TWELFTH AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

Exhibit 10.1

 

EXECUTION COPY

 

TWELFTH AMENDMENT AND WAIVER

TO SECOND AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENTS

 

TWELFTH AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS dated as of December 9, 2005 (this “ Amendment ”) among G-P Receivables, Inc., as the seller (the “ Seller ”), Georgia-Pacific Corporation, as the Collection Agent (the “ Collection Agent ”), Variable Funding Capital Company LLC (“ VFCC ”), as assignee of Blue Ridge Asset Funding Corporation (“ Blue Ridge ”), CRC Funding, LLC (“ CRC ”), Starbird Funding Corporation (“ Starbird ”), Three Pillars Funding LLC (“ Three Pillars ”) and Gotham Funding Corporation (“ Gotham ” and, together with VFCC, CRC, Starbird and Three Pillars, the “ Purchasers ”), Citibank, N.A. (“ Citibank ”), The Bank of Tokyo-Mitsubishi, Ltd., New York Branch (“ BTM ”), BNP Paribas, acting through its New York Branch (“ BNP Paribas ”), SunTrust Bank (“ SunTrust ”) and Wachovia Bank, National Association (“ Wachovia ” and, together with Citibank, BTM, BNP Paribas and SunTrust, the “ Secondary Purchasers ”) and Citicorp North America, Inc. as administrative agent (the “ Administrative Agent ”).

 

WHEREAS, the Seller, the Collection Agent, the Purchasers and the Administrative Agent entered into that certain Second Amended and Restated Receivables Purchase Agreement dated as of December 19, 2001, as amended (the “ Primary Purchase Agreement ”);

 

WHEREAS, the Seller, the Collection Agent, the Secondary Purchasers and the Administrative Agent entered into that certain Second Amended and Restated Receivables Purchase Agreement dated as of December 19, 2001, as amended (the “ Secondary Purchase Agreement ” and together with the Primary Purchase Agreement, the “ Agreements ”);

 

WHEREAS, an Event of Termination has occurred under each Agreement as a result of the failure to establish the Agent’s Account and to deliver a lockbox agreement with respect thereto in accordance with Section 9 of the Tenth Amendment to Second Amended and Restated Receivables Purchase Agreements dated as of December 10, 2004 among the Seller, the Collection Agent, Blue Ridge, CRC, CAFCO, LLC, Gotham, Starbird, Three Pillars, the Secondary Purchasers and the Administrative Agent (the “ Existing Event of Termination ”);

 

WHEREAS, the Seller wishes to waive and the Seller and the Collection Agent have requested that the Administrative Agent, the Purchasers and the Secondary Purchasers waive the Existing Event of Termination;

 

WHEREAS, the Seller, the Collection Agent, the Purchasers, the Secondary Purchaser and the Administrative Agent have agreed to amend the Agreements subject to the terms and conditions described herein;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained, the parties hereto agree as follows:

 

SECTION 1. Defined Terms . Unless otherwise defined herein, the capitalized terms used herein shall have the meanings assigned to such terms in the Primary Purchase Agreement.

 

SECTION 2. Amendments to the Primary Purchase Agreement . Effective as of the date on which all of the conditions precedent set forth in Section 6 shall be satisfied (such date, the “ Effective Date ”):

 

2.1 The Primary Purchase Agreement is amended to incorporate the changes shown on the marked pages attached hereto as Annex A .

 

2.2 Each of Exhibits A, C, D, E, F and G to the Primary Purchase Agreement is amended and restated to read in its entirety as set forth in Exhibits A , C , D , E , F and G , respectively, to this Amendment.

 

2.3 The Primary Purchase Agreement is amended to delete Exhibit H in its entirety.

 

2.4 Each of Schedules I through V and Schedule VII to the Primary Purchase Agreement is amended and restated to read in its entirety as set forth in Schedules I through V and Schedule VII , respectively, to this Amendment.

 

2.5 The Primary Purchase Agreement is amended to add Schedules VIII and IX as set forth in Schedules VIII and IX , respectively, to this Amendment.

 

SECTION 3. Amendments to the Secondary Purchase Agreement. Effective as of the Effective Date:

 

3.1 The Secondary Purchase Agreement is amended to incorporate the changes shown on the marked pages attached hereto as Annex B .

 

3.2 Each of Exhibits A and B to the Secondary Purchase Agreement is amended and restated to read in its entirety as set forth in Exhibits A-l and B-l , respectively, to this Amendment.

 

SECTION 4. Waiver . As of the Effective Date, the Administrative Agent, the Purchasers and the Secondary Purchasers hereby waive the Existing Event of Termination.

 

SECTION 5. No Other Waivers . Nothing contained herein shall be deemed to constitute a waiver of any other Event of Termination or Potential Termination Event which may now or hereafter exist under the Agreements other than the waiver set forth in Section 4 above.

 

SECTION 6. Effectiveness . This Amendment shall become effective as of the date hereof at such time as (i) executed counterparts of this Amendment have been delivered by each

 

2

party hereto to the other parties hereto and (ii) the Administrative Agent shall have received each of the following, each in form and substance satisfactory to the Administrative Agent:

 

6.1 Favorable opinions of counsel for the Seller and the Collection Agent, in each case in form and substance satisfactory to the Administrative Agent as to such matters as the Administrative Agent or the Purchasers or Secondary Purchasers may reasonably request.

 

6.2 An executed copy of the Third Omnibus Amendment to the Transfer Agreements and executed copies, in form and substance satisfactory to the Administrative Agent, of all documents listed therein as conditions precedent to the effectiveness of the Third Omnibus Amendment to the Transfer Agreements.

 

6.3 A certificate as to the good standing of each of the Seller and the Collection Agent from the Secretary of State or other appropriate official of the state of its organization, in each case, dated as of a recent date.

 

6.4 Certificates of the Secretary or Assistant Secretary of the Seller and the Collection Agent certifying the names and true signatures of their respective officers authorized to sign this Amendment and the other documents to be delivered by them hereunder, evidence of authorization of the transactions contemplated hereby and certifying that such entity’s certificate or articles of incorporation or constitutive documents have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to Section 6.3 above.

 

6.5 An executed amendment to the Fee Letter.

 

6.6 Evidence that the Seller has paid all fees, costs, expenses and other amounts due and owing by the Seller to the Administrative Agent, the Purchasers and the Secondary Purchasers.

 

SECTION 7. Representation and Warranties .

 

7.1 Each of the Seller and the Collection Agent makes each of the representations and warranties contained in Section 4.01 of the Agreements (after giving effect to this Amendment). This Amendment shall constitute a Sale Document for the purpose of making such representations and warranties.

 

7.2 The Seller and the Collection Agent each further represents and warrants that no Event of Termination or Potential Event of Termination exists under the Agreements (after giving effect to this Amendment).

 

SECTION 8. Expenses . The Seller and the Collection Agent jointly and severally agree to pay on demand all reasonable costs and expenses actually incurred in connection with the preparation, execution, delivery and administration of this Amendment and the other documents to be delivered pursuant hereto, including, without limitation, rating agency costs incurred by the

 

3

Purchasers in connection herewith and the reasonable fees and disbursements of one firm of outside counsel to represent the Purchasers, the Secondary Purchasers and the Administrative Agent.

 

SECTION 9. Understanding of the Parties . Reference is made to that certain Amended and Restated Commitment Letter dated November 13, 2005 from Citigroup Global Markets Inc. in favor of Koch Forest Products Holdings LLC and Koch Forest Products Inc. pursuant to which it is anticipated that a group of lenders will provide a senior secured credit facility to Koch Forest Products Inc, Georgia-Pacific Corporation and certain other borrowers (such senior secured credit facility, the “ New Credit Agreement ”). The parties hereto acknowledge that it is their intention that (a) certain provisions of the Primary Purchase Agreement and the Secondary Purchase Agreement (including, without limitation, the definition of Pricing Leverage Ratio and related definitions and the dollar amount set forth in Section 7.01(f) and (k) of the Primary Purchase Agreement) be conformed to the parallel provisions of the New Credit Agreement and, to the extent necessary to avoid a conflict with the terms of such New Credit Agreement or any intercreditor agreement referred to in clause (b) below, amended accordingly (including, without limitation, certain representations and warranties and covenants), if and when the New Credit Agreement (and/or intercreditor agreement) becomes effective, pursuant to an amendment agreement in form and substance satisfactory to the Seller, the Administrative Agent and the Secondary Purchasers and (b) the Receivables, Related Security, Collections, Lock-Box Accounts and Depositary Accounts will either be carved out from all liens securing the New Credit Agreement pursuant to the documentation for the New Credit Agreement or will be the subject of an intercreditor agreement confirming that the lenders under the New Credit Agreement have no liens or other rights with respect to Receivables transferred to the Seller, the Related Security and Collections with respect thereto or any Lock-Box Accounts or Depositary Accounts (any such intercreditor agreement to be in form and substance satisfactory to the Administrative Agent and the Secondary Purchasers). Accordingly, in order to effectuate such intentions, the parties hereto agree to use commercially reasonable efforts to enter into, concurrently with the effectiveness of the New Credit Agreement, an appropriate further amendment to the Primary Purchase Agreement and the other Sale Documents and/or an intercreditor agreement. In addition, the Seller and the Collection Agent may propose other changes to be included in such amendment which they believe are appropriate to avoid an inconsistency between the Agreements and the New Credit Agreement (giving due consideration to the differing nature of the facilities), and the Administrative Agent and the Secondary Purchasers, while retaining the right to decline to accept any such proposed changes which they deem not to be appropriate in their sole discretion, agree to consider and negotiate such proposed changes in good faith. The Administrative Agent, the Purchasers and the Secondary Purchasers acknowledge and agree that no additional fees will be payable by the Seller to the Administrative Agent, the Purchasers or the Secondary Purchasers in connection with any amendment and/or intercreditor agreement that reflects the terms referred to in this Section 9.

 

SECTION 10. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be effective as delivery of a manually executed counterpart of this Amendment.

 

4

SECTION 11. Captions . The captions in this Amendment are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

SECTION 12. Confirmation of the Agreements . All references to either of the Agreements in the Agreements and the other documents and instruments delivered pursuant to or in connection with the Agreements shall mean such Agreement as amended by this Amendment, and as hereafter amended, restated or otherwise modified. Except as herein expressly amended, each Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its respective terms.

 

SECTION 13. GOVERNING LAW . THIS AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION 14. Severability of Provisions . Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Remainder of Page Intentionally Left Blank

 

5

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AMD RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

 

SIGNATURE PAGE TO TWELFTH AMENDMENT AND WAIVER TO SECOND

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENTS

Annex A to Twelfth

Amendment and Waiver to Second Amended and Restated

Receivables Purchase Agreements

 

[See attached]

CONFORMED COPY INCORPORATING AMENDMENTS NO. 1 -11, 12,

TO THE EXTENT EFFECTIVE AS OF JULY DECEMBER 1, 9, 2005

 

$800,000,000

 

SECOND AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

 

Dated as of December 19, 2001

 

Among

 

G-P RECEIVABLES, INC.

 

as the Seller

 

GEORGIA-PACIFIC CORPORATION

 

as the Collection Agent

 

BLUE RIDGE ASSET

VARIABLE FUNDING CORPORATION CAPITAL COMPANY LLC,

CRC FUNDING, LLC,

GOTHAM FUNDING CORPORATION,

STARBIRD FUNDING CORPORATION

 

and

THREE PILLARS FUNDING LLC

 

as the Purchasers

 

and

 

CITICORP NORTH AMERICA, INC.

 

as the Administrative Agent

TABLE OF CONTENTS

 

 

 

i

 

ii

SCHEDULES

 

 

iii

SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of December 19, 2001 among G-P RECEIVABLES, INC., a Delaware corporation (the “ Seller ”), GEORGIA-PACIFIC CORPORATION, a Georgia corporation (“ Georgia-Pacific ”), BLUE RIDGE ASSET VARIABLE FUNDING CORPORATION CAPITAL COMPANY LLC (“ Blue Ridge VFCC”), CRC FUNDING, LLC (“ CRC ”), GOTHAM FUNDING CORPORATION (“ Gotham ”), STARBIRD FUNDING CORPORATION (“ Starbird ”), THREE PILLARS FUNDING LLC (“ Three Pillars ”) (each of Blue Ridge VFCC, CRC, Gotham, Starbird and Three Pillars and their respective successors and permitted assigns, individually, a “ Purchaser ” and, collectively, the “ Purchasers ”), and CITICORP NORTH AMERICA, INC. (“ Citicorp ”), as agent (the “ Administrative Agent ”) for the Purchasers. Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Article I hereof.

 

ARTICLE I.

DEFINITIONS

 

SECTION 1.01  Certain Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ Addendum ” means an addendum to this Agreement, in substantially the form of Exhibit F hereto, pursuant to which an Additional Purchaser becomes a party to this Agreement.

 

“ Additional Purchaser ” means each Purchaser as shall become a party to this Agreement by execution of an Addendum pursuant to Section 10.03 hereof.

