EXHIBIT 4(o)
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GEORGIA-PACIFIC CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
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PURCHASE CONTRACT AGREEMENT
Dated as of July 7, 1999
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TABLE OF CONTENTS
Page
RECITALS............................................................... 1
ARTICLE I Definitions and Other Provisions of General Applications
Section 1.1. Definitions........................................... 1
Section 1.2. Compliance Certificates and Opinions.................. 11
Section 1.3. Form of Documents Delivered to Purchase Contract Agent 12
Section 1.4. Acts of Holders; Record Dates......................... 12
Section 1.5. Notices............................................... 14
Section 1.6. Notice to Holders; Waiver............................. 15
Section 1.7. Effect of Headings and Table of Contents.............. 15
Section 1.8. Successors and Assigns................................ 15
Section 1.9. Separability Clause................................... 15
Section 1.10. Benefits of Agreement................................. 15
Section 1.11. Governing Law......................................... 16
Section 1.12. Legal Holidays........................................ 16
Section 1.13. Counterparts.......................................... 16
Section 1.14. Inspection of Agreement............................... 16
ARTICLE II Certificate Forms
Section 2.1. Forms of Certificates Generally....................... 16
Section 2.2. Form of Purchase Contract Agent's Certificate of
Authentication........................................ 18
ARTICLE III The Securities
Section 3.1. Amount; Form and Denominations........................ 18
Section 3.2. Rights and Obligations Evidenced by the Certificates.. 18
Section 3.3. Execution, Authentication, Delivery and Dating........ 19
Section 3.4. Temporary Certificates................................ 20
Section 3.5. Registration; Registration of Transfer and Exchange... 20
Section 3.6. Book-Entry Interests.................................. 22
Section 3.7. Notices to Holders.................................... 22
Section 3.8. Appointment of Successor Clearing Agency.............. 22
Section 3.9. Definitive Certificates............................... 22
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.... 23
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Section 3.11. Persons Deemed Owners................................. 24
Section 3.12. Cancellation.......................................... 24
Section 3.13. Creation of Treasury PEPS Units by Substitution of
Treasury Securities................................... 25
Section 3.14. Reestablishment of PEPS Units......................... 26
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event..................................... 27
Section 3.16. No Consent to Assumption.............................. 28
ARTICLE IV The Senior Deferrable Notes
Section 4.1. Interest Payments; Rights to Interest Payments
Preserved............................................. 28
Section 4.2 Deferral of Interest Payments......................... 29
Section 4.3. Interest Rate Reset; Notice Relating to Cash
Settlement............................................ 29
Section 4.4. Notice and Voting..................................... 30
ARTICLE V The Purchase Contracts
Section 5.1. Purchase of Shares of Georgia-Pacific Group Stock..... 30
Section 5.2. Purchase Contract Payments............................ 33
Section 5.3. Deferral of Purchase Contract Payments................ 33
Section 5.4. Payment of Purchase Price............................. 34
Section 5.5. Issuance of Shares of Georgia-Pacific Group Stock..... 37
Section 5.6. Adjustment of Settlement Rate......................... 38
Section 5.7. Notice of Adjustments and Certain Other Events........ 45
Section 5.8. Termination Event; Notice............................. 45
Section 5.9. Early Settlement...................................... 46
Section 5.10. Acceleration of Purchase Contract Settlement Date..... 48
Section 5.11. No Fractional Shares.................................. 51
Section 5.12. Charges and Taxes..................................... 51
ARTICLE VI Remedies
Section 6.1. Unconditional Right of Holders to Receive
Purchase Contract Payments and to Purchase
Shares of Georgia-Pacific Group Stock................. 51
Section 6.2. Restoration of Rights and Remedies.................... 52
Section 6.3. Rights and Remedies Cumulative........................ 52
Section 6.4. Delay or Omission Not Waiver.......................... 52
Section 6.5. Undertaking for Costs................................. 52
Section 6.6. Waiver of Stay or Extension Laws...................... 53
ARTICLE VII The Purchase Contract Agent
Section 7.1. Certain Duties and Responsibilities.................. 53
Section 7.2. Notice of Default.................................... 54
Section 7.3. Certain Rights of Purchase Contract Agent............ 54
Section 7.4. Not Responsible for Recitals or Issuance of
Securities........................................... 55
Section 7.5. May Hold Securities.................................. 55
Section 7.6. Money Held in Custody................................ 55
Section 7.7. Compensation and Reimbursement....................... 56
Section 7.8. Corporate Purchase Contract Agent Required;
Eligibility.......................................... 56
Section 7.9. Resignation and Removal; Appointment of
Successor............................................ 57
Section 7.10. Acceptance of Appointment by Successor............... 58
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business............................... 58
Section 7.12. Preservation of Information; Communications to
Holders.............................................. 59
Section 7.13. No Obligations of Purchase Contract Agent............ 59
Section 7.14. Tax Compliance....................................... 59
ARTICLE VIII Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders... 60
Section 8.2. Supplemental Agreements With Consent of Holders...... 61
Section 8.3. Execution of Supplemental Agreements................. 62
Section 8.4. Effect of Supplemental Agreements.................... 62
Section 8.5. Reference to Supplemental Agreements................. 62
ARTICLE IX Merger, Consolidation, Share exchange, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Enter into
a Share Exchange, Sell or Convey Property
Except Under Certain Conditions...................... 62
Section 9.2. Rights and Duties of Successor Corporation........... 63
Section 9.3. Officers' Certificate and Opinion of Counsel
Given to Purchase Contract Agent..................... 63
ARTICLE X Covenants
Section 10.1. Performance Under Purchase Contracts................. 64
Section 10.2. Maintenance of Office or Agency...................... 64
Section 10.3. Company to Reserve Georgia-Pacific Group Stock....... 64
Section 10.4. Covenants as to Georgia-Pacific Group Stock.......... 65
Section 10.5. Statements of Officers of the Company as to Default.. 65
Section 10.6. ERISA................................................ 65
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EXHIBITS
EXHIBIT A Form of PEPS Units Certificate
EXHIBIT B Form of Treasury PEPS Units Certificate
EXHIBIT C Instruction to Purchase Contract Agent
EXHIBIT D Notice from Purchase Contract Agent to Holders (Transfer of
Collateral upon Occurrence of a Termination Event)
EXHIBIT E Notice to Settle by Cash
EXHIBIT F Notice from Purchase Contract Agent to Collateral Agent and
Senior Trustee (Settlement of Purchase Contract through
Remarketing)
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PURCHASE CONTRACT AGREEMENT, dated as of July 7, 1999, between GEORGIA-
PACIFIC CORPORATION, a Georgia corporation (the "Company"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Purchase
Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section I.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, Exhibit or other subdivision;
(d) the following terms have the meanings given to them in this Section
1.1(d):
"Act" has the meaning, with respect to any Holder, set forth in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Applicable Market Value" has the meaning set forth in Section 5.1.
"applicants" has the meaning set forth in Section 7.12(b).
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Global Certificate, a
Person who is the beneficial owner of such Book-Entry Interest as reflected
on the books of the Clearing Agency or on the books of a Person maintaining
an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company, to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in New York City are authorized or required
by law or executive order to remain closed or a day on which the Senior
Trustee is closed for business; provided that for purposes of the second
paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange,
Inc. is closed or suspended.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means a PEPS Units Certificate or a Treasury PEPS Units
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Price" has the meaning set forth in Section 5.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement,
and thereafter "Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning set forth in Section 3.13.
"Common Stock" means the Georgia-Pacific Group Stock and the Georgia-
Pacific Corporation--Timber Group Common Stock, par value $.80 per share,
of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Constituent Person" has the meaning set forth in Section 5.6(b).
"Convertible Securities" has the meaning set forth in Section F of
Article V of the Restated Articles of Incorporation of the Company.
"Corporate Trust Office" means the principal corporate trust office of
the Purchase Contract Agent at which, at any particular time, its corporate
trust business shall
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be administered, which office at the date hereof is located at The First
National Bank of Chicago, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Global Corporate Trust Services.
"Coupon Rate" means the percentage rate per annum at which each Senior
Deferrable Note will bear interest initially.
"Current Market Price" has the meaning set forth in Section 5.6(a)(8).
"Depositary" means DTC until another Clearing Agency becomes its
successor.
"Disposition" has the meaning set forth in Section 5.10(a)(i).
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning set forth in Section 5.9(a).
"Early Settlement Amount" has the meaning set forth in Section 5.9(a).
"Early Settlement Date" has the meaning set forth in Section 5.9(a).
"Early Settlement Rate" has the meaning set forth in Section 5.9(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.4(e).
"Expiration Time" has the meaning set forth in Section 5.6(a)(6).
"Extension Period" has the meaning set forth in Section 4.2.
"Failed Remarketing" has the meaning set forth in Section 5.4(b).
"Fair Value" has the meaning set forth in Section F of Article V of
the Restated Articles of Incorporation of the Company.
"Georgia-Pacific Group Stock" means the Georgia-Pacific Corporation--
Georgia-Pacific Group Common Stock, par value $.80 per share, of the
Company.
"Georgia-Pacific Group Subsidiaries" has the meaning set forth in
Section 5.10(b).
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"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.
"Holder" means, with respect to a Security, the Person in whose name
the Security evidenced by a PEPS Units Certificate or a Treasury PEPS Units
Certificate is registered in the related PEPS Units Register or the
Treasury PEPS Units Register, as the case may be; provided, however, that
in determining whether the Holders of the requisite number of PEPS Units or
Treasury PEPS Units have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the
Security remains in the form of one or more Global Certificates and if the
Clearing Agency which is the holder of such Global Certificate has sent an
omnibus proxy assigning voting rights to the Clearing Agency Participants
to whose accounts the Securities are credited on the record date, the term
"Holder" shall mean such Clearing Agency Participant acting at the
direction of the Beneficial Owners.
"Indenture" means the Indenture, dated as of March 1, 1983, between
the Company and The Chase Manhattan Bank (National Association), as
Trustee, as amended and supplemented (including any provisions of the TIA
that are deemed incorporated therein) by the First Supplemental Indenture
to the Indenture, dated July 27, 1988, among Georgia-Pacific Corporation,
The Chase Manhattan Bank (National Association), as Trustee, and Xxxxxx
Guaranty Trust Company of New York, as Successor Trustee, and by the
Agreement of Resignation, Appointment and Acceptance, dated as of
January 31, 1992, by and among Georgia-Pacific Corporation, Xxxxxx Guaranty
Trust Company of New York, as Trustee, and The Bank of New York, as
Successor Trustee, pursuant to which the Senior Deferrable Notes will be
issued.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, its
President or one of its Vice Presidents, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Purchase Contract Agent.
"Net Proceeds" has the meaning set forth in Section F of Article V of
the Restated Articles of Incorporation of the Company.
"non-electing share" has the meaning set forth in Section 5.6(b).
"NYSE" has the meaning set forth in Section 5.1.
"Officers' Certificate" means a certificate signed by (i) either the
Chairman, Chief Executive Officer and President or Executive Vice
President--Finance and Chief Financial Officer and (ii) either the Vice
President and Treasurer or the Vice President, Deputy General Counsel and
Secretary, of the Company, and delivered to the Purchase Contract Agent.
Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
5
(1) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(3) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion
of counsel may rely on certificates as to matters of fact.
"Outstanding Securities" means, with respect to any PEPS Units or
Treasury PEPS Units and as of the date of determination, all PEPS Units or
Treasury PEPS Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(1) If a Termination Event has occurred, (i) Treasury PEPS Units
and (ii) PEPS Units for which the underlying Senior Deferrable Notes
have been theretofore deposited with the Purchase Contract Agent in
trust for the Holders of such PEPS Units;
(2) PEPS Units and Treasury PEPS Units evidenced by Certificates
theretofore cancelled by the Purchase Contract Agent or delivered to
the Purchase Contract Agent for cancellation or deemed cancelled
pursuant to the provisions of this Agreement; and
(3) PEPS Units and Treasury PEPS Units evidenced by Certificates
in exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant
to this Agreement, other than any such Certificate in respect of which
there shall have been presented to the Purchase Contract Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the PEPS Units or Treasury PEPS Units
evidenced by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the PEPS Units or Treasury PEPS Units have given any request,
demand, authorization,
6
direction, notice, consent or waiver hereunder, PEPS Units or Treasury PEPS
Units owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding Securities, except that, in
determining whether the Purchase Contract Agent shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only PEPS Units or Treasury PEPS Units which a
Responsible Officer of the Purchase Contract Agent knows to be so owned
shall be so disregarded. PEPS Units or Treasury PEPS Units so owned which
have been pledged in good faith may be regarded as Outstanding Securities
if the pledgee establishes to the satisfaction of the Purchase Contract
Agent the pledgee's right so to act with respect to such PEPS Units or
Treasury PEPS Units and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing November 16, 1999.
"PEPS Unit" means the collective rights and obligations of a Holder of
a PEPS Units Certificate in respect of the Senior Deferrable Note, subject
to the Pledge thereof, and the related Purchase Contract.
