foreign exchange contracts, futures and
options, the amounts of which were not material to the consolidated financial
position of the Corporation at December 31, 1996 and 1995.
The Corporation may be exposed to losses in the event of nonperformance of
counterparties, but does not anticipate such nonperformance.
OTHER Due to the short-term nature of current assets and current
liabilities, their carrying amounts approximate fair value.
NOTE 7. INCOME TAXES
The provision for income taxes includes income taxes currently payable and
those deferred because of temporary differences between the financial
statement and tax bases of assets and liabilities. The provision for income
taxes consists of the following:
<TABLE>
<CAPTION>
Year ended December 31 -------------
(Millions) 1996 1995 1994
- ---------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $ 111 $ 600 $ 229
Deferred 6 (26) (19)
State income taxes:
Current 17 112 50
Deferred 1 (7) (14)
- -------------------------------------------------------
Provision for income taxes $ 135 $ 679 $ 246
========================================================
Income taxes paid, net of refunds $ 135 $ 686 $251
=======================================================
==
</TABLE>
Income taxes paid during 1996 are net of refunds of approximately $73 million,
primarily related to a 1995 federal overpayment and 1991 and 1992 federal
audits.
Income taxes paid during 1995 and 1994 included tax and interest payments
of $12 million and $84 million, respectively, to the Internal Revenue Service
to settle substantially all pending income tax issues for years prior to
1991. The federal statutory income tax rate was 35%. The provision
for income taxes is reconciled to the federal statutory rate as follows:
<TABLE>
<CAPTION>
Year ended December 31
---------------------
(Millions) 1996 1995 1994
- ---------------------------------------------------------
<S> <C> <C> <C>
Provision for income taxes
computed at the federal
statutory tax rate $ 104 $ 594 $ 200
State income taxes, net
of federal benefit 12 68 23
Goodwill amortization 23 23 23
Foreign sales corporation (7) (9) (5)
Meals and entertainment
disallowance 4 3 3
Other (1) - 2
- --------------------------------------------------------
Provision for income taxes $ 135 $ 679 $ 246
=========================================================
</TABLE>
The components of the net deferred income tax liabilities are as
follows: <TABLE>
<CAPTION>
December 31
-------------
(Millions) 1996 1995
- -------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Compensation related accruals $ 333 $ 315
Other accruals and reserves 76 68
Other (14) 14
- -----------------------------------------------------------
-395 397
Valuation allowance - -
- -----------------------------------------------------------
-395 397
- ------------------------------------------------------------
Deferred income tax liabilities:
Property, plant and equipment (1,215) (1,196)
Timber and timberlands (174) (179)
Other (38) (46)
- -----------------------------------------------------------
-(1,427) (1,421)
- ------------------------------------------------------------
Deferred income tax liabilities, net $(1,032) $ (1,024)
=============================================================
Included in the balance sheets:
Deferred income tax assets* $ 129 $ 123
Deferred income tax liabilities** (1,161) (1,147)
- ------------------------------------------------------------
Deferred income tax liabilities, net $(1,032) $(1,024)
=============================================================
</TABLE>
* Net of current liabilities of $4 million at December 31, 1996 and 1995.
** Net of long-term assets of $262 million and $270 million at December 31,
1996 and 1995, respectively.
NOTE 8. RETIREMENT PLANS DEFINED BENEFIT PENSION PLANS Most of the
Corporation's employees
participate in noncontributory defined benefit pension plans. These include
plans which
are administered solely by the Corporation and union-administered
multiemployer plans. The Corporation's funding policy for solely administered
plans is based on actuarial calculations and the applicable requirements of
federal law. Contributions to multiemployer plans are generally based on
negotiated labor contracts.
Benefits under the majority of plans for hourly employees (including
multiemployer plans) are primarily related to years of service. The
Corporation has separate plans for salaried employees and officers under which
benefits are primarily related to compensation and years of service. The
officers' plan is not funded and is non-qualified for federal income tax
purposes.
Plan assets consist principally of common stocks, bonds, mortgage
securities, interests in limited partnerships, cash equivalents and real
estate. At December 31, 1996 and 1995, respectively, $64 million and $26
million of noncurrent prepaid pension cost was included in other assets.
Accrued pension
cost of $66 million and $73 million at December 31, 1996 and 1995,
respectively, was included in other long-term liabilities.
Pursuant to the provisions of Financial Accounting Standard Number 87 (FAS
87), "Employers' Accounting for Pensions," intangible assets of $3 million and
$56 million were recorded as of December 31, 1996 and 1995, respectively, in
order to recognize the required minimum liability.
The following table sets forth the funded status of the solely administered
plans and the amounts recognized in the accompanying balance sheets.
<TABLE>
<CAPTION>
December 31, 1996
--------------------
Plans having
Plans having accumulated
assets in excess benefits in
of accumulated excess of
(Millions) benefits of assets
- ---------------------------------------------------------------
<S> <C> <C>
Accumulated benefit obligation
at November 30
Vested portion $1,392 $ 92
Nonvested portion 33 3
- --------------------------------------------------------------
-1,425 95
Effect of projected future
compensation levels 12 13
- ---------------------------------------------------------------
Projected benefit obligation
at November 30 1,437 108
Plan assets at fair value
at November 30 1,711 29
- ---------------------------------------------------------------
Plan assets in excess of (less
than) projected benefit obligation 274 (79)
Unrecognized net (gain) loss (243) 20
Unrecognized prior service cost 42 3
Unrecognized net asset from initial
application of FAS 87 (9) -
Adjustment required to recognize
minimum liability - (10)
- ---------------------------------------------------------------
Prepaid (accrued) pension cost
at December 31 $ 64 $ (66)
================================================================
<CAPTION>
December 31, 1995
------------------------
Plans having
Plans having accumulated
assets in excess benefits in
of accumulated excess of
(Millions) benefits of assets
- ---------------------------------------------------------------
<S> <C> <C>
Accumulated benefit obligation
at November 30
Vested portion $ 917 $ 520
Nonvested portion 20 14
- --------------------------------------------------------------
937 534
Effect of projected future
compensation levels 9 13
- --------------------------------------------------------------
Projected benefit obligation
at November 30 946 547
Plan assets at fair value
at November 30 1,163 461
- --------------------------------------------------------------
Plan assets in excess of (less
than) projected benefit obligation 217 (86)
Unrecognized net (gain) loss (169) 47
Unrecognized prior service cost (15) 56
Unrecognized net asset from initial
application of FAS 87 (7) (11)
Adjustment required to recognize
minimum liability - (79)
- --------------------------------------------------------------
Prepaid (accrued) pension cost
at December 31 $ 26 $ (73)
===============================================================
</TABLE>
Net periodic pension cost for solely administered and union-administered
pension plans included the following:
<TABLE>
<CAPTION>
Year ended December 31
--------------------
(Millions) 1996 1995 1994
- ---------------------------------------------------------
<S> <C> <C> <C>
Service cost of benefits earned $ 83 $ 75 $ 81
Interest cost on projected benefit
obligation 106 107 93
Actual return on plan assets (299) (311) (21)
Net amortization and deferral 127 168 (126)
Contributions to multiemployer
pension plans 4 4 4
- --------------------------------------------------------
Net periodic pension cost $ 21 $ 43 $ 31
=========================================================
</TABLE>
The following assumptions were used:
<TABLE>
<CAPTION>
1996 1995 1994
- -------------------------------------------------------
<S> <C> <C> <C>
Discount rate used to determine
the projected benefit obligation 7.0% 7.0% 8.5%
Rate of increase in future
compensation levels used to
determine the projected benefit
obligation 5.5 5.5 6.0
Expected long-term rate of return
on plan assets used to determine
net periodic pension cost 10.0 10.0 10.0
- --------------------------------------------------------
</TABLE>
DEFINED CONTRIBUTION PLANS. The Corporation sponsors several defined
contribution plans to provide eligible employees with additional income upon
retirement. The Corporation's contributions to the plans are based on
employee contributions and compensation. The Corporation's contributions
totaled $50 million in 1996, $46 million in 1995 and $43 million in 1994.
HEALTH CARE AND LIFE INSURANCE BENEFITS. The Corporation provides certain
health care and life insurance benefits to eligible retired employees.
Salaried participants generally become eligible for retiree health care
benefits after reaching age 55 with 10 years of service or after reaching age
65. Benefits, eligibility and cost-sharing provisions for hourly employees
vary by location and/or bargaining unit. Generally, the medical plans pay a
stated percentage of most medical expenses reduced for any deductible and
payments made by government programs and other group coverage. Effective
December 1995, the plans were funded through a trust established for the
payment of future active and retiree benefits. The trust was funded with an
initial contribution of $31 million which was previously recorded as a current
liability on the Corporation's balance sheet. Georgia-Pacific will continue
to contribute to the trust in the amounts necessary to fund current
obligations of the plans.
In 1991, the Corporation began transferring its share of the cost of
post-age
65 health care benefits to future salaried retirees. It is currently
anticipated that the Corporation will continue to reduce the percentage of the
cost of post-age 65 benefits that it will pay on behalf of salaried employees
who retire in each of the years 1995 through 1999 and that the Corporation
will continue to share the pre-age 65 cost with future salaried retirees, but
will no longer pay any of the post-age 65 cost for salaried employees who
retire after 1999.