 

“ Adjusted LIBOR Rate ” means, with respect to a Purchaser for any Fixed Period, the rate per annum obtained by dividing (a) the arithmetic average (rounded upwards, if necessary, to the nearest multiple of one-sixteenth of one percent per annum) of (i) the offered rates for deposits in United States dollars which appear on the display designated as page “LIBO” (or any successor page quoting the offered rates for United States dollars in the London interbank market) on the Reuter Monitor Money Rates Service, or (ii) if such rates are not obtainable from the Reuter Monitor Money Rates Service, the respective rates notified to the Purchaser by each of the Reference Banks as the rate at which it would offer deposits in United States dollars to prime banks in the London interbank market, in either case for a period equal to such Fixed Period as such Purchaser shall select and in an amount comparable to the aggregate amount of Capital of the Receivable Interest to be funded or maintained at or about 11:00 a.m. (London time) on the second Business Day before (and for value on) the first day of such period by (b) a percentage equal to (i) 100% minus (ii) the Eurodollar Reserve Percentage for such Fixed Period.

 

“ Administrative Priority ” means an administrative priority granted under Section 364(a) of the Bankruptcy Code.

 

“ Adverse Claim ” means a lien, security interest, claim or other charge or encumbrance, or any other type of preferential arrangement.

 

“ Affected Party ” has the meaning specified in Section 2.08(a) hereof.

“ Affiliate ” means, as to any Person, any Subsidiary of such Person and any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, a Person shall be deemed to control another Person if such Person possesses, directly of or indirectly, the power to (i) vote 10% or more of the securities or other equity interests having ordinary voting power for the election of directors (or similar governing body) of such other Person or (ii) direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.

 

“ Affiliated Obligor ” means any Obligor that is an Affiliate of another Obligor.

 

“Agent’s Account” means the special account of the Administrative Agent maintained at the office of Citibank, N.A. at 399 Park Avenue, New York, New York, or such other account as the Administrative Agent shall designate in writing to the Seller and the Collection Agent from time to time.

 

“ Aggregate Capital ” means, at the time of any determination thereof with respect to a Purchaser, the sum of the Capital for all Receivable Interests of such Purchaser.

 

“Aggregate Loss and Dilution Reserve” means, as of any date, the product of (i) the Aggregate Loss and Dilution Reserve Percentage on such date and (ii) the Net Receivables Pool Balance on such date.

 

“Aggregate Loss and Dilution Reserve Percentage” means, as of any date of determination, the greater of (i) the sum of the Dynamic Loss Reserve Percentage on such date plus the Dynamic Dilution Reserve Percentage on such date and (ii) the sum of the Loss Reserve Floor Percentage on such date and the Dilution Reserve Floor Percentage on such date.

 

“Approved OECD Country” means each of the countries listed on Schedule VIII hereto, as such Schedule may be amended from time to time upon request of the Seller or the Collection Agent, with the prior written approval of the Administrative Agent. Additionally, the Administrative Agent (acting upon the instructions of any Purchaser) may remove countries from such Schedule at any time upon not less than three Business Days’ notice to the Seller and the Collection Agent.

 

“ Asbestos Amounts ” means, for any period, with respect to all asbestos-related liabilities and/or related defense costs of Georgia-Pacific and/or any of its Subsidiaries, an amount equal to the aggregate cash payments made by Georgia-Pacific or any of its Subsidiaries for such period relating to or to satisfy such liabilities and/or related defense costs, less any insurance or other proceeds received in cash by Georgia-Pacific or any of its Subsidiaries from any persons or entity other than Georgia-Pacific or any of its Affiliates for such period as reimbursement or indemnification with respect to such liabilities and/or costs.

 

“ Assignment Assignee” has the meaning specified in Section  10.01(a). 10.01.

 

“Assignment” has the meaning specified in Section 10.01.

 

2

“Assignment of Claims Act” means (a) in the case of a Government Obligor that is the United States of America, any federal political subdivision thereof, any federal agency or instrumentality of the United States of America or federal political subdivision thereof and any federal entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to the federal government of the United States of America, the Federal Assignment of Claims Act and (b) in the case of a Government Obligor that is a state, county, city or other locality located in the United States of America, any political subdivision thereof, any agency or instrumentality of such state, county, city or other locality located in the United States of America or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to the state, county, city or other locality located in the United States of America, the state or local counterparts to the Federal Assignment of Claims Act.

 

“Assignment of Claims Documents” means (i) a duly completed, fully executed, witnessed and notarized “Instrument of Assignment of Claims” or other similar document in the form prescribed by the applicable Assignment of Claims Act and (ii) a duly completed and fully executed (including the acknowledgment of the governmental contracting officer) “Notice of Assignment of Claims” or other similar document in the form prescribed by the applicable Assignment of Claims Act, in each case with such modifications as may be necessary or advisable to obtain approval of the relevant government agency.

 

“ Bankruptcy Code ” means Title 11 of the United States Code (11 U.S.C. §101 et seq.), as amended from time to time, or any successor statute.

 

“ Bankrupt Receivable ” means a Receivable the Obligor of which has taken any action, or suffered to occur any event, of the type described in Section 7.01(i).

 

“ Base Rate ” means, for any day, a fluctuating rate per annum equal to the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate.” Such rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“ Business Day ” means any day on which banks are not authorized or required to close in Chicago, Illinois or New York, New York and, if the applicable Business Day relates to any computation or payment to be made with respect to the Adjusted LIBOR Rate, any day on which dealings in dollar deposits are carried on in the London interbank market.

 

“ Capital ” of any Receivable Interest owned by a Purchaser means the original amount paid by such Purchaser to the Seller for such Receivable Interest at the time of its purchase by such Purchaser pursuant to this Agreement, or such amount divided or combined in accordance with Section 2.07, in each case reduced from time to time by Collections distributed on account of such Capital pursuant to Section 2.04; provided , that if such Capital shall have

 

3

been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution, as though it had not been made; provided , further , that such Capital shall not be reduced for the purposes of this Agreement to the extent and so long as Collections to be used to effect an Optional Reduction or a Mandatory Reduction are retained by the Collection Agent (if the Seller or an Affiliate thereof).

 

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“ Cash Discounts ” means, with respect to any Receivable, the aggregate amount of Dilutions which have occurred as a result of the application of credits issued to the related Obligor as cash discounts.

 

“ Cash Discount Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the aggregate amount of Cash Discounts for the most recently completed calendar month Fiscal Month and the denominator of which is the aggregate sales of the Originators for the prior calendar Fiscal month Month.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

“ Collection Agent ” means at any time the Person (which may include the Administrative Agent) then authorized pursuant to Article VI to service, administer and collect Pool Receivables.

 

“Collection Agent Default” means the occurrence of any of the following:

 

(a) The Collection Agent shall fail (i) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (ii) and (iii) of this subsection (a)) and such failure shall remain unremedied for three Business Days or (ii) to make any payment or deposit required hereunder on the first Business Day after the due date thereof or (iii) to perform or observe any term, covenant or agreement contained in Section 5.01(c) hereof; or

 

(b) Any representation or warranty made or deemed made by the Collection Agent (or any of its Responsible Officers) in this Agreement or in any information or report delivered by a Responsible Officer of the Collection Agent pursuant hereto shall prove to have been incorrect or untrue when made or deemed made or delivered; or

 

(c) The Collection Agent shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or

 

4

any proceeding shall be instituted by or against the Collection Agent seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Collection Agent shall take any corporate action to authorize any of the actions set forth above in this subsection (c); or

 

(d) The Collection Agent shall fail to pay when due any amount in respect of any Debt which is outstanding in a principal amount of at least $100,000,000 in the aggregate and such failure shall continue after any applicable grace period, or any other event shall occur or condition shall exist in respect of such Debt and shall continue after any applicable grace period, the effect of which is to cause (or permit any holder thereof to cause) such Debt to become due and payable prior to the stated maturity thereof; or

 

(e) There is entered against the Collection Agent (A) a final judgment or order for the payment of money in an aggregate amount exceeding $100,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (B) any one or more non monetary final judgments that have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect upon any Purchaser’s interest in the Pool Receivables generally or in any significant portion of the Pool Receivables, the Related Security or the Collections with respect thereto, the collectibility of the Pool Receivables generally or of any significant portion of the Pool Receivables, the ability of the Collection Agent to perform its duty to collect Pool Receivables generally or otherwise perform its respective obligations hereunder or under any Transfer Agreements or the perfection of or exercise by the Administrative Agent or any Purchaser of its rights and remedies under this Agreement or any other Sale Document, and, in either case, (I) enforcement proceedings are commenced by any creditor upon such judgment or order, or (II) there is a period of 30 consecutive days during which such judgment or order remains unsatisfied or during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, is not in effect; or

 

(f) There shall have occurred a change of control of the Collection Agent (if the Collection Agent is Georgia-Pacific). A “change of control” shall mean the acquisition by any Person (other than Koch and its

 

5

subsidiaries) of 33  ¹ / 3 % of either (A) the then outstanding common shares of Georgia-Pacific or (B) the combined voting rights of the then outstanding voting securities of Georgia-Pacific.

 

“ Collection Agent Fee ” has the meaning specified in Section 6.06.

 

“ Collection Agent Fee Reserve ” means, on any date, the sum of (i) the product of (a) 1% of the Total Aggregate Capital aggregate Outstanding Balance of all Pool Receivables on the last day of the Fiscal Month most recently ended and (b) a fraction having the sum of the Portfolio Turnover Rate (Days) plus the Collection Delay Period (each as in effect at such date) as its numerator and 360 as its denominator plus (ii) the accrued and unpaid Collection Agent Fee on such date.

 

“ Collection Delay Period ” means 10 days or such other number of days as the Administrative Agent may select (acting upon the direction of the Required Purchasers) upon three Business Days’ notice to the Seller.

 

“ Collections ” means, with respect to any Pool Receivable, all cash collections and other cash proceeds in respect of such Pool Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Pool Receivable, and any Collection of such Pool Receivable deemed to have been received pursuant to Section 2.04(d).

 

“ Concentration Limit ” means, at any time, for any Obligor, 3.33% of the Total Aggregate Capital outstanding at such time, the product of (i) 4.0% (the “Normal Concentration Limit”) or such other percentage (a “ Special Concentration Limit ”) for any Obligor listed on Schedule VII or designated as described below and (ii) the Net Receivables Pool Balance at such time. The Special Concentration Limit means, with respect to any Obligor: (i) at any time, and without designation by the Administrative Agent, that such Obligor’s Obligor Debt Rating is at least AA- by S&P and Aa3 by Moody’s, 100% of the Loss Reserve Floor Percentage, (ii) at any time, and without designation by the Administrative Agent, that such Obligor’s Obligor Debt Rating is at least BBB- by S&P and Baa3 by Moody’s, and clause (i) is not applicable, 50% of the Loss Reserve Floor Percentage, or (iii) such other higher percentage or dollar amount for such Obligor designated by the Administrative Agent in a writing delivered to the Seller at the instruction of the Purchasers; provided , that in the case of an Obligor with any Affiliated Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor; ; provided , further , that no Special Concentration Limit shall be designated with respect to any Obligor which is not rated (i) P-1 by Moody’s or, in the case of Lowes Companies, Inc., at least P-2 by Moody’s and (ii) at least A-1 by S&P, in each case, at the time of such designation; provided , further , that any Special Concentration Limit (i) may be cancelled by the Administrative Agent (acting upon the instructions of any Purchaser), upon not less than three Business Days’ notice to the Seller and (ii) shall be cancelled, without any notice or other action by the Administrative Agent or any Purchaser, with respect to (A)  any Obligor (other than Lowes Companies, Inc.) if such Obligor’s Obligor Debt Rating is not rated (I) P-1 by Moody’s and (II)  at least A BBB- 1 by S&P and (B) Lowes Companies, Inc., Baa3 by Moody’s, such cancellation under this clause (ii) to be automatically effective three Business Days after the applicable downgrade occurs. Pursuant to clause (iii) of the foregoing sentence, the Special

 

6

Concentration Limit for Wal-Mart and Home Depot shall be designated to be 125% of the Loss Reserve Floor Percentage; provided, that if Lowes Companies, Inc. the Obligor Debt Rating of Wal-Mart or Home Depot is not rated below AA- or Aa3 but at least (I) P-2 by Moody’s and (II) A BBB- 1 by S&P and Baa3, then the Special Concentration Limit for Wal-Mart or Home Depot shall be the applicable Special Concentration Limit determined pursuant to clause (ii) of the forgoing sentence of this definition (50% of the Loss Reserve Floor Percentage), and if the Obligor Debt Rating of Wal-Mart or Home Depot falls below BBB- or Baa3, then the Normal Concentration Limit shall apply. As of December 9, 2005, the Special Concentration Limits are as set forth on Schedule VII.

 

“ Consent and Acknowledgment ” means the agreement, in substantially the form attached hereto as Exhibit E, by each Originator in favor of the Purchasers, the Secondary Purchasers and the Seller pursuant to which such Originator consents to and acknowledges the transactions contemplated hereby.

