SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 of Incorporation) (IRS Employer Id.Number)
133 PEACHTREE STREET, N.E., ATLANTA, GEORGIA 30303
(Address of Principal Executive Offices)
(404) 652 - 4000
(Telephone Number of Registrant)
-------------------
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 and Exchange Act of 1934 during the preceding 12
months and (2) has been subject to such filing requirements for
the past 90 days. Yes X . No .
------ ------
As of the close of business on August 10, 1999, Georgia-Pacific Corporation
had 171,499,099 shares of Georgia-Pacific Group Common Stock outstanding and
82,857,948 shares of The Timber Company Common Stock outstanding.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
Three Months Ended Six Months Ended
------------------ ---------------- -
(In millions, except per share July 3, June 30, July 3, June 30,
amounts) 1999 1998 1999 1998
----- -------- ------- --------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------
Net sales $ 3,850 $ 3,305 $ 7,255 $ 6,526
- ----------------------------------------------------------------------
Costs and expenses
Cost of sales, excluding depreciation
and cost of timber harvested
shown below 2,789 2,576 5,320 5,070
Selling, general and
Administrative 306 265 604 536
Depreciation and cost of
timber harvested 223 236 444 461
Interest 106 111 217 225
Other income (86) - (86) -
- ----------------------------------------------------------------------
Total costs and expenses 3,338 3,188 6,499 6,292
- ----------------------------------------------------------------------
Income before income taxes and
extraordinary item 512 117 756 234
Provision for income taxes 203 49 302 98
- ----------------------------------------------------------------------
Income before extraordinary item 309 68 454 136
Extraordinary item , net of taxes, - (1) - (15)
- ----------------------------------------------------------------------
Net income $ 309 $ 67 $ 454 $ 121
======================================================================
Georgia-Pacific Group
Income before extraordinary item $ 212 $ 30 $ 311 $ 46
Extraordinary item, net of taxes - (1) - (13)
- ----------------------------------------------------------------------
Net Income $ 212 $ 29 $ 311 $ 33
- ----------------------------------------------------------------------
Basic per common share:
Income before extraordinary item $ 1.23 $ 0.17 $ 1.81 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- ----------------------------------------------------------------------
Net income $ 1.23 $ 0.16 $ 1.81 $ 0.18
- ----------------------------------------------------------------------
Diluted per common share:
Income before extraordinary item $ 1.20 $ 0.17 $ 1.76 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- ----------------------------------------------------------------------
Net income $ 1.20 $ 0.16 $ 1.76 $ 0.18
======================================================================
Average number of shares outstanding:
Basic 171.8 181.0 172.2 182.0
Diluted 176.4 184.4 176.3 184.7
======================================================================
The Timber Company
Income before extraordinary item $ 97 $ 38 $ 143 $ 90
Extraordinary item, net of taxes - - - (2)
- ----------------------------------------------------------------------
Net Income $ 97 $ 38 $ 143 $ 88
- ----------------------------------------------------------------------
Basic per common share:
Income before extraordinary item $ 1.15 $ 0.41 $ 1.67 $ 0.97
Extraordinary item, net of taxes - - - (0.02)
- ----------------------------------------------------------------------
Net income $ 1.15 $ 0.41 $ 1.67 $ 0.95
- ----------------------------------------------------------------------
Diluted per common share:
Income before extraordinary item $ 1.14 $ 0.41 $ 1.66 $ 0.96
Extraordinary item, net of taxes - - - (0.02)
- ----------------------------------------------------------------------
Net income $ 1.14 $ 0.41 $ 1.66 $ 0.94
- ----------------------------------------------------------------------
Average number of shares
outstanding:
Basic 84.6 92.3 85.5 92.3
Diluted 85.3 93.2 85.9 93.2
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
Six Months Ended
-----------------
(In millions) July 3, 1999 June 30, 1998
-------------- --------------
- ----------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 454 $ 121
Adjustments to reconcile net
income to
Cash provided by operations:
Depreciation 364 371
Cost of timber harvested 80 90
Other income (86) -
Deferred income taxes (4) 52
Amortization of goodwill 31 30
Amortization of debt issue costs 1 11
Stock compensation programs 1 14
Gain on sales of assets (8) (30)
Increase in receivables (312) (57)
(Increase) decrease in inventories (64) 88
Decrease (increase) in other
working capital 85 (190)
Change in other assets and other
long-term liabilities (11) 5
- ----------------------------------------------------------------------
Cash provided by operations 531 505
- ----------------------------------------------------------------------
Cash flows from investing activities
Property, plant and equipment
investments (250) (240)
Timber and timberland purchases (73) (128)
Acquisitions (818) (93)
Proceeds from sales of assets 51 70
Other 20 18
- ----------------------------------------------------------------------
Cash used for investing activities (1,070) (373)
- ----------------------------------------------------------------------
Cash flows from financing activities (72) (746)
Repayments of long-term debt
Additions to long-term debt 68 507
Fees paid to issue debt (2) (4)
Increase (decrease) in bank 12 (3)
overdrafts
Increase in commercial paper and 844 360
other short-term notes
Stock repurchases (299) (163)
Proceeds from option plan 113 8
exercises
Cash dividends paid (86) (92)
- ----------------------------------------------------------------------
Cash provided by (used for)
financing activities 578 (133)
- ----------------------------------------------------------------------
Increase (decrease) in cash 39 (1)
Balance at beginning of period 5 8
- ----------------------------------------------------------------------
Balance at end of period $ 44 $ 7
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Georgia-Pacific Corporation and Subsidiaries
(In millions, except shares and per July 3, December 31,
share amounts) 1999 1998
----------- -------------
- ----------------------------------------------------------------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets
Cash $ 44 $ 5
Receivables, less allowances of
$24 and $25, respectively 2,304 1,233
Inventories 1,777 1,280
Deferred income tax assets 61 61
Other current assets 143 66
- ----------------------------------------------------------------------
Total current assets 4,329 2,645
- ----------------------------------------------------------------------
Timber and timberlands, net 1,204 1,210
- ----------------------------------------------------------------------
Property, plant and equipment
Land, buildings, machinery and
equipment, at cost 14,896 14,453
Accumulated depreciation (8,512) (8,204)
- ----------------------------------------------------------------------
Property, plant and equipment, net 6,384 6,249
- ----------------------------------------------------------------------
Goodwill, net 2,433 1,677
- ----------------------------------------------------------------------
Other assets 997 919
- ----------------------------------------------------------------------
Total assets $ 15,347 $ 12,700
======================================================================
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Bank overdrafts, net $ 207 $ 195
Commercial paper and other short-
term notes 2,250 1,209
Current portion of long-term debt 23 22
Accounts payable 984 556
Accrued compensation 300 247
Other current liabilities 631 419
- ----------------------------------------------------------------------
Total current liabilities 4,395 2,648
- ----------------------------------------------------------------------
Long-term debt, excluding current
portion 4,588 4,125
- ----------------------------------------------------------------------
Other long-term liabilities 1,751 1,572
- ----------------------------------------------------------------------
Deferred income tax liabilities 1,272 1,231
- ----------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
Common stock 153 150
Georgia-Pacific Group, par value $.80;
400,000,000 shares authorized;
190,609,000 and 186,564,000 shares issued
The Timber Company, par value $.80;
250,000,000 shares authorized; 93,326,000
and 92,785,000 shares issued
Treasury stock, at cost (793) (492)
18,637,000 and 13,525,000 shares of
Georgia-Pacific Group common stock and
9,559,000 and 5,704,000 shares of The
Timber Company common stock
Additional paid-in capital 1,472 1,331
Retained earnings 2,546 2,178
Accumulated other comprehensive
income (37) (43)
- ----------------------------------------------------------------------
Total shareholders' equity 3,341 3,124
- ----------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 15,347 $ 12,700
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
Three Months Six Months
Ended Ended
---------------- ----------------
July 3, June 30, July 3, June 30,
(In millions) ------- -------- ------- -------
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 309 $ 67 $ 454 $ 121
Other comprehensive income (loss)
before tax:
Foreign currency translation
adjustments 4 (5) 10 (6)
Income tax (expense) benefit
related to items of other
comprehensive income (2) 2 (4) 2
- -------------------------------------------------------------------------
Comprehensive income $ 311 $ 64 $ 460 $ 117
=========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
GEORGIA-PACIFIC CORPORATION
APRIL 3, 1999
1. PRINCIPLES OF PRESENTATION. 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. The interim financial information included herein
is unaudited; however, such information reflects all adjustments
which are, in the opinion of management, necessary for a fair
presentation of the Corporation's financial position, results of
operations, and cash flows for the interim periods. All such
adjustments are of a normal, recurring nature except for the item
discussed in Note 4 below. Certain 1998 amounts have been
reclassified to conform with the 1999 presentation. The Timber
Company's and the Georgia-Pacific Group's combined financial
statements should be read in conjunction with the Corporation's
consolidated financial statements.
On or about April 22, 1999, the Corporation determined to change
its fiscal year from December 31 to end on the Saturday closest
to December 31. Additionally, the Corporation reports its
quarterly periods on a 13-week basis ending on a Saturday. The
impact of three additional days on the six months ended July 3,
1999 was not material. There will be no transition period on
which to report.
2. OTHER INCOME. During the second quarter of 1999, The
Corporation sold approximately 390,000 acres of timberlands in
the Canadian province of New Brunswick and approximately 440,000
acres of timberlands in Maine for approximately $92 million and
recognized a pretax gain of $86 million ($52 million after tax).
3. PROVISION FOR INCOME TAXES. The effective tax rate was 40
percent and 42 percent for the three months ended July 3, 1999,
and June 30, 1998, respectively. The effective tax rate was 40
percent and 42 percent for the six months ended July 3, 1999, and
June 30, 1998, respectively. The effective tax rate for each
period was different than the statutory rate primarily because of
nondeductible goodwill amortization expense.
4. EXTRAORDINARY ITEM. The Corporation redeemed approximately
$600 million of its outstanding debt during the first six months
of 1998. As a result, the Corporation recognized an after-tax
extraordinary loss of $15 million, of which $14 million was
recognized in the first quarter of 1998 and $1 million was
recognized in the second quarter of 1998.
5. EARNINGS PER SHARE. The Corporation's common stock was
redesignated in December 1997 to reflect separately the
performance of the Corporation's pulp, paper and building
products businesses, which are now known as Georgia-Pacific
Group. A separate class of common stock was distributed to
reflect the performance of the Corporation's timber operating
group, which is now known as The Timber Company. Basic earnings
per share is computed based on net income and the weighted
average number of common shares outstanding. Diluted earnings per
share reflect the annual issuance of common shares under long-
term incentive stock option and stock purchase plans. The
computation of diluted earnings per share does not assume
conversion or exercise of securities that would have an
antidilutive effect on earnings per share. Earnings per share
are computed for each class of common stock based on the separate
earnings attributed to each of the respective businesses.
<PAGE> 7
The following table provides earnings and per share data for
Georgia-Pacific Group and The Timber Company for 1999 and 1998.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
(In millions, except July 3, June 30, July 3, June 30
per share amounts) 1999 1998 1999 1998
------- ------- ------- -------
- ---------------------------------------------------------------
Georgia-Pacific Group
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic and diluted income available to
Shareholders (numerator):
Income before extraordinary item $ 212 $ 30 $ 311 $ 46
Extraordinary item, net of taxes - (1) - (13)
- ---------------------------------------------------------------
Net income $ 212 $ 29 $ 311 $ 33
================================================================
Shares (denominator):
Average shares outstanding 171.8 181.0 172.2 182.0
Dilutive securities:
Stock incentive and option plans 4.1 3.0 3.6 2.5
Employee stock purchase plans 0.5 0.4 0.5 0.2
- ---------------------------------------------------------------
Total assuming conversion 176.4 184.4 176.3 184.7
================================================================
Basic per share amounts:
Income before extraordinary item $ 1.23 $ 0.17 $ 1.81 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- ---------------------------------------------------------------
Net income $ 1.23 $ 0.16 $ 1.81 $ 0.18
================================================================
Diluted per share amounts:
Income before extraordinary item $ 1.20 $ 0.17 $ 1.76 $ 0.25
Extraordinary item, net of - (0.01) - (0.07)
- ---------------------------------------------------------------
Net income $ 1.20 $ 0.16 $ 1.76 $ 0.18
================================================================
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Year to Date
------------------ ------------
(In millions, except July 3, June 30, July 3, June 30,
per share amounts) 1999 1998 1999 1998
------- ------- ------- -------
- ---------------------------------------------------------------
The Timber Company
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic and diluted income available to
Shareholders (numerator):
Income before extraordinary item $ 97 $ 38 $ 143 $ 90
Extraordinary item, net of taxes - - - (2)
- ---------------------------------------------------------------
Net income $ 97 $ 38 $ 143 $ 88
================================================================
Shares (denominator):
Average shares outstanding 84.6 92.3 85.5 92.3
Dilutive securities:
Stock incentive and option plans 0.6 0.8 0.4 0.8
Employee stock purchase plans 0.1 0.1 - 0.1
- ---------------------------------------------------------------
Total assuming conversion 85.3 93.2 85.9 93.2
================================================================
Basic per share amounts:
Income before extraordinary item $ 1.15 $ 0.41 $ 1.67 $ 0.97
Extraordinary item, net of taxes - - - (0.02)
- ---------------------------------------------------------------
Net income $ 1.15 $ 0.41 $ 1.67 $ 0.95
- ---------------------------------------------------------------
Diluted per share amounts:
Income before extraordinary item $ 1.14 $ 0.41 $ 1.66 $ 0.96
Extraordinary item, net of taxes - - - (0.02)
- ---------------------------------------------------------------
Net income $ 1.14 $ 0.41 $ 1.66 $ 0.94
================================================================
</TABLE>
<PAGE> 8
6. SUPPLEMENTAL DISCLOSURES - STATEMENTS OF CASH FLOWS. The
cash impact of interest and income taxes is reflected in the
table below. The effect of foreign currency exchange rate changes
on cash was not material in any period.
<TABLE>
<CAPTION>
Six Months Ended
-----------------
(In millions) July 3, June 30,
1999 1998
------ -------
<S> <C> <C>
Total interest costs $ 219 $ 227
Interest capitalized (2) (2)
- ---------------------------------------------------------------
Interest Expense $ 217 $ 225
===============================================================
Interest paid $ 233 $ 244
===============================================================
Income taxes paid, net $ 255 $ 44
===============================================================
Debt assumed in acquisition $ 669 $ 58
===============================================================
</TABLE>
7. INVENTORY VALUATION. Inventories include costs of
materials, labor, and plant overhead. The Corporation uses the
dollar value pool method for computing LIFO inventories. The
major components of inventories were as follows:
<TABLE>
<CAPTION>
(In millions) July 3, December 31,
1999 1998
- ---------------------------------------------------------------
<S> <C> <C>
Raw materials $ 348 $ 418
Finished goods 1,322 760
Supplies 316 311
LIFO reserve (209) (209)
- ---------------------------------------------------------------
Total inventories $ 1,777 $ 1,280
===============================================================
</TABLE>
8. ACQUISITIONS. At the end of the second quarter of 1999, the
Corporation acquired approximately 91% of the outstanding shares
of Unisource Worldwide, Inc. ("Unisource"), the largest
independent marketer and distributor of printing and imaging
paper and supplies in North America. The Corporation expects to
pay for the outstanding shares of Unisource as they are
prescribed to the exchange agent. The value of the transaction
was $12 per share of Unisource stock, or approximately $843
million (assuming all outstanding Unisource shares are tendered),
plus the assumption of approximately $669 million in debt.
Unisource's results of operations will be consolidated with
those of the Corporation beginning July 4, 1999. The
Corporation has accounted for this transaction using the
purchase method to record a new cost basis for assets
acquired and liabilities assumed. The allocation of the
purchase price and acquisition costs to the assets acquired
and liabilities assumed is preliminary as of July 3, 1999,
and is subject to change pending finalization of studies of
fair value and the finalization of management's plans. The
Corporation has begun to assess and formulate plans to
restructure existing Unisource activities, including the
consolidation of certain distribution centers, closure of
the Unisource headquarters facility, termination of
redundant headcount and the relocation of certain
administrative functions. In connection with the acquisition
of Unisource, the Corporation assumed liabilities totaling
approximately $84 million for employee termination and
relocation costs, and $15 million for facility closure
costs. The Corporation has not yet completed its evaluation
of Unisource activities; accordingly, finalization of the
Corporation's plans may result in additional liabilities for
termination, relocation or facility closure costs which
could increase the amount of liabilities assumed in the
acquisition. The difference between the purchase price and
the fair market value of the assets acquired and liabilities
assumed was recorded as goodwill and will be amortized over
40 years. The preliminary allocation of the purchase price
of the acquisition is summarized as follows:
<TABLE>
<CAPTION>
(In millions)
<S> <C>
Current assets $ 1,258
Property, plant and equipment 225
Other non current assets 19
Goodwill 756
Liabilities (1,497)
--------------------------------------------------
Net cash paid for Unisource $ 761
===================================================
</TABLE>
The following unaudited pro forma financial data has been
prepared assuming that the acquisition of Unisource and
related financings were consummated on January 1, 1998.
This pro forma financial data is presented for informational
purposes and is not necessarily indicative of the operating
results that would have occurred had the acquisition been
consummated on January 1, 1998, nor does it include
adjustments for expected synergies or cost savings.
Accordingly, this pro forma data is not necessarily
indicative of future operations.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ------------------ -
(In millions, except per share July 3, June 30, July 3, June 30,
amount) 1999 1998 1999 1998
------- -------- ------ --------
<S> <C> <C> <C> <C>
Net Sales $ 5,355 $ 5,028 $ 10,277 $ 10,006
Income before extraordinary items $ 307 $ 52 $ 447 $ 119
Net Income $ 307 $ 51 $ 447 $ 104
Georgia-Pacific Group per share data:
Basic income before extraordinary
items per share $ 1.22 $ 0.08 $ 1.76 $ 0.16
Diluted income before extraordinary
items per share $ 1.19 $ 0.08 $ 1.72 $ 0.16
Basic earnings per share $ 1.22 $ 0.07 $ 1.76 $ 0.09
Diluted earnings per share $ 1.19 $ 0.07 $ 1.72 $ 0.09
</TABLE>
The Timber Company's results of operations are not impacted.
The 1998 pro forma financial data includes a non-recurring
restructuring charge of $28 million ($18 million after tax)
taken by Unisource in the second quarter of 1998.
In addition during the first six months of 1999, the Corporation
completed the acquisition of a packaging plant and two treated
lumber facilities for a total consideration of approximately $57
million in cash. The results of operations of these acquired
businesses were consolidated with those of the Corporation
beginning in the second quarter of 1999. The Corporation has
accounted for these business combinations using the purchase
method to record a new cost basis for assets acquired and
liabilities assumed.
On June 25, 1999, the Corporation and Chesapeake Corp.
announced that the two companies signed a letter of intent
to combine their commercial tissue business in a new
partnership. The Corporation will contribute the assets of
its commercial tissue business to the partnership. The
Corporation will control and manage the partnership and is
expected to own approximately 90 percent of the equity in
the partnership. Chesapeake Corp. will contribute the
assets of its Wisconsin Tissue business to the partnership,
for which it will receive a 10 percent equity interest in
the partnership and an initial cash distribution of
approximately $730 million. Formation of the partnership is
subject to completion of definitive agreements, completion
of due diligence by both parties and customary regulatory
approvals. Completion is anticipated in the third quarter
of 1999.
On June 30, 1998, the Corporation completed its acquisition of
CeCorr Inc. ("CeCorr"), a leading independent producer of
corrugated sheets in the United States. On June 30, 1998, the
Corporation paid approximately $93 million in cash (net of $2
million of cash acquired) and issued approximately 3.2 million
shares of Georgia-Pacific Group stock valued at approximately
$28.94 per share for all the outstanding shares of CeCorr. In
addition, the Corporation assumed approximately $92 million of
CeCorr's debt, of which $34 million was owed to the Corporation
($58 million net debt assumed). On July 2, 1998, a former owner
of CeCorr exercised his right to resell to the Corporation
approximately 2.2 million shares of Georgia-Pacific Group stock
issued in the transaction. CeCorr's results of operations were
consolidated with those of the Corporation beginning July 1,
1998. The Corporation accounted for the CeCorr acquisition
using the purchase method to record a new cost basis for assets
acquired and liabilities assumed.
<PAGE> 9
9. DEBT. In connection with the acquisition of Unisource, the
Corporation incurred $600 million of short-term bridge financing
until it closed on the issuance of the Premium Equity
Participating Security Units on July 7, 1999 (see below).
In June 1999, the Corporation renegotiated its accounts
receivable sale program and increased the amount outstanding
under the program from $280 million to $750 million. This
program is accounted for as a secured borrowing. The
receivables outstanding under this program and the
corresponding debt are included as current receivables and
short-term debt, respectively, on the Corporation's balance
sheets. 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. The program
expires in May 2000.
In connection with the acquisition of Unisource, the
Corporation retained former Unisource agreements to sell up
to $150 million of certain qualifying U.S. accounts
receivable and up to CN$95 million of certain eligible
Canadian accounts receivable. At July 3, 1999,
approximately $197 million was outstanding under these
programs. The receivables outstanding under these programs
and the corresponding debt are included as current
receivables and short-term debt, respectively on the
accompanying balance sheet. The agreements are accounted
for as a secured borrowing. As collections reduce
previously sold interests, new receivables may be sold.
These agreements expire in September, 1999.
Also in June 1999, the Board of Directors increased the
corporate target debt level under which management can
purchase shares of Georgia-Pacific Group and The Timber
Company common stock on the open market from $5.75 billion
to $6.8 billion. In addition, the Board of Directors
increased the Georgia-Pacific Group's target debt level from
$4.75 billion to $5.8 billion. The Timber Company's target
debt level remains at $1.0 billion.
As of July 3, 1999, the Corporation had a $1.5 billion
unsecured revolving credit facility which is used for direct
borrowings and as support for commercial paper and other
short-term borrowings. At July 3, 1999, $797 million was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5%
Premium Equity Participating Security Units ("PEPS Units")
for $862.5 million. Each PEPS Unit had an issue price of
$50 and consists of a contract to purchase shares of Georgia-
Pacific Group common stock on or prior to August 16, 2002
and a senior deferrable note of Georgia-Pacific Group due
August 16, 2004. Each purchase contract yields interest of
0.35% per year, paid quarterly, on the $50 stated amount of
the PEPS Unit. Each senior deferrable note yields interest
of 7.15% per year, paid quarterly, until August 16, 2002. On
August 16, 2002, following a remarketing of the senior
deferrable notes, the interest rate will be reset at a rate
that will be equal to or greater than 7.15%. The liability
related to the PEPS Units will not be included in the debt
amount for purposes of determining the corporate and Georgia-
Pacific Group debt targets.
During the second quarter of 1999, the Corporation
registered for sale up to $2.975 billion of debt and equity
securities under a shelf registration statement filed with
the Securities and Exchange Commission, of which $1.725
billion relates to the PEPS Units ($862.5 million of which
was received on July 7, 1999, and $862.5 million is to be
received upon exercise of the purchase contracts).
10. STOCK SPLIT. On May 4, 1999, the Board of Directors declared
a two-for-one split of Georgia-Pacific Group's common stock in
the form of a special dividend to shareholders of record on May
14, 1999. The special dividend was paid as one share of Georgia-
Pacific Group common stock for each share of Georgia-Pacific
Group on June 3, 1999. A total of 95,126,911 additional shares
were issued in conjunction with the stock split. The Georgia-
Pacific Group's par value of $0.80 remained unchanged. As a
result, $76.1 million was reclassified from Additional paid-in
capital to Common stock. All historical share and per share
amounts have been restated to reflect retroactively the stock
split.
11. SHARE REPURCHASES. During the first six months of 1999,
Georgia-Pacific Group purchased on the open market approximately
5,113,000 shares of Georgia-Pacific Group common stock, all of
which were held as treasury stock at July 3, 1999, at an
aggregate price of $206 million ($40.24 average per share).
During the first six months of 1999, The Timber Company purchased
on the open market approximately 3,946,000 shares of The Timber
Company common at an aggregate price of $95 million ($24.16
average per share). Of these repurchased shares, approximately
3,855,000 shares of The Timber Company common stock were held as
treasury and 91,000 shares were purchased during the first six
months of 1999 and settled after July 3, 1999.
During the first six months of 1998, Georgia-Pacific Group
purchased on the open market approximately 4,625,000 shares
of Georgia-Pacific Group common stock at an aggregate price
of $150 million ($32.43 average per share). In addition
during the first six months, The Timber Company purchased on
the open market 975,500 shares of The Timber Company common
stock at an aggregate price of $21 million ($21.53 average
per share).
12. 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 176 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 46 percent are being investigated, approximately
30 percent are being remediated and approximately 24 percent are
being monitored (an activity that 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 multiparty 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 that 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 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 $56 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.
<PAGE> 10
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, or that
any injuries they have incurred in fact resulted from
exposure to the Corporation's products.
The Corporation generally settles asbestos cases for amounts
it considers reasonable given the facts and circumstances of
each case. The amounts it has paid to date to defend and
settle these cases have been substantially covered by
product liability insurance. The Corporation is currently
defending claims of approximately 73,000 such plaintiffs as
of July 26, 1999 and anticipates that additional suits will
be filed against it over the next several years. The
Corporation has insurance available in amounts that 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 has
also established a receivable for expected insurance
recoveries.
On May 6, 1998, suit was filed in state court in Columbus,
Ohio, against the Corporation and Georgia-Pacific Resins,
Inc., a wholly owned subsidiary of the Corporation. The
lawsuit was filed by eight plaintiffs who seek to represent
a class of individuals who at any time from 1985 to the
present lived, worked, resided, owned, frequented or
otherwise occupied property located within a three-mile
radius of the Corporation's resins manufacturing operation
in Columbus, Ohio. The lawsuit alleges that the individual
plaintiffs and putative class members have suffered personal
injuries and/or property damage because of (i) alleged
"continuing and long-term releases and threats of releases
of noxious fumes, odors and harmful chemicals, including
hazardous substances" from the Corporation's operations
and/or (ii) a September 10, 1997 explosion at the Columbus
facility and alleged release of hazardous material resulting
from that explosion. Prior to the lawsuit, the Corporation
had received a number of explosion-related claims from
nearby residents and businesses. These claims were for
property damage, personal injury and business interruption
and were being reviewed and adjusted on a case-by-case
basis. The Corporation has denied the material allegations
of the lawsuit. While it is premature to evaluate the claims
asserted in the lawsuit, the Corporation believes it has
meritorious defenses.
On July 28, 1999, the Corporation and the Attorney General
of the State of Florida entered into a Settlement Agreement
pursuant to which the State will dismiss its claims against
the Corporation which alleged that the Corporation engaged
in a conspiracy to fix the prices of sanitary commercial
paper products. The Settlement Agreement states that the
Attorney General is dismissing its claims in the public
interest and consistent with its responsibilities. The
Agreement also provides that the Corporation continues to
deny that there is any evidence that it engaged in the
alleged price fixing conspiracy. In addition, the
Corporation agreed to donate certain real property to the
State of Florida, Board of Trustees of the Internal
Improvement Trust. The value of this real property is not
material to the results of operations or financial position
of the Corporation.
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 effect on the long-term results of
operations, liquidity or consolidated financial position of
the Corporation.
<PAGE> 11
13. OPERATING SEGMENT INFORMATION. The Corporation has five
reportable operating segments: building products, distribution,
timber, containerboard and packaging, and pulp and paper. The
following represents selected operating data for each reportable
segment for the three and six months ended July 3, 1999 and June
30, 1998.
<TABLE>
<CAPTION>
CONSOLIDATED SELECTED OPERATING SEGMENT DATA (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, except Three Months Ended Three Months Ended
per share, in millions) July 3, 1999 June 30, 1998
------------------- -----------------
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 1,047 27% $ 820 25%
Distribution 1,317 34 1,071 32
Timber 46 1 33 1
Containerboard and packaging 573 15 497 15
Pulp and paper 870 23 887 27
Other (3) - (3) -
- --------------------------------------------------------------
Total net sales to
unaffiliated customers $ 3,850 100% $ 3,305 100%
==============================================================
INTERSEGMENT SALES
Building products $ 624 $ 629
Distribution 2 2
Timber 89 86
Containerboard and packaging 14 15
Pulp and paper 7 8
Other* (736) (740)
- --------------------------------------------------------------
Total intersegment sales $ - $ -
==============================================================
TOTAL NET SALES
Building products $ 1,671 43% $ 1,449 44%
Distribution 1,319 34 1,073 33
Timber 135 4 119 4
Containerboard and packaging 587 15 512 15
Pulp and paper 877 23 895 27
Other* (739) (19) (743) (23)
- --------------------------------------------------------------
Total net sales $ 3,850 100% $ 3,305 100%
==============================================================
OPERATING PROFITS
Building products $ 364 59% $ 120 53%
Distribution 35 6 - -
Timber 176 28 80 35
Containerboard and packaging 81 13 31 13
Pulp and paper 33 5 54 24
Other (71) (11) (57) (25)
- --------------------------------------------------------------
Total operating profits 618 100% 228 100%
=== ===
Interest expense (106) (111)
Provision for income taxes (203) (49)
Extraordinary item, net of taxes - (1)
- --------------------------------------------------------------
Net income $ 309 $ 67
==============================================================
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
CONSOLIDATED SELECTED OPERATING SEGMENT DATA (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, except Six Months Ended Six Months Ended
per share, in millions) July 3, 1999 June 30, 1998
------------------ -----------------
<S> <C> <C> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 1,937 27% $ 1,585 24%
Distribution 2,415 33 2,095 32
Timber 99 1 61 1
Containerboard and packaging 1,096 15 985 15
Pulp and paper 1,710 24 1,802 28
Other (2) - (2) -
- ---------------------------------------------------------------
Total net sales to
unaffiliated customers $ 7,255 100% $ 6,526 100%
===============================================================
INTERSEGMENT SALES
Building products $ 1,174 $ 1,231
Distribution 4 4
Timber 175 203
Containerboard and packaging 29 30
Pulp and paper 13 16
Other* (1,395) (1,484)
- ---------------------------------------------------------------
Total intersegment sales $ - $ -
===============================================================
TOTAL NET SALES
Building products $ 3,111 43% $ 2,816 43%
Distribution 2,419 33 2,099 32
Timber 274 4 264 4
Containerboard and packaging 1,125 15 1,015 16
Pulp and paper 1,723 24 1,818 28
Other* (1,397) (19) (1,486) (23)
- ---------------------------------------------------------------
Total net sales $ 7,255 100% $ 6,526 100%
===============================================================
OPERATING PROFITS
Building products $ 612 63% $ 223 49%
Distribution 53 5 (17) (4)
Timber 270 28 183 40
Containerboard and packaging 121 12 64 14
Pulp and paper 53 5 125 27
Other (136) (13) (119) (26)
- ---------------------------------------------------------------
Total operating profits 973 100% 459 100%
=== ===
Interest expense (217) (225)
Provision for income taxes (302) (98)
Extraordinary item, net of taxes - (15)
- ---------------------------------------------------------------
Net income $ 454 $ 121
===============================================================
</TABLE>
*Includes elimination of intersegment sales.
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
SECOND QUARTER 1999 COMPARED WITH SECOND QUARTER 1998
The Corporation reported consolidated net sales of approximately
$3.9 billion for the second quarter of 1999 and $3.3 billion for
the second quarter of 1998. Net income for the 1999 second
quarter was $309 million compared with $67 million in 1998. Net
income in the second quarter of 1998 included an after-tax
extraordinary charge of $1 million for the early retirement of
debt.
The remaining discussion refers to the "Consolidated Selected
Operating Segment Data" table (included in Note 13 to the
Consolidated Financial Statements).
The Corporation's building products segment reported net sales of
$1,671 million for the second three months of 1999 compared with
$1,449 million in 1998. Operating profits were $364 million in
1999 compared with $120 million in 1998. Return on sales was 22
percent and 8 percent for the three months ended July 3, 1999 and
June 30, 1998, respectively. The higher quarter-over-quarter
profits resulted from increases in selling prices for most of
this segment's products. Lumber prices were up 8 percent from the
prior year's quarter; Gypsum prices increased 21 percent; Plywood
prices increased 28 percent; and Oriented strand board prices
increased 49 percent. Mild weather and the home building activity
driven by a strong economy and low inventory have resulted in
high prices in both Plywood and Oriented strand board. The
Corporation expects continued strength in the building products
segment into the fourth quarter of 1999.
The Corporation's distribution segment reported net sales of
$1,319 million for the second three months of 1999 compared with
$1,073 million in 1998. Operating profits for the distribution
segment were $35 million in the second quarter of 1999 compared
with approximately break even results in the second quarter of
1998. The 1998 results included one-time gains, principally on
sales of assets related to the 1997 restructuring plan, of
approximately $11 million. The improvement in the distribution
segment profits in 1999 reflects higher commodity and specialty
products margins related to higher prices for building products
generally.
The timber segment reported net sales of approximately $135
million and $119 million for the second quarter of 1999 and 1998,
respectively. Operating income for the 1999 second quarter was
$176 million, including a one-time, pre tax gain of $86 million
from the sale of company timberlands in Maine and New Brunswick.
Excluding the pre-tax gain on the sale of timberlands in Maine
and New Brunswick, operating earnings increased $10 million to
$90 million in the second quarter of 1999, compared with $80
million in the second quarter of 1998. The 13 percent increase
resulted from a mix of higher harvest volumes and improved sales
to third parties. Total harvest volumes in 1999 are anticipated
to remain comparable to 1998.
The Corporation's containerboard and packaging segment reported
net sales of $587 million and operating profits of $81 million in
the second quarter of 1999, compared with net sales of $512
million and operating profits of $31 million in the second
quarter of 1998. Return on sales was 14 percent and 6 percent in
the second quarter of 1999 and 1998, respectively. Containerboard
and packaging prices increased steadily over the quarter, ending
the quarter at approximately the same levels as a year ago. The
packaging division cost reductions noted in the first quarter
continued into the second quarter. The positive price trend
together with cost reductions and the profits from CeCorr which
was acquired on June 30, 1998, resulted in higher quarter-over-
quarter profits for this segment. The Corporation expects
continued price improvement in the containerboard and packaging
segment through the remainder of 1999.
The Corporation's pulp and paper segment reported net sales of
$877 million and operating profits of $33 million in the 1999
second quarter. For the same period in 1998, the segment reported
net sales of $895 million and operating profits of $54 million.
Return on sales was 4 percent and 6 percent in the second quarter
of 1999 and 1998, respectively. Compared with a year ago, the
Corporation has maintained lower levels of inventory for most
pulp and paper products. In the 1999 second quarter the pulp and
paper segment took market-related down time at its pulp and paper
mills and reduced pulp production by 28,000 tons and
communication papers production by 13,000 tons. During the second
quarter of 1998, the Corporation took market-related downtime at
its pulp and paper mills, and reduced pulp and communication
papers production by approximately 20,000 tons and 25,000 tons,
respectively. Although steadily increasing throughout the second
quarter, prices and demand for pulp remained slightly below the
prior year quarter average. Tissue and communication paper
results were lower than in the 1998 second quarter due to lower
prices than in the prior year period. However, average prices for
the second quarter of 1999 are above those of the 1999 first
quarter. Demand for tissue was above 1998 levels during the
second quarter of 1999. The Corporation expects demand and
pricing for products in this segment to improve through the
remainder of the year.
The operating loss in the "Other" nonreportable segment, which
includes some miscellaneous businesses, certain goodwill
amortization, unallocated corporate operating expenses and the
elimination of profit on intersegment sales, increased by $16
million to a loss of $71 million in 1999 from a loss of $57
million in the 1998 second quarter. This increase is primarily
the result of higher expenses for the Corporation's stock
compensation programs.
Interest expense decreased $5 million to $106 million in the
second quarter of 1999 compared with $111 million in the second
quarter of 1998 as a result of lower average interest rates,
despite slightly higher average debt levels.
<PAGE> 14
YEAR-TO-DATE SECOND QUARTER 1999 COMPARED WITH YEAR-TO-DATE
SECOND QUARTER 1998
The Corporation reported consolidated net sales of $7.3 billion
and net income of $454 million for the six months ended July 3,
1999, compared with net sales of $6.5 billion and net income of
$121 million for the six months ended June 30, 1998. The 1998
results include an extraordinary, after-tax loss of $15 million
for the early retirement of debt.
The remaining discussion refers to the "Consolidated Selected
Operating Segment Data" table (included in Note 13 to the
Consolidated Financial Statements).
The Corporation's building products segment reported net sales of
$3.1 billion and operating profits of $612 million for the six
months ended July 3, 1999, compared with net sales of $2.8
billion and operating profits of $223 million in 1998. Return on
sales increased to 19.7 percent from 7.9 percent a year ago. A
24 percent increase in average plywood prices, 42 percent
increase in average oriented strand board prices, and an 18
percent increase in average gypsum prices in the first six months
of 1999 resulted in significantly higher profit margins over
those realized in the same 1998 period.
The distribution division reported net sales of $2.4 billion and
operating profits of $53 million for the six months ended July 3,
1999, compared with net sales of $2.1 billion and an operating
loss of $17 million in the first half of 1998. The 1998 results
included one-time gains, principally on sales of assets related
to the 1997 restructuring plan, of approximately $13 million.
Continued high margins in commodity and specialty products, and
lower operating costs have contributed to the increased profits.
The Corporation's timber segment reported net sales of
approximately $274 million and operating profit of $270 million
for the six-month period ended July 3, 1999 compared to net
sales of $264 million and operating profit of $183 million for
the six-months ended June 30, 1998. The 1999 results included a
one-time, pre tax gain of $86 million from the sale of company
timberlands in Maine and New Brunswick. Excluding the gain on
the sale of timberlands in Maine and New Brunswick, operating
profit increased $1 million to $184 million in the first six
months of 1999 compared to the same period of 1998. Overall, 15%
higher total harvest volumes helped to offset the year over year
10% decline in average sales prices.
The Corporation's containerboard and packaging segment reported
net sales of $1.1 billion and operating profits of $121 million
in the first half of 1999 compared with net sales of $1.0
billion and operating profits of $64 million in the same 1998
period. Return on sales increased to 10.8 percent from 6.3
percent in 1998. Although year-to-date average prices are below
year ago levels, pricing has increased throughout 1999 and at
July 3, 1999, were very close to year ago levels. Cost decreases
in wood, secondary fibers and energy, as well as increased
production contributed to the increased profit margins.
The Corporation's pulp and paper segment reported net sales of
$1.7 billion and operating profits of $53 million for the six-
month period ended July 3, 1999, compared with net sales of $1.8
billion and operating profits of $125 million in 1998. Return on
sales decreased to 3.1 percent compared with 6.9 percent for the
same period a year ago, principally due to a decrease in average
prices for all of the Corporation's pulp and paper products.
Average pulp prices for the first six months of 1999 were
approximately 7.5% below prices in the same 1998 period, and
average prices of communications papers for the first six months
of 1999 were approximately 11% below year ago levels. Prices for
most of the Corporation's pulp and paper products have increased
steadily throughout the first half of 1999, but still remain
below year ago levels. The Corporation anticipates this upward
trend to continue through the remainder of 1999. Compared with a
year ago, the Corporation has maintained lower inventory levels
for pulp and paper products. During the first half of 1999, the
Corporation incurred market-related downtime at its pulp and
paper mills and reduced pulp production by 62,000 tons and
communication papers production by 24,000 tons. In the same 1998
period, the Corporation incurred market-related downtime at its
pulp and paper mills and reduced pulp and communication papers
production by 100,000 tons and 40,000 tons, respectively.
The operating loss in the "Other" nonreportable segment, which
includes some miscellaneous businesses, certain goodwill
amortization, unallocated corporate operating expenses and the
elimination of profit on intersegment sales, increased by $17
million to a loss of $136 million in the first half of 1999 from
a loss of $119 million in the first half of 1998. This increase
is primarily the result of higher expenses for the Corporation's
stock compensation programs and higher litigation and
environmental remediation costs.
Interest expense decreased $8 million to $217 million in the
first half of 1999, compared with $225 million in the first half
of 1998 as a result of lower interest rates, despite higher
average debt levels.
<PAGE> 15
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. The Corporation generated cash from
operations of $531 million for the six months ended July 3, 1999
compared with $505 million a year ago. The increase in cash
provided from operating activities is primarily a result of very
strong demand and improved prices for several building products'
items, offset in part by higher working capital levels, primarily
accounts receivable associated with the increase in net sales.
INVESTING ACTIVITIES. Capital expenditures for property, plant
and equipment for the six months ended July 3, 1999 were $250
million, which included $101 million in the building products
segment, $5 million in the distribution segment, $1 million in
the timber segment, $32 million in the containerboard and
packaging segment, $91 million in the pulp and paper segment and
$20 million of other and general corporate. The Corporation
expects to make capital expenditures for property, plant and
equipment of approximately $700 million in 1999, excluding the
cost of any acquisitions.
Cash paid for timber and timberlands was $73 million in the first
six months of 1999 compared with $128 million in 1998.
At the end of the second quarter of 1999, the Corporation
acquired approximately 91% of the outstanding shares of
Unisource, the largest independent marketer and distributor of
printing and imaging paper and supplies in North America. The
Corporation expects to pay for the remaining shares of Unisource
as they are prescribed to the exchange agent. The value of the
transaction was $12 per share of Unisource stock, or
approximately $843 million (assuming all outstanding Unisource
shares are tendered), plus the assumption of approximately $669
million in debt. Through July 3, 1999, the Corporation had paid
approximately $761 million (net of $34 million of cash acquired)
for shares of Unisource stock that had been tendered.
Unisource's results of operations will be consolidated with those
of the Corporation beginning July 4, 1999.
During the first six months of 1999, the Corporation also completed
the acquisition of a packaging plant and two treated lumber
facilities for a total consideration of approximately $57 million in
cash. The results of operations of these acquired businesses were
consolidated with those of the Corporation beginning in the second
quarter of 1999.
On June 30, 1998, the Corporation completed its acquisition of
CeCorr, a leading independent producer of corrugated sheets in
the United States. On June 30, 1998, the Corporation paid
approximately $93 million in cash (net of $2 million of cash
acquired) and issued approximately 3.2 million shares of Georgia-
Pacific Group stock valued at approximately $28.94 per share for
all the outstanding shares of CeCorr. In addition, the
Corporation assumed approximately $92 million of CeCorr's debt,
of which $34 million was owed to the Corporation ($58 million net
debt assumed). On July 2, 1998, a former owner of CeCorr
exercised his right to resell to the Corporation approximately
2.2 million shares of Georgia-Pacific Group stock issued in the
transaction. CeCorr's results of operations were consolidated
with those of the Corporation beginning July 1, 1998.
During the first six months of 1999, the Corporation received $51
million of proceeds from the sale of assets, compared with $70
million in the same quarter of 1998. During the second quarter of
1999, the Corporation sold approximately 390,000 acres of
timberlands in the Canadian province of New Brunswick and
approximately 440,000 acres of timberlands in Maine for
approximately $92 million and recognized a pretax gain of $86
million ($52 million after tax). The 1998 proceeds were
principally from sales of real estate development properties
located in South Carolina and Florida.
In June 1999, the Corporation announced that it intends to sell
approximately 196,000 acres of its redwood and Douglas fir
timberlands in northern California. The Corporation does not
expect that this potential timberland sale will have an impact on
the wood supply for the Fort Bragg, California sawmill operations
in the near term. The Fort Bragg sawmill has a supply agreement
with The Timber Company through 1999 that will remain intact with
the potential new owner.
On June 25, 1999, the Corporation and Chesapeake Corp. announced
that the two companies signed a letter of intent to combine their
commercial tissue business in a new partnership. The Corporation
will contribute the assets of its commercial tissue business to
the partnership. The Corporation will control and manage the
partnership and is expected to own approximately 90 percent of
the equity in the partnership. Chesapeake Corp. will contribute
the assets of its Wisconsin Tissue business to the partnership,
for which it will receive a 10 percent equity interest in the
partnership and an initial cash distribution of approximately
$730 million. Formation of the partnership is subject to
completion of definitive agreements, completion of due diligence
by both parties and customary regulatory approvals. Completion
is anticipated in the third quarter of 1999.
In 1999, 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.
<PAGE> 16
FINANCING ACTIVITIES. The Corporation's total debt increased by
$1.52 billion to $7.07 billion at July 3, 1999 from $5.55 billion
at December 31, 1998. At July 3, 1999 and December 31, 1998,
$6.11 billion and $4.57 billion, respectively, of such total debt
was Georgia-Pacific Group's debt and $963 million and $983
million, respectively, was The Timber Company's debt.
In connection with the acquisition of Unisource, the Corporation
incurred $600 million of short-term bridge financing until it
closed on the issuance of the PEPS Units on July 7, 1999.
In June 1999, the Corporation renegotiated its accounts
receivable sale program and increased the amount outstanding
under the program from $280 million to $750 million. This
program is accounted for as a secured borrowing. The receivables
outstanding under this program and the corresponding debt are
included as current receivables and short-term debt,
respectively, on the Corporation's balance sheets. 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. The program expires in May 2000.
In connection with the acquisition of Unisource, the Corporation
retained former Unisource agreements to sell up to $150 million
of certain qualifying U.S. accounts receivable and up to CN$95
million of certain eligible Canadian accounts receivable. At
July 3, 1999, approximately $197 million was outstanding under
these programs. The receivables outstanding under these programs
and the corresponding debt are included as current receivables
and short-term debt, respectively on the accompanying balance
sheets. The agreements are accounted for as a secured borrowing.
As collections reduce previously sold interests, new receivables
may be sold. These agreements expire in September, 1999.
Also in June 1999, the Board of Directors increased the corporate
target debt level under which management can purchase shares of
Georgia-Pacific Group and The Timber Company common stock on the
open market from $5.75 billion to $6.8 billion. In addition, the
Board of Directors increased the Georgia-Pacific Group's target
debt level from $4.75 billion to $5.8 billion. The Timber
Company's target debt level remains at $1.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5% PEPS
Units for $862.5 million. Each PEPS Unit had an issue price of
$50 and consists of a contract to purchase shares of Georgia-
Pacific Group common stock on or prior to August 16, 2002 and a
senior deferrable note of Georgia-Pacific Group due August 16,
2004. Each purchase contract yields interest of 0.35% per year,
paid quarterly, on the $50 stated amount of the PEPS Unit. Each
senior deferrable note yields interest of 7.15% per year, paid
quarterly, until August 16, 2002. On August 16, 2002, following a
remarketing of the senior deferrable notes, the interest rate
will be reset at a rate that will be equal to or greater than
7.15%. The liability related to the PEPS Units will not be
included in the debt amount for purposes of determining the
corporate and Georgia-Pacific Group debt targets.
During the first six months of 1999, approximately $70 million of
fixed and floating rate industrial revenue bonds were replaced,
of which $57 million were refunded by fixed rate instruments and
$13 million were refunded by variable rate instruments.
<PAGE> 17
At July 3, 1999, the Corporation had a $1.5 billion unsecured
revolving credit facility which is used for direct borrowings and
as support for commercial paper and other short-term borrowings.
As of July 3, 1999, $797 million of committed credit was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
The Corporation's senior management establishes the parameters of
the Corporation's financial risk, which have been approved by the
Board of Directors. Hedging interest rate exposure through the
use of swaps and options and hedging foreign exchange exposure
through the use of forward contracts are specifically
contemplated to manage risk in keeping with the management
policy. Derivative instruments, such as swaps, forwards, options
or futures, which are based directly or indirectly upon interest
rates, currencies, equities and commodities, may be used by the
Corporation to manage and reduce the risk inherent in price,
currency and interest rate fluctuations.
The Corporation does not utilize derivatives for speculative
purposes. Derivatives are transaction-specific so that a specific
debt instrument, contract or invoice determines the amount,
maturity and other specifics of the hedge. Counterparty risk is
limited to institutions with long-term debt ratings of A or
better.
The table below presents principal (or notional) amounts and
related weighted average interest rates by year of expected
maturity for the Corporation's debt obligations as of July 3,
1999. For obligations with variable interest rates, the table
sets forth payout amounts based on current rates and does not
attempt to project future interest rates.
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(In millions) 1999 2000 2001 2002
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - - - -
Average interest rates - - - -
Notes and debentures $ 4 - - $ 300
Average interest rates 25.4% - - 10%
Revenue bonds $ 8 $ 24 $ 6 $ 74
Average interest rates 3.5% 4.3% 3.9% 2.5%
Other loans - $ 13 - -
Average interest rates - 8.0% - -
Accounts receivable sale program - - - -
Average interest rates - - - -
Notional principal amount of
interest rate exchange
agreements $ 100 $ 177 - 131
Average interest rate paid
(fixed) 6.6% 7.5% - 6.1%
Average interest rate received
(variable) 5.4% 5.1% - 6.1%
- ------------------------------------------------------------
</TABLE>
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(In millions) Fair value
July 3,
2003 Thereafter Total 1999
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - $ 1,758 $ 1,758 $ 1,758
Average interest rates - 5.9% 5.9% 5.9%
Notes and debentures $ 300 $ 2,900 $ 3,504 $ 3,591
Average interest rates 4.9% 8.6% 8.4% 8.4%
Revenue bonds - $ 532 $ 644 $ 550
Average interest rates - 5.2% 4.8% 4.8%
Other loans $ 14 - $ 27 $ 27
Average interest rates 5.7% - 6.8% 6.8%
Accounts receivable sale program - $ 947 $ 947 $ 947
Average interest rates - 5.3% 5.3% 5.3%
Notional principal amount of
interest rate exchange
agreements $ 300 - $ 708 $ (6)
Average interest rate paid
(fixed) 5.9% - 6.3% 6.3%
Average interest rate received
(variable) 5.1% - 5.3% 5.3%
- ------------------------------------------------------------
</TABLE>
The Corporation has the intent and ability to refinance
commercial paper, other short-term notes and the accounts
receivable sale program as they mature. Therefore, maturities of
these obligations are reflected as cash flows expected to be made
after 2003. The fair value of interest rate exchange agreements
exclude amounts used to determine the fair value of related notes
and debentures.
At July 3, 1999, the Corporation's weighted average interest rate
on its total debt was 6.9% including the accounts receivable sale
program and outstanding interest rate exchange agreements. At
July 3, 1999, these interest rate exchange agreements effectively
converted approximately $400 million of floating rate obligations
with a weighted average interest rate of 5.1% to fixed rate
obligations with an average effective interest rate of 6.5%.
These agreements have a weighted average maturity of
approximately 3.4 years. As of July 3, 1999, the Corporation's
total floating rate debt, including the accounts receivable sale
program, exceeded related interest rate exchange agreements by
$2.2 billion.
The Corporation also enters into foreign currency exchange
agreements and commodity futures and swaps, the amounts of which
were not material to the consolidated financial position of the
Corporation at July 3, 1999.
As of July 3, 1999, the Corporation had registered for sale up to
$2.975 billion of debt and equity securities under a shelf
registration statement filed with the Securities and Exchange
Commission, of which $1.725 billion relates to the PEPS Units
($862.5 million of which was received on July 7, 1999, and $862.5
million is to be received upon exercise of the purchase
contracts). Proceeds from the issuance of securities under this
registration statement may be used for general corporate
purposes, including the reduction of short-term debt,
acquisitions, investments in, or extension or credit to, the
Corporation's subsidiaries and the acquisition of real property.
During the first six months of 1999, Georgia-Pacific Group
purchased on the open market approximately 5,113,000 shares of
Georgia-Pacific Group common stock, all of which were held as
treasury stock at July 3, 1999, at an aggregate price of $206
million ($40.24 average per share). During the first six months
of 1999, The Timber Company purchased on the open market
approximately 3,946,000 shares of The Timber Company common at an
aggregate price of $95 million ($24.16 average per share). Of
these repurchased shares, approximately 3,855,000 shares of The
Timber Company common stock were held as treasury stock and
91,000 shares were purchased during the first six months of 1999
and settled after July 3, 1999.
During the first six months of 1998, Georgia-Pacific Group
purchased on the open market approximately 4,625,000 shares of
Georgia-Pacific Group common stock at an aggregate price of $150
million ($32.43 average per share). In addition during the first
six months of 1998, The Timber Company purchased on the open
market 975,500 shares of The Timber Company common stock at an
aggregate price of $21 million ($21.53 average per share).
<PAGE> 18
Subsequent to July 3, 1999 through August 2, 1999, the
Corporation purchased on the open market approximately 353,300
shares of the Georgia-Pacific Group stock at an aggregate price
of $18 million ($49.86 average per share) and approximately
595,300 shares of The Timber Company stock at an aggregate price
of $15 million ($25.46 average per share). The Corporation
expects to repurchase shares of the Georgia-Pacific Group and The
Timber Company stock throughout 1999 as long as debt levels are
below the established thresholds.
During the first six months of 1999, the Corporation received
$105 million and $8 million from the exercise of stock options of
Georgia-Pacific Group common stock and The Timber Company common
stock, respectively.
During the first six months of 1999 and 1998, the Corporation
paid $86 million and $92 million, respectively, in dividends. On
May 4, 1999, the Board of Directors declared a two-for-one split
of Georgia-Pacific Group's common stock in the form of a special
dividend to shareholders of record on May 14, 1999. The special
dividend was paid as one share of Georgia-Pacific Group common
stock for each share of Georgia-Pacific Group on June 3, 1999. A
total of 95,126,911 additional shares were issued in conjunction
with the stock split. The Georgia-Pacific Group's par value of
$0.80 remained unchanged. As a result, $76.1 million was
reclassified from Additional paid-in capital to Common stock.
All historical share and per share amounts have been restated to
reflect retroactively the stock split. It is anticipated that
future dividends on Georgia-Pacific Group common stock will be
declared at the rate of 12.5 cents per share as a result of the
stock split.
OTHER. In July 1999, the Financial Accounting Standards Board
("FASB") issued SFAS No. 137, providing for a one year delay of
the effective date of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"("SFAS No. 133"). SFAS No. 133
establishes accounting and reporting standards for derivative
instrument and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities on the
balance sheet and measure those instruments at fair value.
Georgia-Pacific Corporation will be required to adopt SFAS No.
133 in 2001. Management is evaluating the effect of this
statement on Georgia-Pacific's derivative instruments: primarily
interest rate swaps, foreign currency forward contracts and long-
term purchase commitments. The impact of adjustments to fair
value is not expected to be material to the Corporation's
consolidated financial position.
The Corporation is working to resolve the effects of the Year
2000 problem on its information systems, the operating systems
used in its manufacturing operations as well as its facilities
systems. The Year 2000 problem, which is common to most
businesses, concerns the inability of such systems to properly
recognize and process dates and date-sensitive information on and
beyond January 1, 2000. In 1996, the Corporation began a
companywide assessment of the vulnerability of its systems to the
Year 2000 problem. Based on such assessment, the Corporation
developed a Year 2000 plan, under which all key systems are being
tested, and noncompliant software or technology is being modified
or replaced. The Corporation is also surveying and assessing the
Year 2000 readiness status and compatibility of customers' and
suppliers' systems and processes that interface with the
Corporation's systems or could otherwise impact the Corporation's
operations.
<PAGE> 19
The Corporation completed the necessary revisions and unit
testing to most systems and processes in 1998 with the few
remaining systems completed in March 1999. Full integration
testing and verification of such systems and processes for Year
2000 readiness has been ongoing and will continue during 1999. At
the end of June 1999, 86 percent of the Corporation's systems are
considered fully Year 2000 ready, and 14 percent are in the final
stages of full integration testing. Early in 1998, the
Corporation completed an inventory of the process control systems
and embedded chips used in its manufacturing operations and
currently believes that only a small percentage of such systems
and chips could be subject to Year 2000 problems. At the end of
June 1999, over 93 percent of the process control and embedded
chip inventory has been fully analyzed and remediated as
necessary with the remaining 7 percent of the inventory in the
repair or test phase. Final post-repair testing is scheduled to
be complete at all operations by the end of September 1999. Due
to system acquisitions and the number and complexity of existing
systems, the Corporation expects some continuing additions of
noncritical systems to the inventory list.
The Corporation has contacted each of its critical suppliers and
service providers including government services, transportation,
energy and communication providers to ascertain their respective
levels of readiness to address and remediate Year 2000 problems
and is currently reviewing their responses and conducting follow-
up reviews as necessary. The Corporation has identified and
contacted critical customers to ascertain their respective levels
of Year 2000 readiness and will be assessing the need for further
testing with customers as appropriate. While the Corporation
currently believes that it will be able to modify or replace its
affected systems in time to minimize any detrimental effects on
its operations, failure to do so, or the failure of the
Corporation's major customers, suppliers and service providers to
modify or replace their affected systems, could have a material
adverse impact on the Corporation's results of operations,
liquidity or consolidated financial position in the future. The
most reasonably likely worst-case scenario of failure by the
Corporation or its customers or suppliers to resolve the Year
2000 problem would be a temporary slowdown or cessation of
manufacturing operations at one or more of the Corporation's
facilities, including its limited foreign operations and a
temporary inability on the part of the Corporation to process
orders and billings in a timely manner and to deliver finished
products to customers. The Corporation's individual business
units and corporate offices have developed plans for various
contingency options, including identification of alternate
suppliers, vendors and service providers as well as direct access
to qualified vendor technical support and manual alternatives to
systems operations. These options will allow them to minimize the
risks of any unresolved Year 2000 problems on their operations
and to minimize the effect of any unforeseen Year 2000 failures
in areas outside the Corporation's control. The primary goal of
the Corporation's contingency plan is to minimize the adverse
impact to personnel safety, environmental safety and assets.
The Corporation currently estimates the incremental cost of the
work needed to resolve the Year 2000 problem at approximately $40
million (including approximately $2 million of capital costs), of
which $23 million has been incurred to date and $6 million is
included for the impact of contingency activities and unexpected
events. In addition, the Corporation expects to incur internal
costs totaling approximately $20 million related to the Year 2000
problem, of which approximately $15 million has been incurred to
date. The bulk of the incremental costs relates to replacement or
modification of affected process control systems in the
Corporation's manufacturing operations and the cost of creating
and maintaining isolated test environments for its information
systems. The majority of the internal costs relates to code or
process system assessment, remediation and testing and is
projected to be incurred through 1999. These incremental and
internal costs will be expensed as incurred, except for new
systems purchased that will be capitalized in accordance with
corporate policy. Such costs may be material to the Corporation's
results of operations in one or more fiscal quarters or years but
are not expected to have a material adverse effect on the long-
term results of operations, liquidity or consolidated financial
position of the Corporation.
The Corporation has reviewed the Unisource Year 2000 project
methodology and progress, including its foreign operations. All
mission critical systems have been remediated and full testing
and final certification efforts are expected to be completed by
the end of September 1999. Unisource has contacted its
technology and service providers as well as its key customers and
suppliers to determine the extent to which their systems are year
2000 ready and the extent to which Unisource could be affected if
they are not. Contingency planning activities are ongoing and
are also expected to be complete by the end of September 1999.
Unisource estimates the total cost of its Year 2000 project to be
approximately $14 million. Of this amount, approximately $11
million has been incurred through July 3, 1999.
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 that are not historical facts are
forward-looking statements (as such term is defined under the
Private Securities Litigation Reform Act of 1995) based on
current expectations. The accuracy of such statements is subject
to a number of risks, uncertainties and assumptions. In addition
to the risks, uncertainties and assumptions discussed elsewhere
herein, factors that could cause or contribute to actual results
differing materially from such forward-looking statements include
the following: the Corporation's production capacity continuing
to exceed demand for its pulp and paper products, necessitating
market-related downtime; the ability of the Corporation, and its
customers and suppliers, to address the Year 2000 problem in a
timely and efficient manner; changes in the productive capacity
and production levels 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,
particularly the Asian markets; variations in the level of
housing starts; fluctuations in interest rates and currency
exchange rates; the availability and cost of wood fiber; material
variation of earnings or cash flow arising from Unisource, the
inability of the Corporation to integrate and rationalize the
business of Unisource into the Corporation in a manner that
realizes cost savings and synergies, including effective
continuing implementation of the Unisource restructuring
announced July 29, 1998 and other risks, uncertainties and
assumptions discussed in the Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1998, the
Corporation's Quarterly Report on Form 10-Q for the quarter ended
April 3, 1999, and the Corporation's Form 8-K dated October 17,
1996.