"PEPS Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of PEPS Units specified on
such certificate.
"PEPS Units Register" and "PEPS Units Registrar" have the respective
meanings set forth in Section 3.5.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company,
limited liability company, trust, unincorporated organization or government
or any agency or political subdivision thereof or any other entity of
whatever nature.
"Plan" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the
Code or any entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Senior
Deferrable Notes or the Treasury Securities, in either case constituting a
part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of July 7,
1999, among the Company, the Collateral Agent, the Securities Intermediary
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact
for the Holders from time to time of the Securities.
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"Pledged Senior Deferrable Notes" has the meaning set forth in Section
1 of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor PEPS Units Certificate
or a Predecessor Treasury PEPS Units Certificate.
"Predecessor PEPS Units Certificate" of any particular PEPS Units
Certificate means every previous PEPS Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under
the PEPS Units evidenced thereby; and, for the purposes of this definition,
any PEPS Units Certificate authenticated and delivered under Section 3.10
in exchange for or in lieu of a mutilated, destroyed, lost or stolen PEPS
Units Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen PEPS Units Certificate.
"Predecessor Treasury PEPS Units Certificate" of any particular
Treasury PEPS Units Certificate means every previous Treasury PEPS Units
Certificate evidencing all or a portion of the rights and obligations of
the Company and the Holder under the Treasury PEPS Units evidenced thereby;
and, for the purposes of this definition, any Treasury PEPS Units
Certificate authenticated and delivered under Section 3.10 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen Treasury PEPS Units
Certificate shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or stolen
Treasury PEPS Units Certificate.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and
the Holder of such Security to purchase, shares of Georgia-Pacific Group
Stock and (ii) pay the Holder Purchase Contract Payments on the terms and
subject to the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent"
shall mean such Person.
"Purchase Contract Payments" means the payments payable by the Company
on the Payment Dates in respect of each Purchase Contract, equal to .% per
annum of the Stated Amount.
"Purchase Contract Settlement Date" means the earlier of (1)
August 16, 2002; (2) the fifth Business Day immediately preceding the
Redemption Date, if any, or (3) the fifth Business Day immediately
preceding the Spin-Off Date, if any.
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"Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.5.
"Purchase Price" has the meaning set forth in Section 5.1.
"Purchased Shares" has the meaning set forth in Section 5.6(a)(6).
"Record Date" for the Purchase Contract Payments payable on any
Payment Date means, as to any Global Certificate, the Business Day next
preceding such Payment Date, and as to any other Certificate, the fifteenth
Business Day prior to such Payment Date.
"Redemption" has the meaning set forth in Section 5.10(a)(i)
"Redemption Date" has the meaning set forth in Section 5.10(a)(i).
"Reference Price" has the meaning set forth in Section 5.1.
"Register" means the PEPS Units Register and the Treasury PEPS Units
Register.
"Registrar" means the PEPS Units Registrar and the Treasury PEPS Units
Registrar.
"Related Business Transaction" has the meaning set forth in Section F
of Article V of the Restated Articles of Incorporation of the Company.
"Remarketing" has the meaning set forth in the Senior Deferrable Notes
Board Resolutions.
"Remarketing Agent" has the meaning set forth in Section 5.4(b).
"Remarketing Agreement" means the Remarketing Agreement, dated as of
July 7, 1999, between the Company and the Remarketing Agent.
"Remarketing Fee" has the meaning set forth in Section 5.4(b).
"Reorganization Event" has the meaning set forth in Section 5.6(b).
"Reset Rate" has the meaning set forth in the Senior Deferrable Notes
Board Resolutions.
"Responsible Officer" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer its corporate trust matters.
"Securities Intermediary" means The Chase Manhattan Bank, as
Securities Intermediary under the Pledge Agreement until a successor
Securities Intermediary shall
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have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"Security" means a PEPS Unit or a Treasury PEPS Unit, as the case may
be.
"Senior Deferrable Notes" means the Senior Deferrable Notes issued
under the Indenture, each bearing interest, payable on the Payment Dates,
at the Coupon Rate until the Purchase Contract Settlement Date, and at the
Reset Rate thereafter.
"Senior Deferrable Notes Board Resolutions" means the resolutions duly
adopted by the Board on June ., 1999 relating to the Senior Deferrable
Notes.
"Senior Trustee" means The Bank of New York, a New York State banking
corporation, as trustee under the Indenture, or any successor thereto.
"Settlement Rate" has the meaning set forth in Section 5.1.
"Spin-Off Date" has the meaning set forth in Section 5.10(b).
"Stated Amount" means $50.
"Stated Maturity" means, with respect to the Senior Deferrable Notes,
August 16, 2004.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events:
(1) at any time on or prior to the Purchase Contract Settlement Date,
a judgment, decree or court order shall have been entered granting relief
under the Bankruptcy Code, adjudicating the Company to be insolvent, or
approving as properly filed a petition seeking reorganization or
liquidation of the Company or any other similar applicable Federal or State
law, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such decree
or order shall have continued undischarged and unstayed for a period of 60
days;
(2) a judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the termination or liquidation of
its affairs, shall have been entered, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase Contract
Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or
(3) at any time on or prior to the Purchase Contract Settlement Date,
the Company shall file a petition for relief under the Bankruptcy Code, or
shall consent to the
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filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization or liquidation under the
Bankruptcy Code or any other similar applicable Federal or State law, or
shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.1.
"Treasury PEPS Unit" means, following the substitution of Treasury
Securities for the Senior Deferrable Note as collateral to secure a
Holder's obligations under the Purchase Contract, the collective rights and
obligations of a Holder of a Treasury PEPS Units Certificate in respect of
such Treasury Securities, subject to the Pledge thereof, and the related
Purchase Contract.
"Treasury PEPS Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury
PEPS Units specified on such certificate.
"Treasury PEPS Units Register" and "Treasury PEPS Units Registrar"
have the respective meanings set forth in Section 3.5.
"Treasury Securities" means zero-coupon U.S. Treasury Securities
(Cusip No. 000000XX0) which are the principal strip of the .% U.S. Treasury
Securities which mature on August 15, 2002.
"Underwriting Agreement" means the Underwriting Agreement, dated
June 30, 1999, between the Company and Xxxxxx Xxxxxxx & Co. Incorporated,
Xxxxxxx, Sachs & Co., PaineWebber Incorporated and Xxxxxxx Xxxxx Xxxxxx
Inc.
Section I.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such
11
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section I.3. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
12
Section I.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Purchase
Contract Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Purchase
Contract Agent and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Purchase Contract Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the PEPS Units Register
or the Treasury PEPS Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Purchase
Contract Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph,
the Holders of the Outstanding PEPS Units and the Outstanding Treasury PEPS
Units, as the case may be, on such record date, and no other Holders, shall be
entitled to take the relevant action with respect to the PEPS Units or the
Treasury PEPS Units, as the case may be, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken prior to or on the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such record date. Nothing
contained in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and be of no
effect), and nothing contained in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by
13
Holders and the applicable Expiration Date to be given to the Purchase Contract
Agent in writing and to each Holder of Securities in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Purchase Contract Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, prior to or on the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Section I.5. Notices.
Any notice or communication is duly given if in writing and delivered in
Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Global Corporate Trust Services
If to the Company:
Georgia-Pacific Corporation
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: .
If to the Collateral Agent:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
14
Attention: Corporate Trust Department
If to the Senior Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: .
Attention: .
Section I.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Purchase Contract Agent
shall constitute a sufficient notification for every purpose hereunder.
Section I.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section I.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
Section I.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
15
Section I.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.
Section I.11. Governing Law.
This Agreement and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section I.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day,
notwithstanding any other provision of this Agreement or the PEPS Units
Certificates or the Treasury PEPS Units Certificates, Purchase Contract Payments
shall not be made on such date, but shall be made on the next succeeding
Business Day with the same force and effect as if made on such Payment Date,
provided that no interest shall accrue or be payable by the Company or any
Holder for the period from and after any such Payment Date, except that, if such
next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, notwithstanding any other provision of this Agreement, the PEPS
Units Certificates or the Treasury PEPS Units Certificates, the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section I.13. Counterparts.
This Agreement may be executed in any number of counterparts by the parties
hereto on separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.
Section I.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.
16
ARTICLE II
Certificate Forms
Section II.1. Forms of Certificates Generally.
The PEPS Units Certificates (including the form of Purchase Contract
forming part of each PEPS Unit evidenced thereby) shall be in substantially the
form set forth in Exhibit A hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the PEPS Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such PEPS Units Certificates, as evidenced by their execution
of the PEPS Units Certificates.
The definitive PEPS Units Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the PEPS Units evidenced
by such PEPS Units Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
The Treasury PEPS Units Certificates (including the form of Purchase
Contract forming part of each Treasury PEPS Unit evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury PEPS Units may be listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Treasury PEPS Units Certificates, as
evidenced by their execution of the Treasury PEPS Units Certificates.
The definitive Treasury PEPS Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury PEPS Units evidenced by such Treasury PEPS Units Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS
17
CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN."
Section II.2. Form of Purchase Contract Agent's Certificate of Authentication.
The form of the Purchase Contract Agent's certificate of authentication of
the PEPS Units shall be in substantially the form set forth on the form of the
PEPS Units Certificates.
The form of the Purchase Contract Agent's certificate of authentication of
the Treasury PEPS Units shall be in substantially the form set forth on the form
of the Treasury PEPS Units Certificates.
ARTICLE III
The Securities
Section III.1. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
17,250,000 (including 2,250,000 relating to the Underwriters' over-allotment
option), except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single PEPS Unit or Treasury PEPS Unit and any integral
multiple thereof.
Section III.2. Rights and Obligations Evidenced by the Certificates.
18
Each PEPS Units Certificate shall evidence the number of PEPS Units
specified therein, with each such PEPS Unit representing (1) the ownership by
the Holder thereof of a beneficial interest in one Senior Deferrable Note,
subject to the Pledge of such Senior Deferrable Note by such Holder pursuant to
the Pledge Agreement, and (2) the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each PEPS Unit shall
pledge, pursuant to the Pledge Agreement, the Senior Deferrable Note, forming a
part of such PEPS Unit, to the Collateral Agent and grant to the Collateral
Agent a security interest in the right, title and interest of such Holder in
such Senior Deferrable Note for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase shares of
Georgia-Pacific Group Stock. Prior to the purchase of shares of Georgia-Pacific
Group Stock under each Purchase Contract, such Purchase Contracts shall not
entitle the Holder of a PEPS Units Certificate to any of the rights of a holder
of shares of Georgia-Pacific Group Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as a shareholder of the Company.
Upon the formation of a Treasury PEPS Unit pursuant to Section 3.13, each
Treasury PEPS Units Certificate shall evidence the number of Treasury PEPS Units
specified therein, with each such Treasury PEPS Unit representing (1) the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000, subject to the Pledge
of such Treasury Security by such Holder pursuant to the Pledge Agreement, and
(2) the rights and obligations of the Holder thereof and the Company under one
Purchase Contract. Prior to the purchase of shares of Georgia-Pacific Group
Stock under each Purchase Contract, such Purchase Contracts shall not entitle
the Holder of a Treasury PEPS Units Certificate to any of the rights of a holder
of shares of Georgia-Pacific Group Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as a shareholder of the Company.
Section III.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by (1) either
the Chairman, Chief Executive Officer and President or the Executive Vice
President--Finance and Chief Financial Officer and (ii) the Vice President and
Treasurer or the Vice President, Deputy General Counsel and Secretary, of the
Company. The signature of any of these officers on the Certificates may be
manual or facsimile.
19
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Purchase Contract Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section III.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
PEPS Units or Treasury PEPS Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation
of definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
PEPS Units or Treasury PEPS Units, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the PEPS Units or Treasury PEPS Units, as the case
may be, evidenced thereby as definitive Certificates.
20
Section III.5. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "PEPS Units Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of PEPS Units Certificates and of transfers of PEPS Units
Certificates (the Purchase Contract Agent, in such capacity, the "PEPS Units
Registrar") and a register (the "Treasury PEPS Units Register") in which,
subject to such reasonable regulations as it may prescribe, the Purchase
Contract Agent shall provide for the registration of the Treasury PEPS Units
Certificates and of transfers of Treasury PEPS Units Certificates (the Purchase
Contract Agent, in such capacity, the "Treasury PEPS Units Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of PEPS Units
or Treasury PEPS Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
PEPS Units or Treasury PEPS Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of PEPS Units or
Treasury PEPS Units, as the case may be, and be entitled to the same benefits
and subject to the same obligations, under this Agreement as the PEPS Units or
Treasury PEPS Units, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Purchase Contract Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Purchase Contract Agent duly executed, by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.6 and 8.5 not involving any transfer.