 

“ Consolidated Adjusted Net Income ” means, for any period, for Georgia-Pacific and its Subsidiaries on a consolidated basis, an amount equal to (a) the Consolidated Net Income (or loss) for such period, plus (b) without duplication of clause (a) above, other losses (or income) (whether combined or separated in the relevant financial statement) and extraordinary items (determined in accordance with GAAP) for such period, plus or minus (as determined in accordance with the last sentence in this definition) (c) the amount of the cumulative effect of accounting changes of Georgia-Pacific for such period, net of taxes, in each case as such amounts would be shown on the consolidated financial statements of Georgia-Pacific for such period prepared in accordance with GAAP. For purposes of calculating Consolidated Adjusted Net Income, if the cumulative effect of accounting changes is a positive number, then such amount shall be subtracted in the calculation thereof, and if such amount is a negative number, then the absolute value of such amount will be added in the calculation thereof.

 

“ Consolidated EBITDA ” means, for any period, for Georgia-Pacific and its Subsidiaries on a consolidated basis, an amount equal to the Consolidated Adjusted Net Income for such period plus (a) the sum of the following to the extent deducted in calculating such Consolidated Adjusted Net Income: (i) Consolidated Interest Charges for such period, (ii) all income taxes for such period, and (iii) all amounts treated as expenses for depreciation, amortization and accretion; in each case with respect to clauses (i), (ii) and (iii) above as such amounts would be shown on the consolidated financial statements of Georgia-Pacific for such period prepared in accordance with GAAP, plus or minus (as determined in accordance with the last sentence in this definition of “Consolidated EBITDA”) (b) any Asbestos Amounts for such period. For purposes of calculating “Consolidated EBITDA”, if the Asbestos Amounts is a positive number, then such amount shall be subtracted in the calculation thereof, and if the Asbestos Amounts is a negative number, then the absolute value of such amount shall be added in the calculation thereof.

 

“ Consolidated Funded Debt ” means, as of any date of determination, for Georgia-Pacific and its Subsidiaries on a consolidated basis, without duplication, the sum of (a) the aggregate amount of all secured borrowings and short-term indebtedness, (b) the aggregate amount of all current portions of long-term indebtedness, and (c) the aggregate amount of all long-term indebtedness, in each case as such amounts would be shown on the consolidated financial statements of Georgia-Pacific as of such time prepared in accordance with GAAP.

 

7

“ Consolidated Interest Charges ” means, for any period, for Georgia-Pacific and its Subsidiaries on a consolidated basis, all amounts treated as expenses for interest, net of any interest income, as such amounts would be shown on the consolidated financial statements of Georgia-Pacific for such period prepared in accordance with GAAP.

 

“ Consolidated Net Income ” means, for any period, for Georgia-Pacific and its Subsidiaries on a consolidated basis, the net income of Georgia-Pacific and its Subsidiaries for such period as such amount would be shown on the consolidated financial statements of Georgia-Pacific for such period prepared in accordance with GAAP.

 

“ Contract ” means an agreement between an Originator and an Obligor, substantially in a form permitted by the Credit and Collection Policy or an invoice, pursuant to or under which such Obligor shall be obligated to pay for merchandise, goods, insurance or services from time to time.

 

“ Contractual Dilution ” means, with respect to any Receivable, the aggregate amount of Dilutions which have occurred as a result of the application of credits issued to the related Obligor as Cash Discounts or other rebates, refunds or incentives pursuant to contractual terms of sale under which such Obligor is entitled to a stipulated maximum discount upon satisfaction of one or more conditions.

 

“ Contractual Dilution Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the aggregate amount of Contractual Dilution for the most recently completed calendar month Fiscal Month and the denominator of which is the aggregate sales of the Originators for the prior calendar Fiscal month Month.

 

“ Credit and Collection Policy ” means those receivables credit and collection policies and practices of the Originators in effect on the date hereof and approved by the Purchasers, summarized on Schedule III hereto, as the same may be modified in strict compliance with this Agreement.

 

“ Current Default Ratio ” means, at the time any determination thereof is to be made, a fraction, expressed as a percentage, the numerator of which is the aggregate Outstanding Balance of all Pool Receivables that were Defaulted Receivables at such time and the denominator of which is the aggregate Outstanding Balance of all Pool Receivables at such time.

 

“Daily Activity Report” means a report in form of Exhibit G hereto (appropriately completed), furnished by the Collection Agent to each Purchaser and the Administrative Agent pursuant to Section 5.01(j)(ix) hereof.

 

“ Dealer Fee ” means, with respect to a Purchaser, any and all commissions of placement agents and commercial paper dealers in respect of Notes issued by such Purchaser to fund the purchase or maintenance by such Purchaser of any Receivable Interest.

 

8

“ Debt ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business), (e) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Debt secured thereby has been assumed, (f) all Guarantees by such Person of Debt of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) liabilities in respect of unfunded vested benefits under plans covered by Title IV or ERISA and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor.

 

“ Debt Rating ” means, on any date, (a) the rating, as most recently publicly announced by Moody’s, applicable to the Specified Debt of Georgia-Pacific most comparable to the Obligations (as defined in the Georgia-Pacific Credit Agreement) of Georgia-Pacific under the Georgia-Pacific Credit Agreement, taking into account all credit support therefor as determined by the Administrative Agent, the Purchasers and the Secondary Purchasers (it being agreed that, from and including April 1, 2003 to, but excluding, the date on which any contrary determination is made by the Administrative Agent, the Purchasers and the Secondary Purchasers, such rating shall be Georgia-Pacific’s senior implied issuer rating) and (b) the rating, as most recently publicly announced by S&P, applicable to the Specified Debt of Georgia-Pacific most comparable to the Obligations (as defined in the Georgia-Pacific Credit Agreement) of Georgia-Pacific under the Georgia-Pacific Credit Agreement, taking into account all credit support therefor as determined by the Administrative Agent, the Purchasers and the Secondary Purchasers (it being agreed that, from and including April 1, 2003 to, but excluding, the date on which any contrary determination is made by the Administrative Agent, the Purchasers and the Secondary Purchasers, such rating shall be the rating of Georgia-Pacific’s senior unsecured debt); provided , however , that if such a rating is available from only one of Moody’s or S&P, the applicable Investor Rate or fee to be determined based on such rating shall be determined solely by reference to such one rating.

 

“ Default Ratio ” means, at the time any determination thereof is to be made, a fraction, expressed as a percentage, the numerator of which is  ¹ / 3 of the aggregate Outstanding Balance of all Pool Receivables that were Defaulted Receivables on the last Business Day of the month Fiscal Month most recently ended and the last Business Day of each of the immediately preceding two (2)  calendar Fiscal months Months or that would have been Defaulted Receivables on such last Business Days had they not been written off the books of the Seller or an Originator during such months Fiscal Months (such Outstanding Balances of such Defaulted Receivables for the three (3)  calendar Fiscal months Months immediately preceding the date hereof as set forth on Schedule VI hereto), and the denominator of which is 1/3 of the aggregate Outstanding Balance of all Pool Receivables on the last Business Day of the month Fiscal Month most

 

9

recently ended and the last Business Day of each of the immediately preceding two (2)  calendar Fiscal months Months (such Outstanding Balances for the three (3)  calendar Fiscal months Months immediately preceding the date hereof as set forth on Schedule VI hereto).

 

“ Defaulted Receivable ” means a Receivable:

 

(i) as to which any payment, or part thereof, remains unpaid for more than 60 days from the original due date of such Receivable;

 

(ii) which is a Bankrupt Receivable and (a) is not entitled to the benefit of an Administrative Priority (regardless of the Outstanding Balance of such Receivable) or (b) the Outstanding Balance of which, together with all other Bankrupt Receivables of the same Obligor, is greater than $500,000 (whether or not one or more of such Bankrupt Receivables is entitled to an Administrative Priority); or

 

(iii) which, consistent with the Credit and Collection Policy, would be written off the Seller’s or an Originator’s books as uncollectible.

 

“ Delinquency Ratio ” means, at the time any determination thereof is to be made, the ratio, expressed as a percentage, computed by dividing (i)   ¹ / 3 of the aggregate Outstanding Balance of all Pool Receivables that were Delinquent Receivables on the last Business Day of the month Fiscal Month most recently ended and the last Business Day of each of the immediately preceding two (2)  calendar Fiscal months Months by (ii)   ¹ / 3 of the aggregate Outstanding Balance of all Pool Receivables on the last Business Day of the month Fiscal Month most recently ended and the last Business Day of each of the immediately preceding two (2)  calendar Fiscal months Months.

 

“ Delinquent Receivable ” means a Receivable as to which any payment, or part thereof, remains unpaid for 30 days or more from the original due date thereof.

 

“ Depositary Account ” means a depositary account maintained at a Depositary Bank, the primary purpose of which is to receive the proceeds of Collections from the Seller or an Originator.

 

“ Depositary Bank ” means, at any time, any of the banks holding one or more Depositary Accounts (as of the date hereof being those banks specified on Schedule II hereof).

 

“ Designated Obligor ” means, at any time, each Obligor; provided , however , that any Obligor shall, upon not less than three Business Days’ notice given to the Seller by the Administrative Agent at the instruction of any Purchaser, cease to be a Designated Obligor.

 

“ Dilution Horizon Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the sum of (i) the aggregate sales of the Originators for the most recently ended calendar month Fiscal Month, plus (ii) one-half of the aggregate sales of the Originators for the calendar Fiscal month Month prior to such calendar Fiscal month Month, and the denominator of which is the aggregate Outstanding Balance of all Eligible Receivables as of the last day of the most recently ended calendar Fiscal month Month.

 

10

“ Dilution Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the sum of (i) the aggregate amount of Contractual Dilution for the most recently completed calendar month Fiscal Month, plus (ii) the aggregate amount of Non-Contractual Dilution for the most recently completed calendar Fiscal month Month, and the denominator of which is the aggregate sales of the Originators for the prior calendar Fiscal month Month.

 

“ Dilution Reserve Floor Percentage” means, as of any date of determination, the product of ( 1 i) the quotient average of (x)  the sum of (a) the Cash Discount Ratio and (b) the Non-Contractual Dilution Reserve Percentage Ratio, each determined for the twelve most recently completed Fiscal Months ending on or prior to such date and ( y) 1 minus ii) the Dilution Horizon Ratio as of such Dilution Reserve Percentage, and (2) the Total Aggregate Capital on such date. date.

 

“Dilution Reserve Percentage” means, as of any date of determination, the amount equal to

 

[(2.0 x ANCDR + {(HNCDR-ANCDR) x (HNCDR / ANCDR)} + ACDR] x DHR

 

 

 

“ Dilutions ” means the aggregate amount of any reductions and cancellations of Receivables which have been reduced or canceled, respectively, for any reason other than that (1) the Obligors have made payments thereon or (2) the Seller has charged-off such Receivables for credit reasons in accordance with the Credit and Collection Policy.

 

“ Downgrade Event ” means Georgia-Pacific’s Debt Rating shall be withdrawn or shall fall below BB B by S&P or Ba B2 by Moody’s.

 

“Dynamic Dilution Reserve Percentage” means, as of any date of determination, the amount equal to

 

[(2.0 x ANCDR + {(HNCDR-ANCDR) x (HNCDR / ANCDR)} + ACDR] x DHR

 

11

 

“Dynamic Loss Reserve Percentage” means, as of any date of determination, the product of (i) two, (ii) the highest Sales Based Default Ratio during the twelve most recently ended Fiscal Months and (iii) the Loss Horizon Ratio as of such date.