The following table sets forth the status of the plans, reconciled to the
accrued postretirement benefit cost recognized in the Corporation's balance
sheet at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
December 31
-----
(Millions) 1996 1995
- --------------------------------------------
- -<S> <C> <C>
Accum ulated postretirement
benefit obligation:
Retirees $ 341 $ 289
Fully eligible active plan
participants 26 32
Other active participants 164 143
- --------------------------------------------
-531 464
Unrecognized net gain (loss) (45) (47)
Unrecognized prior service cost (13) 5
- ----------------------------------------------
Accrued postretirement
benefit cost $ 473 $ 422
==============================================
</TABLE>
Net periodic postretirement benefit cost included the following
components: <TABLE>
<CAPTION>
Year ended
December 31
--------------------
(Millions) 1996 1995 1994
- --------------------------------------------------------
<S> <C> <C> <C>
Service cost of benefits earned $ 10 $ 6 $ 9
Interest cost on accumulated
postretirement benefit obligation 29 27 28
Amortization of (gain) loss - (1) 1
- -------------------------------------------------------
Net periodic postretirement
benefit cost $ 39 $ 32 $ 38
========================================================
</TABLE>
For measuring the expected postretirement benefit obligation, an 10 percent,
11 percent and 12 percent annual rate of increase in the per capita claims
cost was assumed for 1996, 1995 and 1994, respectively. The rate was assumed
to decrease 1 percent per year to 7 percent in 1999 and remain at
that level thereafter. The
weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 6.5 percent at December 31, 1996 and
December 31, 1995 and 8.0 percent at December 31, 1994.
If the annual health care cost trend rate were increased by 1 percent, the
accumulated postretirement benefit obligation would have increased by 14
percent as of December 31, 1996 and December 31, 1995 and 13 percent as of
December 31, 1994. The effect of this change on the aggregate of service and
interest costs would be an increase of 11 percent for 1996, 15 percent for
1995 and 17 percent for 1994.
OTHER. Effective January 1, 1994, the Corporation adopted Financial
Accounting Standard Number 112 (FAS 112), "Employers' Accounting for
Postemployment Benefits." FAS 112 requires accrual-basis recognition of
benefits provided by an employer to former or inactive employees after
employment but before retirement. The adoption of FAS 112 resulted in a one-
time, after-tax charge of $5 million (6 cents per share) in the 1994 first
quarter.
NOTE 9. COMMON AND PREFERRED STOCK
The Corporation's authorized capital stock consists of 10 million shares of
Preferred Stock and 25 million shares of Junior Preferred Stock, of which no
shares were issued at December 31, 1996, and 150 million shares of Common
Stock.
At December 31, 1996, the following authorized shares of the Corporation's
common stock were reserved for issue:
<TABLE>
<CAPTION>
1996
<S> <C>
1995 Employee Stock Purchase Plan 952,000
1995 Outside Directors Stock Plan 25,000
1995 Shareholder Value Incentive Plan 8,100,000
1994 Employee Stock Option Plan 630,000
1993 Employee Stock Option Plan 140,000
1984 Employee Stock Option Plan 99,000
- -------------------------------------------------
Common stock reserved 9,946,000
==================================================
</TABLE>
EMPLOYEE STOCK PURCHASE PLANS. At December 31, 1996, the Corporation had
952,000 shares of common stock reserved for issuance under the 1995 Employee
Stock Purchase Plan (Purchase Plan) at a subscription price of $73.84 per
share. The subscription period for the Purchase Plan expired on September 15,
1995. Subscribers must purchase and pay for shares subscribed not later than
September 30, 1997 but prior to that time may obtain a refund of their
payments plus interest at a rate of 6% per annum in lieu of stock.
Approximately 7,300 subscribers remained in the Purchase Plan at December 31,
1996.
Under the 1995 Purchase Plan, the Corporation issued 19,000 shares of common
stock in 1996.
Under the 1993 Employee Stock Purchase Plan (which expired on July 31, 1995),
the Corporation issued 991,000 and 49,000 shares of common stock in 1995 and
1994, respectively, at a subscription price of $57.06 per share.
OUTSIDE DIRECTORS STOCK PLAN. The Outside Directors Stock Plan (Directors
Plan) provides for the issuance of shares of common stock to non-employee
directors on a restricted basis. Each non-employee director was issued 200
restricted shares of common stock in 1995 and 193 shares in 1996. Subject to
shareholder approval, each year beginning in 1997, each outside director will
be issued a number of shares equal to $40,000 divided by the mean between the
high and low sales price for the Corporation's common stock price on the date
of issuance. The restrictions on the shares lapse at the time of death,
retirement from the board or disability.
LONG-TERM INCENTIVE PLANS. The Corporation initially reserved 4,000,000
shares for issuance under the 1990 Long-Term Incentive Plan (Incentive Plan),
which expired March 9, 1995. Restricted stock was awarded to employees at no
cost, based on increases in average market value of the Corporation's common
stock. At the time restricted shares were awarded, the market value of the
stock was added to common stock and additional paid-in capital and was
deducted from shareholders' equity (long-term incentive plan deferred
compensation). Longterm incentive plan deferred compensation is amortized
over the vesting (restriction) period, generally five years, with adjustments
made quarterly
for market price fluctuations. At the time awarded shares become vested, the
Corporation will pay on behalf of each participant a cash bonus in the amount
of the estimated income tax liability to be incurred by the participant as a
result of the award and cash bonus. Shares totaling 1,155,000 were awarded
under the Incentive Plan, of which 676,000 restricted shares remained
outstanding as of December 31, 1996.
The Corporation recognized compensation expense of $29 million in 1996, $22
million in 1995 and $37 million in 1994 related to these incentive plans.
EMPLOYEE STOCK OPTION PLANS. The 1995 Shareholder Value Incentive Plan
(SVIP) provides for the granting of stock options having a term of either 5-1/2
or 10 years to officers and key employees.
At December 31, 1996, the Corporation
had 8,100,000 shares of common stock reserved for issue under the SVIP.
Options having a term of 10 years become exercisable in 9-1/2 years unless
certain performance targets tied to the Corporation's common stock performance
are met, which would enable the holder to exercise such options after three,
four or five years from the grant date. Options having a term of 5-1/2 years
may be exercised only if such performance targets are met in the third, fourth
or fifth year after such grant date. At the time options are exercised, the
exercise price is payable in cash or by surrender of shares of common stock
already owned by the optionee.
The 1994 Employee Stock Option Plan (1994 Option Plan) provided for the
granting of stock options to certain non-officer key employees. There also
are options outstanding under both the 1993 Employee Stock Option Plan (1993
Option Plan) and the 1984 Employee Stock Option Plan (1984 Option Plan).
Except with respect to the SVIP and the 1994 Option Plan, holders of stock
options are paid cash bonuses, payable upon exercise of an option, of an
amount not to exceed the amount by which the market value of the common stock,
as defined, exceeds the option price. In addition, holders of options granted
under plans other than the SVIP and the 1994 Option Plan may surrender all or
part of the related stock option in exchange for common stock with a fair
market value equal to the amount by which the market value of the shares
covered by the option exceeds the aggregate option exercise price.
Except for the SVIP and the 1994 Option Plan (which are noncompensatory for
financial reporting purposes), compensation resulting from stock options and
cash bonuses was initially measured at the grant date based on the market
value of the common stock, and adjustments are made quarterly for market price
fluctuations. The Corporation recognized 1993 Option Plan and 1984 Option
Plan compensation expense of $2 million in 1996 and and $6 million in 1995
and 1994.
Additional information relating to the Corporation's employee stock option
plans is as follows:
<TABLE>
<CAPTION>
Year ended December 31
------------------------- --
1996 1995 1994
----------------------
<S> <C> <C> <C>
Options outstanding
at January 1 2,217,000 1,646,000 1,055,000
Options granted 2,150,500 1,223,200 937,000
Options exercised/
surrendered (117,400) (619,000) (291,000)
Options canceled (91,600) (33,200) (55,000)
- ------------------------------------------------------
Options outstanding
at December 31 4,158,500 2,217,000 1,646,000
Options available
for grant at
December 31 4,811,000 6,895,000 111,000
------------------------------------------------------
Total reserved shares 8,969,500 9,112,000 1,757,000
=======================================================
Options exercisable
at December 31 869,000 1,012,000 757,000
======================================================
Option prices per share:
Granted $73-$77 $81 $64-$75
Exercised/surrendered $39-$75 $39-$75 $39-$66
Canceled $39-$81 $39-$81 $39-$75
=======================================================
</TABLE>
SHAREHOLDER RIGHTS PLAN. The Corporation has a Shareholder Rights Plan
pursuant to which preferred stock purchase rights are issued at the rate of
one Right for each share of common stock. The Rights expire on July 31, 1999,
unless redeemed earlier. The Rights are exercisable only if a person or group
acquires 15 percent or more of the Corporation's common stock or announces a
tender offer for 30 percent or more of the common stock. In such event, each
Right entitles the holder to buy, at an exercise price of $175, one one
hundredth of a newly issued share of Series A Junior Preferred Stock, of which
5 million shares were reserved at December 31, 1996. Due to the nature of its
dividend, liquidation and voting rights, the economic value of one one-
hundredth of a share of Junior Preferred Stock should approximate the economic
value of one share of common stock. In addition, if one of several specified
events (generally involving self-dealing transactions by an acquirer of the
Corporation's common stock or a business combination involving the
Corporation) occurs, each Right generally entitles the holder to buy, at an
exercise price of $175 (subject to adjustments), shares of either the
Corporation's Series A Junior Preferred Stock or the acquirer's common stock,
in either case having a market value of twice the exercise price.
CAPITAL STOCK. During the year ended December 31, 1995, the Corporation
purchased 618,000 shares of its common stock at an aggregate purchase price of
$47 million on the open market. The resolution of the board of directors
authorizing such repurchases provides that none will be made as long as the
total debt of the Corporation exceeds $5.5 billion.