21
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver the
shares of Georgia-Pacific Group Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such other
Certificate; or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Senior Deferrable Notes or the
Treasury Securities, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Section III.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
by, or on behalf of, the Company. Such Global Certificate shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9. The Purchase Contract Agent
shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.9:
(1) the provisions of this Section 3.6 shall be in full force and
effect;
(2) the Company shall be entitled to deal with the Clearing Agency for
all purposes of this Agreement (including making Purchase Contract Payments
and receiving approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Beneficial Owners;
(3) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control; and
(4) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
or the Clearing Agency Participants.
22
Section III.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
Section III.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section III.9. Definitive Certificates.
If:
(1) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities and a successor Clearing Agency
is not appointed within 90 days after such discontinuance pursuant to
Section 3.8; or
(2) there shall have occurred and be continuing a default by the
Company in respect of its obligations under one or more Purchase Contracts,
then upon surrender of the Global Certificates representing the Securities by
the Clearing Agency, accompanied by registration instructions, the Company shall
cause definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency. The Company shall not be liable
for any delay in delivery of such instructions and may conclusively rely on and
shall be protected in relying on, such instructions.
Section III.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract Agent,
the Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, a new Certificate, evidencing the same number of
PEPS Units or Treasury PEPS Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity as may be required by them to
hold each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Purchase Contract Agent that such Certificate has
been acquired by a bona fide purchaser, the Company shall execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of PEPS Units or Treasury PEPS Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
23
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Purchase Contract Settlement Date or
the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver the
shares of Georgia-Pacific Group Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate;
or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Senior Deferrable Notes or the
Treasury Securities, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Purchase Contract Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
24
Section III.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer, the
Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the PEPS Units or Treasury PEPS Units evidenced
thereby, for the purpose of receiving interest payments on the Senior Deferrable
Notes, receiving Purchase Contract Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any interest
payments on the Senior Deferrable Notes or Purchase Contract Payments payable in
respect of the Purchase Contracts constituting a part of the PEPS Units or
Treasury PEPS Units evidenced thereby shall be overdue and notwithstanding any
notice to the contrary, and neither the Company nor the Purchase Contract Agent,
nor any agent of the Company or the Purchase Contract Agent, shall be affected
by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by any
Clearing Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of beneficial
interests in such Global Certificate, the operation of customary practices
governing the exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
Section III.12. Cancellation.
All Certificates surrendered for delivery of shares of Georgia-Pacific
Group Stock on or after the Purchase Contract Settlement Date, upon the transfer
of Senior Deferrable Notes or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to an Early Settlement, or upon
the registration of transfer or exchange of a Security, or a Collateral
Substitution or the reestablishment of PEPS Units shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by it.
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Purchase Contract Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Purchase
Contract Agent shall be destroyed by the Purchase Contract Agent unless
otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
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Section III.13. Creation of Treasury PEPS Units by Substitution of Treasury
Securities.
A Holder may separate the Senior Deferrable Notes from the related Purchase
Contracts in respect of such Holder's PEPS Units by substituting for such Senior
Deferrable Notes, Treasury Securities in an aggregate principal amount equal to
the aggregate principal amount of such Senior Deferrable Notes (a "Collateral
Substitution"), at any time from and after the date of this Agreement and prior
to or on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date by:
(1) depositing with the Securities Intermediary Treasury Securities
having an aggregate principal amount equal to the aggregate principal
amount of the Senior Deferrable Notes comprising part of such PEPS Units;
and
(2) transferring the related PEPS Units to the Purchase Contract Agent
accompanied by a notice to the Purchase Contract Agent, substantially in
the form of Exhibit C hereto, (i) stating that the Holder has transferred
the relevant amount of Treasury Securities to the Securities Intermediary
and (ii) requesting that the Purchase Contract Agent instruct the
Collateral Agent to release the Senior Deferrable Notes underlying such
PEPS Units, whereupon the Purchase Contract Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit A
to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of such Senior Deferrable Notes from the Pledge, free and
clear of the Company's security interest therein, and the transfer of such
Senior Deferrable Notes to the Purchase Contract Agent on behalf of the Holder.
Upon receipt thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related PEPS Units;
(ii) transfer the Senior Deferrable Notes to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury PEPS Units Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled PEPS Units.
Holders who elect to separate the Senior Deferrable Notes from the related
Purchase Contracts and to substitute Treasury Securities for such Senior
Deferrable Notes shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
Holders may make Collateral Substitutions only in integral multiples of 20
PEPS Units.
26
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the PEPS Units or fails to
deliver PEPS Units Certificates to the Purchase Contract Agent after depositing
Treasury Securities with the Collateral Agent, the Senior Deferrable Notes,
constituting a part of such PEPS Units, and any interest payments on such Senior
Deferrable Notes, shall be held in the name of the Purchase Contract Agent or
its nominee in trust for the benefit of such Holder, until such PEPS Units are
so transferred or the PEPS Units Certificate is so delivered, as the case may
be, or, with respect to a PEPS Units Certificate, such Holder provides evidence
satisfactory to the Company and the Purchase Contract Agent that such PEPS Units
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Purchase Contract Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a PEPS Unit remains in effect, such PEPS Unit shall not be
separable into its constituent parts, and the rights and obligations of the
Holder in respect of the Senior Deferrable Note and the Purchase Contract
comprising such PEPS Unit may be acquired, and may be transferred and exchanged,
only as a PEPS Unit.
Section III.14. Reestablishment of PEPS Units.
A Holder of Treasury PEPS Units may recreate PEPS Units at any time prior
to or on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date by:
(1) depositing with the Securities Intermediary Senior Deferrable
Notes, having an aggregate principal amount equal to the aggregate
principal amount at maturity of the Treasury Securities comprising part of
the Treasury PEPS Units; and
(2) transferring the related Treasury PEPS Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the Holder
has transferred the relevant amount of Senior Deferrable Notes to the
Securities Intermediary and (ii) requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the Treasury Securities
underlying such Treasury PEPS Units, whereupon the Purchase Contract Agent
shall promptly give such instruction to the Collateral Agent, substantially
in the form of Exhibit C to the Pledge Agreement.
Upon receipt of the Senior Deferrable Notes described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of the Treasury Securities having a
corresponding aggregate principal amount at maturity from the Pledge, free and
clear of the Company's security interest therein, and the transfer to the
Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the
Purchase Contract Agent shall promptly:
(i) cancel the related Treasury PEPS Units;
27
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
PEPS Units Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by
the cancelled Treasury PEPS Units.
Holders who elect to recreate PEPS Units shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders of Treasury PEPS Units may reestablish PEPS Units in integral
multiples of 20 Treasury PEPS Units for 20 PEPS Units.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury PEPS Unit remains in effect, such Treasury PEPS
Unit shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Treasury PEPS Unit in respect of the 1/20 of a
Treasury Security and the Purchase Contract comprising such Treasury PEPS Unit
may be acquired, and may be transferred and exchanged, only as a Treasury PEPS
Unit.
Section III.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Purchase
Contract Agent of the Senior Deferrable Notes or the Treasury Securities, as the
case may be, underlying the PEPS Units and the Treasury PEPS Units, as the case
may be, pursuant to the terms of the Pledge Agreement, the Purchase Contract
Agent shall request transfer instructions with respect to such Senior Deferrable
Notes or Treasury Securities, as the case may be, from each Holder by written
request, substantially in the form of Exhibit D hereto, mailed to such Holder at
its address as it appears in the PEPS Units Register or the Treasury PEPS Units
Register, as the case may be.
Upon book-entry transfer of the PEPS Units or the Treasury PEPS Units or
delivery of a PEPS Units Certificate or Treasury PEPS Units Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the Senior Deferrable Notes or Treasury Securities, as the
case may be, underlying such PEPS Units or Treasury PEPS Units, as the case may
be, to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of PEPS Units or
Treasury PEPS Units fails to effect such transfer or delivery, the Senior
Deferrable Notes or Treasury Securities, as the case may be, underlying such
PEPS Units or Treasury PEPS Units, as the case may be, and any distributions
thereon, shall be held in the name of the Purchase Contract Agent or its nominee
in trust for the benefit of such Holder, until the earlier of:
(1) such PEPS Units or Treasury PEPS Units are transferred or the PEPS
Units Certificate or Treasury PEPS Units Certificate is surrendered or such
Holder
28
provides satisfactory evidence that such PEPS Units Certificate or Treasury
PEPS Units Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Purchase Contract Agent and the
Company; and
(2) the expiration of the time period specified in the abandoned
property laws of the relevant State.
Section III.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.
ARTICLE IV
The Senior Deferrable Notes
Section IV.1. Interest Payments; Rights to Interest Payments Preserved.
An interest payment on any Senior Deferrable Note which is paid on any
Payment Date shall, subject to receipt thereof by the Purchase Contract Agent
from the Collateral Agent as provided by the terms of the Pledge Agreement, be
paid to the Person in whose name the PEPS Units Certificate (or one or more
Predecessor PEPS Units Certificates) of which such Senior Deferrable Note is a
part is registered at the close of business on the Record Date for such Payment
Date.
Each PEPS Units Certificate evidencing the Senior Deferrable Note delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other PEPS Units Certificate shall carry the right to accrued and
unpaid and deferred interest and the right to accrue interest, which rights were
carried by the Senior Deferrable Note underlying such other PEPS Units
Certificate.
In the case of any PEPS Units with respect to which Cash Settlement of the
underlying Purchase Contract is effected prior to or on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to prior
notice, or with respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, or with respect to which a
Collateral Substitution is effected, in each case on a date that is after any
Record Date and prior to or on the next succeeding Payment Date, the interest
payment on the Senior Deferrable Note underlying such PEPS Unit otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such interest payment shall, subject to receipt thereof by the
Purchase Contract Agent, be payable to the Person in whose name the PEPS Units
29
Certificate (or one or more Predecessor PEPS Units Certificates) was registered
at the close of business on the Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any PEPS Unit
with respect to which Cash Settlement or Early Settlement of the underlying
Purchase Contract is effected prior to or on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution has been
effected, interest payments on the related Senior Deferrable Notes that would
otherwise be payable after the Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of such PEPS Units;
provided, however, that to the extent that such Holder continues to hold the
separated Senior Deferrable Note that formerly comprised a part of such Holder's
PEPS Unit, such Holder shall be entitled to receive the interest payments on
such separated Senior Deferrable Note, as provided in the Senior Deferrable
Notes Board Resolutions.
Section IV.2. Deferral of Interest Payments.
So long as no event of default has occurred and is occurring under the
Indenture, the Company shall have the right at any time until the Stated
Maturity of the Senior Deferrable Notes to defer the payment of interest on the
Senior Deferrable Notes for a period of time not extending beyond the Stated
Maturity (each such period of deferral, an "Extension Period"). If the Company
so elects to defer interest payments on the Senior Deferrable Notes, the Company
shall pay at the end of the Extension Period all interest then accrued and
unpaid, together with accrued interest at the Coupon Rate or the Reset Rate, as
applicable, compounded on each succeeding Payment Date.
Section IV.3. Interest Rate Reset; Notice Relating to Cash Settlement.
The Coupon Rate on the Senior Deferrable Notes on and after the Purchase
Contract Settlement Date shall be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date equal to the Reset Rate (such
Reset Rate to be in effect on and after the Purchase Contract Settlement Date).
The Reset Rate shall be equal to or greater than the Coupon Rate.
Not later than 15 calendar days nor more than 30 calendar days prior to the
third Business Day immediately preceding the Purchase Contract Settlement Date,
the Company shall request DTC (or any successor Clearing Agency), to notify the
Beneficial Owners or Clearing Agency Participants holding PEPS Units of the
procedures to be followed by Holders of PEPS Units who intend to effect a Cash
Settlement prior to or on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date.
Section IV.4. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Senior Deferrable Notes, but only to the extent instructed in
writing by the Holders as described below. Upon receipt of notice of any
meeting at which holders of Senior Deferrable Notes are entitled to vote
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or upon any solicitation of consents, waivers or proxies of holders of Senior
Deferrable Notes, the Purchase Contract Agent shall, as soon as practicable
thereafter, mail to the Holders of PEPS Units a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Holder on the record date set by the Purchase
Contract Agent therefor (which, to the extent possible, shall be the same
date as the record date for determining the holders of Senior Deferrable
Notes, as the case may be, entitled to vote) shall be entitled to instruct
the Purchase Contract Agent as to the exercise of the voting rights
pertaining to such Senior Deferrable Notes underlying their PEPS Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Holders of PEPS Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Senior Deferrable Notes, as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a PEPS Unit, the Purchase Contract Agent shall
abstain from voting the Senior Deferrable Notes underlying such PEPS Unit. The
Company hereby agrees, if applicable, to solicit Holders of PEPS Units to timely
instruct the Purchase Contract Agent in order to enable the Purchase Contract
Agent to vote such Senior Deferrable Notes.
ARTICLE V
The Purchase Contracts
Section V.1. Purchase of Shares of Georgia-Pacific Group Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred in
accordance with Section 5.9 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated Amount (the "Purchase Price"), a number of shares
of Georgia-Pacific Group Stock equal to the Settlement Rate unless, prior to or
on the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) equals or
exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
Pacific Group Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $. (the "Reference Price"), the number
of shares of Georgia-Pacific Group Stock having a value, based on the
Applicable Market Value, equal to the Stated Amount; and
31
(3) if the Applicable Market Value is less than or equal to the
Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
As provided in Section 5.11, no fractional shares of Georgia-Pacific Group
Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means:
(1) the closing sale price (or, if no closing price is reported, the
last reported sale price) per share on the New York Stock Exchange, Inc.