For a discussion of commitments and contingencies refer to Note
12 of the Notes to Consolidated Financial Statements.
<PAGE> 20
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF INCOME (Unaudited)
Georgia-Pacific Corporation-Georgia-Pacific Group
Three Months Ended Six Months Ended
------------------ ----------------
(In millions, except per share July 3, June 30, July 3, June 30,
amounts) 1999 1998 1999 1998
------- ------- ------- --------
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 3,807 $ 3,275 $ 7,159 $ 6,468
- -----------------------------------------------------------------------
Costs and expenses
Cost of sales excluding depreciation
and cost of timber harvested shown
below
The Timber Company 25 19 45 43
Third parties 2,768 2,556 5,275 5,031
- -----------------------------------------------------------------------
Total cost of sales 2,793 2,575 5,320 5,074
Selling, general and
Administrative 296 256 584 518
Depreciation and cost of
timber harvested
The Timber Company 64 67 130 160
Third parties 212 229 422 440
- -----------------------------------------------------------------------
Total depreciation and cost of
timber harvested 276 296 552 600
Interest 89 94 182 190
- -----------------------------------------------------------------------
Total costs and expenses 3,454 3,221 6,638 6,382
- -----------------------------------------------------------------------
Income before income taxes
and extraordinary item 353 54 521 86
Provision for income taxes 141 24 210 40
- -----------------------------------------------------------------------
Income before extraordinary item 212 30 311 46
Extraordinary item, net of taxes - (1) - (13)
- -----------------------------------------------------------------------
Net income $ 212 $ 29 $ 311 $ 33
======================================================================
Basic per common share:
Income before extraordinary item $ 1.23 $ 0.17 $ 1.81 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- -----------------------------------------------------------------------
Net income $ 1.23 $ 0.16 $ 1.81 $ 0.18
======================================================================
Diluted per common share:
Income before extraordinary item $ 1.20 $ 0.17 $ 1.76 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- -----------------------------------------------------------------------
Net income $ 1.20 $ 0.16 $ 1.76 $ 0.18
======================================================================
Average number of shares
outstanding:
Basic 171.8 181.0 172.2 182.0
Diluted 176.4 184.4 176.3 184.7
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 21
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF CASH FLOWS (Unaudited)
Georgia-Pacific Corporation-Georgia-Pacific Group
Six Months Ended
-------------------
(In millions) July 3, 1999 June 30, 1998
-------------- ---------------
- -----------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 311 $ 33
Adjustments to reconcile net income to
cash provided by operations:
Depreciation 361 369
Cost of timber harvested - The Timber
Company 130 160
Cost of timber harvested - Third
Parties 61 71
Deferred income taxes (15) 50
Amortization of goodwill 31 30
Stock compensation programs (1) 14
(Loss) gain on sales of assets 1 (16)
Increase in receivables (310) (49)
(Increase) decrease in inventories (65) 88
(Increase) decrease in other working
capital 80 (202)
Change in other assets and other
long-term liabilities (62) 15
- -----------------------------------------------------------------------
Cash provided by operations 522 563
- -----------------------------------------------------------------------
Cash flows from investment activities
Property, plant and equipment
investments (249) (238)
Timber purchases from The Timber Company (121) (184)
Timber contract purchases from third
parties (48) (96)
Acquisitions (818) (93)
Proceeds from sales of assets 2 35
Other 25 28
- -----------------------------------------------------------------------
Cash used for investment activities (1,209) (548)
- -----------------------------------------------------------------------
Cash flows from financing activities
Additions to long-term debt 870 177
Common stock repurchased (206) (155)
Cash dividends paid (43) (46)
Proceeds from option plan exercises 105 8
- -----------------------------------------------------------------------
Cash provided by (used for) financing
Activities 726 (16)
- -----------------------------------------------------------------------
Increase (decrease) in cash 39 (1)
Balance at beginning of period 5 8
- -----------------------------------------------------------------------
Balance at end of period $ 44 $ 7
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 22
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS
Georgia-Pacific Corporation-Georgia-Pacific Group
(In millions) July 3, December 31,
1999 1998
---------------- -------------
- ------------------------------------------------------------------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets
Cash $ 44 $ 5
Receivables, less allowances of
$24 and $25, respectively 2,300 1,231
Inventories 1,776 1,278
Deferred income tax assets 61 61
Other current assets 123 65
- ------------------------------------------------------------------------
Total current assets 4,304 2,640
- ------------------------------------------------------------------------
Timber contracts 59 78
- ------------------------------------------------------------------------
Property, plant and equipment
Land and improvements, buildings,
machinery and equipment and construction
in progress, at cost 14,828 14,387
Accumulated depreciation (8,467) (8,162)
- ----------------------------------------------------------------------
Property, plant and equipment, net 6,361 6,225
- -----------------------------------------------------------------------
Goodwill, net 2,433 1,677
- -----------------------------------------------------------------------
Other assets 996 918
- -----------------------------------------------------------------------
Total assets $ 14,153 $ 11,538
======================================================================
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Short-term debt $ 2,160 $ 1,173
Accounts payable 974 553
Accrued compensation 296 243
Other current liabilities 607 412
- ----------------------------------------------------------------------
Total current liabilities 4,037 2,381
- ----------------------------------------------------------------------
Long-term debt, excluding current portion 3,945 3,395
- ----------------------------------------------------------------------
Other long-term liabilities 1,743 1,566
- ----------------------------------------------------------------------
Deferred income tax liabilities 1,017 987
- ----------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity 3,411 3,209
- ----------------------------------------------------------------------
Total liabilities and shareholders' equity $ 14,153 $ 11,538
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 23
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Georgia-Pacific Corporation-Georgia-Pacific Group
Three Months Ended Six Months Ended
------------------- ---------------- -
July 3, June 30, July 3, June 30,
1999 1998 1999 1998
(In millions) ------- -------- ------- --------
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 212 $ 29 $ 311 $ 33
Other comprehensive income (loss)
before tax:
Foreign currency translation
adjustments 4 (5) 10 (6)
Income tax (expense) benefit related
to items of other comprehensive income (2) 2 (4) 2
- ----------------------------------------------------------------------
Comprehensive income $ 214 $ 26 $ 317 $ 29
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
NOTES TO COMBINED FINANCIAL STATEMENTS (Unaudited)
Georgia-Pacific Corporation-Georgia-Pacific Group
APRIL 3, 1999
1. PRINCIPLES OF PRESENTATION. The combined financial
statements include the accounts of Georgia-Pacific Group and
subsidiaries. All significant intercompany balances and
transactions are eliminated in consolidation. The interim
financial information included herein is unaudited; however, such
information reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of the Georgia-
Pacific Group's financial position, results of operations, and
cash flows for the interim periods. All such adjustments are of a
normal, recurring nature except for the item discussed in Note 3
below. Certain 1998 amounts have been reclassified to conform
with the 1999 presentation. The Georgia-Pacific Group's combined
financial statements should be read in conjunction with the
Corporation's consolidated financial statements and The Timber
Company's combined financial statements.
On or about April 22, 1999, the Georgia-Pacific Group determined
to change its fiscal year from December 31 to end on the
Saturday closest to December 31. Additionally, the Georgia-
Pacific Group reports its quarterly periods on a 13-week basis
ending on a Saturday. The impact of three additional days on the
six months ended July 3, 1999 was not material. There will be
no transition period on which to report.
2. PROVISION FOR INCOME TAXES. The effective tax rates for the
periods were different than the statutory rates primarily
because of nondeductible goodwill amortization expense.
3. EXTRAORDINARY ITEM. The Corporation redeemed approximately $600
million of its outstanding debt during the first six months of
1998. As a result, an after-tax extraordinary charge of $13
million ($0.07 per share) was allocated to the Georgia-Pacific
Group based on the ratio of the Georgia-Pacific Group's debt to
the Corporation's total debt, of which $12 million was
recognized in the first quarter of 1998 and $1 million was
recognized in the second quarter of 1998.
4. EARNINGS PER SHARE. The Corporation's common stock was
redesignated in December 1997 to reflect separately the
performance of the Corporation's pulp, paper and building
products businesses, which are now known as Georgia-Pacific
Group. A separate class of common stock was distributed to
reflect the performance of the Corporation's timber operating
group, which is now known as The Timber Company. Basic earnings
per share is computed based on net income and the weighted
average number of common shares outstanding. Diluted earnings
per share reflect the annual issuance of common shares under
long-term incentive stock option and stock purchase plans. The
computation of diluted earnings per share does not assume
conversion or exercise of securities that would have an
antidilutive effect on earnings per share.
The following table provides earnings and per share data for the
Georgia-Pacific Group for 1999 and 1998.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ---------------- -
(In millions, except per share July 3, June 30, July 3, June 30,
amounts) 1999 1998 1999 1998
------- -------- ------- --------
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic and diluted income available to
shareholders (numerator):
Income before extraordinary item $ 212 $ 30 $ 311 $ 46
Extraordinary item, net of taxes - (1) - (13)
- ---------------------------------------------------------------
Net income $ 212 $ 29 $ 311 $ 33
================================================================
Shares (denominator):
Average shares outstanding 171.8 181.0 172.2 182.0
Dilutive securities:
Stock incentive and option plans 4.1 3.0 3.6 2.5
Employee stock purchase plans 0.5 0.4 0.5 0.2
- ---------------------------------------------------------------
Total assuming conversion 176.4 184.4 176.3 184.7
================================================================
Basic per share amounts:
Income before extraordinary item $ 1.23 $ 0.17 $ 1.81 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- ---------------------------------------------------------------
Net income $ 1.23 $ 0.16 $ 1.81 $ 0.18
================================================================
Diluted per share amounts:
Income before extraordinary item $ 1.20 $ 0.17 $ 1.76 $ 0.25
Extraordinary item, net of taxes - (0.01) - (0.07)
- ---------------------------------------------------------------
Net income $ 1.20 $ 0.16 $ 1.76 $ 0.18
================================================================
</TABLE>
<PAGE> 24
5. INVENTORY VALUATION. Inventories include costs of
materials, labor, and plant overhead. The Georgia-Pacific Group
uses the dollar value pool method for computing LIFO inventories.
The major components of inventories were as follows:
<TABLE>
<CAPTION>
(In millions) July 3, December 31,
1999 1998
------------- ---------------
- ---------------------------------------------------------------
<S> <C> <C>
Raw materials $ 347 $ 417
Finished goods 1,322 760
Supplies 316 310
LIFO reserve (209) (209)
- ---------------------------------------------------------------
Total inventories $ 1,776 $ 1,278
===============================================================
</TABLE>
6. ACQUISITIONS. At the end of the second quarter of 1999,
Georgia-Pacific Group acquired approximately 91% of the
outstanding shares of Unisource, the largest independent marketer
and distributor of printing and imaging paper and supplies in
North America. Georgia-Pacific Group expects to pay for the
remaining shares of Unisource as they are prescribed to the
exchange agent. The value of the transaction was $12 per share
of Unisource stock, or approximately $843 million (assuming all
outstanding Unisource shares are tendered), plus the assumption
of approximately $669 million in debt.
Unisource's results of operations will be consolidated with
those of Georgia-Pacific Group beginning July 4, 1999. The
Georgia-Pacific Group has accounted for this transaction
using the purchase method to record a new cost basis for
assets acquired and liabilities assumed. The allocation of
the purchase price and acquisition costs to the assets
acquired and liabilities assumed is preliminary as of July
3, 1999, and is subject to change pending finalization of
studies of fair value and the finalization of management's
plans. The Corporation has begun to assess and formulate
plans to restructure existing Unisource activities,
including the consolidation of certain distribution centers,
closure of the Unisource headquarters facility, termination
of redundant headcount and the relocation of certain
administrative functions. In connection with the
acquisition of Unisource, the Corporation assumed
liabilities totaling approximately $84 million for employee
termination and relocation costs, and $15 million for
facility closure costs. The Corporation has not yet
completed its evaluation of Unisource activities;
accordingly, finalization of the Corporation's plans may
result in additional liabilities for termination, relocation
or facility closure costs which could increase the amount
of liabilities assumed in the acquisition. The difference
between the purchase price and the fair market value of the
assets acquired and liabilities assumed was recorded as
goodwill and will be amortized over 40 years. The
preliminary allocation of the purchase price of the
acquisition is summarized as follows:
<TABLE>
<CAPTION>
(In millions)
<S> <C>
Current assets $ 1,258
Property, plant and equipment 225
Other non current assets 19
Goodwill 756
Liabilities (1,497)
--------------------------------------------------
Net cash paid for Unisource $ 761
==================================================
</TABLE>
The following unaudited pro forma financial data has been
prepared assuming that the acquisition of Unisource and
related financings were consummated on January 1, 1998.
This pro forma financial data is presented for informational
purposes and is not necessarily indicative of the operating
results that would have occurred had the acquisition been
consummated on January 1, 1998, nor does it include
adjustments for expected synergies or cost savings.
Accordingly, this pro forma data is not necessarily
indicative of future operations.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ---------------- -
(In millions, except per share July 3, June 30, July 3, June 30,
amounts) 1999 1998 1999 1998
------- -------- ------ -------
<S> <C> <C> <C> <C>
Net Sales $ 5,312 $ 4,998 $ 10,181 $ 9,948
Income before extraordinary items $ 210 $ 14 $ 304 $ 29
Net Income $ 210 $ 13 $ 304 $ 16
Basic income before
extraordinary Items per share $ 1.22 $ 0.08 $ 1.76 $ 0.16
Diluted income before
extraordinary Items per share $ 1.19 $ 0.08 $ 1.72 $ 0.16
Basic earnings per share $ 1.22 $ 0.07 $ 1.76 $ 0.09
Diluted earnings per share $ 1.19 $ 0.07 $ 1.72 $ 0.09
</TABLE>
The 1998 pro forma financial data includes a non-recurring
restructuring charge of $28 million ($18 million after tax) taken
by Unisource in the second quarter of 1998.
<PAGE> 25
In addition during the first six months of 1999, the Georgia-
Pacific Group completed the acquisition of a packaging plant and
two treated lumber facilities for a total consideration of
approximately $57 million in cash. The results of operations of
these acquired businesses were consolidated with those of the
Corporation beginning in the second quarter of 1999. The
Georgia-Pacific Group has accounted for these business
combinations using the purchase method to record a new cost
basis for assets acquired and liabilities assumed.
On June 25, 1999, the Georgia-Pacific Group and Chesapeake
Corp. announced that the two companies signed a letter of
intent to combine their commercial tissue business in a new
partnership. The Georgia-Pacific Group will contribute the
assets of its commercial tissue business to the partnership.
The Georgia-Pacific Group will control and manage the
partnership and is expected to own approximately 90 percent
of the equity in the partnership. Chesapeake Corp. will
contribute the assets of its Wisconsin Tissue business to
the partnership, for which it will receive a 10 percent
equity interest in the partnership and an initial cash
distribution of approximately $730 million. Formation of
the partnership is subject to completion of definitive
agreements, completion of due diligence by both parties and
customary regulatory approvals. Completion is anticipated
in the third quarter of 1999.
On June 30, 1998, the Georgia-Pacific Group completed its
acquisition of CeCorr, a leading independent producer of
corrugated sheets in the United States. On June 30, 1998, the
Georgia-Pacific Group paid approximately $93 million in cash
(net of $2 million of cash acquired) and issued approximately
3.2 million shares of Georgia-Pacific Group stock valued at
approximately $28.94 per share for all the outstanding shares of
CeCorr. In addition, the Georgia-Pacific Group assumed
approximately $92 million of CeCorr's debt, of which $34 million
was owed to the Corporation ($58 million net debt assumed). On
July 2, 1998, a former owner of CeCorr exercised his right to
resell to the Corporation approximately 2.2 million shares of
Georgia-Pacific Group stock issued in the transaction. CeCorr's
results of operations were consolidated with those of the
Corporation beginning July 1, 1998. The Georgia-Pacific Group
accounted for the CeCorr acquisition using the purchase method
to record a new cost basis for assets acquired and liabilities
assumed.
7. DEBT. In connection with the acquisition of Unisource, the
Georgia-Pacific Group incurred $600 million of short-term bridge
financing until it closed on the issuance of the Premium Equity
Participating Security Units on July 7, 1999 (see below).
In June 1999, the Georgia-Pacific Group renegotiated its
accounts receivable sale program and increased the amount
outstanding under the program from $280 million to $750
million. This program is accounted for as a secured
borrowing. The receivables outstanding under this program
and the corresponding debt are included as current
receivables and short-term debt, respectively, on the
Georgia-Pacific Group's balance sheets. 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. The program expires in May 2000.
In connection with the acquisition of Unisource, the
Corporation retained former Unisource agreements to sell up
to $150 million of certain qualifying U.S. accounts
receivable and up to CN$95 million of certain eligible
Canadian accounts receivable. At July 3, 1999,
approximately $197 million was outstanding under these
programs. The receivables outstanding under these programs
and the corresponding debt are included as current
receivables and short-term debt, respectively on the
accompanying balance sheets. The agreements are accounted
for as a secured borrowing. As collections reduce
previously sold interests, new receivables may be sold.
These agreements expire in September, 1999.
Also in June 1999, the Board of Directors increased the
corporate target debt level under which management can
purchase shares of Georgia-Pacific Group and The Timber
Company common stock on the open market from $5.75 billion
to $6.8 billion. In addition, the Board of Directors
increased the Georgia-Pacific Group's target debt level from
$4.75 billion to $5.8 billion. The Timber Company's target
debt level remains at $1.0 billion.
As of July 3, 1999, the Corporation had a $1.5 billion
unsecured revolving credit facility which is used for direct
borrowings and as support for commercial paper and other
short-term borrowings. At July 3, 1999, $797 million was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5%
PEPS Units for $862.5 million. Each PEPS Unit had an issue
price of $50 and consists of a contract to purchase shares
of Georgia-Pacific Group common stock on or prior to August
16, 2002 and a senior deferrable note of Georgia-Pacific
Group due August 16, 2004. Each purchase contract yields
interest of 0.35% per year, paid quarterly, on the $50
stated amount of the PEPS Unit. Each senior deferrable note
yields interest of 7.15% per year, paid quarterly, until
August 16, 2002. On August 16, 2002, following a remarketing
of the senior deferrable notes, the interest rate will be
reset at a rate that will be equal to or greater than 7.15%.
The liability related to the PEPS Units will not be included
in the debt amount for purposes of determining the corporate
and Georgia-Pacific Group debt targets.
During the second quarter of 1999, the Corporation
registered for sale up to $2.975 billion of debt and equity
securities under a shelf registration statement filed with
the Securities and Exchange Commission, of which $1.725
billion relates to the PEPS Units ($867.5 million of which
was received on July 7, 1999, and $862.5 million is to be
received upon exercise of the purchase contracts).
8. STOCK SPLIT. On May 4, 1999, the Board of Directors declared
a two-for-one split of Georgia-Pacific Group's common stock in
the form of a special dividend to shareholders of record on May
14, 1999. The special dividend was paid as one share of Georgia-
Pacific Group common stock for each share of Georgia-Pacific
Group on June 3, 1999. A total of 95,126,911 additional shares
were issued in conjunction with the stock split. The Georgia-
Pacific Group's par value of $0.80 remained unchanged. As a
result, $76.1 million was reclassified from Additional paid-in
capital to Common stock. All historical share and per share
amounts have been restated to reflect retroactively the stock
split.
9. SHARE REPURCHASES. During the first six months of 1999,
Georgia-Pacific Group purchased on the open market approximately
5,113,000 shares of Georgia-Pacific Group common stock, all of
which were held as treasury stock at July 3, 1999, at an
aggregate price of $206 million ($40.24 average per share).
During the first six months of 1998, Georgia-Pacific Group
purchased on the open market approximately 4,625,000 shares
of Georgia-Pacific Group common stock at an aggregate price
of $150 million ($32.43 average per share).
10. COMMITMENTS AND CONTINGENCIES. The Georgia-Pacific Group is
subject to various legal proceedings and claims that arise in the
ordinary course of its business. As is the case with other
companies in similar industries, the Georgia-Pacific Group faces
exposure from actual or potential claims and legal proceedings
involving environmental matters. Liability insurance in effect
during the last several years provides very limited coverage for
environmental matters.
The following sets forth legal proceedings and claims
arising out of the operations of the Georgia-Pacific Group
to which the Corporation is a party. The holders of Georgia-
Pacific Group stock are shareholders of the Corporation and
are subject to all of the risks associated with an
investment in the Corporation, including any legal
proceedings and claims involving The Timber Company.
The Corporation is involved in environmental remediation
activities at approximately 176 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 46 percent are being investigated, approximately
30 percent are being remediated and approximately 24 percent are
being monitored (an activity that 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 multiparty 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 that 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 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 $56 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.
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, or that
any injuries they have incurred in fact resulted from
exposure to the Corporation's products.
<PAGE> 26
The Corporation generally settles asbestos cases for amounts
it considers reasonable given the facts and circumstances of
each case. The amounts it has paid to date to defend and
settle these cases have been substantially covered by
product liability insurance. The Corporation is currently
defending claims of approximately 73,000 such plaintiffs as
of July 26, 1999 and anticipates that additional suits will
be filed against it over the next several years. The
Corporation has insurance available in amounts that 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 has
also established a receivable for expected insurance
recoveries.
On May 6, 1998, suit was filed in state court in Columbus,
Ohio, against the Corporation and Georgia-Pacific Resins,
Inc., a wholly owned subsidiary of the Corporation. The
lawsuit was filed by eight plaintiffs who seek to represent
a class of individuals who at any time from 1985 to the
present lived, worked, resided, owned, frequented or
otherwise occupied property located within a three-mile
radius of the Corporation's resins manufacturing operation
in Columbus, Ohio. The lawsuit alleges that the individual
plaintiffs and putative class members have suffered personal
injuries and/or property damage because of (i) alleged
"continuing and long-term releases and threats of releases
of noxious fumes, odors and harmful chemicals, including
hazardous substances" from the Corporation's operations
and/or (ii) a September 10, 1997 explosion at the Columbus
facility and alleged release of hazardous material resulting
from that explosion. Prior to the lawsuit, the Corporation
had received a number of explosion-related claims from
nearby residents and businesses. These claims were for
property damage, personal injury and business interruption
and were being reviewed and adjusted on a case-by-case
basis. The Corporation has denied the material allegations
of the lawsuit. While it is premature to evaluate the claims
asserted in the lawsuit, the Corporation believes it has
meritorious defenses.
On July 28, 1999, the Corporation and the Attorney General
of the State of Florida entered into a Settlement Agreement
pursuant to which the State will dismiss its claims against
the Corporation which alleged that the Corporation engaged
in a conspiracy to fix the prices of sanitary commercial
paper products. The Settlement Agreement states that the
Attorney General is dismissing its claims in the public
interest and consistent with its responsibilities. The
Agreement also provides that the Corporation continues to
deny that there is any evidence that it engaged in the
alleged price fixing conspiracy. In addition, the
Corporation agreed to donate certain real property to the
State of Florida, Board of Trustees of the Internal
Improvement Trust. The value of this real property is not
material to the results of operations or financial position
of the Corporation.
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 effect on the long-term results of
operations, liquidity or consolidated financial position of
the Corporation.
<PAGE> 27
11. OPERATING SEGMENT INFORMATION. Georgia-Pacific Group has
four reportable operating segments: building products,
distribution, containerboard and packaging, and pulp and paper.
The following represents selected operating data for each
reportable segment for the second quarter of 1999 and 1998.
<TABLE>
<CAPTION>
COMBINED SELECTED OPERATING SEGMENT DATA (Unaudited)
Georgia-Pacific Group
(Dollar amounts, except Three Months Ended Three Months Ended
per share, in millions) July 3, 1999 June 30, 1998
------------------ -----------------
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 1,047 27% $ 820 25%
Distribution 1,317 35 1,071 33
Containerboard and packaging 573 15 497 15
Pulp and paper 870 23 887 27
Other - - - -
- --------------------------------------------------------------
Total net sales to
unaffiliated customers $ 3,807 100% $ 3,275 100%
==============================================================
INTERSEGMENT SALES
Building products $ 624 $ 629
Distribution 2 2
Containerboard and packaging 14 15
Pulp and paper 7 8
Other* (647) (654)
- --------------------------------------------------------------
Total intersegment sales $ - -
==============================================================
TOTAL NET SALES
Building products $ 1,671 44% $ 1,449 44%
Distribution 1,319 35 1,073 33
Containerboard and packaging 587 15 512 16
Pulp and paper 877 23 895 27
Other* (647) (17) (654) (20)
- --------------------------------------------------------------
Total net sales $ 3,807 100% $ 3,275 100%
==============================================================
OPERATING PROFITS
Building products $ 364 82% $ 120 81%
Distribution 35 8 - -
Containerboard and packaging 81 18 31 21
Pulp and paper 33 8 54 37
Other (71) (16) (57) (39)
- --------------------------------------------------------------
Total operating profits 442 100% 148 100%
=== ===
Interest expense (89) (94)
Provision for income taxes (141) (24)
Extraordinary item, net of taxes - (1)
- ---------------------------------------------------------------
Net income $ 212 $ 29
===============================================================
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
COMBINED SELECTED OPERATING SEGMENT DATA (Unaudited)
Georgia-Pacific Group
(Dollar amounts, except Six Months Ended Six Months Ended
per share, in millions) July 3, 1999 June 30, 1998
---------------- -----------------
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 1,937 27% $ 1,585 25%
Distribution 2,415 34 2,095 32
Containerboard and packaging 1,096 15 985 15
Pulp and paper 1,710 24 1,802 28
Other 1 - 1 -
- ---------------------------------------------------------------
Total net sales to
unaffiliated customers $ 7,159 100% $ 6,468 100%
===============================================================
INTERSEGMENT SALES
Building products $ 1,174 $ 1,231
Distribution 4 4
Containerboard and packaging 29 30
Pulp and paper 13 16
Other* (1,220) (1,281)
- ---------------------------------------------------------------
Total intersegment sales $ - $ -
===============================================================
TOTAL NET SALES
Building products $ 3,111 43% $ 2,816 44%
Distribution 2,419 34 2,099 32
Containerboard and packaging 1,125 16 1,015 16
Pulp and paper 1,723 24 1,818 28
Other* (1,219) (17) (1,280) (20)
- ---------------------------------------------------------------
Total net sales $ 7,159 100% $ 6,468 100%
===============================================================
OPERATING PROFITS
Building products $ 612 87% $ 223 81%
Distribution 53 7 (17) (6)
Containerboard and packaging 121 17 64 23
Pulp and paper 53 8 125 45
Other (136) (19) (119) (43)
- ---------------------------------------------------------------
Total operating profits 703 100% 276 100%
=== ===
Interest expense (182) (190)
Provision for income taxes (210) (40)
Extraordinary item, net of taxes - (13)
- ---------------------------------------------------------------
Net income $ 311 $ 33
===============================================================
</TABLE>
*Includes elimination of intersegment sales.
<PAGE> 29
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
SECOND QUARTER 1999 COMPARED WITH SECOND QUARTER 1998
The Georgia-Pacific Group reported net sales of approximately
$3.8 billion for the second quarter of 1999 and $3.3 billion for
the second quarter of 1998. Net income for the 1999 second
quarter was $212 million compared with $29 million in 1998. Net
income in the second quarter of 1998 included an after-tax
extraordinary charge of $1 million for the early retirement of
debt.
The remaining discussion refers to the "Combined Selected
Operating Segment Data" table (included in Note 11 to the
Combined Financial Statements).
The Georgia-Pacific Group's building products segment reported
net sales of $1,671 million for the second three months of 1999
compared with $1,449 million in 1998. Operating profits were $364
million in 1999 compared with $120 million in 1998. Return on
sales was 22 percent and 8 percent for the three months ended
July 3, 1999 and June 30, 1998, respectively. The higher quarter-
over-quarter profits resulted from increases in selling prices
for most of this segment's products. Lumber prices were up 8
percent from the prior year's quarter; Gypsum prices increased 21
percent; Plywood prices increased 28 percent; and Oriented strand
board prices increased 49 percent. Mild weather, home building
activity driven by a strong economy and low inventory have
resulted in high prices in both Plywood and Oriented strand
board. The Georgia-Pacific Group expects continued strength in
the building products segment into the fourth quarter of 1999.
The Georgia-Pacific Group's distribution segment reported net
sales of $1,319 million for the second three months of 1999
compared with $1,073 million in 1998.Operating profits for the
distribution segment were $35 million in the second quarter of
1999 compared with approximately break even results in the second
quarter of 1998. The 1998 results included one-time gains,
principally on sales of assets related to the 1997 restructuring
plan, of approximately $11 million. The improvement in the
distribution segment profits in 1999 reflects higher commodity
and specialty products margins related to higher prices for
building products generally.
The Georgia-Pacific Group's containerboard and packaging segment
reported net sales of $587 million and operating profits of $81
million in the second quarter of 1999, compared with net sales of
$512 million and operating profits of $31 million in the second
quarter of 1998. Return on sales was 14 percent and 6 percent in
the second quarter of 1999 and 1998, respectively. Containerboard
and packaging prices increased steadily over the quarter, ending
the quarter at approximately the same levels as a year ago. The
packaging division cost reductions noted in the first quarter
continued into the second quarter. The positive price trend
together with cost reductions and the profits from CeCorr which
was acquired on June 30, 1998, resulted in higher quarter-over-
quarter profits for this segment. The Georgia-Pacific Group
expects continued price improvement in the containerboard and
packaging segment through the remainder of 1999.
The Georgia-Pacific Group's pulp and paper segment reported net
sales of $877 million and operating profits of $33 million in the
1999 second quarter. For the same period in 1998, the segment
reported net sales of $895 million and operating profits of $54
million. Return on sales was 4 percent and 6 percent in the
second quarter of 1999 and 1998, respectively. Compared with a
year ago, the Corporation has maintained lower levels of
inventory for most pulp and paper products. In the 1999 second
quarter the pulp and paper segment took market-related down time
at its pulp and paper mills and reduced pulp production by 28,000
tons and communication papers production by 13,000 tons. During
the second quarter of 1998, the Georgia-Pacific Group took market-
related downtime at its pulp and paper mills, and reduced pulp
and communication papers production by approximately 20,000 tons
and 25,000 tons, respectively. Although steadily increasing
throughout the second quarter, prices and demand for pulp
remained slightly below the prior year quarter average. Tissue
and communication paper results were lower than in the 1998
second quarter due to lower prices than in the prior year period.
However, average prices for the second quarter of 1999 are above
those of the 1999 first quarter. Demand for tissue was above
1998 levels for each period during the second quarter of 1999.
The Georgia-Pacific Group expects demand and pricing for products
in this segment to improve through the remainder of the year.
The operating loss in the "Other" nonreportable segment, which
includes some miscellaneous businesses, certain goodwill
amortization, unallocated corporate operating expenses and the
elimination of profit on intersegment sales, increased by $14
million to a loss of $71 million in 1999 from a loss of $57
million in the 1998 second quarter. This increase is primarily
the result of higher expenses for the Corporation's stock
compensation programs.
Interest expense decreased $5 million to $89 million in the
second quarter of 1999 compared with $94 million in the second
quarter of 1998 as a result of lower average interest rates,
despite slightly higher average debt levels.
<PAGE> 30
YEAR-TO-DATE SECOND QUARTER 1999 COMPARED WITH YEAR-TO-DATE
SECOND QUARTER 1998
The Georgia-Pacific Group reported net sales of $7.2 billion and
net income of $311 million for the six months ended July 3, 1999,
compared with net sales of $6.5 billion and net income of $33
million for the six months ended June 30, 1998. The 1998 results
include an extraordinary, after-tax loss of $13 million for the
early retirement of debt.
The remaining discussion refers to the "Combined Selected
Operating Segment Data" table (included in Note 11 to the
Combined Financial Statements).
The Georgia-Pacific Group's building products segment reported
net sales of $3.1 billion and operating profits of $612 million
for the six months ended July 3, 1999, compared with net sales of
$2.8 billion and operating profits of $223 million in 1998.
Return on sales increased to 19.7 percent from 7.9 percent a year
ago. A 24 percent increase in average plywood prices, 42
percent increase in average oriented strand board prices, and an
18 percent increase in average gypsum prices in the first six
months of 1999 resulted in significantly higher profit margins
over those realized in the same 1998 period.
The distribution division reported net sales of $2.4 billion and
operating profits of $53 million for the six months ended July 3,
1999, compared with net sales of $2.1 billion and an operating
loss of $17 million in the first half of 1998. The 1998 results
included one-time gains, principally on sales of assets related
to the 1997 restructuring plan, of approximately $13 million.
Continued high margins in commodity and specialty products, and
lower operating cost have contributed to the increased profits.
The Georgia-Pacific Group's containerboard and packaging segment
reported net sales of $1.1 billion and operating profits of $121
million in the first half of 1999 compared with net sales of
$1.0 billion and operating profits of $64 million in the same
1998 period. Return on sales increased to 10.8 percent from 6.3
percent in 1998. Although year-to-date average prices are below
year ago levels, pricing has increased throughout 1999 and at
July 3, 1999, were very close to year ago levels. Cost
decreases in wood, secondary fibers and energy as well as
increased production contributed to the increased profit
margins.
The Georgia-Pacific Group's pulp and paper segment reported net
sales of $1.7 billion and operating profits of $53 million for
the six-month period ended July 3, 1999, compared with net sales
of $1.8 billion and operating profits of $125 million in 1998.
Return on sales decreased to 3.1 percent compared with 6.9
percent for the same period a year ago, principally due to a
decrease in average prices for all of the Georgia-Pacific Group's
pulp and paper products. Average pulp prices for the first six
months of 1999 were approximately 7.5% below prices in the same
1998 period, and average prices of communications papers for the
first six months of 1999 were approximately 11% below year ago
levels. Prices for most of the Georgia-Pacific Group's pulp and
paper products have increased steadily throughout the first half
of 1999, but still remain below year ago levels. The Georgia-
Pacific Group anticipates this upward trend to continue through
the remainder of 1999. Compared with a year ago, the Georgia-
Pacific Group has maintained lower inventory levels for pulp and
paper products. During the first half of 1999, the Georgia-
Pacific Group incurred market-related downtime at its pulp and
paper mills and reduced pulp production by 62,000 tons and
communication papers production by 24,000 tons. In the same 1998
period, the Corporation incurred market-related downtime at its
pulp and paper mills and reduced pulp and communication papers
production by 100,000 tons and 40,000 tons, respectively.
The operating loss in the "Other" nonreportable segment, which
includes some miscellaneous businesses, certain goodwill
amortization, unallocated corporate operating expenses and the
elimination of profit on intersegment sales, increased by $17
million to a loss of $136 million in the first half of 1999 from
a loss of $119 million in the first half of 1998. This increase
is primarily the result of higher expenses for the Corporation's
stock compensation programs and higher litigation and
environmental remediation costs.
Interest expense decreased $8 million to $182 million in the
first half of 1999, compared with $190 million in the first half
of 1998 as a result of lower interest rates, despite higher
average debt levels.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. The Georgia-Pacific Group generated cash
from operations of $522 million for the six months ended July 3,
1999 compared with $563 million a year ago. The decrease in cash
provided from operating activities is primarily a result of
higher working capital levels, primarily accounts receivable
associated with the increase in net sales; offset somewhat by
strong demand and improved prices for several building products'
items.
INVESTING ACTIVITIES. Capital expenditures for property, plant
and equipment for the six months ended July 3, 1999 were $249
million, which included $101 million in the building products
segment, $5 million in the distribution segment, $32 million in
the containerboard and packaging segment $91 million in the pulp
and paper segment, and $20 million of other and general
corporate. The Georgia-Pacific Group expects to make capital
expenditures for property, plant and equipment of approximately
$700 million in 1999, excluding the cost of any acquisitions.
Cash paid for timber and timber contracts in the first six months
of 1999 and 1998 was $169 million and $280 million, respectively.
At the end of the second quarter of 1999, the Georgia-Pacific
Group acquired approximately 91% of the outstanding shares of
Unisource, the largest independent marketer and distributor of
printing and imaging paper and supplies in North America. The
Georgia-Pacific Group expects to pay for the remaining shares of
Unisource as they are prescribed to the exchange agent. The
value of the transaction was $12 per share of Unisource stock, or
approximately $843 million (assuming all outstanding Unisource
shares are tendered), plus the assumption of approximately $669
million in debt. Through July 3, 1999, the Georgia-Pacific Group
had paid approximately $761 million (net of $34 million of cash
acquired) for shares of Unisource stock that had been tendered.
Unisource's results of operations will be consolidated with those
of the Georgia-Pacific Group beginning July 4, 1999.
During the first six months of 1999, the Georgia-Pacific Group also
completed the acquisition of a packaging plant and two treated lumber
facilities for a total consideration of approximately $57 million in
cash. The results of operations of these acquired businesses were
consolidated with those of the Georgia-Pacific Group beginning in the
second quarter of 1999.
On June 30, 1998, the Georgia-Pacific Group completed its
acquisition of CeCorr, a leading independent producer of
corrugated sheets in the United States. On June 30, 1998, the
Georgia-Pacific Group paid approximately $93 million in cash (net
of $2 million of cash acquired) and issued approximately 3.2
million shares of Georgia-Pacific Group stock valued at
approximately $28.94 per share for all the outstanding shares of
CeCorr. In addition, the Georgia-Pacific Group assumed
approximately $92 million of CeCorr's debt, of which $34 million
was owed to the Georgia-Pacific Group ($58 million net debt
assumed). On July 2, 1998, a former owner of CeCorr exercised
his right to resell to the Georgia-Pacific Group approximately
2.2 million shares of Georgia-Pacific Group stock issued in the
transaction. CeCorr's results of operations were consolidated
with those of the Georgia-Pacific Group beginning July 1, 1998.
In June 1999, The Timber Company announced that it intends to
sell approximately 196,000 acres of its redwood and Douglas fir
timberlands in northern California. The Georgia-Pacific Group
does not expect that this potential timberland sale will have an
impact on the wood supply for its Fort Bragg, California sawmill
operations in the near term. The Fort Bragg sawmill has a supply
agreement with The Timber Company through 1999 that will remain
intact with the potential new owner.
On June 25, 1999, the Georgia-Pacific Group and Chesapeake Corp.
announced that the two companies signed a letter of intent to
combine their commercial tissue business in a new partnership.
The Georgia-Pacific Group will contribute the assets of its
commercial tissue business to the partnership. The Georgia-
Pacific Group will control and manage the partnership and is
expected to own approximately 90 percent of the equity in the
partnership. Chesapeake Corp. will contribute the assets of its
Wisconsin Tissue business to the partnership, for which it will
receive a 10 percent equity interest in the partnership and an
initial cash distribution of approximately $730 million.
Formation of the partnership is subject to completion of
definitive agreements, completion of due diligence by both
parties and customary regulatory approvals. Completion is
anticipated in the third quarter of 1999.
In 1999, the Georgia-Pacific Group 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.
FINANCING ACTIVITIES. The Corporation's total debt increased by
$1.52 billion to $7.07 billion at July 3, 1999 from $5.55 billion
at December 31, 1998. At July 3, 1999 and December 31, 1998,
$6.11 billion and $4.57 billion, respectively, of such total debt
was Georgia-Pacific Group's debt and $963 million and $983
million, respectively, was The Timber Company's debt.
In connection with the acquisition of Unisource, the Corporation
incurred $600 million of short-term bridge financing until it
closed on the issuance of the PEPS Units on July 7, 1999.
In June 1999, the Corporation renegotiated its accounts
receivable sale program and increased the amount outstanding
under the program from $280 million to $750 million. This
program is accounted for as a secured borrowing. The receivables
outstanding under this program and the corresponding debt are
included as current receivables and short-term debt,
respectively, on the Corporation's balance sheets. 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. The program expires in May 2000.
In connection with the acquisition of Unisource, the Corporation
retained former Unisource agreements to sell up to $150 million
of certain qualifying U.S. accounts receivable and up to CN$95
million of certain eligible Canadian accounts receivable. At
July 3, 1999, approximately $197 million was outstanding under
these programs. The receivables outstanding under these programs
and the corresponding debt are included as current receivables
and short-term debt, respectively on the accompanying balance
sheet. The agreements are accounted for as a secured borrowing.
As collections reduce previously sold interests, new receivables
may be sold. These agreements expire in September, 1999.
Also in June 1999, the Board of Directors increased the corporate
target debt level under which management can purchase shares of
Georgia-Pacific Group and The Timber Company common stock on the
open market from $5.75 billion to $6.8 billion. In addition, the
Board of Directors increased the Georgia-Pacific Group's target
debt level from $4.75 billion to $5.8 billion. The Timber
Company's target debt level remains at $1.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5% PEPS
Units for $862.5 million. Each PEPS Unit had an issue price of
$50 and consists of a contract to purchase shares of Georgia-
Pacific Group common stock on or prior to August 16, 2002 and a
senior deferrable note of Georgia-Pacific Group due August 16,
2004. Each purchase contract yields interest of 0.35% per year,
paid quarterly, on the $50 stated amount of the PEPS Unit. Each
senior deferrable note yields interest of 7.15% per year, paid
quarterly, until August 16, 2002. On August 16, 2002, following a
remarketing of the senior deferrable notes, the interest rate
will be reset at a rate that will be equal to or greater than
7.15%. The liability related to the PEPS Units will not be
included in the debt amount for purposes of determining the
corporate and Georgia-Pacific Group debt targets.
During the first six months of 1999, approximately $70 million of
fixed and floating rate industrial revenue bonds were replaced,
of which $57 million were refunded by fixed rate instruments and
$13 million were refunded by variable rate instruments.
<PAGE> 31
At July 3, 1999, the Corporation had a $1.5 billion unsecured
revolving credit facility which is used for direct borrowings and
as support for commercial paper and other short-term borrowings.
As of July 3, 1999, $797 million of committed credit was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
The Corporation's senior management establishes the parameters of
the Corporation's financial risk, which have been approved by the
Board of Directors. Hedging interest rate exposure through the
use of swaps and options and hedging foreign exchange exposure
through the use of forward contracts are specifically
contemplated to manage risk in keeping with the management
policy. Derivative instruments, such as swaps, forwards, options
or futures, which are based directly or indirectly upon interest
rates, currencies, equities and commodities, may be used by the
Corporation to manage and reduce the risk inherent in price,
currency and interest rate fluctuations.
The Corporation does not utilize derivatives for speculative
purposes. Derivatives are transaction-specific so that a specific
debt instrument, contract or invoice determines the amount,
maturity and other specifics of the hedge. Counterparty risk is
limited to institutions with long-term debt ratings of A or
better.
The table below presents principal (or notional)amounts and
related weighted average interest rates by year of expected
maturity for the Corporation's debt obligations as of July 3,
1999. For obligations with variable interest rates, the table
sets forth payout amounts based on current rates and does not
attempt to project future interest rates.
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(In millions) 1999 2000 2001 2002
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - - - -
Average interest rates - - - -
Notes and debentures $ 4 - - $ 300
Average interest rates 25.4% - - 10.0%
Revenue bonds $ 8 $ 24 $ 6 $ 74
Average interest rates 3.5% 4.3% 3.9% 2.5%
Other loans - $ 13 - -
Average interest rates - 8.0% - -
Accounts receivable sale program - - - -
Average interest rates - - - -
Notional principal amount of
interest rate exchange
agreements $ 100 $ 177 - 131
Average interest rate paid
(fixed) 6.6% 7.5% - 6.1%
Average interest rate received
(variable) 5.4% 5.1% - 6.1%
- ------------------------------------------------------------
</TABLE>
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(In millions) 2003 Thereafter Total Fair value
July 3,
1999
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - $ 1,758 $ 1,758 $ 1,758
Average interest rates - 5.9% 5.9% 5.9%
Notes and debentures $ 300 $ 2,900 $ 3,504 $ 3,591
Average interest rates 4.9% 8.6% 8.4% 8.4%
Revenue bonds - $ 532 $ 644 $ 550
Average interest rates - 5.2% 4.8% 4.8%
Other loans $ 14 - $ 27 $ 27
Average interest rates 5.7% - 6.8% 6.8%
Accounts receivable sale program - $ 947 $ 947 $ 947
Average interest rates - 5.3% 5.3% 5.3%
Notional principal amount of
interest rate exchange
agreements $ 300 - $ 708 $ (6)
Average interest rate paid 5.9% - 6.3% 6.3%
(fixed)
Average interest rate received
(variable) 5.1% - 5.3% 5.3%
- ------------------------------------------------------------
</TABLE>
The Corporation has the intent and ability to refinance
commercial paper, other short-term notes and the accounts
receivable sale program as they mature. Therefore, maturities of
these obligations are reflected as cash flows expected to be made
after 2003. The fair value of interest rate exchange agreements
excludes amounts used to determine the fair value of related
notes and debentures.
At July 3, 1999, the Corporation's weighted average interest rate
on its total debt was 6.9% including the accounts receivable sale
program and outstanding interest rate exchange agreements. At
July 3, 1999, these interest rate exchange agreements effectively
converted approximately $400 million of floating rate obligations
with a weighted average interest rate of 5.1% to fixed rate
obligations with an average effective interest rate of 6.5%.
These agreements have a weighted average maturity of
approximately 3.4 years. As of July 3, 1999, the Corporation's
total floating rate debt, including the accounts receivable sale
program, exceeded related interest rate exchange agreements by
$2.2 billion.
The Corporation also enters into foreign currency exchange
agreements and commodity futures and swaps, the amounts of which
were not material to the consolidated financial position of the
Corporation at July 3, 1999.
As of July 3, 1999, the Corporation had registered for sale up to
$2.975 billion of debt and equity securities under a shelf
registration statement filed with the Securities and Exchange
Commission, of which $1.725 billion relates to the PEPS Units
($862.5 million of which was received on July 7, 1999, and $862.5
million is to be received upon exercise of the purchase
contracts). Proceeds from the issuance of securities under this
registration statement may be used for general corporate
purposes, including the reduction of short-term debt,
acquisitions, investments in, or extension or credit to, the
Corporation's subsidiaries and the acquisition of real property.
During the first six months of 1999, Georgia-Pacific Group
purchased on the open market approximately 5,113,000 shares of
Georgia-Pacific Group common stock, all of which were held as
treasury stock at July 3, 1999, at an aggregate price of $206
million ($40.24 average per share). During the first six months
of 1998, Georgia-Pacific Group purchased on the open market
approximately 4,625,000 shares of Georgia-Pacific Group common
stock at an aggregate price of $150 million ($32.43 average per
share). In addition during the first six months of 1998, The
Timber Company purchased on the open market 975,500 shares of The
Timber Company common stock at an aggregate price of $21 million
($21.53 average per share).
<PAGE> 32
Subsequent to July 3, 1999 through August 2, 1999, the Georgia-
Pacific Group purchased on the open market approximately 353,300
shares of the Georgia-Pacific Group stock at an aggregate price
of $18 million ($49.86 average per share). The Georgia-Pacific
Group expects to repurchase shares of the Georgia-Pacific Group
stock throughout 1999 as long as debt levels are below the
established thresholds.
During the first six months of 1999, the Georgia-Pacific Group
received $105 million from the exercise of Georgia-Pacific Group
common stock options.
During the first six months of 1999 and 1998, the Georgia-Pacific
Group paid $43 million and $46 million, respectively, in
dividends. On May 4, 1999, the Board of Directors declared a two-
for-one split of Georgia-Pacific Group's common stock in the form
of a special dividend to shareholders of record on May 14, 1999.
The special dividend was paid as one share of Georgia-Pacific
Group common stock for each share of Georgia-Pacific Group on
June 3, 1999. A total of 95,126,911 additional shares were issued
in conjunction with the stock split. The Georgia-Pacific Group's
par value of $0.80 remained unchanged. As a result, $76.1
million was reclassified from Additional paid-in capital to
Common stock. All historical share and per share amounts have
been restated to reflect retroactively the stock split. It is
anticipated that future dividends on Georgia-Pacific Group common
stock will be declared at the rate of 12.5 cents per share as a
result of the stock split.
OTHER. In July 1999, the FASB issued SFAS No. 137, providing for
a one year delay of the effective date of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 establishes accounting and reporting standards for
derivative instrument and for hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities on the balance sheet and measure those instruments at
fair value. Georgia-Pacific Group will be required to adopt SFAS
No. 133 in 2001. Management is evaluating the effect of this
statement on Georgia-Pacific's derivative instruments: primarily
interest rate swaps, foreign currency forward contracts and long-
term purchase commitments. The impact of adjustment to fair value
is not expected to be material to the Group's consolidated
financial position.
The Georgia-Pacific Group is working to resolve the effects of
the Year 2000 problem on its information systems, the operating
systems used in its manufacturing operations as well as its
facilities systems. The Year 2000 problem, which is common to
most businesses, concerns the inability of such systems to
properly recognize and process dates and date-sensitive
information on and beyond January 1, 2000. In 1996, the Georgia-
Pacific Group began a companywide assessment of the vulnerability
of its systems to the Year 2000 problem. Based on such
assessment, the Georgia-Pacific Group developed a Year 2000 plan,
under which all key systems are being tested, and noncompliant
software or technology is being modified or replaced. The Georgia-
Pacific Group is also surveying and assessing the Year 2000
readiness status and compatibility of customers' and suppliers'
systems and processes that interface with the Georgia-Pacific
Group's systems or could otherwise impact the Georgia-Pacific
Group's operations.
<PAGE> 33
The Georgia-Pacific Group completed the necessary revisions and
unit testing to most systems and processes in 1998 with the few
remaining systems completed in March 1999. Full integration
testing and verification of such systems and processes for Year
2000 readiness has been ongoing and will continue during 1999. At
the end of June 1999, 86 percent of the Georgia-Pacific Group's
systems are considered fully Year 2000 ready, and 14 percent are
in the final stages of full integration testing. Early in 1998,
the Georgia-Pacific Group completed an inventory of the process
control systems and embedded chips used in its manufacturing
operations and currently believes that only a small percentage of
such systems and chips could be subject to Year 2000 problems.
At the end of June 1999, over 93 percent of the process control
and embedded chip inventory has been fully analyzed and
remediated as necessary with the remaining 7 percent of the
inventory in the repair or test phase. Final post-repair testing
is scheduled to be complete at all operations by the end of
September 1999. Due to system acquisitions and the number and
complexity of existing systems, the Georgia-Pacific Group expects
some continuing additions of noncritical systems to the inventory
list.
The Georgia-Pacific Group has contacted each of its critical
suppliers and service providers including government services,
transportation, energy and communication providers to ascertain
their respective levels of readiness to address and remediate
Year 2000 problems and is currently reviewing their responses and
conducting follow-up reviews as necessary. The Georgia-Pacific
Group has identified and contacted critical customers to
ascertain their respective levels of Year 2000 readiness and will
be assessing the need for further testing with customers as
appropriate. While the Georgia-Pacific Group currently believes
that it will be able to modify or replace its affected systems in
time to minimize any detrimental effects on its operations,
failure to do so, or the failure of the Georgia-Pacific Group's
major customers, suppliers and service providers to modify or
replace their affected systems, could have a material adverse
impact on the Georgia-Pacific Group's results of operations,
liquidity or consolidated financial position in the future. The
most reasonably likely worst-case scenario of failure by the
Georgia-Pacific Group or its customers or suppliers to resolve
the Year 2000 problem would be a temporary slowdown or cessation
of manufacturing operations at one or more of the Georgia-Pacific
Group's facilities, including its limited foreign operations and
a temporary inability on the part of the Georgia-Pacific Group to
process orders and billings in a timely manner and to deliver
finished products to customers. The Georgia-Pacific Group's
individual business units and corporate offices have developed
plans for various contingency options, including identification
of alternate suppliers, vendors and service providers as well as
direct access to qualified vendor technical support and manual
alternatives to systems operations. These options will allow them
to minimize the risks of any unresolved Year 2000 problems on
their operations and to minimize the effect of any unforeseen
Year 2000 failures in areas outside the Georgia-Pacific Group's
control. The primary goal of the Georgia-Pacific Group's
contingency plan is to minimize the adverse impact to personnel
safety, environmental safety and assets.
The Georgia-Pacific Group currently estimates the incremental
cost of the work needed to resolve the Year 2000 problem at
approximately $40 million (including approximately $2 million of
capital costs), of which $23 million has been incurred to date
and $6 million is included for the impact of contingency
activities and unexpected events. In addition, the Georgia-
Pacific Group expects to incur internal costs totaling
approximately $20 million related to the Year 2000 problem, of
which approximately $15 million has been incurred to date. The
bulk of the incremental costs relates to replacement or
modification of affected process control systems in the Georgia-
Pacific Group's manufacturing operations and the cost of creating
and maintaining isolated test environments for its information
systems. The majority of the internal costs relates to code or
process system assessment, remediation and testing and is
projected to be incurred through 1999. These incremental and
internal costs will be expensed as incurred, except for new
systems purchased that will be capitalized in accordance with
corporate policy. Such costs may be material to the Georgia-
Pacific Group's results of operations in one or more fiscal
quarters or years but are not expected to have a material adverse
effect on the long-term results of operations, liquidity or
combined financial position of the Georgia-Pacific Group.
The Georgia-Pacific Group has reviewed the Unisource Year 2000
project methodology and progress, including its foreign
operations. All mission critical systems have been remediated
and full testing and final certification efforts are expected to
be completed by the end of September 1999. Unisource has
contacted its technology and service providers as well as its key
customers and suppliers to determine the extent to which their
systems are year 2000 ready and the extent to which Unisource
could be affected if they are not. Contingency planning
activities are ongoing and are also expected to be complete by
the end of September 1999. Unisource estimates the total cost of
its Year 2000 project to be approximately $14 million. Of this
amount, approximately $11 million has been incurred through July
3, 1999.
For a discussion of commitments and contingencies refer to Note
10 of the Notes to Combined Financial Statements.
REFER TO THE "CAUTIONARY STATEMENT FOR PURPOSES OF THE `SAFE
HARBOR' PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995" ON PAGE 19 OF THIS FORM 10-Q.
<PAGE> 34
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF INCOME (Unaudited)
Georgia-Pacific Corporation-The Timber Company
Three Months Ended Six Months Ended
---------------- ---------------
(In millions, except per share July 3, June 30, July 3, June 30,
amounts) 1999 1998 1999 1998
------- -------- ------- --------
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales
Timber-Georgia-Pacific Group $ 89 $ 86 $ 175 $ 203
Timber-third parties
Delivered 13 18 26 25
Stumpage 29 10 67 27
Other 4 5 6 9
- ----------------------------------------------------------------------
Total net sales 135 119 274 264
- ----------------------------------------------------------------------
Costs and expenses
Cost of sales, excluding
depreciation and cost of
timber harvested shown below 24 23 48 42
Selling, general and administrative 10 9 20 18
Depreciation and cost of
timber harvested 11 7 22 21
Interest 17 17 35 35
Other Income (86) - (86) -
- ----------------------------------------------------------------------
Total costs and expenses (24) 56 39 116
- ----------------------------------------------------------------------
Income before income taxes and
extraordinary item 159 63 235 148
Provision for income taxes 62 25 92 58
- ----------------------------------------------------------------------
Income before extraordinary item 97 38 143 90
Extraordinary item, net of taxes - - - (2)
- ----------------------------------------------------------------------
Net income $ 97 $ 38 $ 143 $ 88
======================================================================
Basic per share:
Income before extraordinary item $ 1.15 $0.41 $ 1.67 $0.97
Extraordinary item, net of taxes - - - (0.02)
- ----------------------------------------------------------------------
Net income $ 1.15 $0.41 $ 1.67 $0.95
- ----------------------------------------------------------------------
Diluted per share:
Income before extraordinary item $ 1.14 $0.41 $ 1.66 $0.96
Extraordinary item, net of taxes - - - (0.02)
- ----------------------------------------------------------------------
Net income $ 1.14 $0.41 $ 1.66 $0.94
======================================================================
Average number of shares
outstanding:
Basic 84.6 92.3 85.5 92.3
Diluted 85.3 93.2 85.9 93.2
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 35
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF CASH FLOWS (Unaudited)
Georgia-Pacific Corporation-The Timber Company
Six Months Ended
-----------------
(In millions) July 3, 1999 June 30, 1998
--------------- ---------------
- -----------------------------------------------------------------------
<S> <C> <C>
Cash flows from operations
Net income $ 143 $ 88
Adjustments to reconcile net
income to Cash provided by operations:
Depreciation 3 2
Cost of timber harvested 19 19
Other income (86) -
Deferred income taxes 11 2
Gain on sales of assets (9) (14)
Change in other assets and other
Liabilities (2) 29
- -----------------------------------------------------------------------
Cash provided by operations 79 126
- -----------------------------------------------------------------------
Cash flows from investment activities
Property, plant and equipment
investments (1) (2)
Timber and timberlands purchases (25) (32)
Proceeds from sales of assets 95 25
- -----------------------------------------------------------------------
Cash provided by (used for)investment
activities 69 (9)
- ----------------------------------------------------------------------
Cash flows from financing activities
Share repurchases (93) (8)
Proceeds from option plan exercises 8 -
Repayments of long-term debt (20) (63)
Cash dividends paid (43) (46)
- -----------------------------------------------------------------------
Cash used for financing activities (148) (117)
- -----------------------------------------------------------------------
Increase in cash - -
Balance at beginning of period - - -
- -----------------------------------------------------------------------
Balance at end of period $ - $ -
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 36
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS
Georgia-Pacific Corporation-The Timber Company
(In millions) July 3, December 31,
1999 1998
----------- ------------
- ----------------------------------------------------------------------
ASSETS (Unaudited)
<S> <C> <C>
Timber and timberlands
Timberlands $ 301 $ 303
Fee timber 564 580
Reforestation 245 227
Other 40 34
- ------------------------------------------------------------------------
Total timber and timberlands 1,150 1,144
- ------------------------------------------------------------------------
Property, plant and equipment, less
accumulated depreciation of $45 and $42,
respectively 23 24
- ------------------------------------------------------------------------
Other assets 26 6
- ------------------------------------------------------------------------
Total assets $ 1,199 $ 1,174
======================================================================
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Debt $ 963 $ 983
- ------------------------------------------------------------------------
Other liabilities 51 32
- ------------------------------------------------------------------------
Deferred income tax liabilities 255 244
- ------------------------------------------------------------------------
Total liabilities 1,269 1,259
- ------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity (70) (85)
- ------------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 1,199 $ 1,174
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE> 37
NOTES TO COMBINED FINANCIAL STATEMENTS (Unaudited)
GEORGIA-PACIFIC CORPORATION-THE TIMBER COMPANY
APRIL 3, 1999
1. PRINCIPLES OF PRESENTATION. The combined financial statements
include the accounts of The Timber Company and subsidiaries.
All significant intercompany balances and transactions are
eliminated in consolidation. The interim financial information
included herein is unaudited; however, such information reflects
all adjustments which are, in the opinion of management,
necessary for a fair presentation of The Timber Company's
financial position, results of operations, and cash flows for
the interim periods. All such adjustments are of a normal,
recurring nature except for the item discussed in Note 3
below. Certain 1998 amounts have been reclassified to conform
with the 1999 presentation. The Timber Company's combined
financial statements should be read in conjunction with the
Corporation's consolidated financial statements and Georgia-
Pacific Group's combined financial statements.