OTHER. The Corporation adopted Financial Accounting Standard Number 123 (FAS
123), "Accounting for Stock-Based Compensation," in 1996. The Corporation
has elected to continue to account for its stock-based compensation plans
under APB Opinion Number 25 and disclose pro forma effects of the plans on net
income and earnings per share as provided by FAS 123. Accordingly, no
compensation cost has been recognized for the SVIP plan or the Employee Stock
Purchase Plan. Had compensation cost for these plans been determined based on
the fair value at the grant dates for 1995 and 1996 awards under the plan
consistent with the method of FAS 123, the Corporation's pro forma net income
would have been $144 million and $1,014 million for 1996 and 1995,
respectively. Pro forma earnings per share would have been $1.59 and $11.24
for 1996 and 1995, respectively. The pro forma amounts were calculated with
the fair value of each option grant estimated on the date of grant using the
Black-Scholes option-pricing model. For the SVIP plan, the following weighted
average assumptions were used for grants in 1996 and 1995, respectively:
dividend yield of 2.0 percent and 1.6 percent; option forfeiture rate of 3
percent and 3 percent; stock volatility factor of .3 and .3; risk-free
interest rate of 5.7 percent and 7.4 percent; and an expected life of 10 years
and 10 years. The total value of SVIP options granted during 1996 and 1995
was computed as $40.9 million and $32.0 million, respectively. For the
Employee Stock Purchase Plan, the following weighted average assumptions were
used for grants in 1995: dividend yield of 2.0 percent; option forfeiture rate
of 28 percent; stock volatility factor of .23; risk-free interest rate of 5.7
percent; and an expected life of 2 years. The total value of Employee Stock
Purchase Plan options granted during 1995 was computed as $26.4 million. No
Employee Stock Purchase Plan grants were made in 1996.
NOTE 10. COMMITMENTS AND CONTINGENCIES
The Corporation is a party to various legal proceedings incidental to its
business and is subject to a variety of environmental and pollution control
laws and regulations in all jurisdictions in which it operates. As is the case
with other companies in similar industries, the Corporation faces exposure
from actual or potential claims and legal proceedings involving environmental
matters. Liability insurance in effect during the last several years provides
only very limited coverage for environmental matters.
The Corporation is involved in environmental remediation activities at
approximately 200 sites, both owned by the Corporation and owned by others,
where it has been notified that it is or may be a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act or similar state "superfund" laws. Of the known sites in which
it is involved, the Corporation estimates that approximately 31 percent are
being
investigated, approximately 43 percent are being remediated and approximately
26 percent are being monitored (an activity which occurs after either site
investigation or remediation has been completed). The ultimate costs to the
Corporation for the investigation, remediation and monitoring of many of these
sites cannot be predicted with certainty, due to the often unknown magnitude
of the pollution or the necessary cleanup, the varying costs of alternative
cleanup methods, the amount of time necessary to accomplish such cleanups, the
evolving nature of cleanup technologies and government regulations and the
inability to determine the Corporation's share of multi-party cleanups or the
extent to which contribution will be available from other parties. The
Corporation has established reserves for environmental remediation costs for
these sites in amounts which it believes are probable and reasonably
estimable. Based on analysis of currently available information and previous
experience with respect to the cleanup of hazardous substances, the
Corporation believes that it is reasonably possible that costs associated with
these sites may exceed current reserves by amounts that may prove
insignificant or that could range, in the aggregate, up to approximately $63
million. This estimate of the range of reasonably possible additional costs
is less certain than the estimates upon which reserves are based, and in order
to establish the upper limit of such range, assumptions least favorable to the
Corporation among the range of reasonably possible outcomes were used. In
estimating both its current reserve for environmental remediation and the
possible range of additional costs, the Corporation has not assumed it will
bear the entire cost of remediation of every site to the exclusion of other
known potentially responsible parties who may be jointly and severally liable.
The ability of other potentially responsible parties to participate has been
taken into account, based generally on the parties' financial condition and
probable contribution on a per site basis.
In July of 1996, the Corporation executed an agreement with the United
States Department of Justice and the Environmental Protection Agency (EPA),
which was subsequently approved by the Federal District Court in Atlanta,
to settle numerous allegations made by the EPA involving potential claims
under the Clean Air Act at 41 of the Corporation's building product
manufacturing plants. Pursuant to this settlement, the Corporation has
begun to install emissions control equipment
at 10 of its plywood plants and at one oriented
strand board manufacturing plant at a cost currently estimated at $30 million.
The Corporation has also paid a civil penalty of $6 million, and is funding
various environmental improvement projects having a cost of $4.25 million.
Since 1989 the Corporation has been involved in litigation in state courts in
Mississippi in which numerous plaintiffs claimed personal injury and property
damage as a result of the alleged discharge of dioxin into the Leaf River from
a pulp mill owned by a subsidiary of the Corporation. In 1995 and 1996 the
Mississippi Supreme Court reversed two lower court judgments which had imposed
compensatory and punitive damages on the Corporation. The court ruled that
the plaintiffs had failed to prove that the defendants had caused any personal
injury or property damage or that the defendants' conduct was intentional,
willful, wanton or grossly negligent. Nearly all of the dioxin cases pending
in the Mississippi state courts were dismissed in 1996, although appeals from
some of these dismissals, and one jury verdict in favor of the Corporation,
have been filed. The Corporation intends to file summary judgment motions in
the remaining cases. In light of the opinions of the Mississippi Supreme
Court and the dismissal of nearly all of the pending cases, the Corporation
believes this litigation no longer represents a material contingency.
On April 8, 1996, the United States District Court for the Northern District
of Mississippi granted a declaratory judgment to several subsidiaries of the
Corporation against certain of its insurance carriers, holding that these
insurers are obligated to reimburse such subsidiaries for costs incurred to
defend against litigation involving the alleged discharge of dioxin from the
Leaf River mill, and to indemnify such subsidiaries in the event they are
found liable for damages as a result of such alleged discharges. In December
of 1996, the primary insurer agreed to pay a substantial portion of such
defense costs.
The Corporation and many other companies are defendants in suits brought
in various courts around the nation by plaintiffs who allege that they have
suffered personal injury as a result of exposure to asbestos-containing
products. These suits allege a variety of lung and other diseases based on
alleged exposure to products previously manufactured by the Corporation. In
many cases the plaintiffs are unable to demonstrate that they have suffered
any compensable loss as a result of such exposure.
The Corporation generally resolves asbestos cases by voluntary dismissal or
settlement for amounts it considers reasonable given the facts and
circumstances of each case. The amounts it has paid to defend and settle
these cases to date have been substantially covered by product liability
insurance. The Corporation currently is defending claims of approximately
55,000 such plaintiffs and anticipates that additional suits will be filed
against it over the next several years. The Corporation has insurance
available in amounts which it believes are adequate to cover substantially all
of the reasonably foreseeable damages and settlement amounts arising out of
claims and suits currently pending. The Corporation has further insurance
coverage available for the disposition of suits that may be filed against it
in the future, but there can be no assurance that the amounts of such
insurance will be adequate to cover all future claims. The Corporation has
established reserves for liabilities and legal defense costs it believes are
probable and reasonably estimable with respect to pending suits and claims and
a receivable for expected insurance recoveries.
The Corporation is defending an action in Alabama state court that seeks to
recover damages on behalf of a class of all persons currently owning
structures in the United States on which hardboard siding manufactured by the
Corporation after January 1, 1980, has been installed. The plaintiffs allege
that this hardboard siding was inadequately designed and manufactured and as a
consequence prematurely discolors and deteriorates. They also dispute the
validity and availability of the warranty issued with the product. The
plaintiffs seek unspecified compensatory and punitive damages, declaratory
relief regarding the availability of warranties, restitution and injunctive
relief. A similar case has been filed against the Corporation and another
defendant in state court in Georgia seeking to certify a class of individuals
whose mobile homes contain the Corporation's hardboard siding. The plaintiffs
seek damages in excess of $10,000 for each purported class member.
Although the ultimate outcome of these environmental matters and legal
proceedings cannot be determined with certainty, based on presently available
information management believes that adequate reserves have been established
for probable losses with respect thereto. Management further believes that
the ultimate outcome of such environmental matters and legal proceedings
could be material to operating results in any given quarter or year, but will
not have a material adverse affect on the long-term results of operations,
liquidity or consolidated financial position of the Corporation.
NOTE 11. RELATED PARTY TRANSACTIONS
The Corporation is a 50 percent partner in a joint venture (GA-MET) with
Metropolitan Life Insurance Company (Metropolitan). GA-MET owns and operates
the Corporation's main office building in Atlanta, Georgia. The Corporation
accounts for its investment in GA-MET under the equity method.
At December 31, 1996, GA-MET had an outstanding mortgage loan payable to
Metropolitan in the amount of $153 million. The note bears interest at 9-
1/2%, requires monthly payments of principal and interest through 2011 and is
secured by the land and building owned by the joint venture. In the event of
foreclosure, each partner has severally guaranteed payment of one-half of any
shortfall of collateral value to the outstanding secured indebtedness. Based
on the present market conditions and building occupancy, the likelihood of any
obligation to the Corporation with respect to this guarantee is considered
remote.