(the "NYSE") on such date;
(2) if Georgia-Pacific Group Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which Georgia-Pacific Group Stock is so listed;
(3) if Georgia-Pacific Group Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by The Nasdaq Stock Market, Inc.;
(4) if Georgia-Pacific Group Stock is not so reported, the last quoted
bid price for Georgia-Pacific Group Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Georgia-Pacific Group Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.
Each Holder of a PEPS Unit or a Treasury PEPS Unit, by its acceptance
thereof:
32
(1) irrevocably authorizes the Purchase Contract Agent to enter into
and perform the related Purchase Contract on its behalf as its attorney-in-
fact (including the execution of Certificates on behalf of such Holder);
(2) agrees to be bound by the terms and provisions thereof;
(3) covenants and agrees to perform its obligations under such
Purchase Contracts;
(4) consents to the provisions hereof;
(5) irrevocably authorizes the Purchase Contract Agent to enter into
and perform this Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact; and
(6) consents to, and agrees to be bound by, the Pledge of the Senior
Deferrable Notes or the Treasury Securities pursuant to the Pledge
Agreement,
provided that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations. Each Holder of a PEPS Unit or a Treasury PEPS Unit, by
its acceptance thereof, further covenants and agrees, that to the extent and in
the manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Senior Deferrable Notes or the
proceeds from the Treasury Securities at maturity on the Purchase Contract
Settlement Date, as the case may be, shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee)
by the terms of this Agreement, the Purchase Contracts underlying such
Certificate and the Pledge Agreement and the transferor shall be released from
the obligations under this Agreement, the Purchase Contracts underlying the
Certificate so transferred and the Pledge Agreement. The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
Section V.2. Purchase Contract Payments.
The Company shall pay, on each Payment Date, the Purchase Contract Payments
payable in respect of each Purchase Contract to the Person in whose name a
Certificate (or one or more Predecessor Certificates) is registered at the close
of business on the Record Date next preceding such Payment Date. The Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such Person's
address
33
as it appears on the PEPS Units Register or Treasury PEPS Units
Register. If any date on which Purchase Contract Payments are to be made is not
a Business Day, then payment of the Purchase Contract Payments payable on such
date will be made on the next day that is a Business Day (and without any
interest in respect of any such delay), except that, if such Business Day is in
the next calendar year, such payment will be made on the preceding Business Day.
Upon the occurrence of a Termination Event, the Company's obligation to pay
Purchase Contract Payments (including any accrued or deferred Purchase Contract
Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the reestablishment of PEPS Units) any other
Certificate shall carry the right to accrued and unpaid or deferred Purchase
Contract Payments and the right to accrue Purchase Contract Payments, which
rights were carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date that is after any Record Date and prior to or on the next
succeeding Payment Date, Purchase Contract Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Purchase Contract Payments shall be paid to the Person in
whose name the Certificate evidencing such Security (or one or more Predecessor
Certificates) is registered at the close of business on such Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date, Purchase
Contract Payments that would otherwise be payable after the Early Settlement
Date with respect to such Purchase Contract shall not be payable.
Section V.3. Deferral of Purchase Contract Payments.
The Company has the right to defer payment of all or part of the Purchase
Contract Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date. If the Company so elects to defer Purchase
Contract Payments, the Company shall pay additional Purchase Contract Payments
on such deferred installments of Purchase Contract Payments at a rate equal to
.% per annum, compounding quarterly, until such deferred installments are paid.
If a Holder effects an Early Settlement or if a Termination Event shall occur,
such Holder will have no right to receive any accrued deferred Purchase Contract
Payments.
Section V.4. Payment of Purchase Price.
(a) (i) Unless a Holder of a PEPS Unit effects an Early Settlement of the
underlying Purchase Contract in the manner described in Section 5.9, each such
Holder who intends to pay in cash to satisfy such Holder's obligations under the
Purchase Contract shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of his intention to pay in cash
("Cash Settlement") the Purchase Price for the shares of
34
Georgia-Pacific Group Stock to be purchased pursuant to the related Purchase
Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on
the seventh Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business
Day, the Purchase Contract Agent shall notify the Collateral Agent and the
Senior Trustee of the receipt of such notices from Holders intending to make a
Cash Settlement.
(ii) A Holder of a PEPS Unit who has so notified the Purchase Contract
Agent of his intention to effect a Cash Settlement in accordance with paragraph
(a)(i) above shall pay the Purchase Price to the Securities Intermediary for
deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check or
wire transfer, in each case in immediately available funds payable to or upon
the order of the Securities Intermediary. Any cash received by the Collateral
Agent shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Securities
Intermediary in respect of the investment earnings from the investment in such
Permitted Investments, shall be distributed to the Purchase Contract Agent when
received for payment to the Holder of the related PEPS Unit.
(iii) If a Holder of a PEPS Unit fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, or does notify the Purchase Contract Agent as provided
in paragraph (a)(i) above of his intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (a)(ii) above, such
Holder shall be deemed to have consented to the disposition of the Pledged
Senior Deferrable Notes pursuant to the Remarketing as described in paragraph
(b) below.
(iv) Promptly after 11:00 a.m. (New York City time) on the fifth
Business Day preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent, based on notices received by the Purchase Contract Agent
pursuant to Section 5.4(a) hereof and notice from the Securities Intermediary
regarding cash received by it prior to such time, shall notify the Collateral
Agent and the Senior Trustee of the aggregate number of Senior Deferrable Notes
to be tendered for purchase in the Remarketing in a notice substantially in the
form of Exhibit F hereto.
(b) In order to dispose of the Senior Deferrable Notes, PEPS Units Holders
who have not notified the Purchase Contract Agent of their intention to effect a
Cash Settlement as provided in paragraph (a)(i) above, or who have so notified
the Purchase Contract Agent but failed to make such payment as required by
paragraph (a)(ii) above, the Company shall engage Xxxxxx Xxxxxxx & Co.
Incorporated (the "Remarketing Agent") pursuant to the Remarketing Agreement to
sell such Senior Deferrable Notes. In order to facilitate the Remarketing, the
Purchase Contract Agent, based on the notices specified in Section 5.4(a)(iv),
shall notify the Remarketing Agent, promptly after 11:00 a.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of the aggregate number of
35
Senior Deferrable Notes that are part of PEPS Units to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, shall cause such Senior Deferrable Notes to be presented to the
Remarketing Agent for Remarketing.
Upon receipt of such notice from the Purchase Contract Agent and such
Senior Deferrable Notes, the Remarketing Agent shall, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use reasonable
efforts to remarket such Senior Deferrable Notes on such date at a price equal
to at least 100.25% of the Stated Amount ($50.1250), as provided in the
Remarketing Agreement. The proceeds from the Remarketing shall automatically be
applied by the Collateral Agent, in accordance with the Pledge Agreement, to
satisfy in full such PEPS Units Holders' obligations to pay the Purchase Price
for the shares of Georgia-Pacific Group Stock under the related Purchase
Contracts on the Purchase Contract Settlement Date. In addition, $.1250 per
Senior Deferrable Note of the proceeds shall automatically be remitted to the
Remarketing Agent for services rendered in connection with the Remarketing (the
"Remarketing Fee"). Any proceeds remaining after satisfaction of the Purchase
Contract and payment of the Remarketing Fee shall be payable to the Holder of
such PEPS Unit.
If, in spite of using their reasonable efforts, the Remarketing Agent
cannot remarket the related Senior Deferrable Notes of such Holders of PEPS
Units at a price equal to at least 100.25% of the Stated Amount ($50.1250), the
Remarketing shall be deemed to have failed (a "Failed Remarketing") and in
accordance with the terms of the Pledge Agreement, the Collateral Agent, for the
benefit of the Company, shall exercise its rights as a secured party with
respect to such Senior Deferrable Notes, including those actions specified in
paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral
Agent exercises such rights for the benefit of the Company with respect to such
Senior Deferrable Notes, any accrued and unpaid and deferred interest on such
Senior Deferrable Notes shall become payable by the Company to the Purchase
Contract Agent for payment to the Beneficial Owner of the PEPS Units to which
such Senior Deferrable Notes relate. The Company shall cause a notice of such
Failed Remarketing to be published on the second Business Day immediately
preceding the Purchase Contract Settlement Date in a daily newspaper in the
English language of general circulation in New York City, which is expected to
be The Wall Street Journal, and on Bloomberg News.
(c) With respect to any Senior Deferrable Notes which are subject to a
Failed Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (g) below, may, among other things, (i) retain the
Senior Deferrable Notes in full satisfaction of the Holders' obligations under
the Purchase Contracts or (ii) sell the Senior Deferrable Notes in one or more
public or private sales.
(d) (i) Unless a Holder of a Treasury PEPS Units effects an Early
Settlement of the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section 5.9, each
such Holder who intends to pay in cash shall notify the Purchase Contract Agent
by use of a notice in substantially the form of Exhibit E hereto of his
intention to pay in cash the Purchase Price for the shares of Georgia-Pacific
Group
36
Stock to be purchased pursuant to the related Purchase Contract. Such
notice shall be given prior to 5:00 p.m. (New York City time) on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date. Prior
to 11:00 a.m. (New York City time) on the next succeeding Business Day, the
Purchase Contract Agent shall notify the Collateral Agent of the receipt of such
notices from such Holders intending to make a Cash Settlement.
(ii) A Holder of a Treasury PEPS Unit who has so notified the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance with
paragraph (d)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer, in each case in immediately available funds payable to
or upon the order of the Securities Intermediary. Any cash received by the
Collateral Agent shall be invested promptly by the Securities Intermediary in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments shall be distributed to the Purchase
Contract Agent when received for payment to the Holder of the related Treasury
PEPS Unit.
(iii) If a Holder of a Treasury PEPS Unit fails to notify the
Purchase Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (d)(i) above, or does notify the Purchase Contract Agent as
provided in paragraph (d)(i) above of his intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities held by the Securities
Intermediary on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities received by the
Securities Intermediary shall be invested promptly in Permitted Investments.
On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price shall be remitted to the Company as payment thereof without
receiving any instructions from the Holder of the related Treasury PEPS Unit.
In the event the sum of the proceeds from the related Pledged Treasury
Securities and the investment earnings earned from such investments is in excess
of the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall cause the Securities Intermediary to distribute such
excess to the Purchase Contract Agent for the benefit of the Holder of the
related Treasury PEPS Unit when received.
(iv) A Holder of a Treasury PEPS Unit may elect to have the Senior
Deferrable Note, no longer a part of a PEPS Unit, remarketed. A Holder making
such an election must notify the Senior Trustee prior to 11:00 a.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of the aggregate number of Senior Deferrable Notes that are not
part of PEPS Units to be remarketed. Any such notice will be irrevocable and
may not be conditioned upon the level at which the Reset Rate is established in
the Remarketing. Concurrently, the Senior Trustee shall cause such Senior
Deferrable Notes to be presented to the Remarketing Agent for Remarketing.
37
(e) Any distribution to Holders of excess funds and interest described
above shall be payable at the office of the Purchase Contract Agent in New York
City maintained for that purpose or, at the option of the Holder, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Register.
(f) Upon Cash Settlement of any Purchase Contract:
(1) the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Senior Deferrable Note or the Pledged
Treasury Securities, as the case may be, underlying the relevant Security
to be released from the Pledge, free and clear of any security interest of
the Company, and transferred to the Purchase Contract Agent for delivery to
the Holder thereof or its designee as soon as practicable; and
(2) subject to the receipt thereof, the Purchase Contract Agent shall,
by book-entry transfer or other appropriate procedures, in accordance with
written instructions provided by the Holder thereof, transfer such Senior
Deferrable Note or such Treasury Securities, as the case may be (or, if no
such instructions are given to the Purchase Contract Agent by the Holder,
the Purchase Contract Agent shall hold such Senior Deferrable Note or such
Treasury Securities, as the case may be, and any interest payment thereon,
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder until the expiration of the time period specified in
the abandoned property laws of the relevant State).
(g) The obligations of the Holders to pay the Purchase Price are non-
recourse obligations and, except to the extent satisfied by Early Settlement or
Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.
(h) The Company shall not be obligated to issue any shares of Georgia-
Pacific Group Stock in respect of a Purchase Contract or deliver any
certificates thereof to the Holder of the related PEPS Unit or Treasury PEPS
Unit unless the Company shall have received payment in full for the aggregate
purchase price for the Georgia-Pacific Group Stock to be purchased thereunder in
the manner herein set forth.