 

“ Eligible Receivable ” means, at any time, a Receivable:

 

(i) the Obligor of which is not an Affiliate of any of the parties hereto or of any of the parties to any Transfer Agreement;

 

(ii) which, at the time of the initial creation of a Receivable Interest therein under this Agreement, is not a Defaulted Receivable;

 

(iii) which is an obligation representing all or part of the sales price of merchandise, insurance and services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the nature of which is such that its purchase with the proceeds of notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

 

(iv) which is an “account” within the meaning of Section 9- 106 102 of the UCC of the applicable jurisdiction governing the perfection of the interest in such Receivable created by a Receivable Interest;

 

(v) which arises in the ordinary course of an Originator’s business under a Contract which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any known dispute, offset, counterclaim or defense whatsoever or any Adverse Claim other than those of the Purchasers, the Secondary Purchasers and the Administrative Agent;

 

(vi) which, together with the Contract related thereto, does not contravene or violate in any respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) (other than any contravention or violation which would not have a material adverse effect on the collectibility of such Receivable in the full Outstanding Balance thereof) and with respect to which no party to the Contract related thereto is in violation of any such law, rule or regulation in any respect (other than any contravention or violation which would not have a material adverse effect on the collectibility of such Receivable in the full Outstanding Balance thereof);

 

12

(vii) which satisfies all applicable requirements of the Credit and Collection Policy;

 

(viii) as to which, at the time of the initial creation of a Receivable Interest therein under this Agreement, the Administrative Agent, at the instruction of any Purchaser, has not notified the Seller that such Receivable (or class of Receivables) is no longer acceptable for purchase by the Purchasers hereunder [intentionally omitted];

 

(ix) as to which all right, title and interest of an Originator in such Receivable was transferred to the Seller from such Originator pursuant to a Transfer Agreement;

 

(x) which is denominated and payable in United States dollars in the United States;

 

(xi) the Obligor of which is not the Obligor of any Receivable which has been referred to the collection department of the Seller or an Originator;

 

(xii) as to which the Seller has good and marketable title thereto, freely assignable by the Seller to the Administrative Agent for the benefit of the Purchasers;

 

(xiii) which, if a Bankrupt Receivable, is entitled to the benefit of an Administrative Priority and the Outstanding Balance of which, together with all other Bankrupt Receivables of the same Obligor entitled to the benefit of an Administrative Priority, is equal to or less than $500,000;

 

(xiv) the Obligor of which is a U.S. resident has a billing address in the United States or in an Approved OECD Country or an Other Approved Jurisdiction, provided that (A) the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of an Other Approved Jurisdiction may not exceed 4% of the then Net Receivables Pool Balance and (B) with respect to each country which is an Other Approved Jurisdiction, the aggregate Outstanding Balance of all Eligible Receivables having Obligors which are residents of such country may not exceed 1% of the then Net Receivables Pool Balance;

 

(xv) which is not due from a Government Obligor ; unless the Collection Agent or the Seller shall have delivered to the Administrative Agent evidence that the applicable Assignment of Claims Act provisions have been satisfied and copies of the Assignment of Claims Documents (including, without limitation, a waiver of any setoff rights by such Government Obligor) with respect to the Contract out of which such Receivable arises; provided, however, that if a Receivable satisfies all of the requirements of an Eligible Receivable other than this clause (xv), such Receivable shall be an Eligible Receivable, but only to the extent that including such Receivable as an Eligible Receivable will not cause the aggregate Outstanding Balance of all Receivables included as Eligible Receivables pursuant to this proviso to exceed 5% of the aggregate Outstanding Balance of all Eligible Receivables;

 

13

(xvi) which is required to be paid in full within 181 days of the billing date thereof;

 

(xvii) the outstanding balance of which is less than or equal to $1,000,000, if the Outstanding Balance of all Pool Receivables of the related Obligor has is at least $1,000,000 or more, such Obligor does not have Receivables which remain unpaid for more than 90 days or more from the original due date thereof that equal or exceed twenty-five percent (25%) of the Outstanding Balance of all Pool Receivables of such Obligor.; and

 

(xviii) which has not been compromised, adjusted, extended, rewritten or otherwise modified from the original terms thereof (except as expressly permitted by Section 6.02(c) and which are reported as Dilutions).

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with Georgia-Pacific within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by Georgia-Pacific or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Georgia-Pacific or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“ Eurodollar Reserve Percentage ” for any Purchaser and for any Fixed Period means the reserve percentage applicable to such Purchaser, its Related Secondary Purchaser or the bank or banks providing liquidity, back-up purchase or credit support for the Purchaser during such Fixed Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) (or, if more than one such percentage shall be so applicable, the weighted daily averages of such percentages for those days in such Fixed Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement of such Purchaser, its Related Secondary Purchaser or the bank or banks providing liquidity, back-up purchase or credit support for the Purchaser (including, but not limited to, any emergency, supplemental or other marginal reserve requirement) with respect to liabilities consisting of or including Eurocurrency liabilities (as that term is defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time) having a term equal to such Fixed Period.

 

14

“ Event of Termination ” has the meaning specified in Article VII.

 

“ Excluded Taxes ” means, with respect to an Indemnified Party, Taxes which are (a) both (i) imposed by the jurisdiction in which such Indemnified Party is organized or by any other taxing authority of a United States jurisdiction as a result of such Indemnified Party doing business or maintaining an office in such jurisdiction (other than any such taxes that the Indemnified Party establishes would not have been imposed but for (A) such Indemnified Party’s having executed or enforced a Sale Document or (B) any of the transactions contemplated herein or in the other Sale Documents) and (ii) imposed on, based on or measured by net pre-tax income, capital or net worth of such Indemnified Party (other than Taxes that are, or are in the nature of, sales, use, rental, property or value added or similar taxes) or (b) any Tax, assignment or other governmental charge attributable to and which would not have been imposed but for the failure of an Indemnified Party to deliver to the Seller the applicable tax forms properly completed and duly executed by such Indemnified Party establishing such party’s exemption from, or eligibility for, a reduced rate of any such tax or assessment.

 

“ Facility Termination Date ” has the meaning specified in Section 2.01(j).

 

“Federal Assignment of Claims Act” means (a) 31 U.S.C. § 3727 and 41 U.S.C. § 15, in each case as amended and (b) any rule, regulation or interpretation issued in conjunction therewith.

 

“ Fee Letter ” means that certain sixth amended and restated letter agreement among the Seller, the Purchasers and the Secondary Purchasers dated December  19, 10, 2001, 2004, as the same may, from time to time, be amended, restated, modified or supplemented.

 

“Fiscal Month” means a fiscal month of the Originators, as in effect on the date hereof and set forth on Schedule IX hereto, as such schedule shall be updated from time to time in accordance with the terms hereof (which update may constitute a change from fiscal months to calendar months).

 

“ Fitch ” means Fitch Inc., and any successor thereto.

 

“ Fixed Period ” means, with respect to any Receivable Interest in respect of which Yield is computed by reference to the Adjusted LIBOR Rate, a period from one to and including 30 days, as a Purchaser, after consultation with the Seller, shall select, provided , that (i) any Fixed Period (other than of one day) which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day, except that if such extension would cause the last day of such Fixed Period to occur in the next succeeding month, the last day of such Fixed Period shall occur on the immediately preceding Business Day; and (ii) in the case of any Fixed Period for any Receivable Interest which commences before the Facility Termination Date for such Receivable Interest and would otherwise end on a date occurring after such Facility Termination Date, such Fixed Period shall end on such Facility Termination Date.

 

15

“ GAAP ” means generally accepted accounting principles in the United States of America.

 

“ Georgia-Pacific Credit Agreement ” means the credit agreement dated as of July 2, 2004, among Georgia-Pacific, Bank of America, N.A., as issuing bank and administrative agent for itself and the lenders, and the other financial institutions party thereto, as in effect the same may be amended, modified, supplemented, restated or refinanced from time to time, including but not limited to any credit or loan agreement entered into as contemplated by that certain Amended and Restated Commitment Letter dated November 13, 2005 from Citigroup Global Markets Inc. in favor of Koch Forest Products Holdings LLC and Koch Forest Products Inc.

 

“ Government Obligor ” means any Obligor that is an agency, a department, an instrumentality or a political subdivision of the United States or of any state or local government.

 

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment thereof or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof determined in good faith by the guarantor (assuming the guarantor is required to perform thereunder).

 

“ Indebtedness for Borrowed Money ” of any Person means, without duplication,

 

(a)

all indebtedness for of such Person for borrowed money;

 

(b)

all obligations of such Person issued or assumed as the deferred purchase price of property or services other than bank overdrafts and trade accounts payable arising in the ordinary course of business consistent with past practices;

 

(c)

all obligations of such Person evidenced by notes, bonds, debentures, commercial paper or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses;

 

(d)

all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by

 

16

such Person (even though the rights and remedies of the seller or creditor under such agreement in the event of default are limited to repossession or sale of such property);

 

(e)

all rental obligations of such Person under leases capitalized under GAAP as disclosed in the financial statements delivered pursuant to Section 5.01(j)(ii) hereof; and

 

(f)

all indebtedness of such Person or of others referred to in paragraphs (a) through (e)  secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness.

 

“ Indemnified Party ” has the meaning specified in Section 8.01.

 

“ Interim Activity Report ” means a report in form of Exhibit H G hereto (appropriately completed), furnished by the Collection Agent to each Purchaser and the Administrative Agent pursuant to Section 5.01(j)(ix) hereof.

 

“ Investor Rate ” for any day in a Settlement Period for any Receivable Interest means

 

(a) in the case of any Purchaser, the weighted average of

 

(i) the weighted average, determined on such day, of the sum of (a) the discount rates on all Notes of such Purchaser issued at a discount outstanding on such day (other than Notes the proceeds of which are used by such Purchaser to (x) purchase receivables (other than the Receivables), or extend financing secured thereby, at a fixed interest rate or (y) conduct any arbitrage activities of such Purchaser) plus (b) the Dealer Fee with respect to such Purchaser plus (c) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase or loan facilities which are funded by Notes of such Purchaser (other then than Notes the proceeds of which are used by such Purchaser for the purposes described in clauses (x) and (y) above), converted to an annual yield-equivalent rate on the basis of a 360-day year;

 

(ii) the weighted average, determined on such day, of the sum of (a) the annual interest rates payable on all interest-bearing Notes of such Purchaser outstanding on such day (other than the Notes the proceeds of which are used by such Purchaser for the purposes described in clauses (x) and (y) of paragraph (i) above) plus (b) the Dealer Fee with respect to such Purchaser plus (c) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase or loan facilities which are funded by Notes of such Purchaser (other then than Notes the proceeds of which are used by such Purchaser for the purposes described in clauses (x) and (y) in paragraph (i) above), on the basis of a 360-day year; and

 

17

(iii) the weighted average, determined on such day, of the Adjusted LIBOR Rate on such day, plus the per annum rate set forth below opposite the lower of , based upon the Pricing Leverage Ratio as set forth in the Debt Ratings certificate of Georgia-Pacific from Moody’s a Responsible Officer of the Seller delivered in accordance with and S&P from time to time as required by Section 5.01(j)(xii), to the extent that on such day such Purchaser has any borrowings outstanding under a Liquidity Facility on such day with respect to Receivable Interests or such Purchaser is has sold Receivable Interests (or interests therein) to the provider of such Liquidity Facility, on the basis of a 360-day year:

 

(b) [Intentionally Omitted]

 

(c) In addition to the foregoing, if the Seller shall request any Purchase (other than a reinvestment Purchase) during any period of time determined by the Administrative Agent in its sole discretion to result in incrementally higher costs applicable to such Purchase, the Capital associated with any such Purchase shall, during such period, be deemed to be funded by a Purchaser in a special pool (which may include capital associated with other receivable purchase or loan facilities) for purposes of determining such additional costs.

 

“ Investor Report ” means a report, in substantially the form of Exhibit A hereto (appropriately completed), furnished by the Collection Agent to each Purchaser and the Administrative Agent pursuant to Section 6.02(g) hereof.

 

“ Investor Report Date ” means, with respect to each Settlement Period, the 23rd day of the month immediately following a Settlement Date (or if such day is not a Business Day, the next succeeding Business Day) or such other date or dates as shall be notified to the Seller from time to time by the Administrative Agent at the direction of the Required Purchasers.

 

“Koch” means Koch Industries, Inc.

 

“ Lien ” means any mortgage, security interest, pledge or lien.

 

“ Liquidation Day ” means, for any Receivable Interest, (i) each day during a Settlement Period for such Receivable Interest on which the conditions set forth in Section 3.02 are not satisfied (or expressly waived by the Purchasers), provided such conditions remain unsatisfied (or are not expressly waived by the Purchasers) during such Settlement Period, or (ii) each day which occurs on or after the Reinvestment Termination Date for such Receivable Interest.

 

“Liquidity Facilities” means each of the committed loan facilities, lines of credit and other financial accommodations (including, without limitation, asset purchase agreements) available to a Purchaser to provide liquidity in support of such Purchaser’s Notes and medium-term notes.

 

18

“ Liquidation Fee ” means, for any Purchaser and for any Settlement Period during which a Liquidation Day occurs, the amount, if any, by which (i) the additional Yield (calculated without taking into account any Liquidation Fee or any shortened duration of a Fixed Period pursuant to clause (ii) of the definition thereof) which would have accrued during the remainder of such Settlement Period on all reductions of Capital of the Receivable Interest during such Settlement Period exceeds (ii) the income received by such Purchaser’s investing the proceeds of such reductions of Capital.

 

“ Liquidation Yield Reserve ” means, on any date, an amount equal to the sum of (i) the product of (1) the Total Aggregate Capital on such date, (2) the Adjusted LIBOR Rate for a 30-day Fixed Period to commence on such date multiplied by 1.5 and (3) a fraction having the sum of the Portfolio Turnover Rate (Days) plus the Collection Delay Period (each as in effect at such date) as its numerator and 360 as its denominator plus (ii) the accrued and unpaid Yield and fees payable under the Fee Letter on such date.

 

“Liquidity Facilities” means each of the committed loan facilities, lines of credit and other financial accommodations (including, without limitation, asset purchase agreements) available to a Purchaser to provide liquidity in support of such Purchaser’s Notes and medium-term notes.

 

“ Lock-Box Account ” means a lock-box account maintained at a Lock-Box Bank, the primary purpose of which is to receive Collections.