NOTE 12. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
First Quarter Second Quarter
----------------------------
(Millions, except
per share amounts) 1996 1995 1996 1995
- ----------------------------------------------------------
- -<S> <C> <C> <C> <C>
Net sales $3,053 $3,481 $3,324 $ 3,705
Gross profit (net sales minus
cost of sales) 769 1,084 810 1,123
Income before extraordinary
item 50 232 10 265
Net income 50 232 5 265
Income per share before
extraordinary item .55 2.59 .11 2.95
Net income per share .55 2.59 .06 2.95
Dividends declared per
common share .50 .40 .50 .50
Price range of common stock
High 75.25 81.75 78.50 86.75
Low 63.00 71.13 67.63 75.88
- ------------------------------------------------------------
<CAPTION>
Third Quarter Fourth Quarter
(Millions, except
per share amounts) 1996 1995 1996 1995
- ----------------------------------------------------------
- --
Net sales $3,451 $3,712 $3,196 $ 3,415
Gross profit (net sales minus
cost of sales) 810 1,233 702 988
Income before extraordinary
item 99 324 2 197
Net income* 99 324 2 197
Income per share before
extraordinary item 1.09 3.57 .02 2.17
Net income per share 1.09 3.57 .02 2.17
Dividends declared per
common share .50 .50 .50 .50
Price range of common stock
High 79.75 95.75 81.00 87.88
Low 69.75 84.25 69.25 65.75
- ------------------------------------------------------------
</TABLE>
Report of Independent Public Accountants
Georgia-Pacific Corporation and Subsidiaries
To the Shareholders and the Board of Directors of Georgia-Pacific
Corporation:
We have audited the accompanying balance sheets of Georgia-Pacific
Corporation (a Georgia corporation) and subsidiaries as of December 31, 1996
and 1995 and the related statements of income, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Georgia-Pacific Corporation
and subsidiaries as of December 31, 1996 and 1995 and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ Arthur Andersen LLP
- ------------------------
Arthur Andersen LLP
Atlanta, Georgia
February 7, 1997
Report on Management's Responsibilities Georgia-Pacific Corporation and
Subsidiaries
Management of Georgia-Pacific Corporation is responsible for the preparation,
integrity and fair presentation of the consolidated financial statements and
the estimates and judgments upon which certain amounts in the financial
statements are based. Management is also responsible for preparing the other
financial information included in this annual report. In our opinion, the
financial statements on the preceding pages have been prepared in conformity
with generally accepted accounting principles, and the other financial
information in this annual report is consistent with the financial statements.
Management is also responsible for establishing and maintaining a system of
internal control over financial reporting, which encompasses policies,
procedures and controls directly related to, and designed to provide
reasonable assurance as to, the reliability of the published financial
statements. An independent assessment of the system is performed by the
Corporation's internal audit staff in order to confirm that the system is
adequate and operating effectively. The Corporation's independent public
accountants also consider certain elements of the internal control system in
order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements. Management has considered any
significant recommendations regarding the internal control system which have
been brought to its attention by the internal audit staff or independent
public accountants and has taken steps it deems appropriate to maintain a cost-
effective internal control system. The Audit Committee of the Board of
Directors, consisting of independent directors, provides oversight to the
financial reporting process. The Corporation's internal auditors and
independent public accountants meet regularly with the Audit Committee to
discuss financial reporting and internal control issues and have full and free
access to the Audit Committee.
There are inherent limitations in the effectiveness of any system of internal
control, including the possibility of human error and the circumvention or
overriding of controls. Accordingly, even an effective internal control
system can provide only reasonable assurance with respect to financial
statement preparation. Furthermore, the effectiveness of an internal control
system can vary over time due to changes in conditions.
Management believes that as of December 31, 1996, the internal control system
over financial reporting is adequate and effective in all material
respects.
/s/ James E. Terrell
- ---------------------
James E. Terrell
Vice President and Controller
/s/ John F. McGovern
- ---------------------
John F. McGovern
Executive Vice President - Finance
and Chief Financial Officer
/s/ A. D. Correll
- ------------------
A. D. Correll
Chairman, Chief Executive Officer and
President
February 7, 1997
SELECTED FINANCIAL DATA - OPERATIONS Georgia-
Pacific Corporation and Subsidiaries
CASH DIVIDENDS TO EARNINGS
Cash dividends declared (common and preferred) divided by net income (loss).
EARNINGS TO INTEREST
Income (loss) from operations before income taxes, extraordinary items and
accounting changes plus interest expense divided by total interest cost
(interest expense plus capitalized interest). In the 1996, 1995, 1994, 1993,
1992, 1991 and 1990 calculations, respectively, the $20 million, $37 million,
$33 million, $29 million, $35 million, $59 million and $48 million cost of the
accounts receivable sale program was included in interest expense.
CASH FLOW TO INTEREST
Cash provided by continuing operations plus interest expense divided by total
interest cost (interest expense plus capitalized interest). In the 1995,
1993, 1991 and 1990 calculations, respectively, cash provided by continuing
operations excludes $(350) million, $(100) million, $(50) million and $850
million from the accounts receivable sale program. In the 1996, 1995, 1994,
1993, 1992, 1991 and 1990 calculations, respectively, the $20 million, $37
million, $33 million, $29 million, $35 million, $59 million and $48 million
cost of the accounts receivable sale program was included in interest expense.
EFFECTIVE INCOME TAX RATE
Provision (benefit) for income taxes divided by income (loss) from continuing
operations before income taxes, extraordinary items and accounting changes.
SELECTED FINANCIAL DATA - OPERATIONS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31 ---------------------------------
(Dollar amounts, except
per share, and shares
are in millions) 1996 1995 1994 1993
- --------------------------------------------------------------
- -<S> <C> <C> <C> <C>
Operations
Net sales $13,024 $14,313 $12,738 $12,287
- --------------------------------------------------------------
- -Costs and expenses
Cost of sales, excluding
depreciation and cost
of timber harvested
shown below 9,933 9,885 9,620 9,495
Selling, general and
administrative 1,419 1,410 1,237 1,277
Depreciation and cost
of timber harvested 937 926 913 953
Interest 439 395 453 513
Other (income) loss - - (57) 26
- ---------------------------------------------------------------
Total costs and expenses 12,728 12,616 12,166 12,264
- ---------------------------------------------------------------
Income (loss) from continuing
operations before unusual items,
income taxes, extraordinary
items and accounting
changes 296 1,697 572 23
Unusual items - - - -
Provision (benefit) for
income taxes 135 679 246 41
- --------------------------------------------------------------
- -Income (loss) from continuing
operations before extraordinary
items and accounting
changes 161 1,018 326 (18)
Extraordinary items and
accounting changes, net
of taxes (5) - (16) (16)
- ---------------------------------------------------------------
Net income (loss) $ 156 $ 1,018 $ 310 $ (34)
================================================================
Cash provided by continuing
operations** $ 1,213 $ 1,824 $ 1,009 $ 685
================================================================
Other statistical data
Per common share
Income (loss) from continuing
operations before extraordinary
items and accounting
changes $ 1.78 $ 11.29 $ 3.66 $ (.21)
Extraordinary items and
accounting changes (.06) - (.18) (.18)
- ----------------------------------------------------------------
Net income (loss) $ 1.72 $ 11.29 $ 3.48 $ (.39)
================================================================
Dividends declared $ 2.00 $ 1.90 $ 1.60 $ 1.60
Average shares of common
stock outstanding 90.6 90.2 89.1 87.7
Shares of common stock
outstanding at year end 91.4 91.3 90.5 90.3
Cash dividends to earnings 113.7% 17.0% 44.5% 100%+
Earnings to interest 1.5 4.5 2.1 1.0
Cash flow to interest 3.4 4.8 3.0 2.3
Effective income tax rate 45.6% 40.0% 43.0% 178.3%
================================================================
<CAPTION>
Year ended December 31
--------------------------------
(Dollar amounts, except per share,
and shares
are in millions) 1992 1991 1990* 1989
- --------------------------------------------------------------
- -<S> <C> <C> <C> <C>
Operations
Net sales $11,847 $11,524 $12,665 $10,171
- --------------------------------------------------------------
- -Costs and expenses
Cost of sales, excluding
depreciation and cost
of timber harvested,
shown below 9,238 9,054 9,612 7,488
Selling, general and
administrative 1,170 1,137 951 689
Depreciation and cost
of timber harvested 948 834 825 647
Interest 565 584 606 260
Other (income) loss - (344) (48) -
- --------------------------------------------------------------
- -Total costs and expenses 11,921 11,265 11,946 9,084
- --------------------------------------------------------------
- -Income (loss) from continuing
operations before unusual items,
income taxes, extraordinary
items and accounting
changes (74) 259 719 1,087
Unusual items - - - -
Provision (benefit) for
income taxes (14) 293 354 426
- --------------------------------------------------------------
- -Income (loss) from continuing
operations before extraordinary
items and accounting
changes (60) (34) 365 661
Extraordinary items and
accounting changes, net
of taxes (64) (108) - -
- ---------------------------------------------------------------
Net income (loss) $ (124) $ (142) $ 365 $ 661
================================================================
Cash provided by continuing
operations** $ 1,027 $ 740 $ 1,349 $ 1,491
================================================================
Other statistical data
Per common share
Income (loss) from continuing
operations before extraordinary
items and accounting
changes $ (.69) $ (.40) $ 4.28 $ 7.42
Extraordinary items and
accounting changes (.74) (1.25) - -
- ----------------------------------------------------------------
Net income (loss) $(1.43) $(1.65) $ 4.28 $ 7.42
================================================================
Dividends declared $ 1.60 $ 1.60 $ 1.60 $ 1.45
Average shares of common
stock outstanding 86.4 85.8 85.3 89.1
Shares of common stock
outstanding at year end 88.1 87.4 86.7 86.7
Cash dividends to earnings 100%+ 100%+ 38.1% 19.7%
Earnings to interest 0.9 1.4 2.0 5.0
Cash flow to interest 2.7 2.1 2.9 6.4
Effective income tax rate (18.9)% 113.1% 49.2% 39.2%
================================================================
<CAPTION>
Year ended December 31
----------------------------
(Dollar amounts, except
per share, and shares
are in millions) 1988 1987
1986
- -----------------------------------------------------------
- -<S> <C> <C>
<C>
Operations
Net sales $9,509 $8,603 $
7,223
- -----------------------------------------------------------
- -Costs and expenses
Cost of sales, excluding
depreciation and cost
of timber harvested
shown below 7,312 6,670
5,688
Selling, general and
administrative 632 583
511
Depreciation and cost
of timber harvested 590 494
434
Interest 197 124
138
Other (income) loss - -
- -
- -----------------------------------------------------------
- -Total costs and expenses 8,731 7,871
6,771
- -----------------------------------------------------------
- -Income (loss) from continuing
operations before unusual items,
income taxes, extraordinary
items and accounting
changes 778 732
452
Unusual items - 66
33
Provision (benefit) for
income taxes 311 340
189
- -----------------------------------------------------------
- -Income (loss) from continuing
operations before extraordinary
items and accounting
changes 467 458
296
Extraordinary items and
accounting changes, net
of taxes - -
- -
- -----------------------------------------------------------
- -Net income (loss) $ 467 $ 458 $
296
===========================================================
== Cash provided by continuing
operations** $1,005 $ 888 $
670
===========================================================
== Other statistical data
Per common share
Income (loss) from continuing
operations before extraordinary
items and accounting
changes $ 4.76 $ 4.23 $
2.70
Extraordinary items and
accounting changes - -
- -
- -----------------------------------------------------------
- --
Net income (loss) $ 4.76 $ 4.23 $
2.70
===========================================================
==
Dividends declared $ 1.25 $ 1.05 $
.85
Average shares of common
stock outstanding 98.1 107.5 104.1
Shares of common stock
outstanding at year end 94.8 104.7
107.3
Cash dividends to earnings 26.3% 25.1%
32.8%
Earnings to interest 4.4 6.9
4.2
Cash flow to interest 5.5 7.6
5.5
Effective income tax rate 40.0% 42.6%
39.0%
==========================================================
==
</TABLE>
* The results of Great Northern Nekoosa Corporation and its subsidiaries have
been included beginning on March 9, 1990.