Section V.5. Issuance of Shares of Georgia-Pacific Group Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.6(b), the Company shall issue and deposit with the Purchase
Contract Agent, for the benefit of the Holders of the Outstanding Securities,
one or more certificates representing the shares of Georgia-Pacific Group Stock
registered in the name of the Purchase Contract Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Georgia-Pacific Group
Stock, together with any dividends or distributions for which a record date and
payment date for
38
such dividend or distribution has occurred after the Purchase
Contract Settlement Date, being hereinafter referred to as the "Purchase
Contract Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive forthwith in exchange therefor a
certificate representing that number of whole shares of Georgia-Pacific Group
Stock which such Holder is entitled to receive pursuant to the provisions of
this Article Five (after taking into account all Securities then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.11 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent. If any shares of Georgia-Pacific Group Stock issued in respect
of a Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
Section V.6. Adjustment of Settlement Rate.
(a Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1 In case the Company shall pay or make a dividend or other
distribution on Georgia-Pacific Group Stock in Georgia-Pacific Group Stock,
the Settlement Rate in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Georgia-
Pacific Group Stock outstanding at the close of business on the date
fixed for such determination; and
(ii) the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Georgia-Pacific
Group Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Georgia-
Pacific
39
Group Stock. The Company will not pay any dividend or make any distribution
on shares of Georgia-Pacific Group Stock held in the treasury of the
Company.
(2 In case the Company shall issue rights, warrants or options to all
holders of its Georgia-Pacific Group Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities) entitling them, for a period
expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, warrants or options, to
subscribe for or purchase shares of Georgia-Pacific Group Stock at a price
per share less than the Current Market Price per share of Georgia-Pacific
Group Stock on the date fixed for the determination of shareholders
entitled to receive such rights, warrants or options (other than pursuant
to a dividend reinvestment plan), the Settlement Rate in effect at the
opening of business on the day following the date fixed for such
determination shall be increased by dividing such Settlement Rate by a
fraction of which:
(i) the numerator shall be the number of shares of Georgia-
Pacific Group Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Georgia-
Pacific Group Stock which the aggregate of the offering price of the
total number of shares of Georgia-Pacific Group Stock so offered for
subscription or purchase would purchase at such Current Market Price;
and
(ii) the denominator shall be the number of shares of Georgia-
Pacific Group Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Georgia-
Pacific Group Stock so offered for subscription or purchase,
such increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Georgia-Pacific
Group Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Georgia-
Pacific Group Stock. The Company shall not issue any such rights, warrants
or options in respect of shares of Georgia-Pacific Group Stock held in the
treasury of the Company.
(3 In case outstanding shares of Georgia-Pacific Group Stock shall be
subdivided or split into a greater number of shares of Georgia-Pacific
Group Stock, the Settlement Rate in effect at the opening of business on
the day following the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case
outstanding shares of Georgia-Pacific Group Stock shall each be combined
into a smaller number of shares of Georgia-Pacific Group Stock, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of
40
business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4 In case the Company shall, by dividend or otherwise, distribute to
all holders of its Georgia-Pacific Group Stock evidences of its
indebtedness or assets (including securities, but excluding any rights,
warrants or options referred to in paragraph (2) of this Section 5.6(a),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section 5.6(a)), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to
the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution by a fraction of which:
(i) the numerator shall be the Current Market Price per share of
Georgia-Pacific Group Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Georgia-Pacific
Group Stock; and
(ii) the denominator shall be such Current Market Price per share
of Georgia-Pacific Group Stock,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section 5.6(a)
shall not be applicable.
(5 In case the Company shall, by dividend or otherwise, distribute to
all holders of its Georgia-Pacific Group Stock cash (excluding:
(x) any quarterly cash dividend on Georgia-Pacific Group Stock to the
extent that the aggregate cash dividend per share of Georgia-Pacific Group
Stock in any fiscal quarter does not exceed the greater of (A) the amount
per share of Georgia-Pacific Group Stock of the next preceding quarterly
cash dividend on Georgia-Pacific Group Stock to the extent that such
preceding quarterly dividend did not require an adjustment of the
Settlement Rate pursuant to this Section 5.6(a)(5) (as adjusted to reflect
subdivisions or combinations of Georgia-Pacific Group Stock), and (B) 3.75%
of the arithmetic average of the Closing Prices of Georgia-Pacific Group
Stock during the ten consecutive Trading Days immediately prior to the date
of declaration of such dividend, and
(y) any dividend or distribution in connection with the liquidation,
dissolution or termination of the Company, whether voluntary or
involuntary),
41
then, in such case, the Settlement Rate shall be increased so that the same
shall equal the rate determined by multiplying the Settlement Rate in
effect immediately prior to the close of business on such record date by a
fraction of which:
(i) the numerator shall be the Current Market Price of Georgia-
Pacific Group Stock; and
(ii) the denominator shall be the Current Market Price of
Georgia-Pacific Group Stock on the record date less the amount of cash
so distributed (and not excluded as provided above) applicable to one
share of Georgia-Pacific Group Stock,
such increase to be effective immediately prior to the opening of business
on the day following the record date; provided, however, that in the event
the portion of cash so distributed applicable to one share of Georgia-
Pacific Group Stock is equal to or greater than the Current Market Price
per share of Georgia-Pacific Group Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder
of a Security shall have the right to receive upon settlement of the
Securities the amount of cash such Holder would have received had such
Holder settled each Security on the record date. In the event that such
dividend or distribution is not so paid or made, the Settlement Rate shall
again be adjusted to be the Settlement Rate which would then be in effect
if such dividend or distribution had not been declared. If any adjustment
is required to be made as set forth in this Section 5.6(a)(5) as a result
of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant to this Section
5.6(a)(5), notwithstanding the provisions of Section 5.6(a)(10). If an
adjustment is required to be made as set forth in this Section 5.6(a)(5)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(6 In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Georgia-Pacific Group
Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to shareholders (based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of (I) an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of
such tender or exchange offer, of consideration payable in respect of any
other tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of Georgia-Pacific Group Stock expiring
within the 12 months preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant to this paragraph (6)
has been made, and (II) the aggregate amount of any distributions to all
holders of Georgia-Pacific Group Stock made
42
exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (6) has been made, exceeds 15% of the product of the Current
Market Price per share of Georgia-Pacific Group Stock as of the last time
(the "Expiration Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times the number of shares
of Georgia-Pacific Group Stock outstanding (including any tendered shares)
on the Expiration Time, then, and in each such case, immediately prior to
the opening of business on the day after the date of the Expiration Time,
the Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close
of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the product of
(I) the Current Market Price per share of Georgia-Pacific Group Stock
on the date of the Expiration Time and (II) the number of shares of
Georgia-Pacific Group Stock outstanding (including any tendered
shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the transactions
described in clauses (I) and (II) above (assuming in the case of
clause (I) the acceptance, up to any maximum specified in the terms of
the tender or exchange offer, of Purchased Shares); and
(ii) the denominator of which shall be equal to the product of
(A) the Current Market Price per share of Georgia-Pacific Group Stock
as of the Expiration Time and (B) the number of shares of Georgia-
Pacific Group Stock outstanding (including any tendered shares) as of
the Expiration Time less the number of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(7 The reclassification of Georgia-Pacific Group Stock into securities
including securities other than Georgia-Pacific Group Stock (other than any
reclassification upon a Reorganization Event to which Section 5.6(b)
applies) shall be deemed to involve:
(i) a distribution of such securities other than Georgia-Pacific
Group Stock to all holders of Georgia-Pacific Group Stock (and the
effective date of such reclassification shall be deemed to be "the
date fixed for the determination of shareholders entitled to receive
such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section); and
(ii) a subdivision, split or combination, as the case may be, of
the number of shares of Georgia-Pacific Group Stock outstanding
immediately prior to such reclassification into the number of shares
of Georgia-Pacific Group Stock outstanding immediately thereafter (and
the effective date of such reclassification
43
shall be deemed to be "the day upon which such subdivision or split
becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such
subdivision, split or combination becomes effective" within the
meaning of paragraph (3) of this Section).
(8 The "Current Market Price" per share of Georgia-Pacific Group Stock
on any day means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than
30 Trading Days before, and ending not later than, the earlier of the day
in question and the day before the "ex date" with respect to the issuance
or distribution requiring such computation. For purposes of this
paragraph, the term "ex date", when used with respect to any issuance or
distribution, shall mean the first date on which Georgia-Pacific Group
Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9 All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Georgia-Pacific Group Stock (or if there
is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
thereof; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b) or
(c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the
numerator shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 5.6(a) and the denominator shall be the Settlement Rate immediately
prior to such adjustment; provided, however, that if such adjustment to the
Settlement Rate is required to be made pursuant to the occurrence of any of
the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10)
of this Section 5.6(a) during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary
adjustments shall be made to the Settlement Rate.
(10 The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable
in order to avoid or diminish any income tax to any holders of shares of
Georgia-Pacific Group Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax purposes or for any other
reason.
(b Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of:
44
(i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the shares of Georgia-Pacific Group
Stock outstanding immediately prior to the merger or consolidation are not
exchanged for cash, securities or other property of the Company or another
corporation);
(ii) any sale, transfer, lease or conveyance to another Person of the
property of the Company as an entirety or substantially as an entirety;
(iii) any statutory share exchange of the Company with another Person
(other than in connection with a merger or acquisition);
(iv) any liquidation, dissolution or termination of the Company other
than as a result of or after the occurrence of a Termination Event;
(v) any conversion of all of the shares of Georgia-Pacific Group Stock
into shares of Timber Stock pursuant to the Company's Restated Articles of
Incorporation (any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Georgia-Pacific Group Stock issuable on
account of each Purchase Contract if the Purchase Contract Settlement Date had
occurred immediately prior to such Reorganization Event, assuming such Holder of
Georgia-Pacific Group Stock is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Georgia-Pacific
Group Stock held by Affiliates of the Company and non-affiliates and such Holder
failed to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Georgia-Pacific Group Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised ("non-electing
share"), then for the purpose of this Section the kind and amount of securities,
cash and other property receivable upon such Reorganization Event by each non-
electing share shall be deemed to be the kind and amount so receivable per share
by a plurality of the non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a
45
liquidation, dissolution or termination of the Company, the Company or a
liquidating trust created in connection therewith, shall execute and deliver to
the Purchase Contract Agent an agreement supplemental hereto providing that the
Holders of each Outstanding Security shall have the rights provided by this
Section 5.6(b). Such supplemental agreement shall provide for adjustments which,
for events subsequent to the effective date of such supplemental agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section. The above provisions of this Section shall similarly apply
to successive Reorganization Events.
(c All calculations and determinations pursuant to this Section 5.6 shall
be made by the Company or its agent and the Purchase Contract Agent shall have
no responsibility with respect thereto.
Section V.7. Notice of Adjustments and Certain Other Events.
(a Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(1) forthwith compute the adjusted Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Purchase Contract Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(2) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or
if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
(b The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Georgia-Pacific Group Stock, or of any securities or
property, which may at the time be issued or delivered with respect to any
Purchase Contract; and the Purchase Contract Agent makes no representation with
respect thereto. The Purchase Contract Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Georgia-
Pacific Group Stock pursuant to a Purchase Contract or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.
Section V.8. Termination Event; Notice.
46
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Purchase Contract
Payments (including any deferred or accrued and unpaid Purchase Contract
Payments), if the Company shall have such obligation, and the rights and
obligations of Holders to purchase Georgia-Pacific Group Stock, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Purchase Contract Agent or the Company, if, prior to
or on the Purchase Contract Settlement Date, a Termination Event shall have
occurred.
Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Senior Deferrable Notes forming
part of such Securities in the case of PEPS Units, or Treasury Securities in the
case of Treasury PEPS Units, in accordance with the provisions of Section 5.4 of
the Pledge Agreement. Upon the occurrence of a Termination Event, the Company
shall promptly but in no event later than two Business Days thereafter give
written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the Register.
Section V.9. Early Settlement.
(a Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") prior to or on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date, as
provided herein. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Securities shall deliver such Certificates to the Purchase Contract Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and accompanied by payment (payable to the Company in immediately available
funds) in an amount (the "Early Settlement Amount") equal to:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment Date,
an amount equal to the sum of (x) the Purchase Contract Payments payable on
such Payment Date with respect to such Purchase Contracts plus (y) in the
case of a PEPS Units Certificate, the interest on the related Senior
Deferrable Notes payable on such Payment Date.
Except as provided in the immediately preceding sentence and subject to the
second to last paragraph of Section 5.2, no payment shall be made upon Early
Settlement of any Purchase Contract on account of any Purchase Contract Payments
accrued on such Purchase Contract or on account of any dividends on the Georgia-
Pacific Group Stock issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase Contracts
47
underlying any Securities prior to or at 5:00 p.m. (New York City time) on a
Business Day, such day shall be the "Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m. (New
York City time) on a Business Day or on a day that is not a Business Day, the
"Early Settlement Date" with respect to such Securities shall be the next
succeeding Business Day.
(b Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to
receive, . shares of Georgia-Pacific Group Stock on account of each Purchase
Contract as to which Early Settlement is effected (the "Early Settlement Rate").
The Early Settlement Rate shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted.