On or about April 22, 1999, The Timber Company determined to
change its fiscal year from December 31 to end on the
Saturday closest to December 31. Additionally, The Timber
Company reports its quarterly periods on a 13-week basis
ending on a Saturday. The impact on the six months ended
July 3, 1999 of three additional days was not material.
There will be no transition period on which to report.
2. OTHER INCOME. During the second quarter of 1999, The Timber
Company sold approximately 390,000 acres of timberlands in the
Canadian province of New Brunswick and approximately 440,000
acres of timberlands in Maine for approximately $92 million and
recognized a pretax gain of $86 million ($52 million after tax,
or $0.61 diluted earnings per share).
3. EXTRAORDINARY ITEM. The Corporation called approximately $600
million of its outstanding debt during the first six months of
1998. As a result, an after-tax extraordinary charge of $2
million ($0.02) per share) was allocated to The Timber Company
during the first quarter of 1998 based on the ratio of The Timber
Company's debt to the Corporation's total debt.
4. EARNINGS PER SHARE. The Corporation's common stock was
redesignated in December 1997 to reflect separately the
performance of the Corporation's pulp, paper and building
products businesses, which are now known as Georgia-Pacific
Group. A separate class of common stock was distributed to
reflect the performance of the Corporation's timber operating
group, which is now known as The Timber Company. Basic earnings
per share is computed based on net income and the weighted
average number of common shares outstanding. Diluted earnings per
share reflect the annual issuance of common shares under long-
term incentive stock option and stock purchase plans. The
computation of diluted earnings per share does not assume
conversion or exercise of securities that would have an
antidilutive effect on earnings per share.
The following table provides earnings and per share data for The
Timber Company for 1999 and 1998.
<TABLE>
<CAPTION>
Three Months Ended Year to Date
------------------ ----------------
(In millions, except July 3, June 30, July 3, June 30,
per share amounts) 1999 1998 1999 1998
------- -------- ------- --------
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic and diluted income
available to shareholders
(numerator):
Income before extraordinary item $ 97 $ 38 $ 143 $ 90
Extraordinary item, net of taxes - - - (2)
- ---------------------------------------------------------------
Net income $ 97 $ 38 $ 143 $ 88
================================================================
Shares (denominator):
Average shares outstanding 84.6 92.3 85.5 92.3
Dilutive securities:
Stock incentive and option plans 0.6 0.8 0.4 0.8
Employee stock purchase plans 0.1 0.1 - 0.1
- ----------------------------------------------------------------
Total assuming conversion 85.3 93.2 85.9 93.2
================================================================
Basic per share amounts:
Income before extraordinary item $ 1.15 $ 0.41 $ 1.67 $ 0.97
Extraordinary item, net of taxes - - - (0.02)
Net income $ 1.15 $ 0.41 $ 1.67 $ 0.95
- ---------------------------------------------------------------
Diluted per share amounts:
Income before extraordinary item $ 1.14 $ 0.41 $ 1.66 $ 0.96
Extraordinary item, net of taxes - - - (0.02)
- ---------------------------------------------------------------
Net income $ 1.14 $ 0.41 $ 1.66 $ 0.94
================================================================
</TABLE>
<PAGE> 38
5. COMPREHENSIVE INCOME. The Timber Company's total
comprehensive income was $97 million and $143 million,
respectively, for the three months and six months ended July 3,
1999 and was $38 million and $88 million, respectively, for the
three months and six months ended June 30, 1998. Other
comprehensive income was insignificant for The Timber Company
during each of the three and six months ended July 3, 1999 and
June 30, 1998.
6. DEBT. In connection with the acquisition of Unisource, the
Corporation incurred $600 million of short-term bridge financing
until it closed on the issuance of the Premium Equity
Participating Security Units on July 7, 1999 (see below).
In June 1999, the Corporation renegotiated its accounts
receivable sale program and increased the amount outstanding
under the program from $280 million to $750 million. This
program is accounted for as a secured borrowing. The
receivables outstanding under this program and the
corresponding debt are included as current receivables and
short-term debt, respectively, on the Corporation's balance
sheets. 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. The program
expires in May 2000.
In connection with the acquisition of Unisource, the
Corporation retained former Unisource agreements to sell up
to $150 million of certain qualifying U.S. accounts
receivable and up to CN$95 million of certain eligible
Canadian accounts receivable. At July 3, 1999,
approximately $197 million was outstanding under these
programs. The receivables outstanding under these programs
and the corresponding debt are included as current
receivables and short-term debt, respectively on the
accompanying balance sheets. The agreements are accounted
for as a secured borrowing. As collections reduce
previously sold interests, new receivables may be sold.
These agreements expire in September, 1999.
Also in June 1999, the Board of Directors increased the
corporate target debt level under which management can
purchase shares of Georgia-Pacific Group and The Timber
Company common stock on the open market from $5.75 billion
to $6.8 billion. In addition, the Board of Directors
increased the Georgia-Pacific Group's target debt level from
$4.75 billion to $5.8 billion. The Timber Company's target
debt level remains at $1.0 billion.
As of July 3, 1999, the Corporation had a $1.5 billion
unsecured revolving credit facility which is used for direct
borrowings and as support for commercial paper and other
short-term borrowings. At July 3, 1999, $797 million was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5%
PEPS Units for $862.5 million. Each PEPS Unit had an issue
price of $50 and consists of a contract to purchase shares
of Georgia-Pacific Group common stock on or prior to August
16, 2002 and a senior deferrable note of Georgia-Pacific
Group due August 16, 2004. Each purchase contract yields
interest of 0.35% per year, paid quarterly, on the $50
stated amount of the PEPS Unit. Each senior deferrable note
yields interest of 7.15% per year, paid quarterly, until
August 16, 2002. On August 16, 2002, following a remarketing
of the senior deferrable notes, the interest rate will be
reset at a rate that will be equal to or greater than 7.15%.
The liability related to the PEPS Units will not be included
in the debt amount for purposes of determining the corporate
and Georgia-Pacific Group debt targets.
During the second quarter of 1999, the Corporation
registered for sale up to $2.975 billion of debt and equity
securities under a shelf registration statement filed with
the Securities and Exchange Commission, of which $1.725
billion relates to the PEPS Units ($862.5 million of which
was received on July 7, 1999, and $862.5 million is to be
received upon exercise of the purchase contracts).
7. SHARE REPURCHASES. During the first six months of 1999, The
Timber Company purchased on the open market approximately
3,946,000 shares of The Timber Company common stock at an
aggregate price of $95 million ($24.16 average per share).
Of these repurchased shares, approximately 3,855,000 shares
of The Timber Company common stock were held as treasury and
91,000 shares were purchased during the first six months of
1999 and settled after July 3, 1999. During the first six
months of 1998, The Timber Company purchased on the open
market 975,500 shares of The Timber Company common stock
at an aggregate price of $21 million ($21.53 average per share).
8. COMMITMENTS AND CONTINGENCIES. The Corporation is a party to
various legal proceedings incidental to the businesses of the
Georgia-Pacific Group and The Timber Company 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 very limited
coverage for environmental matters. The management of The Timber
Company believes that the Corporation has established adequate
reserves for probable losses with respect to such environmental
matters and legal proceedings. However, holders of The Timber
Company stock are shareholders of the Corporation and are subject
to all of the risks associated with an investment in the
Corporation, including the environmental matters and legal
proceedings involving the Georgia-Pacific Group discussed below.
COMMITMENTS AND CONTINGENCIES WITH RESPECT TO THE TIMBER
COMPANY. The Timber Company is subject to various legal
proceedings and claims that arise in the ordinary course of
its business. Although the ultimate outcome of these matters
and legal proceedings cannot be determined with certainty,
based on presently available information, management of the
Corporation believes that the final outcome of such matters
and legal proceedings could be material to the operating
results of The Timber Company in any given quarter or year,
but will not have a material adverse effect on the long-term
results of operations, liquidity or financial position of
The Timber Company.
COMMITMENTS AND CONTINGENCIES WITH RESPECT TO GEORGIA-PACIFIC GROUP.
The following sets forth legal proceedings to which the Corporation
is a party and claims related to the operations of the Georgia-Pacific
Group.
The Corporation is involved in environmental remediation
activities at approximately 176 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 46 percent are being investigated, approximately
30 percent are being remediated and approximately 24 percent are
being monitored (an activity that 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 multiparty 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 that 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 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 $56 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.
<PAGE> 39
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, or
that any injuries they have incurred in fact resulted from
exposure to the Corporation's products.
The Corporation generally settles asbestos cases for amounts it
considers reasonable given the facts and circumstances of each
case. The amounts it has paid to date to defend and settle these
cases have been substantially covered by product liability
insurance. The Corporation is currently defending claims of
approximately 73,000 such plaintiffs as of July 26, 1999 and
anticipates that additional suits will be filed against it over
the next several years. The Corporation has insurance available
in amounts that 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 has also established a receivable
for expected insurance recoveries.
On May 6, 1998, suit was filed in state court in Columbus, Ohio,
against the Corporation and Georgia-Pacific Resins, Inc., a
wholly owned subsidiary of the Corporation. The lawsuit was
filed by eight plaintiffs who seek to represent a class of
individuals who at any time from 1985 to the present lived,
worked, resided, owned, frequented or otherwise occupied
property located within a three-mile radius of the Corporation's
resins manufacturing operation in Columbus, Ohio. The lawsuit
alleges that the individual plaintiffs and putative class
members have suffered personal injuries and/or property damage
because of (i) alleged "continuing and long-term releases and
threats of releases of noxious fumes, odors and harmful
chemicals, including hazardous substances" from the
Corporation's operations and/or (ii) a September 10, 1997
explosion at the Columbus facility and alleged release of
hazardous material resulting from that explosion. Prior to the
lawsuit, the Corporation had received a number of explosion-
related claims from nearby residents and businesses. These
claims were for property damage, personal injury and business
interruption and were being reviewed and adjusted on a case-by-
case basis. The Corporation has denied the material allegations
of the lawsuit. While it is premature to evaluate the claims
asserted in the lawsuit, the Corporation believes it has
meritorious defenses.
On July 28, 1999 the Corporation and the Attorney General of
the State of Florida entered into a Settlement Agreement
pursuant to which the State will dismiss its claims against
the Corporation alleging a conspiracy to fix the prices of
sanitary commercial paper products. The Settlement
Agreement states that the Attorney General is dismissing its
claims consistent with its responsibilities and that the
Corporation continues to deny that there is any evidence
that it engaged in the alleged price fixing conspiracy. The
Corporation will donate 271 acres of real property in Levy
County, Florida, which has minimal commercial value, to the
State of Florida for recreational purposes.
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 effect on the long-
term results of operations, liquidity or consolidated financial
position of the Corporation.
<PAGE> 40
9. RELATED PARTY TRANSACTIONS. During 1999 and 1998, The
Timber Company sold timber deeds to Georgia-Pacific Group. The
Timber Company recognizes revenues and earnings from these
related party timber deed contracts as the timber is cut by the
Georgia-Pacific Group. Had The Timber Company recognized
revenues and earnings on these related party timber deed
contracts at the time of the agreement (which is the accounting
policy for timber deed sales to third parties), pro forma net
sales, depreciation and cost of timber harvested, income before
income taxes and extraordinary item, net income and basic and
diluted earnings per share would have been as follows:
<TABLE>
<CAPTION>
Georgia-Pacific Corporation-The Timber Company
Three Months Ended Three Months Ended
July 3, 1999 June 30, 1998
------------------ ------------------
(In millions, except per share As Pro As Pro
amounts) Reported forma Reported forma
(a) (a)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $ 135 $ 131 $ 119 $ 143
Depreciation and cost of timber
harvested 11 10 7 9
Income before income taxes and
Extraordinary item 159 155 63 85
Net income 97 95 38 51
Basic earnings per share 1.15 1.12 0.41 0.55
Diluted earnings per share 1.14 1.11 0.41 0.55
============================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
July 3, 1999 June 30, 1998
---------------- ----------------
(In millions, except per share As Pro As Pro
amounts) Reported forma Reported forma
(a) (a)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $ 274 $ 268 $ 264 $ 288
Depreciation and cost of timber
harvested 22 21 21 23
Income before income taxes and
Extraordinary item 235 230 148 170
Net income 143 140 88 101
Basic earnings per share 1.67 1.64 0.95 1.09
Diluted earnings per share 1.66 1.63 0.94 1.08
============================================================
</TABLE>
(a) Reported on a pro forma basis as if The Timber Company
had recognized revenues and earnings on timber deed sales to
Georgia-Pacific Group at the time of the contract, which is
the accounting treatment utilized in the case of timber
deeds sold to third parties.
<PAGE> 41
<TABLE>
<CAPTION>
SELECTED COMBINED SALES DATA (Unaudited)
Georgia-Pacific Corporation-The Timber Company
Three Months Ended Year to Date
------------------ -----------------
July 3, June 30, July 3, June 30,
1999 1998 1999 1998
------- ------- ------- -------
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
VOLUME (in thousand tons)
Southern softwood sawtimber 1,686 1,055 3,634 2,870
Western softwood sawtimber 398 468 697 769
Softwood pulpwood 1,091 852 2,193 1,987
Hardwood sawtimber 105 91 228 158
Hardwood pulpwood 453 454 942 936
- ----------------------------------------------------------------------
Total volume 3,733 2,920 7,694 6,720
======================================================================
SELLING PRICES (per ton)
Southern softwood sawtimber $ 46 $ 55 $ 47 $ 53
Western softwood sawtimber 85 73 79 72
Softwood pulpwood 13 18 13 16
Hardwood sawtimber 36 32 32 34
Hardwood pulpwood 5 10 7 11
- ----------------------------------------------------------------------
Weighted average price 35 39 35 39
======================================================================
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
SECOND QUARTER 1999 COMPARED WITH SECOND QUARTER 1998
The Timber Company reported net sales of approximately $135 and
$119 million for the second quarter of 1999 and 1998,
respectively. Net income for the 1999 second quarter was $97
million, or $1.14 diluted earnings per share, compared with $38
million, or $0.41 diluted earnings per share, in 1998. The 1999
results included a one-time, after-tax gain of $52 million ($0.61
cents diluted earnings per share) from the sale of company
timberlands in Maine and New Brunswick.
Timber sales increased $17 million, from $114 million in the
second quarter of 1998 to $131 million in the second quarter of
1999, primarily as a result of strong Southern sawtimber harvest
volumes and an increase in Western sawtimber prices. Southern
sawtimber harvest volumes increased 60 percent compared to the
second quarter of 1998, which substantially offset the 16%
decrease in price for the same period. Total second quarter
harvest volumes were up due to a strong increase in demand for
building products as well as recovering Asian markets, and were
approximately 28 percent higher than the same period in 1998. In
addition, softwood pulpwood volume increased 28 percent compared
to second quarter 1998. Western sawtimber volumes decreased 15
percent compared to the second quarter of 1998, due in part to
the wet weather in the Northwest. The decline in volume for
Western sawtimber was fully offset by a 16% increase in price for
the same period. Additionally, The Timber Company increased its
total sales volume to third parties from 25 percent in the second
quarter of 1998 to 32 percent in the second quarter of 1999.
Total 1999 harvest volumes are anticipated to remain comparable
to 1998. Some harvest volumes are expected to shift from the
third quarter of 1999 to the fourth quarter of 1999 in order to
take advantage of expected better pricing in the fourth quarter.
As a result of the land sales in the Northeast, The Timber
Company expects hardwood pulpwood harvest volumes to be slightly
lower for the year.
Southern sawtimber prices decreased 16 percent from record levels
in 1998 due in part to the dry ground conditions in the south and
a change in the operating policy between The Timber Company and
The Georgia-Pacific Group. This operating policy change, which
was effective July 1, 1998, impacted the prices for southern
timber by adjusting them monthly, rather than quarterly. The
decline in Southern sawtimber prices was offset by strong demand
in the building products business. Softwood pulpwood prices were
down 28 percent compared to the second quarter of 1998 due to a
combination of dry weather, the change in the operating policy
between The Timber Company and The Georgia-Pacific Group (as
described above) and pulp mill curtailments and/or shutdowns.
Increased harvest volumes helped to mitigate the impact of this
softening in price. Hardwood pulpwood prices also continued to
drop, as expected. Western sawtimber prices increased 16 percent
quarter over quarter, primarily due to a significant increase in
Douglas Fir prices driven by recovering Asian markets.
The Timber Company expects Southern sawtimber prices to trend
upward, though the prices will vary across the basins. In the
south, seasonally wet weather may impact available harvestable
timber supply which should translate into rising prices. Prices
for pulpwood are stabalizing, but notable increases are not
anticipated before the end of the year without significant wet
weather conditions. The Timber Company expects pricing of
Western sawtimber to continue to remain strong with some
improvements expected in the fourth quarter as the log export
markets continue to recover.
Excluding the pre-tax gain on the sale of timberlands in Maine
and New Brunswick of $86 million in the second quarter of 1999,
earnings before interest and taxes increased $10 million from the
same period a year ago to $90 million in the second quarter of
1999. The 13 percent increase resulted from a mix of higher
harvest volumes and improved sales to third parties.
Selling, general and administrative expense was $10 million for
the second quarter 1999 compared with $9 million for the same
period in 1998.
Interest expense remained unchanged at $17 million for both the
second quarters of 1999 and 1998. Interest on slightly higher
debt levels in the second quarter of 1999 compared with the 1998
second quarter, was offset by a decrease in the weighted average
interest rate.
YEAR-TO-DATE SECOND QUARTER 1999 COMPARED WITH YEAR-TO-DATE
SECOND QUARTER 1998
The Timber Company reported net sales of approximately $274
million and net income of $143 million, or $1.66 diluted earnings
per share, for the six-month period ended July 3, 1999 compared
to net sales of $264 million and net income of $88 million, or
$0.94 cents diluted earnings per share, for the six-months ended
June 30, 1998. The 1999 results included a one-time, after-tax
gain of $52 million ($0.61 cents diluted earnings per share) from
the sale of company timberlands in Maine and New Brunswick. The
1998 results included an extraordinary, after-tax loss of $2
million, or $0.02 diluted earnings per share, for the early
retirement of debt.
Timber sales increased $13 million year-to-date, from $255
million as of June 30, 1998 to $268 million as of July 3, 1999,
primarily as a result of strong Southern sawtimber harvest
volumes and an increase in Western sawtimber prices. Southern
sawtimber harvest volumes increased 27 percent compared to the
first half of 1998, which substantially offset the decrease in
price for the same period. Total harvest volumes were up 14
percent due to a continued increase in demand for building
products as well as recovering Asian markets; however, full year
1999 volumes are expected to remain relatively constant with
1998 full year harvest levels. In addition, softwood pulpwood
sawtimber volume increased 10 percent compared to the first half
of 1998. Western sawtimber volumes decreased 9 percent compared
to the first six-months of 1998 due in part to the wet weather in
the Northwest during the second quarter of 1999. The decline in
volume for Western sawtimber was mostly offset by an increase in
price for the same period. Additionally, The Timber Company
increased its total sales volume to third parties from 28 percent
in the first half of 1998 to 35 percent in the first half of
1999.
Southern sawtimber prices decreased 11 percent from record levels
in 1998 due in part to the dry ground conditions in the south and
a change in the operating policy between The Timber Company and
The Georgia-Pacific Group. This operating policy change, which
was effective July 1, 1998, impacted the prices for southern
timber by adjusting them monthly, rather than quarterly. The
decline in Southern sawtimber prices was offset by strong demand
in the building products business. Softwood pulpwood prices were
down 19 percent compared to the first half of 1998 due to a
combination of dry weather, the change in the operating policy
between The Timber Company and The Georgia-Pacific Group (as
described above) and pulp mill curtailments and/or shutdowns.
Though pulp and paper pricing is beginning to recover, prices and
demand remain below last year levels. Increased harvest volumes
helped to mitigate the impact of this softening in price.
Hardwood pulpwood prices also continued to drop, as anticipated.
Western sawtimber prices increased 9 percent year over year,
primarily due to a significant increase in Douglas Fir prices in
the second quarter of 1999 driven by recovering Asian markets.
Also contributing was the continued increased demand in the
building products business that was initially experienced towards
the end of the first quarter 1999.
Excluding the pre-tax gain on the sale of timberlands in Maine
and New Brunswick of $86 million in the second quarter of 1999,
earnings before interest and taxes increased $1 million to $184
million in the first six-months of 1999 compared with $183
million in the first six-months of 1998. Overall, 15 percent
higher total harvest volumes helped to offset the year over year
10 percent decline in average sales price.
Selling, general and administrative expense was $20 million for
the first half of 1999 compared with $18 million for the same
period in 1998.
Interest expense remained unchanged at $35 million for both the
first half of 1999 and 1998. Interest on slightly higher debt
levels in the second quarter of 1999 compared with the 1998
second quarter, was offset by a decrease in the weighted average
interest rate.
<PAGE> 42
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. The Timber Company generated cash from
operations of $79 million during the six-months ended July 3,
1999 compared with $126 million for the same period a year ago.
The decrease is due in part to the cash received from the sale of
a timber deed sold to The Georgia-Pacific Group in the second
quarter of 1998 for approximately $23 million and to taxes paid
on gains from the 1999 timberland sales.
INVESTING ACTIVITIES. Expenditures during the first half of 1999
were $26 million of which $22 is related to silvicultural
investments. Expenditures for the same period in 1998 totaled $34
million, with $18 million related to silvicultural investments.
The Timber Company expects to invest approximately $50 million in
1999, without considering the cost of any acquisitions, primarily
for silvicultural investments.
Proceeds from sales of assets were $95 million for the first six-
months of 1999. In addition to miscellaneous land sales, during
the second quarter of 1999, The Timber Company sold approximately
390,000 acres of timberlands in the Canadian province of New
Brunswick and approximately 440,000 acres of timberlands in Maine
for approximately $92 million. In conjunction with the sale of
the Maine timberlands, the Corporation received notes receivable
from the purchaser for approximately $51 million. The
Corporation expects to monetize these notes through the issuance
of notes payable in a private placement during the second half of
1999. These notes are included in "Other Assets" on the
Corporation's balance sheet at July 3, 1999. The proceeds from
both these timberland sales are reflected as "Proceeds from sales
of assets" on The Timber Company's Statements of Cash Flows. The
proceeds received by The Timber Company were used primarily to
repurchase shares of The Timber Company's stock. During the first
six-months of 1998, The Timber Company received $25 million in
proceeds from the sale of assets, principally real estate
development properties located in South Carolina and Florida.
These proceeds were used to repay outstanding debt.
In June, 1999, The Timber Company announced that it intends to
sell approximately 196,000 acres of redwood and Douglas fir
timberlands located in northern California. The Georgia-Pacific
Group's Fort Bragg sawmill has a supply agreement with The Timber
Company which extends through the end of 1999.
The Timber Company expects to continue to optimize its timber
portfolio for the remainder of 1999, selling selected properties
that have a greater alternative value, (as conservation,
commercial or recreational sites). There are currently
approximately 125,000 acres of scattered parcels which have been
identified for such sales.
FINANCING ACTIVITIES. The Corporation's total debt was $7.07
billion and $5.55 billion at July 3, 1999 and December 31, 1998,
respectively, of which $963 and $983 million, respectively, was
The Timber Company's debt.
In June 1999, the Corporation renegotiated its accounts
receivable sale program and increased the amount outstanding
under the program from $280 million to $750 million. This
program is accounted for as a secured borrowing. The receivables
outstanding under this program and the corresponding debt are
included as current receivables and short-term debt,
respectively, on the Corporation's balance sheets. 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. The program expires in May 2000.
In connection with the acquisition of Unisource, the Corporation
retained former Unisource agreements to sell up to $150 million
of certain qualifying U.S. accounts receivable and up to CN$95
million of certain eligible Canadian accounts receivable. As of
July 3, 1999, approximately $197 million was outstanding under
these programs. The receivables outstanding under these programs
and the corresponding debt are included as current receivables
and short-term debt, respectively on the Corporation's balance
sheet. The agreements are accounted for as a secured borrowing.
As collections reduce previously sold interests, new receivables
may be sold. These agreements expire in September 1999.
Also in June 1999, the Board of Directors increased the corporate
target debt level under which management can purchase shares of
Georgia-Pacific Group and The Timber Company common stock on the
open market from $5.75 billion to $6.8 billion. In addition, the
Board of Directors increased the Georgia-Pacific Group's target
debt level from $4.75 billion to $5.8 billion. The Timber
Company's target debt level remains at $1.0 billion.
<PAGE> 43
During the first six months of 1999, approximately $70 million of
fixed and floating rate industrial revenue bonds were replaced,
of which $57 million were refunded by fixed rate instruments and
$13 million were refunded by variable rate instruments.
At July 3, 1999, the Corporation had a $1.5 billion unsecured
revolving credit facility which is used for direct borrowings and
as support for commercial paper and other short-term borrowings.
As of July 3, 1999, $797 million of committed credit was
available in excess of all short-term borrowings outstanding
under or supported by the facility. On July 22, 1999, the
Corporation increased the amount of this unsecured credit
facility to $2.0 billion.
On July 7, 1999, the Corporation issued 17,250,000 of 7.5% PEPS
Unitsfor $862.5 million. Each PEPS Unit had an issue price of
$50 and consists of a contract to purchase shares of Georgia-
Pacific Group common stock on or prior to August 16, 2002 and a
senior deferrable note of Georgia-Pacific Group due August 16,
2004. Each purchase contract yields interest of 0.35% per year,
paid quarterly, on the $50 stated amount of the PEPS Unit. Each
senior deferrable note yields interest of 7.15% per year, paid
quarterly, until August 16, 2002. On August 16, 2002, following a
remarketing of the senior deferrable notes, the interest rate
will be reset at a rate that will be equal to or greater than
7.15%. The liability related to the PEPS Units will not be
included in the debt amount for purposes of determining the
corporate and Georgia-Pacific Group debt targets.
The Corporation's senior management establishes the parameters of
the Corporation's financial risk, which have been approved by the
Board of Directors. Hedging interest rate exposure through the
use of swaps and options and hedging foreign exchange exposure
through the use of forward contracts are specifically
contemplated to manage risk in keeping with the management
policy. Derivative instruments, such as swaps, forwards, options
or futures, which are based directly or indirectly upon interest
rates, currencies, equities and commodities, may be used by the
Corporation to manage and reduce the risk inherent in price,
currency and interest rate fluctuations.
The Corporation does not utilize derivatives for speculative
purposes. Derivatives are transaction-specific so that a specific
debt instrument, contract or invoice determines the amount,
maturity and other specifics of the hedge. Counterparty risk is
limited to institutions with long-term debt ratings of A or
better.
The table below presents principal (or notional) amounts and
related weighted average interest rates by year of expected
maturity for the Corporation's debt obligations as of July 3,
1999. For obligations with variable interest rates, the table
sets forth payout amounts based on current rates and does not
attempt to project future interest rates.
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(In millions) 1999 2000 2001 2002
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - - - -
Average interest rates - - - -
Notes and debentures $ 4 - - $ 300
Average interest rates 25.4% - - 10.0%
Revenue bonds $ 8 $ 24 $ 6 $ 74
Average interest rates 3.5% 4.3% 3.9% 2.5%
Other loans - $ 13 - -
Average interest rates - 8.0% - -
Accounts receivable sale program - - - -
Average interest rates - - - -
Notional principal amount
of interest rate exchange
agreements $ 100 $ 177 - $ 131
Average interest rate paid
(fixed) 6.6% 7.5% - 6.1%
Average interest rate received 5.4% 5.1% - 6.1%
(variable)
- ------------------------------------------------------------
</TALBE>
Georgia-Pacific Corporation and Subsidiaries
</TABLE>
<TABLE>
<CAPITON>
(In millions) Fair value
July 3,
2003 Thereafter Total 1999
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Commercial paper and other
short-term notes - $ 1,758 $ 1,758 $ 1,758
Average interest rates - 5.9% 5.9% 5.9%
Notes and debentures $ 300 $ 2,900 $ 3,504 $ 3,591
Average interest rates 4.9% 8.6% 8.4% 8.4%
Revenue bonds - $ 532 $ 644 $ 550
Average interest rates - 5.2% 4.8% 4.8%
Other loans $ 14 - $ 27 $ 27
Average interest rates 5.7% - 6.8% 6.8%
Accounts receivable sale program - $ 947 $ 947 $ 947
Average interest rates - 5.3% 5.3% 5.3%
Notional principal amount of
interest rate exchange
agreements $ 300 - $ 708 $ (6)
Average interest rate paid
(fixed) 5.9% - 6.3% 6.3%
Average interest rate received
(variable) 5.1% - 5.3% 5.3%
------------------------------------------------------------
</TABLE>
The Corporation has the intent and ability to refinance
commercial paper, other short-term notes and the accounts
receivable sale program as they mature. Therefore, maturities of
these obligations are reflected as cash flows expected to be made
after 2003. The fair value of interest rate exchange agreements
excludes amounts used to determine the fair value of related
notes and debentures.
At July 3, 1999, the Corporation's weighted average interest rate
on its total debt was 6.9% including the accounts receivable sale
program and outstanding interest rate exchange agreements. At
July 3, 1999, these interest rate exchange agreements effectively
converted approximately $400 million of floating rate obligations
with a weighted average interest rate of 5.1% to fixed rate
obligations with an average effective interest rate of 6.5%.
These agreements have a weighted average maturity of
approximately 3.4 years. As of July 3, 1999, the Corporation's
total floating rate debt, including the accounts receivable sale
program, exceeded related interest rate exchange agreements by
$2.2 billion.
The Corporation also enters into foreign currency exchange
agreements and commodity futures and swaps, the amounts of which
were not material to the consolidated financial position of the
Corporation at July 3, 1999.
As of July 3, 1999, the Corporation had registered for sale up to
$2.975 billion of debt and equity securities under a shelf
registration statement filed with the Securities and Exchange
Commission, of which $1.725 billion relates to the PEPS Units
($862.5 million of which was received on July 7, 1999, and $862.5
million is to be received upon exercise of the purchase
contracts). Proceeds from the issuance of securities under this
registration statement may be used for general corporate
purposes, including the reduction of short-term debt,
acquisitions, investments in, or extension or credit to, the
Corporation's subsidiaries and the acquisition of real property.
During the first six months of 1999, The Timber Company purchased
on the open market approximately 3,946,000 shares of The Timber
Company common at an aggregate price of $95 million ($24.16
average per share). Of these repurchased shares, approximately
3,855,000 shares of The Timber Company common stock were held as
treasury and 91,000 shares were purchased during the first six
months of 1999 and settled after July 3, 1999.
During the first six months of 1998, The Timber Company purchased
on the open market 975,500 shares of The Timber Company common
stock at an aggregate price of $21 million ($21.53 average per
share).
<PAGE> 44
Subsequent to July 3, 1999 through August 2, 1999, The Timber
Company purchased on the open market approximately 595,300 shares
of The Timber Company stock at an aggregate price of $15 million
($25.46 average per share). The Timber Company expects to
repurchase shares of The Timber Company common stock throughout
1999 as long as debt levels are below the established thresholds.
During the first six months of 1999, The Timber Company received
$8 million from the exercise of options to purchase The Timber
Company common stock.
During the first six months of 1999 and 1998, The Timber Company
paid $43 million and $46 million, respectively, in dividends.
In 1999, The Timber Company 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. In July 1999, the Financial Accounting Standards Board
("FASB") issued SFAS No. 137, providing for a one year delay of
the effective date of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"("SFAS No. 133"). SFAS No. 133
establishes accounting and reporting standards for derivative
instrument and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities on the
balance sheet and measure those instruments at fair value.
Georgia-Pacific Corporation will be required to adopt SFAS No.
133 in 2001. Management is evaluating the effect of this
statement on Georgia-Pacific's derivative instruments: primarily
interest rate swaps, foreign currency forward contracts and long-
term purchase commitments. The impact of adjustments to fair
value is not expected to be material to The Timber financial
position.
The Timber Company is working to resolve the effects of the Year
2000 problem on its information systems. The Year 2000 problem,
which is common to most businesses, concerns the inability of
such systems to properly recognize and process dates and date-
sensitive information on and beyond January 1, 2000. In 1996, the
Corporation began a companywide assessment of the vulnerability
of its systems to the Year 2000 problem. Based on such
assessment, The Timber Company has developed a Year 2000 plan,
under which all of its key information systems are being tested,
and noncompliant software or technology is being modified or
replaced. The Timber Company is also surveying the Year 2000
compliance status and compatibility of customers' and suppliers'
systems that interface with The Timber Company's systems or could
otherwise impact The Timber Company's operations.
The Timber Company has completed testing and verification of its
systems and processes for Year 2000 readiness. The Timber Company
completed an inventory of the systems and embedded chips used in
its operations and found that only a small percentage of such
systems and chips could be subject to Year 2000 problems. The
work needed to resolve the Year 2000 problem with regard to its
operations was performed as part of normal systems maintenance
and replacement practices. The Timber Company did not accelerate
its internal maintenance schedule or incur any incremental cost
for such work. Internal and external costs to resolve the Year
2000 problem are not significant. The Timber Company continues
its process of identifying critical suppliers and customers and
communicating with each of them to ascertain their level of
readiness to address and remediate Year 2000 problems. The most
reasonably likely worst-case scenario of failure by The Timber
Company or its customers or suppliers to resolve the Year 2000
problem would be a temporary inability on the part of The Timber
Company to process timber sales and billings in a timely manner.
The Timber Company is currently identifying and considering
various contingency options, including identification of
alternate suppliers, vendors and service providers, and manual
alternatives to systems operations, which will allow it to
minimize the risks of any unresolved Year 2000 problems on its
operations and to minimize the effect of any unforeseen Year 2000
failures.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR' PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The
statements under this "Management's Discussion and Analysis" and
other statements contained herein that are not historical facts,
including statements regarding pricing trends, expected harvest
rotations and The Timber Company's expectations regarding
resolution of issues associated with the Year 2000 problem, are
forward-looking statements (as such term is defined under the
Private Securities Litigation Reform Act of 1995) based on
current expectations. The accuracy of such statements is subject
to a number of risks, uncertainties and assumptions. In addition
to the risks, uncertainties and assumptions discussed elsewhere
herein, factors that could cause or contribute to actual results
differing materially from such forward-looking statements include
the following: the effect on The Timber Company of government,
legislative and environmental restrictions; catastrophic losses
from fires, floods, windstorms, earthquakes, volcanic eruptions,
insect infestations or diseases; material variations in regional
market demand for timber products; fluctuations in interest
rates; the ability of The Timber Company, and its customers and
suppliers, to address the Year 2000 problem in a timely and
efficient manner; and other risks, uncertainties and assumptions
discussed in the Corporation's filings with the Securities and
Exchange Commission, including the Corporation's Form 10-K dated
December 31, 1998, the Corporation's Quarterly Report on Form 10-
Q for the quarter ended April 3, 1999, and the Corporation's Form
8-K dated October 17, 1996.
For a discussion of commitments and contingencies refer to Note 8
of the Notes to Combined Financial Statements.
<PAGE> 45
PART II - OTHER INFORMATION
---------------------------
GEORGIA-PACIFIC CORPORATION
JULY 3, 1999
Item 1. Legal Proceedings
The information contained in Note 12 "Commitments and
Contingencies" of the Notes to Consolidated Financial
Statements--Georgia-Pacific Corporation, Note 10
`"Commitments and Contingencies" of the Notes to
Combined Financial Statements--Georgia-Pacific Group
and Note 9 "Commitments and Contingencies" of the Notes
to Consolidated Financial Statements--The Timber
Company filed as part of this Quarterly Report on Form
10-Q is incorporated herein by reference.
The Grand Rapids gypsum plants have received several
Letters (notices) of Violation from the Michigan
Department of Environmental Quality (DEQ) alleging
violations of various state air requirements. The
Corporation has equitable and/or legal defenses for
these claims and expects to contest these allegations
vigorously. Preliminary negotiations with the DEQ have
been held, and the Corporation anticipates being able
to negotiate a settlement of these issues with the DEQ.
No penalties have been assessed to date.
On July 28, 1999 the Corporation and the Attorney
General of the State of Florida entered into a
Settlement Agreement pursuant to which the State will
dismiss its claims against the Corporation alleging a
conspiracy to fix the prices of sanitary commercial
paper products. The Settlement Agreement states that
the Attorney General is dismissing its claims
consistent with its responsibilities and that the
Corporation continues to deny that there is any
evidence that it engaged in the alleged price fixing
conspiracy. The Corporation will donate 271 acres of
real property in Levy County, Florida, which has minimal
commercial value, to the State of Florida for recreational
purposes.
The Nekoosa pulp mill has recently received an
Information Request from the EPA pursuant to Section
114 of the Clean Air Act. The Corporation has
responded thereto and is awaiting reaction from the
agency. The request was part of the national
enforcement initiative EPA is pursuing against the
industry.
On June 21, 1999, an Unilateral Administrative Order
for Removal was issued to the Corporation, by the U.S.
Environmental Protection Agency ("EPA") Region IV
pursuant to the Comprehensive Environmental
Compensation and Liability Act (CERCLA). The removal
action pertains to a hardwood sawmill site located in
Plymouth, North Carolina (the "Site") which was sold by
the Corporation in 1985. The EPA completed a Remedial
Investigation at the Site in 1998, and based on the
analytical results generated during implementation of
the Remedial Investigation, the EPA determined that a
removal action was necessary. The Corporation is
cooperating and expects the removal to be completed in
1999.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Corporation was
held on May 4, 1999. At the annual meeting, the following
matters were voted on:
Shareholders elected three directors for three-year
terms expiring at the Annual Meeting in 2002, or until
their successors are elected and qualified. The vote
tabulation for individual directors was:
Directors For Withheld
James S. Balloun 93,027,049 531,915
Robert Carswell 92,715,003 843,961
Alston D. Correll 93,039,865 519,098
Other directors whose term of office as a director
continued after the meeting were Jane Evans, Donald V.
Fites, Harvey C. Fruehauf, Jr., Richard V. Giordano,
David R. Goode, M. Douglas Ivester, Louis W. Sullivan,
M.D. and James B. Williams.
A shareholder proposal requesting the Board to promptly
close the Corporation's remaining elemental chlorine
generator, and to report by the 2000 meeting on plans
to phase-out chlorine-based compounds was defeated with
77,312,548 votes against, 2,468,336 votes in favor and
3,886,045 votes abstaining.
A shareholder proposal requesting that the Board redeem
the shareholder rights plan unless such plan is approved
by the affirmative vote of the shareholders or to submit
the continuation of the rights plan to a vote of the
shareholders was approved with 58,990,165 votes in
favor, 23, 232,891 votes against and 991,754 votes
abstaining.
The text of the above proposals is incorporated by
reference to Items 2 and 3 of the Corporation's
definitive Proxy Statement dated March 31, 1999, filed
with the SEC pursuant to Regulation 14A on March 31,
1999.
Item 5 Other Events
1) The Corporation paid a stock dividend on Georgia-
Pacific Group Stock on June 3, 1999 which was
distributed, by book-entry to holders of record of
Georgia-Pacific Group Stock as of May 14, 1999.
Holders of Georgia-Pacific Group Stock received one
share of such stock for each share held as of such
record date.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 2 Agreement and Plan of Merger, dated as
of May 25, 1999, among Georgia-Pacific
Corporation, Atlanta Acquisition Corp.
and Unisource Worldwide, Inc. (filed
as Exhibit (c)(1) to Tender Offer
Statement filed on Schedule 14D-1
(File No. 5-51073) and incorporated
herein by this reference thereto).
Exhibit 3.2 Bylaws, as amended to date.
Exhibit 4.1 Form of Purchase Contract Agreement
relating to Stock Purchase Contracts
and Stock Purchase Units (filed as
Exhibit 4(p) to the Company's
Registration Statement No. 333-80757
and incorporated herein by this
reference thereto).
Exhibit 4.2 Form of Pledge Agreement for Stock
Purchase Contracts and Stock Purchase
Units (filed as Exhibit 4(q) to the
Company's Registration Statement on
Form 8-A relating to File No.333-
35813, and incorporated herein by this
reference thereto).
Exhibit 4.3 Form of Remarketing Agreement between
Georgia-Pacific Corporation and Morgan
Stanley & Co. Incorporated (filed as
Exhibit 4(u) to the Company's
Registration Statement No. 333-80757
and incorporated herein by this
reference thereto).
Exhibit 4.4 Form of Stock Purchase Units (included
as Exhibits A and B of Exhibit 4.3)
(filed as Exhibit 4(v) to the
Company's Registration Statement No.
333-80757 and incorporated herein by
this reference thereto).
Exhibit 4.5 Form of Credit Agreement, dated as of
June 30, 1999, among Georgia-Pacific
Corporation, the Lenders amended
therein and Morgan Stanley Senior
Funding, Inc., as Agent for the
Lenders and as Lead Arranger and Book
Manager (filed as Exhibit 4(w) to the
Company's Registration Statement No.
333-80757 and incorporated herein by
this reference thereto).
Exhibit Credit Agreement, dated as of July 22,
10.1 1999, among Georgia-Pacific
Corporation, the Lenders Named
therein, Bank of America National
Trust and Savings Association, as
Administrative Agent, Commerzbank AG,
New York Branch, as Documentation
Agent, and The Chase Manhattan Bank
and Citibank, N.A. as Co-Syndication
Agents, Banc of America Securities LLC
as Sole Book Manager and Sole Lead
Arranger
Exhibit Credit Agreement, dated as of July 22,
10.2 1999, among North American Timber
Corp., the Lenders Named therein, Bank
of America National Trust and Savings
Association, as Administrative Agent,
Commerzbank AG, New York Branch, as
Documentation Agent, and The Chase
Manhattan Bank and Citibank, N.A. as
Co-Syndication Agents, Banc of America
Securities LLC as Sole Book Manager
and Sole Lead Arranger
Exhibit Form of Parent (Georgia-Pacific
10.3 Corporation) Guaranty (included as
7.01(c) Exhibit 10.2)
Exhibit 27. Financial Data Schedule.
(b) The Corporation filed the following Current
Reports on Form 8-K during and subsequent to the
end of the quarter ended July 3, 1999:
Date of 8-K Description of 8-K
May 4, 1999 Submitted a copy of the
Corporation's News Release issued
May 4, 1999, reporting the
Corporation's announcement of (i) a
stock split of the Georgia-Pacific
Group common stock; (ii) a quarterly
dividend payable on each of the
Corporations common stocks, Georgia-
Pacific Group and the Timber
Company; and (iii) the dismantling
of a hardwood pulp dryer.
June 22, 1999 Submitted a copy of the
Corporation's News Release issued
June 22, 1999, reporting Georgia-
Pacific Group's estimated earnings
for the quarter ended July 3, 1999.
June 28, 1999 Submitted a copy of the
Corporation's News Release issued
June 25, 1999, reporting that
Georgia-Pacific Group signed a
Letter of Intent regarding a
possible joint venture with
Chesapeake Corporation in their
respective away-from-home tissue
businesses.
July 15, 1999 Filed pursuant to "Item 2 -
Acquisition or Disposition of
Assets" regarding the corporation's
successful tender offer and its
wholly owned subsidiary's subsequent
merger with Unisource Worldwide,
Inc. on July 6, 1999.
<PAGE> 46
SIGNATURES
Pursuant to the requirements 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.
Date: August 17, 1999 GEORGIA-PACIFIC CORPORATION
(Registrant)
by /s/John F. McGovern
-----------------------
John F. McGovern,
Executive Vice President -
Finance and Chief
Financial Officer
by /s/James E. Terrell
-----------------------
James E. Terrell,
Vice President and Controller
(Chief Accounting Officer)
<PAGE> 47
GEORGIA-PACIFIC CORPORATION
---------------------------
INDEX TO EXHIBITS
FILED WITH THE QUARTERLY REPORT
ON FORM 10-Q FOR THE
QUARTER ENDED JULY 3, 1999
Number Description
3.2 Bylaws, as amended to date.(1)
10.1 Credit Agreement, dated as of July 22,
1999, among Georgia-Pacific
Corporation, the Lenders Named therein,
Bank of America National Trust and
Savings Association, as Administrative
Agent, Commerzbank AG, New York Branch,
as Documentation Agent, and The Chase
Manhattan Bank and Citibank, N.A. as Co-
Syndication Agents, Banc of America
Securities LLC as Sole Book Manager and
Sole Lead Arranger (1)
10.2 Credit Agreement, dated as of July 22,
1999, among North American Timber
Corp., the Lenders Named therein, Bank
of America National Trust and Savings
Association, as Administrative Agent,
Commerzbank AG, New York Branch, as
Documentation Agent, and The Chase
Manhattan Bank and Citibank, N.A. as Co-
Syndication Agents, Banc of America
Securities LLC as Sole Book Manager and
Sole Lead Arranger (1)
27 Financial Data Schedule. (1)
(1) Filed by EDGAR
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1998, AND IT QUALIRED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-END> JUL-03-1999
<CASH> 44
<SECURITIES> 0
<RECEIVABLES> 2,328
<ALLOWANCES> 24
<INVENTORY> 1,777
<CURRENT-ASSETS> 4,329
<PP&E> 14,896
<DEPRECIATION> 8,512
<TOTAL-ASSETS> 15,347
<CURRENT-LIABILITIES> 4,395
<BONDS> 4,588
0
0
<COMMON> 153
<OTHER-SE> 3,188
<TOTAL-LIABILITY-AND-EQUITY> 15,347
<SALES> 7,255
<TOTAL-REVENUES> 7,255
<CGS> 5,320
<TOTAL-COSTS> 5,320
<OTHER-EXPENSES> 444
<LOSS-PROVISION> 1
<INTEREST-EXPENSE> 217
<INCOME-PRETAX> 756
<INCOME-TAX> 302
<INCOME-CONTINUING> 454
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 454
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F2>
<FN>
<F1> Georgia-Pacific Group EPS - Primary 1.81
The Timber Company EPS - Primary 1.67
<F2> Georgia-Pacific Group EPS - Primary Diluted 1.76
The Timber Company EPS - Diluted 1.66
</FN>
</TABLE>
REVISED AS OF JULY 23 , 1999
BYLAWS
OF
GEORGIA-PACIFIC CORPORATION
ARTICLE I
SHAREHOLDERS' MEETINGS
SECTION 1. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the
transaction of such other business as may properly come before
the meeting shall be held at such place, either within or without
the State of Georgia, on such date and at such time as the Board
of Directors may by resolution provide, or, if the Board of
Directors fails to provide, then such meeting shall be held at
the principal executive office of the Corporation at 11:00 A.M.
on the first Tuesday in the month of May in each year, or, if
such date is a legal holiday, on the next following business day.
If an annual meeting of shareholders is not held as provided in
this Section 1 of this Article I, any business, including the
election of directors, that might properly have been acted upon
at such annual meeting may be acted upon at a special meeting in
lieu of the annual meeting held pursuant to these Bylaws or held
pursuant to a court order.
SECTION 2. Special Meetings. Special meetings of the
shareholders may be called at any time by the Chairman, any Vice
Chairman, the President, the Chief Executive Officer or the Board
of Directors. In addition, special meetings of shareholders
shall be called by the Corporation as set forth in the
Corporation's Articles of Incorporation or upon written demand of
the holders of at least seventy-five percent (75%) of the voting
power of the outstanding capital stock of the Corporation
entitled to vote on any issue proposed to be considered at the
proposed special meeting, voting as a separate voting group, or
upon the written demand of shareholders as provided in Section 1
(C) of Article II hereof, any such written demand to be made in
accordance with the requirements of applicable law. Each special
meeting shall be held at such place, either within or without the
State of Georgia, as the Board of Directors may by resolution
provide, or, if the Board of Directors fails to provide, then
such meeting shall be held at the principal executive office of
the Corporation, on such date and at such time as shall be fixed
by the party calling the meeting.
SECTION 3. Notice of Meeting. Except as may otherwise be
required or prohibited by law, written notice stating the place,
day and hour of the meeting of shareholders and, in case of a
special meeting of shareholders, the purpose or purposes for
which the meeting is called, shall be delivered in the case of an
annual or special meeting of shareholders, not less than ten (10)
nor more than sixty (60) days before the date of the meeting
either personally or by mail, by the Corporation by or at the
direction of the Chairman, any Vice Chairman, the President, the
Chief Executive Officer, the Secretary or the officer or persons
calling the meeting, to each shareholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail, addressed
to the shareholder at his or its address as it appears on the
stock transfer books of the Corporation, with first class postage
thereon prepaid, or, if the Corporation has more than 500
shareholders of record entitled to vote at the meeting and the
notice is mailed not less than thirty (30) days before the date
of the meeting, with postage thereon prepaid for any other class
of United States mail.
SECTION 4. Waivers. Notwithstanding anything herein to the
contrary, notice of a meeting of shareholders need not be given
to any shareholder who waives notice of such meeting in
accordance with the Georgia Business Corporation Code.
SECTION 5. Voting Group. Voting group means all shares of
one or more classes or series that are entitled to vote and be
counted together collectively on a matter at a meeting of
shareholders. All shares entitled to vote generally on the
matter are for that purpose a separate voting group.
SECTION 6. Quorum. With respect to shares entitled to vote
as a separate voting group on a matter at a meeting of
shareholders, the presence, in person or by proxy, of a majority
of the votes entitled to be cast on the matter by the voting
group shall constitute a quorum of that voting group for action
on that matter unless the Articles of Incorporation, any
designation of a class or series of capital stock of the
Corporation, or the Georgia Business Corporation Code provides
otherwise. Once a share is represented for any purpose at a
meeting, other than solely to object to holding the meeting or to
transacting business at the meeting, it is deemed present for
quorum purposes for the remainder of the meeting and for any
adjournment of the meeting unless a new record date is or must be
set for the adjourned meeting.
SECTION 7. Vote Required for Action. If a quorum exists,
action on a matter (other than the election of directors) by a
voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation, provisions of these
Bylaws validly adopted by the shareholders, or the Georgia
Business Corporation Code requires a greater number of
affirmative votes. Unless otherwise provided in the Articles of
Incorporation, directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election of
directors at a meeting at which a quorum is present. If the
Articles of Incorporation or the Georgia Business Corporation
Code provide for voting by two or more voting groups on a matter,
action on that matter is taken only when voted upon by each of
those voting groups counted separately. Action may be taken by
one voting group on a matter even though no action is taken by
another voting group entitled to vote on the matter.
SECTION 8. Voting of Shares. Unless the Articles of
Incorporation, any designation of a class or series of capital
stock of the Corporation, or the Georgia Business Corporation
Code provides otherwise, each outstanding share having voting
rights shall be entitled to one vote on each matter submitted to
a vote at a meeting of shareholders. Voting on all matters shall
be by voice vote or by show of hands unless any qualified voter,
prior to the voting on any matter, demands vote by ballot, in
which case each ballot shall state the name of the shareholder
voting and the number of shares voted by him, and if the ballot
be cast by proxy, it shall also state the name of the proxy.
SECTION 9. Proxies. A shareholder entitled to vote may
vote in person or by proxy pursuant to an appointment of proxy
executed in writing by the shareholder or by his or its attorney
in fact. An appointment of proxy shall be valid for only one
meeting to be specified therein, and any adjournments of such
meeting, but shall not be valid for more than eleven (11) months
unless expressly provided therein. Appointments of proxy shall
be dated and filed with the records of the meeting to which they
relate. If the validity of any appointment of proxy is
questioned, it must be submitted to the secretary of the meeting
of shareholders for examination or to a proxy officer or
committee appointed by the person presiding at the meeting. The
secretary of the meeting or, if appointed, the proxy officer or
committee shall determine the validity or invalidity of any
appointment of proxy submitted, and reference by the secretary in
the minutes of the meeting to the regularity of an appointment of
proxy shall be received as prima facie evidence of the facts
stated for the purpose of establishing the presence of a quorum
at the meeting and for all other purposes.
SECTION 11. Presiding Officer. The Chief Executive Officer
shall serve as the chairman of every meeting of shareholders
unless another person is elected by shareholders to serve as
chairman at the meeting. The chairman shall appoint any persons
he deems necessary to assist with the meeting.
SECTION 12. Adjournments. Whether or not a quorum is
present to organize a meeting, any meeting of shareholders
(including an adjourned meeting) may be adjourned by the holders
of a majority of the voting power represented at the meeting to
reconvene at a specific time and place, but no later than 120
days after the date fixed for the original meeting unless the
requirements of the Georgia Business Corporation Code concerning
the selection of a new record date have been met. At any
reconvened meeting within that time period, any business may be
transacted that could have been transacted at the meeting that
was adjourned. If notice of the adjourned meeting was properly
given, it shall not be necessary to give any notice of the
reconvened meeting or of the business to be transacted, if the
date, time and place of the reconvened meeting are announced at
the meeting that was adjourned and before adjournment; provided,
however, that if a new record date is or must be fixed, notice of
the reconvened meeting must be given to persons who are
shareholders as of the new record date.
SECTION 13. Fixing of Record Date with Regard to
Shareholder Action. For the purpose of determining shareholders
entitled to notice of a shareholders' meeting, to demand a
special meeting, to vote, or to take any other action, the Board
of Directors may fix a future date as the record date, which date
shall be not more than seventy (70) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action, requiring a determination of
shareholders, is to be taken. A determination of shareholders
entitled to notice of or to vote at a shareholders' meeting is
effective for any adjournment of the meeting unless the Board of
Directors fixes a new record date, which it must do if the
meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. If no record date is fixed by
the Board of Directors, the record date shall be determined in
accordance with the provisions of the Georgia Business
Corporation Code.
SECTION 14. Shareholder Proposals. No proposal for a
shareholder vote (other than director nominations, to which
Section 1(D) of Article II applies) (a "Shareholder Proposal")
shall be submitted by a shareholder, either pursuant to
Securities and Exchange Commission Rule 14a-8, 14a-4 or
otherwise, to the Corporation's shareholders unless the
shareholder submitting such proposal (the "Proponent") shall have
filed a written notice setting forth with particularity (i) the
names and business addresses of the Proponent and all natural
persons, corporations, partnerships, trusts or any other type of
legal entity or recognized ownership vehicle (collectively, a
"Person") acting in concert with the Proponent; (ii) the name and
address of the Proponent and the Persons identified in clause
(i), as they appear on the Corporation's books (if they so
appear); (iii) the class and number of shares of the Corporation
beneficially owned by the Proponent and the Persons identified in
clause (i); (iv) a description of the Shareholder Proposal
containing all material information relating thereto; and (v)
such other information as the Board of Directors reasonably
determines is necessary or appropriate to enable the Board of
Directors and shareholders of the Corporation to consider the
Shareholder Proposal. Shareholder Proposals shall be delivered
to the Secretary of the Corporation at the principal executive
office of the Corporation within the time period specified in
Securities and Exchange Commission Rule 14a-8(e)(2), or any
successor rule. The presiding officer at any shareholders'
meeting may determine that any Shareholder Proposal was not made
in accordance with the procedures prescribed in these Bylaws or
is otherwise not in accordance with law, and if it is so
determined, such officer shall so declare at the meeting and the
Shareholder Proposal shall be disregarded.
ARTICLE II
DIRECTORS
SECTION 1. Number, Election and Term of Office.
(A) Number of Directors. The business and affairs of the
Corporation shall be managed and controlled by or under the
authority of its Board of Directors. In addition to the powers
and authority expressly conferred upon it by these Bylaws and the
Articles of Incorporation, the Board of Directors may exercise
all such lawful acts and things as are not by law, by the
Articles of Incorporation or by these Bylaws directed or required
to be exercised or done by the shareholders. The number of
directors shall be twelve ( 12 ), but the
number may be increased or diminished by amendment of these
Bylaws either by the Board of Directors or by the affirmative
vote of at least seventy-five percent (75%) of the voting power
of the outstanding capital stock of the Corporation entitled to
vote generally in the election of directors, voting as a
separate voting group. The directors shall be divided into
three (3) classes, each composed, as nearly as possible, of
one-third of the total number of directors. In the event that
the number of directors shall not be evenly divisible by three
(3), the Board of Directors shall determine in which class or
classes the remaining director or directors, as the case may be,
shall be included. The term of office of each director shall be
three (3) years; provided, that, of those directors initially
elected in classes, the term of office of directors of the
first class shall expire at the first annual meeting of the
shareholders after their election, that of the second class shall
expire at the second annual meeting after their election, and
that of the third class shall expire at the third annual meeting
after their election. At each annual meeting of shareholders
subsequent to the initial election of directors in classes,
directors shall be elected for a full term of three (3) years to
succeed those whose terms expire. When the number of directors
is increased and any newly created directorships are filled
by the Board of Directors, there shall be no classification of
the additional directors until the next election of directors by
the shareholders.
(B) Special Voting Rights. Anything in this Section 1 of
this Article II to the contrary notwithstanding, if and whenever
any class or series of capital stock of the Corporation shall
have the exclusive right, voting as a separate voting group, to
elect one or more directors of the Corporation, the term of
office of all directors in office when such voting rights shall
vest in such class or series (other than directors who were
elected by vote of another class or series of capital stock)
shall terminate upon the election of any new directors at any
meeting of shareholders called for the purpose of electing
directors; and, while such voting rights are vested in any class
or series of capital stock, the directors shall not be divided
into classes, and the term of office of each director elected
shall extend only until the next succeeding annual meeting of
shareholders.
(C) Election of Directors Following Termination of Special
Voting Rights. Upon the termination of the exclusive right of
one or more classes or series of capital stock, voting as a
separate voting group, to vote for directors, the term of office
of all such directors then in office shall terminate upon the
election of any new directors at a meeting of the shareholders
then entitled to vote for directors, which meeting may be held at
any time after the termination of such exclusive right and which
meeting, if not previously called, shall be called by the
Secretary of the Corporation upon written request of the holders
of record of ten percent (10%) of the aggregate voting power of
the outstanding capital stock of the Corporation then entitled to
vote generally in the election of directors. At such election
and thereafter, unless and until a class or series of capital
stock shall again have the exclusive right, voting as a separate
voting group, to vote for directors, the directors shall again be
divided into three (3) classes, as hereinabove provided, the term
of office of each to be three (3) years; provided, that the terms
of office of those initially elected in classes shall be as
hereinabove provided.
(D) Nominations for Election of Directors.
(i) Subject to the rights of holders of any class or series
of capital stock of the Corporation then outstanding, nominations
for the election of directors may be made by the affirmative vote
of a majority of the entire Board of Directors or by any
shareholder of record entitled to vote generally in the election
of directors. However, any shareholder of record entitled to
vote generally in the election of directors may nominate one or
more persons for election as directors at a meeting only if
written notice of such shareholder's intent to make such
nomination or nominations has been given, either by personal
delivery or by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 60 days nor
more than 75 days prior to the meeting; provided, that in the
event that less than 70 days' notice or prior public disclosure
of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the
day on which such notice of the date of meeting was mailed or
such public disclosure was made, whichever first occurs.
(ii) Each notice to the Secretary under subsection (D)(i)
above shall set forth: (a) the name and address of record of the
shareholder who intends to make the nomination; (b) a
representation that the shareholder is a holder of record of
shares of the Corporation's capital stock entitled to vote at
such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) the class and number of shares of common stock held
of record, owned beneficially, and represented by proxy, by the
shareholder, and each proposed nominee, as of the date of the
notice; (d) the name, age, business and residence addresses, and
principal occupation or employment of each proposed nominee; (e)
a description of all arrangements or understandings between the
shareholder and each proposed nominee and any other person or
persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (f)
such other information regarding each proposed nominee as would
be required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission; and
(g) the written consent of each proposed nominee to serve as a
director of the Corporation if so elected. The Corporation may
require any proposed nominee to furnish such other information as
may reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as a director of
the Corporation.
(iii) The chairman of the meeting may, if the facts
warrant, determine and declare to the meeting that a nomination
was not made in accordance with the foregoing procedure, and if
he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
SECTION 2. Term. Subject to the provisions of the Articles
of Incorporation and of Section 1 of this Article II, each
director shall hold office until the election and qualification
of his successor or until his death or until he shall resign or
be removed from office as hereinafter provided.