** Excludes the accounts receivable sale program.
SELECTED FINANCIAL DATA - FINANCIAL POSITION, END OF YEAR
Georgia-Pacific Corporation and Subsidiaries
BOOK VALUE PER COMMON SHARE
Shareholders' equity minus the unamortized discount on redeemable preferred
stock, divided by shares of common stock outstanding as of the end of the
year.
TOTAL DEBT TO CAPITAL, BOOK BASIS
Total debt divided by the sum of total debt, deferred income taxes, other long
term liabilities, redeemable preferred stock and shareholders' equity as of
the end of the year. Total debt includes bank overdrafts, commercial paper
and short-term notes, current portion of long-term debt, long-term debt and
accounts receivable sold.
TOTAL DEBT TO CAPITAL, MARKET BASIS
Total debt divided by the sum of total debt and the market value of
shareholders' equity as of the end of the year. Total debt includes bank
overdrafts, commercial paper and short-term notes, current portion of long-
term debt, long-term debt and accounts receivable sold. The value of
shareholders' equity is the market price of common stock multiplied by the
number of common stock shares outstanding.
CURRENT RATIO
Current assets divided by current liabilities as of the end of the year.
SELECTED FINANCIAL DATA - FINANCIAL POSITION, END OF YEAR
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
(Dollar amounts, except per share,
and shares are in millions) 1996 1995 1994 1993 ------------
- -----------------------------------------------------
<S> <C> <C> <C> <C>
Financial position, end of year
Current assets $2,615 $2,595 $1,984 $ 1,646
Timber and timberlands, net 1,337 1,374 1,363
1,381
Property, plant and
equipment, net 6,560 6,013 5,488
5,448
Goodwill 1,658 1,714 1,773
1,832
Other assets 648 639 256
238
- ---------------------------------------------------------------
- --
Total assets 12,818 12,335 10,864
10,545
- ---------------------------------------------------------------
- -Current liabilities 2,490 1,764 2,325
2,064
Long-term debt 4,371 4,704 3,904
4,157
Other long-term liabilities 1,275 1,201 825
827
Deferred income taxes 1,161 1,147 1,190
1,095
Redeemable preferred stock - - -
- -
- ---------------------------------------------------------------
- -Shareholders' equity $3,521 $3,519 $2,620 $
2,402
- ---------------------------------------------------------------
- -Working capital $ 125 $ 831 $(341) $
(418)
- ---------------------------------------------------------------
- --
Other statistical data
Property, plant and equipment
investments (including
acquisitions) $1,407 $1,259 $ 850 $
421
Proprty, plant and equipment
investments (excluding
acquisitions) 1,059 1,259 850
421
Timber & timberlands purchases 142 244 211
235
Per common share
Market price: High 81.00 95.75 79.00
75.00
Low 63.00 65.75 56.75
55.00
Year-end 72.00 68.63 71.50
68.75
Book value 38.52 38.54 28.95
26.60
Total debt to capital,
book basis 50.4% 49.3% 56.0%
57.0%
Total debt to capital,
market basis 47.4% 47.2% 46.9%
48.0%
Current ratio 1.1 1.5 .9
.8
===============================================================
==
<CAPTION>
Year ended December 31 ----
-------------------------------
(Dollar amounts, except per share,
and shares are in millions) 1992 1991 1990*
1989
- ---------------------------------------------------------------
- -<S> <C> <C> <C>
<C>
Financial position, end of year
Current assets $1,607 $1,562 $1,766 $
1,829
Timber and timberlands, net 1,402 1,377 1,630
1,246
Property, plant and
equipment, net 5,831 5,567 6,341
3,691
Goodwill 1,891 1,949 2,042
91
Other assets 181 174 284
202
- ---------------------------------------------------------------
- -Total assets 10,912 10,629 12,063
7,059
- ---------------------------------------------------------------
- -Current liabilities 2,452 2,722 2,535
924
Long-term debt 4,019 3,743 5,218
2,336
Other long-term liabilities 731 633 407
241
Deferred income taxes 1,202 795 928
841
Redeemable preferred stock - - -
- -
- ---------------------------------------------------------------
- -Shareholders' equity $2,508 $2,736 $2,975 $
2,717
- ---------------------------------------------------------------
- -Working capital $(845) $(1,160) $(769) $
905
- ---------------------------------------------------------------
- --
Other statistical data
Property, plant and equipment
investments (including
acquisitions) $ 347 $ 490 $3,320 $
453
Property, plant and equipment
investments (excluding
acquisitions) 347 490 833
447
Timber & timberland purchases 196 148 595
179
Per common share
Market price: High 72.00 60.25 52.13
62.00
Low 48.25 36.25 25.38
36.63
Year-end 62.38 53.63 37.25
48.50
Book value 28.47 31.30 34.31
31.35
Total debt to capital,
book basis 57.0% 60.1% 63.6%
40.1%
Total debt to capital,
market basis 51.7% 57.2% 69.9%
37.7%
Current ratio .7 .6 .7
2.0
===============================================================
==
<CAPTION>
Year ended December 31
-----------------------
--
(Dollar amounts, except
per share, and shares
are in millions) 1988 1987
1986
- ---------------------------------------------------------------
- -<S> <C> <C>
<C>
Financial position, end of year
Current assets $1,892 $1,729 $
1,420
Timber and timberlands, net 1,289 915
844
Property, plant and
equipment, net 3,723 3,048
2,691
Goodwill 101 92
- -
Other assets 113 90
160
- ---------------------------------------------------------------
- -Total assets 7,118 5,874
5,115
- ---------------------------------------------------------------
- -Current liabilities 1,013 996
837
Long-term debt 2,514 1,298
893
Other long-term liabilities 168 156
125
Deferred income taxes 788 744
695
Redeemable preferred stock - -
113
- ---------------------------------------------------------------
- -Shareholders' equity $2,635 $2,680 $
2,452
- ---------------------------------------------------------------
- -Working capital $ 879 $ 733 $
583
- ---------------------------------------------------------------
- --
Other statistical data
Property, plant and equipment
investments (including
acquisitions) $1,115 $ 717 $
426
Property, plant and equipment
investments (excluding
acquisitions) 697 532
390
Timber & timberland purchases 577 215
151
Per common share
Market price:High 42.88 52.75
41.25
Low 30.75 22.75
24.75
Year-end 36.88 34.50
37.00
Book value 27.79 25.59
22.70
Total debt to capital,
book basis 44.1% 31.4%
26.3%
Total debt to capital,
market basis 44.8% 31.2% 23.3%
Current ratio 1.9 1.7 1.7
=================================================================
</TABLE>
* The financial position of Great Northern Nekoosa Corporation and
its
subsidiaries has been included beginning March 1990.