(c No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(1) the shares of Georgia-Pacific Group Stock issuable upon Early
Settlement of Purchase Contracts to be issued and delivered, together with
payment in lieu of any fraction of a share, as provided in Section 5.11;
and
(2) the related Senior Deferrable Notes, in the case of PEPS Units, or
the related Treasury Securities, in the case of Treasury PEPS Units, to be
released from the Pledge by the Collateral Agent and transferred, in each
case, to the Purchase Contract Agent for delivery to the Holder thereof or
its designee.
(d Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Georgia-Pacific Group Stock from the Company and the Senior
Deferrable Notes or Treasury Securities, as the case may be, from the Securities
Intermediary, as applicable, the Purchase Contract Agent shall, in accordance
with the instructions provided by the Holder thereof on the applicable form of
Election to Settle Early on the reverse of the Certificate evidencing the
related Securities:
(1) transfer to the Holder the Senior Deferrable Notes or Treasury
Securities, as the case may be, forming a part of such Securities; and
(2) deliver to the Holder a certificate or certificates for the full
number of shares of Georgia-Pacific Group Stock issuable upon such Early
Settlement, together with payment in lieu of any fraction of a share, as
provided in Section 5.11.
(e In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.
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(f) A Holder of a Security who effects Early Settlement may elect to have
the Senior Deferrable Note, no longer a part of a PEPS Unit or Treasury PEPS
Unit. as the case my be, remarketed. A Holder making such an election must
notify the Senior Trustee prior to 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Senior Deferrable Notes that are not part of PEPS Units or
Treasury PEPS Units, as the case may be, to be remarketed. Any such notice will
be irrevocable and may not be conditioned upon the level at which the Reset Rate
is established in the Remarketing. Concurrently, the Senior Trustee shall cause
such Senior Deferrable Notes to be presented to the Remarketing Agent for
Remarketing.
Section V.10. Acceleration of Purchase Contract Settlement Date.
(a) (i) In the event the Company sells, transfers, assigns or otherwise
disposes of (whether by merger, consolidation, sale or contribution of assets or
stock or otherwise), in one transaction or a series of related transactions, all
of the properties and assets of the Georgia-Pacific Group, (a "Disposition"), to
one or more Persons (other than:
(1) the Disposition by the Company of all of the Company's properties
and assets in one transaction or a series of related transactions in
connection with the liquidation, dissolution or termination of the Company
and the distribution of assets to shareholders;
(2) on a pro rata basis to the holders of all outstanding shares of
Georgia-Pacific Group Stock;
(3) to any Person controlled by the Company (as determined by the
Board); or
(4) in connection with a Related Business Transaction),
and the Company determines to redeem all of the outstanding shares of Georgia-
Pacific Group Stock in exchange for cash and/or securities (other than Common
Stock) and other property having a Fair Value as of the date of such
consummation in the aggregate equal to the Fair Value of the Net Proceeds of
such Disposition as of the date of such consummation (a "Redemption"), then the
Purchase Contract Settlement Date shall be accelerated to the fifth Business Day
immediately preceding the 85th Trading Day following the consummation of such
Disposition (the "Redemption Date").
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(ii) Not later than the 10th Trading Day following the consummation of
such a Disposition, the Company shall announce publicly by press release:
(1) the estimated Net Proceeds of such Disposition;
(2) the number of shares of Georgia-Pacific Group Stock outstanding;
and
(3) the number of shares of Georgia-Pacific Group Stock into which or
for which outstanding Convertible Securities (including the Purchase
Contracts) are then convertible, exchangeable or exercisable and the
conversion, exchange or exercise price thereof.
(iii) Not earlier than the 26th Trading Day and not later than the
30th Trading Day following the consummation of such a Disposition, the Company
shall announce publicly by press release that it has irrevocably determined to
effect the Redemption.
(iv) Not earlier than the 35th Trading Day and not later than the 45th
Trading Day following the consummation of such a Disposition, the Company shall
cause to be given to the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary, the Remarketing Agent, DTC (or any successor Clearing
Agency) and each Holder of a Purchase Contract a notice setting forth, among
other things required by the Company's Restated Articles of Incorporation:
(1) a statement that the Purchase Contract Settlement Date is being
accelerated to the fifth Business Day prior to the Redemption Date because
all shares of Georgia-Pacific Group Stock outstanding on the Redemption
Date are being redeemed on the Redemption Date;
(2) the time and date by which a Holder must give notice to the
Purchase Contract Agent of his intention to effect a Cash Settlement
pursuant to Section 5.4 of the Purchase Contract Agreement, which shall be
prior to 5:00 p.m. (New York City time) on the seventh Business Day
preceding the accelerated Purchase Contract Settlement Date;
(3) the time and date by which a Holder who has so notified the
Purchase Contract Agent of his intention to effect a Cash Settlement must
pay the Purchase Price to the Securities Intermediary for deposit in the
Collateral Account, which shall be prior to 11:00 a.m. (New York City time)
on the fifth Business Day preceding the accelerated Purchase Contract
Settlement Date;
(4) the time and date by which the Purchase Contract Agent shall
notify the Collateral Agent and the Senior Trustee of the aggregate number
of Senior Deferrable Notes to be tendered for purchase in the Remarketing,
which shall be after 11:00 a.m. (New York City time) on the fifth Business
Day preceding the accelerated Purchase Contract Settlement Date;
50
(5) the time and date by which the Purchase Contract Agent shall
notify the Remarketing Agent of the aggregate number of Senior Deferrable
Notes to be remarketed, which shall be after 11:00 a.m. (New York City
time) on the fifth Business Day preceding the accelerated Purchase Contract
Settlement Date;
(6) the date on which the Remarketing Agent shall use reasonable
efforts to remarket such Senior Deferrable Notes, which shall be the third
Business Day preceding the accelerated Purchase Contract Settlement Date;
(7) the date by which a Holder electing to effect an Early Settlement
must effect such Early Settlement, which shall be the seventh Business Day
preceding the accelerated Purchase Contract Settlement Date; and
(8) the Redemption Date.
(b) (i) In the event that all of the assets and liabilities of the
Georgia-Pacific Group (and no other assets or liabilities of the Company or any
subsidiary thereof) are held directly or indirectly by one or more wholly owned
subsidiaries of the Company (the "Georgia-Pacific Group Subsidiaries"), and the
Company determines to redeem all of the outstanding shares of Georgia-Pacific
Group Stock in exchange for all of the outstanding shares of the common stock
of the Georgia-Pacific Group Subsidiaries equal to the number of shares of the
Georgia-Pacific Group Subsidiaries to be outstanding immediately following such
redemption, then the Purchase Contract Settlement Date shall be accelerated to
the fifth Business Day immediately preceding such redemption date (the "Spin-Off
Date").
(ii) Not earlier than the 30th Trading Day and not later than the 45th
Trading Day prior to the Spin-Off Date, the Company shall cause to be given to
the Purchase Contract Agent, the Collateral Agent, the Securities Intermediary,
the Remarketing Agent, DTC (or any successor Clearing Agency) and each Holder
of a Purchase Contract a notice setting forth, among other things required by
the Company's Restated Articles of Incorporation:
(1) a statement that the Purchase Contract Settlement Date is being
accelerated to the fifth Business Day prior to the Spin-Off Date because
all shares of Georgia-Pacific Group Stock outstanding on the Spin-Off Date
are being redeemed on the Spin-Off Date in exchange for shares of common
stock of the Georgia-Pacific Group Subsidiaries;
(2) the time and date by which a Holder must give notice to the
Purchase Contract Agent of his intention to effect a Cash Settlement
pursuant to Section 5.4 of the Purchase Contract Agreement, which shall be
prior to 5:00 p.m. (New York City time) on the seventh Business Day
preceding the accelerated Purchase Contract Settlement Date;
(3) the time and date by which a Holder who has so notified the
Purchase Contract Agent of his intention to effect a Cash Settlement must
pay the Purchase Price to the Securities Intermediary for deposit in the
Collateral Account, which shall be prior to
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11:00 a.m. (New York City time) on the fifth Business Day preceding the
accelerated Purchase Contract Settlement Date;
(4) the time and date by which the Purchase Contract Agent shall
notify the Collateral Agent and the Senior Trustee of the aggregate number
of Senior Deferrable Notes to be tendered for purchase in the Remarketing,
which shall be after 11:00 a.m. (New York City time) on the fifth Business
Day preceding the accelerated Purchase Contract Settlement Date;
(5) the time and date by which the Purchase Contract Agent shall
notify the Remarketing Agent of the aggregate number of Senior Deferrable
Notes to be remarketed, which shall be after 11:00 a.m. (New York City
time) on the fifth Business Day preceding the accelerated Purchase Contract
Settlement Date;
(6) the date on which the Remarketing Agent shall use reasonable
efforts to remarket such Senior Deferrable Notes, which shall be the third
Business Day preceding the accelerated Purchase Contract Settlement Date;
(7) the date by which a Holder electing to effect an Early Settlement
must effect such Early Settlement, which shall be the seventh Business Day
preceding the accelerated Purchase Contract Settlement Date; and
(8) the Spin-Off Date.
Section V.11. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Georgia-
Pacific Group Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Georgia-
Pacific Group Stock which shall be delivered upon settlement shall be computed
on the basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered. Instead of any fractional share of Georgia-Pacific
Group Stock which would otherwise be deliverable upon settlement of any Purchase
Contracts on the Purchase Contract Settlement Date or upon Early Settlement, the
Company, through the Purchase Contract Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company shall provide
the Purchase Contract Agent from time to time with sufficient funds to permit
the Purchase Contract Agent to make all cash payments required by this Section
5.11 in a timely manner.
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Section V.12. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Georgia-Pacific Group Stock
pursuant to the Purchase Contracts; provided, however, that the Company shall
not be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Georgia-Pacific Group Stock in a name other than that of
the registered Holder of a Certificate surrendered in respect of the Securities
evidenced thereby, other than in the name of the Purchase Contract Agent, as
custodian for such Holder, and the Company shall not be required to issue or
deliver such share certificates or Certificates unless or until the Person or
Persons requesting the transfer or issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
ARTICLE VI
Remedies
Section VI.1. Unconditional Right of Holders to Receive Purchase Contract
Payments and to Purchase Shares of Georgia-Pacific Group Stock.
Each Holder of a PEPS Unit or Treasury PEPS Unit shall have the right,
which is absolute and unconditional, (1) subject to the payment by such Holder
of Purchase Contract Payments pursuant to Section 5.9(a), to receive each
Purchase Contract Payment with respect to the Purchase Contract constituting a
part of such Security on the respective Payment Date for such Security,
provided, however, that a Holder will have no right to receive any accrued
deferred Purchase Contract Payments if he effects an Early Settlement or if a
Termination Event shall occur and (2) to purchase shares of Georgia-Pacific
Group Stock pursuant to such Purchase Contract and, in each such case, to
institute suit for the enforcement of any such Purchase Contract Payment and
right to purchase shares of Georgia-Pacific Group Stock, and such rights shall
not be impaired without the consent of such Holder.
Section VI.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
Section VI.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy
53
herein conferred upon or reserved to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section VI.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders
may be exercised from time to time, and as often as may be deemed expedient, by
such Holders.
Section VI.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a PEPS Unit or a
Treasury PEPS Unit, by its acceptance of such PEPS Unit or Treasury PEPS Unit
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Purchase Contract Agent for any action taken, suffered or
omitted by it as Purchase Contract Agent, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided
that the provisions of this Section shall not apply to any suit instituted by
the Company, to any suit instituted by the Purchase Contract Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of distributions on any Senior Deferrable Notes or Purchase
Contract Payments on any Purchase Contract on or after the respective Payment
Date therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase shares of Georgia-Pacific Group Stock under the
Purchase Contracts constituting part of any Security held by such Holder.
Section VI.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE VII
The Purchase Contract Agent
Section VII.1. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Securities, such duties
and only such duties as are specifically set forth in this Agreement and
the Pledge Agreement, and no implied covenants or obligations shall be read
into this Agreement or the Pledge Agreement against the Purchase Contract
Agent; and
(2) in the absence of bad faith or negligence on its part, may, with
respect to the Securities, conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Purchase Contract Agent and
conforming to the requirements of this Agreement or the Pledge Agreement,
as applicable, but in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Purchase
Contract Agent, the Purchase Contract Agent shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Agreement or the Pledge Agreement, as applicable.
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Purchase Contract Agent was negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.
55
Section VII.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company hereunder
of which a Responsible Officer of the Purchase Contract Agent has actual
knowledge, the Purchase Contract Agent shall transmit by mail to the Company and
the Holders of Securities, as their names and addresses appear in the Register,
notice of such default hereunder, unless such default shall have been cured or
waived.
Section VII.3. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.1:
(1) the Purchase Contract Agent may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any action
hereunder, the Purchase Contract Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent,
in its discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the
Purchase Contract Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
56
(6) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Purchase Contract Agent shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it hereunder.