SECTION 3. Resignations. Any director of the Corporation
may resign at any time by giving written notice thereof to the
Board of Directors, the Chairman or the Corporation. Such
resignation shall take effect at the time the notice is delivered
unless the notice specifies a later effective date; and, unless
otherwise specified with respect thereto, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 4. Removal of Directors. At any shareholders'
meeting with respect to which notice of such purpose has been
given, the entire Board of Directors or any individual director
may be removed, with or without cause, by the affirmative vote of
the holders of seventy-five percent (75%) of the voting power of
the outstanding capital stock of the Corporation entitled to vote
generally in the election of directors, voting as a separate
voting group. Whenever the holders of the shares of any class or
series of capital stock are entitled to elect one or more
directors by the provisions of the Articles of Incorporation, the
provisions of this Section 4 of this Article II shall apply, in
respect of the removal of a director or directors so elected, to
the vote of the holders of the outstanding shares of that class
or series and not to the vote of the outstanding shares as a
whole. Removal action may be taken at any shareholders' meeting
with respect to which notice of such purpose has been given.
SECTION 5. Vacancies.
(A) Director Elected by All Shareholders. Except as
provided in Subsection 5(B) below, any vacancy occurring in the
Board of Directors may be filled by the affirmative vote of a
majority of the remaining directors though less than a quorum of
the Board of Directors, or by the sole remaining director, as the
case may be, or, if the vacancy is not so filled, or if no
director remains, by the holders of the shares of capital stock
who are entitled to vote for the director with respect to which
the vacancy is being filled.
(B) Director Elected by Particular Class or Series. If a
vacancy occurs with respect to a director elected by a particular
class or series of shares voting as a separate voting group, the
vacancy may be filled by the remaining director or directors
elected by that class or series, or, if the vacancy is not filled
by such remaining director or directors, or if no such director
remains, by the holders of that class or series of shares.
(C) Term of New Director. A director elected to fill a
vacancy shall be elected for the unexpired term of his
predecessor in office. Any directorship to be filled by reason
of an increase in the number of directors may be filled by the
Board of Directors, but only for a term of office continuing
until the next election of directors by the shareholders and the
election and qualification of his successor.
SECTION 6. Place of Meeting. Meetings of the Board of
Directors or of any committee thereof may be held either within
or without the State of Georgia.
SECTION 7. Regular Meetings. The Board of Directors may,
by resolution adopted by vote of a majority of the whole Board,
from time to time, appoint the time and place for holding regular
meetings of the Board, if deemed advisable by the Board; and such
regular meetings shall, thereupon, be held at the time and place
so appointed, without the giving of any notice with regard
thereto. In case the day appointed for the regular meeting shall
fall on a legal holiday, such meeting shall be held on the next
following business day, at the regular appointed hour.
SECTION 8. Special Meetings. Special meetings of the Board
of Directors shall be held whenever called by the Chairman, by
any Vice Chairman, by the President, by the Chief Executive
Officer, by the Chief Operating Officer, or by any two directors.
Notice of any such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, not
later than three (3) days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegram,
telex, facsimile or cablegram, or be delivered personally, or by
telephone, not later than the day before the day on which the
meeting is to be held. Notice of a meeting of the Board of
Directors need not be given to any director who signs a waiver of
notice either before or after the meeting (in addition to any
other form of waiver, such waiver may be evidenced by a telegram,
telex, facsimile or cablegram from a director). Attendance of a
director at a meeting shall constitute a waiver of notice of such
meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting or the manner in which it has
been called or convened, except when a director states, at the
beginning of the meeting (or promptly upon his arrival), any such
objection or objections to the transaction of business and does
not thereafter vote for or assent to action taken at the meeting.
Neither the business to be transacted at, nor the purpose of, any
special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting. Except as is
otherwise indicated in the notice thereof, any and all business
may be transacted at any special meeting of the Board of
Directors.
SECTION 9. Quorum and Manner of Acting. Except as herein
otherwise provided, two-fifths of the whole Board of Directors at
a meeting duly assembled shall constitute a quorum for the
transaction of business, except that, if the Chairman or the
President is not present at any such meeting, a majority of the
whole Board of Directors shall be necessary to constitute a
quorum; and, except as otherwise required by statute or by the
Bylaws, the act of a majority of the directors present at any
such meeting at which a quorum is present shall be the act of the
Board of Directors. In the absence of a quorum, a majority of
the directors present may adjourn the meeting from time to time,
until a quorum is present. No notice of any adjourned meeting
need be given.
SECTION 10. Participation by Conference Telephone. Any or
all directors may participate in a meeting of the Board of
Directors or of a committee of the Board of Directors through the
use of any means of communication by which all directors
participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting.
SECTION 11. Action by Directors Without a Meeting. Unless
the Articles of Incorporation or these Bylaws provide otherwise,
any action required or permitted to be taken at any meeting of
the Board of Directors or any action that may be taken at a
meeting of a committee of the Board of Directors may be taken
without a meeting if the action is taken by all the members of
the Board of Directors (or of the committee as the case may be).
The action must be evidenced by one or more written consents
describing the action taken, signed by each director (or each
director serving on the committee, as the case may be), and
delivered to the Corporation for inclusion in the minutes or
filing with the corporate records.
SECTION 12. Directors' Fees. In consideration of a
director serving in such capacity, each director of the
Corporation, other than directors who are officers of the
Corporation or any of its subsidiary companies, shall be entitled
to receive such compensation as the Board of Directors, by vote
of a majority of the whole Board, may from time to time
determine. The Board of Directors shall also have the authority
to determine, from time to time, the amount of compensation, if
any, which shall be paid to its members for attendance at any
meeting of the Board or any committee thereof. A director may
also serve the Corporation in a capacity other than that of
director and receive compensation, as determined by the Board of
Directors, for services rendered in such other capacity.
ARTICLE III
EXECUTIVE COMMITTEE
SECTION 1. Constitution and Powers. The Board of Directors
may, by resolution adopted by vote of a majority of the whole
Board, designate from among its members an Executive Committee,
to consist of the Chairman, the Chief Executive Officer (provided
he is also a director), and one or more other directors, which
Executive Committee shall have and may exercise all the powers of
the Board of Directors in the management of the business, affairs
and property of the Corporation and the exercise of its corporate
powers, including the power to authorize the seal of the
Corporation to be affixed to all papers which may require it. So
far as practicable, members of the Executive Committee shall be
designated at the organization meeting of the Board, in each
year, and, unless sooner discharged by vote of a majority of the
whole Board of Directors, shall hold office until the
organization meeting of the Board in the next subsequent year and
until their respective successors are appointed. The Board shall
designate one member of the Committee as Chairman of the
Executive Committee, but such designee shall not be considered to
be an officer of the Corporation by reason of such designation.
Anything herein to the contrary notwithstanding, the Executive
Committee shall not exercise the authority of the Board of
Directors in reference to: (1) approving or proposing to
shareholders any action required by applicable law to be approved
by the shareholders of the Corporation; (2) the filling of
vacancies on the Board of Directors or any of its committees; (3)
amending the Articles of Incorporation of the Corporation; (4)
the adoption, amendment or repeal of any Bylaws of the
Corporation; or (5) the approval of a plan of merger or
consolidation, the sale, lease, exchange or other disposition of
all or substantially all the property and assets of the
Corporation, or a voluntary dissolution of the Corporation or a
revocation thereof.
SECTION 2. Meetings. Regular meetings of the Executive
Committee, of which no notice shall be necessary, shall be held
on such days and at such places as shall be fixed, from time to
time, by resolution adopted by vote of a majority of the
Committee and communicated to all the members thereof. Special
meetings of the Executive Committee may be called by the Chairman
of the Committee at any time. Notice of each special meeting of
the Committee shall be sent to each member of the Committee by
mail to his residence or usual place of business not later than
three (3) days before the day on which the meeting is to be held,
or shall be sent to him at such place by telegram, telex,
facsimile or cablegram, or be delivered personally, or by
telephone, to each member of the Committee not later than the day
before the day on which the meeting is to be held. Notice of any
such meeting need not be given to any member who signs a waiver
of notice either before or after the meeting (in addition to any
other form of waiver, such waiver may be evidenced by a telegram,
telex, facsimile or cablegram from a member). Attendance of a
member at a meeting shall constitute a waiver of notice of such
meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting or the manner in which it has
been called or convened, except when a member states, at the
beginning of the meeting (or promptly upon his arrival), any such
objection or objections to the transaction of business. Neither
the business to be transacted at, nor the purpose of, any meeting
of the Committee need be specified in the notice or waiver of
notice of such meeting. A majority of the Executive Committee
shall constitute a quorum for the transaction of business, and
the act of a majority of those present at a meeting, at which a
quorum is present, shall be the act of the Executive Committee.
The members of the Executive Committee shall act only as a
committee, and the individual members shall have no power as
such.
SECTION 3. Records. The Executive Committee shall keep a
record of its acts and proceedings and shall report the same
promptly to the Board of Directors. Such acts and proceedings
shall be subject to review by the Board of Directors, but no
rights of third parties shall be affected by such review. The
Secretary of the Corporation, or, in his absence, an Assistant
Secretary, shall act as secretary to the Executive Committee; or
the Committee may, in its discretion, appoint its own secretary.
SECTION 4. Vacancies. Any vacancy in the Executive
Committee shall be filled by vote of a majority of the whole
Board of Directors.
ARTICLE IV
OTHER COMMITTEES
The Board of Directors, by resolution adopted by a majority
of the whole Board, may designate from among its members other
committees in addition to the Executive Committee, each
consisting of two (2) or more directors and each of which, to the
extent provided in such resolution, shall have and may exercise
all the authority of the Board of Directors, provided that no
such committee shall have the authority of the Board of Directors
in reference to: (1) approving or proposing to shareholders any
action required by applicable law to be approved by the
shareholders of the Corporation; (2) the filling of vacancies on
the Board of Directors or any of its committees; (3) amending the
Articles of Incorporation of the Corporation; (4) the adoption,
amendment or repeal of any Bylaws of the Corporation; or (5) the
approval of a plan of merger or consolidation, the sale, lease,
exchange or other disposition of all or substantially all of the
property and assets of the Corporation, or a voluntary
dissolution of the Corporation or a revocation thereof. The
provisions of Section 2 of Article III as to the Executive
Committee and its deliberations shall be applicable to any such
other committee of the Board of Directors.
ARTICLE V
OFFICERS AND AGENTS; POWERS AND DUTIES
SECTION 1. Officers. The Board of Directors shall elect a
Chairman (who shall be a director), a President, a Secretary and
a Treasurer. The Board of Directors may also elect one or more
Vice Chairmen, one or more Vice Presidents (one or more of whom
may be designated an Executive Vice President and one or more of
whom may be designated a Senior Vice President and one or more of
whom may be designated a Group Vice President), a Controller and
such other officers and agents of the Corporation as from time to
time may appear to be necessary or advisable in the conduct of
the affairs of the Corporation. The Board shall designate from
among such elected officers a Chief Executive Officer and may
designate from among such elected officers a Chief Operating
Officer. Any two or more offices may be held by the same person,
except that the office of President and the office of Secretary
shall be held by separate persons. In addition to the authority
of the Board of Directors set forth in this Section 1, the Chief
Executive Officer shall have the authority to appoint one or more
Vice Presidents, none of whom may be designated an Executive Vice
President, Senior Vice President or Group Vice President (a "CEO
Appointed Office"). Individuals appointed to CEO Appointed
Offices by the Chief Executive Officer shall be officers of the
Corporation as fully as if elected by the Board of Directors.
SECTION 2. Term of Office. So far as practicable, all
officers shall be elected at the organization meeting of the
Board of Directors in each year, and, subject to the provisions
of Section 3 of this Article V, each officer shall hold office
until the organization meeting of the Board of Directors in the
next subsequent year and until his successor has been elected and
has qualified, or until his earlier resignation, removal from
office, or death.
SECTION 3. Removal of Officers. Any officer may be removed
at any time, either with or without cause, by the Board of
Directors at any meeting. Any officer holding a CEO Appointed
Office, whether elected to such office by the Board or appointed
by the Chief Executive Officer, may be removed at any time,
either with or without cause, by the Chief Executive Officer,
except for such individuals holding CEO Appointed Offices who
also hold any of the titles of Controller, Treasurer or
Secretary.
SECTION 4. Vacancies. If any vacancy occurs in any office,
the Board of Directors may elect a successor to fill such vacancy
for the remainder of the term. If a vacancy occurs in any CEO
Appointed Office, the Chief Executive Officer may appoint a
successor to fill such vacancy for the remainder of the term.
SECTION 5. Chief Executive Officer. The Chief Executive
Officer shall, under the direction of the Board of Directors,
have general direction of the Corporation's business, policies
and affairs. He shall preside, when present, at all meetings of
the shareholders and, in the absence of the Chairman of the
Executive Committee, at all meetings of the Executive Committee.
He, the Vice Chairmen, the President and the Chief Operating
Officer shall each have general power to execute bonds, deeds and
contracts in the name of the Corporation and to affix the
corporate seal; to sign stock certificates; and to remove or
suspend such employees or agents as shall not have been appointed
by the Board of Directors. In the absence or disability of the
Chief Executive Officer, his duties shall be performed and his
powers may be exercised by the Chief Operating Officer or by such
other officer as shall be designated by the Board of Directors.
SECTION 6. Chief Operating Officer. The Chief Operating
Officer shall, under the direction of the Chief Executive
Officer, have direct superintendence of the Corporation's
business, policies, properties and affairs. He shall have such
further powers and duties as from time to time may be conferred
upon, or assigned to, him by the Board of Directors or the Chief
Executive Officer. In the absence or disability of the Chief
Executive Officer, the Chief Operating Officer shall perform his
duties and may exercise his powers.
SECTION 7. Chairman. The Chairman shall preside, when
present, at all meetings of the Board of Directors and shall have
such other powers and duties as from time to time may be
conferred upon or assigned to him by the Board of Directors or
the Chief Executive Officer (if the Chairman is not the Chief
Executive Officer).
SECTION 8. Vice Chairmen. Each of the several Vice
Chairmen shall have such powers and duties as from time to time
may be conferred upon or assigned to him by the Board of
Directors or the Chief Executive Officer (if such Vice Chairman
is not the Chief Executive Officer).
SECTION 9. President. The President shall have such powers
and duties as from time to time may be conferred upon or assigned
to him by the Board of Directors or the Chief Executive Officer
(if the President is not the Chief Executive Officer).
SECTION 10. Vice Presidents. The several Vice Presidents
shall have such powers and duties as shall be assigned to or
required of them, from time to time, by the Board of Directors,
the Chief Executive Officer or the Chief Operating Officer.
SECTION 11. Secretary. The Secretary shall attend to the
giving of notice of all meetings of shareholders and of the Board
of Directors and shall keep and attest true records of all
proceedings thereat. He shall have the responsibility of
authenticating records of the Corporation. He shall have charge
of the corporate seal and have authority to attest any and all
instruments or writings to which the same may be affixed. He
shall keep and account for all books, documents, papers and
records of the Corporation, except those which are hereinafter
directed to be in the charge of the Treasurer or the Controller.
He shall have authority to sign stock certificates and shall
generally perform all the duties usually appertaining to the
office of secretary of a corporation. In the absence of the
Secretary, an Assistant Secretary or Secretary pro tempore shall
perform his duties.
SECTION 12. Treasurer. The Treasurer shall have the care
and custody of all moneys, funds and securities of the
Corporation and shall deposit or cause to be deposited all funds
of the Corporation in and with such depositories as shall, from
time to time, be designated by the Board of Directors or by such
officers of the Corporation as may be authorized by the Board of
Directors to make such designation. He shall have power to sign
stock certificates; to endorse for deposit or collection, or
otherwise, all checks, drafts, notes, bills of exchange or other
commercial paper payable to the Corporation; and to give proper
receipts or discharges therefor.
SECTION 13. Controller. The Controller shall keep complete
and accurate books of account relating to the business of the
Corporation, including records of all assets, liabilities,
commitments, receipts, disbursements and other financial
transactions of the Corporation, and its divisions and
subsidiaries. He shall render a statement of the Corporation's
financial condition whenever required to do so by the Board of
Directors, the Chief Executive Officer, the Chief Operating
Officer or the Executive Vice President - Finance.
SECTION 14. Attorneys. The Board of Directors may, from
time to time, appoint one or more attorneys-in-fact to act for
and in representation of the Corporation, either generally or
specially, judicially or extra-judicially, and may delegate to
any such attorney or attorneys-in-fact all or any powers which,
in the judgment of the Board of Directors, may be necessary,
advisable, convenient or suitable for exercise in any country or
jurisdiction in the administration or management of the business
of the Corporation, or the defense or enforcement of its rights,
even though such powers be herein provided or directed to be
exercised by a designated officer of the Corporation, or by the
Board of Directors. The act of the Board of Directors in
conferring any such powers upon, or delegating the same to, any
attorney-in-fact shall be conclusive evidence in favor of any
third person of the right of the Board of Directors so to confer
or delegate such powers; and the exercise by any attorney-in-fact
of any powers so conferred or delegated shall in all respects be
binding upon the Corporation.
SECTION 15. Additional Powers and Duties. In addition to
the foregoing especially enumerated duties and powers, the
several officers of the Corporation shall perform such other
duties and exercise such further powers as may be provided by
these Bylaws or as the Board of Directors may, from time to time,
determine, or as may be assigned to them by any competent
superior officer.
SECTION 16. Compensation. The compensation of all officers
of the Corporation shall be fixed, from time to time, by the
Board of Directors.
SECTION 17. Designated Positions and Titles. The Chief
Executive Officer may, from time to time, designate employees
("Designated Employees") to serve in such designated capacities
for the Corporation and to hold such nominal titles (such as a
designated officer of a group, division or of another area of the
business affairs of the Corporation) as the Chief Executive
Officer may deem appropriate. No individual designated pursuant
to this Section 17 shall, by reason of such designation, become
an officer of the Corporation. Each Designated Employee shall
perform such duties and shall have such authority as shall be
delegated to him from time to time by the Chief Executive
Officer. Any title granted to any Designated Employee pursuant
to this Section 17 may be withdrawn, with or without cause, at
any time by the Chief Executive Officer, and any duty or
authority delegated to any Designated Employee pursuant to this
Section 17 may be withdrawn, with or without cause, at any time
by the Chief Executive Officer.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 1. Indemnified Parties. Every person (and the
heirs and personal representatives of such person) who is or was
a director, officer, employee or agent of the Corporation, or of
any other corporation, partnership, joint venture, trust or other
enterprise in which he served as such at the request of the
Corporation, shall be indemnified by the Corporation in
accordance with the provisions of this Article VI against any and
all liability and expense (including, without limitation, counsel
fees and disbursements, and amounts of judgments, fines or
penalties against, or amounts paid in settlement by, a director,
officer, employee or agent) actually and reasonably incurred by
him in connection with or resulting from any threatened, pending
or completed claim, action, suit or proceeding, whether civil,
criminal, administrative, or investigative or in connection with
any appeal relating thereto, in which he may become involved, as
a party or otherwise, or with which he may be threatened, by
reason of his being or having been a director, officer, employee
or agent of the Corporation or such other corporation,
partnership, joint venture, trust or other enterprise, or by
reason of any action taken or omitted by him in his capacity as
such director, officer, employee or agent whether or not he
continues to be such at the time such liability or expense shall
have been incurred.
SECTION 2. Indemnification As of Right. Every person (and
the heirs and personal representatives of such person) referred
to in Section I of this Article VI, to the extent that such
person has been successful on the merits or otherwise with
respect to any claim, action, matter, suit or proceeding of the
character described in Section 1, shall be entitled to
indemnification as of right for expenses (including attorneys'
fees) actually and reasonably incurred by him in connection
therewith.
SECTION 3. Indemnification Based on Review. Except as
provided in Section 2 of this Article VI, upon receipt of a claim
for indemnification hereunder, the Corporation shall proceed as
follows, or as otherwise permitted by applicable law. If the
claim is made by a director or officer of the Corporation, the
Board of Directors, by a majority vote of a quorum consisting of
directors who were not parties to the applicable action, suit or
proceeding, shall determine whether the claimant met the
applicable standard of conduct as set forth in Subsections (A)
and (B) below. If such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, such
determination shall be made by independent legal counsel (who may
be the regular inside or outside counsel of the Corporation) in a
written opinion. If such determination has not been made within
90 days after the claim is asserted, the claimant shall have the
right to require that the determination be submitted to the
shareholders at the next regular meeting of shareholders by vote
of a majority of the shares entitled to vote thereon. If a claim
is made by a person who is not a director or officer of the
Corporation, the Chief Executive Officer and the general counsel
of the Corporation shall determine, subject to applicable law,
the manner in which there shall be made the determination as to
whether the claimant met the applicable standard of conduct as
set forth in Subsections (A) and (B) below. In the case of each
claim for indemnification, the Corporation shall pay the claim to
the extent the determination is favorable to the person making
the claim.
(A) In the case of a claim, action, suit or proceeding
other than by or in the right of the Corporation to procure a
judgment in its favor, the director, officer, employee or agent
must have acted in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, in
addition, in any criminal action or proceeding, had no reasonable
cause to believe that his conduct was unlawful. In addition, any
director seeking indemnification must not have been adjudged
liable on the basis that any personal benefit was received by
him. For the purpose of this Subsection (A), the termination of
any claim, action, suit or proceeding, civil, criminal or
administrative, by judgment, order, settlement (either with or
without court approval) or conviction, or upon a plea of guilty
or nolo contenders or its equivalent, shall not create a
presumption that a director, officer, employee or agent did not
meet the standards of conduct set forth in this Subsection.
(B) In the case of a claim, action, suit or proceeding by
or in the right of the Corporation to procure a judgment in its
favor, the director, officer, employee or agent must have acted
in good faith in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; provided,
however, that no indemnification under this Subsection (B) shall
be made (1) with regard to any claim, issue or matter as to which
such director, officer, employee or agent shall have been
adjudged to be liable to the Corporation unless and only to the
extent that the court in which such action or suit was brought
shall determine that, despite the adjudication of liability but
in view of all the circumstances of the case, such director,
officer, employee or agent is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper, or
(2) for amounts paid, or expenses incurred, in connection with
the defense or settlement of any such claim, action, suit or
proceeding, unless a court of competent jurisdiction has approved
indemnification with regard to such amounts or expenses.
SECTION 4. Advances. Expenses incurred with respect to any
claim, action, suit or proceeding of the character described in
Section 1 of this Article VI shall be advanced by the Corporation
prior to the final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such amount
if it shall be ultimately determined that he is not entitled to
indemnification under this Article VI.
SECTION 5. General. The rights of indemnification and
advancement of expenses provided in this Article VI shall be in
addition to any rights to which any such director, officer,
employee or other person may otherwise be entitled by contract or
as a matter of law. Each person who shall act as a director,
officer, employee or agent of the Corporation or of any other
corporation referred to in Section 1 of this Article VI, shall be
deemed to be doing so in reliance upon the right of
indemnification provided for in this Article VI, and this Article
VI constitutes a contract between the Corporation and each of the
persons from time to time entitled to indemnification hereunder,
and the rights of each such person hereunder may not be modified
without the consent of such person.
ARTICLE VII
STOCK AND TRANSFER OF STOCK
SECTION 1. Direct Registration of Shares. The Corporation
may, with the Board of Directors' approval, participate in a
direct registration system approved by the Securities and
Exchange Commission and by the New York Stock Exchange or any
securities exchange on which the stock of the Corporation may
from time to time be traded, whereby shares of capital stock of
the Corporation may be registered in the holder's name in
uncertificated, book-entry form on the books of the Corporation.
SECTION 2. Stock Certificates. Except in the case of
shares represented in book-entry form under a direct registration
system contemplated in Section 1 of this Article VII, every
shareholder shall be entitled to a certificate signed by the
Chairman, the President or a Vice President and the Secretary or
an Assistant Secretary or the Treasurer or an Assistant
Treasurer, certifying the number of shares owned by him in the
Corporation and that those shares are fully paid and non-
assessable. Where any such certificate is countersigned by
either a Transfer Agent or a Registrar (other than the
Corporation or one of its employees) designated by the
Corporation for that purpose, any other signature on such
certificate may be a facsimile, engraved, stamped or printed. In
case any person who served as any such officer shall have signed
any such certificate or whose facsimile signature shall have been
placed thereon shall have ceased to hold such office prior to the
issue of such certificate, such certificate may be issued at the
direction of the Corporation with the same effect as if such
person held such office at the date of the issue of such
certificate.
SECTION 3. Transfer Agents and Registrars. The Board of
Directors may, in its discretion, appoint responsible banks or
trust companies in such city or cities as the Board may deem
advisable, from time to time, to act as Transfer Agents and
Registrars of the stock of the Corporation; and, upon such
appointments being made, no stock certificate shall be valid
until countersigned by one of such Transfer Agents and registered
by one of such Registrars.
SECTION 4. Transfer of Stock. Except in the case of shares
represented in book-entry form under a direct registration system
contemplated in Section 1 of this Article VII, shares of stock
may be transferred by delivery of the certificates therefor,
accompanied either by an assignment, in writing on the back of
the certificates or by written power of attorney to sell, assign
and transfer the same, signed by the record holder thereof; but
no transfer shall affect the right of the Corporation to pay any
dividend upon the stock to the holder of record thereof, or to
treat the holder of record as the holder in fact thereof for all
purposes, and no transfer shall be valid, except between the
parties thereto, until such transfer shall have been made upon
the books of the Corporation.
SECTION 5. Lost Certificates. In case any certificate of
stock shall be lost, stolen or destroyed, the Board of Directors
or the Executive Committee, in its discretion, may authorize the
issue of a substitute certificate in place of the certificate so
lost, stolen or destroyed, and may cause such substitute
certificate to be countersigned by the appropriate Transfer Agent
and registered by the appropriate Registrar; provided, that, in
each such case, the applicant for a substitute certificate shall
furnish to the Corporation, or to its Transfer Agents and
Registrars, satisfactory evidence of the loss, theft or
destruction of such certificate and of the ownership thereof, and
also such security or indemnity as may be required by any of such
parties.
ARTICLE VIII
MISCELLANEOUS
SECTION 1. Inspection of Books and Records. The Board of
Directors shall have power to determine which accounts, books and
records of the Corporation shall be opened to the inspection of
shareholders, except those as may by law specifically be made
open to inspection, and shall have power to fix reasonable rules
and regulations not in conflict with the applicable law for the
inspection of accounts, books and records which by law or by
determination of the Board of Directors shall be open to
inspection. Without the prior approval of the Board of Directors
in its discretion, the right of inspection set forth in Section
14-2-1602(c) of the Georgia Business Corporation Code shall not
be available to any shareholder owning two percent or less of the
shares outstanding.
SECTION 2. Fiscal Year. The fiscal year of the Corporation
shall end on the Saturday closest to December 31. The quarterly
periods shall be on a 13 week basis ending on a Saturday .
SECTION 3. Surety Bonds. Such officers or agents of the
Corporation as the Board of Directors may direct, from time to
time, shall be bonded for the faithful performance of their
duties, in such amounts and by such surety companies as the Board
of Directors may determine. The premiums on such bonds shall be
paid by the Corporation, and the bonds so furnished shall be in
the custody of the Secretary.
SECTION 4. Signature of Negotiable Instruments. All bills,
notes, checks or other instruments for the payment of money shall
be signed or countersigned by such officers and in such manner
as, from time to time, may be prescribed by resolution (whether
general or special) of the Board of Directors.
SECTION 5. Conflict with Articles of Incorporation. In the
event that any provision of these Bylaws conflicts with any
provision of the Articles of Incorporation, the Articles of
Incorporation shall govern.
SECTION 6. Election of Certain Provisions of Georgia
Business Corporation Code. All requirements and provisions of
Parts 2 and 3 of Article 11 of the Georgia Business Corporation
Code, as may be in effect from time to time, including any
successor statutes, shall be applicable to any "business
combination" (as respectively defined in Parts 2 and 3 of such
Article 11) of the Corporation.
ARTICLE IX
AMENDMENTS
Subject to the provisions of the Georgia Business
Corporation Code, the Board of Directors shall have the power to
alter, amend or repeal these Bylaws or to adopt new bylaws, but
any bylaws adopted by the Board of Directors may be altered,
amended or repealed, and new bylaws adopted, by the shareholders.
The shareholders may prescribe that any bylaw or bylaws adopted
by them shall not be altered, amended or repealed by the Board of
Directors. Action by the directors with respect to the Bylaws
shall be taken by an affirmative vote of a majority of all of the
directors then in office. Except as provided in the Articles of
Incorporation, action by the shareholders with respect to the
Bylaws shall be taken by an affirmative vote of the holders of a
majority of the voting power of the outstanding capital stock of
the Corporation entitled to vote generally in the election of
directors, voting as a separate voting group.
The undersigned Secretary of Georgia-Pacific Corporation, a
Georgia corporation, hereby certifies that the foregoing is a
true and complete copy of the Bylaws of the said Corporation, as
at present in full force and effect.
Witness the hand of the undersigned and the seal of the
said Corporation this 23rd day of July , 1999.
/s/ Kenneth F. Khoury
Kenneth F. Khoury
Vice President, Deputy
General Counsel and
Secretary
#180203
|sf-712790||
[EXECUTION COPY]
CREDIT AGREEMENT
among
GEORGIA-PACIFIC CORPORATION
THE LENDERS NAMED HEREIN
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent,
COMMERZBANK AG,
NEW YORK BRANCH,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK
and
CITIBANK, N.A.,
as Co-Syndication Agents
BANC OF AMERICA SECURITIES LLC,
Sole Book Manager and Sole Lead Arranger
$1,000,000,000
Dated as of July 22, 1999
TABLE OF CONTENTS
<PAGE>
Page
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Certain Defined Terms. 1
1.02 Computation of Time Periods. 15
1.03 Accounting Matters. 15
1.04 Certain Terms. 16
ARTICLE 2 AMOUNTS AND TERMS OF THE LOANS 16
2.01 Committed Loans. 16
2.02 Procedure for Committed Borrowings. 17
2.03 Bid Borrowings. 18
2.04 Procedure for Bid Borrowings. 18
2.05 Evidence of Indebtedness. 21
2.06 Optional Reduction of the Commitments. 21
2.07 Repayment. 21
2.08 Optional Prepayments. 22
2.09 Interest. 22
2.10 Default Interest. 23
2.11 Continuation and Conversion Elections for
Committed Loans. 23
2.12 Termination of Prior Commitments. 25
ARTICLE 3 THE LETTERS OF CREDIT 25
3.01 The Letter of Credit Subfacility. 25
3.02 Issuance, Amendment and Renewal of Letters of
Credit. 26
3.03 Role of the Issuing Bank. 28
3.04 Obligations Absolute. 29
3.05 Cash Collateral Pledge. 30
3.06 Letter of Credit Fees. 30
3.07 International Standby Practices. 31
ARTICLE 4 FEES; PAYMENTS; TAXES 31
4.01 Fees. 31
4.02 Computation of Interest, Fees. 32
4.03 Payments by the Company. 32
4.04 Payments by the Lenders. 33
4.05 Taxes. 34
4.06 Sharing of Payments, Etc. 38
ARTICLE 5 CHANGES IN CIRCUMSTANCES; ETC. 38
5.01 Eurodollar Rate Protection. 38
5.02 Additional Interest on Eurodollar Loans. 39
5.03 Increased Costs. 39
<PAGE> sf-712790 i
5.04 Illegality. 39
5.05 Capital Adequacy. 39
5.06 Funding Losses. 40
5.07 Funding; Certificates of Lenders. 41
5.08 Change of Lending Office; Limitation on
Increased Costs. 41
5.09 Replacement of Lenders. 42
ARTICLE 6 REPRESENTATIONS AND WARRANTIES 42
6.01 Corporate Existence; Compliance with Law. 42
6.02 Corporate Power; Authorization. 43
6.03 Enforceable Obligations. 44
6.04 Taxes. 44
6.05 Financial Matters. 44
6.06 Litigation. 44
6.07 Subsidiaries. 45
6.08 Liens. 45
6.09 No Burdensome Restrictions; No Defaults. 45
6.10 Investment Company Act; Public Utility Holding
Company Act. 45
6.11 Margin Regulations. 45
6.12 Environmental Matters. 46
6.13 Labor Matters. 48
6.14 ERISA Plans. 48
6.15 Y2K Review. 48
6.16 Swap Obligations. 48
6.17 Full Disclosure. 48
ARTICLE 7 CONDITIONS PRECEDENT 49
7.01 Conditions Precedent to the First Loan. 49
7.02 Additional Conditions Precedent to the First
Loan. 50
7.03 Conditions Precedent to Each Committed Loan and
Letter of Credit. 50
7.04 Conditions Precedent to Each Bid Borrowing. 51
ARTICLE 8 AFFIRMATIVE COVENANTS 51
8.01 Application of Proceeds. 51
8.02 Compliance with Laws, Etc. 51
8.03 Payment of Taxes, Etc. 51
8.04 Maintenance of Insurance. 52
8.05 Preservation of Corporate Existence, Etc. 52
8.06 Access. 52
8.07 Keeping of Books. 52
8.08 Maintenance of Properties, Etc. 52
8.09 Financial Statements. 52
8.10 Reporting Requirements. 53
8.11 ERISA Plans. 54
8.12 Environmental Compliance; Notice. 54
8.13 New Subsidiaries. 54
<PAGE> sf-712790 ii
ARTICLE 9 NEGATIVE COVENANTS 54
9.01 Liens, Etc. 55
9.02 Sale-Leaseback Transactions. 57
9.03 Mergers, Etc. 58
9.04 Transactions with Affiliates. 58
9.05 Accounting Changes. 58
9.06 Margin Regulations. 58
9.07 Negative Pledges, Etc. 58
9.08 Leverage Ratio. 58
ARTICLE 10 EVENTS OF DEFAULT 58
10.01 Events of Default. 58
10.02 Remedies. 61
ARTICLE 11 THE AGENT 61
11.01 Appointment. 61
11.02 Delegation of Duties. 62
11.03 Liability of Agent. 62
11.04 Reliance by Agent. 62
11.05 Notice of Default. 63
11.06 Credit Decision. 63
11.07 Indemnification. 64
11.08 Agent in Individual Capacity. 64
11.09 Successor Agent. 64
11.10 Documentation, Co-Syndication, Managing Agents. 65
ARTICLE 12 MISCELLANEOUS 65
12.01 Notices, Etc. 65
12.02 Amendments, Etc. 66
12.03 No Waiver; Remedies. 66
12.04 Costs and Expenses. 67
12.05 Indemnity. 67
12.06 Right of Set-off. 68
12.07 Binding Effect. 68
12.08 Assignments, Participations, Etc. 69
12.09 Confidentiality. 70
12.10 Survival. 71
12.11 Severability. 71
12.12 Headings. 71
12.13 No Third Parties Benefited. 71
12.14 Governing Law. 72
12.15 Execution in Counterparts. 72
12.16 ENTIRE AGREEMENT. 72
12.17 WAIVER OF JURY TRIAL. 72
<PAGE> sf-712790 iii
SCHEDULES
Schedule Description
1.01(a) Commitments; Commitment Percentages
1.01(b) Lending Offices
6.02(d) Corporate Power; Authorizations
6.07 Subsidiaries
6.12 Environmental Matters
6.13 Labor Matters
6.14 ERISA
9.01 Existing Liens
EXHIBITS
Exhibit Description
2.02(a) Form of Notice of Borrowing
2.04(a) 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(b) Form of Notice of Conversion/Continuation
7.01(c) Form of Subsidiary Guaranty
7.01(d) Form of Opinion of Counsel for the Company
7.01(e) Form of Contribution Agreement
7.02(d) Form of Officer's Closing Certificate
8.09(c) Form of Compliance Certificate
12.08(b) Form of Assignment and Assumption Agreement
<PAGE> sf-712790 iv
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July 22, 1999
among GEORGIA-PACIFIC CORPORATION, a Georgia corporation (the
"Company"), the various LENDERS that are, or may from time to
time become, party hereto (the "Lenders") and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative agent
for the Lenders (in such capacity, the "Agent"), COMMERZBANK AG,
NEW YORK BRANCH, as Documentation Agent, and THE CHASE MANHATTAN
BANK and CITIBANK, N.A., as Co-Syndication Agents.
WHEREAS, the Company, certain of the Lenders and the Agent
are party to the Credit Agreement, dated as of December 23, 1996,
as amended (the "1996 Credit Agreement");
WHEREAS, the Company has terminated the commitments under
the 1996 Credit Agreement and desires to enter into a new credit
facility; 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 $1,000,000,000, on the terms and subject to the conditions
set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 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 at
its executive offices, as its reference rate or prime 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:
<PAGE> sf712790 1
(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.
"Agent" means Bank of America in its capacity as
administrative agent for the Lenders, together with any successor
thereto in such capacity.
"Agent-Related Persons" means Bank of America and any
successor agent arising under Section 11.09 and any successor
letter of credit issuing bank hereunder, together with their
respective Affiliates (including, in the case of Bank of America,
the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Aggregate Tranche A Commitments" means the aggregate amount
of the Tranche A Commitments of all the Lenders as in effect from
time to time.
"Aggregate Tranche B Commitments" means the aggregate amount
of the Tranche B Commitments of all the Lenders as in effect from
time to time.
"Agreement" means this Credit Agreement.
"Arranger" means Banc of America Securities LLC.
"Assignee" means any Person which becomes a party to this
Agreement pursuant to Section 12.08.
"Available Tranche A Commitments" means, at any time, the
excess, if any, of the Aggregate Tranche A Commitments in effect
at such time over the sum of (a) the aggregate principal amount
of all Tranche A Loans then outstanding, plus (b) the aggregate
principal amount of all Tranche A Bid Loans then outstanding,
plus (c) the outstanding Tranche A L/C Obligations.
"Available Tranche B Commitments" means, at any time, the
excess, if any, of the Aggregate Tranche B Commitments in effect
at such time over the sum of (a) the aggregate principal amount
of all Tranche B Loans then outstanding, plus (b) the aggregate
principal amount of all Tranche B Bid Loans then outstanding,
plus (c), the aggregate principal amount of all 1996 Facility Bid
Loans then outstanding, plus (d) the outstanding Tranche B L/C
Obligations.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association and its
successors by merger and permitted assigns.
"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.
<PAGE> sf712790 2
"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 either a Tranche A Bid Loan or a Tranche B
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.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing
Bank and the Lenders, as collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance satisfactory to the Agent and the Issuing Bank (which
documents are hereby consented to by the Lenders). Derivatives
of such term shall have corresponding meaning. The Company
hereby grants the Agent, for the benefit of the Agent, the
Issuing Bank and the Lenders, a security interest in all such
cash and deposit account balances. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at
Bank of America.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act of 1980.
"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 7.01 and 7.02 shall have been
satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means for any Lender, either its Tranche A
Commitment or Tranche B Commitment, as applicable.
"Commitments" means, for any Lender, the sum of its Tranche
A Commitment and Tranche B Commitment.
"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 on 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 12.08.
"Committed Borrowing" means an extension of credit hereunder
consisting of Tranche A Loans or Tranche B Loans (but not
both) 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.
<PAGE> sf712790 3
"Committed Loan" means a Tranche A Loan or a Tranche B Loan
by a Lender to the Company pursuant to Section 2.01 and may be in
the form of 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.
"Contribution Agreement" means the Contribution Agreement of
even date herewith between the Company and each of its
Subsidiaries now or hereafter parties to the Subsidiary Guaranty
or the "Subsidiary Guaranty" as defined in the North American
Timber Agreement.
"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.
"EBITDA" means, as of the end of any Measurement Period, the
sum of the following, calculated for the Company and its
Subsidiaries on a consolidated basis: (a) net income (or net
loss) for such period, plus (b) all amounts treated as expenses
for depreciation, interest and the non-cash amortization of
intangibles of any kind to the extent included in the
determination of such net income (or loss), plus (c) cost of
timber sold by North American Timber Corporation (to the extent
it represents depletion) to the extent included in the
determination of such net income (or loss), plus (d) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss); provided, however,
that net income (or loss) shall be computed for these purposes
without giving effect to extraordinary cash gains or non-
recurring, non-cash items.
<PAGE> sf712790 4
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $250,000,000;
(b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital
and surplus of at least $250,000,000, provided that such bank is
acting through a branch or agency located in the United States;
(c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Lender,
(ii) a Subsidiary of a Person of which a Lender is a Subsidiary,
or (iii) a Person of which a Lender is a Subsidiary; and (d) any
other Person approved in writing by the Company, the Agent, and
the Issuing Bank.
"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, together with the regulations thereunder.
"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 10.01.
"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.
<PAGE> sf712790 5
"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 4.05(f)(i)(B).
"Form 4224" has the meaning specified in
Section 4.05(f)(i)(A).
"Form W-8" has the meaning specified in
Section 4.05(f)(i)(B).
"Form W-9" has the meaning specified in
Section 4.05(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.
<PAGE> sf712790 6
"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 6.05(a).
"Indebtedness for Borrowed Money" of any Person means,
without duplication,
(a) all indebtedness of such Person for borrowed money,
including the Company's Premium Equity Participating Security
Units, whether or not treated as indebtedness under GAAP, until
such time as they are converted into common stock of the Company;
(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 8.09; and
(f) all indebtedness of such Person or of others referred to in
paragraphs (a) through (e) 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 12.05(a).
"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:
<PAGE> sf712790 7
(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 Tranche A Termination Date, in the case of a Borrowing
of Tranche A Loans, or the Tranche B Termination Date, in the
case of a Borrowing of Tranche B Loans.
"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.
"Issuance Date" has the meaning specified in
subsection 3.01(a).
"Issue" means, with respect to any Letter of Credit, to
issue or to extend the expiry of, or to renew or increase the
amount of, such Letter of Credit; and the terms "Issued,"
"Issuing" and "Issuance" have corresponding meanings.
"Issuing Bank" means Bank of America in its capacity as
issuer of one or more Letters of Credit hereunder.
"Lender" has the meaning specified in the introduction to
this Agreement and includes each Lender listed on the signature
pages hereof and each Assignee. References to the "Lenders"
shall include Bank of America in its capacity as Issuing Bank;
for purposes of clarification only, to the extent that Bank of
America may have any rights or obligations in addition to those
of the Lenders due to its status as Issuing Bank, its status as
such will be specifically referenced.
<PAGE> sf712790 8
"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 on
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.
"L/C Advance" means each Lender's participation in any L/C
Borrowing in accordance with its Commitment Percentage.
"L/C Amendment Application" means an application form for
amendment of outstanding standby letters of credit as shall at
any time be in use at the Issuing Bank, as the Issuing Bank shall
request.
"L/C Application" means an application form for issuances of
standby letters of credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from
a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made.
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Lenders severally to participate
in, Letters of Credit from time to time Issued or outstanding
under Article 3, in an aggregate amount not to exceed on any date
the amount of $150,000,000, as the same shall be reduced as a
result of a reduction in the L/C Commitment pursuant to
Section 2.06. The L/C Commitment is a part of the combined
Commitments, rather than a separate, independent commitment.
"L/C Obligations" means at any time the sum of Tranche A L/C
Obligations and Tranche B L/C Obligations.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other
document relating to any Letter of Credit, including any of the
Issuing Bank's standard-form documents for Letter of Credit
Issuances.
"Letter of Credit" means any Tranche A Letter of Credit or
Tranche B Letter of Credit.
"LIBOR" means, for any Interest Period:
(a) the rate of interest per annum (carried out to the fifth
decimal point) equal to the rate determined by the Agent to be
the offered rate that appears on the page of the Telerate Screen
that displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3750) for
deposits in dollars (for delivery on the first day of
<PAGE> sf712790 9
such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period;
or
(b) in the event the rate referenced in the preceding
subsection (a) does not appear on such page or service or such
page or service shall cease to be available, the rate per annum
(carried to the fifth decimal place) equal to the rate determined
by the Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association
Interest Settlement Rate for deposits in dollars (for delivery on
the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period; or
(c) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by the Agent as the rate of interest at which dollar
deposits (for delivery on the first day of such Interest Period)
in same-day funds in the approximate amount of the applicable
Committed Loan and with a term equivalent to such Interest Period
would be offered by its London Branch to major banks in the
offshore dollar market at their request at approximately 11:00
a.m. (London time) two Business Days prior to the first day of
such Interest Period.
"Lien" means any mortgage, security interest, pledge or
lien.
"Loan" means a loan by a Lender to the Company pursuant to
Article 2 or Article 3 in the form of a Committed Loan, a Bid
Loan, or an L/C Advance.
"Loan Documents" means this Agreement, the Subsidiary
Guaranty, the Contribution Agreement, the L/C Related Documents,
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
<PAGE> sf712790 10
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.
"1996 Credit Agreement" has the meaning specified in the
first recital of this Agreement.
"1996 Facility Bid Loan" means any bid loan outstanding
under the 1996 Credit Agreement on the Closing Date.
"North American Timber Agreement" means the Credit
Agreement, dated as of the date hereof, by and among North
American Timber Corporation, the Lenders, and Bank of America as
the agent for the Lenders.
"Notice of Assignment" has the meaning specified in
Section 12.08(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, L/C Obligations and other
Indebtedness, 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.
"Other Taxes" has the meaning specified in Section 4.05(b).
"Participant" has the meaning specified in Section 12.08(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,
<PAGE> sf712790 11
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 9.01.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of the Company or any Subsidiary
existing or arising under Swap Contracts, provided that such
obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or
assets held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person in conjunction
with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a
"market view".
"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 North American Timber
Corp., a Delaware corporation, Unisource Worldwide, Inc., a
Delaware corporation, 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, Nekoosa Papers Inc., a
Wisconsin corporation, and any other Subsidiary having assets
constituting at least 10% of the Company's consolidated assets.
<PAGE> sf712790 12
"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 5.09.
"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 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
Executive 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
together with the Company and/or one or more other Restricted
Subsidiaries, owns a Principal Property.
"Sale-Leaseback Transaction" has the meaning specified in
Section 9.02.
"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
7.01(c).
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, cap,
<PAGE> sf712790 13
collar or floor transaction, currency swap, cross-currency rate
swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise
clearly requires, any master agreement relating to or governing
any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or
more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in
clause (a) the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined by the Agent
based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap
Contracts (which may include any Lender).
"Taxes" has the meaning specified in Section 4.05(a).
"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.
"Tranche A Bid Loan" means a Loan made by a Lender to the
Company pursuant to subsection 2.03(a) and may be a Base Rate Bid
Loan or a Fixed Rate Bid Loan.
"Tranche A Commitment" means for each Lender, as the context
may require, (a) the amount in dollars set forth on Schedule
1.01(a) opposite the name of such Lender under the heading
"Tranche A 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 12.08; or (b) the obligation of such Lender to extend
credit to the Company hereunder in the amount specified in the
immediately preceding clause (a).
"Tranche A L/C Obligations" means at any time the sum of
(a) the aggregate undrawn amount of all Tranche A Letters of
Credit then outstanding, plus (b) the amount of all unreimbursed
drawings under all Tranche A Letters of Credit, including all
outstanding L/C Borrowings made on account of Tranche A Letters
of Credit.
"Tranche A Letter of Credit" means any letter of credit
Issued by the Issuing Bank pursuant to Article 3 and allocated in
the Company's request therefor to the Tranche A Commitments.
"Tranche A Loan" has the meaning set forth in
subsection 2.01(a).
"Tranche A Termination Date" means July 20, 2000.
"Tranche B Bid Loan" means a Loan made by a Lender to the
Company pursuant to subsection 2.03(b) and may be a Base Rate Bid
Loan or a Fixed Rate Bid Loan.
<PAGE> sf712790 14
"Tranche B Commitment" means for each Lender, as the context
may require (a) the amount in dollars set forth on Schedule
1.01(a) opposite the name of such Lender under the heading
"Tranche B 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 12.08; or (b) the obligation of such Lender to extend
credit to the Company hereunder in the amount specified in the
immediately preceding clause (b).
"Tranche B L/C Obligations" means at any time the sum of
(a) the aggregate undrawn amount of all Tranche B Letters of
Credit then outstanding, plus (b) the amount of all unreimbursed
drawings under all Tranche B Letters of Credit, including all
outstanding L/C Borrowings made on account of Tranche B Letters
of Credit.
"Tranche B Letter of Credit" means any letter of credit
Issued by the Issuing Bank pursuant to Article 3 and allocated in
the Company's request therefor to the Tranche B Commitments.
"Tranche B Loan" has the meaning set forth in
Section 2.01(b).
"Tranche B Termination Date" means July 22, 2004.
"Unrestricted Subsidiary" means any Subsidiary of the
Company other than a Restricted Subsidiary.
"Utilization Fee" has the meaning specified in
Section 4.01(a).
"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.
1.02 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."
1.03 Accounting Matters.
All accounting terms not specifically defined herein shall
be construed in accordance with GAAP, and all financial
statements referred to in Sections 8.09(a) and (b) shall be
prepared in accordance with GAAP; provided, however, that all
computations determining compliance with Article 8 shall use
accounting principles consistent with those applied in the
preparation of the financial statements of the Company referred
to in Section 6.05(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
<PAGE> sf712790 15
of the Required Lenders) and the Company shall negotiate in good
faith to amend such financial covenant to account for such
changes in GAAP.
1.04 Certain Terms.
The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole, including
the Exhibits and Schedules hereto, 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.
Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments
and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
ARTICLE 2
AMOUNTS AND TERMS OF THE LOANS
2.01 Committed Loans.
(a) Tranche A 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 Tranche A Termination Date (each
such loan, a "Tranche A Loan"), in an aggregate principal amount
at any time outstanding which does not exceed such Lender's
Tranche A Commitment; provided, however, that after giving effect
to any Committed Borrowing of Tranche A Loans, (i) the aggregate
principal amount of all Tranche A Loans then outstanding, plus
(ii) the aggregate principal amount of all Tranche A Bid Loans
then outstanding, plus (iii) the outstanding Tranche A L/C
Obligations shall not exceed the Aggregate Tranche A Commitments.
Any principal amount of the Tranche A Loans which is repaid or
prepaid by the Company may be reborrowed within the limitations
set forth in this Section 2.01(a).
(b) Tranche B 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 Tranche B Termination Date (each
such loan, a "Tranche B Loan"), in an aggregate principal amount
at any time outstanding which does not exceed such Lender's
Tranche B Commitment.; provided, however, that after giving
effect to any Committed Borrowing of Tranche B Loans, (i) the
aggregate principal amount of all Tranche B Loans then
outstanding, plus (ii) the aggregate principal amount of all
Tranche B Bid Loans then outstanding, plus (iii) the aggregate
principal amount of all 1996 Facility Bid Loans then outstanding,
<PAGE> sf712790 16
plus (vi) the outstanding Tranche B L/C Obligations shall not
exceed the Aggregate Tranche B Commitments. Any principal amount
of the Tranche B Loans which is repaid or prepaid by the Company
may be reborrowed within the limitations set forth in this
Section 2.01(b).
2.02 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 delivered by facsimile, in substantially
the form of Exhibit 2.02(a), 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 unused Aggregate Tranche
A Commitments or Aggregate Tranche B Commitments, as
applicable, set forth in Section 2.01(a) or (b),
respectively, 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 of
Tranche A Loans or Tranche B Loans;
(iv) whether such Borrowing is to be comprised of
Eurodollar Loans or Reference Rate Loans; and
(v) 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 4.04(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 7 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
<PAGE> sf712790 17
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.
2.03 Bid Borrowings.
(a) 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 Tranche A Termination Date
request the Lenders to submit offers to make Tranche A 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 Tranche A Bid Loans made by all Lenders
then outstanding plus (ii) the aggregate principal amount of all
Tranche A Loans then outstanding plus (iii) the outstanding
Tranche A L/C Obligations exceed (b) the Aggregate Tranche A
Commitments.
(b) 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 Tranche B Termination Date
request the Lenders to submit offers to make Tranche B 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 Tranche B Bid Loans made by all Lenders
then outstanding plus (ii) the aggregate principal amount of all
Tranche B Loans then outstanding plus (iii) the aggregate
principal amount of all 1996 Facility Bid Loans then outstanding
plus (vi) the outstanding Tranche B L/C Obligations exceed
(b) the Aggregate Tranche B Commitments.
2.04 Procedure for Bid Borrowings.
(a) The Company may request a Bid Borrowing hereunder by
delivering to the Agent by facsimile 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(a) 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 in excess
thereof and shall not, in the case of a Tranche A Bid
Borrowing, exceed the Available Tranche A Commitments on the
date such proposed Borrowing is made (after giving effect to
each payment and prepayment made on such date) or, in the
case of a Tranche B Bid Borrowing, exceed the Available
Tranche B Commitments on the date such proposed Borrowing is
made (after giving effect to each payment and prepayment
made on such date);
<PAGE> sf712790 18
(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 Tranche B
Termination Date) and, in the case of each partial repayment, the
amount thereof;
(iv) whether the Bid Loans requested are Tranche A
Bid Loans or Tranche B Bid Loans, and 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 4.05 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 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) (A) three Business
Days prior to the date of the proposed Bid Borrowing, in the case
of a request for Base Rate Bid Loans, and (B) 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 Tranche A Commitment or its
Tranche B 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 Section 2.04(b)(ii);
(B) contains qualifying, conditional or similar
language;
<PAGE> sf712790 19
(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
Section 2.04(b)(i).
(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 Section 2.04(b), 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
Section 2.04(b)) 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
Section 2.04(c)(i) or accept one or more of the offers
pursuant to this Section 2.04(c)(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 Section 2.04(c)(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 4.01(a), each
outstanding Bid Loan (and until repayment in full thereof, each
1996 Facility Bid Loan) shall be deemed to utilize the Tranche A
Commitments of each Lender, in the case of Tranche A Bid Loans,
or the Tranche B Commitments of each Lender, in the case of
Tranche B Bid Loans, 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 1996 Facility Bid Loan).
(e) The rights of any Lender under the 1996 Credit Agreement
which is also a Lender under this Agreement and which has made
1996 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 1996 Facility Bid Loans as if
such 1996 Facility Bid Loans were Bid Loans hereunder.
<PAGE> sf712790 20
2.05 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 12.08(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).
2.06 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, allocated between
Tranche A Commitments or Tranche B Commitments, as the Company
may elect; 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. No reduction in the
Commitments shall reduce the L/C Commitment until the aggregate
Commitments are reduced to $150,000,000, after which each
reduction in the Commitments shall reduce the L/C Commitment
dollar for dollar. The Agent shall promptly notify each Lender
of its receipt of any notice under this Section 2.06.
2.07 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 Tranche A Loans on the Tranche A Termination Date.
The Company agrees to repay to the Agent for the account of the
Lenders the outstanding principal amount of all Tranche B Loans
on the Tranche B 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)).
<PAGE> sf712790 21
2.08 Optional Prepayments.
(a) Subject to Section 5.06(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 5.06(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.
2.09 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:
<TABLE>
<CAPTION>
Debt Rating Applicable Margin
on Eurodollar Loans
Moody's S&P Tranche A Loans / Tranche B Loans
<S> <C> <C> <C>
Baal higher or BBB+ or higher 0.525% / 0.500%
Baa2 or BBB 0.625% / 0.600%
Baa3 or BBB- 0.725% / 0.700%
Bal or BB+ 1.075% / 1.050%
Ba2 or lower and BB or lower 1.275% / 1.250%
</TABLE>
<PAGE> sf712790 22
provided, however, that if at any time no Debt Rating is
available, the applicable margin shall be 1.275% per annum for
Tranche A Loans and 1.250% per annum for Tranche B Loans.
(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. In the event of a split rating, the
higher rating will apply; if the Debt Ratings are split by more
than one level, one level above the lower rating will apply.
(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).
2.10 Default Interest.
During the continuation of any Event of Default pursuant
to Section 10.01(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).
2.11 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
<PAGE> sf712790 23
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(b), 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, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Committed Loans to be
converted or continued;
(iii) whether such Committed Loans are Tranche
A Loans or Tranche B Loans; and
(iv) 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.
2.12 Termination of Prior Commitments.
The Company and each of the Lenders agree that the
"Commitments" (as defined in the 1996 Credit Agreement) will
terminate as of the Closing Date, and each Lender waives the
notice requirement set forth in Section 2.08(a) of the 1996
Credit Agreement regarding such termination.
<PAGE> sf712790 24
ARTICLE 3
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein
(i) the Issuing Bank agrees, (A) from time to time on any
Business Day during the period from the Closing Date to the
Tranche A Termination Date to issue Tranche A Letters of Credit
for the account of the Company, and to amend or renew Tranche A
Letters of Credit previously issued by it, in accordance with
subsections 3.02(c) and 3.02(d), (B) from time to time on any
Business Day during the period from the Closing Date to the
Tranche B Termination Date to issue Tranche B Letters of Credit
for the account of the Company, and to amend or renew Tranche B
Letters of Credit previously issued by it, in accordance with
subsections 3.02(c) and 3.02(d), and (C) to honor drafts under
the Letters of Credit; and (ii) the Lenders severally agree to
purchase an irrevocable and unconditional participation in each
Letter of Credit Issued for the account of the Company; provided,
that the Issuing Bank shall not be obligated to Issue, and no
Lender shall be obligated to participate in, any Letter of Credit
if as of the date of Issuance of such Letter of Credit (the
"Issuance Date"), after giving effect to any requested Loans,
(A) (1) the aggregate principal amount of all Tranche A Loans
then outstanding plus (2) the aggregate principal amount of all
Tranche A Bid Loans then outstanding plus (3) the outstanding
Tranche A L/C Obligations exceeds the Aggregate Tranche A
Commitments; (B) (1) the aggregate principal amount of all
Tranche B Loans then outstanding plus (2) the aggregate principal
amount of all Tranche B Bid Loans then outstanding plus (3) the
aggregate principal amount of all 1996 Facility Bid Loans then
outstanding plus (4) the outstanding Tranche B L/C Obligations
exceeds the Aggregate Tranche B Commitments; or (C) the total
amount of L/C Obligations exceeds the L/C Commitment. Within the
foregoing limits, and subject to the other terms and conditions
hereof, the Company's ability to obtain Letters of Credit shall
be fully revolving, and, accordingly, the Company may, during the
foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and
reimbursed.