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31 -------------
--------------------------------------
(Millions) 1996 1995 1994 1993
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Net sales
Building products(2)
Wood panels $ 2,666 21%$ 2,962 21% $3,159 25% $ 2,913
24%
Lumber 2,398 18 2,251 16 2,556 20 2,672
22
Gypsum products 613 5 349 2 320 3 236
2
Chemicals 356 3 372 3 334 3 267
2
Other 1,332 10 1,367 9 1,192 9 979
8
- --------------------------------------------------------------------
7,365 57 7,301 51 7,561 60 7,067
58
- --------------------------------------------------------------------
Pulp and paper
Containerboard and
packaging 2,293 17 2,797 20 2,185 17 1,902
15
Communication
papers 1,521 12 1,961 14 1,310 10 1,195
10
Tissue 934 7 871 6 740 6 713
6
Market pulp 738 6 1,220 8 772 6 579
5
Paper distribution
and envelopes - - - - 35 - 748
6
Other 123 1 113 1 96 1 51
- -
- --------------------------------------------------------------------
5,609 43 6,962 49 5,138 40 5,188
42
- --------------------------------------------------------------------
Other operations 50 - 50 - 39 - 32
- -
- --------------------------------------------------------------------
Continuing
operations $13,024 100%$14,313 100% $12,738 100% $12,287
100%
====================================================================
=
Operating results(3, 4)
Building products $ 516 56%$ 669 29% $1,013 83% $ 973
126%
Pulp and paper 390 43 1,611 71 204 17 (213)
(27)
Other operations 8 1 10 - 10 - 10
1
- --------------------------------------------------------------------
Continuing
operations $ 914 100%$ 2,290 100% $1,227 100% $ 770
100%
====================================================================
=
<CAPTION>
Year ended December 31 -------------
--------------------------------------
(Millions) 1992 1991 1990(1) 1989
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Net sales
Building products(2)
Wood panels $ 2,543 22%$ 2,097 18% $2,296 18% $ 2,488
24%
Lumber 2,055 17 1,819 16 1,966 16 2,109
21
Gypsum products 216 2 222 2 270 2 299
3
Chemicals 240 2 223 2 247 2 253
3
Other 1,058 9 1,044 9 1,144 9 939
9
- --------------------------------------------------------------------
6,112 52 5,405 47 5,923 47 6,088
60
- --------------------------------------------------------------------
Pulp and paper
Containerboard and
packaging 2,001 17 2,008 17 2,440 19 1,578
15
Communication
papers 1,070 9 1,134 10 1,360 11 983
10
Tissue 682 6 664 6 719 6 679
7
Market pulp 681 6 645 6 779 6 728
7
Paper distribution
and envelopes 1,208 10 1,218 10 1,027 8 -
- -
Other 69 - 420 4 377 3 74
1
- --------------------------------------------------------------------
5,711 48 6,089 53 6,702 53 4,042
40
- --------------------------------------------------------------------
Other operations 24 - 30 - 40 - 41
- -
- --------------------------------------------------------------------
Continuing
operations $11,847 100%$11,524 100% $12,665 100% $10,171
100%
=====================================================================
Operating results(3, 4)
Building products $ 691 100%$ 504 47% $ 511 35% $ 533 36%
Pulp and paper (8) (1) 546 51 939 64 917 63
Other operations 9 1 17 2 17 1 15 1
- --------------------------------------------------------------------
Continuing
operations $ 692 100%$ 1,067 100% $1,467 100% $ 1,465 100%
=====================================================================
<CAPTION>
Year ended December 31 -----------------
------------------
(Millions) 1988 1987 1986
- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales
Building products(2)
Wood panels $ 2,442 26% $ 2,355 28% $ 1,864 26%
Lumber 2,134 22 2,002 23 1,676 23
Gypsum products 305 3 361 4 375 5
Chemicals 241 2 189 2 155 2
Other 907 10 848 10 783 11
- -------------------------------------------------------
-6,029 63 5,755 67 4,853 67
- -------------------------------------------------------
- -Pulp and paper
Containerboard and
packaging 1,433 15 1,246 15 1,029 15
Communication
papers 796 8 621 7 461 6
Tissue 590 6 539 6 502 7
Market pulp 533 6 314 4 221 3
Paper distribution
and envelopes - - - - -
- -
Other 84 1 90 1 681
- -------------------------------------------------------
-3,436 36 2,810 33 2,281
32
- -------------------------------------------------------
- -Other operations 44 1 38 - 891
- -------------------------------------------------------
- -Continuing
operations $ 9,509 100% $ 8,603 100% $ 7,223 100%
=========================================================
Operating results(3, 4)
Building products $ 428 41% $ 533 58% $ 500 73%
Pulp and paper 616 58 383 41 146 22
Other operations 10 1 10 1 355
- --------------------------------------------------------
Continuing
operations $ 1,054 100% $ 926 100% $ 681 100%
=========================================================
</TABLE>
(1) Sales and operating profits of Great Northern Nekoosa Corporation and its
subsidiaries have been included beginning on March 9, 1990.
(2) Building products sales include products manufactured by the Corporation
and products purchased and resold by the Corporation's distribution division.
(3) Operating results are before general corporate expenses, interest, cost
of accounts receivable sale program, income taxes, extraordinary items and
accounting changes.
(4) Segment operating results include a net $117 million pretax expense in
1996, a net $70 million pretax expense in 1995, a net $57 million pretax gain
in 1994, a net $26 million pretax loss in 1993, a net $344 million pretax gain
in 1991 and a net $48 million pretax gain in 1990 primarily resulting from
asset divestitures and restructuring charges. If these amounts had been
excluded from segment operating profits, pulp and paper operating profits
would have been $410 million in 1996, $171 million in 1994, $(187) million in
1993, $362 million in 1991 and $979 million in 1990; building products
operating profits would have been $613 million in 1996, $739 million in 1995,
$989 million in 1994, $344 million in 1991 and $423 million in 1990.
OPERATING STATISTICS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Production
As of December 31, 1996
- -----------------------------------------
Number of Annual
Facilities Capacity 1996 1995 1994
- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pulp and paper
Paper (t.tons)
Containerboard and packaging
Linerboard and medium 4 3,491 3,290 3,067 3,105
Other paperboard 6 708 611 576 614
Kraft paper 1 253 298 302 345
Communication papers 7 2,216 2,114 2,114 2,064
Tissue 5 595 618 616 586
Groundwood papers - - - - -
Market pulp,
shipments (t.tons) 6 2,070 2,029 1,871 1,977
- ------------------------------------------------------------
Total paper and market pulp 29 9,333 8,960 8,546 8,691
Converting
Corrugated
packaging (t.tons) 36 2,654 2,408 2,373 2,327
Tissue (t.tons) 6 593 581 574 544
Other 11
- -----------------------------------------------------------
- -Total paper, market pulp
and converting 82
=============================================================
Building products
Wood panels
Softwood plywood (3/8'')
(m.sq.ft.) 16 5,299 5,383 5,337 5,445
Oriented strand board
(3/8'')(m.sq.ft.) 6 1,681 1,416 1,104 1,028
Hardboard (1/8'')
(m.sq.ft.) 8 1,397 1,266 1,296 1,365
Particleboard (3/4'')
(m.sq.ft.) 9 1,315 1,276 1,145 1,190
Hardwood plywood (sm)
(m.sq.ft.) 2 600 433 429 448
Medium-density fiberboard
(3/4'')(m.sq.ft.) 3 382 173 84 95
Panelboard (1/8'')
(m.sq.ft.) 1 373 271 343 378
Softboard (1/2'')
(m.sq.ft.) 1 250 221 221 241
Lumber (m.bd.ft.) 40 2,671 2,518 2,430 2,561
Gypsum board (m.sq.ft.)** 21 6,400 4,942 2,754 2,786
Roofing-shingles
(t.squares)*** - - - - 959
Formaldehyde (m.lbs.) 15 2,226 2,068 1,985 2,006
Thermosetting resins
(m.lbs.) 18 3,508 3,164 2,866 2,926
Other 20
- ------------------------------------------------------------
Total building products 160
=============================================================
Distribution centers 102
Other operations 2
=============================================================
Resources (as of December 31)
North American timberlands (t.acres)
Owned 5,682 5,663 5,732
Controlled 412 417 681
=============================================================
<CAPTION>
Production
1993 1992 1991 1990*
- ----------------------------------------------------
<S> <C> <C> <C> <C>
Pulp and paper
Paper (t.tons)
Containerboard and packaging
Linerboard and medium 3,030 2,889 2,936 3,139
Other paperboard 567 526 522 544
Kraft paper 343 377 358 354
Communication papers 2,119 2,002 1,994 1,780
Tissue 594 576 556 553
Groundwood papers - - 603 531
Market pulp,
shipments (t.tons) 1,940 1,829 1,793 1,667
- ------------------------------------------------------------
Total paper and market pulp 8,593 8,199 8,762 8,568
Converting
Corrugated packaging
(t.tons) 2,065 1,917 1,816 2,225
Tissue (t.tons) 543 521 491 497
Other ------------------------------------------------------
- ------Total paper, market pulp
and converting
=============================================================
Building products
Wood panels
Softwood plywood (3/8'')
(m.sq.ft.) 5,462 5,133 4,968 5,395
Oriented strand board (3/8'')
(m.sq.ft.) 1,045 1,011 851 969
Hardboard (1/8'')
(m.sq.ft.) 1,388 1,330 1,202 1,203
Particleboard (3/4'')
(m.sq.ft.) 1,089 977 932 984
Hardwood plywood (sm)
(m.sq.ft.) 477 458 424 437
Medium-density fiberboard
(3/4'')(m.sq.ft.) 98 92 79 88
Panelboard (1/8'')
(m.sq.ft.) 366 365 332 344
Softboard (1/2'') (m.sq.ft.) 247 234 237 252
Lumber (m.bd.ft.) 2,580 2,568 2,570 2,674
Gypsum board (m.sq.ft.)** 2,409 2,112 1,955 2,309
Roofing-shingles
(t.squares)*** 7,274 7,447 7,775 7,674
Formaldehyde (m.lbs.) 1,809 1,614 1,540 1,547
Thermosetting resins (m.lbs.) 2,761 2,571 2,377 2,470
Other -------------------------------------------------------
- -----Total building products
=============================================================
Distribution centers
Other operations
=============================================================
Resources (as of December 31)
North American timberlands (t.acres)
Owned 5,821 5,942 5,969 8,203****
Controlled 681 707 922 1,047****
=============================================================
<CAPTION>
Production
1989 1988 1987 1986
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Pulp and paper
Paper (t.tons)
Containerboard and packaging
Linerboard and medium 1,419 1,297 1,318 1,146
Other paperboard 555 458 393 368
Kraft paper 350 356 348 394
Communication papers 1,161 970 868 731
Tissue 519 511 490 496
Groundwood papers - - - -
Market pulp,
shipments (t.tons) 1,194 870 718 611
- -----------------------------------------------------------
- -Total paper and market pulp 5,198 4,462 4,135 3,746
Converting
Corrugated packaging
(t.tons) 1,258 1,270 1,205 1,102
Tissue (t.tons) 467 462 446 437
Other ----------------------------------------------------
Total paper, market pulp
and converting
=============================================================
Building products
Wood panels
Softwood plywood (3/8'')
(m.sq.ft.) 5,341 5,545 5,050 4,706
Oriented strand board
(3/8'')(m.sq.ft.) 873 793 652 525
Hardboard (1/8'') (m.sq.ft.) 1,203 1,198 1,159 349
Particleboard (3/4'')
(m.sq.ft.) 1,062 1,004 695 425
Hardwood plywood (sm)
(m.sq.ft.) 420 456 357 335
Medium-density fiberboard
(3/4'')(m.sq.ft.) 74 62 59 75
Panelboard (1/8'')
(m.sq.ft.) 318 330 295 248
Softboard (1/2'') (m.sq.ft.) 242 238 231 241
Lumber (m.bd.ft.) 2,426 2,324 1,956 1,784
Gypsum board (m.sq.ft.)** 2,403 2,406 2,620 2,473
Roofing-shingles
(t.squares)*** 8,106 7,155 6,976 7,361
Formaldehyde (m.lbs.) 1,454 1,394 1,309 1,233
Thermosetting resins (m.lbs.) 2,372 2,362 2,136 1,805
Other ------------------------------------------------------------
Total building products
=============================================================
Distribution centers
Other operations
=============================================================
Resources (as of December 31)
North American timberlands (t.acres)
Owned 5,430 5,480 4,910 4,700
Controlled 670 1,010 670 530
===========================================================
==
</TABLE>
sm = surface measure basis
t = thousands
m = millions
The Corporation has 236 manufacturing facilities in the United States and
eight in Canada.