 

“ Lock-Box Agreement ” means an agreement, in substantially the form of Exhibit B (or in such other form as shall be acceptable to the Purchasers, the Secondary Purchasers and the Administrative Agent in their sole discretion), among an Originator, the Administrative Agent and a Lock-Box Bank or a Depositary Bank.

 

“ Lock-Box Bank ” means, at any time, any of the banks holding one or more Lock-Box Accounts (as of the date hereof being those specified on Schedule I hereof).

 

“ Lock-Box Notice ” means a notice, in substantially the form of Attachment A to Exhibit B, from the Seller or an Originator to any Lock-Box Bank or any Depositary Bank.

 

“ Loss Horizon Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the sum of the aggregate sales generated by the Originators during the three most recently completed calendar month sFiscal Months immediately preceding such date of determination, and the denominator of which is the Net Receivables Pool Balance at the end of the most recently ended calendar Fiscal month Month.

 

“ Loss Reserve Floor Percentage” means, as of any date of determination, the product of (i)  a fraction expressed as a percentage, the numerator of which will equal the greatest of four (A) (I)  if no Upgrade Event has occurred and is continuing, 400% of the Concentration Limit for any Obligor (other than any Special Concentration Limit exists) on such date or three ( II)  if an Upgrade Event has occurred and is continuing, 300% of the Concentration Limit for

 

19

any Obligor (other than any Special Concentration Limit exists) on such date, and (B) the product of (I) 200% of the highest Sales Based Default Ratio for any of the twelve calendar months immediately preceding such date, (II) the Loss Horizon Ratio as of such date and (III) the Payment Terms Factor as of such date, and the denominator of which will equal 1 minus the numerator and (ii) the Total Aggregate CapitalNormal Concentration Limit on such date.

 

“ Loss-to-Liquidation Ratio ” means, at the time of any determination thereof, a fraction, expressed as a percentage, the numerator of which is equal to 1/3 of the aggregate Outstanding Balance (net of recoveries) of all Receivables that were written-off of the books of the Seller or an Originator as uncollectible in accordance with the Credit and Collection Policy during the month Fiscal Month most recently ended and during the immediately preceding two calendar Fiscal months Months and the denominator of which is equal to 1/3 of the aggregate Collections received during the month Fiscal Month most recently ended and during the immediately preceding two calendar Fiscal months Months less the aggregate amount of Collections deemed to have been received during such period pursuant to Section 2.04(d).

 

“Majority Affiliate” means, as to any Person, any Subsidiary of such Person and any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, a Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to (i) vote 100% of the securities or other equity interests having ordinary voting power for the election of directors (or similar governing body) of such other Person or (ii) direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.

 

“ Mandatory Reduction ” means the required reduction of the Aggregate Capital of a Purchaser as a result of the occurrence of a Mandatory Reduction Day.

 

“ Mandatory Reduction Amount ” means, with respect to the Receivable Interests of any Purchaser on any Mandatory Reduction Day, the lowest dollar amount of a reduction in the Aggregate Capital of such Purchaser which is necessary to cause such Receivable Interests (if greater than the Pro Rata Share of such Purchaser) to reduce to an amount equal to the Pro Rata Share of such Purchaser.

 

“ Mandatory Reduction Day ” means each day during a Settlement Period on which the Receivable Interests of a Purchaser exceed an amount equal to the Pro Rata Share of such Purchaser.

 

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the business, assets and liabilities (actual or contingent), results of operations, or financial condition of Georgia-Pacific and its Subsidiaries, taken as a whole; or (b) a material adverse effect upon the legality, validity, binding effect or enforceability against the Seller, the Collection Agent or any Originator of any Sale Document to which it is a party.

 

“ Measurement Period ” means a period consisting of four consecutive fiscal quarters of Georgia-Pacific and ending on the last day of the most recently completed fiscal quarter of Georgia-Pacific.

 

20

“ Moody’s ” means Moody’s Investors Service, Inc., and any successor thereto.

 

“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which Georgia-Pacific or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“ Net Receivables Pool Balance ” means, at any time with respect to any Receivables Pool, the Outstanding Balance of Eligible Receivables then in the Receivables Pool reduced by the sum of (i) the Outstanding Balance of such Eligible Receivables that have become Defaulted Receivables, (ii) the aggregate amount by which the Outstanding Balance of Eligible Receivables (other than Defaulted Receivables) of each Obligor then in the Receivables Pool exceeds the Concentration Limit or Special Concentration Limit for such Obligor, (iii) the aggregate amount of any cash Collections received from Obligors but not yet applied to reduce the aggregate outstanding balance of Receivables (to the extent that such unapplied cash has not already been considered in the determination of Eligible Receivables) and (iv) amounts, as reflected in the books and records of the Seller, the Collection Agent or an Originator, representing total accruals earned by, but not yet paid to, Obligors for rebates, refunds or incentives pursuant to contractual terms of sale under which each Obligor is entitled to a stipulated maximum discount upon satisfaction of one or more conditions.

 

“ Non-Contractual Dilution ” means, with respect to any Receivable, the aggregate amount of Dilutions, which have occurred for any reason other than as a result of Contractual Dilution.

 

“ Non-Contractual Dilution Ratio ” means, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the aggregate amount of Non-Contractual Dilution for the most recently completed calendar month Fiscal Month and the denominator of which is the aggregate sales of the Originators for the prior calendar Fiscal month Month.

 

“ Notes ” means, with respect to a Purchaser, commercial paper notes or other short-term promissory notes issued by such Purchaser in the United States commercial paper market from time to time.

 

“1.5 Month Rolling Average Non-Contractual Dilution Ratio” means, as of any date of determination, a fraction, expressed as a percentage, which is the product of (i) the sum of (a) the Non-Contractual Dilution Ratio as of such date and (b) 50% of the Non-Contractual Dilution Ratio determined as of the first day of the most recently completed Fiscal Month and (ii) a fraction, the numerator of which is 30 and the denominator of which is 45.

 

“ Obligor ” means a Person obligated to make payments pursuant to a Contract.

 

“Obligor Debt Rating” for any Person, means the rating by S&P or Moody’s of such Person’s long-term public senior unsecured non-credit enhanced debt.

 

21

“ Optional Reduction ” means the election of the Seller to reduce the Total Aggregate Capital by directing the Collection Agent and the Purchasers to terminate temporarily the reinvestment of Collections.

 

“ Optional Reduction Amount ” means the dollar amount specified in a notice given by the Seller in accordance with Section 2.01(c) hereof as being the amount by which the Seller would like to reduce temporarily the Total Aggregate Capital.

 

“ Optional Reduction Day ” means for each Receivable Interest, each day during a Settlement Period on which a portion of the Collections which would ordinarily be reinvested as a return of the Capital thereof are paid to the Purchaser or held by the Collection Agent for the account of such Purchaser in order to effect the reduction of the Capital with respect thereto.

 

“ Optional Reduction Effective Date ” means the day on which the Purchasers and the Collection Agent shall commence the temporary termination of reinvestments of Collections pursuant to Section 2.01(c) hereof.

 

“ Originator ” means Georgia-Pacific and any direct or indirect Subsidiary of Georgia-Pacific party to a Transfer Agreement and approved by the Purchasers (as of the date hereof being those subsidiaries specified on Schedule IV hereof).

 

“Other Approved Jurisdiction” means a country, other than an Approved OECD Country, that (i) has a country rating of at least BBB- by S&P and Baa3 by Moody’s and (ii) is not a country that the United States has imposed Category I economic sanctions under 31 CFR 500 (Foreign Assets Control Regulations).

 

“ Outstanding Balance ” of any Receivable at any time means the then outstanding principal balance thereof.

 

“Payment Terms Factor” means, as of any date of determination, the quotient of (i) the sum of (A) 60 and (B) the Weighted Average Payment Term as of such date of determination divided by (ii) 90.

 

“Parent” means Georgia-Pacific.

 

“ PBGC ” means the Pension Benefit Guaranty Corporation.

 

“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Georgia-Pacific or any ERISA Affiliate or to which Georgia-Pacific or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

 

“ Permitted Lien ” means the Liens permitted or required by Section 7.01 of the Georgia-Pacific Credit Agreement. as in effect on December 9, 2005.

 

22

“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“ Pool Receivable ” means a Receivable in a Receivables Pool.

 

“ Portfolio Turnover Rate (Days) ” means, as of any date of determination, the result of (i) the Outstanding Balance of all Pool Receivables as of the last day of the Settlement Period most recently ended, divided by (ii) the aggregate amount of Pool Receivables generated during the prior Settlement Period, times (iii) the actual number of days in the Settlement Period most recently ended.

 

“ Potential Termination Event ” means an event which, with the passage of time or notice or both, would constitute an Event of Termination.

 

“ Pricing Leverage Ratio ” means, as measured as of the end of each fiscal quarter of Georgia-Pacific, the ratio of (a) Consolidated Funded Debt at the last day of such fiscal quarter to (b) Consolidated EBITDA for such Measurement Period ending on the last day of such fiscal quarter. Any change in the Pricing Leverage Ratio shall become effective the Business Day immediately following receipt by the Purchasers of a certificate of a Responsible Officer of the Seller delivered in accordance with and as required by Section 5.01(j)(xii).

 

“ Pro Rata Share ” means, for each Purchaser, the percentage set forth below opposite such Purchaser’s name, or such other percentage for such Purchaser as shall result from any reallocation in accordance with Section 2.01(d):

 

 

“ Provisional Liquidation Day ” means each day that would be a Liquidation Day but for the proviso in clause (i) of the definition of “Liquidation Day.”

 

“ Purchase ” has the meaning specified in Section 2.01(a).

 

“ Purchase Limit ” means, for all Purchasers in the aggregate, an amount equal to $800,000,000 initially, or such lesser amount as shall reflect any reduction pursuant to Section 2.01(b), and for each Purchaser, its Pro Rata Share of such aggregate amount. References to the unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit in effect at such time, less the sum of the Total Aggregate Capital under this Agreement and the “Total Aggregate Capital” under the Secondary Purchase Agreement. Furthermore, on any day on which the Seller reduces the unused portion of (or terminates) the “Commitment” under the Secondary Purchase Agreement, the Purchase Limit automatically shall reduce by the same amount (or so terminate).

 

23

“ Receivable ” means the indebtedness of any Obligor under a Contract (other than a Contract with respect to the sale by an Originator of gypsum at the minehead) from a sale of merchandise, goods or insurance, or the rendering of services which have been completed and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.

 

“ Receivable Interest ” means, at any time, an undivided percentage ownership interest of a Purchaser in (i) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.03, (ii) all Related Security with respect to such Pool Receivables, and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest shall be a fraction, expressed as a percentage, the numerator of which is the sum of (i) the Capital of such Receivable Interest at the time of computation and (ii) a number equal to the product of (x) the Reserve and (y) a fraction, expressed as a percentage, the numerator of which is the Capital of such Receivable Interest, and the denominator of which is the Total Aggregate Capital, and the denominator of which is the Net Receivables Pool Balance at the time of computation. Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.03.

 

“ Receivables Pool ” means at any time the aggregation of each then outstanding Receivable in respect of which the Obligor is a Designated Obligor at such time or was a Designated Obligor on the date of the initial creation of an interest in such Receivable under this Agreement.

 

“ Records ” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

 

“ Reference Banks ” means Citibank, N.A., The Bank of Tokyo- Mitsubishi, Ltd. (New York Branch), Wachovia Bank, National Association, BNP Paribas, acting through its New York Branch, and SunTrust Bank or such other banks as the Purchasers shall designate with the consent of the Seller.

 

“ Reinvestment Termination Date ” means, with respect to any Receivable Interest, that Business Day which the Administrative Agent at the instruction of any Purchaser so designates by notice to the Seller as being the first day on which reinvestments will not be made with respect to such Receivable Interest.

 

“ Related Secondary Purchaser ” means, with respect to each Purchaser set forth below, the Person set forth opposite its name, or, in the case of any Additional Secondary Purchaser under the Secondary Purchase Agreement, the Person specified as such Additional Secondary Purchaser’s Related Purchaser.

 

24

 

“ Related Security ” means with respect to any Receivable:

 

(i) all of the Seller’s interest in any merchandise (including returned merchandise) relating to any sale giving rise to such Receivable;

 

(ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements describing any collateral securing such Receivable;

 

(iii) all guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and

 

(iv) all Records relating to such Receivable.

 

“ Reportable Event ” means any of the events set forth in Section  043 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“ Required Purchasers ” means, at a particular time, the Purchasers, the aggregate Purchase Limit of which is more than 50% of the overall Purchase Limit; provided , that the Purchase Limit for any Purchaser that has breached a material provision of this Agreement shall be zero for so long as such breach has not been cured.

 

“ Reserve ” means, on any date, the sum of (a) the Aggregate Loss and Dilution Reserve on such date, (b) the Liquidation Yield Reserve on such date, and (c) the Collection Agent Fee Reserve, if any, on such date, and (d) the Dilution Reserve on such date.

 

“ Responsible Officer ” means, as to the Seller and the Originators, any officer (including, for the purpose of this Agreement, any assistant secretary and any assistant treasurer) of such entity or any person designated in writing by any such officer.