(b) The Issuing Bank is under no obligation to Issue
any Letter of Credit if:
(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain the Issuing Bank from Issuing
such Letter of Credit, or any Requirement of Law applicable
to the Issuing Bank or any request or directive (whether or
not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the Issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which the Issuing Bank in good faith
deems material to it;
<PAGE> sf712790 25
(ii) the Issuing Bank has received written
notice from any Lender, the Agent or the Company, on or
prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Article 7 is not then
satisfied;
(iii) the expiry date of any requested
Letter of Credit is (A) more than one year after the date of
Issuance, unless the Required Lenders have approved such
expiry date in writing, (B) after the Tranche A Termination
Date, in the case of a Tranche A Letter of Credit, unless
all of the Lenders have approved such expiry date in
writing, or (C) after the Tranche B Termination Date, in the
case of a Tranche B Letter of Credit, unless all of the
Lenders have approved such expiry date in writing;
(iv) the expiry date of any requested Letter
of Credit is prior to the maturity date of any financial
obligation to be supported by the requested Letter of
Credit;
(v) any requested Letter of Credit does not
provide for drafts, or is not otherwise in form and
substance acceptable to the Issuing Bank, or the Issuance of
a Letter of Credit shall violate any applicable policies of
the Issuing Bank;
(vi) any standby Letter of Credit is for the
purpose of supporting the Issuance of any Letter of Credit
by any other Person; or
(vii) such Letter of Credit is in a face
amount less than $100,000 or is denominated in a currency
other than dollars.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of the Company received by the Issuing Bank (with
a copy sent by the Company to the Agent) at least four days (or
such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of
issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the Issuing Bank: (i) the
proposed date of issuance of the Letter of Credit (which shall be
a Business Day); (ii) the face amount of the Letter of Credit;
(iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any certificate to
be presented by the beneficiary in case of any drawing
thereunder; (vii) whether such Letter of Credit should be
allocated to the Tranche A Commitments or the Tranche B
Commitments; and (viii) such other matters as the Issuing Bank
may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit, the Issuing Bank will confirm with the Agent
(by telephone or in writing) that the Agent has received a copy
of the L/C Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the Agent with
a copy thereof. Unless the Issuing Bank has received notice on
or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit from the
Agent (i) directing the Issuing Bank not to issue such Letter of
Credit because such issuance is not then permitted under
subsection 3.01(b)(iii) as a result of the limitations set forth
<PAGE> sf712790 26
in clauses (A) through (B) thereof or subsection 3.01(b)(ii); or
(ii) that one or more conditions specified in Article 7 are not
then satisfied; then, subject to the terms and conditions hereof,
the Issuing Bank shall, on the requested date, issue a Letter of
Credit for the account of the Company in accordance with the
Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Tranche A Termination Date (in the case of
Tranche A Letters of Credit) or the Tranche B Termination Date
(in the case of Tranche B Letters of Credit), the Issuing Bank
will, upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at
least five days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion) prior to
the proposed date of amendment, amend any Letter of Credit issued
by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original
writing, made in the form of an L/C Amendment Application and
shall specify in form and detail satisfactory to the Issuing
Bank: (i) the Letter of Credit to be amended; (ii) the proposed
date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as the Issuing Bank may require. The
Issuing Bank shall be under no obligation to amend any Letter of
Credit if: (A) the Issuing Bank would have no obligation at such
time to issue such Letter of Credit in its amended form under the
terms of this Agreement; or (B) the beneficiary of any such
letter of Credit does not accept the proposed amendment to the
Letter of Credit. The Agent will promptly notify the Banks of
the receipt by it of any L/C Application or L/C Amendment
Application.
(d) The Issuing Bank and the Lenders agree that, while a Letter
of Credit is outstanding and prior to the Tranche A Termination
Date (in the case of Tranche A Letters of Credit) or the Tranche
B Termination Date (in the case of Tranche B Letters of Credit),
at the option of the Company and upon the written request of the
Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least five days (or such shorter time as
the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of notification of
renewal, the Issuing Bank shall be entitled to authorize the
renewal of any Letter of Credit issued by it. Each such request
for renewal of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, in the form of an
L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be
renewed; (ii) the proposed date of notification of renewal of the
Letter of Credit (which shall be a Business Day); (iii) the
revised expiry date of the Letter of Credit; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall
be under no obligation so to renew any Letter of Credit if:
(A) the Issuing Bank would have no obligation at such time to
issue or amend such Letter of Credit in its renewed form under
the terms of this Agreement; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed renewal of the
Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that
such Letter of Credit shall not be renewed, and if at the time of
renewal the Issuing Bank would be entitled to authorize the
<PAGE> sf712790 27
automatic renewal of such Letter of Credit in accordance with
this subsection 3.02(d) upon the request of the Company but the
Issuing Bank shall not have received any L/C Amendment
Application from the Company with respect to such renewal or
other written direction by the Company with respect thereto, the
Issuing Bank shall (unless such renewal would cause the expiry
date thereof to extend beyond the Tranche A Termination Date, in
the case of a Tranche A Letter of Credit, or the Tranche B
Termination Date, in the case of a Tranche B Letter of Credit)
nonetheless be permitted to allow such Letter of Credit to renew,
and the Company and the Lenders hereby authorize such renewal,
and, accordingly, the Issuing Bank shall be deemed to have
received an L/C Amendment Application from the Company requesting
such renewal.
(e) The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Required Lenders), deliver any
notices of termination or other communications to any Letter of
Credit beneficiary or transferee, and take any other action as
necessary or appropriate, at any time and from time to time, in
order to cause the expiry date of such Letter of Credit to be a
date not later than the Tranche A Termination Date, in the case
of a Tranche A Letter of Credit, or in order to cause the expiry
date of such Letter of Credit to be a date not later than the
Tranche B Termination Date, in the case of a Tranche B Letter of
Credit.
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of
Credit, or amendment to or renewal of a Letter of Credit, to an
advising bank or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of
Credit.
3.03 Role of the Issuing Bank.
(a) Each Lender and the Company agree that, in paying any
drawing under a Letter of Credit, the Issuing Bank shall not have
any responsibility to obtain any document (other than any sight
draft and certificates expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or
delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank
shall be liable to any Lender for: (i) any action taken or
omitted in connection herewith at the request or with the
approval of the Lenders (including the Required Lenders, as
applicable); (ii) any action taken or omitted in the absence of
gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-
Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its
use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the
Company's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the Issuing Bank,
<PAGE> sf712790 28
shall be liable or responsible for any of the matters described
in subsections 3.04(a) through (g); provided, however, anything
in such clauses to the contrary notwithstanding, that the Company
may have a claim against the Issuing Bank, and the Issuing Bank
may be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Company which the Company proves were
caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and
not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of
any notice or information to the contrary; and (ii) the Issuing
Bank shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.
3.04 Obligations Absolute.
The obligations of the Company under this Agreement and
any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing
and any drawing under a Letter of Credit converted into Revolving
Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each
such other L/C-Related Document under all circumstances,
including the following:
(a) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Company
in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-
Related Documents;
(c) the existence of any claim, set-off, defense or other right
that the Company may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-
Related Documents or any unrelated transaction;
(d) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay
in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit;
(e) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any
payment made by the Issuing Bank under any Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor-in-
possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including
any arising in connection with any Insolvency Proceeding;
<PAGE> sf712790 29
(f) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of
the Company in respect of any Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, the Company or a guarantor.
3.05 Cash Collateral Pledge.
Upon the request of the Agent or the Required Lenders,
(a) if the Issuing Bank has honored any full or partial drawing
request on any Letter of Credit and such drawing has resulted in
an L/C Borrowing hereunder, (b) if, as of the Tranche A
Termination Date, any Tranche A Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or
(c) if, as of the Tranche B Termination Date, any Tranche B
Letters of Credit may for any reason remain outstanding and
partially or wholly undrawn, then, the Company shall immediately
Cash Collateralize the L/C Obligations in an amount equal to such
L/C Obligations.
3.06 Letter of Credit Fees.
(a) The Company shall pay to the Agent for the account of each
of the Lenders a letter of credit fee with respect to the Tranche
A Letters of Credit equal to the applicable margin above LIBOR
then in effect under Section 2.09 for Tranche A Eurodollar Loans
for each day such Tranche A Letters of Credit are outstanding,
computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter and based upon Tranche A Letters of
Credit outstanding for that quarter as calculated by the Agent.
The Company shall pay to the Agent for the account of each of the
Lenders a letter of credit fee with respect to the Tranche B
Letters of Credit equal to the applicable margin above LIBOR then
in effect under Section 2.09 for Tranche B Eurodollar Loans for
each day such Tranche B Letters of Credit are outstanding,
computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter and based upon Tranche B Letters of
Credit outstanding for that quarter as calculated by the Agent.
Such letter of credit fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter during
which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Closing Date, through the
Tranche B Termination Date (or such later date upon which the
outstanding Letters of Credit shall expire), with the final
payment to be made on the Tranche A Termination Date (or such
later expiration date), in the case of Tranche A Letters of
Credit and on the Tranche B Termination Date (or such later
expiration date), in the case of Tranche B Letters of Credit.
(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank
equal to 0.125% of the face amount (or increased face amount, as
the case may be) of such Letter of Credit. Such Letter of Credit
fronting fee shall be due and payable on each date of Issuance of
a Letter of Credit.
<PAGE> sf712790 30
(c) The Company shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the
Issuing Bank relating to standby letters of credit as from time
to time in effect.
3.07 International Standby Practices.
The International Standby Practices as published by the
International Chamber of Commerce most recently at the time of
issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters
of Credit.
ARTICLE 4
FEES; PAYMENTS; TAXES
4.01 Fees.
(a) Utilization Fee. The Company shall pay to the Agent for the
account of each Lender a utilization fee ("Utilization Fee") on
the actual daily aggregate principal amount of such Lender's
Committed Loans then outstanding hereunder with respect to each
day on which the principal amount of all Committed Loans then
outstanding is equal to or exceeds 33% of the aggregate
Commitments (each such day a "Utilization Fee Day"). Such fee
shall be computed with respect to each Utilization Fee Day at a
rate equal to 0.125% per annum, and shall accrue with respect to
each Utilization Fee Day occurring on and after the Closing Date
to the later to occur of (A) the Tranche B Termination Date and
(B) the date on which all Loans and interest thereon are paid in
full and the Commitments hereunder terminated, and, to the extent
accrued during such period, shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter
(commencing on September 30, 1999) through the later to occur of
(X) the Tranche B Termination Date and (Y) the date on which all
Loans, L/C Obligations and interest thereon are paid in full and
the Commitments hereunder terminated, with the final payment to
be made on the latest to occur of such dates.
(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
Tranche B Termination Date at a rate per annum times the Tranche
A Commitment and the Tranche B Commitment of such Lender
(regardless of utilization thereof) as follows:
Debt Rating Facility Fee
Moody's S&P Tranche A / Tranche B
Baal higher or BBB+ or higher 0.100% / 0.125%
Baa2 or BBB 0.125% / 0.150%
Baa3 or BBB- 0.150% / 0.175%
Bal or BB+ 0.175% / 0.200%
Ba2 or lower and BB or lower 0.225% / 0.250%
<PAGE> sf712790 31
provided, however, that if at any time no Debt Rating is
available, the facility fee shall be 0.225% per annum for
Tranche A Commitments and 0.250% per annum for Tranche B
Commitments. In the event of a split rating, the higher
rating will apply; if the Debt Ratings are split by more
than one level, one level above the lower rating will apply.
(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 September 30,
1999, (B) on any date of reduction or termination of the
Commitments and (C) on the Tranche B 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.
4.02 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.
4.03 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
<PAGE> sf712790 32
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%.
4.04 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 4.04(b) shall
relieve any Lender which has failed to make available its
Commitment Percentage of any Committed Borrowing hereunder from
its obligation to do so in accordance with the terms hereof.
<PAGE> sf712790 33
(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.
4.05 Taxes.
(a) Subject to Section 4.05(g), 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 Section 4.05(g), 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 4.05) 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,
<PAGE> sf712790 34
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
Section 4.05(g),
(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 4.05), 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 4.05, 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 12.08 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;
<PAGE> sf712790 35
(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)) 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 Section 4.05(a), 4.05(b), 4.05(d), or 4.05(i) 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 4.05(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 Section 4.05(f)(i)(A), 4.05(f)(ii)(A) or
4.05(f)(iii) 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
<PAGE> sf712790 36
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 Section 4.05(a),
4.05(c) or 4.05(d) 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 Section 4.05(f)(i)(B),
4.05(f)(ii)(B) or 4.05(f)(iii) 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 Section 4.05(a),
4.05(c) or 4.05(d) 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 4.05; 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 Section 4.05(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 4.05, 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.
<PAGE> sf712790 37
4.06 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 10.01(a), in respect of any
Obligation owing to it (including with respect to any 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 10.01(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 10.01(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 10.01(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 4.06 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 4.06 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 4.06 to share
in the benefits of any recovery on such secured claim.
ARTICLE 5
CHANGES IN CIRCUMSTANCES; ETC.
5.01 Eurodollar Rate Protection.
If with respect to any Interest Period for Eurodollar Loans,
either (a) the Agent or the Required Lenders determine that for
any reason adequate and reasonable means do not exist for
ascertaining LIBOR for such Interest Period; 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.
<PAGE> sf712790 38
5.02 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 (a) LIBOR for the Interest
Period for such Eurodollar Loan from (b) 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.
5.03 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 5.02) 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 or participating in
Letters of Credit or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue,
issuing or maintaining any Letter of Credit or of agreeing to
make or making, funding or maintaining any unpaid drawing under
any Letter of Credit, then the Company shall, subject to
Section 5.08(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 5.03, the term
"Taxes" shall have the meaning specified in
Section 4.05(a) without regard to the exclusions set forth in
Section 4.05(a).
5.04 Illegality.
Notwithstanding any other provision of this Agreement, if
the introduction of any Requirement of Law, or in the
interpretation or administration of any Requirement of Law 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 applicable 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.
5.05 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
<PAGE> sf712790 39
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 5.08(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.
5.06 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 5.06(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 5.06(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
<PAGE> sf712790 40
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 constituting Tranche
A Loans pursuant to Section 2.09(a)(ii).
5.07 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 5.01, 5.02, 5.03,
5.04 or 5.06, 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 4.05, 5.02, 5.03, 5.05 and/or 5.06 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 Sections 5.02, 5.03,
5.05 or 5.06 the amount requested by such Lender no later than
five Business Days after such demand.
5.08 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 4.05(c) or (d) or
Sections 5.02, 5.03, 5.04 or 5.05 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 5.08 shall affect or postpone
any of the obligations of the Company or the right of any Lender
provided in Section 4.05(c) or (d) or Sections 5.02, 5.03, 5.04
or 5.05.
(b) Notwithstanding the provisions of Sections 4.05(c), 4.05(d),
5.02, 5.03 and 5.05, 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 4.05(c) or (d), not more than six months and (B) in the
case of Sections 5.02, 5.03 or 5.05, 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.
<PAGE> sf712790 41
5.09 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 5 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 Utilization Fees and
facility 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 5.06 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 6
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:
6.01 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.
<PAGE> sf712790 42
6.02 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 on Schedule 6.02(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.
<PAGE> sf712790 43
6.03 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.
6.04 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.
6.05 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, 1998, 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,
1998 or in the notes thereto which are required to be disclosed
therein.
(b) Since December 31, 1998, 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, 1998
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.
6.06 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
<PAGE> sf712790 44
before any court or other Governmental Authority or any
arbitrator that are likely to have a Material Adverse Effect.
6.07 Subsidiaries.
(a) Set forth on Schedule 6.07 is a complete and correct list of
all Restricted Subsidiaries and Unrestricted Subsidiaries of the
Company 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.
(b) (i) All of the outstanding shares of securities of each of
the Subsidiaries of the Company listed on Schedule 6.07 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.
6.08 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.
6.09 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.
6.10 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.
6.11 Margin Regulations. No part of the proceeds of any Loan
will be used in violation of Regulation T, U, or X of the Federal
Reserve Board. After giving effect to the
<PAGE> sf712790 45
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 6.11 with such meanings.
6.12 Environmental Matters.
Except as set forth on Schedule 6.12:
(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;
<PAGE> sf712790 46
(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.
<PAGE> sf712790 47
6.13 Labor Matters.
Except as set forth on Schedule 6.13, 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.
6.14 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 on
Schedule 6.14, 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.
6.15 Y2K Review.
On the basis of a comprehensive review and assessment of the
Company's and its Subsidiaries' systems and equipment and due
inquiry made of the Company's and its Subsidiaries' material
suppliers, vendors and customers, the Company's Responsible
Officers are of the view that the "Year 2000 problem" (i.e., the
inability of computers, as well as embedded microchips in non-
computing devices, to perform properly date-sensitive functions
with respect to certain dates prior to and after December 31,
1999), including costs of remediation, will not result in a
Material Adverse Effect. The Company and its Subsidiaries have
developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of
failure of their own or a third party's systems or equipment due
to the Year 2000 problem, including those of vendors, customers
and suppliers, as well as a general failure of or interruption in
its communications and delivery infrastructure.
6.16 Swap Obligations.
Neither the Company nor any of its Subsidiaries has incurred
any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own
independent assessment of its consolidated assets, liabilities
and commitments and has considered appropriate means of
mitigating and managing risks associated with such matters and
has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap
Contract.
6.17 Full Disclosure.
None of the representations or warranties made by the
Company or any Restricted Subsidiary in the Loan Documents as of
the date such representations and warranties are made or deemed
made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of the
Company or any Restricted Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials
delivered by or on behalf of the Company to the Lenders prior to
the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or
otherwise necessary to make the statements made therein, in light
of the circumstances under which they are made, not misleading as
of the time when made or delivered.
<PAGE> sf712790 48
ARTICLE 7
CONDITIONS PRECEDENT
7.01 Conditions Precedent to the First Loan.
The obligation of each Lender to make its initial Loan and
the obligation of the Issuing Bank to Issue its initial Letter of
Credit is subject to the satisfaction of the condition precedent
that the Agent shall have received the following, each, unless
otherwise specified below, dated as of 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
they shall have received a further certificate of the Secretary
or Assistant Secretary of such Loan Party canceling 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
7.01(c) (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 7.01(d) (which opinion the
Company and its Subsidiaries hereby expressly instruct such
counsel to prepare and deliver);
(e) Contribution Agreement. A duly executed copy of the
Contribution Agreement, in substantially the form of Exhibit
7.01(e) (the "Contribution Agreement"); and
(f) Termination of the 1996 Credit Agreement. Evidence
satisfactory to the Agent that the 1996 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 1996 Facility Bid Loans
<PAGE> sf712790 49
outstanding on the Closing Date shall survive the termination of
the 1996 Credit Agreement and such 1996 Facility Bid Loans shall
be repaid when due in accordance with their respective terms.
7.02 Additional Conditions Precedent to the First Loan.
The obligation of each Lender to make its initial Loan and
the obligation of the Issuing Bank to Issue its initial Letter of
Credit is subject to the further conditions precedent that:
(a) No Material Adverse Effect. Since December 31, 1998, 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 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 4.01 to the extent then due and
payable and all reasonable costs and expenses referred to in
Section 12.04 (including legal fees and expenses) and any
indemnity pursuant to Section 12.05 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 7.02(d) as to
the satisfaction of the conditions set forth in this Section 7.02
and to the effect that on the Closing Date, the representations
and warranties contained in Article 6 are correct.
(e) North American Timber Agreement. All conditions precedent
described in Sections 7.01 and 7.02 of the North American Timber
Agreement shall have been satisfied.
7.03 Conditions Precedent to Each Committed Loan and Letter of
Credit.
The obligation of each Lender to make any Committed Loan
(including its initial Committed Loan) and the obligation of the
Issuing Bank to Issue any Letter of Credit (including the initial
Letter of Credit) 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 or in the case of any
Issuance of any Letter of Credit, the Issuing Bank and the Agent
shall have received an L/C Application or L/C Amendment
Application, as required under Section 3.02.
(b) Accuracy of Representations; No Default; Etc. The following
statements shall be true on the date of each Committed Loan or
Issuance Date, as the case may be, before and after giving effect
thereto:
(i) The representations and warranties contained in
Article 6 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
Section 6.05(b)) as of such date as though made on and as of such
date; and
<PAGE> sf712790 50
(ii) No Default or Event of Default has occurred and is
continuing or would result from such Committed Loan being made or
Letter of Credit being Issued 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.
7.04 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 6 are correct on and (except for representations and
warranties relating solely to a particular point in time and
other than under Section 6.05(b) 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 8
AFFIRMATIVE COVENANTS
The Company agrees that as long as the obligations of the
Lenders to make Loans shall remain in effect or any Letter of
Credit remain outstanding and until all Obligations shall have
been paid or performed in full, unless the Required Lenders shall
otherwise consent in writing:
8.01 Application of Proceeds.
The Company will apply the proceeds of the Loans for general
corporate purposes.
8.02 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.
8.03 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,
<PAGE> sf712790 51
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.
8.04 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.
8.05 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 9.03 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.
8.06 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.
8.07 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.
8.08 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 8.08 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.
8.09 Financial Statements.
The Company will furnish to the Agent, with sufficient
copies for the Lenders:
<PAGE> sf712790 52
(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 subsections 8.09(a) and (b), (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 8.09(c).
8.10 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.
<PAGE> sf712790 53
8.11 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.
8.12 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 8.12.
8.13 New Subsidiaries.
If the Company or any of its Subsidiaries at any time after the
date hereof acquires, forms, or establishes any Principal
Subsidiary or any Subsidiary becomes a Principal Subsidiary, the
Company shall cause any such Principal Subsidiary to promptly
(a) execute and deliver to Agent each of the Subsidiary Guaranty
and the Contribution Agreement; and (b) provide such evidence of
due authorization, execution, and delivery of such Loan Documents
as the Agent or the Required Lenders may reasonably require.
ARTICLE 9
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:
<PAGE> sf712790 54
9.01 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 on Schedule
9.01;
(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 Sections 9.01(c) and 9.01(d), 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 Restricted 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;
<PAGE> sf712790 55
(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 Restricted 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 Section 9.01(a) through (l) or this Section 9.01(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 Restricted 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 Restricted Subsidiaries are a
party;
<PAGE> sf712790 56
(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 Restricted 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 9.02.
9.02 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 Restricted Subsidiaries to such Person (a "Sale-Leaseback
Transaction") unless (a) the Company and/or such Restricted
Subsidiary or Restricted 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 9.01, 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 9.01 and 9.02,
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 Section 9.02(b) or 9.02(c), provided that the aggregate
amount of all such Liens and Sale-Leaseback Transactions
permitted by this Section 9.02 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 9.01, 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.
<PAGE> sf712790 57
9.03 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) either (x) in the case of such merger or consolidation, the
Company is the surviving corporation or (y) 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; and (b) after
giving effect to such transaction, no Default or Event of Default
exists and the Company or such surviving Person, as applicable,
has demonstrated its compliance with Section 9.08 to the
reasonable satisfaction of the Required Lenders.
9.04 Transactions with Affiliates.
The Company shall not enter into or be a party to, or permit
any of its Restricted Subsidiaries to enter into or be a party
to, any transaction with any Affiliate of the Company except
(a) as may be permitted under Sections 9.01, 9.02, or 9.03 or
(b) transactions in the ordinary course of business which are not
likely to have a Material Adverse Effect.
9.05 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 other than a fiscal year
that ends on the closest Saturday to December 31 of each year.
9.06 Margin Regulations.
The Company shall not use the proceeds of any Loan in
violation of Regulation T, U or X of the Board of Governors of
the Federal Reserve System.
9.07 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 9.01 or restricting the ability of the Company or any
other Loan Party to amend or otherwise modify this Agreement or
any other Loan Document.
9.08 Leverage Ratio.
The Company shall not permit the ratio of (a) Funded
Indebtedness on the last day of any fiscal quarter to (b) EBITDA
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 10
EVENTS OF DEFAULT
10.01 Events of Default.
The term "Event of Default" shall mean any of the events set
forth in this Section 10.01.
<PAGE> sf712790 58
(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; or
(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; or
(c) Specific Defaults. The Company shall fail to perform or
observe any term, covenant or agreement contained in Sections
8.01, 8.05, 8.06 or 8.10(a) or Article 9; or
(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; or
(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 Swap Contracts of the
Company or any of its Subsidiaries resulting in aggregate
Swap Termination Values 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 Swap Contract; or
(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;
<PAGE> sf712790 59
(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; or
(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; or
(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; or
(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; or
(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
<PAGE> sf712790 60
(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; or
(l) North American Timber Agreement. An "Event of Default"
shall exist as defined in the North American Timber Agreement.
10.02 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 and the
commitment of the Issuing Bank to Issue Letters of Credit to be
terminated, whereupon the Commitments and such commitment shall
forthwith be terminated; and/or
(b) The Agent shall at the request of, and may with the consent
of, the Required Lenders, declare an amount equal to the maximum
aggregate amount that is or at any time thereafter may become
available for drawing under any outstanding Letters of Credit
(whether or not any beneficiary shall have presented, or shall be
entitled at such time to present, the drafts or other documents
required to draw under such Letters of Credit) to be immediately
due and payable, which amount the Company shall immediately Cash
Collateralize in full, and 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 Section 10.01(f)(ii) or Section 10.01(g) 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 and the commitment of the Issuing Bank to
Issue Letters of Credit 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 11
THE AGENT
11.01 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.
<PAGE> sf712790 60
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.
Without limiting the generality of the foregoing sentence, the
use of the term "agent" in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an
administrative relationship between independent contracting
parties.
The Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as
the Agent may agree at the request of the Required Lenders to act
for such Issuing Bank with respect thereto; provided, however,
that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Article 11 with
respect to any acts taken or omissions suffered by the Issuing
Bank in connection with Letters of Credit Issued by it or
proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as
fully as if the term "Agent", as used in this Article 11,
included the Issuing Bank with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect
to the Issuing Bank.
11.02 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.
11.03 Liability of Agent. None of the Agent-Related Persons
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. No Agent-Related Person
shall 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.
11.04 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, 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
<PAGE> sf712790 62
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 12.02, 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 7.01 and 7.02, 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.
11.05 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 10; 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.
11.06 Credit Decision. Each Lender expressly acknowledges
that no Agent-Related Person 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 any Agent-Related Person to any Lender. Each Lender
represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person 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 any Agent-Related Person
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,
<PAGE> sf712790 63
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, no Agent-Related
Person 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 any Agent-
Related Person.
11.07 Indemnification. The Lenders agree to indemnify the
Agent-Related Person (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 any Agent-Related Person 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 any Agent-Related Person under or in
connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment to any Agent-Related
Person of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from any Agent-Related Person's
gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the
Agent-Related Persons 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-Related Person 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 any Agent-Related Person is not reimbursed for
such expenses by or on behalf of the Company.
11.08 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 or the Issuing Bank, and the
terms "Lender" and "Lenders" shall include Bank of America in its
individual capacity.
11.09 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
<PAGE> sf712790 64
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 11 and
Sections 12.04 and 12.05 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.
Notwithstanding the foregoing, however, Bank of America may not
be removed as the Agent at the request of the Required Lenders
unless Bank of America shall also simultaneously be replaced as
"Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to Bank of America.
11.10 Documentation, Co-Syndication, Managing Agents. None
of the Lenders identified on the facing page or signature pages
of this Agreement as a "Documentation Agent," "Co-Syndication
Agent," or "Managing Agent" shall have any right, power,
obligation, liability, responsibility, or duty under this
Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified
as "Documentation Agent," "Co-Syndication Agent," or "Managing
Agent" shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 12
MISCELLANEOUS
12.01 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 on 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 Articles 2 or
11 shall not be effective until received by the Agent, (b) any
notice by facsimile to the Agent must be confirmed by telephone
or mail, and (c) notices pursuant to Article 3 to the Issuing
Bank shall not be effective until actually received by the
Issuing Bank at the address specified for the "Issuing Bank" on
the applicable signature page hereof.
<PAGE> sf712790 65
12.02 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 and/or the
Contribution Agreement;
(vi) amend or waive the provisions of Sections
7.01 or 7.02; or
(vii) amend this Section 12.02;
(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 Required Lenders or all the Lenders, as the case
may be;
(c) No amendment, waiver or consent which affect the rights or
duties of the Issuing Bank under the Agreement or any L/C-Related
Document relating to any Letter of Credit Issued or to be Issued
by it shall become effective unless signed by the Issuing Bank in
addition to the Required Lenders or all the Lenders, as the case
may be; and
(d) 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 Agent and the Lender having made such Bid Loan in addition
to the Required Lenders or all the Lenders, as the case may be.
12.03 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
<PAGE> sf712790 66
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.
12.04 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 5.09, 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.
12.05 Indemnity.
(a) The Company agrees to indemnify and hold harmless the Agent-
Related Persons, 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 12.04) or any
other transaction contemplated hereby; except to the extent such
claim, damage, loss, liability, cost or expense has resulted
primarily
<PAGE> sf712790 67
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 if 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 12.05. 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.
12.06 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 12.06
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.
12.07 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 9.03, the Company may
not assign or transfer its rights or
<PAGE> sf712790 68
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 12.08.
12.08 Assignments, Participations, Etc.
(a) Subject to Sections 12.08(b) and 12.08(e):
(i) Any Lender may with the prior consent of the
Company, the Agent, and the Issuing Bank (which consents will not
be unreasonably withheld and which consent of the Company shall
not be required if a Default or Event of Default exists) at any
time assign to one or more Eligible Assignees 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 5.09, shall assign to another Eligible
Assignee its entire Commitment and all outstanding Committed
Loans.
(v) Except as provided in Section 12.08(a)(iii),
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 Section 12.08(a)(i).
(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) such Lender and
such Assignee shall have executed an Assignment and Assumption
Agreement substantially in the form of Exhibit 12.08(b) and
written notice of such assignment, 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 Attachment A to
Exhibit 12.08 (a "Notice of Assignment"); (ii) a processing fee
in the amount of $3,500 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.
<PAGE> sf712790 69
(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) Subject to Section 12.08(e), 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 12.08(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, the Agent, and the Issuing
Bank 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 Section 12.02.
The Company acknowledges and agrees that each Participant,
for purposes of Sections 4.05, 4.06, 5.02, 5.03, 5.05, 5.06 or
12.06, shall be considered a Lender; provided, however, that for
purposes of Sections 4.05, 5.02, 5.03, 5.05 and 5.06, 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.
(e) No assignment (other than an assignment made pursuant to
Section 12.08(a)(iii)) or participation of any Committed Loans,
or Commitments shall be effective, and shall instead be null and
void, unless it represents an assignment of or participation in
identical percentages of a Lender's outstanding Tranche A Loans,
Tranche B Loans, Tranche A Commitment, Tranche B Commitment,
"Tranche A Loans," "Tranche B Loans," "Tranche A Commitment" and
"Tranche B Commitment" (as those quoted terms are defined in the
North American Timber Agreement).
12.09 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
<PAGE> sf712790 70
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.
12.10 Survival. The obligations of the Company under
Sections 4.05, 5.02, 5.03, 5.05, 5.06, 12.04 and 12.05, and the
obligations of the Lenders under Sections 4.05(i) and 11.07,
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 12.04(b) and
(c) and 12.05) 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.
12.11 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.
12.12 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.
12.13 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the
Company, the Lenders, the Agent and the Agent-Related Persons,
and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.
<PAGE> sf712790 71
12.14 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
12.15 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.
12.16 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.
12.17 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.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.
<PAGE> sf712790 72
GEORGIA-PACIFIC CORPORATION
By: /s/ DANNY W. HUFF
Name: Danny W. Huff
Title: Vice President and Treasurer
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.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Agent, Issuing Bank, and as
Lender
By: /s/ MICHAEL BALOK
Name: Michael Balok
Title: Managing Director
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.
COMMERZBANK AG,
NEW YORK BRANCH,
as Documentation Agent
By: /s/ HARRY P. YERGEY
Name: Harry P. Yergey
Title: SVP & Manager
By: /s/ BRIAN J. CAMBELL
Name: Brian J. Cambell
Title: Vice President
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.
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent
By: /s/ PETER S. PREDUN
Name: Peter S. Predun
Title: Vice President
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.
CITIBANK, N.A.,
as Co-Syndication Agent
By: /s/ DAVID L. HARRIS
Name: David L. Harris
Title: Vice President
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.
THE BANK OF NEW YORK,
as Managing Agent
By: /s/ DAVID C. SIEGEL
Name: David C. Siegel
Title: Vice President
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.
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ M. R. MARRON
Name: M.R. Marron
Title: Vice President & Manager
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.
CIBC INC.
By: /s/ NORA Q. CATIIS
Name: Nora Q. Catiis
Title: Executive Director
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.
FIRST NATIONAL BANK OF CHICAGO,
as Managing Agent
By: /s/ DAVID T. MCNEELA
Name: David T. McNeela
Title: Vice President
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.
HSBC BANK USA,
as Managing Agent
By: /s/ JEREMY P. BOLLINGTON
Name: Jeremy P. Bollington
Title: Vice President
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.
THE SANWA BANK, LIMITED, NEW YORK
BRANCH
By: /s/ MASAHITO OKUBO
Name: Masahito Okubo
Title: Vice President
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.
THE SUMITOMO BANK, LIMITED
By: /s/ C. MICHAEL GARRIDO
Name: C. Michael Garrido
Title: Senior Vice President
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.
SUNTRUST BANK, ATLANTA,
as Managing Agent
By: /s/ W. DAVID WISDOM
Name: W. David Wisdom
Title: Vice President
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.
TORONTO DOMINION (TEXAS), INC.,
as Managing Agent
By: /s/ SHEILA M. CONLEY
Name: Sheila M. Conley
Title: Vice President
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.
UBS AG, STAMFORD BRANCH,
as Managing Agent
By: /s/ PAUL R. MORRISON
Name: Paul R. Morrison
Title: Executive Director
By: /s/ ANDREW N. TAYLOR
Name: Andrew N. Taylor
Title: Associate Director
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.
WACHOVIA BANK NA,
as Managing Agent
By: /s/ ANNE L. SAYLES
Name: Anne L. Sayles
Title: Vice President
[DO NOT DELETE THIS PAGE]
[JUST THROW AWAY ONCE PRINTED]
Exhibit 2.02(a)
to GP Credit Agreement
FORM OF NOTICE OF BORROWING
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: Georgia-Pacific Corporation Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This Notice of Borrowing is delivered to you pursuant to
Section 2.02(a) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests the following Committed
Borrowing[s]: [Tranche A Loans in the aggregate principal amount
of $________________ on, ______________, _____ comprised of
[Eurodollar Loans having an Interest Period of_________________
months] [Reference Rate Loans]; [and] [Tranche B Loans in the
aggregate principal amount of $________________ on,
______________, _____ comprised of [Eurodollar Loans having an
Interest Period of_________________ months] [Reference Rate
Loans].
The Company hereby certifies and warrants that on the date
the Committed Borrowing[s] requested hereby [is/are] made (both
before and after giving effect to the making of such Committed
Borrowing[s] and after giving effect to the application, directly
or indirectly, of the proceeds thereof):
(a) the representations and warranties contained in
Article 6 of the Credit Agreement are correct on and (except
for representations and warranties relating solely to a
particular point in time) as of such date as though made on
and as of such date;
(b) no Default or Event of Default has occurred and is
continuing;
(c) the proceeds of the Committed Borrowing[s] hereby
requested are being or will be used in accordance with
Section 8.01 of the Credit Agreement; and
<PAGE> sf-709114
[(d) [If Tranche A Loans are requested: The sum of the
aggregate principal amount of (i) all Tranche A Loans
outstanding on the date of this request, after giving effect
to the Tranche A Loans requested hereby; plus (ii) the
aggregate principal amount of all Tranche A Bid Loans then
outstanding; plus (iii) the outstanding Tranche A L/C
Obligations, and giving effect to each payment and
prepayment to be made on the proposed Borrowing date, will
be $_________________, which amount does not exceed the
Aggregate Tranche A Commitments as of the Proposed Borrowing
Date.
[(e) [If the Tranche B Loans are requested: The sum of
the aggregate principal amount of (i) all Tranche B Loans
outstanding on the date of this request, after giving effect
to the Tranche B Loans requested hereby; plus (ii) the
aggregate principal amount of all Tranche B Bid Loans then
outstanding; (iii) plus the 1996 Facility Bid Loans then
outstanding; (iv) plus the outstanding Tranche B L/C
Obligations, and giving effect to each payment and
prepayment to made on the proposed Borrowing date, will be
$_________________, which amount does not exceed the
Aggregate Tranche B Commitments as of the as of the Proposed
Borrowing Date.
The Company agrees that if prior to the time of the
Committed Borrowing requested hereby any matter certified to
herein by it will not be true and correct at such time as if then
made, it will immediately so notify the Agent. Except to the
extent, if any, that prior to the time of the Committed Borrowing
requested hereby the Agent shall receive written notice to the
contrary from the Company, each matter certified to herein shall
be deemed once again to be certified as true and correct at the
date of such Committed Borrowing as if then made.
Please wire transfer the proceeds of the Committed Borrowing
requested hereby to the accounts of the following Persons at the
financial institutions indicated respectively:
Amount to be Person to be Paid Name, Address, Etc.
Transferred Name Account No. of Transferee
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
Balance of ________
such Proceeds: The Attention:
Company
<PAGE> sf-709114 2
The Company has caused this Notice of Borrowing to be
executed and delivered, and the certification and warranties
contained herein to be made, by its duly authorized officer this
day of ____________________, ____.
GEORGIA-PACIFIC CORPORATION
By:
Title:
<PAGE> sf-709114 3
Exhibit 2.04(a)
to GP Credit Agreement
FORM OF COMPETITIVE BID REQUEST
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: Georgia-Pacific Corporation Credit Agreement, dated as
of July 22, 1999
Ladies and Gentlemen:
This Competitive Bid Request is delivered to you pursuant to
Section 2.04(a) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, , as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests that the Lenders (or any of
them) furnish Competitive Bids for [Tranch A or Tranche B] Bid
Loan[s], subject to the terms of the Credit Agreement, as
follows:
(a) date of Bid Borrowing (which is a Business Day)
for the Bid Loan[s] that will result from the Competitive
Bids requested hereby: ____________, ____.
(b) maximum aggregate principal amount of Bid Loan[s]
that will result from the Competitive Bids requested hereby:
$_______________, which shall not [for a Tranche A Bid
Borrowing: exceed the Available Tranche A Commitments on the
date such Bid Borrowing[s] [is/are] to be made (after giving
effect to each payment and prepayment made on such
date)][for a Tranche B Bid Borrowing: exceed the Available
Tranche B Commitments on the date such Bid Borrowing[s]
[is/are] to be made (after giving effect to each payment and
prepayment made on such date)].
(c) The maturity date or dates for partial or complete
<PAGE> sf-709112
repayment of each Bid Loan resulting from the
Competitive Bids requested hereby <F1> (including, in
the case of each partial repayment, the amount to be
repaid).
Principal Amount Date of Complete Date[s] of Partial Amount[s] to be
Repayment Repayment Repaid
(d) Type of Bid Loan[s] for which Competitive Bids
are requested: [Base Rate Bid Loans bearing interest
calculated on the basis of a year consisting of 360 days and
actual days elapsed and with [insert interest rate basis for
Base Rate Bid Loans]] [Fixed Rate Bid Loans].
(e) The following additional terms shall be applicable
to the Bid Loan[s] resulting from the Competitive Bids
requested hereby: <F2>
The Company hereby certifies that on the date the Bid
Borrowing resulting from the Competitive Bids requested
hereby is made (both before and after giving effect to the
making of such Bid Borrowing and after giving effect to the
application, directly or indirectly, of the proceeds
thereof):
(1) the representations and warranties contained
in Article 6 of the Credit Agreement are correct on and
(except for representations and warranties relating
solely to a particular point in time) as of such date
as though made on and as of such date;
(2) no Default or Event of Default has occurred
and is continuing;
(3) The sum of the aggregate principal amount of
[(i) all Tranche A Bid Loans outstanding on the date of
the Bid Borrowing[s] requested hereby, after giving
effect to the Tranche A Bid Loan[s] resulting from this
Competitive Bid Request; plus (ii) Tranche A Loans then
outstanding; plus (iii) the outstanding Tranche A L/C
Obligations, and giving effect to each payment and
prepayment to be made on such date, will be
$_________________, which amount does not exceed the
Aggregate Tranche A Commitments][[(i) all Tranche B Bid
Loans outstanding on the date of the Bid Borrowing[s]
requested hereby, after giving effect to the Tranche B
Bid Loan[s] resulting from this Competitive Bid Request;
plus (ii) Tranche B Loans then outstanding; plus (iii)
the aggregate principal amount of all 1996 Facility Bid
Loans then outstanding; plus (iv) the outstanding
Tranche B L/C Obligations, and giving effect to each
payment and prepayment to be made on such date, will be
$_________________, which amount does not exceed the
Aggregate Tranche B Commitments];
<F1> No such date may occur after the Tranche A Termination
Date or the Tranche B Termination Date, as applicable.
<F2> Such additional terms may include terms similar to
Section 2.08 of the Credit Agreement and terms specifying
prepayment rights of the Company.
<PAGE> sf-709112 2
The Company agrees that if prior to the time of the Bid
Borrowing requested hereby any matter certified to herein by it
will not be true and correct at such time as if then made, it
will immediately so notify the Agent. Except to the extent, if
any, that prior to the time of the Bid Borrowing requested hereby
the Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once
again to be certified as true and correct at the date of such Bid
Borrowing as if then made.
[Wire transfer instructions with respect to the Bid
Borrowing requested hereby will be furnished at the time the
Company accepts any Competitive Bids.] Please wire transfer the
proceeds of the Bid Borrowing requested hereby to the accounts of
the following Persons at the financial institutions indicated
respectively:
financial institutions indicated respectively:
Amount to be Person to be Paid Name, Address, Etc.
Transferred Name Account No. of Transferee
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
Balance of ________
such Proceeds: The Company Attention:
The Company has caused this Competitive Bid Request to be
executed and delivered, and the certification and warranties
contained herein to be made, by its duly authorized officer this
day of ____________, _____.
GEORGIA-PACIFIC CORPORATION
By:
Title:
<PAGE> sf-709112 3
Exhibit 2.05(b)
to GP Credit Agreement
FORM OF PROMISSORY NOTE
([Tranche A/Tranche B] Loans)
$_________________ _______________, ____
For value received, on [ ], 200[ ], the undersigned promises
to pay to the order of
(the "Lender") at the office of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Agent"), specified
in the Credit Agreement referred to below, $____________ or, if
less, the aggregate unpaid principal amount of all [Tranche
A/Tranche B] Loans made by the Lender to the undersigned pursuant
to the Credit Agreement (as defined below), as shown in the
schedule attached hereto (and any continuation thereof).
The undersigned also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding from the
date hereof until maturity (whether by acceleration or otherwise)
and, after maturity, until paid, at the rates per annum and on
the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in
lawful money of the United States of America and in immediately
available funds.
This Promissory Note is one of the promissory notes
evidencing [Tranche A/Tranche B] Loans described in, and is
subject to the terms and provisions of, the Credit Agreement,
dated as of July 22, 1999 among GEORGIA-PACIFIC CORPORATION,
certain financial institutions (including the Lender) party
thereto, the Agent, COMMERZBANK AG, NEW YORK BRANCH, as
Documentation Agent, and THE CHASE MANHATTAN BANK and CITIBANK,
N.A., as Co-Syndication Agents (as from time to time amended,
modified, or supplemented, the "Credit Agreement"). Reference is
hereby made to the Credit Agreement for a statement of the
prepayment rights and obligations of the undersigned, the
guaranty of this Promissory Note, and the terms and conditions
under which the due date of this Promissory Note may be
accelerated.
This Promissory Note may only be assigned as provided in the
Credit Agreement.
The undersigned promises to pay all costs of collection,
including reasonable attorney's fees, incurred in the collection
of this Promissory Note.
The undersigned hereby waives presentment for payment,
demand, protest, and notice of dishonor.
<PAGE> sf-709086 1
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
GEORGIA-PACIFIC CORPORATION
By:_______________________________
Title:_____________________________
<PAGE> sf-709086 2
<TABLE>
LOANS AND PRINCIPAL PAYMENTS
<CAPTION>
Amount of Loan Made Amount of Principal Repaid Unpaid Principal Balance
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Date Reference Eurodollar Interest Reference Eurodollar Total Eurodollar Made by
Rate Loan Loan Period (if Rate Loan Loan Made by
Applicable)
</TABLE>
<PAGE> sf-709086 3
Exhibit 2.05(c)
to GP Credit Agreement
FORM OF PROMISSORY NOTE
(Tranche A/Tranche B Bid Loans)
$_________________ _______________, ____
For value received, on ________________, _____, the
undersigned
promises to pay to the order of
(the "Lender") in lawful
money of the United States and in immediately available funds the
principal amount of $___________________ and interest thereon at
the rate of ____% per annum, as well after as before maturity, at
the Lender's office specified in the Credit Agreement referred to
below. Interest will be computed on the basis of a year of 360
days and actual days elapsed.
This Promissory Note is one of the promissory notes
evidencing [Tranch A/Tranche B] Bid Loans described in, and is
subject to the terms and provisions of, the Credit Agreement
dated as of July 22, 1999 among GEORGIA-PACIFIC CORPORATION,
certain banks (including the Lender) party thereto, the Agent,
COMMERZBANK AG, NEW YORK BRANCH, as Documentation Agent, and THE
CHASE MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents
(as from time to time amended, modified, or supplemented, the
"Credit Agreement"). Reference is hereby made to the Credit
Agreement for a statement of the prepayment rights and
obligations of the undersigned, the guaranty of this Promissory
Note and the terms and conditions under which the due date of
this Promissory Note may be accelerated. The undersigned
promises to pay all costs of collection, including reasonable
attorney's fees, incurred in the collection of this Promissory
Note.
The undersigned hereby waives presentment for payment,
demand, protest, and notice of dishonor.
This Promissory Note may only be assigned as provided in the
Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
GEORGIA-PACIFIC CORPORATION
By: ________________________________
Title:_______________________________
<PAGE> sf-709086 4
Exhibit 2.11(b)
to GP Credit Agreement
FORM OF NOTICE OF CONVERSION/CONTINUATION
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: Georgia-Pacific Corporation Credit Agreement,
dated as of July 22, 1999
Ladies and Gentlemen:
This Notice of Conversion/Continuation is delivered to you
pursuant to Section 2.11(b) of the Credit Agreement, dated as of
July 22, 1999 (together with all amendments, if any, from time to
time made thereto, the "Credit Agreement"), among GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests that on ______________, ____,
(1) $__________ of the presently outstanding principal
amount of the [Tranche A/Tranche B] Committed Loans originally
made on __________, ____ ;
(2) all presently being maintained as [Reference Rate
Loans] [Eurodollar Loans];<F1>
(3) be [converted into] [continued as];
(4) [Eurodollar Loans having an Interest Period of
_________ months] [Reference Rate Loans].<F1>
The Company has caused this Notice of
Conversion/Continuation to be executed and delivered by its duly
authorized officer this __ day of _____________, ____.
GEORGIA-PACIFIC CORPORATION
By:
Title:
<F1> Select appropriate interest rate option.
<PAGE> sf-709120
[Execution Copy]
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (the "Guaranty"), dated as of July
22, 1999, is made by NORTH AMERICAN TIMBER CORP., a Delaware
corporation; UNISOURCE WORLDWIDE, INC., a Delaware corporation;
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 (collectively, the "Guarantors" and, individually, a
"Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, as
administrative agent (in such capacity, the "Agent") for each of
the Lenders (as defined below).
RECITALS:
A. Pursuant to the Credit Agreement, dated as of July 22, 1999
(together with all amendments, supplements, and other
modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among Georgia-Pacific
Corporation, a Georgia corporation ("Georgia-Pacific") as
borrower, the various commercial lending and other financial
institutions (individually, a "Lender" and, collectively,
the "Lenders") as are, or may from time to time become,
party thereto, the Agent, Commerzbank AG, New York Branch,
as Documentation Agent, and The Chase Manhattan Bank and
Citibank, N.A. as Co-Syndication Agents, the Lenders have
extended commitments (the "Commitments") to make loans (the
"Loans") to Georgia-Pacific, and to extend other financial
accommodations to or for the account of Georgia-Pacific,
which Loans and other financial accommodations are to be
unconditionally guaranteed by each Principal Subsidiary
of Georgia-Pacific (which Principal Subsidiaries are the
Guarantors hereunder).
B. As a condition precedent to the initial Loan under the
Credit Agreement, each Guarantor is required to execute and
deliver this Guaranty.
C. Each Guarantor has duly authorized the execution, delivery,
and performance of this Guaranty.
D. It is in the best interests of each Guarantor to execute
this Guaranty inasmuch as such Guarantor will derive
substantial direct and indirect benefits from the Loans made
to Georgia-Pacific by the Lenders under the Credit
Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and in order to induce
the Lenders to make Loans (including the initial Loans) to
<PAGE> sf-709121
Georgia-Pacific pursuant to the Credit Agreement, each Guarantor
agrees, for the benefit of each Lender, as follows:
ARTICLE 13
DEFINITIONS
Unless otherwise defined herein or the context otherwise
requires, terms used in this Guaranty, including its preamble and
recitals, have the meanings provided in the Credit Agreement.
ARTICLE 14
GUARANTY PROVISIONS
14.01 Guaranty.
Each Guarantor, jointly and severally, hereby absolutely,
unconditionally, and irrevocably:
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand, or otherwise, of all Obligations of
Georgia-Pacific and each other Loan Party (other than such
Guarantor) now or hereafter existing under the Credit Agreement
and each other Loan Document to which it is or may become a
party, whether for principal, interest, fees, expenses, or
otherwise (including all such amounts which would become due but
for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. 362(a)), and the
operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. 502(b) and 506(b)); and
(b) indemnifies and holds harmless the Agent and each
Lender for any and all out-of-pocket costs and expenses (including
the out-of-pocket expenses and reasonable fees of counsel and the
allocated cost of in-house counsel retained by the Agent or such
Lender) incurred by the Agent or such Lender in preserving and
enforcing any rights under this Guaranty;
provided, however, that each Guarantor shall be liable under this
Guaranty for the maximum amount of such liability that can
be hereby incurred without rendering this Guaranty, as it
relates to such Guarantor, voidable under applicable law
relating to fraudulent obligations, fraudulent conveyance,
or fraudulent transfer, and not for any greater amount.
This Guaranty constitutes a guaranty of payment when due and
not of collection or of performance, and each Guarantor
specifically agrees that it shall not be necessary or
required that the Agent or any Lender exercise any right,
assert any claim or demand, or enforce any remedy whatsoever
against Georgia-Pacific, any other Loan Party, or any other
Person before or as a condition to the obligations of each
Guarantor hereunder.
14.02 Acceleration of Guaranty.
Subject to the proviso of Section 2.1, each Guarantor agrees
that, in the event of the occurrence and continuance of an Event
of Default and the acceleration of the Obligations in accordance
with the terms of the Credit Agreement, each Guarantor will pay
to the Agent and the Lenders forthwith the full amount of the
Obligations.
<PAGE> sf-709121 2
14.03 Guaranty Absolute, etc.
This Guaranty shall in all respects be a continuing,
absolute, unconditional, and irrevocable guaranty of payment, and
shall remain in full force and effect until all Obligations of
Georgia-Pacific and each other Loan Party have been paid in cash
in full, and all Commitments shall have terminated. Each
Guarantor guarantees that the Obligations of Georgia-Pacific and
each other Loan Party will be paid strictly in accordance with
the terms of the Credit Agreement and each other Loan Document
under which they arise, regardless of any law, regulation, or
order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or any Lender with
respect thereto. The liability of each Guarantor under this
Guaranty shall be absolute, unconditional, and irrevocable
irrespective of:
(a) any lack of validity, legality, or enforceability of the
Credit Agreement or any other Loan Document;
(b) the failure of the Agent or any Lender:
(i) to assert any claim or demand or to enforce any right or
remedy against Georgia-Pacific, any other Loan Party, or any
other Person (including any other guarantor) under the provisions
of the Credit Agreement, any other Loan Document, or otherwise;
or
(ii) to exercise any right or remedy against any other
guarantor of, or any collateral securing, any Obligations of
Georgia-Pacific or any other Loan Party;
(c) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Obligations of
Georgia-Pacific or any other Loan Party, or any other extension,
compromise, or renewal of any Obligations of Georgia-Pacific or
any other Loan Party;
(d) any reduction, limitation, impairment, or termination of the
Obligations of Georgia-Pacific or any other Loan Party for any
reason, including any claim of waiver, release, surrender,
alteration, or compromise, and shall not be subject to (and each
Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event
or occurrence affecting, the Obligations of Georgia-Pacific or
any other Loan Party or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of the
Credit Agreement or any other Loan Document;
(f) any addition, exchange, release, surrender, or
non-perfection of any collateral, or any amendment to or waiver
or release or addition of, or consent to departure from, any
other guaranty, held by the Agent or any Lender securing any of
the Obligations of Georgia-Pacific or any other Loan Party; or
<PAGE> sf-709121 3
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of,
Georgia-Pacific, any other Loan Party, any surety, or any
guarantor.
14.04 Reinstatement, etc.
Each Guarantor agrees that this Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by the Agent or any
Lender, upon the insolvency, bankruptcy, or reorganization of
Georgia-Pacific, any other Loan Party, or otherwise, all as
though such payment had not been made.
14.05 Waiver, etc.
Each Guarantor hereby waives promptness, diligence, notice
of acceptance, and any other notice with respect to any of the
Obligations of Georgia-Pacific or any other Loan Party and this
Guaranty and any requirement that the Agent or any Lender
protect, secure, perfect, or insure any security interest or
lien, or any property subject thereto, or exhaust any right or
take any action against Georgia-Pacific, any other Loan Party, or
any other Person (including any other guarantor) or any
collateral securing the Obligations of Georgia-Pacific or any
other Loan Party, as the case may be.
14.06 Subordination.
Until such time as the Guaranteed Obligations have been paid
and performed in full and the period of time has expired during
which any payment made by Georgia-Pacific, a Guarantor, or any
other guarantor of the Guaranteed Obligations to Agent may be
subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid by Agent or
paid over to a trustee, receiver, or any other entity, whether
under any bankruptcy act or otherwise (any such payment being
hereinafter referred to as a "Preferential Payment"), any claim
or other rights which any Guarantor may now have or hereafter
acquire against Georgia-Pacific or such other guarantor that
arises from the existence or performance of any Guarantor's
obligations under this Guaranty or any other agreement (all such
claims and rights being hereinafter referred to as "Guarantor's
Conditional Rights"), including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, or
indemnification, any right to participate in any claim or remedy
of Agent or such other guarantor or any collateral which Agent
now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute, or common
law, by any payment made hereunder or otherwise, including,
without limitation, the right to take or receive from Georgia-
Pacific or such other guarantor, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment,
or security on account of such claim or other rights, shall be
subordinate to Agent's right to full payment and performance of
the Guaranteed Obligations, and each Guarantor shall not enforce
Guarantor's Conditional Rights until such time as the Guaranteed
Obligations have been paid and performed in full and the period
of time has expired during which any payment made by Georgia-
Pacific or a Guarantor to Agent may be determined to be a
Preferential Payment.
14.07 Successors, Transferees and Assigns; Transfers of
Loans, etc. This Guaranty shall:
<PAGE> sf-709121 4
(a) be binding upon each Guarantor, and its successors,
transferees, and assigns; and
(b) inure to the benefit of and be enforceable by the Agent and
each Lender.
Without limiting the generality of subsection (b), any Lender may
assign or otherwise transfer (in whole or in part) any Loan
held by it to any other Person, and such other Person shall
thereupon become vested with all rights and benefits in
respect thereof granted to such Lender under any Loan
Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 12.08 and Article
11 of the Credit Agreement.
14.08 Payments Free and Clear of Taxes, etc.
Each Guarantor hereby agrees that:
(a) Subject to paragraph (e) below, any and all payments made by
each Guarantor hereunder to or for the account of the Agent or
any Lender (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 in accordance with Section 3.03 of the Credit
Agreement 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, excluding (i) such taxes (including income taxes
or franchise taxes or branch profit taxes) as are imposed on or
measured by the Agent's or such Lender's 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 the Agent or such Lender and the jurisdiction imposing
such taxes (other than a connection arising principally by reason
of the Credit Agreement or this Guaranty) (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If any
Guarantor shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to the
Agent or any Lender:
(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 2.8) the Agent or such Lender receives an amount equal to
the sum it would have received had no such deductions been made;
(ii) such Guarantor shall make such deductions; and
(iii) such Guarantor shall pay the full amount deducted
to the relevant taxation authority or other governmental
authority in accordance with applicable law.
(b) Each Guarantor shall 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,
<PAGE> sf-709121 5
or registration of, or otherwise with respect to, this
Guaranty (other than on account of a Bid Loan, except to the
extent otherwise specified as being applicable to such Bid
Loan) (hereinafter referred to as "Other Taxes")
(c) Subject to subsection (e) below, each Guarantor, jointly and
severally, hereby indemnifies and holds harmless the Agent and
each Lender 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 2.6) paid by the Agent or
such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted;
provided, however, that the Agent and each Lender agree to
contest in good faith any Taxes or Other Taxes that the Agent or
such Lender, in its sole discretion, believes have been
incorrectly asserted. A certificate as to the amount demanded by
the Agent or any Lender, or the Agent on behalf of any Lender,
absent manifest error, shall be binding and conclusive.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, each Guarantor shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment reasonably satisfactory to
the Agent.
(e) Each Lender shall, promptly upon the request of any
Guarantor to that effect, deliver to the Agent and such Guarantor
such 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 (if appropriate) such
Lender's tax status for withholding purposes or may otherwise be
appropriate to eliminate or minimize any Taxes on payments under
this Guaranty. The provisions of Sections 3.05(f), (g), (h), and
(i) of the Credit Agreement are hereby incorporated by reference
into this Guaranty as if fully stated herein, except that each
reference to the "Company" contained therein shall be deemed to
be a reference to the "Guarantors" for purposes of this Guaranty.
(f) Without prejudice to the survival of any other agreement of
each Guarantor hereunder, the agreements and obligations of each
Guarantor contained in this Section 2.8 shall survive the payment
in full of the principal of and interest on the Loans.
ARTICLE 15
REPRESENTATIONS AND WARRANTIES
15.01 Representations and Warranties.
Each Guarantor hereby makes each of the representations and
warranties made by Georgia-Pacific in the Credit Agreement, to
the extent that any such representation or warranty made by
Georgia-Pacific in the Credit Agreement shall be applicable to
such Guarantor, its Subsidiaries, or any of its or their
properties.
<PAGE> sf-709121 6
ARTICLE 16
COVENANTS, ETC.
16.01 Affirmative Covenants.
Each Guarantor covenants and agrees that, so long as any
portion of the Obligations shall remain unpaid or any Lender
shall have any outstanding Commitment, such Guarantor will,
unless the Required Lenders shall otherwise consent in writing,
duly keep, perform, and observe for the benefit of the Agent and
the Lenders each and every covenant set forth in Article 8 of the
Credit Agreement to the extent that any such covenant shall be
applicable to such Guarantor, any of its Subsidiaries, or any of
its or their properties (all of which covenants, together with
related definitions and ancillary provisions, are hereby
incorporated herein by reference as if such terms were set forth
herein in full), without regard to any termination of the Credit
Agreement.
16.02 Negative Covenants.
Each Guarantor covenants and agrees that, so long as any
portion of the Obligations shall remain unpaid or any Lender
shall have any outstanding Commitment, such Guarantor will,
unless the Required Lenders shall otherwise consent in writing,
duly keep, perform, and observe for the benefit of the Agent and
the Lenders each and every covenant set forth in Article 9 of the
Credit Agreement to the extent that any such covenant shall be
applicable to such Guarantor, any of its Subsidiaries, or any of
its or their properties (all of which covenants, together with
related definitions and ancillary provisions, are hereby
incorporated herein by reference as if such terms were set forth
herein in full), without regard to any termination of the Credit
Agreement.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.01 Loan Document.
This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with
the terms and provisions thereof, including, without limitation,
Article 12 of the Credit Agreement.
17.02 Binding on Successors, Transferees and Assigns;
Assignment.
In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon each Guarantor and its successors,
transferees, and assigns and shall inure to the benefit of and be
enforceable by the Agent, each Lender, and their respective
successors, transferees, and assigns (to the full extent provided
pursuant to Section 2.7); provided, however, that no Guarantor
may assign any of its obligations hereunder.
17.03 Amendment, etc.
No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by any Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and
signed by the Guarantors, the Agent and consented to by the
Required Lenders (or, as provided in Section 12.02(e) of the
Credit Agreement, all Lenders), and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
17.04 Addresses for Notices to each Guarantor.
All notices and other communications hereunder to any
Guarantor shall be in writing (including by facsimile) and mailed
<PAGE> sf-709121 7
by overnight delivery, transmitted by facsimile, or delivered to
it, addressed to it at the address set forth below its signature
hereto or at such other address as shall be designated by such
Guarantor in a written notice to the Agent at the address
specified in the Credit Agreement complying as to delivery with
the terms of this Section 5.4. All such notices and other
communications shall be effective, if transmitted by facsimile
when transmitted or, if mailed by overnight delivery or
delivered, upon delivery, addressed as aforesaid
17.05 No Waiver; Remedies.
In addition to, and not in limitation of, Sections 2.3 and
2.5, no failure on the part of the Agent or any Lender 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. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
17.06 Section Captions.
Section captions used in this Guaranty are for convenience
of reference only, and shall not affect the construction of this
Guaranty.