* The production of Great Northern Nekoosa facilities has been included
beginning on March 9, 1990.
** Domtar facilities production has been included beginning in April 1996.
*** Roofing operations were sold in February 1994.
**** Excludes 540,000 fee acres and 98,000 controlled acres of timberland
sold in January 1991.
INVESTOR INFORMATION
Georgia-Pacific Corporation and Subsidiaries
CORPORATE HEADQUARTERS
Georgia-Pacific Center, 133 Peachtree Street, N.E.,
Atlanta, Georgia 30303
STOCK EXCHANGES AND SYMBOLS
Georgia-Pacific Corporation Common Stock is listed on the New York Stock
Exchange ("NYSE"). The Corporation's NYSE symbol is "GP"; however, the stock
is quoted as "GaPac" in stock table listings in newspapers. G-P options are
traded on the Philadelphia Stock Exchange.
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York
Post Office Box 2500
Jersey City, New Jersey 07303-2500
SHAREHOLDER INFORMATION
For shareholder information, contact the Transfer Agent and Registrar, First
Chicago Trust Company of New York, at Post Office Box 2500, Jersey City, New
Jersey 07303-2500, or telephone (800) 519-3111.
Registered G-P shareholders are eligible to participate in the G-P Dividend
Reinvestment Plan. For information on the Plan, contact the Plan agent, First
Chicago Trust Company of New York, Post Office Box 2500, Jersey City, New
Jersey 07303-2500.
Number of shareholders of record at December 31, 1996: 40,381.
FINANCIAL INFORMATION
A copy of the Georgia-Pacific 1996 Annual Report to the Securities and
Exchange
Commission on Form 10-K will be supplied without charge. Annual Statistical
Updates are also available. Requests for current quarterly financial results
should be directed to (800) 340-2384. Copies of corporate news releases are
available through fax-on-demand by telephoning (800) 758-5804, extension
357498. All other requests for financial information should be directed to:
Investor Relations, Georgia-Pacific Corporation, P.O. Box 105605, Atlanta,
Georgia 30348, or telephone (404) 652-5555. Information concerning the
company can also be found on the Internet at http://www.gp.com.
Georgia-Pacific is an equal opportunity employer.
EXHIBIT 21
GEORGIA-PACIFIC CORPORATION SUBSIDIARIES
The following table lists each subsidiary of the Registrant as of March 1, 1997
indented under the name of its immediate parent, the percentage of each
subsidiary's voting securities beneficially owned by its immediate parent and
the jurisdiction under the laws of which each subsidiary was organized:
% of
Name Voting Jurisdiction
Securities
GEORGIA-PACIFIC CORPORATION - GEORGIA
A) Amador Central Railroad 100 California
B) Arkansas Louisiana & Mississippi 100 Delaware
Railroad Company
C) Ashley, Drew & Northern Railway 100 Arkansas
Company
D) Blue Rapids Railway Company 100 Kansas
E) Brunswick Pulp & Paper Company 100 Delaware
1) Brunswick Chemical Company, Inc. 100 Delaware
F) Brunswick Pulp Land Company, Inc. 100 Delaware
G) Fordyce and Princeton R. R. Co. 100 Arkansas
H) G-P Gypsum Corporation 100 Delaware
1) KMHC, Incorporated 100 California
I) Georgia-Pacific Development Company 100 Delaware
1) Dunes West Joint Venture, A 100 1 South
Partnership Carolina
a) Dunes West Recreation 100 Delaware
Association, Inc.
J) Georgia-Pacific Holdings, Inc. 100 Delaware
K) Georgia-Pacific Investment Company 100 Oregon
L) Georgia-Pacific Pulpwood Company 100 Delaware
M) Georgia-Pacific Resins, Inc. 100 Delaware
N) Georgia-Pacific Shared Services 100 Delaware
Corp.
O) Georgia-Pacific West, Inc. 100 Oregon
1) Aztec Trading Company, S.A. 100 Panama
2) G-P Canada Holdings, Ltd. 100 Ontario
a) Beaverwood Finance Company 100 Nova Scotia
b) G-P Canada Finance Company 100 Nova Scotia
c) Georgia-Pacific Canada, Inc. 100 Ontario
3) G-P Flakeboard Limited 67 Ontario
4) Georgia-Pacific Asia, Inc. 100 Delaware
a) Georgia-Pacific-Asia (H. K.) 100 Hong Kong
Limited
5) Georgia-Pacific Building 100 New Brunswick
Materials Sales, Ltd.
6) Georgia-Pacific de Mexico, S. de 100 2 Mexico
R. L. de C. V.
7) Georgia-Pacific Foreign Sales 100 Barbados
Corporation
8) Georgia-Pacific Global 100 Oregon
Corporation
a) GPSP, Inc. 100 Delaware
9) Georgia-Pacific GmbH 100 Germany
10) Georgia-Pacific Italia S.r.l. 100 3 Italy
11) Georgia-Pacific S.A. 99.93 Switzerland
12) Georgia-Pacific U.K. Limited 100 England
13) Georgia Steamship Company, Inc. 100 Delaware
14) St. Croix Pulpwood, Limited 100 New Brunswick
<PAGE>
P) Georgia Temp, Inc. 100 Delaware
Q) Gloster Southern Railroad Company 100 Delaware
R) Great Northern Nekoosa Corporation 100 Maine
1) Chattahoochee Industrial 100 Georgia
Railroad
2) Envases Industriales de Costa 33.33 Costa Rica
Rica, S.A.
3) Fipasa-Fibras, Panama, S.A. 50 Panama
4) Great Southern Paper Company 100 Georgia
5) Industria Panamena de Papel, S.A. 50 Panama
6) Leaf River Corporation 100 Delaware
a) Leaf River Forest Products, 100 Delaware
Inc.
i) Old Augusta Railroad 100 Mississippi
Company
7) Nekoosa Packaging Corporation 100 Delaware
a) Nekoosa Packaging Mexican 100 Delaware
Paper Corporation
8) Nekoosa Papers Inc. 100 Wisconsin
a) Georgia-Pacific Britain, 100 4
L.L.C.
S) Phoenix Athletic Club, Inc. 100 Georgia
T) Saint Croix Water Power Company, The 100 New Brunswick
U) Southwest Millwork and Specialties, 100 Delaware
Inc.
1) Maderas Howrey S. A. de C. V. 99.65 Mexico
V) Sprague's Falls Manufacturing 100 Canada
Company (Limited), The
W) St. Croix Water Power Company 100 Maine
X) Thacker Land Company 57 West Virginia
Y) Tomahawk Land Company 100 Delaware
Z) XRS, Inc. 100 Delaware
NOTES
1 50% of the partnership of Dunes West Joint Venture is owned by Georgia-
Pacific Development Company and 50% is owned by Georgia-Pacific Investment
Company.
2 Georgia-Pacific de Mexico, S. de R. L. de C. V. is owned by Georgia-Pacific
West, Inc. and Georgia-Pacific Investment Company.
3 99% of the stock of Georgia-Pacific Italia S.r.l. is issued to Georgia-
Pacific West, Inc. and the remaining 1% is issued to Georgia-Pacific
Holdings, Inc. Georgia-Pacific Italia S.r.l. is in liquidation effective
December 31, 1994.
4 Georgia-Pacific Britain, L.L.C. is owned by Nekoosa Papers, Inc. (90%) and
Great Northern Nekoosa Corporation (10%).