 

“ Restricted Transferee ” means any Originator that is a direct or indirect transferee of all or a substantial portion of (i) the assets of Georgia-Pacific Corporation or Fort James Operating Company or (ii) any assets that were at any time from and after the date hereof assets of Georgia-Pacific Corporation or Fort James Operating Company.

 

“ S&P ” means Standard & Poor’s Rating Services, a division of McGraw Hill Companies, Inc., and any successor thereto.

 

25

“ Sale Documents ” means this Agreement, the Secondary Purchase Agreement, the each Transfer Agreement, the each Consent and Acknowledgment, each Lock-Box Agreement and the other documents delivered in connection herewith or therewith.

 

“ Sales Based Default Ratio ” means, at any time the determination thereof is to be made, the average of the Sales Based Default Percentages for each of the three most recently ended calendar months Fiscal Months.

 

“ Sales Based Default Percentage ” means, with respect to any calendar month Fiscal Month, a fraction (expressed as a percentage) the numerator of which is the sum of (i) the aggregate Outstanding Balance of all Pool Receivables that were at least 61, but not more than 90, days past due as of the last day of such calendar Fiscal month Month and (ii) the aggregate Outstanding Balance of all Pool Receivables that were less than 61 days past due as of the last day of such Fiscal Month and that were written off the books of the Seller or an Originator at any time during such calendar Fiscal month Month, and the denominator of which is the aggregate Outstanding Balance of all Pool Receivables that were generated during the third calendar Fiscal month Month preceding such calendar Fiscal month Month.

 

“ Secondary Purchase Agreement ” means the Second Amended and Restated Receivables Purchase Agreement, dated as of the date hereof, among the Seller, Georgia-Pacific, the Secondary Purchasers and Citicorp, as administrative agent, as the same may, from time to time, be amended, modified or supplemented.

 

“ Secondary Purchasers ” means collectively Citibank, N.A., The Bank of Tokyo-Mitsubishi, Ltd. (New York Branch), Wachovia Bank, National Association, BNP Paribas, acting through its New York Branch, SunTrust Bank, and any “Additional Secondary Purchaser” under the Secondary Purchase Agreement.

 

“ Settlement Date ” means, the following:

 

(a) with respect to any Settlement Period in which the Investor Rate is determined in accordance with paragraphs (a)(i) , or (a)(ii) or (b)  of the definition “Investor Rate”, the date which is the second Business Day following the end of such Settlement Period;

 

(b) with respect to any Settlement Period in which the Investor Rate is determined in accordance with paragraph (a)(iii) of the definition “Investor Rate”, the last day of such Settlement Period;

 

(c) if the Required Purchasers determine, in their sole discretion, that (i) an Event of Termination or Potential Termination Event has occurred or (ii) a Purchaser’s commercial paper program is being liquidated, each day designated as a Settlement Date by the Required Purchasers;

 

(d) each Business Day on which a Purchaser’s Investment is reduced in accordance with Section 2.01(b), (c) or (d); and

 

26

(e) any date on which a reduction in the Total Aggregate Capital is required to prevent the sum of the Total Aggregate Capital and the “Total Aggregate Capital” under the Secondary Purchase Agreement from exceeding the Purchase Limit.

 

“ Settlement Period ” means a period equal to one calendar month, provided , however , that the first Settlement Period shall commence on the date hereof and terminate on the last day of the calendar month in which such Settlement Period commenced.

 

“Significant Potential Termination Event” means an event that, but for notice or lapse of time or both, would constitute an Event of Termination pursuant to clause (i) or (k) of Section 7.01.

 

“ Solvent ” means, when used with respect to any Person, that, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) ”debt” means liability on a “claim,” and (ii) ”claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

“ Specified Debt ” of any Person means, without duplication, the consolidated Indebtedness for Borrowed Money of such Person and guaranties of indebtedness of others provided by such Person, all as determined in accordance with GAAP.

 

“ Subsidiary ” means, with respect to any Person, any partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity of which more than 50% of the outstanding equity interests having ordinary voting power to elect a majority of the board of directors (or others performing a comparable function) of such entity is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

 

“ Taxes ” means all license and registration fees and all income, gross receipts, rental, franchise, excise, occupational, capital, value added, sales, use, ad valorem (real and personal), property (real and personal) and excise taxes, fees, levies, imposts, charges or withholdings of any nature whatsoever, together with any assessments, penalties, fines, additions to tax and interest thereon, by any federal, state or local government or taxing authority in the United States or by any foreign government, foreign governmental subdivision or other foreign or international taxing authority.

 

27

“ Termination Date ” means the earlier of (i) the Reinvestment Termination Date and (ii) the Facility Termination Date.

 

“ Total Aggregate Capital ” means, at any time of determination, the sum of the Aggregate Capital for the Purchasers.

 

“ Transfer Agreement ” means each agreement, in substantially the form attached hereto as Exhibit C, between the Seller and each Originator pursuant to which the Seller will purchase Receivables from the Originators.

 

“ UCC ” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

 

“ Upgrade Event ” means Georgia-Pacific’s Debt Rating shall be BBB- or higher from S&P ( provided , that, at such time, Georgia-Pacific’s Debt Rating is not lower than Ba1 from Moody’s) or Baa3 or higher from Moody’s ( provided , that, at such time, Georgia-Pacific’s Debt Rating is not lower than BB+ from S&P).

 

“Weighted Average Payment Term” means, as of any date of determination, the quotient of (i) the sum of the products obtained by multiplying the Outstanding Balance at the end of the most recently ended calendar month of each Eligible Receivable times the number of days following the billing date thereof in which such Eligible Receivable is required under the related Contract to be paid in full (such number of days, the “Duration”) divided by (ii) the Net Receivables Pool Balance at the end of the most recently ended calendar month; provided, that, solely for purposes of this calculation, all Eligible Receivables with a Duration of (i) less than 30 days shall be deemed to have a Duration of 30 days, (ii) between 30 days and 60 days shall be deemed to have a Duration of 60 days, (iii) between 61 days and 90 days shall be deemed to have a Duration of 90 days and (iv) greater than 90 days shall be deemed to have a Duration of 120 days.

 

“ Yield ” means for each Receivable Interest for any Settlement Period

 

 

 

 

28

provided , that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; and provided , further , that Yield for any Receivable Interest shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

 

SECTION 1.02  Other Terms . All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

 

ARTICLE II.

AMOUNTS AND TERMS OF THE PURCHASES

 

SECTION 2.01  Purchase Facility .

 

(a) On the terms and conditions hereinafter set forth, each Purchaser may, in its sole discretion, purchase Receivable Interests from the Seller from time to time during the period from the date hereof to the Termination Date and such Purchase shall be deemed consummated upon payment of the Purchase Price in accordance with Section 2.02(b). Each purchase (each, a “ Purchase ”) of Receivable Interests with respect to a Receivables Pool requested by the Seller shall be made by the Purchasers electing to Purchase at such time simultaneously and ratably according to their respective Pro Rata Shares. Under no circumstances shall a Purchaser make any Purchase if after giving effect to such Purchase, such Purchaser’s Aggregate Capital, together with the Related Secondary Purchaser’s “Aggregate Capital” under the Secondary Purchase Agreement, would exceed such Purchaser’s Purchase Limit. Notwithstanding anything to the contrary contained herein, until such time as the parties expressly agree, all Purchases of Receivable Interests hereunder and under the Secondary Purchase Agreement shall be made with respect to a single Receivables Pool.

 

(b) The Seller may, upon at least five Business Days’ notice to the Administrative Agent and the Purchasers, terminate in whole or reduce in part the unused portion of the Purchase Limit; provided , that each partial reduction shall be in the amount of at least $5,000,000 or an integral multiple thereof and shall be applied pro rata among the Purchasers according to their Pro Rata Shares; provided , further , that any partial reduction of the Purchase Limit for any Purchaser must not result in a remaining Purchase Limit of less than $25,000,000 or the Purchase Limit for such Purchaser shall be reduced to zero. Any reductions in the Purchase Limit pursuant to this subsection (b) shall be permanent.

 

(c) The Seller may, upon at least two Business Days’ written notice to the Administrative Agent and the Purchasers specifying an Optional Reduction Amount and an Optional Reduction Effective Date, effect an Optional Reduction. Commencing on the Optional Reduction Effective Date, the Collection Agent shall cease the reinvestment of Collections for a

 

29

period of time such that after giving effect to the amount of Collections which are not reinvested in accordance with the provisions of Section 2.04(b)(ii), the amount of Total Aggregate Capital on the day immediately preceding the Optional Reduction Effective Date is reduced by an amount equal to the Optional Reduction Amount. Any Optional Reduction under this subsection (c) shall be applied pro rata among the Purchasers according to their Pro Rata Shares. The Seller shall indemnify any Purchaser for all losses, expenses and liabilities, if any (including, without limitation, any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds required by any Purchaser in connection with such Purchaser’s funding or maintenance of the Receivable Interests), which such Purchaser may sustain as a result of any Optional Reduction pursuant to this subsection (c).

 

(d) The Seller may, upon 60 days’ prior written notice to the Purchasers, request the reallocation of the Pro Rata Shares of the Purchasers; provided , however , that the Seller shall not be able to request such reallocation after the occurrence of an Event of Termination or a Potential Termination Event. Any reallocation of a Purchaser’s Pro Rata Share as in effect prior to such reallocation which increases the Purchase Limit of such Purchaser shall be at the sole discretion of such Purchaser and shall be effective only if the Related Secondary Purchaser increases its “Commitment” under the Secondary Purchase Agreement by an amount corresponding to the amount of the increase, if any, in the Purchaser’s Purchase Limit arising from such reallocation. If, as a result of any reallocation, a Purchaser’s Aggregate Capital exceeds its Pro Rata Share (as proposed to be reallocated) of the Purchase Limit, such Purchaser shall transfer a Receivable Interest or Receivables Interest computed on the basis of such excess Capital to the Purchaser or Purchasers whose Pro Rata Share has increased as a result of such reallocation in exchange for a cash payment in an amount equal to the aggregate Capital of the Receivable Interests so transferred.

 

(e) The Seller may, upon thirty days’ prior written notice to the Administrative Agent and the Purchasers and the written signed consent of the Administrative Agent and the Purchasers, cease purchasing Receivables from any Originator, and after the Seller ceases purchasing Receivables from such Originator, such Originator shall no longer have the obligations of an Originator for all purposes of this Agreement other than with respect to those obligations which are expressly intended to survive the termination of this Agreement, including, without limitation, the indemnities contained in Section 8.01 as incorporated by reference in the Consent and Acknowledgement to which such Originator is a party. If, as a result of the Seller’s decision to cease purchasing Receivables from any Originator, the Required Purchasers determine, in their sole discretion, that the Events of Termination in Section 7.01(j) or the Reserve are no longer reasonable or protective, the Purchasers may modify the provisions of such Section 7.01(j) or the Reserve with the consent of the Seller (which consent shall not be unreasonably withheld or delayed).

 

(f) The Seller may, upon thirty days’ prior written notice to the Administrative Agent and the Purchasers and the written signed consent of the Administrative Agent and the Purchasers (which consent shall not be unreasonably withheld or delayed), cease purchasing from any Originator all Receivables generated by any division of such Originator (an “ Originator Division ”), and after the Seller ceases purchasing from such Originator all Receivables generated by such Originator Division, any agreement arising thereafter between such Originator and an Obligor pursuant to or under which such Obligor shall be obligated to pay for merchandise,

 

30

insurance or services provided by such Originator Division, shall not be a “Contract” for purposes of this Agreement; provided , that any Contract generated by such Originator Division prior to the date the Seller ceases purchasing such Originator Division’s Receivables shall remain a “Contract” for purposes of this Agreement. If, as a result of the Seller’s decision to cease purchasing from any Originator all Receivables generated by an Originator Division pursuant to this Section 2.01(f), the Required Purchasers determine, in their sole discretion, that the Events of Termination in Section 7.01(j) or the Reserve are no longer reasonable or protective, the Purchasers may modify the provisions of such Section 7.01(j) or the Reserve with the consent of the Seller (which consent shall not be unreasonably withheld or delayed).

 

(g) The Seller may, upon ninety days’ prior written notice to the Administrative Agent and the Purchasers and the written signed consent of the Administrative Agent and the Purchasers, commence purchasing from any Originator all Receivables generated by any Originator Division, and after the Seller commences purchasing from such Originator all Receivables generated by such Originator Division, all related agreements between the Originator, and an Obligor pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or service provided by such Originator Division shall be “Contracts” for all purposes of this Agreement. If, as a result of the Seller’s decision to commence purchasing from any Originator all Receivables generated by an Originator Division pursuant to this Section 2.01(g), the Required Purchasers determine, in their sole discretion, that the Events of Termination in Section 7.01(j) or the Reserve are no longer reasonable or protective, the Purchasers may modify the provisions of such Section 7.01(j) or the Reserve with the consent of the Seller (which consent shall not be unreasonably withheld or delayed).