17.07 Setoff.
In addition to, and not limitation of, any rights of the
Agent or any Lender under applicable law, the Agent and each
Lender shall, upon the occurrence and during the continuance of
any Event of Default, have the right to appropriate and apply to
the payment of the obligations of each Guarantor owing to it
hereunder, whether or not then due, any and all balances,
credits, deposits, accounts or moneys of such Guarantor then or
thereafter maintained with the Agent or such Lender; provided,
however, that any such appropriation and application shall be
subject to the provisions of Section 3.06 of the Credit
Agreement. Each Lender agrees promptly to notify the relevant
Guarantor after any such setoff and application made by such
party; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application.
The rights of the Agent and each Lender under this Section 5.7
are in addition to any other right or remedy (including any other
right of set off) which the Agent or such Lender may have.
17.08 Severability.
Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
17.09 Governing Law, etc.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS GUARANTY
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE PARTIES TO THE LOAN DOCUMENTS WITH
RESPECT TO THE SUBJECT MATTER THEREOF AND SUPERSEDE ALL PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO, EXCEPT FOR THE
FEE LETTER AND ANY PRIOR ARRANGEMENT MADE WITH RESPECT TO THE
PAYMENT BY ANY LENDER 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 ANY LENDER.
<PAGE> sf-709121 8
17.10 Waiver of Jury Trial.
EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY EAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS GUARANTY. EACH GUARANTOR ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDERS ENTERING INTO THE CREDIT AGREEMENT.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty
to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
NORTH AMERICAN TIMBER CORP.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
UNISOURCE WORLDWIDE, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GREAT NORTHERN NEKOOSA CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
BRUNSWICK PULP & PAPER COMPANY
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GEORGIA-PACIFIC WEST, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
G-P GYPSUM CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
LEAF RIVER FOREST PRODUCTS, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PACKAGING CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PAPERS INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
<PAGE>
Exhibit 7.01(d)
to GP Credit Agreement
FORM OF OPINION OF COUNSEL FOR THE COMPANY
[Letterhead of Counsel for the Company]
July 22, 1999
To each of the Lenders
party to the Credit Agreement
hereinafter referred to and
to Bank of America National
Trust and Savings Association, as Agent
Re: Georgia-Pacific Corporation Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section
7.01(d) of the Credit Agreement, dated as of July 22, 1999 (the
"Credit Agreement"), among GEORGIA-PACIFIC CORPORATION, a Georgia
corporation, as borrower (the "Company"), the Lenders party
thereto (collectively, the "Lenders"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as administrative agent (in such
capacity, the "Agent") for the Lenders thereunder, COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms in the Credit
Agreement.
I am Vice President and Secretary of the Company and, as
such, I have acted as counsel to (a) the Company and (b) each
Principal Subsidiary (the Principal Subsidiaries together with
the Company being called herein, collectively, the "Loan Parties"
and, individually, a "Loan Party") in connection with the
negotiation, execution, and delivery of the Credit Agreement and
the Subsidiary Guaranty.
In so acting as such counsel, I have examined, or caused to
be examined, the following:
(a) the promissory notes delivered at the Closing;
(b) the Credit Agreement; and
(c) the Subsidiary Guaranty and the Parent Guaranty
(collectively, the "Loan Documents").
<PAGE> sf-709119
I have also examined, or caused to be examined, originals or
copies of originals, certified or otherwise identified to my
satisfaction, of such corporate records, agreements, documents,
instruments, certificates, and other statements of public and
governmental officials and corporate officers and other
representatives of the Loan Parties and have made such inquiries
of such corporate officers and other representatives, as I have
deemed relevant and necessary as a basis for the opinions
hereinafter set forth.
For purposes of the examination of the documents referred to
above, I have assumed the genuineness of all signatures (except
those on behalf of the Loan Parties), the authenticity of all
documents submitted to me as originals, and the conformity to
originals of all documents submitted to me as certified or
photostatic copies, which facts I have not independently
verified. As to all questions of fact material to this opinion
which have not been independently verified by me, I have relied
upon the representations and warranties of the Loan Parties
contained in the Loan Documents and other documents and
certificates related to these transactions.
I have assumed the due execution and delivery, pursuant to
due authorization, of each of the Loan Documents by all of the
parties thereto, other than any Loan Party, and that the Loan
Documents are enforceable against such other parties in
accordance with their respective terms.
I have further assumed that the Lenders and the Agent will
act in good faith and will seek to enforce their rights and
remedies under the Loan Documents in a commercially reasonable
manner.
Based upon the foregoing and subject to the qualifications
set forth herein, I am of the opinion that:
1. Each of the Loan Parties:
(a) is a corporation 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;
and
(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.
2. 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 its shareholders where required; and
<PAGE> sf-709119 2
(c) do not:
(i) contravene the articles or certificate of
incorporation or by-laws of such Loan Party;
(ii) to the best of my knowledge after due
inquiry, violate any existing law or regulation of the
United States, of the States of Georgia, New York, or
the general corporation law of the State of Delaware
which, to my knowledge, is applicable, or any order,
decree, or other determination of an arbitrator or a
court or other governmental agency applicable to or
binding upon any Loan Party or any of its property or
to which such Loan Party or any of its property is
subject;
(iii) to the best of my knowledge after due
inquiry, 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;
(iv) to the best of my knowledge after due
inquiry, result in the creation or imposition of any
Lien upon any of the property of such Loan Party, other
than if the Obligations or certain other Indebtedness
of the Company is to be secured by certain Liens, for
Permitted Liens required to be created pursuant to
Section 9.01 of the Credit Agreement; or
(v) to the best of my knowledge after due
inquiry, require, as of the date hereof, the consent
of, authorization by, approval of or notice to, or
prior filing or registration with, any United States,
Georgia, or New York governmental agency.
3. The Loan Documents to which any Loan Party is a party
have been duly executed and delivered by such Loan Party. The
Loan Documents are the legal, valid, and binding obligations of
each Loan Party which is a party thereto, enforceable against
each such Loan Party in accordance with their respective terms.
4. To the best of my knowledge after due inquiry, there
are no pending or overtly threatened actions or proceedings
affecting the Company, any Principal Subsidiary or any Restricted
Subsidiary before any court or other Governmental Authority or
any arbitrator that is likely to have a Material Adverse Effect.
5. To the best of my knowledge after due inquiry, the
Company has no Subsidiaries other than the Subsidiaries of the
Company listed in Schedule 6.07 to the Credit Agreement.
The foregoing opinions are subject to the following
qualifications:
(a) My opinion as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting
creditors' rights generally.
(b) My opinion as to enforceability is also subject to
the effect of general principles of equity, including
concepts of materiality, reasonableness, good faith, and
fair
<PAGE> sf-709119 3
dealing (regardless of whether considered in a proceeding in
equity or at law). Pursuant to such equitable principles,
Section 2.3 of the Subsidiary Guaranty and the Parent
Guaranty, which provides that the liability of the Principal
Subsidiaries or Parent thereunder shall not be affected by
changes in or amendments to the agreements and documents
referred to in such Section, might be enforceable only to
the extent that such changes or amendments were not so
material as to constitute a new contract among the parties.
(c) My opinion as to enforceability is also subject to
the effect of limitations on enforceability of rights to
indemnification or contribution under the Loan Documents by
federal or state securities laws or regulations or public
policy relative thereto.
(d) My opinion as to enforceability is also subject to
the qualifications that certain provisions of the Loan
Documents are or may be unenforceable in whole or in part
under the laws of the State of New York, but the inclusion
of such provisions does not affect the validity of any of
the Loan Documents, and each of the Loan Documents contains
adequate provisions for enforcing payment of the obligations
of the Loan Parties (to the extent that any Loan Party is a
party thereto) thereunder and for the practical realization
of the rights and benefits afforded thereby, except for the
economic consequences resulting from any delay imposed by,
or any procedure required by, applicable New York laws,
rules, regulations and court decisions and by constitutional
requirements in and out of the State of New York.
(e) I express no opinion as to the enforceability of
the provisions of the last sentence of Section 12.08(d) of
the Credit Agreement (insofar as it pertains to Section
12.06 of the Credit Agreement), as to the proviso in Section
2.1 of the Subsidiary Guaranty or as to the proviso in the
first sentence of Section 5.7 of the Subsidiary Guaranty, or
to Section 2.1 of the Parent Guaranty.
(f) I express no opinion as to the enforceability of
any provision in the Loan Documents purporting to preserve
and maintain the liability of any party thereto despite the
fact that the guaranteed debt is unenforceable due to
illegality or the fact that the Lenders had voluntarily
released the primary obligor's liability on the guaranteed
debt.
(g) I express no opinion as to the applicability (and,
if applicable, the effect) of Section 548 of the Bankruptcy
Code, or any comparable provisions of state or foreign law,
to, or on, the Loan Documents.
(h) I express no opinion as to those provisions of the
Loan Documents purporting to waive the right to a jury
trial.
My opinions relate only to the laws of the States of New
York and Georgia, the general corporation laws of the State of
Delaware, and the Federal laws of the United States; and I do not
express any opinion with respect to the laws of any other
jurisdiction. This opinion letter is furnished to you by me as
counsel to the Loan Parties and is solely for your benefit and
for the benefit of each Lender and each Assignee, and may not be
quoted or relied upon by any other Person without my prior
written consent.
<PAGE> sf-709119 4
I am a member of the bar of the States of New Jersey and New
York and do not hold myself out to be an expert on the laws of
any other State, including the State of Wisconsin. In rendering
the foregoing opinion, I have relied as to matters of Georgia
law, insofar as such law affects the opinions expressed above,
upon an opinion of even date herewith addressed to me by an
attorney in the Law Department of the Company licensed to
practice law in the State of Georgia, which opinion contains no
qualifications or assumptions (other than those which limit such
opinions solely to matters of Georgia law) not contained in this
opinion. The opinion from the attorney in the Law Department of
the Company is satisfactory in form and scope to me and I believe
that I am justified in relying on such opinion as to the matters
covered thereby.
Very truly yours,
<PAGE> sf-709119 5
[Execution Copy]
CONTRIBUTION AGREEMENT
This Contribution Agreement ("Agreement") is entered into as
of July 22, 1999 by and among GEORGIA-PACIFIC CORPORATION, a
Georgia corporation (the "Parent"), NORTH AMERICAN TIMBER CORP.,
a Delaware corporation ("NAT"), UNISOURCE WORLDWIDE, INC., a
Delaware corporation, 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, NEKOOSA PAPERS INC., a
Wisconsin corporation, and such other Persons that may hereafter
become a party hereto pursuant to Section 3.1 (collectively,
including NAT but excluding the Parent, the "Contributing
Subsidiaries").
Recitals
A. Parent, certain financial institutions which are or may
become parties thereto (the "Lenders"), Bank of America National
Trust and Savings Association, as administrative agent (the
"Parent Agent"), Commerzbank AG, New York Branch, as
Documentation Agent, and The Chase Manhattan Bank and Citibank,
N.A., as Co-Syndication Agents have entered into a Credit
Agreement, dated as of the date hereof (together with all
amendments from time to time made thereto, the "Parent Credit
Agreement"). Pursuant to the Parent Credit Agreement, the
Lenders have agreed to provide credit facilities to the Parent in
the aggregate amount of up to $1,000,000,000.
B. NAT, the Lenders, the Agent, Bank of America National
Trust and Savings Association, as administrative agent (the "NAT
Agent"), Commerzbank AG, New York Branch, as Documentation Agent,
and The Chase Manhattan Bank and Citibank, N.A., as Co-
Syndication Agents have also entered into a Credit Agreement,
dated as of the date hereof (together with all amendments, if
any, from time to time made thereto, the "NAT Credit Agreement"
and, together with the Parent Credit Agreement, the "Credit
Agreements"). Pursuant to the NAT Credit Agreement, the Lenders
have agreed to provide credit facilities to NAT in the aggregate
amount of up to $1,000,000,000.
E. Each of the Principal Subsidiaries (as defined in the
Parent Credit Agreement) is a direct or indirect beneficiary of
the credit facilities provided pursuant to the Parent Credit
Agreement, and each Person hereafter becoming a Principal
Subsidiary (as defined in the NAT Credit Agreement) will be a
direct or indirect beneficiary of the credit facilities provided
pursuant to the NAT Credit Agreement. Accordingly, each
Principal Subsidiary (as defined in the Parent Credit Agreement)
has entered into, and each Person becoming such a Principal
Subsidiary hereafter is obligated to enter into, the Subsidiary
<PAGE> sf-715802 1
Guaranty of even date herewith (as defined in the Parent Credit
Agreement) (the "Parent Subsidiary Guaranty"), and each Person
hereafter becoming a Principal Subsidiary (as defined in the NAT
Credit Agreement) is obligated to enter into the Subsidiary
Guaranty of even date herewith (as defined in the NAT Credit
Agreement) (the "NAT Subsidiary Guaranty" and, together with the
Parent Subsidiary Guaranty, the "Guaranties").
G. Because of the joint and several nature of the
Guaranties and the transactions contemplated by the Credit
Agreements, any of the Principal Subsidiaries may be called upon
or required to pay an amount in respect of such obligations which
is greater than the benefit actually received by such
Contributing Subsidiary as the result of the apportionment and
distribution of the Group Commitment loan proceeds, and so the
Parent desires to provide for rights of reimbursement and
contribution among the Parent on behalf of itself and its
Principal Subsidiaries in such event.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises of the parties hereto, the parties hereto hereby
agree as follows:
ARTICLE 18
REIMBURSEMENT AND CONTRIBUTION
18.01 Reimbursement and Contribution. The Parent hereby
agrees that, if a Contributing Subsidiary shall be called upon
and required to pay amounts (or suffer the loss of its collateral
pledged to secure amounts) in respect of the joint and several
obligations of the Principal Subsidiaries under either of the
Guaranties which exceed the aggregate benefit actually received
by such Contributing Subsidiary (the "Paying Subsidiary") as the
result of apportionment and distribution of the proceeds of the
Credit Agreements, then such Paying Subsidiary shall be entitled
to contribution and reimbursement from the Parent and the other
Principal Subsidiaries, and the Parent shall pay and contribute,
or shall cause one or more of the other Principal Subsidiaries to
pay and contribute, to such Paying Subsidiary and reimburse it
for an amount equal to the amount by which the amount such Paying
Subsidiary is actually called upon to pay exceeds the aggregate
benefit actually received by such Paying Subsidiary as the result
of the apportionment and distribution of the proceeds of the
Credit Agreements.
ARTICLE 19
REPRESENTATIONS AND WARRANTIES
19.01 Representations and Warranties. As of the date hereof
(in the case of Contributing Subsidiaries initially executing
this Agreement) and as of the date of execution and delivery
hereof (in the case of Contributing Signatories becoming a party
hereto pursuant to Section 3.1), each Contributing Subsidiary
hereby makes each of the representations and warranties made by
the Parent and, in the case of Principal Subsidiaries as defined
in the NAT Credit Agreement, NAT in the
<PAGE> sf-715802 2
Credit Agreements, to the extent that any such representation or
warranty made by the Parent or NAT in the Credit Agreements shall
be applicable to such Contributing Subsidiary, its Subsidiaries,
or any of its or their properties.
ARTICLE 20
ADDITIONAL SIGNATORIES
20.01 Additional Signatories. As required by the terms of
the Credit Agreements, Principal Subsidiaries as defined in
either Credit Agreement may from time to time hereafter become
parties hereto by executing and delivering to the NAT Agent and
the Parent Agent a signature page to this Agreement attached to a
photocopy of this Agreement as previously executed.
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.01 Loan Document.
This Agreement is a Loan Document for purposes of both of
the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in
accordance with the terms and provisions thereof, including,
without limitation, Article 12 of the Parent Credit Agreement.
21.02 Binding on Successors, Transferees, and Assigns;
Assignment.
This Agreement shall be binding upon the Parent, each
Contributing Subsidiary and their respective successors,
transferees, and assigns and shall inure to the benefit of and be
enforceable by the Parent, each Contributing Subsidiary, the NAT
Agent, the Parent Agent, each Lender, and their respective
successors, transferees, and assigns; provided, however, that
neither the Parent nor any Contributing Subsidiary may assign any
of its obligations hereunder.
21.03 Amendment, etc.
No amendment to or waiver of any provision of this
Agreement, nor consent to any departure by the Parent or any
Contributing Subsidiary herefrom, shall in any event be effective
unless the same shall be in writing and signed by the NAT Agent,
the Parent Agent, and authorized by the Required Lenders as
defined in each Credit Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
21.04 No Waiver; Remedies.
No failure on the part of the NAT Agent, the Parent Agent,
or any Lender 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. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
21.05 Section Captions.
Section captions used in this Agreement are for convenience
of reference only, and shall not affect the construction of this
Agreement.
<PAGE> sf-715802 3
21.06 Severability.
Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
21.07 Governing Law, etc.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE PARTIES TO THE LOAN DOCUMENTS WITH
RESPECT TO THE SUBJECT MATTER THEREOF AND SUPERSEDE ALL PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO, EXCEPT FOR THE
FEE LETTER AND ANY PRIOR ARRANGEMENT MADE WITH RESPECT TO THE
PAYMENT BY ANY LENDER 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 ANY LENDER.
21.08 Waiver of Jury Trial.
EACH CONTRIBUTING SUBSIDIARY HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY EAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT. EACH
CONTRIBUTING SUBSIDIARY ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THE CREDIT AGREEMENTS.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
<PAGE> sf-715802 4
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date set forth above.
GEORGIA-PACIFIC CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NORTH AMERICAN TIMBER CORP.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
UNISOURCE WORLDWIDE, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GREAT NORTHERN NEKOOSA CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
BRUNSWICK PULP & PAPER COMPANY
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GEORGIA-PACIFIC WEST, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
G-P GYPSUM CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
LEAF RIVER FOREST PRODUCTS, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PACKAGING CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PAPERS INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
<PAGE>
Exhibit 7.02(d)
to GP Credit Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE
July ___, 1999
To each of the Lenders party
to the Credit Agreement
hereinafter referred to and to
Bank of America National Trust
and Savings Association, as Agent
Re: Georgia-Pacific Corporation Credit Agreement
dated as of July 22, 1999
This Certificate is delivered to you pursuant to Section
7.02(d) of the Credit Agreement, dated as of July 22, 1999 (the
"Credit Agreement"), among GEORGIA-PACIFIC CORPORATION, a Georgia
corporation (the "Company"), the Lenders party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative agent (the "Agent"), COMMERZBANK AG, NEW YORK
BRANCH, as Documentation Agent, and THE CHASE MANHATTAN BANK and
CITIBANK, N.A., as Co-Syndication Agents. Unless otherwise
defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
The undersigned hereby certifies to each Lender and the
Agent as follows:
1. I hold, and at all pertinent times mentioned herein
have held, the position listed below my name below. I have read
and am familiar with the Credit Agreement and the other Loan
Documents, and I am familiar with the transactions contemplated
thereunder. I am authorized to execute and deliver this
Certificate on behalf of the Company.
2. The conditions precedent to the initial Borrowing
contained in Section 7.02 of the Credit Agreement have been and
remain satisfied in full as of the date hereof.
3. The representations and warranties contained in
Article 6 of the Credit Agreement are correct.
4. I understand that you are relying on this Certificate
in connection with the extensions of credit being made to or for
the account of the Company Pursuant to the Credit Agreement.
IN WITNESS WHEREOF, the undersigned, on behalf of the
Company, has caused this Certificate to be executed this ___ of
July, 1999.
GEORGIA-PACIFIC CORPORATION
By:
Title:
<PAGE> sf-709118
Exhibit 8.09(c)
to GP Credit Agreement
FORM OF COMPLIANCE CERTIFICATE
[ Date ]
Bank of America National Trust
and Savings Association, as Agent
Paper & Forest Products #9973
555 California Street -- 41st Floor
San Francisco, CA 94104
Attention: M.J. Balok, Managing Director
Re: Georgia-Pacific Corporation Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This Compliance Certificate is delivered to you pursuant to
Section 8.09(c) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein (including the attachments hereto)
have the meanings provided in the Credit Agreement.
The Company hereby certifies and warrants that, as of the
dates set forth below:
(a) on _____________, ____<F1> (the "Computation
Date"), the Leverage Ratio (as defined in Attachment A
hereto) for the Company and its consolidated Subsidiaries
was _____ to 1.0, as computed on Attachment A hereto;
(b) as of each of the Computation Date and the date
hereof, no Default or Event of Default has occurred and is
continuing; and
<F1> The last day of the most recently ended fiscal quarter
of the Company.
<PAGE> sf-709116
(c) as of the date hereof, there are no pending or, to
the knowledge of the Company, threatened, actions or
proceedings affecting the Company, any Principal Subsidiary
or any Restricted Subsidiary before any court or other
Governmental Authority or any arbitrator that are reasonably
likely to have a Material Adverse Effect.
The undersigned Responsible Officer of the Company executing
this Certificate on behalf of the Company is, and at all
pertinent times mentioned herein has been, the Chief Financial
Officer of the Company and in such capacity has been responsible
for the management of the financial affairs of the Company and
the preparation of financial statements of the Company and its
Subsidiaries on a consolidated basis.
IN WITNESS WHEREOF, the Company has caused this
Certificate to be executed and delivered, and the certification
and warranties contained herein to be made, this _____ day
of____________, ____.
GEORGIA-PACIFIC CORPORATION
By:
Title:
<PAGE> sf-709116 2
ATTACHMENT A
to GP Compliance Certificate <F2>
LEVERAGE RATIO
ON __________, ____
[Computation Date]
Item Measurement
All of the foregoing computed
for the Company and its
consolidated Subsidiaries
1. Indebtedness for Borrowed Money $_____________
outstanding as of the
Computation Date
2. aggregate capital invested by $_____________
Persons other than the Company
and its Restricted Subsidiaries
in receivables and other
accounts sold to such Persons by
the Company and its Restricted
Subsidiaries as of the
Computation Date, excluding
receivables and other accounts
sold in connection with the sale
of a business or the assets
and/or operations generating
such receivables and other
accounts
3. sum of Item 1 and Item 2 (Funded $_____________
Indebtedness)
4. net income or (or net loss) $_____________
during the Measurement Period
ending on the Computation Date
<F2> By necessity, the computations described in this
Compliance Certificate are less detailed than those contained in
the Credit Agreement. In the event of any conflict between the
two, the terms of the Credit Agreement shall in all instances
prevail.
<PAGE> sf-709116
5. all amounts treated as expenses $_____________
for depreciation, interest and
the non-cash amortization of
intangibles of any kind to the
extent included in the
determination of such net income
(or loss)
6. cost of timber sold by North $_____________
American Timber Corp. (to the
extent constituting depletion)
for such Measurement Period to
the extent included in the
determination of such net income
(or loss) computed without
giving effect to extraordinary
cash gains or non-recurring, non-
cash items.
7. all accrued taxes on or measured $_____________
by income to the extent included
8. in the determination of such net $______________
income (or loss)
Item 4, plus Item 5, plus Item
6, plus Item 7 (EBITDA)
9. ratio of Item 3 to Item 8 (the ______ to 1.0
"Leverage Ratio")
<PAGE> sf-709116 2
Exhibit 12.08(b)
to GP Credit Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
(Georgia-Pacific Corporation)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
_________________, ____, is made by [NAME OF ASSIGNOR], a
___________________ (the "Assignor"), to [NAME OF ASSIGNEE], a
________________ ("Assignee").
RECITALS:
A. The Assignor has entered into a Credit Agreement dated as of
July 22, 1999 (together with all amendments, if any, from
time to time made thereto, the "Credit Agreement"), among
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (the
"Company"), the Lenders party thereto, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative
agent (the "Agent"), COMMERZBANK AG, NEW YORK BRANCH, as
Documentation Agent, and THE CHASE MANHATTAN BANK and
CITIBANK, N.A., as Co-Syndication Agents. Unless otherwise
defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Assignor has, as of
the date hereof, a Tranche A Commitment of $___________ and
a Tranche B Commitment of $___________ (collectively, the
"Commitments").
C. The outstanding principal balance on this date of Assignor's
Tranche A Committed Loans is $__________, and the
outstanding principal balance on this date of Assignor's
Tranche B Committed Loans is $__________.
D. [The Assignor has acquired a participation in the Issuing
Bank's liability under Tranche A Letters of Credit in an
aggregate principal amount of $_____________ and under
Tranche B Letters of Credit in an aggregate principal amount
of $_____________ (the "L/C Obligations")] or [No Letters of
Credit are outstanding.]
E. The Assignor wishes to assign to the Assignee [part][all] of
its rights and obligations under the Credit Agreement in
respect of its Commitments, [together with a corresponding
portion of its L/C Obligations,] in an amount equal to
$____________ , [unless the Tranche A Commitments have
expired or been terminated: representing an identical
percentage of the Assignor's Tranche A Commitment and
Tranche B Commitment] on the terms and subject to the
conditions set forth herein, and the Assignee wishes to
accept the assignment of such rights and assume such
obligations from the Assignor on such terms and subject to
such conditions.
NOW, THEREFORE, In consideration of the premises and the mutual
covenants contained herein, the Assignor and the Assignee hereby
covenant and agree as follows:
<PAGE> sf-709110
1. Assignment and Assumption.
(a) Subject to the terms and conditions of this
Agreement, the Assignor and the Assignee agree that the Assignor
hereby sells, transfers, and assigns to the Assignee, and the
Assignee hereby purchases, assumes, and undertakes from the
Assignor, without recourse and without representation or warranty
(except as provided in this Agreement, (i) ____% of the Tranche A
Commitments, the Tranche B Commitments, the Tranche A Committed
Loans, the Tranche B Committed Loans, [and the Tranche A L/C
Obligations and Tranche B L/C Obligations] of the Assignor
("Assignee's Percentage Share") (such assigned Commitments
representing ___% of the aggregate Commitments of all Lenders);
and (ii) all related rights, benefits, obligations, liabilities
and indemnities under and in connection with the Credit Agreement
and each other Loan Document (other than any such rights,
benefits, obligations, liabilities, or indemnities with respect
to any Bid Loan or 1996 Facility Bid Loan made by the Assignor),
including the right to receive payments of principal of and
interest on the Assignor's Committed Loans and L/C Obligations
hereby assigned, and the obligation to fund future Committed
Loans and L/C Commitments in respect of such assignment, and to
indemnify the Agent or any other party under the Credit Agreement
and to pay all other amounts payable by a Lender (in respect of
the Commitments and L/C Obligations assigned hereunder) under or
in connection with the Credit Agreement (other than any such
amounts payable in respect of a Bid Loan or a 1996 Facility Bid
Loan). After giving effect to the foregoing assignments, the
Tranche A Commitment of the Assignee shall be $___________, the
Tranche B Commitment of the Assignee shall be $___________, the
Tranche A Commitment of the Assignor shall be $____________, and
the Tranche B Commitment of the Assignor shall be $____________.
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and
fees with respect to, Committed Loans or L/C Obligations
assigned.]
(b) With effect on or after the Effective Date (as
defined herein), the Assignee shall be a party to the Credit
Agreement and succeed to all the rights and be obligated to
perform all of the obligations of a Lender under the Credit
Agreement, with Commitments in the amount assigned hereunder.
The Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender. It is
the intent of the parties that the Commitments of the Assignor
shall be reduced by an amount equal to Assignee's Percentage
Share thereof and the the Assignor shall reliquish its rights and
be released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee.
2. Payments.
(a)As consideration for the sale, assignment, and transfer
contemplated in Section 1, the Assignee shall pay to the Assignor
on the Effective Date in immediately available funds an amount
equal to $____________, representing the Assignee's Percentage
Share of the principal amount of all Committed Loans previously
made to the Company by the Assignor under the Credit Agreement
and outstanding on the Effective Date.
(b)The [Assignor/Assignee] further agrees to pay to the
Agent the processing fee referred to in the amount specified in
Section 12.08(b) of the Credit Agreement.
<PAGE> sf-709110 2
3. Reallocation of Payments. The Assignor shall notify
the Agent and the Company to make all payments with respect to
the Commitments, Loans, and L/C Obligations assigned hereunder
after the Effective Date directly to the Assignee, as its
interest may appear. The Assignor and the Assignee agree and
acknowledge that all payments of interest, commitment fees,
utilization fees, facility fees, utilization fees, and letter of
credit fees accrued up to, but not including, the Effective Date
are the property of the Assignor, and not the Assignee. The
Assignee shall, upon receipt by the Assignee of any interest,
commitment fees, utilization fees, or facility fees remit to the
Assignor all of such interest, commitment fees, utilization fees,
and facility fees accrued up to, but not including, the Effective
Date. The Assignor shall, upon receipt by the Assignor of any
interest, commitment fees, utilization fees, facility fees, and
letter of credit fees remit to the Assignee all of such interest,
commitment fees, utilization fees, facility fees, and letter of
credit fees accrued for any period from and after the Effective
Date. The Assignor shall promptly notify the Assignee of any
notices received by the Assignor in connection with the Credit
Agreement affecting or relating to the rights and obligations
assigned hereunder.
4. Independent Credit Decision. The Assignee
(a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements referred to in
Section 8.09 of the Credit Agreement, and such other documents
and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this
Agreement; and (b) agrees that it will, independently and without
reliance upon the Assignor, the Agent, or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and
legal decisions in taking or not taking action under the Credit
Agreement.
5. Effective Date; Notices. As between the Assignor and
the Assignee, the effective date for this Agreement shall be
, ____ (the "Effective Date");
provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(a)this Agreement shall be executed and delivered by the
Assignor and the Assignee;
(b)the consent of the Company, the Agent, and the Issuing
Bank required for an effective assignment of the Commitment and
outstanding Committed Loans assigned hereunder by the Assignor to
the Assignee under Section 12.08(a) of the Credit Agreement, if
any, shall have been duly obtained and shall be in full force and
effect as of the Effective Date;
(c)the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Agreement;
(d)the Assignee shall have complied with Section 4.05(f)
of the Credit Agreement (if applicable);
(e)the processing fee referred to above and in Section
12.08(b) of the Credit Agreement shall have been paid by
[Assignor/Assignee] to the Agent; and
<PAGE> sf-709110 3
(f)Promptly following the execution of this Agreement, the
Assignor shall deliver to the Company and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form
attached hereto as Attachment A.
6. Agent. [Include only if Assignor is Agent:
(a)The Assignee hereby appoints and authorizes the
Assignor to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated
to the Agent by the Lenders pursuant to the terms of the Credit
Agreement.
(b)The Assignee shall assume no duties or obligations held
by the Assignor in its capacity as Agent under the Credit
Agreement.]
7. Withholding Tax. The Assignee agrees to comply with
Section 4.05(f) of the Credit Agreement (if applicable).
8. Representations and Warranties.
(a)The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any lien,
security interest, or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to
take, and has taken, all action necessary to execute and deliver
this Agreement and any other documents required or permitted to
be executed or delivered by it in connection with herewith and to
fulfill its obligations hereunder; (iii) no notices to, or
consents, authorizations, or approvals of, any Person are
required (other than any already given or obtained) for its due
execution, delivery, and performance of this Agreement, and apart
from any agreements or undertakings or filings required by the
Credit Agreement, no further action by, or notice to, or filing
with, any person is required of it for such execution, delivery,
or performance; and (iv) this Agreement has been duly executed
and delivered by it and constitutes the legal, valid, and binding
obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization, and other
laws of general application relating to or affecting creditors'
rights and to general equitable principles.
(b)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 the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to,
the solvency, financial condition, or statements of the Company,
or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c)The Assignee represents and warrants that (i) it is
duly organized and existing and it has full power and authority
to take, and has taken, all action necessary to execute and
deliver this Agreement and any other documents required or
permitted to be executed or delivered by it in connection
herewith, and to fulfill its obligations hereunder; (ii) no
<PAGE> sf-709110 4
notices to, or consents, authorizations, or approvals of, any
Person are required (other than any already given or obtained)
for its due execution, delivery, and performance of this
Agreement; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any person is required of it for
such execution, delivery, or performance; (iii) this Agreement
has been duly executed and delivered by it and constitutes the
legal, valid, and binding obligation of the Assignee, enforceable
against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization, and other laws of general application
relating to or affecting creditors' rights and to general
equitable principles; and (iv) it is an Eligible Assignee.
9. Further Assurances. The Assignor and the Assignee each
hereby agrees to execute and deliver such other instruments, and
take such other action, as either party may reasonably request in
connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
(a)Any amendment or waiver of any provision of this
Agreement shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any
right, power, or privilege hereunder shall operate as a waiver
thereof and any waiver of any breach of the provisions of this
Agreement shall be without prejudice to any rights with respect
to any other or further breach thereof.
(b)All payments made hereunder shall be made without any
set-off or counterclaim.
(c)The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation,
preparation, execution, and performance of this Agreement.
(d)This Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The
Assignor and the Assignee each irrevocably submits to the
non-exclusive jurisdiction of any New York State or Federal court
sitting in the City of New York over any suit, action or
proceeding arising out of or relating to this Agreement and
irrevocably agrees that all claims in respect of such suit,
action or proceeding may be heard and determined in such New York
State or Federal court, and each party to this Agreement hereby
irrevocably waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of
such suit, Action or proceeding.
(f)THE ASSIGNOR AND THE ASSIGNEE EACH 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, THE
CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS, OR ANY
<PAGE> sf-709110 5
COURSE OF CONDUCT, COURSE OF DEALING, OR OTHER STATEMENTS
(WHETHER VERBAL OR WRITTEN).
[Other provisions to be added as may be negotiated between
the Assignor and the Assignee, provided that such provisions are
not inconsistent with the Credit Agreement.]
<PAGE> sf-709110 6
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed on their behalf by their duly authorized officers
as of the day and year first above written.
[ASSIGNOR]
Address:
____________________________ By: ____________________________
[Address of Assignor] _________________(print name)
Title: _________________________
[ASSIGNEE]
Address:
____________________________ By: ____________________________
[Address of Assignee] _________________(print name)
Title: _________________________
<PAGE> sf-709110 7
Attachment A to Exhibit 12.08(b)
Assignment and Assumption Agreement
FORM OF NOTICE OF ASSIGNMENT
To: Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Treasurer's Department
To: Bank of America National Trust
and Savings Association, as Agent and Issuing Bank
Credit Products - Forest Products - SF #9973
Mail Code: CA5-705-41-01
555 California St., 41st Fl.
San Francisco, CA 94104
Attention: Mike Balok, Managing Director
Re: Georgia-Pacific Corporation Credit Agreement,
dated as of July 22, 1999
Ladies and Gentlemen:
We refer to Section 12.08(b) of the Credit Agreement, dated
as of July 22, 1999 (together with all amendments, if any, from
time to time made thereto, the "Credit Agreement"), among GEORGIA-
PACIFIC CORPORATION, a Georgia corporation (the "Company"), the
Lenders party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
This Notice of Assignment is delivered to you pursuant to
Section 12.08(b) of the Credit Agreement and also constitutes
notice to each of you, pursuant to Section 12.08(b)(i) of the
Credit Agreement, of the assignment to ________________ (the
"Assignee") of [____%] of the Commitment and the Committed Loans
of ___________________________ (the "Assignor") outstanding under
the Credit Agreement on the date hereof, which assignment was
undertaken pursuant to an Assignment and Assumption Agreement,
duly executed and delivered by the Assignor and the Assignee on
_____________, _____. After giving effect to the foregoing
assignment, the Assignor's and the Assignee's Commitments for the
purposes of the Credit Agreement are set forth opposite such
Person's name on the signature pages hereof.
[If applicable: The Assignee hereby represents and warrants
<PAGE> sf-709110 8
to the Agent that it has obtained from the Company the prior
consent to the assignment required pursuant to Section 12.08(a).]
The Assignee hereby acknowledges and confirms that it has
received a copy of the Credit Agreement and the Schedules and
Exhibits thereto, together with copies of the documents which
were required to be delivered under the Credit Agreement as a
condition to the initial Borrowing thereunder. The Assignee
further confirms and agrees that in becoming a Lender and in
extending its Commitment and making its Committed Loans under the
Credit Agreement, such actions have and will be made without
recourse to, or representation or warranty by, the Agent.
Except as otherwise provided in the Credit Agreement,
effective as of the date contemplated by Section 12.08(b)(iii) of
the Credit Agreement for the effectiveness of the assignment
which is the subject of this Notice of Assignment (the "Effective
Date"):
(a) the Assignee
(i) shall be deemed automatically to have
become a party to the Credit Agreement, have all the
rights and obligations of a "Lender" under the Credit
Agreement and the other Loan Documents as if it were an
original signatory thereto to the extent specified in
the second paragraph hereof; and
(ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the
other Loan Documents as if it were an original
signatory thereto; and
(b) the Assignor shall be released from its
obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph
hereof.
The Assignor and the Assignee hereby agree that the
[Assignor] [Assignee] will pay to the Agent the processing fee
referred to in Section 12.08(b)(ii) of the Credit Agreement upon
the delivery hereof.
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned Loans and
Commitments and requests the Agent to acknowledge receipt of this
document:
(A) Address for Notices:
Institution Name:
Attention:
Domestic Lending Office:
Telephone:
Facsimile:
<PAGE> sf-709110 9
Eurodollar Lending Office:
Telephone:
Facsimile:
(B) Payment Instructions:
The Assignee agrees to furnish to the Agent and the Company
on or before the Effective Date the tax form[s] required by
Section 4.05(f) (if so required) of the Credit Agreement.
This Notice of Assignment may be executed by the Assignor
and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same notice
and agreement.
Adjusted Tranche A Commitment: [ASSIGNOR]
By: __________________________
$__________________ Title: _______________________
Adjusted Tranche B Commitment:
$__________________
Tranche A Commitment: [ASSIGNEE]
By: __________________________
$_________________ Title: _______________________
Tranche B Commitment:
$_________________
<PAGE> sf-709110 10
ACCEPTED AND ACKNOWLEDGED
this _____ day of__________, ____
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent and Issuing Bank
By: __________________________
Title: _______________________
GEORGIA-PACIFIC CORPORATION
By: __________________________
Title: _______________________
<PAGE> sf-709110 11
[EXECUTION COPY]
CREDIT AGREEMENT
among
NORTH AMERICAN TIMBER CORP.
THE LENDERS NAMED HEREIN
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent,
COMMERZBANK AG,
NEW YORK BRANCH,
as Documentation Agent,
THE CHASE MANHATTAN BANK and CITIBANK, N.A.,
as Co-Syndication Agents
and
BANC OF AMERICA SECURITIES LLC,
Sole Book Manager and Sole Lead Arranger,
$1,000,000,000
Dated as of July 22, 1999
<PAGE> sf-712846
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Certain Defined Terms. 1
1.02 Computation of Time Periods. 15
1.03 Accounting Matters. 15
1.04 Certain Terms. 15
ARTICLE 2 AMOUNTS AND TERMS OF THE LOANS 16
2.01 Committed Loans. 16
2.02 Procedure for Committed Borrowings. 17
2.03 Bid Borrowings. 17
2.04 Procedure for Bid Borrowings. 18
2.05 Evidence of Indebtedness. 20
2.06 Optional Reduction of the Commitments. 21
2.07 Repayment. 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
ARTICLE 3 THE LETTERS OF CREDIT 24
3.01 The Letter of Credit Subfacility. 24
3.02 Issuance, Amendment and Renewal of Letters of
Credit. 26
3.03 Role of the Issuing Bank. 28
3.04 Obligations Absolute. 28
3.05 Cash Collateral Pledge. 29
3.06 Letter of Credit Fees. 29
3.07 International Standby Practices. 30
ARTICLE 4 FEES; PAYMENTS; TAXES 30
4.01 Fees. 30
4.02 Computation of Interest, Fees. 31
4.03 Payments by the Company. 32
4.04 Payments by the Lenders. 32
4.05 Taxes. 33
4.06 Sharing of Payments, Etc. 37
ARTICLE 5 CHANGES IN CIRCUMSTANCES; ETC. 38
5.01 Eurodollar Rate Protection. 38
5.02 Additional Interest on Eurodollar Loans. 38
5.03 Increased Costs. 38
5.04 Illegality. 39
<PAGE> sf-712846 i
5.05 Capital Adequacy. 39
5.06 Funding Losses. 39
5.07 Funding; Certificates of Lenders. 40
5.08 Change of Lending Office; Limitation on
Increased Costs. 41
5.09 Replacement of Lenders. 42
ARTICLE 6 REPRESENTATIONS AND WARRANTIES 42
6.01 Corporate Existence; Compliance with Law. 42
6.02 Corporate Power; Authorization. 43
6.03 Enforceable Obligations. 43
6.04 Taxes. 43
6.05 Financial Matters. 43
6.06 Litigation. 44
6.07 Subsidiaries. 44
6.08 Liens. 44
6.09 No Burdensome Restrictions; No Defaults. 44
6.10 Investment Company Act; Public Utility Holding
Company Act. 45
6.11 Margin Regulations. 45
6.12 Environmental Matters. 45
6.13 Labor Matters. 46
6.14 ERISA Plans. 46
6.15 Y2K Review. 47
6.16 Swap Obligations. 47
6.17 Full Disclosure. 47
ARTICLE 7 CONDITIONS PRECEDENT 47
7.01 Conditions Precedent to the First Loan. 47
7.02 Additional Conditions Precedent to the First
Loan. 48
7.03 Conditions Precedent to Each Committed Loan and
Letter of Credit. 49
7.04 Conditions Precedent to Each Bid Borrowing. 49
ARTICLE 8 AFFIRMATIVE COVENANTS 50
8.01 Application of Proceeds. 50
8.02 Compliance with Laws, Etc. 50
8.03 Payment of Taxes, Etc. 50
8.04 Maintenance of Insurance. 50
8.05 Preservation of Corporate Existence, Etc. 50
8.06 Access. 51
8.07 Keeping of Books. 51
8.08 Maintenance of Properties, Etc. 51
8.09 Financial Statements. 51
8.10 Reporting Requirements. 51
8.11 ERISA Plans. 52
8.12 Environmental Compliance; Notice. 52
8.13 New Subsidiaries. 52
<PAGE> sf-712846 ii
ARTICLE 9 NEGATIVE COVENANTS 53
9.01 Liens, Etc. 53
9.02 Sale-Leaseback Transactions. 55
9.03 Mergers, Etc. 56
9.04 Transactions with Affiliates. 56
9.05 Accounting Changes. 56
9.06 Margin Regulations. 56
9.07 Negative Pledges, Etc. 56
9.08 Leverage Ratio. 57
ARTICLE 10 EVENTS OF DEFAULT 57
10.01 Events of Default. 57
10.02 Remedies. 59
ARTICLE 11 THE AGENT 60
11.01 Appointment. 60
11.02 Delegation of Duties. 60
11.03 Liability of Agent. 60
11.04 Reliance by Agent. 61
11.05 Notice of Default. 61
11.06 Credit Decision. 61
11.07 Indemnification. 62
11.08 Agent in Individual Capacity. 62
11.09 Successor Agent. 63
11.10 Documentation, Co-Syndication, Managing Agents. 63
ARTICLE 12 MISCELLANEOUS 63
12.01 Notices, Etc. 63
12.02 Amendments, Etc. 64
12.03 No Waiver; Remedies. 65
12.04 Costs and Expenses. 65
12.05 Indemnity. 66
12.06 Right of Set-off. 66
12.07 Binding Effect. 67
12.08 Assignments, Participations, Etc. 67
12.09 Confidentiality. 69
12.10 Survival. 69
12.11 Severability. 69
12.12 Headings. 70
12.13 No Third Parties Benefited. 70
12.14 Governing Law. 70
12.15 Execution in Counterparts. 70
12.16 ENTIRE AGREEMENT. 70
12.17 WAIVER OF JURY TRIAL. 70
<PAGE> sf-712846 iii
SCHEDULES
Schedule Description
1.01(a) Commitments; Commitment Percentages
1.01(b) Lending Offices
6.02(d) Corporate Power; Authorizations
6.12 Environmental Matters
6.13 Labor Matters
6.14 ERISA
9.01 Existing Liens
EXHIBITS
Exhibit Description
2.02(a) Form of Notice of Borrowing
2.04(a) 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(b) Form of Notice of Conversion/Continuation
7.01(c) Form of Parent Guaranty
7.01(d) Form of Opinion of Counsel for the Company
7.01(e) Form of Contribution Agreement
7.02(d) Form of Officer's Closing Certificate
8.09(c) Form of Compliance Certificate
8.13(a) Form of Subsidiary Guaranty
12.08(b) Form of Assignment and Assumption Agreement
<PAGE> sf-712846 iv
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July 22, 1999
among NORTH AMERICAN TIMBER CORP., a Delaware corporation (the
"Company"), the various LENDERS that are, or may from time to
time become, party hereto (the "Lenders") and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative agent
for the Lenders (in such capacity, the "Agent"), COMMERZBANK AG,
NEW YORK BRANCH, as Documentation Agent, and THE CHASE MANHATTAN
BANK and CITIBANK, N.A., as Co-Syndication Agents.
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 $1,000,000,000, on the terms and subject to the conditions
set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 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 at its executive offices, as its reference
rate or prime 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.
<PAGE> sf-712846 1
"Agent" means Bank of America in its capacity as
administrative agent for the Lenders, together with any successor
thereto in such capacity.
"Agent-Related Persons" means Bank of America and any
successor agent arising under Section 11.09 and any successor
letter of credit issuing bank hereunder, together with their
respective Affiliates (including, in the case of Bank of America,
the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Aggregate Tranche A Commitments" means the aggregate amount
of the Tranche A Commitments of all the Lenders as in effect from
time to time.
"Aggregate Tranche B Commitments" means the aggregate amount
of the Tranche B Commitments of all the Lenders as in effect from
time to time.
"Agreement" means this Credit Agreement.
"Arranger" means Banc of America Securities LLC.
"Assignee" means any Person which becomes a party to this
Agreement pursuant to Section 12.08.
"Available Tranche A Commitments" means, at any time, the
excess, if any, of the Aggregate Tranche A Commitments in effect
at such time over the sum of (a) the aggregate principal amount
of all Tranche A Loans then outstanding, plus (b) the aggregate
principal amount of all Tranche A Bid Loans then outstanding,
plus (c) the outstanding Tranche A L/C Obligations.
"Available Tranche B Commitments" means, at any time, the
excess, if any, of the Aggregate Tranche B Commitments in effect
at such time over the sum of (a) the aggregate principal amount
of all Tranche B Loans then outstanding, plus (b) the aggregate
principal amount of all Tranche B Bid Loans then outstanding,
plus (c) the outstanding Tranche B L/C Obligations.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association and its
successors by merger and permitted assigns.
"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 either a Tranche A Bid Loan or a Tranche B
Bid Loan.
"Borrowing" means a Bid Borrowing or a Committed Borrowing.
<PAGE> sf-712846 2
"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.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing
Bank and the Lenders, as collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance satisfactory to the Agent and the Issuing Bank (which
documents are hereby consented to by the Lenders). Derivatives
of such term shall have corresponding meaning. The Company
hereby grants the Agent, for the benefit of the Agent, the
Issuing Bank and the Lenders, a security interest in all such
cash and deposit account balances. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at
Bank of America.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act of 1980.
"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 7.01 and 7.02 shall have been
satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means for any Lender, either its Tranche A
Commitment or Tranche B Commitment, as applicable.
"Commitments" means, for any Lender, the sum of its Tranche
A Commitment and Tranche B Commitment.
"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 on 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 12.08.
"Committed Borrowing" means an extension of credit hereunder
consisting of Tranche A Loans or Tranche B Loans (but not
both) 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 Tranche A Loan or a Tranche B Loan
by a Lender to the Company pursuant to Section 2.01 and may be in
the form of a 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.
<PAGE> sf-712846 3
"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.
"Contribution Agreement" means the Contribution Agreement of
even date herewith between the Parent and each of its
Subsidiaries (including the Company) now or hereafter parties to
the Subsidiary Guaranty or the "Subsidiary Guaranty" as defined
in the Georgia-Pacific Agreement.
"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 Parent'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.
"EBITDA" means, as of the end of any Measurement Period, the
sum of the following, calculated for the Parent and its
Subsidiaries on a consolidated basis: (a) net income (or net
loss) for such period, plus (b) all amounts treated as expenses
for depreciation, interest and the non-cash amortization of
intangibles of any kind to the extent included in the
determination of such net income (or loss), plus (c) cost of
timber harvested by the Company (to the extent it represents
depletion) to the extent included in the determination of such
net income (or loss), plus (d) all accrued taxes on or measured
by income to the extent included in the determination of such net
income (or loss); provided, however, that net income (or
loss) shall be computed for these purposes without giving effect
to extraordinary cash gains or non-recurring, non-cash items.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $250,000,000;
(b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital
and surplus of at least $250,000,000, provided that such bank is
acting through a branch or agency located in the United States;
(c) a Person that is primarily engaged in
<PAGE> sf-712846 4
the business of commercial banking and that is (i) a Subsidiary
of a Lender, (ii) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (iii) a Person of which a Lender is a Subsidiary;
and (d) any other Person approved in writing by the Company, the
Agent, and the Issuing Bank.
"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, together with the regulations thereunder.
"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 10.01.
"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 4.05(f)(i)(B).
"Form 4224" has the meaning specified in
Section 4.05(f)(i)(A).
<PAGE> sf-712846 5
"Form W-8" has the meaning specified in
Section 4.05(f)(i)(B).
"Form W-9" has the meaning specified in
Section 4.05(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.
"Georgia-Pacific Agreement" means the Credit Agreement,
dated as of the date hereof, by and among the Parent, Bank of
America, and the Lenders.
"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 6.05(a).
<PAGE> sf-712846 6
"Indebtedness for Borrowed Money" of any Person means,
without duplication,
(a) all indebtedness of such Person for borrowed money,
including the Company's Premium Equity Participating Security
Units, whether or not treated as indebtedness under GAAP, until
such time as they are converted into common stock of the Company;
(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 8.09; and
(f) all indebtedness of such Person or of others referred to in
paragraphs (a) through (e) 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 12.05(a).
"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;
<PAGE> sf-712846 7
(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 Tranche A Termination Date, in the case of a Borrowing
of Tranche A Loans, or the Tranche B Termination Date, in the
case of a Borrowing of Tranche B Loans.
"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.
"Issuance Date" has the meaning specified in
subsection 3.01(a).
"Issue" means, with respect to any Letter of Credit, to
issue or to extend the expiry of, or to renew or increase the
amount of, such Letter of Credit; and the terms "Issued,"
"Issuing" and "Issuance" have corresponding meanings.
"Issuing Bank" means Bank of America in its capacity as
issuer of one or more Letters of Credit hereunder.
<PAGE> sf-712846 8
"Lender" has the meaning specified in the introduction to
this Agreement and includes each Lender listed on the signature
pages hereof and each Assignee. References to the "Lenders"
shall include Bank of America in its capacity as Issuing Bank;
for purposes of clarification only, to the extent that Bank of
America may have any rights or obligations in addition to those
of the Lenders due to its status as Issuing Bank, its status as
such will be specifically referenced.
"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 on
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.
"L/C Advance" means each Lender's participation in any L/C
Borrowing in accordance with its Commitment Percentage.
"L/C Amendment Application" means an application form for
amendment of outstanding standby letters of credit as shall at
any time be in use at the Issuing Bank, as the Issuing Bank shall
request.
"L/C Application" means an application form for issuances of
standby letters of credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from
a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made.
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Lenders severally to participate
in, Letters of Credit from time to time Issued or outstanding
under Article 3, in an aggregate amount not to exceed on any date
the amount of $150,000,000, as the same shall be reduced as a
result of a reduction in the L/C Commitment pursuant to
Section 2.06. The L/C Commitment is a part of the combined
Commitments, rather than a separate, independent commitment.
"L/C Obligations" means at any time the sum of Tranche A L/C
Obligations and Tranche B L/C Obligations.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other
document relating to any Letter of Credit, including any of the
Issuing Bank's standard-form documents for Letter of Credit
Issuances.
"Letter of Credit" means any Tranche A Letter of Credit or
Tranche B Letter of Credit.
"LIBOR" means, for any Interest Period:
<PAGE> sf-712846 9
(a) the rate of interest per annum (carried out to the fifth
decimal point) equal to the rate determined by the Agent to be
the offered rate that appears on the page of the Telerate Screen
that displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3750) for
deposits in dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period; or
(b) in the event the rate referenced in the preceding
subsection (a) does not appear on such page or service or such
page or service shall cease to be available, the rate per annum
(carried to the fifth decimal place) equal to the rate determined
by the Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association
Interest Settlement Rate for deposits in dollars (for delivery on
the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period; or
(c) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by the Agent as the rate of interest at which dollar
deposits (for delivery on the first day of such Interest Period)
in same-day funds in the approximate amount of the applicable
Committed Loan and with a term equivalent to such Interest Period
would be offered by its London Branch to major banks in the
offshore dollar market at their request at approximately 11:00
a.m. (London time) two Business Days prior to the first day of
such Interest Period.
"Lien" means any mortgage, security interest, pledge or
lien.
"Loan" means a loan by a Lender to the Company pursuant to
Article 2 or Article 3 in the form of a Committed Loan, a Bid
Loan, or an L/C Advance.
"Loan Documents" means this Agreement, the Subsidiary
Guaranty, the Parent Guaranty, the Contribution Agreement, the
L/C Related Documents, 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.
<PAGE> sf-712846 10
"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.
"Notice of Assignment" has the meaning specified in
Section 12.08(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, L/C Obligations and other
Indebtedness, 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.
"Other Taxes" has the meaning specified in Section 4.05(b).
"Parent" means Georgia-Pacific Corporation.
"Parent Guaranty" has the meaning specified in Section
7.01(c).
"Participant" has the meaning specified in Section 12.08(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
<PAGE> sf-712846 11
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 9.01.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of the Company or any Subsidiary
existing or arising under Swap Contracts, provided that such
obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or
assets held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person in conjunction
with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a
"market view".
"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 any Subsidiary of the Company
having assets constituting at least 10% of the Company's
consolidated assets.
"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.
<PAGE> sf-712846 12
"Release" means a "release", as such term is defined in
CERCLA.
"Replacement Lender" has the meaning specified in
Section 5.09.
"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 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
Executive 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
together with the Company and/or one or more other Restricted
Subsidiaries, owns a Principal Property.
"Sale-Leaseback Transaction" has the meaning specified in
Section 9.02.
"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" means a guaranty in the form attached
as Exhibit 8.13(a).
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, cap,
collar or floor transaction, currency swap, cross-currency rate
swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise
clearly requires, any master agreement relating to or governing
any or all of the foregoing.
<PAGE> sf-712846 13
"Swap Termination Value" means, in respect of any one or
more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in
clause (a) the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined by the Agent
based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap
Contracts (which may include any Lender).
"Taxes" has the meaning specified in Section 4.05(a).
"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.
"Tranche A Bid Loan" means a Loan made by a Lender to the
Company pursuant to subsection 2.03(a) and may be a Base Rate Bid
Loan or a Fixed Rate Bid Loan.
"Tranche A Commitment" means for each Lender, as the context
may require, (a) the amount in dollars set forth on Schedule
1.01(a) opposite the name of such Lender under the heading
"Tranche A 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 12.08; or (b) the obligation of such Lender to extend
credit to the Company hereunder in the amount specified in the
immediately preceding clause (a).
"Tranche A L/C Obligations" means at any time the sum of
(a) the aggregate undrawn amount of all Tranche A Letters of
Credit then outstanding, plus (b) the amount of all unreimbursed
drawings under all Tranche A Letters of Credit, including all
outstanding L/C Borrowings made on account of Tranche A Letters
of Credit.
"Tranche A Letter of Credit" means any letter of credit
Issued by the Issuing Bank pursuant to Article 3 and allocated in
the Company's request therefor to the Tranche A Commitments.
"Tranche A Loan" has the meaning set forth in
subsection 2.01(a).
"Tranche A Termination Date" means July 20, 2000.
"Tranche B Bid Loan" means a Loan made by a Lender to the
Company pursuant to subsection 2.03(b) and may be a Base Rate Bid
Loan or a Fixed Rate Bid Loan.
"Tranche B Commitment" means for each Lender, as the context
may require (a) the amount in dollars set forth on Schedule
1.01(a) opposite the name of such Lender under the heading
"Tranche B 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
<PAGE> sf-712846 14
one or more assignments pursuant to Section 12.08; or (b) the
obligation of such Lender to extend credit to the Company
hereunder in the amount specified in the immediately preceding
clause (b).
"Tranche B L/C Obligations" means at any time the sum of
(a) the aggregate undrawn amount of all Tranche B Letters of
Credit then outstanding, plus (b) the amount of all unreimbursed
drawings under all Tranche B Letters of Credit, including all
outstanding L/C Borrowings made on account of Tranche B Letters
of Credit.
"Tranche B Letter of Credit" means any letter of credit
Issued by the Issuing Bank pursuant to Article 3 and allocated in
the Company's request therefor to the Tranche B Commitments.
"Tranche B Loan" has the meaning set forth in
Section 2.01(b).
"Tranche B Termination Date" means July 22, 2004.
"Unrestricted Subsidiary" means any Subsidiary of the
Company other than a Restricted Subsidiary.
"Utilization Fee" has the meaning specified in
Section 4.01(a).
"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.
1.02 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."
1.03 Accounting Matters. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and
all financial statements referred to in Sections 8.09(a) and
(b) shall be prepared in accordance with GAAP; provided, however,
that all computations determining compliance with Article 8 shall
use accounting principles consistent with those applied in the
preparation of the financial statements of the Company referred
to in Section 6.05(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.
1.04 Certain Terms. The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
<PAGE> sf-712846 15
The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole, including
the Exhibits and Schedules hereto, 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.
Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments
and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
ARTICLE 2
AMOUNTS AND TERMS OF THE LOANS
2.01 Committed Loans.
(a) Tranche A 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 Tranche A Termination Date (each
such loan, a "Tranche A Loan"), in an aggregate principal amount
at any time outstanding which does not exceed such Lender's
Tranche A Commitment; provided, however, that after giving effect
to any Committed Borrowing of Tranche A Loans, (i) the aggregate
principal amount of all Tranche A Loans then outstanding, plus
(ii) the aggregate principal amount of all Tranche A Bid Loans
then outstanding, plus (iii) the outstanding Tranche A L/C
Obligations shall not exceed the Aggregate Tranche A Commitments.
Any principal amount of the Tranche A Loans which is repaid or
prepaid by the Company may be reborrowed within the limitations
set forth in this Section 2.01(a).
(b) Tranche B 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 Tranche B Termination Date (each
such loan, a "Tranche B Loan"), in an aggregate principal amount
at any time outstanding which does not exceed such Lender's
Tranche B Commitment.; provided, however, that after giving
effect to any Committed Borrowing of Tranche B Loans, (i) the
aggregate principal amount of all Tranche B Loans then
outstanding, plus (ii) the aggregate principal amount of all
Tranche B Bid Loans then outstanding, plus (iii) the outstanding
Tranche B L/C Obligations shall not exceed the Aggregate Tranche
B Commitments. Any principal amount of the Tranche B Loans which
is repaid or prepaid by the Company may be reborrowed within the
limitations set forth in this Section 2.01(b).
<PAGE> sf-712846 16
2.02 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 delivered by facsimile, in substantially
the form of Exhibit 2.02(a), 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 unused Aggregate Tranche
A Commitments or Aggregate Tranche B Commitments, as
applicable, set forth in Section 2.01(a) or (b),
respectively, 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 of
Tranche A Loans or Tranche B Loans;
(iv) whether such Borrowing is to be comprised of
Eurodollar Loans or Reference Rate Loans; and
(v) 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 4.04(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 7 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.