Section VII.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
Section VII.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Purchase Contract
Agent and its Affiliates, in their individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if it
were not Registrar or such other agent, or the Purchase Contract Agent.
Section VII.6. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.
Section VII.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;
(2) except as otherwise expressly provided for herein, to reimburse
the Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent
in accordance with any provision of this Agreement and the Pledge Agreement
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
57
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section VII.8. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be an Purchase Contract Agent hereunder which
shall be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section VII.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to the
Purchase Contract Agent and the Company.
(d) If at any time:
58
(1) the Purchase Contract Agent fails to comply with Section 310(b) of
the TIA, as if the Purchase Contract Agent were an indenture trustee under
an indenture qualified under the TIA, after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for
at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.8 and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public officer
shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase Contract
Agent to give, notice of each resignation and each removal of the Purchase
Contract Agent and each appointment of a successor Purchase Contract Agent by
mailing written notice of such event by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the applicable Register.
Each notice shall include the name of the successor Purchase Contract Agent and
the address of its Corporate Trust Office.
Section VII.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase Contract
Agent, every such successor Purchase Contract Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Purchase Contract
Agent an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
59
retiring Purchase Contract Agent; but, on the request of the Company or the
successor Purchase Contract Agent, such retiring Purchase Contract Agent shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and deliver to
such successor Purchase Contract Agent all property and money held by such
retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Purchase Contract Agent all such rights, powers
and agencies referred to in paragraph (a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
Section VII.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, with the execution
or filing of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been authenticated and executed on
behalf of the Holders, but not delivered, by the Purchase Contract Agent then in
office, any successor by merger, conversion or consolidation to such Purchase
Contract Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Purchase Contract Agent had itself authenticated and executed such
Securities.
Section VII.12. Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Purchase Contract Agent, and furnish to the Purchase Contract
Agent reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable
60
promptness after a tender to the Purchase Contract Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of such mailing.
Section VII.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement, the
Purchase Contract Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and attorney-
in-fact for the Holders, and that the Purchase Contract Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof. Anything contained in
this Agreement to the contrary notwithstanding, in no event shall the Purchase
Contract Agent or its officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Purchase Contract Agent,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Purchase Contract Agent.
Section VII.14. Tax Compliance.
(a) The Company will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the preparation
and timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its designated
agent.
(b) The Purchase Contract Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely on any such direction
in accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
61
ARTICLE VIII
Supplemental Agreements
Section VIII.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Purchase Contract
Agent, at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Purchase
Contract Agent, to:
(1) evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and
in the Certificates;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company;
(4) make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, cure any ambiguity, correct
or supplement any provisions herein which may be inconsistent with any
other provisions herein, or make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
Section VIII.2. Supplemental Agreements With Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Purchase Contract Agent, the Company,
when authorized by a Board Resolution, and the Purchase Contract Agent may enter
into an agreement or agreements supplemental hereto for the purpose of modifying
in any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be Pledged
to secure a Holder's obligations under the Purchase Contract, impair the
right of the Holder of any Purchase Contract to receive distributions on
the related Collateral or otherwise
62
adversely affect the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Purchase Contract Payments or change any place where,
or the coin or currency in which, any Purchase Contract Payment is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Georgia-Pacific Group Stock to be
purchased pursuant to any Purchase Contract, increase the price to purchase
shares of Georgia-Pacific Group Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the PEPS Units or the Treasury PEPS Units, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; and provided, further, that the unanimous consent
of the Holders of each outstanding Purchase Contract of such class affected
thereby shall be required to approve any amendment or proposal specified in
clauses (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section VIII.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement. The
Purchase Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
Section VIII.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of
63
this Agreement for all purposes; and every Holder of Certificates theretofore or
thereafter authenticated, executed on behalf of the Holders and delivered
hereunder, shall be bound thereby.
Section VIII.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any supplemental agreement pursuant to this Article may,
and shall if required by the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Purchase Contract Agent and the
Company, to any such supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and delivered by
the Purchase Contract Agent in exchange for Outstanding Certificates.
ARTICLE IX
Merger, Consolidation, Share exchange, Sale or Conveyance
Section IX.1. Covenant Not to Merge, Consolidate, Enter into a Share Exchange,
Sell or Convey Property Except Under Certain Conditions.
The Company covenants that it will not merge, consolidate or enter into a
share exchange with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless:
(1) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly assume all
the obligations of the Company under the Purchase Contracts, this Agreement
and the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Purchase Contract Agent and the Collateral
Agent, executed and delivered to the Purchase Contract Agent and the
Collateral Agent by such corporation; and
(2) the Company or such successor corporation, as the case may be,
shall not, immediately after such merger, consolidation or share exchange,
or such sale, assignment, transfer, lease or conveyance, be in default in
the performance of any covenant or condition hereunder, under any of the
Securities or under the Pledge Agreement.
Section IX.2. Rights and Duties of Successor Corporation.
64
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect as if
it had been named herein as the Company. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
Georgia-Pacific Corporation, any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Purchase Contract Agent; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Purchase
Contract Agent shall authenticate and execute on behalf of the Holders and
deliver any Certificates which previously shall have been signed and delivered
by the officers of the Company to the Purchase Contract Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
Section IX.3. Officers' Certificate and Opinion of Counsel Given to Purchase
Contract Agent'.
The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance, and any such assumption, complies with the provisions of
this Article and that all conditions precedent to the consummation of any such
merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance have been met.
ARTICLE X
Covenants
Section X.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section X.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Georgia-
65
Pacific Group Stock upon settlement of the Purchase Contracts on the Purchase
Contract Settlement Date or Early Settlement and for transfer of Collateral upon
occurrence of a Termination Event, where Certificates may be surrendered for
registration of transfer or exchange, for a Collateral Substitution or
reestablishment of PEPS Units and where notices and demands to or upon the
Company in respect of the Securities and this Agreement may be served. The
Company will give prompt written notice to the Purchase Contract Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Purchase Contract
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City for such purposes. The Company will give prompt
written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.
Section X.3. Company to Reserve Georgia-Pacific Group Stock.
The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Georgia-Pacific Group Stock the full number of shares of
Georgia-Pacific Group Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.
Section X.4. Covenants as to Georgia-Pacific Group Stock.
The Company covenants that all shares of Georgia-Pacific Group Stock which
may be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section X.5. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120 days
after the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company), stating whether or not
to the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
hereof, and if the
66
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section X.6. ERISA.
Each Holder from time to time of the PEPS Units which is a Plan hereby
represents that its acquisition of the PEPS Units and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is entitled
to exemption relief from the prohibited transaction provisions of ERISA and the
Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.
67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GEORGIA-PACIFIC CORPORATION
By: ______________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as
Purchase Contract Agent
By: ______________________________________
Name:
Title:
68
EXHIBIT A
FACE OF PEPS UNITS CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO
TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _______ Cusip No. 000000000
Number of PEPS Units ________
GEORGIA-PACIFIC CORPORATION
PEPS UNITS
This PEPS Units Certificate certifies that Cede & Co. is the registered
Holder of the number of PEPS Units set forth above. Each PEPS Unit consists of
(i) the beneficial ownership by the Holder of one Senior Deferrable Note (the
"Senior Deferrable Note") of Georgia-Pacific Corporation, a Georgia corporation
(the "Company"), having a principal amount of $50, subject to the Pledge of such
Senior Deferrable Note by such Holder pursuant to the Pledge Agreement, and (ii)
the rights and obligations of the Holder under one Purchase Contract with the
Company. All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Senior Deferrable Note constituting
part of each PEPS Unit evidenced hereby has been pledged to the Collateral
Agent, for the benefit of the
Company, to secure the obligations of the Holder under the Purchase Contract
comprising part of such PEPS Unit.
Payments of interest on any Senior Deferrable Note forming part of a PEPS
Unit evidenced hereby, shall, subject to receipt thereof by the Purchase
Contract Agent from the Securities Intermediary, be paid to the Person in whose
name this PEPS Units Certificate (or a Predecessor PEPS Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Interest is payable quarterly in arrears on February 16, May 16, August 16 and
November 16 of each year, commencing November 16, 1999 (each, a "Payment Date").
The Company may, at its option, defer payments of interest.
Each Purchase Contract evidenced hereby obligates the Holder of this PEPS
Units Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date, at a price equal to $50 (the "Stated Amount"), a number of
shares of Georgia-Pacific Group Common Stock, par value $.80 per share
("Georgia-Pacific Group Stock"), equal to the Settlement Rate, unless prior to
or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the PEPS Unit of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Georgia-Pacific Group Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall
be paid on the Purchase Contract Settlement Date by cash or by application of
payment received in respect of the principal amount with respect to each Pledged
Senior Deferrable Note pursuant to the Remarketing pledged to secure the
obligations under such Purchase Contract of the Holder of the PEPS Unit of which
such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a PEPS Unit evidenced hereby, an amount (the "Purchase
Contract Payments") equal to .% per annum of the Stated Amount. Such Purchase
Contract Payments shall be payable to the Person in whose name this PEPS Units
Certificate (or a Predecessor PEPS Units Certificate) is registered at the close
of business on the Record Date for such Payment Date. The Company may, at its
option, defer Purchase Contract Payments.
Interest payments on the Senior Deferrable Notes and Purchase Contract
Payments will be payable at the office of the Purchase Contract Agent in New
York City or, at the option of the Company, by check mailed to the address of
the Person entitled thereto as such address appears on the PEPS Units Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this PEPS Units Certificate shall
not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
GEORGIA-PACIFIC CORPORATION
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts
evidenced hereby)
By: The First National Bank of Chicago,
not individually but solely as
Attorney-in-Fact of such Holder
By: ______________________________________
Name:
Title:
Dated:
A-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the PEPS Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO, as
Purchase Contract Agent
By: ______________________________________
Authorized Officer
Dated:
A-4
(FORM OF REVERSE OF PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1999 (as may be supplemented from time to time,
the "Purchase Contract Agreement"), between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors hereunder,
the "Purchase Contract Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company, and the Holders and of
the terms upon which the PEPS Units Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this PEPS
Units Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Georgia-Pacific Group Stock equal to the Settlement Rate,
unless, prior to or on the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part or an Early Settlement shall have occurred. The "Settlement
Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is equals or
exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
Pacific Group Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $. (the "Reference Price"), the number
of shares of Georgia-Pacific Group Stock per Purchase Contract having a
value, based on the Applicable Market Value, equal to the Stated Amount;
and
(3) if the Applicable Market Amount is less than or equal to the
Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement.
No fractional shares of Georgia-Pacific Group Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.11 of the Purchase
Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
PEPS Unit to purchase at the Purchase Price, and the Company to sell, a number
of shares of Georgia-Pacific Group Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
A-5
The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means:
(1) the closing sale price (or, if no closing price is reported, the
last reported sale price) per share on the New York Stock Exchange, Inc.
(the "NYSE") on such date;
(2) if Georgia-Pacific Group Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which Georgia-Pacific Group Stock is so listed;
(3) if Georgia-Pacific Group Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by The Nasdaq Stock Market, Inc.;
(4) if Georgia-Pacific Group Stock is not so reported, the last quoted
bid price for Georgia-Pacific Group Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Georgia-Pacific Group Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this PEPS Units Certificate may pay the Purchase Price for the shares of
Georgia-Pacific Group Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement or an Early Settlement or a
Remarketing of the related Pledged Senior Deferrable Notes. A Holder of PEPS
Units who does not effect, on or prior to 11:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
an effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Georgia-Pacific Group Stock to be delivered under the
related Purchase Contract from the proceeds of the sale of the related Pledged
Notes held by the Collateral Agent. Such sale will be made by the Remarketing
Agent pursuant to the terms of the Remarketing Agreement on the third Business
Day prior to the Purchase Contract Settlement Date. If, as provided in the
Purchase Contract Agreement, upon the occurrence of a Failed Remarketing, the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Senior Deferrable Notes related to
this PEPS Units certificate, any accrued and
A-6
unpaid or deferred interest payments on such Pledged Senior Deferrable Notes
will become payable by the Company to the holder of this PEPS Units Certificate
in the manner provided for in the Purchase Contract Agreement.
In the event the Company sells, transfers, assigns or otherwise disposes
of all of the properties and assets of the Georgia-Pacific Group and determines
to redeem all of the outstanding shares of Georgia-Pacific Group Stock, or
redeems all of the shares of Georgia-Pacific Group Stock for shares of common
stock of one or more of its wholly owned subsidiaries which own all of the
assets and liabilities attributed to the Georgia-Pacific Group, the Purchase
Contract Settlement Date and Remarketing Date shall be accelerated to five
Business Days immediately preceding the Redemption Date or Spin-Off Date, as the
case may be.
The Company shall not be obligated to issue any shares of Georgia-Pacific
Group Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the aggregate
purchase price for the shares of Georgia-Pacific Group Stock to be purchased
thereunder in the manner herein set forth.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Senior Deferrable Notes. Upon receipt of notice of any meeting at
which holders of Senior Deferrable Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Senior Deferrable
Notes, the Purchase Contract Agent shall, as soon as practicable thereafter,
mail to the PEPS Units Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each PEPS Unit Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Senior
Deferrable Notes entitled to vote) shall be entitled to instruct the
Purchase Contract Agent as to the exercise of the voting rights pertaining
to the Senior Deferrable Notes constituting a part of such Holder's PEPS
Unit; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the PEPS Unit Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum number of Senior Deferrable Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the
Senior Deferrable Notes evidenced by such PEPS Unit.