 

(h) If Georgia-Pacific sells or otherwise conveys or disposes of the stock of any Originator, upon the effective date of such sale, such Originator shall no longer be an Originator under this Agreement; provided , that, if the Required Purchasers determine, in their sole discretion, that the Events of Termination in Section 7.01(j) or the Reserve are no longer reasonable or protective as a result of such sale, the Purchasers may modify the provisions of such Section 7.01(j) or the Reserve with the consent of the Seller (which consent shall not be unreasonably withheld or delayed).

 

(i) If Georgia-Pacific Corporation , Fort James Operating Company or any Restricted Transferee is an Originator and such Originator sells or otherwise disposes of all or a substantial portion of its assets to any Person other than another Originator, the Seller shall deliver to the Purchasers at the time of such sale a pro forma Investor Report eliminating therefrom the Receivables of Georgia-Pacific Corporation , Fort James Operating Company or such Restricted Transferee, as applicable. If, based upon such report, the Required Purchasers determine, in their sole discretion, that the Events of Termination in Section 7.01(j) or the Reserve are no longer reasonable or protective as a result of such sale, the Purchasers may modify the provisions of such Section 7.01(j) or the Reserve with the consent of the Seller (which consent shall not be unreasonably withheld or delayed).

 

(j) The Facility Termination Date shall be December  9, 2007. 3, 2010.

 

31

SECTION 2.02  Making Purchases .

 

(a) Each Purchase shall be made on at least two Business Days’ notice from the Seller to each Purchaser. Each such notice shall specify (i) the amount requested to be paid to the Seller (which shall not be less than $5,000,000), and (ii) the date of such Purchase (which shall be a Business Day). Each Purchaser shall notify the Seller whether it has determined to make such Purchase not later than 10:00 A.M., New York City time, on the second Business Day prior to the proposed purchase date.

 

(b) On the date of each Purchase, each Purchaser shall, upon satisfaction of the applicable conditions set forth in Section 3.01 and Section 3.02, make available to the Seller in same day funds, at the Seller’s account with JPMorgan Chase Bank, One N.A., account number 10 - -31343, an amount equal to the initial Capital of such Receivable Interest purchased by the Purchaser. Each notice given by the Seller pursuant to subsection (a) above shall be irrevocable and binding on the Seller and the Seller shall indemnify each Purchaser against any loss or expense incurred by such Purchaser as a result of any failure by the Seller to accept the amount requested to be paid by such Purchaser, including, without limitation, any loss (including loss of anticipated profits) or expense incurred by such Purchaser by reason of the liquidation or reemployment of funds acquired or requested by such Purchaser to fund such requested amount.

 

SECTION 2.03  Receivable Interest Percentage .

 

(a) Each Receivable Interest shall be initially computed on its date of purchase. Thereafter, until the Reinvestment Termination Date for such Receivable Interest, such Receivable Interest shall be automatically recomputed (or deemed to be recomputed) on each day other than a Liquidation Day. Any Receivable Interest as computed (or deemed recomputed) as of the close of business on the day immediately succeeding the Reinvestment Termination Date for such Receivable Interest shall remain constant at all times after such Reinvestment Termination Date. Upon the occurrence and during the continuation of an Event of Termination, such Receivable Interest shall be 100%. Such Receivable Interest shall become zero when the Capital thereof, Yield thereon and all other amounts due and payable to the Purchasers and the Agent under and in connection with this Agreement shall have been paid in full and the Collection Agent (if not the Seller or an Affiliate thereof) shall have received the accrued Collection Agent Fee thereon.

 

(b) If any Receivable Interest would otherwise be reduced on any day on account of newly arising Pool Receivables, the Purchasers may prevent such reduction by notifying the Collection Agent on such day that the Receivables Pool and the Net Receivables Pool Balance for such Receivable Interest will include, with respect to Receivables arising as Pool Receivables on such day, only such number or portion of such Receivables as shall cause such Receivable Interest to remain constant. The remainder of such Receivables or portion thereof shall be treated as Receivables arising on the next succeeding Business Day (subject to reapplication of this subsection (b)).

 

(c) If any Investor Report indicates that the last day of the prior Settlement Period was a Mandatory Reduction Day, the Collection Agent shall promptly notify the Purchasers and the Seller and shall specify the Mandatory Reduction Amount. In addition, if on any Business Day the Seller knows such day to be a Mandatory Reduction Day, it shall promptly notify the Purchasers and the Collection Agent and shall specify the Mandatory Reduction Amount. On

 

32

the Business Day next succeeding the Investor Report Date or such notification to the Purchasers and the Collection Agent, unless the Seller can demonstrate to the satisfaction of the Purchasers that such day is not a Mandatory Reduction Day, the Seller shall pay to each Purchaser its full Mandatory Reduction Amount to the extent that the Mandatory Reduction Amount represents Collections which should have been set aside and held in the trust for such Purchaser pursuant to Section 2.04 hereof but were previously deemed to be reinvested on behalf of such Purchaser. If the full Mandatory Reduction Amount is not so paid, the Collection Agent shall continue the suspension of the reinvestment of Collections on each Mandatory Reduction Day until such time that, after giving effect to the amount of Collections which are not reinvested in accordance with the provisions of Section 2.04(b)(ii) and the recomputation of the Receivable Interests pursuant to Section 2.03, the amount of the Aggregate Capital of such Purchaser on the day immediately preceding any Mandatory Reduction Day is reduced by an amount equal to the Mandatory Reduction Amount for such Mandatory Reduction Day. The Seller shall indemnify any Purchaser for all losses, expenses and liabilities, if any (including, without limitation, any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds required by such Purchaser in connection with such Purchaser’s funding or maintenance of the Receivable Interests), which such Purchaser may sustain as a result of any Mandatory Reduction.

 

SECTION 2.04  Settlement Procedures .

 

(a) Collection of the Pool Receivables shall be administered by the Collection Agent in accordance with the terms of this Agreement. The Seller shall provide to the Collection Agent on a timely basis all information needed for such administration, including notice of the occurrence of any Liquidation Day or Provisional Liquidation Day and current computations of each Receivable Interest.

 

(b) The Collection Agent shall, on each day on which Collections of Pool Receivables are received by it with respect to any Receivable Interest owned by a Purchaser:

 

(i) set aside and hold in trust for such Purchaser, out of the percentage of such Collections represented by such Receivable Interest, an amount equal to such Purchaser’s Yield and Pro Rata Share of the Collection Agent Fee and fees payable pursuant to the Fee Letter, if any, accrued through such day for such Receivable Interest and not previously set aside; provided , that notwithstanding the preceding clause, unless the Administrative Agent shall have given notice at the direction of the Required Purchasers to the contrary, such amounts may be commingled with the Collection Agent’s other funds prior to their payment to the Purchasers;

 

(ii) if such day is neither a Liquidation Day nor a Provisional Liquidation Day nor an Optional Reduction Day nor a Mandatory Reduction Day, reinvest on behalf of such Purchaser (such reinvestment to be deemed a Purchase of a Receivable Interest by such Purchaser) the remainder of such percentage of Collections, to the extent representing a return of Capital, by recomputation of such Receivable Interest pursuant to Section 2.03;

 

(iii) if such day is a Liquidation Day or a Provisional Liquidation Day, refrain from making reinvestments and set aside and hold in trust for such Purchaser the entire

 

33

remainder of such percentage of Collections; provided , that amounts set aside and held in trust on any Provisional Liquidation Day that is subsequently determined not to be a Liquidation Day thereupon shall, to the extent representing a return of Capital, be reinvested in accordance with the preceding subsection (ii);

 

(iv) if such day is an Optional Reduction Day, set aside and hold in trust for the Purchaser the entire remainder of such percentage of Collections or, if the remainder of such Collections exceeds the remaining amount of the Optional Reduction Amount, the portion of the remainder of such Collections equal to such remaining amount of the Optional Reduction Amount; provided , that, notwithstanding the preceding clause, unless the Administrative Agent shall have given notice at the direction of the Required Purchasers to the contrary, such amounts may be commingled with the Collection Agent’s other funds prior to their payment to the Purchasers; provided , further , that if a Downgrade Event has occurred and is continuing, such notice may be given by the Administrative Agent in its sole discretion or at the direction of any Purchaser;

 

(v) if such day is a Mandatory Reduction Day , to the extent not set aside and held in the Agent’s Account pursuant to Section 2.04(e) , set aside and hold in trust for the Purchaser the entire remainder of such percentage of Collections, or if the remainder of such Collections exceeds the remaining amount of the Mandatory Reduction Amount for such day, the portion of the remainder of such Collections equal to such remaining amount of the Mandatory Reduction Amount; provided , that, notwithstanding the preceding clause, unless the Administrative Agent shall have given notice at the direction of the Required Purchasers to the contrary, such amounts may be commingled with the Collection Agent’s other funds prior to their payment to the Purchasers; provided , further , that if a Downgrade Event has occurred and is continuing, such notice may be given by the Administrative Agent in its sole discretion or at the direction of any Purchaser; and

 

(vi) release to the Seller for its own account any Collections in excess of such amounts allocated pursuant to subsections (i) through (v) above.

 

(c) The Collection Agent shall deposit into an account designated by each Purchaser, on each Settlement Date, unless the Required Purchasers, in their sole discretion, require more frequent deposits, all amounts held by the Collection Agent for each Purchaser in accordance with Section 2.04(b), unless deposited earlier as provided in the next succeeding sentence; provided , however , if Collections have been commingled with the Collection Agent’s other funds prior to their payment to the Purchasers as permitted by the terms of this Agreement, any deposits made pursuant to the preceding clause shall be made by the Collection Agent from and to the extent of the Collections with respect to a Receivable Interest owned by such Purchaser. If a Liquidation Day or a Provisional Liquidation Day has occurred and is continuing, all amounts held by the Collection Agent for each Purchaser in accordance with Section 2.04(b) shall be deposited on the first Business Day following receipt by the Collection Agent into an account designated by such Purchaser. The aggregate amount so deposited with respect to a Receivable Interest owned by a Purchaser shall not exceed the sum of such Purchaser’s Capital of, and accrued Yield and Pro Rata Share of the Collection Agent Fee, if any, on such Receivable Interest plus the aggregate of any other amounts then owed by the Seller to such Purchaser hereunder. If the amounts so deposited are insufficient to pay in full all

 

34

amounts due to such Purchaser hereunder, such amounts shall be applied in the following order of priority (whether or not such funds are sufficient to pay in full all such amounts): first to the Collection Agent (if other than Georgia-Pacific or its designee) in payment of all accrued and unpaid Collection Agent Fee, if any, second to such Purchaser in payment in full of all accrued and unpaid Yield, third to such Purchaser in reduction to zero of the Aggregate Capital of such Purchaser, fourth to such Purchaser in payment of any other amounts owed by the Seller to such Purchaser under this Agreement, fifth to the Administrative Agent in payment of amounts owed by the Seller to the Administrative Agent under this Agreement and sixth to the Collection Agent (if Georgia-Pacific or its designee).

 

After the Capital and Yield with respect to a Receivable Interest, and any other amounts payable by the Seller to the Purchasers or the Administrative Agent hereunder, have been paid in full, all additional Collections with respect to such Receivable Interest shall be paid to the Seller for its own account.

 

(d) For the purposes of this Section 2.04:

 

(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a result of any defective, rejected, returned, repossessed or foreclosed goods, merchandise or services, or any cash discount or other adjustment made by the Seller or an Originator, or any right of setoff is exercised by the Obligor thereunder, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such reduction or adjustment;

 

(ii) if on any day either (w) any of the representations or warranties contained in Sections 4.01(h) or 4.01(n) are no longer true with respect to any Pool Receivable, (x) the Seller shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(d), or (y) the Seller or any Originator or the Collection Agent (if Georgia-Pacific or an Affiliate thereof) shall extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive the terms or conditions of the Contract under which such Pool Receivable arises in a manner which materially and adversely affects the collectibility of such Pool Receivable, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in full;

 

(iii) except as provided in subsection (i) or (ii) of this Section 2.04(d), or as otherwise required by applicable law or the relevant Contract, all Collections received from an Obligor of any Receivable shall be applied to the Receivables of such Obligor in order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables; and

 

(iv) if and to the extent any Purchaser shall be required for any reason to pay over to an Obligor any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Seller and, accordingly, such Purchaser shall have a claim against the Seller for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

 

35

(e) If the Collection Agent shall be required to segregate and deposit Collections to the Agent’s Account in accordance with Section 6.02(b):

 

(i) so long as no Event of Termination, Liquidation Day or Mandatory Reduction Day has occurred and is continuing, the Collection Agent shall be permitted to withdraw amounts from the Agent’s Account and, on each day, apply all Collections so withdrawn from the Agent’s Account in accordance with Section 2.04(b);

 

(ii) if an Event of Termination or a Liquidation Day has occurred and is continuing, the Collection Agent shall not be permitted to withdraw any amounts from the Agent’s Account unless and until such Event of Termination or Liquidation Day is no longer continuing, and amounts on deposit in the Agent’s Account shall be allocated and paid to each Purchaser (based on its Pro Rata Share), and applied by such Purchaser, on each day in accordance with Section 2.04(c); and

 

(iii) if a Mandatory Reduction Day has occurred and is continuing (and no Event of Termination or Liquidation Day has occurred and is continuing), all Collections on deposit in the Agent’s Account in excess of the Mandatory Reduction Amount of all of the Purchasers shall be applied as provided in Section 2.04(b) and, on Friday of each week, if such day is a Mandatory Reduction Day, the Collection Agent shall (and if the Collection Agent does not do so, the Administrative Agent shall, at the direction of any Purchaser) immediately cause to be to remitted to each Purchaser such Purchaser’s Mandatory Reduction Amount from Collections on deposit in the Agent’s Account.