2.03 Bid Borrowings.
<PAGE> sf-712846 17
(a) 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 Tranche A Termination Date
request the Lenders to submit offers to make Tranche A 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 Tranche A Bid Loans made by all Lenders
then outstanding plus (ii) the aggregate principal amount of all
Tranche A Loans then outstanding plus (iii) the outstanding
Tranche A L/C Obligations exceed (b) the Aggregate Tranche A
Commitments.
(b) 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 Tranche B Termination Date
request the Lenders to submit offers to make Tranche B 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 Tranche B Bid Loans made by all Lenders
then outstanding plus (ii) the aggregate principal amount of all
Tranche B Loans then outstanding plus (iii) the outstanding
Tranche B L/C Obligations exceed (b) the Aggregate Tranche B
Commitments.
2.04 Procedure for Bid Borrowings.
(a) The Company may request a Bid Borrowing hereunder by
delivering to the Agent by facsimile 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(a) 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 in excess
thereof and shall not, in the case of a Tranche A Bid
Borrowing, exceed the Available Tranche A Commitments on the
date such proposed Borrowing is made (after giving effect to
each payment and prepayment made on such date) or, in the
case of a Tranche B Bid Borrowing, exceed the Available
Tranche B 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 Tranche B Termination Date) and, in the case of each
partial repayment, the amount thereof;
<PAGE> sf-712846 18
(iv) whether the Bid Loans requested are Tranche A Bid Loans
or Tranche B Bid Loans, and 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 4.05 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 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) (A) three Business
Days prior to the date of the proposed Bid Borrowing, in the case
of a request for Base Rate Bid Loans, and (B) 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 Tranche A Commitment or its
Tranche B 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 Section 2.04(b)(ii);
(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
Section 2.04(b)(i).
<PAGE> sf-712846 19
(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 Section 2.04(b), 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
Section 2.04(b)) 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
Section 2.04(c)(i) or accept one or more of the offers
pursuant to this Section 2.04(c)(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 Section 2.04(c)(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 4.01(a), each
outstanding Bid Loan shall be deemed to utilize the Tranche A
Commitments of each Lender, in the case of Tranche A Bid Loans,
or the Tranche B Commitments of each Lender, in the case of
Tranche B Bid Loans, 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.
2.05 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
<PAGE> sf-712846 20
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 12.08(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).
2.06 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, allocated between
Tranche A Commitments or Tranche B Commitments, as the Company
may elect; 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. No reduction in the
Commitments shall reduce the L/C Commitment until the aggregate
Commitments are reduced to $150,000,000, after which each
reduction in the Commitments shall reduce the L/C Commitment
dollar for dollar. The Agent shall promptly notify each Lender
of its receipt of any notice under this Section 2.06.
2.07 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 Tranche A Loans on the Tranche A Termination Date.
The Company agrees to repay to the Agent for the account of the
Lenders the outstanding principal amount of all Tranche B
Loans on the Tranche B 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)).
2.08 Optional Prepayments.
(a) Subject to Section 5.06(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.
<PAGE> sf-712846 21
(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 5.06(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.
2.09 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:
<TABLE>
<CAPTION>
Debt Rating Applicable Margin
on Eurodollar Loans
Moody's S&P Tranche A Loans / Tranche B Loans
<S> <S> <S> <C>
Baal higher or BBB+ or higher 0.525% / 0.500%
Baa2 or BBB 0.625% / 0.600%
Baa3 or BBB- 0.725% / 0.700%
Bal or BB+ 1.075% / 1.050%
Ba2 or lower and BB or lower 1.275% / 1.250%
</TABLE>
provided, however, that if at any time no Debt Rating is
available, the applicable margin shall be 1.275% per annum for
Tranche A Loans and 1.250% per annum for Tranche B Loans.
(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
<PAGE> sf-712846 22
applicable Debt Rating. In the event of a split rating, the
higher rating will apply; if the Debt Ratings are split by more
than one level, one level above the lower rating will apply.
(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).
2.10 Default Interest.
During the continuation of any Event of Default pursuant
to Section 10.01(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).
2.11 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(b), 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
<PAGE> sf-712846 23
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, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Committed Loans to be
converted or continued;
(iii) whether such Committed Loans are Tranche
A Loans or Tranche B Loans; and
(iv) 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 3
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time on any Business Day during the
period from the Closing Date to the Tranche A Termination Date to
issue Tranche A Letters of Credit for the account of the Company,
and to amend or renew Tranche A Letters of Credit previously
issued by it, in accordance with subsections 3.02(c) and 3.02(d),
(B) from time to time on any Business Day during the period from
the Closing Date to the Tranche B Termination Date to issue
Tranche B Letters of Credit for the account of the Company, and
to amend or renew Tranche B Letters of Credit previously issued
by it, in accordance with subsections 3.02(c) and 3.02(d), and
(C) to honor drafts under the Letters of Credit; and (ii) the
Lenders severally agree to purchase an irrevocable and
unconditional participation in each
<PAGE> sf-712846 24
Letter of Credit Issued for the account of the Company; provided,
that the Issuing Bank shall not be obligated to Issue, and no
Lender shall be obligated to participate in, any Letter of Credit
if as of the date of Issuance of such Letter of Credit (the
"Issuance Date"), after giving effect to any requested Loans,
(A) (1) the aggregate principal amount of all Tranche A Loans
then outstanding plus (2) the aggregate principal amount of all
Tranche A Bid Loans then outstanding plus (3) the outstanding
Tranche A L/C Obligations exceeds the Aggregate Tranche A
Commitments; (B) (1) the aggregate principal amount of all
Tranche B Loans then outstanding plus (2) the aggregate principal
amount of all Tranche B Bid Loans then outstanding plus (3) the
outstanding Tranche B L/C Obligations exceeds the Aggregate
Tranche B Commitments; or (C) the total amount of L/C Obligations
exceeds the L/C Commitment. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Company's
ability to obtain Letters of Credit shall be fully revolving,
and, accordingly, the Company may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit which have
expired or which have been drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue
any Letter of Credit if:
(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain the Issuing Bank from Issuing
such Letter of Credit, or any Requirement of Law applicable
to the Issuing Bank or any request or directive (whether or
not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the Issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which the Issuing Bank in good faith
deems material to it;
(ii) the Issuing Bank has received written
notice from any Lender, the Agent or the Company, on or
prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Article 7 is not then
satisfied;
(iii) the expiry date of any requested
Letter of Credit is (A) more than one year after the date of
Issuance, unless the Required Lenders have approved such
expiry date in writing, (B) after the Tranche A Termination
Date, in the case of a Tranche A Letter of Credit, unless
all of the Lenders have approved such expiry date in
writing, or (C) after the Tranche B Termination Date, in the
case of a Tranche B Letter of Credit, unless all of the
Lenders have approved such expiry date in writing;
(iv) the expiry date of any requested Letter
of Credit is prior to the maturity date of any financial
obligation to be supported by the requested Letter of
Credit;
<PAGE> sf-712846 25
(v) any requested Letter of Credit does not
provide for drafts, or is not otherwise in form and
substance acceptable to the Issuing Bank, or the Issuance of
a Letter of Credit shall violate any applicable policies of
the Issuing Bank;
(vi) any standby Letter of Credit is for the
purpose of supporting the Issuance of any Letter of Credit
by any other Person; or
(vii) such Letter of Credit is in a face
amount less than $100,000 or is denominated in a currency
other than dollars.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of the Company received by the Issuing Bank (with
a copy sent by the Company to the Agent) at least four days (or
such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of
issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the Issuing Bank: (i) the
proposed date of issuance of the Letter of Credit (which shall be
a Business Day); (ii) the face amount of the Letter of Credit;
(iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any certificate to
be presented by the beneficiary in case of any drawing
thereunder; (vii) whether such Letter of Credit should be
allocated to the Tranche A Commitments or the Tranche B
Commitments; and (viii) such other matters as the Issuing Bank
may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit, the Issuing Bank will confirm with the Agent
(by telephone or in writing) that the Agent has received a copy
of the L/C Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the Agent with
a copy thereof. Unless the Issuing Bank has received notice on
or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit from the
Agent (i) directing the Issuing Bank not to issue such Letter of
Credit because such issuance is not then permitted under
subsection 3.01(b)(iii) as a result of the limitations set forth
in clauses (A) through (C) thereof or subsection 3.01(b)(ii); or
(ii) that one or more conditions specified in Article 7 are not
then satisfied; then, subject to the terms and conditions hereof,
the Issuing Bank shall, on the requested date, issue a Letter of
Credit for the account of the Company in accordance with the
Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Tranche A Termination Date (in the case of
Tranche A Letters of Credit) or the Tranche B Termination Date
(in the case of Tranche B Letters of Credit), the Issuing Bank
will, upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at
least five days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion) prior to
the proposed date of amendment, amend any Letter of Credit issued
by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original
writing, made in the form of an L/C
<PAGE> sf-712846 26
Amendment Application and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of
Credit (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation
to amend any Letter of Credit if: (A) the Issuing Bank would
have no obligation at such time to issue such Letter of Credit in
its amended form under the terms of this Agreement; or (B) the
beneficiary of any such letter of Credit does not accept the
proposed amendment to the Letter of Credit. The Agent will
promptly notify the Banks of the receipt by it of any L/C
Application or L/C Amendment Application.
(d) The Issuing Bank and the Lenders agree that, while a Letter
of Credit is outstanding and prior to the Tranche A Termination
Date (in the case of Tranche A Letters of Credit) or the Tranche
B Termination Date (in the case of Tranche B Letters of Credit),
at the option of the Company and upon the written request of the
Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least five days (or such shorter time as
the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of notification of
renewal, the Issuing Bank shall be entitled to authorize the
renewal of any Letter of Credit issued by it. Each such request
for renewal of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, in the form of an
L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be
renewed; (ii) the proposed date of notification of renewal of the
Letter of Credit (which shall be a Business Day); (iii) the
revised expiry date of the Letter of Credit; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall
be under no obligation so to renew any Letter of Credit if:
(A) the Issuing Bank would have no obligation at such time to
issue or amend such Letter of Credit in its renewed form under
the terms of this Agreement; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed renewal of the
Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that
such Letter of Credit shall not be renewed, and if at the time of
renewal the Issuing Bank would be entitled to authorize the
automatic renewal of such Letter of Credit in accordance with
this subsection 3.02(d) upon the request of the Company but the
Issuing Bank shall not have received any L/C Amendment
Application from the Company with respect to such renewal or
other written direction by the Company with respect thereto, the
Issuing Bank shall (unless such renewal would cause the expiry
date thereof to extend beyond the Tranche A Termination Date, in
the case of a Tranche A Letter of Credit, or the Tranche B
Termination Date, in the case of a Tranche B Letter of Credit)
nonetheless be permitted to allow such Letter of Credit to renew,
and the Company and the Lenders hereby authorize such renewal,
and, accordingly, the Issuing Bank shall be deemed to have
received an L/C Amendment Application from the Company requesting
such renewal.
(e) The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Required Lenders), deliver any
notices of termination or other communications to any Letter of
Credit beneficiary or transferee, and take any other action as
necessary or appropriate, at any time and from time to time, in
order to cause the expiry date of such Letter of Credit to be a
date not later than the Tranche A Termination Date, in the case
of a Tranche A Letter of Credit, or in order to cause the expiry
date of such Letter of Credit to be a date not later than the
Tranche B Termination Date, in the case of a Tranche B Letter of
Credit.
<PAGE> sf-712846 27
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of
Credit, or amendment to or renewal of a Letter of Credit, to an
advising bank or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of
Credit.
3.03 Role of the Issuing Bank.
(a) Each Lender and the Company agree that, in paying any
drawing under a Letter of Credit, the Issuing Bank shall not have
any responsibility to obtain any document (other than any sight
draft and certificates expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or
delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank
shall be liable to any Lender for: (i) any action taken or
omitted in connection herewith at the request or with the
approval of the Lenders (including the Required Lenders, as
applicable); (ii) any action taken or omitted in the absence of
gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-
Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its
use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the
Company's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the Issuing Bank,
shall be liable or responsible for any of the matters described
in subsections 3.04(a) through (g); provided, however, anything
in such clauses to the contrary notwithstanding, that the Company
may have a claim against the Issuing Bank, and the Issuing Bank
may be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Company which the Company proves were
caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and
not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of
any notice or information to the contrary; and (ii) the Issuing
Bank shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.
3.04 Obligations Absolute.
The obligations of the Company under this Agreement and
any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing
and any drawing under a Letter of Credit converted into Revolving
<PAGE> sf-712846 28
Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each
such other L/C-Related Document under all circumstances,
including the following:
(a) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Company
in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-
Related Documents;
(c) the existence of any claim, set-off, defense or other right
that the Company may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-
Related Documents or any unrelated transaction;
(d) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay
in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit;
(e) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any
payment made by the Issuing Bank under any Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor-in-
possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including
any arising in connection with any Insolvency Proceeding;
(f) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of
the Company in respect of any Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, the Company or a guarantor.
3.05 Cash Collateral Pledge.
Upon the request of the Agent or the Required Lenders,
(a) if the Issuing Bank has honored any full or partial drawing
request on any Letter of Credit and such drawing has resulted in
an L/C Borrowing hereunder, (b) if, as of the Tranche A
Termination Date, any Tranche A Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or
(c) if, as of the Tranche B Termination Date, any Tranche B
Letters of Credit may for any reason remain outstanding and
partially or wholly undrawn, then, the Company shall immediately
Cash Collateralize the L/C Obligations in an amount equal to such
L/C Obligations.
3.06 Letter of Credit Fees.
<PAGE> sf-712846 29
(a) The Company shall pay to the Agent for the account of each
of the Lenders a letter of credit fee with respect to the Tranche
A Letters of Credit equal to the applicable margin above LIBOR
then in effect under Section 2.09 for Tranche A Eurodollar Loans
for each day such Tranche A Letters of Credit are outstanding,
computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter and based upon Tranche A Letters of
Credit outstanding for that quarter as calculated by the Agent.
The Company shall pay to the Agent for the account of each of the
Lenders a letter of credit fee with respect to the Tranche B
Letters of Credit equal to the applicable margin above LIBOR then
in effect under Section 2.09 for Tranche B Eurodollar Loans for
each day such Tranche B Letters of Credit are outstanding,
computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter and based upon Tranche B Letters of
Credit outstanding for that quarter as calculated by the Agent.
Such letter of credit fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter during
which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Closing Date, through the
Tranche B Termination Date (or such later date upon which the
outstanding Letters of Credit shall expire), with the final
payment to be made on the Tranche A Termination Date (or such
later expiration date), in the case of Tranche A Letters of
Credit and on the Tranche B Termination Date (or such later
expiration date), in the case of Tranche B Letters of Credit.
(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank
equal to 0.125% of the face amount (or increased face amount, as
the case may be) of such Letter of Credit. Such Letter of Credit
fronting fee shall be due and payable on each date of Issuance of
a Letter of Credit.
(c) The Company shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the
Issuing Bank relating to standby letters of credit as from time
to time in effect.
3.07 International Standby Practices.
The International Standby Practices as published by the
International Chamber of Commerce most recently at the time of
issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters
of Credit.
ARTICLE 4
FEES; PAYMENTS; TAXES
4.01 Fees.
(a) Utilization Fee.
The Company shall pay to the Agent for the account of each
Lender a utilization fee ("Utilization Fee") on the actual daily
aggregate principal amount of such Lender's Committed Loans then
outstanding hereunder with respect to each day on which the
principal amount of all Committed Loans then outstanding is equal
to or exceeds 33% of the aggregate Commitments (each such day a
"Utilization Fee Day"). Such fee shall be computed with respect
to each Utilization Fee Day at a rate equal to 0.125% per annum,
and shall accrue with respect to each Utilization Fee Day
occurring on and after the Closing Date to the later to occur of
(A) the Tranche B Termination Date and (B) the date on which all
<PAGE> sf-712846 30
Loans and interest thereon are paid in full and the Commitments
hereunder terminated, and, to the extent accrued during such
period, shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter (commencing on September
30, 1999) through the later to occur of (X) the Tranche B
Termination Date and (Y) the date on which all Loans, L/C
Obligations and interest thereon are paid in full and the
Commitments hereunder terminated, with the final payment to be
made on the latest to occur of such dates.
(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 Tranche B Termination Date at a rate per annum times
the Tranche A Commitment and the Tranche B Commitment of such
Lender (regardless of utilization thereof) as follows:
Debt Rating Facility Fee
Moody's S&P Tranche A / Tranche B
Baal higher or BBB+ or higher 0.100% / 0.125%
Baa2 or BBB 0.125% / 0.150%
Baa3 or BBB- 0.150% / 0.175%
Bal or BB+ 0.175% / 0.200%
Ba2 or lower and BB or lower 0.225% / 0.250%
provided, however, that if at any time no Debt Rating is
available, the facility fee shall be 0.225% per annum for
Tranche A Commitments and 0.250% per annum for Tranche B
Commitments. In the event of a split rating, the higher
rating will apply; if the Debt Ratings are split by more
than one level, one level above the lower rating will apply.
(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 September 30,
1999, (B) on any date of reduction or termination of the
Commitments and (C) on the Tranche B 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.
4.02 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
<PAGE> sf-712846 30
manifest error. The Agent, upon determining LIBOR for any
Interest Period, shall promptly notify the Company and the
Lenders thereof.
4.03 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%.
4.04 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
<PAGE> sf-712846 32
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 4.04(b) shall
relieve any Lender which has failed to make available its
Commitment Percentage 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.
4.05 Taxes.
(a) Subject to Section 4.05(g), any and all payments by the
Company to the Agent for its account and for the account of any
<PAGE> sf-712846 33
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 Section 4.05(g), 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 4.05) 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
Section 4.05(g),
(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 4.05), 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.
<PAGE> sf-712846 34
(e) Within 30 days after the date of any payment by the Company
of Taxes or Other Taxes under this Section 4.05, 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 12.08 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)) requiring a
<PAGE> sf-712846 35
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 Section 4.05(a), 4.05(b), 4.05(d), or 4.05(i) 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 Section 4.05(f)(i)(A), 4.05(f)(ii)(A) or
4.05(f)(iii) 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 Section 4.05(a),
4.05(c) or 4.05(d) 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 Section 4.05(f)(i)(B),
4.05(f)(ii)(B) or 4.05(f)(iii) 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
<PAGE> sf-712846 36
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 Sections 4.05(a),
4.05(c) or 4.05(d) 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 4.05; 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 Section 4.05(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 4.05, 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.
4.06 Sharing of Payments, Etc.
If, other than as provided in Sections 3.05, 4.02, 4.03,
4.04, 4.05 or this 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 10.01(a), in respect
of any Obligation owing to it (including with respect to any 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 10.01(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 10.01(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 10.01(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
<PAGE> sf-712846 37
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 4.06 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 4.06
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 4.06 to share in the benefits of any recovery on such
secured claim.
ARTICLE 5
CHANGES IN CIRCUMSTANCES; ETC.
5.01 Eurodollar Rate Protection.
If with respect to any Interest Period for Eurodollar Loans,
, either (a) the Agent or the Required Lenders determine that for
any reason adequate and reasonable means do not exist for
ascertaining LIBOR for such Interest Period; 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.
5.02 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 (a) LIBOR for the Interest
Period for such Eurodollar Loan from (b) 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.
5.03 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 5.02) 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
<PAGE> sf-712846 38
agreeing to make or making, funding or maintaining any Eurodollar
Loans or participating in Letters of Credit or, in the case of
the Issuing Bank, any increase in the cost to the Issuing Bank of
agreeing to issue, issuing or maintaining any Letter of Credit or
of agreeing to make or making, funding or maintaining any unpaid
drawing under any Letter of Credit, then the Company shall,
subject to Section 5.08(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 5.03, the
term "Taxes" shall have the meaning specified in
Section 4.05(a) without regard to the exclusions set forth in
Section 4.05(a).
5.04 Illegality.
Notwithstanding any other provision of this Agreement, if
the introduction of any Requirement of Law, or in the
interpretation or administration of any Requirement of Law 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 applicable 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.
5.05 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 5.08(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.
5.06 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
<PAGE> sf-712846 39
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 5.06(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 5.06(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 constituting Tranche
A Loans pursuant to Section 2.09(a)(ii).
5.07 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 Sections 5.01, 5.02, 5.03,
5.04 or 5.06, 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.
<PAGE> sf-712846 40
(b) Any Lender claiming reimbursement or compensation pursuant
to Sections 4.05, 5.02, 5.03, 5.05 and/or 5.06 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 Sections 5.02, 5.03,
5.05 or 5.06 the amount requested by such Lender no later than
five Business Days after such demand.
5.08 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 4.05(c) or (d) or
Sections 5.02, 5.03, 5.04 or 5.05 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 5.08 shall affect or postpone
any of the obligations of the Company or the right of any Lender
provided in Section 4.05(c) or (d) or Sections 5.02, 5.03, 5.04
or 5.05.
(b) Notwithstanding the provisions of Sections 4.05(c), 4.05(d),
5.02, 5.03 and 5.05, 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 4.05(c) or (d), not more than six months and (B) in the
case of Sections 5.02, 5.03 or 5.05, 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.
<PAGE> sf-712846 41
5.09 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 5 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 Utilization Fees and
facility 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 5.06 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 6
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:
6.01 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.
<PAGE> sf-712846 42
6.02 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 on Schedule 6.02(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.
6.03 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.
6.04 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.
6.05 Financial Matters.
<PAGE> sf-712846 43
(a) The consolidated balance sheet of the Company and its
Subsidiaries as of the last day of the fiscal year ended on
December 31, 1998, 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,
1998 or in the notes thereto which are required to be disclosed
therein.
(b) Since December 31, 1998, 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, 1998
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.
6.06 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.
6.07 Subsidiaries.
As of the Closing Date, the Company has no Subsidiaries.
6.08 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.
6.09 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.
<PAGE> sf-712846 44
6.10 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.
6.11 Margin Regulations.
No part of the proceeds of any Loan will be used in
violation of Regulation 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 6.11 with such meanings.
6.12 Environmental Matters.
Except as set forth on Schedule 6.12:
(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
<PAGE> sf-712846 45
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.
6.13 Labor Matters.
Except as set forth on Schedule 6.13, 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.
6.14 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 on
Schedule 6.14, neither the Company nor any Subsidiary of the
Company has any material contingent liability
<PAGE> sf-712846 46
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.
6.15 Y2K Review.
On the basis of a comprehensive review and assessment of the
Company's and its Subsidiaries' systems and equipment and due
inquiry made of the Company's and its Subsidiaries' material
suppliers, vendors and customers, the Company's Responsible
Officers are of the view that the "Year 2000 problem" (i.e., the
inability of computers, as well as embedded microchips in non-
computing devices, to perform properly date-sensitive functions
with respect to certain dates prior to and after December 31,
1999), including costs of remediation, will not result in a
Material Adverse Effect. The Company and its Subsidiaries have
developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of
failure of their own or a third party's systems or equipment due
to the Year 2000 problem, including those of vendors, customers
and suppliers, as well as a general failure of or interruption in
its communications and delivery infrastructure.
6.16 Swap Obligations.
Neither the Company nor any of its Subsidiaries has incurred
any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own
independent assessment of its consolidated assets, liabilities
and commitments and has considered appropriate means of
mitigating and managing risks associated with such matters and
has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap
Contract.
6.17 Full Disclosure.
None of the representations or warranties made by the
Company or any Restricted Subsidiary in the Loan Documents as of
the date such representations and warranties are made or deemed
made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of the
Company or any Restricted Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials
delivered by or on behalf of the Company to the Lenders prior to
the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or
otherwise necessary to make the statements made therein, in light
of the circumstances under which they are made, not misleading as
of the time when made or delivered.
ARTICLE 7
CONDITIONS PRECEDENT
7.01 Conditions Precedent to the First Loan.
The obligation of each Lender to make its initial Loan and
the obligation of the Issuing Bank to Issue its initial Letter of
Credit is subject to the satisfaction of the condition precedent
that the Agent shall have received the following, each, unless
otherwise specified below, dated as of 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
<PAGE> sf-712846 47
Document executed by it, upon which certificate the Agent and
each Lender may conclusively rely until they shall have received
a further certificate of the Secretary or Assistant Secretary of
such Loan Party canceling 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) Parent Guaranty.
A guaranty, duly executed by the Parent, in substantially
the form of Exhibit 7.01(c) (the "Parent Guaranty").
(d) Legal Opinion.
A favorable opinion addressed to the Agent and all Lenders
from counsel to the Company, in substantially the form of Exhibit
7.01(d) (which opinion the Company hereby expressly instruct such
counsel to prepare and deliver); and
(e) Contribution Agreement.
A duly executed copy of the Contribution Agreement, in
substantially the form of Exhibit 7.01(e) (the "Contribution
Agreement").
7.02 Additional Conditions Precedent to the First Loan.
The obligation of each Lender to make its initial Loan and
the obligation of the Issuing Bank to Issue its initial Letter of
Credit is subject to the further conditions precedent that:
(a) No Material Adverse Effect.
Since December 31, 1998, 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 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 4.01 to the extent then due and payable and all
reasonable costs and expenses referred to in Section 12.04
(including legal fees and expenses) and any indemnity pursuant to
Section 12.05 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 7.02(d) as to
<PAGE> sf-712846 48
the satisfaction of the conditions set forth in Section 7.02 and
to the effect that on the Closing Date, the representations and
warranties contained in Article 6 are correct.
(e) Georgia-Pacific Agreement.
All conditions precedent described in Sections 7.01 and 7.02
of the Georgia-Pacific Agreement shall have been satisfied.
7.03 Conditions Precedent to Each Committed Loan and Letter of
Credit.
The obligation of each Lender to make any Committed Loan
(including its initial Committed Loan) and the obligation of the
Issuing Bank to Issue any Letter of Credit (including the initial
Letter of Credit) 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 or in the case of any Issuance of any
Letter of Credit, the Issuing Bank and the Agent shall have
received an L/C Application or L/C Amendment Application, as
required under Section 3.02.
(b) Accuracy of Representations; No Default; Etc.
The following statements shall be true on the date of each
Committed Loan or Issuance Date, as the case may be, before and
after giving effect thereto:
(i) The representations and warranties contained in
Article 6 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
Section 6.05(b)) 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 or Letter of Credit being Issued 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.
7.04 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 6 are correct on and (except for representations and
warranties relating solely to a particular point in time and
<PAGE> sf-712846 49
other than under Section 6.05(b)) 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 8
AFFIRMATIVE COVENANTS
The Company agrees that as long as the obligations of the
Lenders to make Loans shall remain in effect or any Letter of
Credit remain outstanding and until all Obligations shall have
been paid or performed in full, unless the Required Lenders shall
otherwise consent in writing:
8.01 Application of Proceeds.
The Company will apply the proceeds of the Loans for general
corporate purposes.
8.02 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.
8.03 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.
8.04 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.
8.05 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 9.03 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.
<PAGE> sf-712846 50
8.06 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.
8.07 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.
8.08 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 8.08 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.
8.09 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 subsections 8.09(a) and (b), (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 8.09(c).
8.10 Reporting Requirements.
The Company will furnish to the Agent, with sufficient
copies for the Lenders:
<PAGE> sf-712846 51
(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.
8.11 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.
8.12 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 8.12.
8.13 New Subsidiaries.
If the Company at any time after the date hereof acquires,
forms, or establishes any Principal Subsidiary or any Subsidiary
becomes a Principal Subsidiary, the Company shall cause any such
Principal Subsidiary to promptly (a) execute and deliver to Agent
the Subsidiary Guaranty and the Contribution Agreement; and
(b) provide such evidence of due
<PAGE> sf-712846 52
authorization, execution, and delivery of such Loan Documents as
the Agent or the Required Lenders may reasonably require.
ARTICLE 9
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:
9.01 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 on Schedule
9.01;
(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 Sections 9.01(c) and 9.01(d), 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;
<PAGE> sf-712846 53
(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 Restricted 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 Section 9.01(a) through (l) or this Section 9.01(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;
<PAGE> sf-712846 54
(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 Restricted 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 Restricted 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 Restricted 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 9.02.
9.02 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 Restricted Subsidiaries to such Person (a "Sale-Leaseback
Transaction") unless (a) the Company and/or such Restricted
Subsidiary or Restricted 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 9.01, 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 9.01 and 9.02,
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
<PAGE> sf-712846 55
enter into Sale-Leaseback Transactions without compliance with
either Section 9.02(b) or 9.02(c), provided that the aggregate
amount of all such Liens and Sale-Leaseback Transactions
permitted by this Section 9.02 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 9.01, 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.
9.03 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) either (x) in the case of such merger or consolidation, the
Company is the surviving corporation or (y) 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; and (b) after
giving effect to such transaction, no Default or Event of Default
exists and the Company or such surviving Person, as applicable,
has demonstrated its compliance with Section 9.08 to the
reasonable satisfaction of the Required Lenders.
9.04 Transactions with Affiliates.
The Company shall not enter into or be a party to, or permit
any of its Restricted Subsidiaries to enter into or be a party
to, any transaction with any Affiliate of the Company except
(a) as may be permitted under Sections 9.01, 9.02 or 9.03 or
(b) transactions in the ordinary course of business which are not
likely to have a Material Adverse Effect.
9.05 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 other than a fiscal year
that ends on the closest Saturday to December 31 of each year.
9.06 Margin Regulations.
The Company shall not use the proceeds of any Loan in
violation of Regulation T, U or X of the Board of Governors of
the Federal Reserve System.
9.07 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 9.01 or restricting the ability of the Company or any
other Loan Party to amend or otherwise modify this Agreement or
any other Loan Document.
<PAGE> sf-712846 56
9.08 Leverage Ratio.
The Company shall not permit the ratio of (a) Funded
Indebtedness on the last day of any fiscal quarter to (b) EBITDA
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 10
EVENTS OF DEFAULT
10.01 Events of Default.
The term "Event of Default" shall mean any of the events set
forth in this Section 10.01.
(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; or
(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; or
(c) Specific Defaults.
The Company shall fail to perform or observe any term,
covenant or agreement contained in Sections 8.01, 8.05, 8.06, or
8.10(a) or Article 9; or
(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; or
(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 Swap Contracts of the
Company or any of its Subsidiaries resulting in aggregate
Swap Termination Values 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
<PAGE> sf-712846 57
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 Swap Contract; or
(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;
(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; or
(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; or
(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; or
(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
<PAGE> sf-712846 58
(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; or
(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; or
(l) Georgia-Pacific Agreement.
An "Event of Default" shall exist as defined in the Georgia-
Pacific Agreement.
10.02 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 and the
commitment of the Issuing Bank to Issue Letters of Credit to be
terminated, whereupon the Commitments and such commitment shall
forthwith be terminated; and/or
(b) The Agent shall at the request of, and may with the consent
of, the Required Lenders, declare an amount equal to the maximum
aggregate amount that is or at any time thereafter may become
available for drawing under any outstanding Letters of Credit
(whether or not any beneficiary shall have presented, or shall be
entitled at such time to present, the drafts or other documents
required to draw under such Letters of Credit) to be immediately
due and payable, which amount the Company shall immediately Cash
Collateralize in full, and 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 Section 10.01(f)(ii) or Section 10.01(g) 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 and the commitment of the Issuing Bank to
Issue Letters of Credit shall automatically terminate and the
<PAGE> sf-712846 59
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 11
THE AGENT
11.01 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. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent
contracting parties.
The Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as
the Agent may agree at the request of the Required Lenders to act
for such Issuing Bank with respect thereto; provided, however,
that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Article 11 with
respect to any acts taken or omissions suffered by the Issuing
Bank in connection with Letters of Credit Issued by it or
proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as
fully as if the term "Agent", as used in this Article 11,
included the Issuing Bank with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect
to the Issuing Bank.
11.02 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.
11.03 Liability of Agent.
None of the Agent-Related Persons 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
<PAGE> sf-712846 60
obligations hereunder or thereunder. No Agent-Related Person
shall 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.
11.04 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, 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 12.02, 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 7.01 and 7.02, 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.
11.05 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 10; 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.
11.06 Credit Decision.
Each Lender expressly acknowledges that no Agent-Related
Person has made any representation or warranty to it and that no
act by the Agent hereinafter taken,
<PAGE> sf-712846 61
including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender
represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person 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 any Agent-Related Person
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, no Agent-Related
Person 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 any Agent-
Related Person.
11.07 Indemnification.
The Lenders agree to indemnify the Agent-Related Person (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
any Agent-Related Person 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 any Agent-Related Person under or in connection
with any of the foregoing; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from any Agent-Related Person's
gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the
Agent-Related Persons 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-Related Person 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 any Agent-Related Person is not reimbursed for
such expenses by or on behalf of the Company.
11.08 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
<PAGE> sf-712846 62
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 or the Issuing Bank, and the
terms "Lender" and "Lenders" shall include Bank of America in its
individual capacity.
11.09 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 11 and
Sections 12.04 and 12.05 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.
Notwithstanding the foregoing, however, Bank of America may not
be removed as the Agent at the request of the Required Lenders
unless Bank of America shall also simultaneously be replaced as
"Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to Bank of America.
11.10 Documentation, Co-Syndication, Managing Agents.
None of the Lenders identified on the facing page or
signature pages of this Agreement as a "Documentation Agent," "Co-
Syndication Agent," or "Managing Agent" shall have any right,
power, obligation, liability, responsibility, or duty under this
Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified
as "Documentation Agent," "Co-Syndication Agent," or "Managing
Agent" shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 12
MISCELLANEOUS
12.01 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 on Schedule
1.01(b); and, if to the Agent, to its address
<PAGE> sf-712846 63
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 Articles 2 or
11 shall not be effective until received by the Agent, (b) any
notice by facsimile to the Agent must be confirmed by telephone
or mail, and (c) notices pursuant to Article 3 to the Issuing
Bank shall not be effective until actually received by the
Issuing Bank at the address specified for the "Issuing Bank" on
the applicable signature page hereof.
12.02 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 and/or the
Contribution Agreement or release the Parent Guaranty;
(vi) amend or waive the provisions of Sections
7.01 or 7.02; or
(vii) amend this Section 12.02;
(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 Required Lenders or all the Lenders, as the case
may be;
<PAGE> sf-712846 64
(c) No amendment, waiver or consent which affect the rights or
duties of the Issuing Bank under the Agreement or any L/C-Related
Document relating to any Letter of Credit Issued or to be Issued
by it shall become effective unless signed by the Issuing Bank in
addition to the Required Lenders or all the Lenders, as the case
may be; and
(d) 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 Agent and the Lender having made such Bid Loan in addition
to the Required Lenders or all the Lenders, as the case may be.
12.03 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.
12.04 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 5.09, 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.
<PAGE> sf-712846 65
12.05 Indemnity.
(a) The Company agrees to indemnify and hold harmless the Agent-
Related Persons, 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 12.04) 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 if 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 12.05. 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.
12.06 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
<PAGE> sf-712846 66
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 12.06
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.
12.07 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) of Section 9.03, 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 12.08.
12.08 Assignments, Participations, Etc.
(a) Subject to Sections 12.08(b) and 12.08(e):
(i) Any Lender may with the prior consent of the
Company, the Agent, and the Issuing Bank (which consents will not
be unreasonably withheld and which consent of the Company shall
not be required if a Default or Event of Default exists) at any
time assign to one or more Eligible Assignees 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 5.09, shall assign to another Eligible
Assignee its entire Commitment and all outstanding Committed
Loans.
(v) Except as provided in Section 12.08(a)(iii),
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 Section 12.08(a)(i).
<PAGE> sf-712846 67
(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) such Lender and
such Assignee shall have executed an Assignment and Assumption
Agreement substantially in the form of Exhibit 12.08(b) and
written notice of such assignment, 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 Attachment A to
Exhibit 12.08 (a "Notice of Assignment"); (ii) a processing fee
in the amount of $3,500 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) Subject to Section 12.08(e), 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 12.08(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, the Agent, and the Issuing
Bank 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 Section 12.02.
The Company acknowledges and agrees that each Participant,
for purposes of Sections 4.05, 4.06, 5.02, 5.03, 5.05, 5.06 or
12.06, shall be considered a Lender; provided, however, that for
purposes of Sections 4.05, 5.02, 5.03, 5.05 and 5.06, no
Participant shall be entitled to receive any payment or
<PAGE> sf-712846 68
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.
(e) No assignment (other than an assignment made pursuant to
Section 12.08(a)(iii)) or participation of any Committed Loans,
or Commitments shall be effective, and shall instead be null and
void, unless it represents an assignment of or participation in
identical percentages of a Lender's outstanding Tranche A Loans,
Tranche B Loans, Tranche A Commitment, Tranche B Commitment,
"Tranche A Loans," "Tranche B Loans," "Tranche A Commitment" and
"Tranche B Commitment" (as those quoted terms are defined in the
North American Timber Agreement).
12.09 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.
12.10 Survival.
The obligations of the Company under Sections 4.05, 5.02,
5.03, 5.05, 5.06, 12.04 and 12.05, and the obligations of the
Lenders under Sections 4.05(i) and 11.07, 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 12.04(b) and (c) and 12.05) 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.
12.11 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
<PAGE> sf-712846 69
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.
12.12 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.
12.13 No Third Parties Benefited.
This Agreement is made and entered into for the sole
protection and legal benefit of the Company, the Lenders, the
Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or
any of the other Loan Documents.
12.14 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12.15 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.
12.16 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.
12.17 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.
<PAGE> sf-712846 70
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.
NORTH AMERICAN TIMBER CORP.
By: /s/ DANNY W. HUFF
Name: Danny W. Huff
Title: Vice President and Treasurer
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.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Agent, Issuing Bank, and as
Lender
By: /s/ MICHAEL BALOK
Name: Michael Balok
Title: Managing Director
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.
COMMERZBANK AG,
NEW YORK BRANCH,
as Documentation Agent
By: /s/ HARRY P. YERGEY
Name: Harry P. Yergey
Title: SVP & Manager
By: /s/ BRIAN J. CAMBELL
Name: Brian J. Cambell
Title: Vice President
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.
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent
By: /s/ PETER S. PREDUN
Name: Peter S. Predun
Title: Vice President
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.
CITIBANK, N.A.,
as Co-Syndication Agent
By: /s/ DAVID L. HARRIS
Name: David L. Harris
Title: Vice President
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.
THE BANK OF NEW YORK,
as Managing Agent
By: /s/ DAVID C. SIEGEL
Name: David C. Siegel
Title: Vice President
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.
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ M. R. MARRON
Name: M.R. Marron
Title: Vice President & Manager
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.
CIBC INC.
By: /s/ NORA Q. CATIIS
Name: Nora Q. Catiis
Title: Executive Director
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.
FIRST NATIONAL BANK OF CHICAGO,
as Managing Agent
By: /s/ DAVID T. MCNEELA
Name: David T. McNeela
Title: Vice President
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.
HSBC BANK USA,
as Managing Agent
By: /s/ JEREMY P. BOLLINGTON
Name: Jeremy P. Bollington
Title: Vice President
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.
THE SANWA BANK, LIMITED, NEW YORK
BRANCH
By: /s/ MASAHITO OKUBO
Name: Masahito Okubo
Title: Vice President
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.
THE SUMITOMO BANK, LIMITED
By: /s/ C. MICHAEL GARRIDO
Name: C. Michael Garrido
Title: Senior Vice President
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.
SUNTRUST BANK, ATLANTA,
as Managing Agent
By: /s/ W. DAVID WISDOM
Name: W. David Wisdom
Title: Vice President
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.
TORONTO DOMINION (TEXAS), INC.,
as Managing Agent
By: /s/ SHEILA M. CONLEY
Name: Sheila M. Conley
Title: Vice President
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.
UBS AG, STAMFORD BRANCH,
as Managing Agent
By: /s/ PAUL R. MORRISON
Name: Paul R. Morrison
Title: Executive Director
By: /s/ ANDREW N. TAYLOR
Name: Andrew N. Taylor
Title: Associate Director
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.
WACHOVIA BANK NA,
as Managing Agent
By: /s/ ANNE L. SAYLES
Name: Anne L. Sayles
Title: Vice President
[DO NOT DELETE THIS PAGE]
[JUST THROW AWAY ONCE PRINTED]
<PAGE>
Exhibit 2.02(a)
to NAT Credit Agreement
FORM OF NOTICE OF BORROWING
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: North American Timber Corp. Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This Notice of Borrowing is delivered to you pursuant to
Section 2.02(a) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among NORTH AMERICAN
TIMBER CORP., a Delaware corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests the following Committed
Borrowing[s]: [Tranche A Loans in the aggregate principal amount
of $________________ on, ______________, _____ comprised of
[Eurodollar Loans having an Interest Period of_________________
months] [Reference Rate Loans]; [and] [Tranche B Loans in the
aggregate principal amount of $________________ on,
______________, _____ comprised of [Eurodollar Loans having an
Interest Period of_________________ months] [Reference Rate
Loans].
The Company hereby certifies and warrants that on the date
the Committed Borrowing[s] requested hereby [is/are] made (both
before and after giving effect to the making of such Committed
Borrowing[s] and after giving effect to the application, directly
or indirectly, of the proceeds thereof):
(a) the representations and warranties contained in
Article 6 of the Credit Agreement are correct on and (except
for representations and warranties relating solely to a
particular point in time) as of such date as though made on
and as of such date;
(b) no Default or Event of Default has occurred and is
continuing;
(c) the proceeds of the Committed Borrowing[s] hereby
requested are being or will be used in accordance with
Section 8.01 of the Credit Agreement; and
<PAGE> sf-721560
[(d) [If Tranche A Loans are requested: The sum of the
aggregate principal amount of (i) all Tranche A Loans
outstanding on the date of this request, after giving effect
to the Tranche A Loans requested hereby; plus (ii) the
aggregate principal amount of all Tranche A Bid Loans then
outstanding; plus (iii) the outstanding Tranche A L/C
Obligations, and giving effect to each payment and
prepayment to be made on the proposed Borrowing date, will
be $_________________, which amount does not exceed the
Aggregate Tranche A Commitments as of the Proposed Borrowing
Date.
[(e) [If the Tranche B Loans are requested: The sum of
the aggregate principal amount of (i) all Tranche B Loans
outstanding on the date of this request, after giving effect
to the Tranche B Loans requested hereby; plus (ii) the
aggregate principal amount of all Tranche B Bid Loans then
outstanding; (iii) plus the outstanding Tranche B L/C
Obligations, and giving effect to each payment and
prepayment to made on the proposed Borrowing date, will be
$_________________, which amount does not exceed the
Aggregate Tranche B Commitments as of the as of the Proposed
Borrowing Date.
The Company agrees that if prior to the time of the
Committed Borrowing requested hereby any matter certified to
herein by it will not be true and correct at such time as if then
made, it will immediately so notify the Agent. Except to the
extent, if any, that prior to the time of the Committed Borrowing
requested hereby the Agent shall receive written notice to the
contrary from the Company, each matter certified to herein shall
be deemed once again to be certified as true and correct at the
date of such Committed Borrowing as if then made.
Please wire transfer the proceeds of the Committed Borrowing
requested hereby to the accounts of the following Persons at the
financial institutions indicated respectively:
Amount to be Person to be Paid Name, Address, Etc.
Transferred Name Account No. of Transferee
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
Balance of ________
such Proceeds: The Attention:
Company
<PAGE> sf-721560 2
The Company has caused this Notice of Borrowing to be
executed and delivered, and the certification and warranties
contained herein to be made, by its duly authorized officer this
day of ____________________, ____.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-721560 3
Exhibit 2.04(a)
to NAT Credit Agreement
FORM OF COMPETITIVE BID REQUEST
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: North American Timber Corp. Credit Agreement, dated as
of July 22, 1999
Ladies and Gentlemen:
This Competitive Bid Request is delivered to you pursuant to
Section 2.04(a) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among NORTH AMERICAN
TIMBER CORP., a Delaware corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, , as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests that the Lenders (or any of
them) furnish Competitive Bids for [Tranch A or Tranche B] Bid
Loan[s], subject to the terms of the Credit Agreement, as
follows:
(a) date of Bid Borrowing (which is a Business Day)
for the Bid Loan[s] that will result from the Competitive
Bids requested hereby: ____________, ____.
(b) maximum aggregate principal amount of Bid Loan[s]
that will result from the Competitive Bids requested hereby:
$_______________, which shall not [for a Tranche A Bid
Borrowing: exceed the Available Tranche A Commitments on the
date such Bid Borrowing[s] [is/are] to be made (after giving
effect to each payment and prepayment made on such
date)][for a Tranche B Bid Borrowing: exceed the Available
Tranche B Commitments on the date such Bid Borrowing[s]
[is/are] to be made (after giving effect to each payment and
prepayment made on such date)].
(c) The maturity date or dates for partial or complete
repayment of each Bid Loan resulting from the Competitive
Bids requested hereby<F1> (including, in the case of each
partial repayment, the amount to be repaid).
<PAGE> sf-721571
Principal Amount Date of Complete Date[s] of Partial Amount[s] to be
Repayment Repayment Repaid
(d) Type of Bid Loan[s] for which Competitive Bids
are requested: [Base Rate Bid Loans bearing interest
calculated on the basis of a year consisting of 360 days and
actual days elapsed and with [insert interest rate basis for
Base Rate Bid Loans]] [Fixed Rate Bid Loans].
(e) The following additional terms shall be applicable
to the Bid Loan[s] resulting from the Competitive Bids
requested hereby:<F2>
The Company hereby certifies that on the date the Bid
Borrowing resulting from the Competitive Bids requested
hereby is made (both before and after giving effect to the
making of such Bid Borrowing and after giving effect to the
application, directly or indirectly, of the proceeds
thereof):
(1) the representations and warranties contained
in Article 6 of the Credit Agreement are correct on and
(except for representations and warranties relating
solely to a particular point in time) as of such date
as though made on and as of such date;
(2) no Default or Event of Default has occurred
and is continuing;
(3) The sum of the aggregate principal amount of
[(i) all Tranche A Bid Loans outstanding on the date of
the Bid Borrowing[s] requested hereby, after giving
effect to the Tranche A Bid Loan[s] resulting from this
Competitive Bid Request; plus (ii) Tranche A Loans then
outstanding; plus (iii) the outstanding Tranche A L/C
Obligations, and giving effect to each payment and
prepayment to be made on such date, will be
$_________________, which amount does not exceed the
Aggregate Tranche A Commitments][[(i) all Tranche B Bid
Loans outstanding on the date of the Bid Borrowing[s]
requested hereby, after giving effect to the Tranche B
Bid Loan[s] resulting from this Competitive Bid Request;
plus (ii) Tranche B Loans then outstanding; plus (iii)
the outstanding Tranche B L/C Obligations, and giving
effect to each payment and prepayment to be made on such
date, will be $_________________, which amount does not
exceed the Aggregate Tranche B Commitments];
<F1> No such date may occur after the Tranche A Termination
Date or the Tranche B Termination Date, as applicable.
<F2> Such additional terms may include terms similar to
Section 2.08 of the Credit Agreement and terms specifying
prepayment rights of the Company.
<PAGE> sf-721571 2
The Company agrees that if prior to the time of the Bid
Borrowing requested hereby any matter certified to herein by it
will not be true and correct at such time as if then made, it
will immediately so notify the Agent. Except to the extent, if
any, that prior to the time of the Bid Borrowing requested hereby
the Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once
again to be certified as true and correct at the date of such Bid
Borrowing as if then made.
[Wire transfer instructions with respect to the Bid
Borrowing requested hereby will be furnished at the time the
Company accepts any Competitive Bids.] Please wire transfer the
proceeds of the Bid Borrowing requested hereby to the accounts of
the following Persons at the financial institutions indicated
respectively:
Amount to be Person to be Paid Name, Address, Etc.
Transferred Name Account No. of Transferee
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
$____________ ___________ ________
Attention:
Balance of ________
such Proceeds: The Attention:
Company
The Company has caused this Competitive Bid Request to be
executed and delivered, and the certification and warranties
contained herein to be made, by its duly authorized officer this
day of ____________, _____.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-721571 3
Exhibit 2.05(b)
to NAT Credit Agreement
FORM OF PROMISSORY NOTE
([Tranche A/Tranche B] Loans)
$_________________ _______________, ____
For value received, on [ ], 200[ ], the undersigned promises
to pay to the order of
(the "Lender") at the office of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Agent"), specified
in the Credit Agreement referred to below, $____________ or, if
less, the aggregate unpaid principal amount of all [Tranche
A/Tranche B] Loans made by the Lender to the undersigned pursuant
to the Credit Agreement (as defined below), as shown in the
schedule attached hereto (and any continuation thereof).
The undersigned also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding from the
date hereof until maturity (whether by acceleration or otherwise)
and, after maturity, until paid, at the rates per annum and on
the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in
lawful money of the United States of America and in immediately
available funds.
This Promissory Note is one of the promissory notes
evidencing [Tranche A/Tranche B] Loans described in, and is
subject to the terms and provisions of, the Credit Agreement,
dated as of July 22, 1999 among NORTH AMERICAN TIMBER CORP.,
certain financial institutions (including the Lender) party
thereto, the Agent, COMMERZBANK AG, NEW YORK BRANCH, as
Documentation Agent, and THE CHASE MANHATTAN BANK and CITIBANK,
N.A., as Co-Syndication Agents (as from time to time amended,
modified, or supplemented, the "Credit Agreement"). Reference is
hereby made to the Credit Agreement for a statement of the
prepayment rights and obligations of the undersigned, the
guaranty of this Promissory Note, and the terms and conditions
under which the due date of this Promissory Note may be
accelerated.
This Promissory Note may only be assigned as provided in the
Credit Agreement.
The undersigned promises to pay all costs of collection,
including reasonable attorney's fees, incurred in the collection
of this Promissory Note.
The undersigned hereby waives presentment for payment,
demand, protest, and notice of dishonor.
<PAGE> sf-709086
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-709086 2
<TABLE>
LOANS AND PRINCIPAL PAYMENTS
<CAPTION>
Amount of Loan Made Amount of Principal Repaid Unpaid Principal Balance
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Date Reference Eurodollar Interest Reference Eurodollar Total Eurodollar Made by
Rate Loan Loan Period (if Rate Loan Loan Made by
Applicable)
</TABLE>
<PAGE> sf-709086 3
Exhibit 2.05(c)
to NAT Credit Agreement
FORM OF PROMISSORY NOTE
(Tranche A/Tranche B Bid Loans)
$_________________ _______________, ____
For value received, on ________________, _____, the
undersigned
promises to pay to the order of
(the "Lender") in lawful
money of the United States and in immediately available funds the
principal amount of $___________________ and interest thereon at
the rate of ____% per annum, as well after as before maturity, at
the Lender's office specified in the Credit Agreement referred to
below. Interest will be computed on the basis of a year of 360
days and actual days elapsed.
This Promissory Note is one of the promissory notes
evidencing [Tranch A/Tranche B] Bid Loans described in, and is
subject to the terms and provisions of, the Credit Agreement
dated as of July 22, 1999 among NORTH AMERICAN TIMBER CORP.,
certain banks (including the Lender) party thereto, the Agent,
COMMERZBANK AG, NEW YORK BRANCH, as Documentation Agent, and THE
CHASE MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents
(as from time to time amended, modified, or supplemented, the
"Credit Agreement"). Reference is hereby made to the Credit
Agreement for a statement of the prepayment rights and
obligations of the undersigned, the guaranty of this Promissory
Note and the terms and conditions under which the due date of
this Promissory Note may be accelerated. The undersigned
promises to pay all costs of collection, including reasonable
attorney's fees, incurred in the collection of this Promissory
Note.
The undersigned hereby waives presentment for payment,
demand, protest, and notice of dishonor.
This Promissory Note may only be assigned as provided in the
Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-709086 4
Exhibit 2.11(b)
to NAT Credit Agreement
FORM OF NOTICE OF CONVERSION/CONTINUATION
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Mail Code: CA 4-706-05-09
1850 Gateway Blvd.
Concord, CA 94520
Attention: Irene Ruddell, Associate Agency Officer
Re: North American Timber Corporation Credit Agreement, dated as
of July 22, 1999
Ladies and Gentlemen:
This Notice of Conversion/Continuation is delivered to you
pursuant to Section 2.11(b) of the Credit Agreement, dated as of
July 22, 1999 (together with all amendments, if any, from time to
time made thereto, the "Credit Agreement"), among NORTH AMERICAN
TIMBER CORP., a Delaware corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
The Company hereby requests that on ______________, ____,
(1) $__________ of the presently outstanding principal
amount of the [Tranche A/Tranche B] Committed Loans originally
made on __________, ____ ;
(2) all presently being maintained as [Reference Rate
Loans] [Eurodollar Loans];<F1>
(3) be [converted into] [continued as];
(4) [Eurodollar Loans having an Interest Period of
_________ months] [Reference Rate Loans].<F1>
The Company has caused this Notice of
Conversion/Continuation to be executed and delivered by its duly
authorized officer this __ day of _____________, ____.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<F1> Select appropriate interest rate option.
<PAGE> sf-721575
[Execution Copy]
PARENT GUARANTY
THIS PARENT GUARANTY (the "Guaranty"), dated as of July 22,
1999, is made by GEORGIA-PACIFIC CORPORATION, a Georgia
corporation (the "Guarantor"), in favor of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as administrative agent (in such capacity, the
"Agent"), and each of the financial institutions from time to
time party to the Credit Agreement (as hereinafter defined)
(collectively, the "Lenders").
Recitals:
A. Pursuant to the Credit Agreement, dated as of July 22, 1999
(together with all amendments, supplements, and other
modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among North American
Timber Corp., a Delaware corporation ("NAT"), as borrower,
the Lenders, the Agent, Commerzbank AG, New York Branch, as
Documentation Agent, and The Chase Manhattan Bank and
Citibank, N.A. as Co-Syndication Agents, the Lenders have
extended commitments (the "Commitments") to make loans (the
"Loans") to NAT, and to extend other financial
accommodations to or for the account of NAT, which Loans and
other financial accommodations are to be unconditionally
guaranteed by Guarantor.
B. As a condition precedent to the initial Loan under the
Credit Agreement, Guarantor is required to execute and
deliver this Guaranty.
C. Guarantor has duly authorized the execution, delivery, and
performance of this Guaranty.
D. It is in the best interests of Guarantor to execute this
Guaranty inasmuch as NAT is a wholly-owned subsidiary of
Guarantor.
In consideration of the foregoing, and other good and
valuable consideration, the receipt and adequacy of which is
hereby acknowledged, and in order to induce the Lenders to make
the Loans (including the initial Loans) to NAT pursuant to the
Credit Agreement, Guarantor agrees, for the benefit of each
Lender, as follows:
ARTICLE 13
DEFINITIONS
Unless otherwise defined herein or the context otherwise
requires, terms used in this Guaranty have the meanings provided
in the Credit Agreement.
<PAGE> sf-714755
ARTICLE 14
GUARANTY PROVISIONS
14.01 Guaranty.
Guarantor hereby absolutely, unconditionally, and
irrevocably:
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand, or otherwise, of all Obligations of NAT now
or hereafter existing under the Credit Agreement and each other
Loan Document to which it is or may become a party, whether for
principal, interest, fees, expenses, or otherwise (including all
such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. 362(a)), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
502(b) and 506(b) (the "Guaranteed Obligations"); and
(b) indemnifies and holds harmless the Agent and each Lender for
any and all out-of-pocket costs and expenses (including the
out-of-pocket expenses and reasonable fees of counsel and the
allocated cost of in-house counsel retained by the Agent or such
Lender) incurred by the Agent or such Lender in preserving and
enforcing any rights under this Guaranty.
This Guaranty constitutes a guaranty of payment when due and not
of collection or of performance, and Guarantor specifically
agrees that it shall not be necessary or required that the Agent
or any Lender exercise any right, assert any claim or demand, or
enforce any remedy whatsoever against NAT or any other Person
before or as a condition to the obligations of Guarantor
hereunder.
14.02 Acceleration of Guaranty.
Guarantor agrees that, in the event of the occurrence and
continuance of an Event of Default and the acceleration of the
Obligations in accordance with the terms of the Credit Agreement,
Guarantor will pay to the Agent and the Lenders forthwith the
full amount of the Obligations.
14.03 Guaranty Absolute, etc.
This Guaranty shall in all respects be a continuing,
absolute, unconditional, and irrevocable guaranty of payment, and
shall remain in full force and effect until all Guaranteed
Obligations have been paid in cash in full, and all Commitments
shall have terminated. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of
the Credit Agreement and each other Loan Document under which
they arise, regardless of any law, regulation, or order now or
hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Agent or any Lender with respect
thereto. The liability of Guarantor under this Guaranty shall be
absolute, unconditional, and irrevocable irrespective of:
(a) any lack of validity, legality, or enforceability of the
Credit Agreement or any other Loan Document;
(b) the failure of the Agent or any Lender:
<PAGE> sf-714755 2
to assert any claim or demand or to enforce any right or
remedy against NAT, any other Loan Party, or any other Person
(including any other guarantor) under the provisions of the
Credit Agreement, any other Loan Document, or otherwise; or
to exercise any right or remedy against any other
guarantor of, or any collateral securing, any Guaranteed
Obligations;
(c) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations,
or any other extension, compromise, or renewal of any Guaranteed
Obligations;
(d) any reduction, limitation, impairment, or termination of the
Guaranteed Obligations for any reason, including any claim of
waiver, release, surrender, alteration, or compromise, and shall
not be subject to (and Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment, or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Guaranteed
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of the
Credit Agreement or any other Loan Document;
(f) any addition, exchange, release, surrender, or
non-perfection of any collateral, or any amendment to or waiver
or release or addition of, or consent to departure from, any
other guaranty, held by the Agent or any Lender securing any of
the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, NAT,
any surety, or any guarantor.
14.04 Reinstatement, etc.
Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by the Agent or any
Lender, upon the insolvency, bankruptcy, or reorganization of NAT
or otherwise, all as though such payment had not been made.
14.05 Waiver, etc.
Guarantor hereby waives promptness, diligence, notice of
acceptance, and any other notice with respect to any of the
Guaranteed Obligations or any other Loan Party and this Guaranty
and any requirement that the Agent or any Lender protect, secure,
perfect, or insure any security interest or lien, or any property
subject thereto, or exhaust any right or take any action against
NAT, any other Loan Party, or any other Person or any collateral
securing the Guaranteed Obligations, as the case may be.
14.06 Subordination.
Until such time as the Guaranteed Obligations have been paid
and performed in full and the period of time has expired during
which any payment made by NAT, Guarantor, or any other guarantor
<PAGE> sf-714755 3
of the Guaranteed Obligations to Agent may be subsequently
invalidated, declared to be fraudulent or preferential, set
aside, or required to be repaid by Agent or paid over to a
trustee, receiver, or any other entity, whether under any
bankruptcy act or otherwise (any such payment being hereinafter
referred to as a "Preferential Payment"), any claim or other
rights which Guarantor may now have or hereafter acquire against
NAT or such other guarantor that arises from the existence or
performance of Guarantor's obligations under this Guaranty or any
other agreement (all such claims and rights being hereinafter
referred to as "Guarantor's Conditional Rights"), including,
without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to
participate in any claim or remedy of Agent or such other
guarantor or any collateral which Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute, or common law, by any payment
made hereunder or otherwise, including, without limitation, the
right to take or receive from NAT or such other guarantor,
directly or indirectly, in cash or other property or by setoff or
in any other manner, payment, or security on account of such
claim or other rights, shall be subordinate to Agent's right to
full payment and performance of the Guaranteed Obligations, and
Guarantor shall not enforce Guarantor's Conditional Rights until
such time as the Guaranteed Obligations have been paid and
performed in full and the period of time has expired during which
any payment made by NAT or Guarantor to Agent may be determined
to be a Preferential Payment.