The PEPS Certificates are issuable only in registered form and only in
denominations of a single PEPS Unit and any integral multiple thereof. The
transfer of any PEPS Units Certificate
A-7
will be registered and PEPS Units Certificates may be exchanged as provided in
the Purchase Contract Agreement. The PEPS Units Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Purchase Contract Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A holder who
elects to substitute a Treasury Security for Senior Deferrable Notes, thereby
creating Treasury PEPS Units, shall be responsible for any fees or expenses
payable in connection therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a PEPS Unit remains
in effect, such PEPS Unit shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such PEPS Unit in respect of the
Senior Deferrable Note and Purchase Contract constituting such PEPS Unit may be
transferred and exchanged only as a PEPS Unit.
The Holder of PEPS Units may substitute for the Pledged Senior Deferrable
Notes securing such Holder's obligations under the related Purchase Contracts
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Senior Deferrable Notes in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, each Security for which such Pledged
Treasury Securities secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Treasury PEPS Unit". A Holder may make such
Collateral Substitution only in integral multiples of 20 PEPS Units for 20
Treasury PEPS Units. Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, this PEPS Units Certificate shall not represent more than
4,000,000 PEPS Units. All such adjustments to the equivalent aggregate
principal amount of this PEPS Units Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.
A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to
the Securities Intermediary with an aggregate principal amount, in the case of
such Senior Deferrable Notes equal to the aggregate principal amount of the
Pledged Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
The Company shall pay, on each Payment Date, the Purchase Contract Payments
payable in respect of each Purchase Contract to the Person in whose name the
PEPS Units Certificate evidencing such Purchase Contract is registered at the
close of business on the Record Date for such Payment Date. Purchase Contract
Payments will be payable at the office of the Purchase Contract Agent in New
York City or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the PEPS Units
Register.
The Company has the right to defer payment of all or part of the Purchase
Contract Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date. If the Company so elects to defer Purchase
Contract Payments, the Company shall pay additional Purchase Contract Payments
on such deferred installments of Purchase
Contract Payments at a rate equal to .% per annum, compounding quarterly, until
such deferred installments are paid. If a Holder effects an Early Settlement or
if a Termination Event shall occur, such Holder will have no right to receive
any accrued and unpaid or deferred Purchase Contract Payments.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Purchase Contract
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the PEPS Units Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall release
the Senior Deferrable Notes from the Pledge in accordance with the provisions of
the Pledge Agreement. A PEPS Unit shall thereafter represent the right to
receive the Senior Deferrable Note forming a part of such PEPS Unit in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this PEPS Units Certificate,
the Holder of this PEPS Units Certificate shall deliver this PEPS Units
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date for any
Payment Date to the opening of business on such Payment Date, an amount
equal to the Purchase Contract Payments payable on such Payment Date with
respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Senior Deferrable Notes underlying such Securities shall
be released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Georgia-Pacific Group Stock
on account of each Purchase Contract forming part of a PEPS Unit as to which
Early Settlement is effected equal to the Early Settlement Rate. The Early
Settlement Rate shall initially be equal to . shares of Georgia-Pacific Group
Stock and shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract Agreement.
A-9
Upon registration of transfer of this PEPS Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this PEPS Units Certificate. The Company covenants and agrees, and
the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.
The Holder of this PEPS Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the PEPS Units evidenced hereby on its behalf
as its attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee in
the event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Purchase Contract
Agent to enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of
the Senior Deferrable Notes underlying this PEPS Units Certificate pursuant to
the Pledge Agreement. The Holder further covenants and agrees that, to the
extent and in the manner provided in the Purchase Contract Agreement and the
Pledge Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Senior Deferrable Notes, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in accordance
with, the laws of the State of New York.
The Company, the Purchase Contract Agent and its Affiliates and any agent
of the Company or the Purchase Contract Agent may treat the Person in whose name
this PEPS Units Certificate is registered as the owner of the PEPS Units
evidenced hereby for the purpose of receiving payments of interest payable
quarterly on the Senior Deferrable Notes, receiving payments of Purchase
Contract Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Georgia-Pacific Group
Stock.
A-10
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Purchase Contract Agent.
A-11
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM:
as tenants in common
UNIF GIFT MIN ACT:
---------------Custodian---------------
(cust) (minor)
Under Uniform Gifts to Minors Act of
-------
--------------------------------------------
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within PEPS Units Certificates and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said PEPS Units Certificates on
the books of Georgia-Pacific Corporation with full power of substitution in the
premises.
Dated:
------------------- -----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within PEPS
Units Certificates in every particular,
without alteration or enlargement or any
change whatsoever.
Signature Guarantee:
-----------------------------------
A-12
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Georgia-
Pacific Group Stock deliverable upon settlement on or after the Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of PEPS
Units evidenced by this PEPS Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
------------ --------------------------------------
Signature
Signature Guarantee:
-----------------
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of
Registered Holder:
------------------------------------- -------------------------------------
Name Name
------------------------------------- -------------------------------------
Address Address
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-------------------------------------
A-13
ELECTION TO SETTLE EARLY
The undersigned Holder of this PEPS Units Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of PEPS Units evidenced by this PEPS Units Certificate
specified below. The undersigned Holder directs that a certificate for shares
of Georgia-Pacific Group Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any PEPS Units Certificate representing any PEPS Units
evidenced hereby as to which Early Settlement of the related Purchase Contracts
is not effected, to the undersigned at the address indicated below unless a
different name and address have been indicated below. Pledged Senior Deferrable
Notes deliverable upon such Early Settlement will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:
---------------- -----------------------------------
Signature
Signature Guarantee:
-------------------------------------
A-14
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Georgia-Pacific Group REGISTERED HOLDER
Stock or PEPS Units Certificates are
to be registered in the name of and
delivered to and Pledged Senior
Deferrable Notes are to be transferred
to a Person other than the Holder,
please print such Person's name and
address:
Please print name and address of
Registered Holder:
------------------------------------- -------------------------------------
Name Name
------------------------------------- -------------------------------------
Address Address
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-------------------------------------
A-15
Transfer Instructions for Pledged Senior Deferrable Notes Transferable Upon
Early Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-16
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
============================================================================================================================
Number of PEPS Units
Amount of decrease in Amount of decrease in evidenced by this
Number of PEPS Units Number of PEPS Units Global Certificate Signature of authorized
evidenced by the evidenced by the following such officer of Trustee or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
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A-17
EXHIBIT B
FACE OF TREASURY PEPS CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO
TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No. 000000000
Number of Treasury PEPS Units _________
GEORGIA-PACIFIC CORPORATION
TREASURY PEPS UNITS
This Treasury PEPS Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Treasury PEPS Units set forth above. Each
Treasury PEPS Unit consists of (i) a 1/20 undivided beneficial ownership
interest of a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with Georgia-Pacific Corporation, a Georgia corporation
(the "Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement (as defined on the reverse hereof) have the meaning
set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Treasury PEPS Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising part of such Treasury PEPS Unit.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PEPS Units Certificate to purchase, and the Company, to sell, on the
Purchase Contract Settlement Date, at a price equal to $50 (the "Stated
Amount"), a number of shares of Georgia-Pacific Group Common Stock, par value
$.80 per share ("Georgia-Pacific Group Stock"), equal to the Settlement Rate,
unless prior to or on the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement with respect to the Treasury
PEPS Unit of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
purchase price (the "Purchase Price") for the shares of Georgia-Pacific Group
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Purchase Contract of the Treasury PEPS Unit
of which such Purchase Contract is a part.
The Company shall pay, quarterly in arrears on February 16, May 16, August
16 and November 16, commencing November 16, 1999 (each, a "Payment Date"), in
respect of each Purchase Contract evidenced hereby an amount (the "Purchase
Contract Payments") equal to .% per annum of the Stated Amount. Such Purchase
Contract Payments shall be payable to the Person in whose name this Treasury
PEPS Units Certificate (or a Predecessor Treasury PEPS Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
The Company may, at its option, defer Purchase Contract Payments.
Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Treasury PEPS Units Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Treasury PEPS Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
GEORGIA-PACIFIC CORPORATION
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under
the Purchase Contracts)
By: The First National Bank of
Chicago, not individually but
solely as Attorney-in-Fact
of such Holder
By: _______________________________
Name:
Title:
Dated:
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury PEPS Units referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase
Contract Agent
By: ____________________________
Authorized Officer
Dated:
B-4
(REVERSE OF TREASURY PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1999 (as may be supplemented from time to time,
the "Purchase Contract Agreement") between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury PEPS Units Certificates
are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PEPS Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price") a number of shares of Georgia-Pacific Group Stock equal to the
Settlement Rate, unless prior to the Purchase Contract Settlement Date, there
shall have occurred a Termination Event with respect to the Security of which
such Purchase Contract is a part or an Early Settlement shall have occurred.
The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is equals or
exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
Pacific Group Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $. (the "Reference Price"), the number
of shares of Georgia-Pacific Group Stock per Purchase Contract having a
value, based on the Applicable Market Value, equal to the Stated Amount;
and
(3) if the Applicable Market Amount is less than or equal to the
Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement.
No fractional shares of Georgia-Pacific Group Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.11 of the Purchase
Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Treasury PEPS Unit to purchase at the Purchase Price for cash, and the Company
to sell, a number of shares of Georgia-Pacific Group Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Prices per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
B-5
The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means the:
(1) closing sale price (or, if no closing price is reported, the last
reported sale price) per share on the New York Stock Exchange, Inc. (the
"NYSE") on such date;
(2) if Georgia-Pacific Group Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which Georgia-Pacific Group Stock is so listed;
(3) if Georgia-Pacific Group Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by The Nasdaq Stock Market, Inc.;
(4) if Georgia-Pacific Group Stock is not so reported, the last quoted
bid price for Georgia-Pacific Group Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Georgia-Pacific Group Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Treasury PEPS Unit shall pay the Purchase Price for the shares of
Georgia-Pacific Group Stock purchased pursuant to each Purchase Contract
evidenced hereby either by effecting a Cash Settlement or an Early Settlement of
each such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Treasury PEPS Unit equal to the
Stated Amount of such Purchase Contract to the purchase of the Georgia-Pacific
Group Stock. A Holder of Treasury PEPS Unit who does not effect, prior to or on
11:00 a.m. (New York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Georgia-Pacific Group
Stock to be issued under the related Purchase Contract from the proceeds of the
Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Georgia-Pacific
Group Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the aggregate
purchase price for the shares of Georgia-Pacific Group Stock to be purchased
thereunder in the manner herein set forth.
B-6
In the event the Company sells, transfers, assigns or otherwise disposes
of all of the properties and assets of the Georgia-Pacific Group and determines
to redeem all of the outstanding shares of Georgia-Pacific Group Stock, or
redeems all of the shares of Georgia-Pacific Group Stock for shares of common
stock of one or more of its wholly owned subsidiaries which own all of the
assets and liabilities attributed to the Georgia-Pacific Group, the Purchase
Contract Settlement Date and Remarketing Date shall be accelerated to five
Business Days immediately preceding the Redemption Date or Spin-Off Date, as the
case may be.
The Treasury PEPS Units Certificates are issuable only in registered form
and only in denominations of a single Treasury PEPS and any integral multiple
thereof. The transfer of any Treasury PEPS Certificate will be registered and
Treasury PEPS Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury PEPS Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Deferrable Notes for Treasury Securities, thereby recreating
PEPS Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Treasury PEPS Unit remains in effect, such
Treasury PEPS Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Treasury PEPS Unit in respect of
the Treasury Security and the Purchase Contract constituting such Treasury PEPS
Unit may be transferred and exchanged only as a Treasury PEPS Unit.
A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to
the Collateral Agent Senior Deferrable Notes with a principal amount, in the
case of such Senior Deferrable Notes, equal to the aggregate principal amount at
maturity of the Pledged Treasury Securities in exchange for the release of such
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Security shall be referred to as a "PEPS Unit". Such substitution
may cause the equivalent aggregate principal amount of this Certificate to be
increased or decreased; provided, however, this Treasury PEPS Units Certificate
shall not represent more than 4,000,000 Treasury PEPS Units. All such
adjustments to the equivalent aggregate principal amount of this Treasury PEPS
Units Certificate shall be duly recorded by placing an appropriate notation on
the Schedule attached hereto.
A Holder of PEPS Units may recreate Treasury PEPS Units by delivering to
the Collateral Agent Treasury Securities in an aggregate principal amount equal
to the aggregate principal amount at maturity of the Pledged Senior Deferrable
Notes in exchange for the release of such Pledged Senior Deferrable Notes in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of Treasury PEPS Units may be effected only in
multiples of 20 PEPS Units for 20 Treasury PEPS Units.
B-7