5 99.6% of Series A stock of Maderas Howrey S. A. de C. V. is issued to
Southwest Millwork and Specialties, Inc. and the remaining .4% is issued to
Georgia-Pacific Shared Services Corp., Georgia-Pacific Pulpwood Company,
Georgia-Pacific Holdings, Inc. and Georgia-Pacific West, Inc. in equal
parts. 100% of Series B stock and 100% of Series C stock of Maderas Howrey
S. A. de C. V. are issued to Southwest Millwork and Specialties, Inc.
Each subsidiary is included in the consolidated financial statements of the
Registrant.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports included or incorporated by reference in this Annual Report on
Form 10K, into Georgia-Pacific Corporation's previously filed Registration
StatementNo. 2-93184; Registration Statement No. 2-99381; Registration
Statement No. 2-97165; Registration Statement No. 2-99380; Registration
Statement No. 2-76072; Registration Statement No. 2-68688; Registration
Statement No. 33-5964; Registration Statement No. 33-16528; Registration
Statement No. 33-18482; Registration Statement No. 33-21018; Registration
Statement No. 33-23776; Registration Statement No. 33-25446; Registration
Statement No. 33-26985; Registration Statement No. 33-11341; Registration
Statement No. 33-37930; Registration Statement No. 33-38561; Registration
Statement No. 33-48331; Registration Statement No. 33-48329; Registration
Statement No. 33-48330; Registration Statement No. 33-34810; Registration
Statement No. 33-39693; Registration Statement No. 33-43453; Registration
Statement No. 33-45892; Registration Statement No. 33-48041; Registration
Statement No. 33-51182; Registration Statement No. 33-52815; Registration
Statement No. 33-52823; Registration Statement No. 33-62498; Registration
Statement No. 33-58664; Registration Statement No. 33-65208; Registration
Statement No. 33-48328; PostEffective Amendment No. 1 to Registration
Statement No. 2-64516; and PostEffective Amendment No. 5 (with respect to the
1974 Employee Stock Option Plan), Post-Effective Amendment No. 6 (with respect
to the Savings and Capital Growth Plan); Post-Effective Amendment No. 7 (with
respect to the Savings and Capital Growth Plan) to Registration Statement No.
2-53427; Registration Statement No. 33-59057; Registration Statement No. 33-
60933; Registration Statement No. 3360127 and Registration Statement No. 33-
64673.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN
LLP
Atlanta, Georgia
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 12 MONTHS ENDED
DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 969
<ALLOWANCES> 10
<INVENTORY> 1,467
<CURRENT-ASSETS> 2,615
<PP&E> 13,733
<DEPRECIATION> 7,173
<TOTAL-ASSETS> 12,818
<CURRENT-LIABILITIES> 2,490
<BONDS> 4,371
0
0
<COMMON> 73
<OTHER-SE> 3,448
<TOTAL-LIABILITY-AND-EQUITY> 12,818
<SALES> 13,024
<TOTAL-REVENUES> 13,024
<CGS> 9,933
<TOTAL-COSTS> 9,933
<OTHER-EXPENSES> 937
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 439
<INCOME-PRETAX> 296
<INCOME-TAX> 135
<INCOME-CONTINUING> 161
<DISCONTINUED> 0
<EXTRAORDINARY> (5)
<CHANGES> 0
<NET-INCOME> 156
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 1,048
<ALLOWANCES> 27
<INVENTORY> 1,423
<CURRENT-ASSETS> 2,642
<PP&E> 13,779
<DEPRECIATION> 7,188
<TOTAL-ASSETS> 12,873
<CURRENT-LIABILITIES> 2,578
<BONDS> 4,274
0
0
<COMMON> 73
<OTHER-SE> 3,479
<TOTAL-LIABILITY-AND-EQUITY> 12,873
<SALES> 9,828
<TOTAL-REVENUES> 9,828
<CGS> 7,439
<TOTAL-COSTS> 7,439
<OTHER-EXPENSES> 707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 331
<INCOME-PRETAX> 290
<INCOME-TAX> 131
<INCOME-CONTINUING> 159
<DISCONTINUED> 0
<EXTRAORDINARY> (5)
<CHANGES> 0
<NET-INCOME> 154
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 6 MONTHS ENDED JUNE
30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 1,032
<ALLOWANCES> 27
<INVENTORY> 1,420
<CURRENT-ASSETS> 2,658
<PP&E> 13,695
<DEPRECIATION> 7,084
<TOTAL-ASSETS> 12,892
<CURRENT-LIABILITIES> 2,739
<BONDS> 4,253
0
0
<COMMON> 73
<OTHER-SE> 3,415
<TOTAL-LIABILITY-AND-EQUITY> 12,892
<SALES> 6,377
<TOTAL-REVENUES> 6,377
<CGS> 4,798
<TOTAL-COSTS> 4,798
<OTHER-EXPENSES> 460
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 216
<INCOME-PRETAX> 115
<INCOME-TAX> 55
<INCOME-CONTINUING> 60
<DISCONTINUED> 0
<EXTRAORDINARY> (5)
<CHANGES> 0
<NET-INCOME> 55
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC COROPRATION FOR THE 3 MONTHS ENDED MARCH
31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 12
<SECURITIES> 0
<RECEIVABLES> 937
<ALLOWANCES> 26
<INVENTORY> 1,458
<CURRENT-ASSETS> 2,556
<PP&E> 12,888
<DEPRECIATION> 6,716
<TOTAL-ASSETS> 12,402
<CURRENT-LIABILITIES> 1,967
<BONDS> 4,545
0
0
<COMMON> 73
<OTHER-SE> 3,461
<TOTAL-LIABILITY-AND-EQUITY> 12,402
<SALES> 3,053
<TOTAL-REVENUES> 3,053
<CGS> 2,284
<TOTAL-COSTS> 2,284
<OTHER-EXPENSES> 212
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 107
<INCOME-PRETAX> 90
<INCOME-TAX> 40
<INCOME-CONTINUING> 50
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 12 MONTHS ENDED
DECEMBER 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 974
<ALLOWANCES> 25
<INVENTORY> 1,446
<CURRENT-ASSETS> 2,595
<PP&E> 12,576
<DEPRECIATION> 6,563
<TOTAL-ASSETS> 12,335
<CURRENT-LIABILITIES> 1,764
<BONDS> 4,704
0
0
<COMMON> 73
<OTHER-SE> 3,446
<TOTAL-LIABILITY-AND-EQUITY> 12,335
<SALES> 14,313
<TOTAL-REVENUES> 14,313
<CGS> 9,885
<TOTAL-COSTS> 9,885
<OTHER-EXPENSES> 926
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 395
<INCOME-PRETAX> 1,697
<INCOME-TAX> 679
<INCOME-CONTINUING> 1,018
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,018
<EPS-PRIMARY> 11.18
<EPS-DILUTED> 11.18
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 375
<SECURITIES> 0
<RECEIVABLES> 974
<ALLOWANCES> 31
<INVENTORY> 1,396
<CURRENT-ASSETS> 2,910
<PP&E> 12,214
<DEPRECIATION> 6,441
<TOTAL-ASSETS> 12,377
<CURRENT-LIABILITIES> 2,308
<BONDS> 4,268
0
0
<COMMON> 73
<OTHER-SE> 3,368
<TOTAL-LIABILITY-AND-EQUITY> 12,377
<SALES> 10,898
<TOTAL-REVENUES> 10,898
<CGS> 7,458
<TOTAL-COSTS> 7,458
<OTHER-EXPENSES> 694
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 299
<INCOME-PRETAX> 1,369
<INCOME-TAX> 548
<INCOME-CONTINUING> 821
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 821
<EPS-PRIMARY> 9.03
<EPS-DILUTED> 9.01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 6 MONTHS ENDED JUNE
30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 22
<SECURITIES> 0
<RECEIVABLES> 1,034
<ALLOWANCES> 29
<INVENTORY> 1,262
<CURRENT-ASSETS> 2,456
<PP&E> 11,939
<DEPRECIATION> 6,311
<TOTAL-ASSETS> 11,470
<CURRENT-LIABILITIES> 2,139
<BONDS> 4,224
0
0
<COMMON> 72
<OTHER-SE> 3,014
<TOTAL-LIABILITY-AND-EQUITY> 11,470
<SALES> 7,186
<TOTAL-REVENUES> 7,186
<CGS> 4,979
<TOTAL-COSTS> 4,979
<OTHER-EXPENSES> 457
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 205
<INCOME-PRETAX> 829
<INCOME-TAX> 332
<INCOME-CONTINUING> 497
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 497
<EPS-PRIMARY> 5.49
<EPS-DILUTED> 5.47
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 3 MONTHS ENDED
MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 763
<ALLOWANCES> 29
<INVENTORY> 1,300
<CURRENT-ASSETS> 2,219
<PP&E> 11,696
<DEPRECIATION> 6,171
<TOTAL-ASSETS> 11,138
<CURRENT-LIABILITIES> 2,554
<BONDS> 3,715
0
0
<COMMON> 72
<OTHER-SE> 2,773
<TOTAL-LIABILITY-AND-EQUITY> 11,138
<SALES> 3,481
<TOTAL-REVENUES> 3,481
<CGS> 2,397
<TOTAL-COSTS> 2,397
<OTHER-EXPENSES> 230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 105
<INCOME-PRETAX> 392
<INCOME-TAX> 160
<INCOME-CONTINUING> 232
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 232
<EPS-PRIMARY> 2.57
<EPS-DILUTED> 2.56
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE 12 MONTHS ENDED
DECEMBER 31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS."
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 53
<SECURITIES> 0
<RECEIVABLES> 580
<ALLOWANCES> 28
<INVENTORY> 1,209
<CURRENT-ASSETS> 1,984
<PP&E> 11,500
<DEPRECIATION> 6,012
<TOTAL-ASSETS> 10,864
<CURRENT-LIABILITIES> 2,325
<BONDS> 3,904
0
0
<COMMON> 72
<OTHER-SE> 2,548
<TOTAL-LIABILITY-AND-EQUITY> 10,864
<SALES> 12,738
<TOTAL-REVENUES> 12,738
<CGS> 9,620
<TOTAL-COSTS> 9,620
<OTHER-EXPENSES> 913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 453
<INCOME-PRETAX> 572
<INCOME-TAX> 246
<INCOME-CONTINUING> 326
<DISCONTINUED> 0
<EXTRAORDINARY> (11)
<CHANGES> (5)
<NET-INCOME> 310
<EPS-PRIMARY> 3.45
<EPS-DILUTED> 3.45
</TABLE>