14.07 Successors, Transferees and Assigns; Transfers of
Loans, etc.
This Guaranty shall:
(a) be binding upon Guarantor and its successors, transferees,
and assigns; and
(b) inure to the benefit of and be enforceable by the Agent and
each Lender.
Without limiting the generality of subsection (b), any Lender may
assign or otherwise transfer (in whole or in part) any Loan
held by it to any other Person, and such other Person shall
thereupon become vested with all rights and benefits in
respect thereof granted to such Lender under any Loan
Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions in such assignment or
transfer, and to the provisions of Article 11 and Section
12.08 of the Credit Agreement.
14.08 Payments Free and Clear of Taxes, etc.
Guarantor hereby agrees that:
(a) Subject to paragraph (e) below, any and all payments made by
Guarantor hereunder to or for the account of the Agent or any
Lender (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 in accordance with Section 3.03 of the Credit
Agreement 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, excluding (i) such taxes (including income taxes
or franchise taxes or branch profit taxes) as are imposed on or
measured by the Agent's or such Lender's net income and (ii) such
taxes as are imposed by a jurisdiction other than the
<PAGE> sf-714755 4
United States of America or any political subdivision
thereof and that would not have been imposed but for the
existence of a connection between the Agent or such Lender
and the jurisdiction imposing such taxes (other than a
connection arising principally by reason of the Credit
Agreement or this Guaranty) (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If
Guarantor shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to the
Agent or any Lender:
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 2.8) the Agent or such Lender receives an amount
equal to the sum it would have received had no such
deductions been made;
Guarantor shall make such deductions; and
Guarantor shall pay the full amount deducted to
the relevant taxation authority or other governmental
authority in accordance with applicable law.
(b) Guarantor shall 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 Guaranty (other than on account
of a Bid Loan, except to the extent otherwise specified as being
applicable to such Bid Loan) (hereinafter referred to as "Other
Taxes").
(c) Subject to subsection (e) below, Guarantor hereby
indemnifies and holds harmless the Agent and each Lender 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 2.8) paid by the Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted; provided, however, that the
Agent and each Lender agree to contest in good faith any Taxes or
Other Taxes that the Agent or such Lender, in its sole
discretion, believes have been incorrectly asserted. A
certificate as to the amount demanded by the Agent or any Lender,
or the Agent on behalf of any Lender, absent manifest error,
shall be binding and conclusive.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, Guarantor shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof or other
evidence of payment reasonably satisfactory to the Agent.
(e) Each Lender shall, promptly upon the request of Guarantor to
that effect, deliver to the Agent and Guarantor such 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 (if
<PAGE> sf-714755 5
appropriate) such Lender's tax status for withholding
purposes or may otherwise be appropriate to eliminate or
minimize any Taxes on payments under this Guaranty. The
provisions of Sections 4.05(f), (g), (h), and (i) of the
Credit Agreement are hereby incorporated by reference into
this Guaranty as if fully stated herein, except that each
reference to the "Company" contained therein shall be deemed
to be a reference to the "Guarantor" for purposes of this
Guaranty.
(f) Without prejudice to the survival of any other agreement of
Guarantor hereunder, the agreements and obligations of Guarantor
contained in this Section 2.8 shall survive the payment in full
of the principal of and interest on the Loans.
ARTICLE 15
REPRESENTATIONS AND WARRANTIES
15.01 Representations and Warranties.
Guarantor hereby makes each of the representations and
warranties made by NAT in the Credit Agreement.
ARTICLE 16
COVENANTS, ETC.
16.01 Affirmative Covenants.
Guarantor covenants and agrees that, so long as any portion
of the Obligations shall remain unpaid or any Lender shall have
any outstanding Commitment, Guarantor will, unless the Required
Lenders shall otherwise consent in writing, cause NAT to duly
keep, perform, and observe for the benefit of the Agent and the
Lenders each and every covenant set forth in Article 8 of the
Credit Agreement (all of which covenants, together with related
definitions and ancillary provisions, are hereby incorporated
herein by reference as if such terms were set forth herein in
full), without regard to any termination of the Credit Agreement.
16.02 Negative Covenants.
Guarantor covenants and agrees that, so long as any portion
of the Obligations shall remain unpaid or any Lender shall have
any outstanding Commitment, Guarantor will, unless the Required
Lenders shall otherwise consent in writing, cause NAT to duly
keep, perform, and observe for the benefit of the Agent and the
Lenders each and every covenant set forth in Article 9 of the
Credit Agreement (all of which covenants, together with related
definitions and ancillary provisions, are hereby incorporated
herein by reference as if such terms were set forth herein in
full), without regard to any termination of the Credit Agreement.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.01 Loan Document.
This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with
the terms and provisions thereof, including Article 12 of the
Credit Agreement.
17.02 Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section
2.8, this Guaranty shall be binding upon
<PAGE> sf-714755 6
Guarantor and its successors, transferees, and assigns and shall
inure to the benefit of and be enforceable by the Agent, each
Lender, and their respective successors, transferees, and assigns
(to the full extent provided pursuant to Section 2.8); provided,
however, that Guarantor may not assign any of its obligations
hereunder.
17.03 Amendment, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by
Guarantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Guarantor, the Agent
and consented to by the Required Lenders (or, as provided in
Section 12.02(e) of the Credit Agreement, all Lenders), and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
17.04 Addresses for Notices to Guarantor. All notices and
other communications hereunder to Guarantor shall be in writing
(including by facsimile) and mailed by overnight delivery,
transmitted by facsimile, or delivered to it, addressed to it at
the address set forth below its signature hereto or at such other
address as shall be designated by Guarantor in a written notice
to the Agent at the address specified in the Credit Agreement
complying as to delivery with the terms of this Section 5.4. All
such notices and other communications shall be effective, if
transmitted by facsimile when transmitted or, if mailed by
overnight delivery or delivered, upon delivery, addressed as
aforesaid
17.05 No Waiver; Remedies. In addition to, and not in
limitation of, Sections 2.3 and 2.6, no failure on the part of
the Agent or any Lender 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. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
17.06 Section Captions. Section captions used in this
Guaranty are for convenience of reference only, and shall not
affect the construction of this Guaranty.
17.07 Setoff. In addition to, and not limitation of, any
rights of the Agent or any Lender under applicable law, the Agent
and each Lender shall, upon the occurrence and during the
continuance of any Event of Default, have the right to
appropriate and apply to the payment of the obligations of
Guarantor owing to it hereunder, whether or not then due, any and
all balances, credits, deposits, accounts or moneys of Guarantor
then or thereafter maintained with the Agent or such Lender;
provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.06 of the Credit
Agreement. Each Lender agrees promptly to notify Guarantor after
any such setoff and application made by such party; provided,
however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of the
Agent and each Lender under this Section 5.7 are in addition to
any other right or remedy (including any other right of set off)
which the Agent or such Lender may have.
17.08 Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under such law,
<PAGE> sf-714755 7
such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Guaranty.
17.09 Governing Law, etc. THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE PARTIES TO THE LOAN
DOCUMENTS WITH RESPECT TO THE SUBJECT MATTER THEREOF AND
SUPERSEDE ALL PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO, EXCEPT FOR THE FEE LETTER AND ANY PRIOR ARRANGEMENT MADE
WITH RESPECT TO THE PAYMENT BY ANY LENDER 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 ANY
LENDER.
17.10 Waiver of Jury Trial. GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY EAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY.
GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO
THE CREDIT AGREEMENT.
<PAGE> sf-714755 8
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
GEORGIA-PACIFIC CORPORATION
______________________________
By:
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
<PAGE> sf-714755 9
Exhibit 7.01(e)
to NAT Credit Agreement
FORM OF OPINION OF COUNSEL FOR THE COMPANY
[Letterhead of Counsel for the Company]
July 22, 1999
To each of the Lenders
party to the Credit Agreement
hereinafter referred to and
to Bank of America National
Trust and Savings Association, as Agent
Re: North American Timber Corp. Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section
7.01(e) of the Credit Agreement, dated as of July 22, 1999 (the
"Credit Agreement"), among NORTH AMERICAN TIMBER CORP., a
Delaware corporation, as borrower (the "Company"), the Lenders
party thereto (collectively, the "Lenders"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative agent
(in such capacity, the "Agent") for the Lenders thereunder,
COMMERZBANK AG, NEW YORK BRANCH, as Documentation Agent, and THE
CHASE MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication
Agents. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to such terms in the
Credit Agreement.
I am [Vice President and Secretary] of the Company and, as
such, I have acted as counsel to the Company in connection with
the negotiation, execution, and delivery of the Credit Agreement
and the Subsidiary Guaranty.
In so acting as such counsel, I have examined, or caused to
be examined, the following:
(a) the promissory notes delivered at the Closing;
(b) the Credit Agreement; and
(c) the Subsidiary Guaranty and the Parent Guaranty
(collectively, the "Loan Documents").
<PAGE> sf-721576
I have also examined, or caused to be examined, originals or
copies of originals, certified or otherwise identified to my
satisfaction, of such corporate records, agreements, documents,
instruments, certificates, and other statements of public and
governmental officials and corporate officers and other
representatives of the Company and have made such inquiries of
such corporate officers and other representatives, as I have
deemed relevant and necessary as a basis for the opinions
hereinafter set forth.
For purposes of the examination of the documents referred to
above, I have assumed the genuineness of all signatures (except
those on behalf of the Company), the authenticity of all
documents submitted to me as originals, and the conformity to
originals of all documents submitted to me as certified or
photostatic copies, which facts I have not independently
verified. As to all questions of fact material to this opinion
which have not been independently verified by me, I have relied
upon the representations and warranties of the Company contained
in the Loan Documents and other documents and certificates
related to these transactions.
I have assumed the due execution and delivery, pursuant to
due authorization, of each of the Loan Documents by all of the
parties thereto, other than the Company, and that the Loan
Documents are enforceable against such other parties in
accordance with their respective terms.
I have further assumed that the Lenders and the Agent will
act in good faith and will seek to enforce their rights and
remedies under the Loan Documents in a commercially reasonable
manner.
Based upon the foregoing and subject to the qualifications
set forth herein, I am of the opinion that:
1. The Company:
(a) is a corporation validly existing and in good
standing under the laws of the State of Delaware;
(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;
and
(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.
2. The execution, delivery, and performance by the Company
of the Loan Documents to which it is a party:
(a) are within its corporate powers;
(b) have been, or prior to such execution will have
been, duly authorized by all necessary corporate action,
including the consent of its shareholder where required; and
(c) do not:
<PAGE> sf-721576 2
(i) contravene its articles or certificate of
incorporation or by-laws;
(ii) to the best of my knowledge after due
inquiry, violate any existing law or regulation of the
United States, of the States of Georgia, New York, or
the general corporation law of the State of Delaware
which, to my knowledge, is applicable, or any order,
decree, or other determination of an arbitrator or a
court or other governmental agency applicable to or
binding upon the Company or any of its property or to
which it or any of its property is subject;
(iii) to the best of my knowledge after due
inquiry, conflict with or result in the breach of, or
constitute a default under, any Contractual Obligation
of the Company, except for such conflicts, breaches, or
defaults which are not likely to have a Material
Adverse Effect;
(iv) to the best of my knowledge after due
inquiry, result in the creation or imposition of any
Lien upon any of the property of the Company, other
than if the Obligations or certain other Indebtedness
of the Company is to be secured by certain Liens, for
Permitted Liens required to be created pursuant to
Section 9.01 of the Credit Agreement; or
(v) to the best of my knowledge after due
inquiry, require, as of the date hereof, the consent
of, authorization by, approval of or notice to, or
prior filing or registration with, any United States,
Georgia, Delaware, or New York governmental agency.
3. The Loan Documents to which the Company is a party have
been duly executed and delivered by it. The Loan Documents are
the legal, valid, and binding obligations of the Company,
enforceable against it in accordance with their respective terms.
4. To the best of my knowledge after due inquiry, there
are no pending or overtly threatened actions or proceedings
affecting the Company before any court or other Governmental
Authority or any arbitrator that is likely to have a Material
Adverse Effect.
5. To the best of my knowledge after due inquiry, the
Company has no Subsidiaries.
The foregoing opinions are subject to the following
qualifications:
(a) My opinion as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting
creditors' rights generally.
(b) My opinion as to enforceability is also subject to
the effect of general principles of equity, including
concepts of materiality, reasonableness, good faith, and
fair dealing (regardless of whether considered in a
proceeding in equity or at law). Pursuant to such equitable
principles, Section 2.3 of the Subsidiary Guaranty and the
Parent Guaranty, which provides that the liability of the
Principal Subsidiaries or Parent thereunder shall not be
affected by
<PAGE> sf-721576 3
changes in or amendments to the agreements and documents
referred to in such Section, might be enforceable only to
the extent that such changes or amendments were not so
material as to constitute a new contract among the parties.
(c) My opinion as to enforceability is also subject to
the effect of limitations on enforceability of rights to
indemnification or contribution under the Loan Documents by
federal or state securities laws or regulations or public
policy relative thereto.
(d) My opinion as to enforceability is also subject to
the qualifications that certain provisions of the Loan
Documents are or may be unenforceable in whole or in part
under the laws of the State of New York, but the inclusion
of such provisions does not affect the validity of any of
the Loan Documents, and each of the Loan Documents contains
adequate provisions for enforcing payment of the obligations
of the Company thereunder and for the practical realization
of the rights and benefits afforded thereby, except for the
economic consequences resulting from any delay imposed by,
or any procedure required by, applicable New York laws,
rules, regulations and court decisions and by constitutional
requirements in and out of the State of New York.
(e) I express no opinion as to the enforceability of
the provisions of the last sentence of Section 12.08(d) of
the Credit Agreement (insofar as it pertains to Section
12.06 of the Credit Agreement), as to the proviso in Section
2.1 of the Subsidiary Guaranty or as to the proviso in the
first sentence of Section 5.7 of the Subsidiary Guaranty, or
to Section [ ] of the Parent Guaranty.
(f) I express no opinion as to the enforceability of
any provision in the Loan Documents purporting to preserve
and maintain the liability of any party thereto despite the
fact that the guaranteed debt is unenforceable due to
illegality or the fact that the Lenders had voluntarily
released the primary obligor's liability on the guaranteed
debt.
(g) I express no opinion as to the applicability (and,
if applicable, the effect) of Section 548 of the Bankruptcy
Code, or any comparable provisions of state or foreign law,
to, or on, the Loan Documents.
(h) I express no opinion as to those provisions of the
Loan Documents purporting to waive the right to a jury
trial.
My opinions relate only to the laws of the States of New
York and Georgia, the general corporation laws of the State of
Delaware, and the Federal laws of the United States; and I do not
express any opinion with respect to the laws of any other
jurisdiction. This opinion letter is furnished to you by me as
counsel to the Company and is solely for your benefit and for the
benefit of each Lender and each Assignee, and may not be quoted
or relied upon by any other Person without my prior written
consent.
I am a member of the bar of the States of New Jersey and New
York and do not hold myself out to be an expert on the laws of
any other State, including the State of Wisconsin. In rendering
the foregoing opinion, I have relied as to matters of Georgia
law, insofar as such law affects the opinions expressed above,
upon an opinion of even date herewith addressed to me by an
attorney in the Law Department of the Company licensed to
practice law in the
<PAGE> sf-721576 4
State of Georgia, which opinion contains no qualifications or
assumptions (other than those which limit such opinions solely to
matters of Georgia law) not contained in this opinion. The
opinion from the attorney in the Law Department of the Company is
satisfactory in form and scope to me and I believe that I am
justified in relying on such opinion as to the matters covered
thereby.
Very truly yours,
<PAGE> sf-721576 5
[Execution Copy]
CONTRIBUTION AGREEMENT
This Contribution Agreement ("Agreement") is entered into as
of July 22, 1999 by and among GEORGIA-PACIFIC CORPORATION, a
Georgia corporation (the "Parent"), NORTH AMERICAN TIMBER CORP.,
a Delaware corporation ("NAT"), UNISOURCE WORLDWIDE, INC., a
Delaware corporation, 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, NEKOOSA PAPERS INC., a
Wisconsin corporation, and such other Persons that may hereafter
become a party hereto pursuant to Section 3.1 (collectively,
including NAT but excluding the Parent, the "Contributing
Subsidiaries").
Recitals
A. Parent, certain financial institutions which are or may
become parties thereto (the "Lenders"), Bank of America National
Trust and Savings Association, as administrative agent (the
"Parent Agent"), Commerzbank AG, New York Branch, as
Documentation Agent, and The Chase Manhattan Bank and Citibank,
N.A., as Co-Syndication Agents have entered into a Credit
Agreement, dated as of the date hereof (together with all
amendments from time to time made thereto, the "Parent Credit
Agreement"). Pursuant to the Parent Credit Agreement, the
Lenders have agreed to provide credit facilities to the Parent in
the aggregate amount of up to $1,000,000,000.
B. NAT, the Lenders, the Agent, Bank of America National
Trust and Savings Association, as administrative agent (the "NAT
Agent"), Commerzbank AG, New York Branch, as Documentation Agent,
and The Chase Manhattan Bank and Citibank, N.A., as Co-
Syndication Agents have also entered into a Credit Agreement,
dated as of the date hereof (together with all amendments, if
any, from time to time made thereto, the "NAT Credit Agreement"
and, together with the Parent Credit Agreement, the "Credit
Agreements"). Pursuant to the NAT Credit Agreement, the Lenders
have agreed to provide credit facilities to NAT in the aggregate
amount of up to $1,000,000,000.
E. Each of the Principal Subsidiaries (as defined in the
Parent Credit Agreement) is a direct or indirect beneficiary of
the credit facilities provided pursuant to the Parent Credit
Agreement, and each Person hereafter becoming a Principal
Subsidiary (as defined in the NAT Credit Agreement) will be a
direct or indirect beneficiary of the credit facilities provided
pursuant to the NAT Credit Agreement. Accordingly, each
Principal Subsidiary (as defined in the Parent Credit Agreement)
has entered into, and each Person becoming such a Principal
Subsidiary hereafter is obligated to enter into, the Subsidiary
<PAGE> sf-715802 1
Guaranty of even date herewith (as defined in the Parent Credit
Agreement) (the "Parent Subsidiary Guaranty"), and each Person
hereafter becoming a Principal Subsidiary (as defined in the NAT
Credit Agreement) is obligated to enter into the Subsidiary
Guaranty of even date herewith (as defined in the NAT Credit
Agreement) (the "NAT Subsidiary Guaranty" and, together with the
Parent Subsidiary Guaranty, the "Guaranties").
G. Because of the joint and several nature of the
Guaranties and the transactions contemplated by the Credit
Agreements, any of the Principal Subsidiaries may be called upon
or required to pay an amount in respect of such obligations which
is greater than the benefit actually received by such
Contributing Subsidiary as the result of the apportionment and
distribution of the Group Commitment loan proceeds, and so the
Parent desires to provide for rights of reimbursement and
contribution among the Parent on behalf of itself and its
Principal Subsidiaries in such event.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises of the parties hereto, the parties hereto hereby
agree as follows:
ARTICLE 18
REIMBURSEMENT AND CONTRIBUTION
18.01 Reimbursement and Contribution. The Parent hereby
agrees that, if a Contributing Subsidiary shall be called upon
and required to pay amounts (or suffer the loss of its collateral
pledged to secure amounts) in respect of the joint and several
obligations of the Principal Subsidiaries under either of the
Guaranties which exceed the aggregate benefit actually received
by such Contributing Subsidiary (the "Paying Subsidiary") as the
result of apportionment and distribution of the proceeds of the
Credit Agreements, then such Paying Subsidiary shall be entitled
to contribution and reimbursement from the Parent and the other
Principal Subsidiaries, and the Parent shall pay and contribute,
or shall cause one or more of the other Principal Subsidiaries to
pay and contribute, to such Paying Subsidiary and reimburse it
for an amount equal to the amount by which the amount such Paying
Subsidiary is actually called upon to pay exceeds the aggregate
benefit actually received by such Paying Subsidiary as the result
of the apportionment and distribution of the proceeds of the
Credit Agreements.
ARTICLE 19
REPRESENTATIONS AND WARRANTIES
19.01 Representations and Warranties. As of the date hereof
(in the case of Contributing Subsidiaries initially executing
this Agreement) and as of the date of execution and delivery
hereof (in the case of Contributing Signatories becoming a party
hereto pursuant to Section 3.1), each Contributing Subsidiary
hereby makes each of the representations and warranties made by
the Parent and, in the case of Principal Subsidiaries as defined
in the NAT Credit Agreement, NAT in the
<PAGE> sf-715802 2
Credit Agreements, to the extent that any such representation or
warranty made by the Parent or NAT in the Credit Agreements shall
be applicable to such Contributing Subsidiary, its Subsidiaries,
or any of its or their properties.
ARTICLE 20
ADDITIONAL SIGNATORIES
20.01 Additional Signatories. As required by the terms of
the Credit Agreements, Principal Subsidiaries as defined in
either Credit Agreement may from time to time hereafter become
parties hereto by executing and delivering to the NAT Agent and
the Parent Agent a signature page to this Agreement attached to a
photocopy of this Agreement as previously executed.
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.01 Loan Document.
This Agreement is a Loan Document for purposes of both of
the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in
accordance with the terms and provisions thereof, including,
without limitation, Article 12 of the Parent Credit Agreement.
21.02 Binding on Successors, Transferees, and Assigns;
Assignment.
This Agreement shall be binding upon the Parent, each
Contributing Subsidiary and their respective successors,
transferees, and assigns and shall inure to the benefit of and be
enforceable by the Parent, each Contributing Subsidiary, the NAT
Agent, the Parent Agent, each Lender, and their respective
successors, transferees, and assigns; provided, however, that
neither the Parent nor any Contributing Subsidiary may assign any
of its obligations hereunder.
21.03 Amendment, etc.
No amendment to or waiver of any provision of this
Agreement, nor consent to any departure by the Parent or any
Contributing Subsidiary herefrom, shall in any event be effective
unless the same shall be in writing and signed by the NAT Agent,
the Parent Agent, and authorized by the Required Lenders as
defined in each Credit Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
21.04 No Waiver; Remedies.
No failure on the part of the NAT Agent, the Parent Agent,
or any Lender 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. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
21.05 Section Captions.
Section captions used in this Agreement are for convenience
of reference only, and shall not affect the construction of this
Agreement.
<PAGE> sf-715802 3
21.06 Severability.
Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
21.07 Governing Law, etc.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE PARTIES TO THE LOAN DOCUMENTS WITH
RESPECT TO THE SUBJECT MATTER THEREOF AND SUPERSEDE ALL PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO, EXCEPT FOR THE
FEE LETTER AND ANY PRIOR ARRANGEMENT MADE WITH RESPECT TO THE
PAYMENT BY ANY LENDER 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 ANY LENDER.
21.08 Waiver of Jury Trial.
EACH CONTRIBUTING SUBSIDIARY HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY EAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT. EACH
CONTRIBUTING SUBSIDIARY ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THE CREDIT AGREEMENTS.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
<PAGE> sf-715802 4
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date set forth above.
GEORGIA-PACIFIC CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NORTH AMERICAN TIMBER CORP.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
UNISOURCE WORLDWIDE, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GREAT NORTHERN NEKOOSA CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
BRUNSWICK PULP & PAPER COMPANY
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
GEORGIA-PACIFIC WEST, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
G-P GYPSUM CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
LEAF RIVER FOREST PRODUCTS, INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PACKAGING CORPORATION
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
NEKOOSA PAPERS INC.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
Exhibit 7.02(d)
to NAT Credit Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE
July __, 1999
To each of the Lenders party
to the Credit Agreement
hereinafter referred to and to
Bank of America National Trust
and Savings Association, as Agent
Re: North American Timber Corp. Credit Agreement
dated as of July 22, 1999
This Certificate is delivered to you pursuant to Section
7.02(d) of the Credit Agreement, dated as of July 22, 1999 (the
"Credit Agreement"), among NORTH AMERICAN TIMBER CORP., a
Delaware corporation (the "Company"), the Lenders party thereto,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative agent (the "Agent"), COMMERZBANK AG, NEW YORK
BRANCH, as Documentation Agent, and THE CHASE MANHATTAN BANK and
CITIBANK, N.A., as Co-Syndication Agents. Unless otherwise
defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
The undersigned hereby certifies to each Lender and the
Agent as follows:
1. I hold, and at all pertinent times mentioned herein
have held, the position listed below my name below. I have read
and am familiar with the Credit Agreement and the other Loan
Documents, and I am familiar with the transactions contemplated
thereunder. I am authorized to execute and deliver this
Certificate on behalf of the Company.
2. The conditions precedent to the initial Borrowing
contained in Section 7.02 of the Credit Agreement have been and
remain satisfied in full as of the date hereof.
3. The representations and warranties contained in
Article 6 of the Credit Agreement are correct.
4. I understand that you are relying on this Certificate
in connection with the extensions of credit being made to or for
the account of the Company Pursuant to the Credit Agreement.
<PAGE> sf-721583
IN WITNESS WHEREOF, the undersigned, on behalf of the
Company, has caused this Certificate to be executed this ___th of
July, 1999.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-721583 -2-
Exhibit 8.09(c)
to NAT Credit Agreement
FORM OF COMPLIANCE CERTIFICATE
[ Date ]
Bank of America National Trust
and Savings Association, as Agent
Paper & Forest Products #9973
555 California Street -- 41st Floor
San Francisco, CA 94104
Attention: M.J. Balok, Managing Director
Re: North American Timber Corp. Credit Agreement
dated as of July 22, 1999
Ladies and Gentlemen:
This Compliance Certificate is delivered to you pursuant to
Section 8.09(c) of the Credit Agreement, dated as of July 22,
1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement"), among NORTH AMERICAN
TIMBER CORP., a Delaware corporation (the "Company"), the Lenders
party thereto, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (the "Agent"), COMMERZBANK
AG, NEW YORK BRANCH, as Documentation Agent, and THE CHASE
MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication Agents.
Unless otherwise defined herein or the context otherwise
requires, terms used herein (including the attachments hereto)
have the meanings provided in the Credit Agreement.
The Company hereby certifies and warrants that, as of the
dates set forth below:
(a) on _____________, ____<F1> (the "Computation
Date"), the Leverage Ratio (as defined in Attachment A
hereto) for the Company and its consolidated Subsidiaries
was _____ to 1.0, as computed on Attachment A hereto;
(b) as of each of the Computation Date and the date
hereof, no Default or Event of Default has occurred and is
continuing; and
<F1> The last day of the most recently ended fiscal quarter
of the Company.
<PAGE> sf-721585
(c) as of the date hereof, there are no pending or, to
the knowledge of the Company, threatened, actions or
proceedings affecting the Company, any Principal Subsidiary
or any Restricted Subsidiary before any court or other
Governmental Authority or any arbitrator that are reasonably
likely to have a Material Adverse Effect.
The undersigned Responsible Officer of the Company executing
this Certificate on behalf of the Company is, and at all
pertinent times mentioned herein has been, the Chief Financial
Officer of the Company and in such capacity has been responsible
for the management of the financial affairs of the Company and
the preparation of financial statements of the Company and its
Subsidiaries on a consolidated basis.
IN WITNESS WHEREOF, the Company has caused this
Certificate to be executed and delivered, and the certification
and warranties contained herein to be made, this _____ day
of____________, ____.
NORTH AMERICAN TIMBER CORP.
By:
Title:
<PAGE> sf-721585 2
ATTACHMENT A
to NAT Compliance Certificate <F2>
LEVERAGE RATIO
ON __________, ____
[Computation Date]
Item Measurement
All of the foregoing computed
for the Company and its
consolidated Subsidiaries
1. Indebtedness for Borrowed Money $_____________
outstanding as of the
Computation Date
2. aggregate capital invested by $_____________
Persons other than the Company
and its Restricted Subsidiaries
in receivables and other
accounts sold to such Persons by
the Company and its Restricted
Subsidiaries as of the
Computation Date, excluding
receivables and other accounts
sold in connection with the sale
of a business or the assets
and/or operations generating
such receivables and other
accounts
3. sum of Item 1 and Item 2 (Funded $_____________
Indebtedness)
4. net income or (or net loss) $_____________
during the Measurement Period
ending on the Computation Date
<F2>By necessity, the computations described in this
Compliance Certificate are less detailed than those contained in
the Credit Agreement. In the event of any conflict between the
two, the terms of the Credit Agreement shall in all instances
prevail.
5. all amounts treated as expenses $_____________
for depreciation, interest and
the non-cash amortization of
intangibles of any kind to the
extent included in the
determination of such net income
(or loss)
6. cost of timber sold by the $_____________
Company (to the extent
constituting depletion) for such
Measurement Period to the extent
included in the determination of
such net income (or loss)
computed without giving effect
to extraordinary cash gains or
non-recurring, non-cash items.
7. all accrued taxes on or measured $_____________
by income to the extent included
8. in the determination of such net $______________
income (or loss)
Item 4, plus Item 5, plus Item
6, plus Item 7 (EBITDA)
9. ratio of Item 3 to Item 8 (the ______ to 1.0
"Leverage Ratio")
<PAGE> sf-721585 2
Exhibit 8.13(a)
to the NAT Credit Agreement
FORM OF SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (the "Guaranty"), dated as of
_________, is made by [ ], a [ ] corporation; and [ ], a [ ]
corporation (collectively, the "Guarantors" and, individually, a
"Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, as
administrative agent (in such capacity, the "Agent") for each of
the Lenders (as defined below).
RECITALS:
A. Pursuant to the Credit Agreement, dated as of July 22, 1999
(together with all amendments, supplements, and other
modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among North American
Timber Corp., a Delaware corporation ("NAT") as borrower,
the various commercial lending and other financial
institutions (individually, a "Lender" and, collectively,
the "Lenders") as are, or may from time to time become,
party thereto, the Agent, Commerzbank AG, New York Branch,
as Documentation Agent, and The Chase Manhattan Bank and
Citibank, N.A. as Co-Syndication Agents, the Lenders have
extended commitments (the "Commitments") to make loans (the
"Loans") to NAT, and to extend other financial
accommodations to or for the account of NAT, which Loans and
other financial accommodations are to be unconditionally
guaranteed by each Principal Subsidiary of NAT (which
Principal Subsidiaries are the Guarantors hereunder).
B. As a condition precedent to the initial Loan under the
Credit Agreement, each Guarantor is required to execute and
deliver this Guaranty.
C. Each Guarantor has duly authorized the execution, delivery,
and performance of this Guaranty.
D. It is in the best interests of each Guarantor to execute
this Guaranty inasmuch as such Guarantor will derive
substantial direct and indirect benefits from the Loans made
to NAT by the Lenders under the Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and in order to induce
the Lenders to make Loans (including the initial Loans) to NAT
pursuant to the Credit Agreement, each Guarantor agrees, for the
benefit of each Lender, as follows:
<PAGE> sf-721568
ARTICLE 22
DEFINITIONS
Unless otherwise defined herein or the context otherwise
requires, terms used in this Guaranty, including its preamble and
recitals, have the meanings provided in the Credit Agreement.
ARTICLE 23
GUARANTY PROVISIONS
23.01 Guaranty.
Each Guarantor, jointly and severally, hereby absolutely,
unconditionally, and irrevocably:
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand, or otherwise, of all Obligations of NAT and
each other Loan Party (other than such Guarantor) now or
hereafter existing under the Credit Agreement and each other Loan
Document to which it is or may become a party, whether for
principal, interest, fees, expenses, or otherwise (including all
such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. 362(a)), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
502(b) and 506(b)); and
(b) indemnifies and holds harmless the Agent and each Lender for
any and all out-of-pocket costs and expenses (including the
out-of-pocket expenses and reasonable fees of counsel and the
allocated cost of in-house counsel retained by the Agent or such
Lender) incurred by the Agent or such Lender in preserving and
enforcing any rights under this Guaranty;
provided, however, that each Guarantor shall be liable under this
Guaranty for the maximum amount of such liability that can
be hereby incurred without rendering this Guaranty, as it
relates to such Guarantor, voidable under applicable law
relating to fraudulent obligations, fraudulent conveyance,
or fraudulent transfer, and not for any greater amount.
This Guaranty constitutes a guaranty of payment when due and
not of collection or of performance, and each Guarantor
specifically agrees that it shall not be necessary or
required that the Agent or any Lender exercise any right,
assert any claim or demand, or enforce any remedy whatsoever
against NAT, any other Loan Party, or any other Person
before or as a condition to the obligations of each
Guarantor hereunder.
23.02 Acceleration of Guaranty.
Subject to the proviso of Section 2.1, each Guarantor agrees
that, in the event of the occurrence and continuance of an Event
of Default and the acceleration of the Obligations in accordance
with the terms of the Credit Agreement, each Guarantor will pay
to the Agent and the Lenders forthwith the full amount of the
Obligations.
23.03 Guaranty Absolute, etc.
This Guaranty shall in all respects be a continuing,
absolute, unconditional, and irrevocable guaranty of payment, and
shall remain in full force and effect until all Obligations of
NAT and each other Loan Party have been paid in cash in full, and
<PAGE> sf-721568 2
all Commitments shall have terminated. Each Guarantor guarantees
that the Obligations of NAT and each other Loan Party will be
paid strictly in accordance with the terms of the Credit
Agreement and each other Loan Document under which they arise,
regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Lender with respect thereto. The
liability of each Guarantor under this Guaranty shall be
absolute, unconditional, and irrevocable irrespective of:
(a) any lack of validity, legality, or enforceability of the
Credit Agreement or any other Loan Document;
(b) the failure of the Agent or any Lender:
to assert any claim or demand or to enforce any right or
remedy against NAT, any other Loan Party, or any other Person
(including any other guarantor) under the provisions of the
Credit Agreement, any other Loan Document, or otherwise; or
to exercise any right or remedy against any other
guarantor of, or any collateral securing, any Obligations of
NAT or any other Loan Party;
(c) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Obligations of NAT or any
other Loan Party, or any other extension, compromise, or renewal
of any Obligations of NAT or any other Loan Party;
(d) any reduction, limitation, impairment, or termination of the
Obligations of NAT or any other Loan Party for any reason,
including any claim of waiver, release, surrender, alteration, or
compromise, and shall not be subject to (and each Guarantor
hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment, or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, the Obligations of NAT or any other Loan Party or
otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of the
Credit Agreement or any other Loan Document;
(f) any addition, exchange, release, surrender, or
non-perfection of any collateral, or any amendment to or waiver
or release or addition of, or consent to departure from, any
other guaranty, held by the Agent or any Lender securing any of
the Obligations of NAT or any other Loan Party; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, NAT,
any other Loan Party, any surety, or any guarantor.
23.04 Reinstatement, etc.
Each Guarantor agrees that this Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time
<PAGE> sf-721568 3
any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by the Agent or any
Lender, upon the insolvency, bankruptcy, or reorganization of
NAT, any other Loan Party, or otherwise, all as though such
payment had not been made.
23.05 Waiver, etc.
Each Guarantor hereby waives promptness, diligence, notice
of acceptance, and any other notice with respect to any of the
Obligations of NAT or any other Loan Party and this Guaranty and
any requirement that the Agent or any Lender protect, secure,
perfect, or insure any security interest or lien, or any property
subject thereto, or exhaust any right or take any action against
NAT, any other Loan Party, or any other Person (including any
other guarantor) or any collateral securing the Obligations of
NAT or any other Loan Party, as the case may be.
23.06 Subordination.
Until such time as the Guaranteed Obligations have been paid
and performed in full and the period of time has expired during
which any payment made by NAT, a Guarantor, or any other
guarantor of the Guaranteed Obligations to Agent may be
subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid by Agent or
paid over to a trustee, receiver, or any other entity, whether
under any bankruptcy act or otherwise (any such payment being
hereinafter referred to as a "Preferential Payment"), any claim
or other rights which any Guarantor may now have or hereafter
acquire against NAT or such other guarantor that arises from the
existence or performance of any Guarantor's obligations under
this Guaranty or any other agreement (all such claims and rights
being hereinafter referred to as "Guarantor's Conditional
Rights"), including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, or
indemnification, any right to participate in any claim or remedy
of Agent or such other guarantor or any collateral which Agent
now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute, or common
law, by any payment made hereunder or otherwise, including,
without limitation, the right to take or receive from NAT or such
other guarantor, directly or indirectly, in cash or other
property or by setoff or in any other manner, payment, or
security on account of such claim or other rights, shall be
subordinate to Agent's right to full payment and performance of
the Guaranteed Obligations, and each Guarantor shall not enforce
Guarantor's Conditional Rights until such time as the Guaranteed
Obligations have been paid and performed in full and the period
of time has expired during which any payment made by NAT or a
Guarantor to Agent may be determined to be a Preferential
Payment.
23.07 Successors, Transferees and Assigns; Transfers of
Loans, etc.
This Guaranty shall:
(a) be binding upon each Guarantor, and its successors,
transferees, and assigns; and
(b) inure to the benefit of and be enforceable by the Agent and
each Lender.
Without limiting the generality of subsection (b), any Lender may
assign or otherwise transfer (in whole or in part) any Loan
held by it to any other Person, and such other Person shall
thereupon become vested with all rights and benefits in
respect thereof granted to such Lender under any Loan
Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 12.08 and Article
11 of the Credit Agreement.
<PAGE> sf-721568 4
23.08 Payments Free and Clear of Taxes, etc.
Each Guarantor hereby agrees that:
(a) Subject to paragraph (e) below, any and all payments made by
each Guarantor hereunder to or for the account of the Agent or
any Lender (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 in accordance with Section 3.03 of the Credit
Agreement 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, excluding (i) such taxes (including income taxes
or franchise taxes or branch profit taxes) as are imposed on or
measured by the Agent's or such Lender's 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 the Agent or such Lender and the jurisdiction imposing
such taxes (other than a connection arising principally by reason
of the Credit Agreement or this Guaranty) (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If any
Guarantor shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to the
Agent or any Lender:
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 2.8) the Agent or such Lender receives an amount equal to
the sum it would have received had no such deductions been made;
such Guarantor shall make such deductions; and
such Guarantor shall pay the full amount deducted
to the relevant taxation authority or other governmental
authority in accordance with applicable law.
(b) Each Guarantor shall 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 Guaranty (other than on account
of a Bid Loan, except to the extent otherwise specified as being
applicable to such Bid Loan) (hereinafter referred to as "Other
Taxes")
(c) Subject to subsection (e) below, each Guarantor, jointly and
severally, hereby indemnifies and holds harmless the Agent and
each Lender 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 2.6) paid by the Agent or
such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted;
provided,
<PAGE> sf-721568 5
however, that the Agent and each Lender agree to contest in
good faith any Taxes or Other Taxes that the Agent or such
Lender, in its sole discretion, believes have been
incorrectly asserted. A certificate as to the amount
demanded by the Agent or any Lender, or the Agent on behalf
of any Lender, absent manifest error, shall be binding and
conclusive.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, each Guarantor shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment reasonably satisfactory to
the Agent.
(e) Each Lender shall, promptly upon the request of any
Guarantor to that effect, deliver to the Agent and such Guarantor
such 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 (if appropriate) such
Lender's tax status for withholding purposes or may otherwise be
appropriate to eliminate or minimize any Taxes on payments under
this Guaranty. The provisions of Sections 3.05(f), (g), (h), and
(i) of the Credit Agreement are hereby incorporated by reference
into this Guaranty as if fully stated herein, except that each
reference to the "Company" contained therein shall be deemed to
be a reference to the "Guarantors" for purposes of this Guaranty.
(f) Without prejudice to the survival of any other agreement of
each Guarantor hereunder, the agreements and obligations of each
Guarantor contained in this Section 2.8 shall survive the payment
in full of the principal of and interest on the Loans.
ARTICLE 24
REPRESENTATIONS AND WARRANTIES
24.01 Representations and Warranties.
Each Guarantor hereby makes each of the representations and
warranties made by NAT in the Credit Agreement, to the extent
that any such representation or warranty made by NAT in the
Credit Agreement shall be applicable to such Guarantor, its
Subsidiaries, or any of its or their properties.
ARTICLE 25
COVENANTS, ETC.
25.01 Affirmative Covenants.
Each Guarantor covenants and agrees that, so long as any
portion of the Obligations shall remain unpaid or any Lender
shall have any outstanding Commitment, such Guarantor will,
unless the Required Lenders shall otherwise consent in writing,
duly keep, perform, and observe for the benefit of the Agent and
the Lenders each and every covenant set forth in Article 8 of the
Credit Agreement to the extent that any such covenant shall be
applicable to such Guarantor, any of its Subsidiaries, or any of
its or their properties (all of which covenants, together with
related definitions and ancillary provisions, are hereby
incorporated herein by reference as if such terms were set forth
herein in full), without regard to any termination of the Credit
Agreement.
25.02 Negative Covenants.
Each Guarantor covenants and agrees that, so long as any
portion of the Obligations shall remain unpaid or any Lender
shall have any outstanding Commitment, such Guarantor will,
unless the Required Lenders shall otherwise consent in writing,
duly keep, perform, and observe for the benefit of the Agent and
the Lenders each and every covenant set forth in Article 9 of the
Credit Agreement to the extent that any such covenant shall be
applicable to such Guarantor, any of its Subsidiaries, or any of
its or their properties (all of which covenants, together with
related definitions and ancillary provisions, are hereby
incorporated herein by reference as if such terms were set forth
herein in full), without regard to any termination of the Credit
Agreement.
<PAGE> sf-721568 6
ARTICLE 26
MISCELLANEOUS PROVISIONS
26.01 Loan Document.
This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with
the terms and provisions thereof, including, without limitation,
Article 12 of the Credit Agreement.
26.02 Binding on Successors, Transferees and Assigns;
Assignment.
In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon each Guarantor and its successors,
transferees, and assigns and shall inure to the benefit of and be
enforceable by the Agent, each Lender, and their respective
successors, transferees, and assigns (to the full extent provided
pursuant to Section 2.7); provided, however, that no Guarantor
may assign any of its obligations hereunder.
26.03 Amendment, etc.
No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by any Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and
signed by the Guarantors, the Agent and consented to by the
Required Lenders (or, as provided in Section 12.02(e) of the
Credit Agreement, all Lenders), and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
26.04 Addresses for Notices to each Guarantor.
All notices and other communications hereunder to any
Guarantor shall be in writing (including by facsimile) and mailed
by overnight delivery, transmitted by facsimile, or delivered to
it, addressed to it at the address set forth below its signature
hereto or at such other address as shall be designated by such
Guarantor in a written notice to the Agent at the address
specified in the Credit Agreement complying as to delivery with
the terms of this Section 5.4. All such notices and other
communications shall be effective, if transmitted by facsimile
when transmitted or, if mailed by overnight delivery or
delivered, upon delivery, addressed as aforesaid
26.05 No Waiver; Remedies.
In addition to, and not in limitation of, Sections 2.3 and
2.5, no failure on the part of the Agent or any Lender 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. The
<PAGE> sf-721568 7
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
26.06 Section Captions.
Section captions used in this Guaranty are for convenience
of reference only, and shall not affect the construction of this
Guaranty.
26.07 Setoff.
In addition to, and not limitation of, any rights of the
Agent or any Lender under applicable law, the Agent and each
Lender shall, upon the occurrence and during the continuance of
any Event of Default, have the right to appropriate and apply to
the payment of the obligations of each Guarantor owing to it
hereunder, whether or not then due, any and all balances,
credits, deposits, accounts or moneys of such Guarantor then or
thereafter maintained with the Agent or such Lender; provided,
however, that any such appropriation and application shall be
subject to the provisions of Section 3.06 of the Credit
Agreement. Each Lender agrees promptly to notify the relevant
Guarantor after any such setoff and application made by such
party; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application.
The rights of the Agent and each Lender under this Section 5.7
are in addition to any other right or remedy (including any other
right of set off) which the Agent or such Lender may have.
26.08 Severability.
Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
26.09 Governing Law, etc.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS GUARANTY
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE PARTIES TO THE LOAN DOCUMENTS WITH
RESPECT TO THE SUBJECT MATTER THEREOF AND SUPERSEDE ALL PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO, EXCEPT FOR THE
FEE LETTER AND ANY PRIOR ARRANGEMENT MADE WITH RESPECT TO THE
PAYMENT BY ANY LENDER 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 ANY LENDER.
26.10 Waiver of Jury Trial.
EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY EAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS GUARANTY. EACH GUARANTOR ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDERS ENTERING INTO THE CREDIT AGREEMENT.
<PAGE> sf-721568 8
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty
to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
NORTH AMERICAN TIMBER CORP.
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
[ ]
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
[ ]
By: ______________________________
Title:
Address: c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30348-5605
Attn: Treasurer's Department
Facsimile: 404-230-5598
<PAGE> sf-721568 9
Exhibit 12.08(b)
to NAT Credit Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
(North American Timber Corp.)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
_________________, ____, is made by [NAME OF ASSIGNOR], a
___________________ (the "Assignor"), to [NAME OF ASSIGNEE], a
________________ ("Assignee").
RECITALS:
A. The Assignor has entered into a Credit Agreement dated as of
July 22, 1999 (together with all amendments, if any, from
time to time made thereto, the "Credit Agreement"), among
NORTH AMERICAN TIMBER CORP., a Delaware corporation (the
"Company"), the Lenders party thereto, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative
agent (the "Agent"), COMMERZBANK AG, NEW YORK BRANCH, as
Documentation Agent, and THE CHASE MANHATTAN BANK and
CITIBANK, N.A., as Co-Syndication Agents. Unless otherwise
defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Assignor has, as of
the date hereof, a Tranche A Commitment of $___________ and
a Tranche B Commitment of $___________ (collectively, the
"Commitments").
C. The outstanding principal balance on this date of Assignor's
Tranche A Committed Loans is $__________, and the
outstanding principal balance on this date of Assignor's
Tranche B Committed Loans is $__________.
D. [The Assignor has acquired a participation in the Issuing
Bank's liability under Tranche A Letters of Credit in an
aggregate principal amount of $_____________ and under
Tranche B Letters of Credit in an aggregate principal amount
of $_____________ (the "L/C Obligations")] or [No Letters of
Credit are outstanding.]
E. The Assignor wishes to assign to the Assignee [part][all] of
its rights and obligations under the Credit Agreement in
respect of its Commitments, [together with a corresponding
portion of its L/C Obligations,] in an amount equal to
$____________ , [unless the Tranche A Commitments have
expired or been terminated: representing an identical
percentage of the Assignor's Tranche A Commitment and
Tranche B Commitment] on the terms and subject to the
conditions set forth herein, and the Assignee wishes to
accept the assignment of such rights and assume such
obligations from the Assignor on such terms and subject to
such conditions.
NOW, THEREFORE, In consideration of the premises and the mutual
covenants contained herein, the Assignor and the Assignee hereby
covenant and agree as follows:
<PAGE> sf-722994
1. Assignment and Assumption.
(a) Subject to the terms and conditions of this
Agreement, the Assignor and the Assignee agree that the Assignor
hereby sells, transfers, and assigns to the Assignee, and the
Assignee hereby purchases, assumes, and undertakes from the
Assignor, without recourse and without representation or warranty
(except as provided in this Agreement, (i) ____% of the Tranche A
Commitments, the Tranche B Commitments, the Tranche A Committed
Loans, the Tranche B Committed Loans, [and the Tranche A L/C
Obligations and Tranche B L/C Obligations] of the Assignor
("Assignee's Percentage Share") (such assigned Commitments
representing ___% of the aggregate Commitments of all Lenders);
and (ii) all related rights, benefits, obligations, liabilities
and indemnities under and in connection with the Credit Agreement
and each other Loan Document (other than any such rights,
benefits, obligations, liabilities, or indemnities with respect
to any Bid Loan made by the Assignor), including the right to
receive payments of principal of and interest on the Assignor's
Committed Loans and L/C Obligations hereby assigned, and the
obligation to fund future Committed Loans and L/C Commitments in
respect of such assignment, and to indemnify the Agent or any
other party under the Credit Agreement and to pay all other
amounts payable by a Lender (in respect of the Commitments and
L/C Obligations assigned hereunder) under or in connection with
the Credit Agreement (other than any such amounts payable in
respect of a Bid Loan). After giving effect to the foregoing
assignments, the Tranche A Commitment of the Assignee shall be
$___________, the Tranche B Commitment of the Assignee shall be
$___________, the Tranche A Commitment of the Assignor shall be
$____________, and the Tranche B Commitment of the Assignor shall
be $____________.
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and
fees with respect to, Committed Loans or L/C Obligations
assigned.]
(b) With effect on or after the Effective Date (as
defined herein), the Assignee shall be a party to the Credit
Agreement and succeed to all the rights and be obligated to
perform all of the obligations of a Lender under the Credit
Agreement, with Commitments in the amount assigned hereunder.
The Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender. It is
the intent of the parties that the Commitments of the Assignor
shall be reduced by an amount equal to Assignee's Percentage
Share thereof and the the Assignor shall reliquish its rights and
be released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee.
2. Payments.
(a)As consideration for the sale, assignment, and transfer
contemplated in Section 1, the Assignee shall pay to the Assignor
on the Effective Date in immediately available funds an amount
equal to $____________, representing the Assignee's Percentage
Share of the principal amount of all Committed Loans previously
made to the Company by the Assignor under the Credit Agreement
and outstanding on the Effective Date.
(b) The [Assignor/Assignee] further agrees to pay to the
<PAGE> sf-722994 2
Agent the processing fee referred to in the amount specified in
Section 12.08(b) of the Credit Agreement.
3. Reallocation of Payments. The Assignor shall notify
the Agent and the Company to make all payments with respect to
the Commitments, Loans, and L/C Obligations assigned hereunder
after the Effective Date directly to the Assignee, as its
interest may appear. The Assignor and the Assignee agree and
acknowledge that all payments of interest, commitment fees,
utilization fees, facility fees, utilization fees, and letter of
credit fees accrued up to, but not including, the Effective Date
are the property of the Assignor, and not the Assignee. The
Assignee shall, upon receipt by the Assignee of any interest,
commitment fees, utilization fees, or facility fees remit to the
Assignor all of such interest, commitment fees, utilization fees,
and facility fees accrued up to, but not including, the Effective
Date. The Assignor shall, upon receipt by the Assignor of any
interest, commitment fees, utilization fees, facility fees, and
letter of credit fees remit to the Assignee all of such interest,
commitment fees, utilization fees, facility fees, and letter of
credit fees accrued for any period from and after the Effective
Date. The Assignor shall promptly notify the Assignee of any
notices received by the Assignor in connection with the Credit
Agreement affecting or relating to the rights and obligations
assigned hereunder.
4. Independent Credit Decision. The Assignee
(a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements referred to in
Section 8.09 of the Credit Agreement, and such other documents
and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this
Agreement; and (b) agrees that it will, independently and without
reliance upon the Assignor, the Agent, or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and
legal decisions in taking or not taking action under the Credit
Agreement.
5. Effective Date; Notices. As between the Assignor and
the Assignee, the effective date for this Agreement shall be
, ____ (the "Effective Date");
provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(a)this Agreement shall be executed and delivered by the
Assignor and the Assignee;
(b)the consent of the Company, the Agent, and the Issuing
Bank required for an effective assignment of the Commitment and
outstanding Committed Loans assigned hereunder by the Assignor to
the Assignee under Section 12.08(a) of the Credit Agreement, if
any, shall have been duly obtained and shall be in full force and
effect as of the Effective Date;
(c)the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Agreement;
(d)the Assignee shall have complied with Section 4.05(f)
of the Credit Agreement (if applicable);
(e)the processing fee referred to above and in Section
12.08(b) of the Credit Agreement shall have been paid by
[Assignor/Assignee] to the Agent; and
<PAGE> sf-722994 3
(f)Promptly following the execution of this Agreement, the
Assignor shall deliver to the Company and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form
attached hereto as Attachment A.
6. Agent. [Include only if Assignor is Agent:
(a)The Assignee hereby appoints and authorizes the
Assignor to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated
to the Agent by the Lenders pursuant to the terms of the Credit
Agreement.
(b)The Assignee shall assume no duties or obligations held
by the Assignor in its capacity as Agent under the Credit
Agreement.]
7. Withholding Tax. The Assignee agrees to comply with
Section 4.05(f) of the Credit Agreement (if applicable).
8. Representations and Warranties.
(a)The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any lien,
security interest, or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to
take, and has taken, all action necessary to execute and deliver
this Agreement and any other documents required or permitted to
be executed or delivered by it in connection with herewith and to
fulfill its obligations hereunder; (iii) no notices to, or
consents, authorizations, or approvals of, any Person are
required (other than any already given or obtained) for its due
execution, delivery, and performance of this Agreement, and apart
from any agreements or undertakings or filings required by the
Credit Agreement, no further action by, or notice to, or filing
with, any person is required of it for such execution, delivery,
or performance; and (iv) this Agreement has been duly executed
and delivered by it and constitutes the legal, valid, and binding
obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization, and other
laws of general application relating to or affecting creditors'
rights and to general equitable principles.
(b)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 the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to,
the solvency, financial condition, or statements of the Company,
or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c)The Assignee represents and warrants that (i) it is
duly organized and existing and it has full power and authority
to take, and has taken, all action necessary to execute and
deliver this Agreement and any other documents required or
permitted to be executed or delivered by it in connection
herewith, and to fulfill its obligations hereunder; (ii) no
<PAGE> sf-722994 4
notices to, or consents, authorizations, or approvals of, any
Person are required (other than any already given or obtained)
for its due execution, delivery, and performance of this
Agreement; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any person is required of it for
such execution, delivery, or performance; (iii) this Agreement
has been duly executed and delivered by it and constitutes the
legal, valid, and binding obligation of the Assignee, enforceable
against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization, and other laws of general application
relating to or affecting creditors' rights and to general
equitable principles; and (iv) it is an Eligible Assignee.
9. Further Assurances. The Assignor and the Assignee each
hereby agrees to execute and deliver such other instruments, and
take such other action, as either party may reasonably request in
connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
(a)Any amendment or waiver of any provision of this
Agreement shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any
right, power, or privilege hereunder shall operate as a waiver
thereof and any waiver of any breach of the provisions of this
Agreement shall be without prejudice to any rights with respect
to any other or further breach thereof.
(b)All payments made hereunder shall be made without any
set-off or counterclaim.
(c)The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation,
preparation, execution, and performance of this Agreement.
(d)This Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The
Assignor and the Assignee each irrevocably submits to the
non-exclusive jurisdiction of any New York State or Federal court
sitting in the City of New York over any suit, action or
proceeding arising out of or relating to this Agreement and
irrevocably agrees that all claims in respect of such suit,
action or proceeding may be heard and determined in such New York
State or Federal court, and each party to this Agreement hereby
irrevocably waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of
such suit, Action or proceeding.
(f)THE ASSIGNOR AND THE ASSIGNEE EACH 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, THE
CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS, OR ANY
<PAGE> sf-722994 5
COURSE OF CONDUCT, COURSE OF DEALING, OR OTHER STATEMENTS
(WHETHER VERBAL OR WRITTEN).
[Other provisions to be added as may be negotiated between
the Assignor and the Assignee, provided that such provisions are
not inconsistent with the Credit Agreement.]
<PAGE> sf-722994 6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by their duly authorized officers as of
the day and year first above written.
[ASSIGNOR]
Address:
____________________________ By: ____________________________
[Address of Assignor] _________________(print
name)
Title: _________________________
[ASSIGNEE]
Address:
____________________________ By: ____________________________
[Address of Assignee] _________________(print
name)
Title: _________________________
<PAGE> 7
Attachment A to Exhibit 12.08(b)
Assignment and Assumption Agreement
FORM OF NOTICE OF ASSIGNMENT
To: North American Timber Corp.
c/o Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Treasurer's Department
To: Bank of America National Trust
and Savings Association, as Agent and Issuing Bank
Credit Products - Forest Products - SF #9973
Mail Code: CA5-705-41-01
555 California St., 41st Fl.
San Francisco, CA 94104
Attention: Mike Balok, Managing Director
Re: North American Timber Corp. Credit Agreement,
dated as of July 22, 1999
Ladies and Gentlemen:
We refer to Section 12.08(b) of the Credit Agreement, dated
as of July 22, 1999 (together with all amendments, if any, from
time to time made thereto, the "Credit Agreement"), among NORTH
AMERICAN TIMBER CORP., a Delaware corporation (the "Company"),
the Lenders party thereto, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as administrative agent (the "Agent"),
COMMERZBANK AG, NEW YORK BRANCH, as Documentation Agent, and THE
CHASE MANHATTAN BANK and CITIBANK, N.A., as Co-Syndication
Agents. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the
Credit Agreement.
This Notice of Assignment is delivered to you pursuant to
Section 12.08(b) of the Credit Agreement and also constitutes
notice to each of you, pursuant to Section 12.08(b)(i) of the
Credit Agreement, of the assignment to ________________ (the
"Assignee") of [____%] of the Commitment and the Committed Loans
of ___________________________ (the "Assignor") outstanding under
the Credit Agreement on the date hereof, which assignment was
undertaken pursuant to an Assignment and Assumption Agreement,
duly executed and delivered by the Assignor and the Assignee on
_____________, _____. After giving effect to the foregoing
assignment, the Assignor's and the Assignee's Commitments for the
purposes of the Credit Agreement are set forth opposite such
Person's name on the signature pages hereof.
<PAGE> sf-722994 8
[If applicable: The Assignee hereby represents and warrants
to the Agent that it has obtained from the Company the prior
consent to the assignment required pursuant to Section 12.08(a).]
The Assignee hereby acknowledges and confirms that it has
received a copy of the Credit Agreement and the Schedules and
Exhibits thereto, together with copies of the documents which
were required to be delivered under the Credit Agreement as a
condition to the initial Borrowing thereunder. The Assignee
further confirms and agrees that in becoming a Lender and in
extending its Commitment and making its Committed Loans under the
Credit Agreement, such actions have and will be made without
recourse to, or representation or warranty by, the Agent.
Except as otherwise provided in the Credit Agreement,
effective as of the date contemplated by Section 12.08(b)(iii) of
the Credit Agreement for the effectiveness of the assignment
which is the subject of this Notice of Assignment (the "Effective
Date"):
(a) the Assignee
(i) shall be deemed automatically to have
become a party to the Credit Agreement, have all the
rights and obligations of a "Lender" under the Credit
Agreement and the other Loan Documents as if it were an
original signatory thereto to the extent specified in
the second paragraph hereof; and
(ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the
other Loan Documents as if it were an original
signatory thereto; and
(b) the Assignor shall be released from its
obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph
hereof.
The Assignor and the Assignee hereby agree that the
[Assignor] [Assignee] will pay to the Agent the processing fee
referred to in Section 12.08(b)(ii) of the Credit Agreement upon
the delivery hereof.
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned Loans and
Commitments and requests the Agent to acknowledge receipt of this
document:
(A) Address for Notices:
Institution Name:
Attention:
Domestic Lending Office:
Telephone:
Facsimile:
<PAGE> sf-722994 9
Eurodollar Lending Office:
Telephone:
Facsimile:
(B) Payment Instructions:
The Assignee agrees to furnish to the Agent and the Company
on or before the Effective Date the tax form[s] required by
Section 4.05(f) (if so required) of the Credit Agreement.
This Notice of Assignment may be executed by the Assignor
and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same notice
and agreement.
Adjusted Tranche A Commitment: [ASSIGNOR]
By: __________________________
$__________________ Title: _______________________
Adjusted Tranche B Commitment:
$__________________
Tranche A Commitment: [ASSIGNEE]
By: __________________________
$_________________ Title: _______________________
Tranche B Commitment:
$_________________
<PAGE> sf-722994 10
ACCEPTED AND ACKNOWLEDGED
this _____ day of__________, ____
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent and Issuing Bank
By: __________________________
Title: _______________________
NORTH AMERICAN TIMBER CORP.
By: __________________________
Title: _______________________
<PAGE> sf-722994 11