 

Amounts on deposit in the Agent’s Account shall remain uninvested at all times.

 

SECTION 2.05  Fees .

 

(a) The Seller shall pay to the Purchasers fees in the amounts and at the times specified in the Fee Letter.

 

(b) The Collection Agent shall be paid a Collection Agent Fee as set forth in Section 6.06 hereof.

 

(c) The Seller shall pay to the Administrative Agent a fee as separately agreed between the Seller and the Administrative Agent.

 

Each Purchaser shall, on the first Business Day of each calendar month, provide to the Seller and the Collection Agent a statement specifying, for the most recently completed Settlement Period, the amount and calculation of such Purchaser’s Yield and Pro Rata Share of the fees payable pursuant to the Fee Letter. The failure of any Purchaser to provide any such statement to the Seller or the Collection Agent shall not relieve the Seller of its obligations to pay such Purchaser’s Yield or Pro Rata Share of such fees.

 

36

SECTION 2.06  Payments and Computations, Etc.

 

(a) All amounts to be paid or deposited by the Seller or the Collection Agent hereunder shall be paid or deposited no later than 3:00 P.M. (New York City time) on the day when due in same day funds to each Purchaser’s account (as designated by each such Purchaser).

 

(b) The Seller shall, to the extent permitted by law, pay on demand from time to time interest on any amount not paid or deposited by the Seller or the Collection Agent when due hereunder at an interest rate per annum equal to 2% per annum above the Base Rate in effect from time to time; provided , however , that such interest rate shall not at any time exceed the maximum rate permitted by applicable law.

 

(c) All computations of interest under subsection (b) above and all computations of Yield, fees, and other amounts hereunder shall be made on the basis of a year of 360 days and the actual number of days elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

 

SECTION 2.07  Dividing or Combining Receivable Interests . The Seller may, on notice to and consent by a Purchaser received at least three Business Days prior to the last day of any Settlement Period, divide any Receivable Interest of such Purchaser into two or more Receivable Interests having aggregate Capital equal to the Capital of such divided Receivable Interest. The Seller may, on notice to and consent by a Purchaser received at least three Business Days prior to the last day of any Settlement Period either (i) combine two or more existing Receivable Interests of such Purchaser or (ii) combine an existing Receivable Interest or existing Receivable Interests and a proposed Receivable Interest, all of such Purchaser, in each case on such last day into a single Receivable Interest having Capital equal to the aggregate Capital of such existing Receivable Interest or such existing Receivable Interests and such proposed Receivable Interest, as the case may be.

 

SECTION 2.08  Yield Protection .

 

(a) If, after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein, including Regulation D of the Board of Governors of the Federal Reserve System, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Purchaser or any Person controlling any thereof, any permitted assignee under this Agreement or any Person maintaining any liquidity, purchase or credit enhancement facility for any Purchaser (each of which being an “ Affected Party ”) with any request or directive of any such authority, central bank or comparable agency or any change in the application of GAAP (in any case, whether or not having the force of law),

 

(A) shall subject an Affected Party to any tax (except for taxes on the overall net income of such Affected Party), duty or other charge with respect to the Receivable Interests or any right to make purchases, or shall change the basis of taxation of payments to an Affected Party of its Capital or Yield or any other amounts due under this Agreement in respect of its Capital or its rights, if any, to make purchases; or

 

37

(B) shall impose, modify or deem applicable any reserve requirement (including, without limitation, any reserve requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in the determination of Yield), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party; or

 

(C) shall impose any other condition affecting the Receivable Interests or the Purchaser’s rights, if any, to make purchases;

 

and the result of any of the foregoing is (i) to increase the cost to, or, in the case of Regulation D referred to above, to impose a cost on an Affected Party funding or making or maintaining any Receivable Interest, or (ii) to reduce the amount of any sum received or receivable by an Affected Party under this Agreement with respect thereto, then within ten days after demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Seller shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered.

 

(b) If an Affected Party shall reasonably determine that the adoption of any applicable law, rule, regulation, directive or guideline regarding capital adequacy, or any change in or phase-in of any applicable law, rule, regulation, directive or guideline or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by an Affected Party with any request or directive regarding capital adequacy of any such authority, central bank or comparable agency or any change in the application of GAAP (in any case, whether or not having the force of law), has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such adoption, change or compliance (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, within ten days after demand by such Affected Party, the Seller shall pay to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.

 

(c) Each Affected Party will promptly notify the Seller of any event of which it has knowledge occurring after the date hereof which will entitle such Affected Party to compensation pursuant to this Section 2.08. If an Affected Party fails to give such notice within 90 days after it obtains actual knowledge of such event and such result, such Affected Party shall be entitled to compensation pursuant to this Section 2.08 only to the extent such additional amount or reduction accrues on or after the date 90 days prior to the date on which such Affected Party gives such notice.

 

(d) In determining any amount provided for in this Section 2.08, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.08 shall submit to the Seller a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent demonstrable error; provided , that the failure to deliver any such certificate shall not affect the Affected Party’s right to payment hereunder unless notice as required by Section 2.08(c) has not been given.

 

38

(e) For the avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other change in accounting standards or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of a Purchaser with the assets and liabilities of any Affected Party, such event shall constitute a circumstance on which such Affected Party may base a claim for reimbursement under this Section 2.08.

 

(f) If the Seller shall become obligated to pay amounts under this Section 2.08 to any Affected Party, and the Seller shall not then be obligated to pay amounts under this Section 2.08 to Affected Parties with respect to all of the Purchasers, the Seller shall have the right to require such Affected Party (or the Purchaser through whom such Affected Party has made such claim) to sell and assign, and within 60 days of the Seller’s request to such effect, such Affected Party or Purchaser, as the case may be, shall sell and assign, all of its interests, rights and obligations under this Agreement to an Assignee (but no Assignee shall have any obligation to make any such purchase) or to an assignee identified by the Seller and approved by the Administrative Agent and the Related Secondary Purchaser, which approval shall not be unreasonably withheld; provided, however, that (i) such assignment shall not conflict with any statute, law, rule, regulation, order or decree of any governmental authority, (ii) the assigning Affected Party shall have received from such Assignee or such assignee full payment in immediately available funds of all amounts payable to it in respect of Capital, accrued Yield and fees and other amounts owing to it under or in connection with this Agreement and the other Sale Documents, (iii) the assigning Affected Party shall have been released of any and all liabilities and obligations under this Agreement, (iv) such assignment shall be without representation or warranty (except to the extent set forth in the related Assignment) by the assigning Affected Party and shall be at the sole expense of the Seller and (v) the assigning Affected Party shall continue to have the benefit of all indemnities and other agreements under this Agreement which survive the termination of this Agreement.

 

SECTION 2.09  Sharing of Payments, Etc. If any Purchaser shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Pool Receivables covered by a Receivable Interest (other than pursuant to Section 2.08) in excess of payments on account of Pool Receivables allocable to such Receivable Interest, such Purchaser shall forthwith purchase from the other Purchasers such participations in the Pool Receivables as shall be necessary to cause such purchasing Purchaser to share the excess payment ratably with each of them, provided , however , that if all or any portion of each excess payment is thereafter recovered from such purchasing Purchaser, such purchase from each Purchaser shall be rescinded and such Purchaser shall repay to the purchasing Purchaser the purchase price to the extent of such recovery together with an amount equal to each Purchaser’s Pro Rata Share of any interest or other amount paid or payable by the purchasing Purchaser in respect of the total amount so recovered.

 

SECTION 2.10  Effect of Early Payments . In the event any Purchaser: (i) has the Capital of a Receivable Interest reduced without compliance by the Seller with the notice

 

39

requirements hereunder or (ii) does not become subject to a Mandatory Reduction or an Optional Reduction upon the occurrence of a Mandatory Reduction Day or an Optional Reduction Day, then the Seller agrees to pay to the relevant Purchaser an amount equal to the excess, if any, of:

 

(A) Yield that would have accrued during the remainder of the Settlement Period or the tranche periods for Notes determined by such Purchaser to relate to such Receivable Interest (as applicable) subsequent to the date of such reduction (or in respect of clause (ii) above, the date such Mandatory Reduction or Optional Reduction took effect pursuant to the occurrence of a Mandatory Reduction Day or an Optional Reduction Day) on such Capital if such reduction or such Mandatory Reduction Day or Optional Reduction Day had not occurred,

 

over

 

(B) the income, if any, actually received during the remainder of such period by such Purchaser from investing the amount received as a reduction of such Capital, in accordance with such Purchaser’s normal investment policies.

 

All payments made pursuant to this Section 2.10 shall be due and payable hereunder upon demand. The determinations made by any Purchaser pursuant to this Section 2.10 shall be binding absent demonstrable error.

 

ARTICLE III.

CONDITIONS OF PURCHASES

 

SECTION 3.01  Conditions Precedent to Initial Purchase . The initial Purchase of Receivable Interests under this Agreement is subject to the conditions precedent that the Purchasers shall have received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date and in form and substance satisfactory to the Purchasers and the Administrative Agent:

 

(a) Certificates of the Secretary or Assistant Secretary of the Seller and each Originator certifying the names and true signatures of their respective officers authorized to sign this Agreement and the other documents to be delivered by them hereunder or in connection herewith, evidence of authorization of the transactions contemplated hereby, the articles of incorporation or formation (attached and appropriately certified by the Secretary of State of the Seller’s and each Originator’s jurisdiction of incorporation or formation) and the by-laws and all amendments thereto of the Seller and each Originator.

 

(b) Executed financing statements (including any assignments of and amendments to financing statements previously filed), to be filed on or before the date of such initial Purchase under the UCC of all jurisdictions that the Purchasers or the Administrative Agent may deem necessary or desirable in order (i) to perfect the ownership interests contemplated by this Agreement and (ii) to perfect the ownership interests of the Seller in the receivables purchased by the Seller from the Originators pursuant to the Transfer Agreements.

 

(c) Executed UCC termination statements, if any, necessary to release all security interests and other rights of any Person (other than the Purchasers and the Secondary Purchasers) in the Receivables, Contracts or Related Security previously granted by the Seller or any Originator.

 

40

(d) Evidence (including Uniform Commercial Code search reports) that all Receivables and all proceeds thereof are free and clear of liens, security interests, claims and encumbrances other than those held by the Purchasers and the Secondary Purchasers.

 

(e) An executed Transfer Agreement and Consent and Acknowledgment from each Originator.

 

(f) A favorable opinion of counsel for the Seller and for each Originator as to such matters as the Purchasers or the Administrative Agent may reasonably request, including, without limitation, bankruptcy opinions with respect to “true sale” and nonconsolidation.

 

SECTION 3.02  Conditions Precedent to All Purchases and Reinvestments . Each Purchase (including the initial Purchase) and each reinvestment shall be subject to the further conditions precedent that (a) in the case of each Purchase, the Collection Agent shall have delivered to the Purchasers and the Administrative Agent on or prior to the date of such Purchase, in form and substance satisfactory to the Purchasers, all Investor Reports as and when due under Section 6.02(g) and, on or prior to the date of the initial Purchase, an Investor Report containing then current information acceptable to the Purchasers, and (b) on the date of each Purchase or reinvestment, the following statements shall be true (and acceptance of the proceeds of such Purchase or reinvestment shall be deemed a representation and warranty by the Seller that such statements are then true):

 

(i) the representations and warranties contained in Article IV are correct on and as of the date of such Purchase or reinvestment as though made on and as of such date,

 

(ii) no event has occurred and is continuing, or would result from such Purchase or reinvestment, that constitutes (x) in the case of a Purchase, an Event of of Termination or a a Potential Termination Event and (y) in the case of reinvestment, an Event of Termination or a Significant Potential Termination Event,

 

(iii) the Internal Revenue Service shall not have filed a notice of lien pursuant to Section 6323 of the Code with regard to any assets of the Seller or any Originator, and the Pension Benefit Guaranty Corporation shall not have filed a notice of lien pursuant to Section 4068 of ERISA with regard to any assets of the Seller or any Originator, unless such liens (1) have been suspended or (2) are being contested in good faith by the Seller or such Originator and have been bonded in the full amount thereof; provided , however , that with respect to any Originator, the amount of such lien shall be greater than $50,000,000, and

 

(iv) the Facility Termination Date shall not have occurred,

 

and (c) the Purchasers shall have received such other a